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Free Tax Amendment

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Free Tax Amendment

Free tax amendment 4. Free tax amendment   Underpayment Penalty for 2013 Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: General RuleFarmers and fishermen. Free tax amendment Higher income taxpayers. Free tax amendment Minimum required for higher income taxpayers. Free tax amendment Estate or trust payments of estimated tax. Free tax amendment Lowering or eliminating the penalty. Free tax amendment ExceptionsLess Than $1,000 Due No Tax Liability Last Year Figuring Your Required Annual Payment (Part I) Short Method for Figuring the Penalty (Part III) Regular Method for Figuring the Penalty (Part IV)Figuring Your Underpayment (Part IV, Section A) Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Annualized Income Installment Method (Schedule AI) Farmers and Fishermen Waiver of PenaltyFarmers and fishermen. Free tax amendment Introduction If you did not pay enough tax, either through withholding or by making timely estimated tax payments, you will have underpaid your estimated tax and may have to pay a penalty. Free tax amendment You may understand this chapter better if you can refer to a copy of your latest federal income tax return. Free tax amendment No penalty. Free tax amendment   Generally, you will not have to pay a penalty for 2013 if any of the following apply. Free tax amendment The total of your withholding and timely estimated tax payments was at least as much as your 2012 tax. Free tax amendment (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen. Free tax amendment ) The tax balance due on your 2013 return is no more than 10% of your total 2013 tax, and you paid all required estimated tax payments on time. Free tax amendment Your total tax for 2013 (defined later) minus your withholding is less than $1,000. Free tax amendment You did not have a tax liability for 2012. Free tax amendment You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. Free tax amendment IRS can figure the penalty for you. Free tax amendment   If you think you owe the penalty, but you do not want to figure it yourself when you file your tax return, you may not have to. Free tax amendment Generally, the IRS will figure the penalty for you and send you a bill. Free tax amendment   You only need to figure your penalty in the following three situations. Free tax amendment You are requesting a waiver of part, but not all, of the penalty. Free tax amendment You are using the annualized income installment method to figure the penalty. Free tax amendment You are treating the federal income tax withheld from your income as paid on the dates actually withheld. Free tax amendment However, if these situations do not apply to you, and you think you can lower or eliminate your penalty, complete Form 2210 or Form 2210-F and attach it to your return. Free tax amendment See Form 2210 , later. Free tax amendment Topics - This chapter discusses: The general rule for the underpayment penalty, Special rules for certain individuals, Exceptions to the underpayment penalty, How to figure your underpayment and the amount of your penalty on Form 2210, and How to ask the IRS to waive the penalty. Free tax amendment Useful Items - You may want to see: Form (and Instructions) 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2210-F Underpayment of Estimated Tax by Farmers and Fishermen See chapter 5 for information about getting these forms. Free tax amendment General Rule In general, you may owe a penalty for 2013 if the total of your withholding and timely estimated tax payments did not equal at least the smaller of: 90% of your 2013 tax, or 100% of your 2012 tax. Free tax amendment (Your 2012 tax return must cover a 12-month period. Free tax amendment ) Your 2013 tax, for this purpose, is defined under Total tax for 2013 , later. Free tax amendment Special rules for certain individuals. Free tax amendment   There are special rules for farmers and fishermen and certain higher income taxpayers. Free tax amendment Farmers and fishermen. Free tax amendment   If at least two-thirds of your gross income for 2012 or 2013 is from farming or fishing, substitute  662/3% for 90% in (1) above. Free tax amendment   See Farmers and Fishermen , later. Free tax amendment Higher income taxpayers. Free tax amendment   If your AGI for 2012 was more than $150,000 ($75,000 if your 2013 filing status is married filing a separate return), substitute 110% for 100% in (2) under General Rule . Free tax amendment This rule does not apply to farmers or fishermen. Free tax amendment   For 2012, AGI is the amount shown on Form 1040, line 37; Form 1040A, line 21; and Form 1040EZ, line 4. Free tax amendment Penalty figured separately for each period. Free tax amendment   Because the penalty is figured separately for each payment period, you may owe a penalty for an earlier payment period even if you later paid enough to make up the underpayment. Free tax amendment This is true even if you are due a refund when you file your income tax return. Free tax amendment Example. Free tax amendment You did not make estimated tax payments for 2013 because you thought you had enough tax withheld from your wages. Free tax amendment Early in January 2014, you made an estimate of your total 2013 tax. Free tax amendment Then you realized that your withholding was $2,000 less than the amount needed to avoid a penalty for underpayment of estimated tax. Free tax amendment On January 10, you made an estimated tax payment of $3,000, which is the difference between your withholding and your estimate of your total tax. Free tax amendment Your final return shows your total tax to be $50 less than your estimate, so you are due a refund. Free tax amendment You do not owe a penalty for your payment due January 15, 2014. Free tax amendment However, you may owe a penalty through January 10, 2014, the day you made the $3,000 payment, for your underpayments for the earlier payment periods. Free tax amendment Minimum required each period. Free tax amendment   You will owe a penalty for any 2013 payment period for which your estimated tax payment plus your withholding for the period and overpayments applied from previous periods was less than the smaller of: 22. Free tax amendment 5% of your 2013 tax, or 25% of your 2012 tax. Free tax amendment (Your 2012 tax return must cover a 12-month period. Free tax amendment ) Minimum required for higher income taxpayers. Free tax amendment   If you are subject to the rule for higher income taxpayers, discussed above, substitute 27. Free tax amendment 5% for 25% in (2) under General Rule . Free tax amendment When penalty is charged. Free tax amendment   If you miss a payment or you paid less than the minimum required in a period, you may be charged an underpayment penalty from the date the amount was due to the date the payment is made. Free tax amendment If a payment is mailed, the date of the U. Free tax amendment S. Free tax amendment postmark is considered the date of payment. Free tax amendment   If a payment is made electronically, the date the payment is shown on your payment account (checking, savings, etc. Free tax amendment ) is considered to be the date of payment. Free tax amendment Estate or trust payments of estimated tax. Free tax amendment   If you have estimated taxes credited to you from an estate or trust (Schedule K-1 (Form 1041)), treat the payment as made by you on January 15, 2014. Free tax amendment Amended returns. Free tax amendment    If you file an amended return by the due date of your original return, use the tax shown on your amended return to figure your required estimated tax payments. Free tax amendment If you file an amended return after the due date of the original return, use the tax shown on the original return. Free tax amendment   However, if you and your spouse file a joint return after the due date to replace separate returns you originally filed by the due date, use the tax shown on the joint return to figure your required estimated tax payments. Free tax amendment This rule applies only if both original separate returns were filed on time. Free tax amendment 2012 separate returns and 2013 joint return. Free tax amendment    If you file a joint return with your spouse for 2013, but you filed separate returns for 2012, your 2012 tax is the total of the tax shown on your separate returns. Free tax amendment You filed a separate return if you filed as single, head of household, or married filing separately. Free tax amendment 2012 joint return and 2013 separate returns. Free tax amendment    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, your 2012 tax is your share of the tax on the joint return. Free tax amendment You are filing a separate return if you file as single, head of household, or married filing separately. Free tax amendment   To figure your share of the taxes on a joint return, first figure the tax both you and your spouse would have paid had you filed separate returns for 2012 using the same filing status as for 2013. Free tax amendment Then multiply the tax on the joint return by the following fraction. Free tax amendment   The tax you would have paid had you filed a separate return   The total tax you and your spouse would have paid had you filed separate returns Example. Free tax amendment Lisa and Paul filed a joint return for 2012 showing taxable income of $49,000 and a tax of $6,484. Free tax amendment Of the $49,000 taxable income, $41,000 was Lisa's and the rest was Paul's. Free tax amendment For 2013, they file married filing separately. Free tax amendment Lisa figures her share of the tax on the 2012 joint return as follows. Free tax amendment 2012 tax on $41,000 based on a separate return $ 6,286 2012 tax on $8,000 based on a  separate return 803 Total $ 7,089 Lisa's percentage of total tax  ($6,286 ÷ $ 7,089) 88. Free tax amendment 67% Lisa's part of tax on joint return ($6,484 × 88. Free tax amendment 67%) $ 5,749 Form 2210. Free tax amendment   In most cases, you do not need to file Form 2210. Free tax amendment The IRS will figure the penalty for you and send you a bill. Free tax amendment If you want us to figure the penalty for you, leave the penalty line on your return blank. Free tax amendment Do not file Form 2210. Free tax amendment   To determine if you should file Form 2210, see Part II of Form 2210. Free tax amendment If you decide to figure your penalty, complete Part I, Part II, and either Part III or Part IV of the form and the Penalty Worksheet in the Instructions for Form 2210. Free tax amendment If you use Form 2210, you cannot file Form 1040EZ. Free tax amendment   On Form 1040, enter the amount of your penalty on line 77. Free tax amendment If you owe tax on line 76, add the penalty to your tax due and show your total payment on line 76. Free tax amendment If you are due a refund, subtract the penalty from the overpayment and enter the result on line 73. Free tax amendment   On Form 1040A, enter the amount of your penalty on line 46. Free tax amendment If you owe tax on line 45, add the penalty to your tax due and show your total payment on line 45. Free tax amendment If you are due a refund, subtract the penalty from the overpayment and enter the result on line 42. Free tax amendment Lowering or eliminating the penalty. Free tax amendment    You may be able to lower or eliminate your penalty if you file Form 2210. Free tax amendment You must file Form 2210 with your return if any of the following applies. Free tax amendment You request a waiver. Free tax amendment See Waiver of Penalty , later. Free tax amendment You use the annualized income installment method. Free tax amendment See the explanation of this method under Annualized Income Installment Method (Schedule AI) . Free tax amendment You use your actual withholding for each payment period for estimated tax purposes. Free tax amendment See Actual withholding method under Figuring Your Underpayment (Part IV, Section A). Free tax amendment You base any of your required installments on the tax shown on your 2012 return and you filed or are filing a joint return for either 2012 or 2013, but not for both years. Free tax amendment Exceptions Generally, you do not have to pay an underpayment penalty if either: Your total tax is less than $1,000, or You had no tax liability last year. Free tax amendment Less Than $1,000 Due You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000. Free tax amendment Total tax for 2013. Free tax amendment   For 2013, your total tax on Form 1040 is the amount on line 61 reduced by the following. Free tax amendment    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Free tax amendment Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Free tax amendment The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Free tax amendment Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line 71. Free tax amendment   If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Free tax amendment   If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a. Free tax amendment Note. Free tax amendment When figuring the amount on line 60, include household employment taxes only if you had federal income tax withheld from your income or you would owe the penalty even if you did not include those taxes. Free tax amendment Paid through withholding. Free tax amendment    For 2013, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 69. Free tax amendment Add to that any write-in amount on line 72 identified as “Form 8689. Free tax amendment ” On Form 1040A, the amount you paid through withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included on line 41. Free tax amendment On Form 1040EZ, it is the amount on line 7. Free tax amendment No Tax Liability Last Year You do not owe a penalty if you had no tax liability last year and you were a U. Free tax amendment S. Free tax amendment citizen or resident for the whole year. Free tax amendment For this rule to apply, your tax year must have included all 12 months of the year. Free tax amendment You had no tax liability for 2012 if your total tax was zero or you were not required to file an income tax return. Free tax amendment Example. Free tax amendment Ray, who is single and 22 years old, was unemployed for a few months during 2012. Free tax amendment He earned $6,700 in wages before he was laid off, and he received $1,400 in unemployment compensation afterwards. Free tax amendment He had no other income. Free tax amendment Even though he had gross income of $8,100, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($9,750 for 2012). Free tax amendment He filed a return only to have his withheld income tax refunded to him. Free tax amendment In 2013, Ray began regular work as an independent contractor. Free tax amendment Ray made no estimated tax payments in 2013. Free tax amendment Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2013 because he had no tax liability in 2012. Free tax amendment Total tax for 2012. Free tax amendment   For 2012, your total tax on Form 1040 is the amount on line 61 reduced by the following. Free tax amendment    Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line 57). Free tax amendment Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement plans. Free tax amendment The following write-ins on line 60: Uncollected social security and Medicare tax or RRTA tax on tips or group-term life insurance, Tax on excess golden parachute payments, Excise tax on insider stock compensation from an expatriated corporation, Look-back interest due under section 167(g), Look-back interest due under section 460(b), Recapture of federal mortgage subsidy, and Additional tax on advance payments of health coverage tax credit when not eligible. Free tax amendment Any refundable credit amounts listed on lines 64a, 65, 66, 70, and credits from Forms 8801 (line 27 only), and 8885 included on line 71. Free tax amendment   If you filed Form 1040A, your 2012 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and 40. Free tax amendment   If you filed Form 1040EZ, your 2012 total tax is the amount on line 11 reduced by the amount on line 8a. Free tax amendment Figuring Your Required Annual Payment (Part I) Figure your required annual payment in Part I of Form 2210, following the line-by-line instructions. Free tax amendment If you rounded the entries on your tax return to whole dollars, you can round on Form 2210. Free tax amendment Example. Free tax amendment The tax on Lori Lane's 2012 return was $12,400. Free tax amendment Her AGI was not more than $150,000 for either 2012 or 2013. Free tax amendment The tax on her 2013 return (Form 1040, line 55) is $13,044. Free tax amendment Line 56 (self-employment tax) is $8,902. Free tax amendment Her 2013 total tax is $21,946. Free tax amendment For 2013, Lori had $1,600 income tax withheld and made four equal estimated tax payments ($1,000 each). Free tax amendment 90% of her 2013 tax is $19,751. Free tax amendment Because she paid less than her 2012 tax ($12,400) and less than 90% of her 2013 tax ($19,751), and does not meet an exception, Lori knows that she owes a penalty for underpayment of estimated tax. Free tax amendment The IRS will figure the penalty for Lori, but she decides to figure it herself on Form 2210 and pay it with her taxes when she files her tax return. Free tax amendment Lori's required annual payment is $12,400 (100% of 2012 tax) because that is smaller than 90% of her 2013 tax. Free tax amendment Different 2012 filing status. Free tax amendment    If you file a separate return for 2013, but you filed a joint return with your spouse for 2012, see 2012 joint return and 2013 separate returns , earlier, to figure the amount to enter as your 2012 tax on line 8 of Form 2210. Free tax amendment Short Method for Figuring the Penalty (Part III) You may be able to use the short method in Part III of Form 2210 to figure your penalty for underpayment of estimated tax. Free tax amendment If you qualify to use this method, it will result in the same penalty amount as the regular method. Free tax amendment However, either the annualized income installment method or the actual withholding method, explained later, may result in a smaller penalty. Free tax amendment You can use the short method only if you meet one of the following requirements. Free tax amendment You made no estimated tax payments for 2013 (it does not matter whether you had income tax withholding). Free tax amendment You paid the same amount of estimated tax on each of the four payment due dates. Free tax amendment If you do not meet either requirement, figure your penalty using the regular method in Part IV of Form 2210 and the Penalty Worksheet in the instructions. Free tax amendment Note. Free tax amendment If any payment was made before the due date, you can use the short method, but the penalty may be less if you use the regular method. Free tax amendment However, if the payment was only a few days early, the difference is likely to be small. Free tax amendment You cannot use the short method if any of the following apply. Free tax amendment You made any estimated tax payments late. Free tax amendment You checked box C or D in Part II of Form 2210. Free tax amendment You are filing Form 1040NR or 1040NR-EZ and you did not receive wages as an employee subject to U. Free tax amendment S. Free tax amendment income tax withholding. Free tax amendment If you use the short method, you cannot use the annualized income installment method to figure your underpayment for each payment period. Free tax amendment Also, you cannot use your actual withholding during each period to figure your payments for each period. Free tax amendment These methods, which may give you a smaller penalty amount, are explained under Figuring Your Underpayment (Part IV, Section A). Free tax amendment Complete Part III of Form 2210 following the line-by-line instructions in the Instructions for Form 2210. Free tax amendment Regular Method for Figuring the Penalty (Part IV) You can use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if you paid one or more estimated tax payments earlier than the due date. Free tax amendment You must use the regular method in Part IV of Form 2210 to figure your penalty for underpayment of estimated tax if any of the following apply to you. Free tax amendment You paid one or more estimated tax payments on a date after the due date. Free tax amendment You paid at least one, but less than four, installments of estimated tax. Free tax amendment You paid estimated tax payments in un- equal amounts. Free tax amendment You use the annualized income installment method to figure your underpayment for each payment period. Free tax amendment You use your actual withholding during each payment period to figure your payments. Free tax amendment Under the regular method, figure your underpayment for each payment period in Section A, then figure your penalty using the Penalty Worksheet in the Instructions for Form 2210. Free tax amendment Enter the results on line 27 of Section B. Free tax amendment Figuring Your Underpayment (Part IV, Section A) Figure your underpayment of estimated tax for each payment period in Section A following the line-by-line instructions in the Instructions for Form 2210. Free tax amendment Complete lines 20 through 26 of the first column before going to line 20 of the next column. Free tax amendment Required installments—line 18. Free tax amendment   Your required payment for each payment period (line 18) is usually one-fourth of your required annual payment (Part I, line 9). Free tax amendment This method—the regular method—is the one to use if you received your income evenly throughout the year. Free tax amendment   However, if you did not receive your income evenly throughout the year, you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Free tax amendment First complete Schedule AI (Form 2210), then enter the amounts from line 25 of that schedule on line 18 of Form 2210, Part IV. Free tax amendment See Annualized Income Installment Method (Schedule AI), later. Free tax amendment Payments made—line 19. Free tax amendment   Enter in each column the total of: Your estimated tax paid after the due date for the previous column and by the due date shown at the top of the column, and One-fourth of your withholding. Free tax amendment For special rules for figuring your payments, see Form 2210 instructions for line 19. Free tax amendment   If you file Form 1040, your withholding is the amount on line 62, plus any excess social security or tier 1 RRTA tax withholding on line 69. Free tax amendment If you file Form 1040A, your withholding is the amount on line 36 plus any excess social security or tier 1 RRTA tax withholding included in line 41. Free tax amendment Actual withholding method. Free tax amendment    Instead of using one-fourth of your withholding for each quarter, you can choose to use the amounts actually withheld by each due date. Free tax amendment You can make this choice separately for the tax withheld from your wages and for all other withholding. Free tax amendment This includes any excess social security and tier 1 RRTA tax withheld. Free tax amendment   Using your actual withholding may result in a smaller penalty if most of your withholding occurred early in the year. Free tax amendment   If you use your actual withholding, you must check box D in Form 2210, Part II. Free tax amendment Then complete Form 2210 using the regular method (Part IV) and file it with your return. Free tax amendment Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty Figure the amount of your penalty for Section B using the Penalty Worksheet in the Form 2210 instructions. Free tax amendment The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid. Free tax amendment For 2013, there are four rate periods—April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2014 through April 15, 2014. Free tax amendment A 3% rate applies to all four periods. Free tax amendment Payments. Free tax amendment    Before completing the Penalty Worksheet, it may be helpful to make a list of the payments you made and income tax withheld after the due date (or the last day payments could be made on time) for the earliest payment period an underpayment occurred. Free tax amendment For example, if you had an underpayment for the first payment period, list your payments after April 15, 2013. Free tax amendment You can use the table in the Form 2210 instructions to make your list. Free tax amendment Follow those instructions for listing income tax withheld and payments made with your return. Free tax amendment Use the list to determine when each underpayment was paid. Free tax amendment   If you mail your estimated tax payments, use the date of the U. Free tax amendment S. Free tax amendment postmark as the date of payment. Free tax amendment Line 1b. Free tax amendment   Apply the payments listed to underpayment balance in the first column until it is fully paid. Free tax amendment Apply payments in the order made. Free tax amendment Figuring the penalty. Free tax amendment   If an underpayment was paid in two or more payments on different dates, you must figure the penalty separately for each payment. Free tax amendment On line 3 of the Penalty Worksheet enter the number of days between the due date (line 2) and the date of each payment on line 1b. Free tax amendment On line 4 figure the penalty for the amount of each payment applied on line 1b or the amount remaining unpaid. Free tax amendment If no payments are applied, figure the penalty on the amount on line 1a. Free tax amendment Aid for counting days. Free tax amendment    Table 4-1 provides a simple method for counting the number of days between a due date and a payment date. Free tax amendment Find the number for the date the payment was due by going across to the column of the month the payment was due and moving down the column to the due date. Free tax amendment In the same manner, find the number for the date the payment was made. Free tax amendment Subtract the due date “number” from the payment date “number. Free tax amendment ”   For example, if a payment was due on June 15 (61), but was not paid until September 1 (139), the payment was 78 (139 – 61) days late. Free tax amendment Table 4-1. Free tax amendment Calendar To Determine the Number of Days a Payment Is Late Instructions. Free tax amendment Use this table with Form 2210 if you are completing Part IV, Section B. Free tax amendment First, find the number for the payment due date by going across to the column of the month the payment was due and moving down the column to the due date. Free tax amendment Then, in the same manner, find the number for the date the payment was made. Free tax amendment Finally, subtract the due date number from the payment date number. Free tax amendment The result is the number of days the payment is late. Free tax amendment Example. Free tax amendment The payment due date is June 15 (61). Free tax amendment The payment was made on November 4 (203). Free tax amendment The payment is 142 days late (203 – 61). Free tax amendment Tax Year 2013 Day of 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 Month April May June July Aug. Free tax amendment Sept. Free tax amendment Oct. Free tax amendment Nov. Free tax amendment Dec. Free tax amendment Jan. Free tax amendment Feb. Free tax amendment Mar. Free tax amendment Apr. Free tax amendment 1   16 47 77 108 139 169 200 230 261 292 320 351 2   17 48 78 109 140 170 201 231 262 293 321 352 3   18 49 79 110 141 171 202 232 263 294 322 353 4   19 50 80 111 142 172 203 233 264 295 323 354 5   20 51 81 112 143 173 204 234 265 296 324 355 6   21 52 82 113 144 174 205 235 266 297 325 356 7   22 53 83 114 145 175 206 236 267 298 326 357 8   23 54 84 115 146 176 207 237 268 299 327 358 9   24 55 85 116 147 177 208 238 269 300 328 359 10   25 56 86 117 148 178 209 239 270 301 329 360 11   26 57 87 118 149 179 210 240 271 302 330 361 12   27 58 88 119 150 180 211 241 272 303 331 362 13   28 59 89 120 151 181 212 242 273 304 332 363 14   29 60 90 121 152 182 213 243 274 305 333 364 15 0 30 61 91 122 153 183 214 244 275 306 334 365 16 1 31 62 92 123 154 184 215 245 276 307 335   17 2 32 63 93 124 155 185 216 246 277 308 336   18 3 33 64 94 125 156 186 217 247 278 309 337   19 4 34 65 95 126 157 187 218 248 279 310 338   20 5 35 66 96 127 158 188 219 249 280 311 339   21 6 36 67 97 128 159 189 220 250 281 312 340   22 7 37 68 98 129 160 190 221 251 282 313 341   23 8 38 69 99 130 161 191 222 252 283 314 342   24 9 39 70 100 131 162 192 223 253 284 315 343   25 10 40 71 101 132 163 193 224 254 285 316 344   26 11 41 72 102 133 164 194 225 255 286 317 345   27 12 42 73 103 134 165 195 226 256 287 318 346   28 13 43 74 104 135 166 196 227 257 288 319 347   29 14 44 75 105 136 167 197 228 258 289   348   30 15 45 76 106 137 168 198 229 259 290   349   31   46   107 138   199   260 291   350   Annualized Income Installment Method (Schedule AI) If you did not receive your income evenly throughout the year (for example, your income from a shop you operated at a marina was much larger in the summer than it was during the rest of the year), you may be able to lower or eliminate your penalty by figuring your underpayment using the annualized income installment method. Free tax amendment Under this method, your required installment (Part IV, line 18) for one or more payment periods may be less than one-fourth of your required annual payment. Free tax amendment To figure your underpayment using this method, complete Form 2210, Schedule AI. Free tax amendment Schedule AI annualizes your tax at the end of each payment period based on your income, deductions, and other items relating to events that occurred from the beginning of the tax year through the end of the period. Free tax amendment If you use the annualized income installment method, you must check box C in Part II of Form 2210. Free tax amendment Also, you must attach Form 2210 and Schedule AI to your return. Free tax amendment If you use Schedule AI for any payment due date, you must use it for all payment due dates. Free tax amendment Completing Schedule AI. Free tax amendment   Follow the Form 2210 instructions to complete Schedule AI. Free tax amendment For each period shown on Schedule AI, figure your income and deductions based on your method of accounting. Free tax amendment If you use the cash method of accounting (used by most people), include all income actually or constructively received during the period and all deductions actually paid during the period. Free tax amendment Note. Free tax amendment Each period includes amounts from the previous period(s). Free tax amendment Period (a) includes items for January 1 through March 31. Free tax amendment Period (b) includes items for January 1 through May 31. Free tax amendment Period (c) includes items for January 1 through August 31. Free tax amendment Period (d) includes items for the entire year. Free tax amendment Farmers and Fishermen If you are a farmer or fisherman, the following special rules for underpayment of estimated tax apply to you. Free tax amendment The penalty for underpaying your 2013 estimated tax will not apply if you file your return and pay all the tax due by March 3, 2014. Free tax amendment If you are a fiscal year taxpayer, the penalty will not apply if you file your return and pay the tax due by the first day of the third month after the end of your tax year. Free tax amendment Any penalty you owe for underpaying your 2013 estimated tax will be figured from one payment due date, January 15, 2014. Free tax amendment The underpayment penalty for 2013 is figured on the difference between the amount of 2013 withholding plus estimated tax paid by the due date and the smaller of: 662/3% (rather than 90%) of your 2013 tax, or 100% of the tax shown on your 2012 return. Free tax amendment Even if these special rules apply to you, you will not owe the penalty if you meet either of the two conditions discussed under Exceptions . Free tax amendment See Who Must Pay Estimated Tax in chapter 2 for the definition of a farmer or fisherman who is eligible for these special rules. Free tax amendment Form 2210-F. Free tax amendment   Use Form 2210-F to figure any underpayment penalty. Free tax amendment Do not attach it to your return unless you check a box in Part I. Free tax amendment However, if none of the boxes apply to you and you owe a penalty, you do not need to attach Form 2210-F. Free tax amendment Enter the amount from line 16 on Form 1040, line 77 and add the penalty to any balance due on your return or subtract it from your refund. Free tax amendment Keep your filled-in Form 2210-F for your records. Free tax amendment    If none of the boxes on Form 2210-F apply to you and you owe a penalty, the IRS can figure your penalty and send you a bill. Free tax amendment Waiver of Penalty The IRS can waive the penalty for underpayment if either of the following applies. Free tax amendment You did not make a payment because of a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty. Free tax amendment You retired (after reaching age 62) or became disabled in 2012 or 2013 and both the following requirements are met. Free tax amendment You had a reasonable cause for not making the payment. Free tax amendment Your underpayment was not due to willful neglect. Free tax amendment How to request a waiver. Free tax amendment   To request a waiver, see the Instructions for Form 2210. Free tax amendment Farmers and fishermen. Free tax amendment   To request a waiver, see the Instructions for Form 2210-F. Free tax amendment Federally declared disaster. Free tax amendment   Certain estimated tax payment deadlines for taxpayers who reside or have a business in a federally declared disaster area are postponed for a period during and after the disaster. Free tax amendment During the processing of your tax return, the IRS automatically identifies taxpayers located in a covered disaster area (by county or parish) and applies the appropriate penalty relief. Free tax amendment Do not file Form 2210 or 2210-F if your underpayment was due to a federally declared disaster. Free tax amendment If you still owe a penalty after the automatic waiver is applied, we will send you a bill. Free tax amendment   Individuals, estates, and trusts not in a covered disaster area but whose books, records, or tax professionals' offices are in a covered area are also entitled to relief. Free tax amendment Also eligible are relief workers affiliated with a recognized government or charitable organization assisting in the relief activities in a covered disaster area. Free tax amendment If you meet either of these eligibility requirements, you must call the IRS disaster hotline at 1-866-562-5227 and identify yourself as eligible for this relief. Free tax amendment   Details on the applicable disaster postponement period can be found at IRS. Free tax amendment gov. Free tax amendment Enter Tax Relief in Disaster Situations. Free tax amendment Select the federally declared disaster that affected you. Free tax amendment    Worksheet 4-1. Free tax amendment 2013 Form 2210, Schedule AI—Line 12 Qualified Dividends and Capital Gain Tax Worksheet Note. Free tax amendment To figure the annualized entries for lines 2, 3, and 5 below, multiply the expected amount for the period by the  annualization amount on line 2 of Schedule AI for the same period. Free tax amendment                   1. Free tax amendment Enter line 11 of your Schedule AI, or line 3 from Worksheet 4-2 1. Free tax amendment       2. Free tax amendment Enter your annualized qualified dividends for the period 2. Free tax amendment           3. Free tax amendment Are you filing Schedule D?               □ Yes. Free tax amendment Enter the smaller of your annualized amount from line 15 or line 16 of Schedule D. Free tax amendment If either line 15 or line 16 is blank or a loss, enter -0-. Free tax amendment 3. Free tax amendment             □ No. Free tax amendment Enter your annualized capital gain distributions from Form 1040, line 13             4. Free tax amendment Add lines 2 and 3   4. Free tax amendment           5. Free tax amendment If you are claiming investment interest expense on Form 4952, enter your annualized amount from line 4g of that form. Free tax amendment Otherwise, enter -0-   5. Free tax amendment           6. Free tax amendment Subtract line 5 from line 4. Free tax amendment If zero or less, enter -0- 6. Free tax amendment       7. Free tax amendment Subtract line 6 from line 1. Free tax amendment If zero or less, enter -0- 7. Free tax amendment       8. Free tax amendment Enter: $36,900 if single or married filing separately, $73,800 if married filing jointly or qualifying widow(er), $49,400 if head of household. Free tax amendment 8. Free tax amendment       9. Free tax amendment Enter the smaller of line 1 or line 8 9. Free tax amendment       10. Free tax amendment Enter the smaller of line 7 or line 9 10. Free tax amendment       11. Free tax amendment Subtract line 10 from line 9. Free tax amendment This amount is taxed at 0% 11. Free tax amendment       12. Free tax amendment Enter the smaller of line 1 or line 6 12. Free tax amendment       13. Free tax amendment Enter the amount from line 11 13. Free tax amendment       14. Free tax amendment Subtract line 13 from line 12 14. Free tax amendment       15. Free tax amendment Multiply line 14 by 15% (. Free tax amendment 15) 15. Free tax amendment   16. Free tax amendment Figure the tax on the amount on line 7. Free tax amendment If the amount on line 7 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Free tax amendment If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 16. Free tax amendment   17. Free tax amendment Add lines 15 and 16 17. Free tax amendment   18. Free tax amendment Figure the tax on the amount on line 1. Free tax amendment If the amount on line 1 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Free tax amendment If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 18. Free tax amendment   19. Free tax amendment Tax on all taxable income. Free tax amendment Enter the smaller of line 17 or line 18. Free tax amendment Also enter this amount on line 12 of Schedule AI in the appropriate column. Free tax amendment However, if you are using this worksheet to figure the tax on the amount on line 3 of Worksheet 4-2, enter the amount from line 19 on Worksheet 4-2, line 4 19. Free tax amendment   Worksheet 4-2. Free tax amendment 2013 Form 2210, Schedule AI—Line 12 Foreign Earned Income Tax Worksheet Before you begin:If Schedule AI, line 11, is zero for the period, do not complete this worksheet. Free tax amendment             1. Free tax amendment Enter the amount from line 11 of Schedule AI for the period 1. Free tax amendment   2. Free tax amendment Enter the annualized amount* of foreign earned income and housing amount excluded or deducted (from  Form 2555, lines 45 and 50, or Form 2555-EZ, line 18) in figuring the amount entered for the period on line 1  of Schedule AI 2. Free tax amendment   3. Free tax amendment Add lines 1 and 2 3. Free tax amendment   4. Free tax amendment Tax on the amount on line 3. Free tax amendment Use the Tax Table, Tax Computation Worksheet, Form 8615**, Qualified Dividends and Capital Gain Tax Worksheet***, or Schedule D Tax Worksheet***, whichever applies. Free tax amendment See the 2013 Instructions for Form 1040, line 44, to find out which tax computation method to use. Free tax amendment (Note. Free tax amendment You do not have to use the same method for each period on Schedule AI. Free tax amendment ) 4. Free tax amendment   5. Free tax amendment Tax on the amount on line 2. Free tax amendment If the amount on line 2 is less than $100,000, use the Tax Table in the 2013 Form 1040 instructions to figure this tax. Free tax amendment If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet in the 2013 Form 1040 instructions 5. Free tax amendment   6. Free tax amendment Subtract line 5 from line 4. Free tax amendment Enter the result here and on line 12 of Schedule AI. Free tax amendment If zero or less,  enter -0- 6. Free tax amendment             * To figure the annualized amount for line 2, multiply the exclusion or deduction for the period by the annualization amount on line 2 of Schedule AI for the same period. Free tax amendment     ** If you use Form 8615 to figure the tax on line 4 above, enter the amount from line 3 above on line 4 of Form 8615. Free tax amendment If the child's parent files Form 2555 or 2555-EZ, enter the amounts from lines 3 and 4 of the parent's Foreign Earned Income Tax Worksheet on lines 6 and 10, respectively, of Form 8615. Free tax amendment Complete the rest of Form 8615 according to its instructions. Free tax amendment Then complete lines 5 and 6 above. Free tax amendment     *** Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet (or Worksheet 4-1 in this chapter) or the Schedule D Tax Worksheet, whichever worksheet you use to figure the tax on line 4 above. Free tax amendment Complete that worksheet through line 6 (line 10 if you use the Schedule D Tax Worksheet). Free tax amendment Next, determine if you have a capital gain excess. Free tax amendment     Figuring capital gain excess. Free tax amendment To find out if you have a capital gain excess for the appropriate period, subtract line 11 of Schedule AI from line 6 of Worksheet 4-1 or your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). Free tax amendment If the result is more than zero, that amount is your capital gain excess. Free tax amendment     No capital gain excess. Free tax amendment If you do not have a capital gain excess, complete the rest of Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or the Schedule D Tax Worksheet according to the worksheet's instructions. Free tax amendment Then complete lines 5 and 6 above. Free tax amendment     Capital gain excess. Free tax amendment If you have a capital gain excess, complete a second Worksheet 4-1, Qualified Dividends and Capital Gain Tax Worksheet, or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Free tax amendment Then complete lines 5 and 6 above. Free tax amendment     Make the modifications below only for purposes of filling out Worksheet 4-2 above. Free tax amendment     a. Free tax amendment Reduce (but not below zero) the amount you otherwise would enter on line 3 of your Worksheet 4-1, line 3 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 9 of your Schedule D Tax Worksheet by your capital gain excess. Free tax amendment     b. Free tax amendment Reduce (but not below zero) the amount you otherwise would enter on line 2 of your Worksheet 4-1, line 2 of your Qualified Dividends and Capital Gain Tax Worksheet, or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (a) above. Free tax amendment     c. Free tax amendment Reduce (but not below zero) the amount on your Schedule D (Form 1040), line 18, by your capital gain excess. Free tax amendment     d. Free tax amendment Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the 2013 Instructions for Schedule D (Form 1040). Free tax amendment   Prev  Up  Next   Home   More Online Publications
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Optional expedited process for section 501 (c)(4) applications (120 days old as of May 28, 2013)

An optional expedited process is available for certain Section 501(c)(4) applicants. If your organization’s application has been pending for more than 120 days as of May 28, 2013, and your organization’s activities involve possible political campaign intervention or issue advocacy, you may receive a Letter 5228, Application Notification of Expedited 501(c)(4) Option.

As of December 23, 2013, this optional, expedited processing is being offered to all Section 501(c)(4) applicants whose applications indicate that the organization may be involved in political campaign intervention or in providing private benefit to a political party and that otherwise do not present any issue with regard to exempt status.

This webpage is for organizations who were eligible for the original optional expedited process. If you are eligible for the expanded optional expedited process offered on December 23, 2013, see additional information.

If you receive Letter 5228

You will be able to self-certify your organization if you represent to the following:

  • Your organization devotes 60% or more of both spending and time to activities that promote social welfare as defined by Section 501(c)(4).
  • Your organization devotes less than 40% of both spending and time to political campaign intervention.
  • Your organization ensures the above thresholds apply for past, current and future activities.

Self-certify your organization

Please review Letter 5228 and follow the instructions. Sign and return pages 4-5 within 45 days from the date of your letter. IRS will send you a favorable determination letter within two weeks after we receive your signed representations.

If you think you should have received a letter

If you did not receive Letter 5228 but believe your organization is eligible for the expedited 501(c)(4) option because your case was older than 120 days old as of May 28, 2013 and involved the issues discussed above, you should make sure you meet the eligibility criteria listed in Letter 5228, then call 877-829-5500.

Related Item

Expanded Optional Expedited Approval Process for 501(c)(4)s

Page Last Reviewed or Updated: 03-Jan-2014

The Free Tax Amendment

Free tax amendment 5. Free tax amendment   Recordkeeping Table of Contents How To Prove ExpensesWhat Are Adequate Records? What If I Have Incomplete Records? Separating and Combining Expenses How Long To Keep Records and Receipts Examples of Records If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense. Free tax amendment This chapter discusses the records you need to keep to prove these expenses. Free tax amendment If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. Free tax amendment You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan. Free tax amendment These plans are discussed in chapter 6 under Reimbursements . Free tax amendment How To Prove Expenses Table 5-1 is a summary of records you need to prove each expense discussed in this publication. Free tax amendment You must be able to prove the elements listed across the top portion of the chart. Free tax amendment You prove them by having the information and receipts (where needed) for the expenses listed in the first column. Free tax amendment You cannot deduct amounts that you approximate or estimate. Free tax amendment You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. Free tax amendment You must generally prepare a written record for it to be considered adequate. Free tax amendment This is because written evidence is more reliable than oral evidence alone. Free tax amendment However, if you prepare a record on a computer, it is considered an adequate record. Free tax amendment What Are Adequate Records? You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. Free tax amendment You should also keep documentary evidence that, together with your record, will support each element of an expense. Free tax amendment Documentary evidence. Free tax amendment   You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. Free tax amendment Exception. Free tax amendment   Documentary evidence is not needed if any of the following conditions apply. Free tax amendment You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. Free tax amendment ( Accountable plans and per diem allowances are discussed in chapter 6. Free tax amendment ) Your expense, other than lodging, is less than $75. Free tax amendment You have a transportation expense for which a receipt is not readily available. Free tax amendment Adequate evidence. Free tax amendment   Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. Free tax amendment   For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information. Free tax amendment The name and location of the hotel. Free tax amendment The dates you stayed there. Free tax amendment Separate amounts for charges such as lodging, meals, and telephone calls. Free tax amendment   A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. Free tax amendment The name and location of the restaurant. Free tax amendment The number of people served. Free tax amendment The date and amount of the expense. Free tax amendment If a charge is made for items other than food and beverages, the receipt must show that this is the case. Free tax amendment Canceled check. Free tax amendment   A canceled check, together with a bill from the payee, ordinarily establishes the cost. Free tax amendment However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose. Free tax amendment Duplicate information. Free tax amendment   You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner. Free tax amendment   You do not have to record amounts your employer pays directly for any ticket or other travel item. Free tax amendment However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend. Free tax amendment Timely-kept records. Free tax amendment   You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. Free tax amendment A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall. Free tax amendment   You do not need to write down the elements of every expense on the day of the expense. Free tax amendment If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record. Free tax amendment   If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. Free tax amendment This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record. Free tax amendment Proving business purpose. Free tax amendment   You must generally provide a written statement of the business purpose of an expense. Free tax amendment However, the degree of proof varies according to the circumstances in each case. Free tax amendment If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation. Free tax amendment Example. Free tax amendment If you are a sales representative who calls on customers on an established sales route, you do not have to give a written explanation of the business purpose for traveling that route. Free tax amendment You can satisfy the requirements by recording the length of the delivery route once, the date of each trip at or near the time of the trips, and the total miles you drove the car during the tax year. Free tax amendment You could also establish the date of each trip with a receipt, record of delivery, or other documentary evidence. Free tax amendment Confidential information. Free tax amendment   You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. Free tax amendment However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. Free tax amendment What If I Have Incomplete Records? If you do not have complete records to prove an element of an expense, then you must prove the element with: Your own written or oral statement containing specific information about the element, and Other supporting evidence that is sufficient to establish the element. Free tax amendment If the element is the description of a gift, or the cost, time, place, or date of an expense, the supporting evidence must be either direct evidence or documentary evidence. Free tax amendment Direct evidence can be written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element. Free tax amendment Documentary evidence can be receipts, paid bills, or similar evidence. Free tax amendment If the element is either the business relationship of your guests or the business purpose of the amount spent, the supporting evidence can be circumstantial rather than direct. Free tax amendment For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. Free tax amendment Invoices of deliveries establish when you used the car for business. Free tax amendment Table 5-1. Free tax amendment How To Prove Certain Business Expenses IF you have expenses for . Free tax amendment . Free tax amendment THEN you must keep records that show details of the following elements . Free tax amendment . Free tax amendment . Free tax amendment   Amount Time Place or  Description Business Purpose Business Relationship Travel Cost of each separate expense for travel, lodging, and meals. Free tax amendment Incidental expenses may be totaled in reasonable categories such as taxis, fees and tips, etc. Free tax amendment Dates you left and returned for each trip and number of days spent on business. Free tax amendment Destination or area of your travel (name of city, town, or other designation). Free tax amendment Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. Free tax amendment    Relationship: N/A Entertainment Cost of each separate expense. Free tax amendment Incidental expenses such as taxis, telephones, etc. Free tax amendment , may be totaled on a daily basis. Free tax amendment Date of entertainment. Free tax amendment (Also see Business Purpose. Free tax amendment ) Name and address or location of place of entertainment. Free tax amendment Type of entertainment if not otherwise apparent. Free tax amendment (Also see Business Purpose. Free tax amendment ) Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. Free tax amendment  For entertainment, the nature of the business discussion or activity. Free tax amendment If the entertainment was directly before or after a business discussion: the date, place, nature, and duration of the business discussion, and the identities of the persons who took part in both the business discussion and the entertainment activity. Free tax amendment    Relationship: Occupations or other information (such as names, titles, or other designations) about the recipients that shows their business relationship to you. Free tax amendment  For entertainment, you must also prove that you or your employee was present if the entertainment was a business meal. Free tax amendment Gifts Cost of the gift. Free tax amendment Date of the gift. Free tax amendment Description of the gift. Free tax amendment   Transportation Cost of each separate expense. Free tax amendment For car expenses, the cost of the car and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. Free tax amendment Date of the expense. Free tax amendment For car expenses, the date of the use of the car. Free tax amendment Your business destination. Free tax amendment Purpose: Business purpose for the expense. Free tax amendment    Relationship: N/A Sampling. Free tax amendment   You can keep an adequate record for parts of a tax year and use that record to prove the amount of business or investment use for the entire year. Free tax amendment You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year. Free tax amendment Example. Free tax amendment You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. Free tax amendment There is no other business use of the car, but you and your family use the car for personal purposes. Free tax amendment You keep adequate records during the first week of each month that show that 75% of the use of the car is for business. Free tax amendment Invoices and bills show that your business use continues at the same rate during the later weeks of each month. Free tax amendment Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. Free tax amendment Exceptional circumstances. Free tax amendment   You can satisfy the substantiation requirements with other evidence if, because of the nature of the situation in which an expense is made, you cannot get a receipt. Free tax amendment This applies if all the following are true. Free tax amendment You were unable to obtain evidence for an element of the expense or use that completely satisfies the requirements explained earlier under What Are Adequate Records . Free tax amendment You are unable to obtain evidence for an element that completely satisfies the two rules listed earlier under What If I Have Incomplete Records . Free tax amendment You have presented other evidence for the element that is the best proof possible under the circumstances. Free tax amendment Destroyed records. Free tax amendment   If you cannot produce a receipt because of reasons beyond your control, you can prove a deduction by reconstructing your records or expenses. Free tax amendment Reasons beyond your control include fire, flood, and other casualties. Free tax amendment    Table 5-2. Free tax amendment Daily Business Mileage and Expense Log Name:       Odometer Readings Expenses Date Destination  (City, Town, or Area) Business Purpose Start Stop Miles  this trip Type  (Gas, oil, tolls, etc. Free tax amendment ) Amount                                                                                                                   Weekly  Total             Total Year-to-Date             Separating and Combining Expenses This section explains when expenses must be kept separate and when expenses can be combined. Free tax amendment Separating expenses. Free tax amendment   Each separate payment is generally considered a separate expense. Free tax amendment For example, if you entertain a customer or client at dinner and then go to the theater, the dinner expense and the cost of the theater tickets are two separate expenses. Free tax amendment You must record them separately in your records. Free tax amendment Season or series tickets. Free tax amendment   If you buy season or series tickets for business use, you must treat each ticket in the series as a separate item. Free tax amendment To determine the cost of individual tickets, divide the total cost (but not more than face value) by the number of games or performances in the series. Free tax amendment You must keep records to show whether you use each ticket as a gift or entertainment. Free tax amendment Also, you must be able to prove the cost of nonluxury box seat tickets if you rent a skybox or other private luxury box for more than one event. Free tax amendment See Entertainment tickets in chapter 2. Free tax amendment Combining items. Free tax amendment   You can make one daily entry in your record for reasonable categories of expenses. Free tax amendment Examples are taxi fares, telephone calls, or other incidental travel costs. Free tax amendment Meals should be in a separate category. Free tax amendment You can include tips for meal-related services with the costs of the meals. Free tax amendment   Expenses of a similar nature occurring during the course of a single event are considered a single expense. Free tax amendment For example, if during entertainment at a cocktail lounge, you pay separately for each serving of refreshments, the total expense for the refreshments is treated as a single expense. Free tax amendment Car expenses. Free tax amendment   You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. Free tax amendment Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use. Free tax amendment Example. Free tax amendment You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. Free tax amendment You can account for these using a single record of miles driven. Free tax amendment Gift expenses. Free tax amendment   You do not always have to record the name of each recipient of a gift. Free tax amendment A general listing will be enough if it is evident that you are not trying to avoid the $25 annual limit on the amount you can deduct for gifts to any one person. Free tax amendment For example, if you buy a large number of tickets to local high school basketball games and give one or two tickets to each of many customers, it is usually enough to record a general description of the recipients. Free tax amendment Allocating total cost. Free tax amendment   If you can prove the total cost of travel or entertainment but you cannot prove how much it cost for each person who participated in the event, you may have to allocate the total cost among you and your guests on a pro rata basis. Free tax amendment To do so, you must establish the number of persons who participated in the event. Free tax amendment   An allocation would be needed, for example, if you did not have a business relationship with all of your guests. Free tax amendment See Allocating between business and nonbusiness in chapter 2. Free tax amendment If your return is examined. Free tax amendment    If your return is examined, you may have to provide additional information to the IRS. Free tax amendment This information could be needed to clarify or to establish the accuracy or reliability of information contained in your records, statements, testimony, or documentary evidence before a deduction is allowed. Free tax amendment    THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Table 5-3. Free tax amendment Weekly Traveling Expense and Entertainment Record From: To: Name: Expenses Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total 1. Free tax amendment Travel Expenses: Airlines                                 Excess Baggage                                 Bus – Train                                 Cab and Limousine                                 Tips                                 Porter                                 2. Free tax amendment Meals and Lodging:  Breakfast                                 Lunch                                 Dinner                                 Hotel and Motel  (Detail in Schedule B)                                 3. Free tax amendment Entertainment  (Detail in Schedule C)                                 4. Free tax amendment Other Expenses:  Postage                                 Telephone & Telegraph                                 Stationery & Printing                                 Stenographer                                 Sample Room                                 Advertising                                 Assistant(s)                                 Trade Shows                                 5. Free tax amendment Car Expenses: (List all car expenses - the division between business and personal expenses may be made at the end of the year. Free tax amendment ) (Detail mileage in Schedule A. Free tax amendment ) Gas, oil, lube, wash                                 Repairs, parts                                 Tires, supplies                                 Parking fees, tolls                                 6. Free tax amendment Other (Identify)                                 Total                                 Note: Attach receipted bills for (1) ALL lodging and (2) any other expenses of $75. Free tax amendment 00 or more. Free tax amendment Schedule A – Car Mileage: End                 Start                 Total                 Business Mileage                 Schedule B – Lodging Hotel or Motel Name                 City                 Schedule C – Entertainment Date Item Place Amount Business Purpose Business Relationship                                             WEEKLY REIMBURSEMENTS:     Travel and transportation expenses     Other reimbursements     TOTAL   How Long To Keep Records and Receipts You must keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Free tax amendment Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. Free tax amendment A return filed early is considered filed on the due date. Free tax amendment For a more complete explanation of how long to keep records, see Publication 583, Starting a Business and Keeping Records. Free tax amendment You must keep records of the business use of your car for each year of the recovery period. Free tax amendment See More-than-50%-use test in chapter 4 under Depreciation Deduction. Free tax amendment Reimbursed for expenses. Free tax amendment   Employees who give their records and documentation to their employers and are reimbursed for their expenses generally do not have to keep copies of this information. Free tax amendment However, you may have to prove your expenses if any of the following conditions apply. Free tax amendment You claim deductions for expenses that are more than reimbursements. Free tax amendment Your expenses are reimbursed under a nonaccountable plan. Free tax amendment Your employer does not use adequate accounting procedures to verify expense accounts. Free tax amendment You are related to your employer as defined under Per Diem and Car Allowances , in chapter 6. Free tax amendment Reimbursements , adequate accounting , and nonaccountable plans are discussed in chapter 6. Free tax amendment Examples of Records Table 5-2 and Table 5-3 are examples of worksheets which can be used for tracking business expenses. Free tax amendment Prev  Up  Next   Home   More Online Publications