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Free tax efile Publication 536 - Main Content Table of Contents NOL Steps How To Figure an NOLNonbusiness deductions (line 6). Free tax efile Nonbusiness income (line 7). Free tax efile Nonbusiness capital losses. Free tax efile Business capital losses. Free tax efile Illustrated Form 1045, Schedule A When To Use an NOLExceptions to 2-Year Carryback Rule Waiving the Carryback Period How To Carry an NOL Back or Forward How To Claim an NOL DeductionDeducting a Carryback Deducting a Carryforward Change in Marital Status Change in Filing Status Illustrated Form 1045 How To Figure an NOL CarryoverIllustrated Form 1045, Schedule B NOL Carryover From 2013 to 2014Worksheet Instructions How To Get Tax HelpLow Income Taxpayer Clinics NOL Steps Follow Steps 1 through 5 to figure and use your NOL. Free tax efile Step 1. Free tax efile   Complete your tax return for the year. Free tax efile You may have an NOL if a negative figure appears on the line below: Individuals — Form 1040, line 41, or Form 1040NR, line 39. Free tax efile Estates and trusts — Form 1041, line 22. Free tax efile   If the amount on that line is not negative, stop here — you do not have an NOL. Free tax efile Step 2. Free tax efile   Determine whether you have an NOL and its amount. Free tax efile See How To Figure an NOL , later. Free tax efile If you do not have an NOL, stop here. Free tax efile Step 3. Free tax efile   Decide whether to carry the NOL back to a past year or to waive the carryback period and instead carry the NOL forward to a future year. Free tax efile See When To Use an NOL , later. Free tax efile Step 4. Free tax efile   Deduct the NOL in the carryback or carryforward year. Free tax efile See How To Claim an NOL Deduction , later. Free tax efile If your NOL deduction is equal to or less than your taxable income without the deduction, stop here — you have used up your NOL. Free tax efile Step 5. Free tax efile   Determine the amount of your unused NOL. Free tax efile See How To Figure an NOL Carryover , later. Free tax efile Carry over the unused NOL to the next carryback or carryforward year and begin again at Step 4. Free tax efile Note. Free tax efile   If your NOL deduction includes more than one NOL amount, apply Step 5 separately to each NOL amount, starting with the amount from the earliest year. Free tax efile How To Figure an NOL If your deductions for the year are more than your income for the year, you may have an NOL. Free tax efile There are rules that limit what you can deduct when figuring an NOL. Free tax efile In general, the following items are not allowed when figuring an NOL. Free tax efile Any deduction for personal exemptions. Free tax efile Capital losses in excess of capital gains. Free tax efile The section 1202 exclusion of the gain from the sale or exchange of qualified small business stock. Free tax efile Nonbusiness deductions in excess of nonbusiness income. Free tax efile The net operating loss deduction. Free tax efile The domestic production activities deduction. Free tax efile Form 1045, Schedule A. Free tax efile   Use Form 1045, Schedule A, to figure an NOL. Free tax efile The following discussion explains Schedule A and includes an illustrated example. Free tax efile   First, complete Form 1045, Schedule A, line 1, using amounts from your return. Free tax efile If line 1 is a negative amount, you may have an NOL. Free tax efile   Next, complete the rest of Form 1045, Schedule A, to figure your NOL. Free tax efile Nonbusiness deductions (line 6). Free tax efile   Enter on line 6 deductions that are not connected to your trade or business or your employment. Free tax efile Examples of deductions not related to your trade or business are: Alimony paid, Deductions for contributions to an IRA or a self-employed retirement plan, Health savings account deduction, Archer medical savings account deduction, Most itemized deductions (except for casualty and theft losses, state income tax on trade and business income, and any employee business expenses), and The standard deduction. Free tax efile   Do not include on line 6 the deduction for personal exemptions for you, your spouse, or your dependents. Free tax efile   Do not enter business deductions on line 6. Free tax efile These are deductions that are connected to your trade or business. Free tax efile They include the following. Free tax efile State income tax on income attributable to trade or business (including wages, salary, and unemployment compensation). Free tax efile Moving expenses. Free tax efile Educator expenses. Free tax efile The deduction for the deductible part of self-employed health insurance. Free tax efile Domestic production activities deduction. Free tax efile Rental losses. Free tax efile Loss on the sale or exchange of business real estate or depreciable property. Free tax efile Your share of a business loss from a partnership or an S corporation. Free tax efile Ordinary loss on the sale or exchange of stock in a small business corporation or a small business investment company. Free tax efile If you itemize your deductions, casualty and theft losses (even if they involve nonbusiness property) and employee business expenses (such as union dues, uniforms, tools, education expenses, and travel and transportation expenses). Free tax efile Loss on the sale of accounts receivable (if you use an accrual method of accounting). Free tax efile Interest and litigation expenses on state and federal income taxes related to your business. Free tax efile Unrecovered investment in a pension or annuity claimed on a decedent's final return. Free tax efile Payment by a federal employee to buy back sick leave used in an earlier year. Free tax efile Nonbusiness income (line 7). Free tax efile   Enter on line 7 only income that is not related to your trade or business or your employment. Free tax efile For example, enter your annuity income, dividends, and interest on investments. Free tax efile Also, include your share of nonbusiness income from partnerships and S corporations. Free tax efile   Do not include on line 7 the income you receive from your trade or business or your employment. Free tax efile This includes salaries and wages, self-employment income, unemployment compensation included in your gross income, and your share of business income from partnerships and S corporations. Free tax efile Also, do not include rental income or ordinary gain from the sale or other disposition of business real estate or depreciable business property. Free tax efile Adjustment for section 1202 exclusion (line 17). Free tax efile   Enter on line 17 any gain you excluded under section 1202 on the sale or exchange of qualified small business stock. Free tax efile Adjustments for capital losses (lines 19–22). Free tax efile   The amount deductible for capital losses is limited based on whether the losses are business capital losses or nonbusiness capital losses. Free tax efile Nonbusiness capital losses. Free tax efile   You can deduct your nonbusiness capital losses (line 2) only up to the amount of your nonbusiness capital gains without regard to any section 1202 exclusion (line 3). Free tax efile If your nonbusiness capital losses are more than your nonbusiness capital gains without regard to any section 1202 exclusion, you cannot deduct the excess. Free tax efile Business capital losses. Free tax efile   You can deduct your business capital losses (line 11) only up to the total of: Your nonbusiness capital gains that are more than the total of your nonbusiness capital losses and excess nonbusiness deductions (line 10), and Your total business capital gains without regard to any section 1202 exclusion (line 12). Free tax efile Domestic production activities deduction (line 23). Free tax efile   You cannot take the domestic production activities deduction when figuring your NOL. Free tax efile Enter on line 23 any domestic production activities deduction claimed on your return. Free tax efile NOLs from other years (line 24). Free tax efile   You cannot deduct any NOL carryovers or carrybacks from other years. Free tax efile Enter the total amount of your NOL deduction for losses from other years. Free tax efile Illustrated Form 1045, Schedule A The following example illustrates how to figure an NOL. Free tax efile It includes filled-in pages 1 and 2 of Form 1040 and Form 1045, Schedule A. Free tax efile Example. Free tax efile Glenn Johnson is in the retail record business. Free tax efile He is single and has the following income and deductions on his Form 1040 for 2013. Free tax efile See the illustrated Form 1040 , later. Free tax efile INCOME   Wages from part-time job $1,225 Interest on savings 425 Net long-term capital gain on sale of real estate used in business 2,000 Glenn's total income $3,650 DEDUCTIONS   Net loss from business (gross income of $67,000 minus expenses of $72,000) $5,000 Net short-term capital loss on sale of stock 1,000 Standard deduction 6,100 Personal exemption 3,900 Glenn's total deductions $16,000 Glenn's deductions exceed his income by $12,350 ($16,000 − $3,650). Free tax efile However, to figure whether he has an NOL, certain deductions are not allowed. Free tax efile He uses Form 1045, Schedule A, to figure his NOL. Free tax efile See the Illustrated Form 1045, Schedule A , later. Free tax efile The following items are not allowed on Form 1045, Schedule A. Free tax efile Nonbusiness net short-term capital loss $1,000 Nonbusiness deductions (standard deduction, $6,100) minus nonbusiness income (interest, $425) 5,675 Deduction for personal exemption 3,900 Total adjustments to net loss $10,575     Therefore, Glenn's NOL for 2013 is figured as follows: Glenn's total 2013 income $3,650 Less:     Glenn's original 2013 total deductions $16,000   Reduced by the disallowed items − 10,575 − 5,425 Glenn's NOL for 2013 $1,775 This image is too large to be displayed in the current screen. Free tax efile Please click the link to view the image. Free tax efile Form 1040, page 1 This image is too large to be displayed in the current screen. Free tax efile Please click the link to view the image. Free tax efile Form 1040, page 2 This image is too large to be displayed in the current screen. Free tax efile Please click the link to view the image. Free tax efile Form 1045, page 2 When To Use an NOL Generally, if you have an NOL for a tax year ending in 2013, you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL for up to 20 years after the NOL year (the carryforward period). Free tax efile You can, however, choose not to carry back an NOL and only carry it forward. Free tax efile See Waiving the Carryback Period , later. Free tax efile You cannot deduct any part of the NOL remaining after the 20-year carryforward period. Free tax efile NOL year. Free tax efile   This is the year in which the NOL occurred. Free tax efile Exceptions to 2-Year Carryback Rule Eligible losses, farming losses, qualified disaster losses, and specified liability losses, all defined next, qualify for longer carryback periods. Free tax efile Eligible loss. Free tax efile   The carryback period for eligible losses is 3 years. Free tax efile Only the eligible loss portion of the NOL can be carried back 3 years. Free tax efile An eligible loss is any part of an NOL that: Is from a casualty or theft, or Is attributable to a federally declared disaster for a qualified small business or certain qualified farming businesses. Free tax efile Qualified small business. Free tax efile   A qualified small business is a sole proprietorship or a partnership that has average annual gross receipts (reduced by returns and allowances) of $5 million or less during the 3-year period ending with the tax year of the NOL. Free tax efile If the business did not exist for this entire 3-year period, use the period the business was in existence. Free tax efile   An eligible loss does not include a farming loss or a qualified disaster loss. Free tax efile Farming loss. Free tax efile   The carryback period for a farming loss is 5 years. Free tax efile Only the farming loss portion of the NOL can be carried back 5 years. Free tax efile A farming loss is the smaller of: The amount that would be the NOL for the tax year if only income and deductions attributable to farming businesses were taken into account, or The NOL for the tax year. Free tax efile Farming business. Free tax efile   A farming business is a trade or business involving cultivation of land or the raising or harvesting of any agricultural or horticultural commodity. Free tax efile A farming business can include operating a nursery or sod farm or raising or harvesting most ornamental trees or trees bearing fruit, nuts, or other crops. Free tax efile The raising, shearing, feeding, caring for, training, and management of animals is also considered a farming business. Free tax efile   A farming business does not include contract harvesting of an agricultural or horticultural commodity grown or raised by someone else. Free tax efile It also does not include a business in which you merely buy or sell plants or animals grown or raised entirely by someone else. Free tax efile Waiving the 5-year carryback. Free tax efile   You can choose to figure the carryback period for a farming loss without regard to the special 5-year carryback rule. Free tax efile To make this choice for 2013, attach to your 2013 income tax return filed by the due date (including extensions) a statement that you are choosing to treat any 2013 farming losses without regard to the special 5-year carryback rule. Free tax efile If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months after the due date of the return (excluding extensions). Free tax efile Attach an election statement to your amended return, and write “Filed pursuant to section 301. Free tax efile 9100-2” at the top of the statement. Free tax efile Once made, this choice is irrevocable. Free tax efile Qualified disaster loss. Free tax efile   The carryback period for a qualified disaster loss is 5 years. Free tax efile Only the qualified disaster loss portion of the NOL can be carried back 5 years. Free tax efile A qualified disaster loss is the smaller of: The sum of: Any losses attributable to a federally declared disaster and occurring before January 1, 2010, in the disaster area, plus Any allowable qualified disaster expenses (even if you did not choose to treat those expenses as deductions in the current year), or The NOL for the tax year. Free tax efile Qualified disaster expenses. Free tax efile   A qualified disaster expense is any capital expense paid or incurred in connection with a trade or business or with business-related property which is: For the abatement or control of hazardous substances that were released as a result of a federally declared disaster occurring before January 1, 2010, For the removal of debris from, or the demolition of structures on, real property which is business-related property damaged or destroyed as a result of a federally declared disaster occurring before January 1, 2010, or For the repair of business-related property damaged as a result of a federally declared disaster occurring before January 1, 2010. Free tax efile Business-related property is property held for use in a trade or business, property held for the production of income, or inventory property. Free tax efile Note. Free tax efile Section 198A allows taxpayers to treat certain capital expenses (qualified disaster expenses) as deductions in the year the expenses were paid or incurred. Free tax efile Excluded losses. Free tax efile   A qualified disaster loss does not include any losses from property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store for which the principal business is the sale of alcoholic beverages for consumption off premises. Free tax efile   A qualified disaster loss also does not include any losses from any gambling or animal racing property. Free tax efile Gambling or animal racing property is any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and the portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. Free tax efile Specified liability loss. Free tax efile   The carryback period for a specified liability loss is 10 years. Free tax efile Only the specified liability loss portion of the NOL can be carried back 10 years. Free tax efile Generally, a specified liability loss is a loss arising from: Product liability and expenses incurred in the investigation or settlement of, or opposition to, product liability claims, or An act (or failure to act) that occurred at least 3 years before the beginning of the loss year and resulted in a liability under a federal or state law requiring: Reclamation of land, Dismantling of a drilling platform, Remediation of environmental contamination, or Payment under any workers compensation act. Free tax efile   Any loss from a liability arising from (1) through (4) above can be taken into account as a specified liability loss only if you used an accrual method of accounting throughout the period in which the act (or failure to act) occurred. Free tax efile For details, see section 172(f). Free tax efile Waiving the 10-year carryback. Free tax efile   You can choose to figure the carryback period for a specified liability loss without regard to the special 10-year carryback rule. Free tax efile To make this choice for 2013 attach to your 2013 income tax return filed by the due date (including extensions) a statement that you are choosing to treat any 2013 specified liability losses without regard to the special 10-year carryback rule. Free tax efile If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months after the due date of the return (excluding extensions). Free tax efile Attach a statement to your amended return and write “Filed pursuant to section 301. Free tax efile 9100-2” at the top of the statement. Free tax efile Once made, this choice is irrevocable. Free tax efile Waiving the Carryback Period You can choose not to carry back your NOL. Free tax efile If you make this choice, then you can use your NOL only in the 20-year carryforward period. Free tax efile (This choice means you also choose not to carry back any alternative tax NOL. Free tax efile ) To make this choice, attach a statement to your original return filed by the due date (including extensions) for the NOL year. Free tax efile This statement must show that you are choosing to waive the carryback period under section 172(b)(3). Free tax efile If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months of the due date of the return (excluding extensions). Free tax efile Attach a statement to your amended return, and write “Filed pursuant to section 301. Free tax efile 9100-2” at the top of the statement. Free tax efile Once you choose to waive the carryback period, it generally is irrevocable. Free tax efile If you choose to waive the carryback period for more than one NOL, you must make a separate choice and attach a separate statement for each NOL year. Free tax efile If you do not file this statement on time, you cannot waive the carryback period. Free tax efile How To Carry an NOL Back or Forward If you choose to carry back the NOL, you must first carry the entire NOL to the earliest carryback year. Free tax efile If your NOL is not used up, you can carry the rest to the next earliest carryback year, and so on. Free tax efile If you waive the carryback period or do not use up the NOL in the carryback period, carry forward what remains of the NOL to the 20 tax years following the NOL year. Free tax efile Start by carrying it to the first tax year after the NOL year. Free tax efile If you do not use it up, carry the unused part to the next year. Free tax efile Continue to carry any unused part of the NOL forward until the NOL is used up or you complete the 20-year carryforward period. Free tax efile Example 1. Free tax efile You started your business as a sole proprietor in 2013 and had a $42,000 NOL for the year. Free tax efile No part of the NOL qualifies for the 3-year, 5-year, or 10-year carryback. Free tax efile You begin using your NOL in 2011, the second year before the NOL year, as shown in the following chart. Free tax efile Year   Carryback/  Carryover Unused  Loss 2011 $42,000 $40,000 2012 40,000 37,000 2013 (NOL year)     2014 37,000 31,500 2015 31,500 22,500 2016 22,500 12,700 2017 12,700 4,000 2018 4,000 -0- If your loss were larger, you could carry it forward until the year 2033. Free tax efile If you still had an unused 2013 carryforward after the year 2033, you would not be allowed to deduct it. Free tax efile Example 2. Free tax efile Assume the same facts as in Example 1 , except that $4,000 of the NOL is attributable to a casualty loss and this loss qualifies for a 3-year carryback period. Free tax efile You begin using the $4,000 in 2010. Free tax efile As shown in the following chart, $3,000 of this NOL is used in 2010. Free tax efile The remaining $1,000 is carried to 2011 with the $38,000 NOL that you must begin using in 2011. Free tax efile Year   Carryback/  Carryover Unused  Loss 2010 $4,000 $1,000 2011 39,000 37,000 2012 37,000 34,000 2013 (NOL year)     2014 34,000 28,500 2015 28,500 19,500 2016 19,500 9,700 2017 9,700 1,000 2018 1,000 -0- How To Claim an NOL Deduction If you have not already carried the NOL to an earlier year, your NOL deduction is the total NOL. Free tax efile If you carried the NOL to an earlier year, your NOL deduction is the carried over NOL minus the NOL amount you used in the earlier year or years. Free tax efile If you carry more than one NOL to the same year, your NOL deduction is the total of these carrybacks and carryovers. Free tax efile NOL resulting in no taxable income. Free tax efile   If your NOL is more than the taxable income of the year you carry it to (figured before deducting the NOL), you generally will have an NOL carryover to the next year. Free tax efile See How To Figure an NOL Carryover , later, to determine how much NOL you have used and how much you carry to the next year. Free tax efile Deducting a Carryback If you carry back your NOL, you can use either Form 1045 or Form 1040X. Free tax efile You can get your refund faster by using Form 1045, but you have a shorter time to file it. Free tax efile You can use Form 1045 to apply an NOL to all carryback years. Free tax efile If you use Form 1040X, you must use a separate Form 1040X for each carryback year to which you apply the NOL. Free tax efile Estates and trusts that do not file Form 1045 must file an amended Form 1041 (instead of Form 1040X) for each carryback year to which NOLs are applied. Free tax efile Use a copy of the appropriate year's Form 1041, check the “Amended return” box, and follow the Form 1041 instructions for amended returns. Free tax efile Include the NOL deduction with other deductions not subject to the 2% limit (line 15a). Free tax efile Also, see the special procedures for filing an amended return due to an NOL carryback, explained under Form 1040X , later. Free tax efile Form 1045. Free tax efile   You can apply for a quick refund by filing Form 1045. Free tax efile This form results in a tentative adjustment of tax in the carryback year. Free tax efile See the Illustrated Form 1045 . Free tax efile at the end of this discussion. Free tax efile   If the IRS refunds or credits an amount to you from Form 1045 and later determines that the refund or credit is too much, the IRS may assess and collect the excess immediately. Free tax efile   Generally, you must file Form 1045 on or after the date you file your tax return for the NOL year, but not later than one year after the end of the NOL year. Free tax efile If the last day of the NOL year falls on a Saturday, Sunday, or holiday, the form will be considered timely if postmarked on the next business day. Free tax efile For example, if you are a calendar year taxpayer with a carryback from 2013 to 2011, you must file Form 1045 on or after the date you file your tax return for 2013, but no later than December 31, 2014. Free tax efile Form 1040X. Free tax efile   If you do not file Form 1045, you can file Form 1040X to get a refund of tax because of an NOL carryback. Free tax efile File Form 1040X within 3 years after the due date, including extensions, for filing the return for the NOL year. Free tax efile For example, if you are a calendar year taxpayer and filed your 2011 return by the April 15, 2012, due date, you must file a claim for refund of 2008 tax because of an NOL carryback from 2011 by April 15, 2015. Free tax efile   Attach a computation of your NOL using Form 1045, Schedule A, and, if it applies, your NOL carryover using Form 1045, Schedule B, discussed later . Free tax efile Refiguring your tax. Free tax efile   To refigure your total tax liability for a carryback year, first refigure your adjusted gross income for that year. Free tax efile (On Form 1045, use lines 10 and 11 and the “After carryback” column for the applicable carryback year. Free tax efile ) Use your adjusted gross income after applying the NOL deduction to refigure income or deduction items that are based on, or limited to, a percentage of your adjusted gross income. Free tax efile Refigure the following items. Free tax efile The special allowance for passive activity losses from rental real estate activities. Free tax efile Taxable social security and tier 1 railroad retirement benefits. Free tax efile IRA deductions. Free tax efile Excludable savings bond interest. Free tax efile Excludable employer-provided adoption benefits. Free tax efile The student loan interest deduction. Free tax efile The tuition and fees deduction. Free tax efile   If more than one of these items apply, refigure them in the order listed above, using your adjusted gross income after applying the NOL deduction and any previous item. Free tax efile (Enter your NOL deduction on Form 1045, line 10. Free tax efile On line 11, using the “After carryback” column, enter your adjusted gross income refigured after applying the NOL deduction and after refiguring any above items. Free tax efile )   Next, refigure your taxable income. Free tax efile (On Form 1045, use lines 12 through 15 and the “After carryback” column. Free tax efile ) Use your refigured adjusted gross income (Form 1045, line 11, using the “After carryback” column) to refigure certain deductions and other items that are based on or limited to a percentage of your adjusted gross income. Free tax efile Refigure the following items. Free tax efile The itemized deduction for medical expenses. Free tax efile The itemized deduction for qualified mortgage insurance premiums. Free tax efile The itemized deduction for casualty losses. Free tax efile Miscellaneous itemized deductions subject to the 2% limit. Free tax efile The overall limit on itemized deductions (do not apply to carryback years beginning after December 31, 2009). Free tax efile The phaseout of the deduction for exemptions (do not apply to carryback years beginning after December 31, 2009). Free tax efile Qualified motor vehicle tax (do not apply to carryback years beginning after December 31, 2009). Free tax efile    Do not refigure the itemized deduction for charitable contributions. Free tax efile   Finally, use your refigured taxable income (Form 1045, line 15, using the “After carryback” column) to refigure your total tax liability. Free tax efile Refigure your income tax, your alternative minimum tax, and any credits that are based on or limited by your adjusted gross income (AGI), modified adjusted gross income (MAGI), or tax liability. Free tax efile (On Form 1045, use lines 16 through 25, and the “After carryback” column. Free tax efile ) The earned income credit, for example, may be affected by changes to adjusted gross income or the amount of tax (or both) and, therefore, must be recomputed. Free tax efile If you become eligible for a credit because of the carryback, complete the form for that specific credit (such as the EIC Worksheet) for that year. Free tax efile   While it is necessary to refigure your income tax, alternative minimum tax, and credits, do not refigure your self-employment tax. Free tax efile Deducting a Carryforward If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the “Other income” line of Form 1040 or Form 1040NR (line 21 for 2013). Free tax efile Estates and trusts include an NOL deduction on Form 1041 with other deductions not subject to the 2% limit (line 15a for 2013). Free tax efile You must attach a statement that shows all the important facts about the NOL. Free tax efile Your statement should include a computation showing how you figured the NOL deduction. Free tax efile If you deduct more than one NOL in the same year, your statement must cover each of them. Free tax efile Change in Marital Status If you and your spouse were not married to each other in all years involved in figuring NOL carrybacks and carryovers, only the spouse who had the loss can take the NOL deduction. Free tax efile If you file a joint return, the NOL deduction is limited to the income of that spouse. Free tax efile For example, if your marital status changes because of death or divorce, and in a later year you have an NOL, you can carry back that loss only to the part of the income reported on the joint return (filed with your former spouse) that was related to your taxable income. Free tax efile After you deduct the NOL in the carryback year, the joint rates apply to the resulting taxable income. Free tax efile Refund limit. Free tax efile   If you are not married in the NOL year (or are married to a different spouse), and in the carryback year you were married and filed a joint return, your refund for the overpaid joint tax may be limited. Free tax efile You can claim a refund for the difference between your share of the refigured tax and your contribution toward the tax paid on the joint return. Free tax efile The refund cannot be more than the joint overpayment. Free tax efile Attach a statement showing how you figured your refund. Free tax efile Figuring your share of a joint tax liability. Free tax efile   There are five steps for figuring your share of the refigured joint tax liability. Free tax efile Figure your total tax as though you had filed as married filing separately. Free tax efile Figure your spouse's total tax as though your spouse had also filed as married filing separately. Free tax efile Add the amounts in (1) and (2). Free tax efile Divide the amount in (1) by the amount in (3). Free tax efile Multiply the refigured tax on your joint return by the amount figured in (4). Free tax efile This is your share of the joint tax liability. Free tax efile Figuring your contribution toward tax paid. Free tax efile   Unless you have an agreement or clear evidence of each spouse's contributions toward the payment of the joint tax liability, figure your contribution by adding the tax withheld on your wages and your share of joint estimated tax payments or tax paid with the return. Free tax efile If the original return for the carryback year resulted in an overpayment, reduce your contribution by your share of the tax refund. Free tax efile Figure your share of a joint payment or refund by the same method used in figuring your share of the joint tax liability. Free tax efile Use your taxable income as originally reported on the joint return in steps (1) and (2) above, and substitute the joint payment or refund for the refigured joint tax in step (5). Free tax efile Change in Filing Status If you and your spouse were married and filed a joint return for each year involved in figuring NOL carrybacks and carryovers, figure the NOL deduction on a joint return as you would for an individual. Free tax efile However, treat the NOL deduction as a joint NOL. Free tax efile If you and your spouse were married and filed separate returns for each year involved in figuring NOL carrybacks and carryovers, the spouse who sustained the loss may take the NOL deduction on a separate return. Free tax efile Special rules apply for figuring the NOL carrybacks and carryovers of married people whose filing status changes for any tax year involved in figuring an NOL carryback or carryover. Free tax efile Separate to joint return. Free tax efile   If you and your spouse file a joint return for a carryback or carryforward year, and were married but filed separate returns for any of the tax years involved in figuring the NOL carryback or carryover, treat the separate carryback or carryover as a joint carryback or carryover. Free tax efile Joint to separate returns. Free tax efile   If you and your spouse file separate returns for a carryback or carryforward year, but filed a joint return for any or all of the tax years involved in figuring the NOL carryover, figure each of your carryovers separately. Free tax efile Joint return in NOL year. Free tax efile   Figure each spouse's share of the joint NOL through the following steps. Free tax efile Figure each spouse's NOL as if he or she filed a separate return. Free tax efile See How To Figure an NOL , earlier. Free tax efile If only one spouse has an NOL, stop here. Free tax efile All of the joint NOL is that spouse's NOL. Free tax efile If both spouses have an NOL, multiply the joint NOL by a fraction, the numerator of which is spouse A's NOL figured in (1) and the denominator of which is the total of the spouses' NOLs figured in (1). Free tax efile The result is spouse A's share of the joint NOL. Free tax efile The rest of the joint NOL is spouse B's share. Free tax efile Example 1. Free tax efile Mark and Nancy are married and file a joint return for 2013. Free tax efile They have an NOL of $5,000. Free tax efile They carry the NOL back to 2011, a year in which Mark and Nancy filed separate returns. Free tax efile Figured separately, Nancy's 2013 deductions were more than her income, and Mark's income was more than his deductions. Free tax efile Mark does not have any NOL to carry back. Free tax efile Nancy can carry back the entire $5,000 NOL to her 2011 separate return. Free tax efile Example 2. Free tax efile Assume the same facts as in Example 1 , except that both Mark and Nancy had deductions in 2013 that were more than their income. Free tax efile Figured separately, his NOL is $1,800 and her NOL is $3,000. Free tax efile The sum of their separate NOLs ($4,800) is less than their $5,000 joint NOL because his deductions included a $200 net capital loss that is not allowed in figuring his separate NOL. Free tax efile The loss is allowed in figuring their joint NOL because it was offset by Nancy's capital gains. Free tax efile Mark's share of their $5,000 joint NOL is $1,875 ($5,000 × $1,800/$4,800) and Nancy's is $3,125 ($5,000 − $1,875). Free tax efile Joint return in previous carryback or carryforward year. Free tax efile   If only one spouse had an NOL deduction on the previous year's joint return, all of the joint carryover is that spouse's carryover. Free tax efile If both spouses had an NOL deduction (including separate carryovers of a joint NOL, figured as explained in the previous discussion ), figure each spouse's share of the joint carryover through the following steps. Free tax efile Figure each spouse's modified taxable income as if he or she filed a separate return. Free tax efile See Modified taxable income under How To Figure an NOL Carryover , later. Free tax efile Multiply the joint modified taxable income you used to figure the joint carryover by a fraction, the numerator of which is spouse A's modified taxable income figured in (1) and the denominator of which is the total of the spouses' modified taxable incomes figured in (1). Free tax efile This is spouse A's share of the joint modified taxable income. Free tax efile Subtract the amount figured in (2) from the joint modified taxable income. Free tax efile This is spouse B's share of the joint modified taxable income. Free tax efile Reduce the amount figured in (3), but not below zero, by spouse B's NOL deduction. Free tax efile Add the amounts figured in (2) and (4). Free tax efile Subtract the amount figured in (5) from spouse A's NOL deduction. Free tax efile This is spouse A's share of the joint carryover. Free tax efile The rest of the joint carryover is spouse B's share. Free tax efile Example. Free tax efile Sam and Wanda filed a joint return for 2011 and separate returns for 2012 and 2013. Free tax efile In 2013, Sam had an NOL of $18,000 and Wanda had an NOL of $2,000. Free tax efile They choose to carry back both NOLs 2 years to their 2011 joint return and claim a $20,000 NOL deduction. Free tax efile Their joint modified taxable income (MTI) for 2011 is $15,000, and their joint NOL carryover to 2012 is $5,000 ($20,000 – $15,000). Free tax efile Sam and Wanda each figure their separate MTI for 2011 as if they had filed separate returns. Free tax efile Then they figure their shares of the $5,000 carryover as follows. Free tax efile Step 1. Free tax efile   Sam's separate MTI $9,000 Wanda's separate MTI + 3,000 Total MTI $12,000 Step 2. Free tax efile   Joint MTI $15,000 Sam's MTI ÷ total MTI ($9,000 ÷ $12,000) × . Free tax efile 75 Sam's share of joint MTI $11,250 Step 3. Free tax efile   Joint MTI $15,000 Sam's share of joint MTI − 11,250 Wanda's share of joint MTI $3,750 Step 4. Free tax efile   Wanda's share of joint MTI $3,750 Wanda's NOL deduction − 2,000 Wanda's remaining share $1,750 Step 5. Free tax efile   Sam's share of joint MTI $11,250 Wanda's remaining share + 1,750 Joint MTI to be offset $13,000 Step 6. Free tax efile   Sam's NOL deduction $18,000 Joint MTI to be offset − 13,000 Sam's carryover to 2012 $5,000 Joint carryover to 2012 $5,000 Sam's carryover − 5,000 Wanda's carryover to 2012 $-0- Wanda's $2,000 NOL deduction offsets $2,000 of her $3,750 share of the joint modified taxable income and is completely used up. Free tax efile She has no carryover to 2012. Free tax efile Sam's $18,000 NOL deduction offsets all of his $11,250 share of joint modified taxable income and the remaining $1,750 of Wanda's share. Free tax efile His carryover to 2012 is $5,000. Free tax efile Illustrated Form 1045 The following example illustrates how to use Form 1045 to claim an NOL deduction in a carryback year. Free tax efile It includes a filled-in page 1 of Form 1045. Free tax efile Example. Free tax efile Martha Sanders is a self-employed contractor. Free tax efile Martha's 2013 deductions are more than her 2013 income because of a business loss. Free tax efile She uses Form 1045 to carry back her NOL 2 years and claim an NOL deduction in 2011. Free tax efile Her filing status in both years was single. Free tax efile See the filled-in Form 1045 later. Free tax efile Martha figures her 2013 NOL on Form 1045, Schedule A (not shown). Free tax efile (For an example using Form 1045, Schedule A, see Illustrated Form 1045, Schedule A under How To Figure an NOL , earlier. Free tax efile ) She enters the $10,000 NOL from Form 1045, Schedule A, line 25, on Form 1045, line 1a. Free tax efile Martha completes lines 10 through 25, using the “Before carryback” column under the column for the second preceding tax year ended 12/31/11 on page 1 of Form 1045 using the following amounts from her 2011 return. Free tax efile 2011 Adjusted gross income $50,000 Itemized deductions:     Medical expenses [$6,000 − ($50,000 × 7. Free tax efile 5%)] $2,250   State income tax + 2,000   Real estate tax + 4,000   Home mortgage interest + 5,000   Total itemized deductions $13,250 Exemption $3,700 Income tax $4,550 Self-employment tax $6,120   Martha refigures her taxable income for 2011 after carrying back her 2013 NOL as follows: 2011 Adjusted gross income $50,000 Less:     NOL from 2013 −10,000 2011 Adjusted gross income after carryback $40,000 Less:     Itemized deductions:     Medical expenses [$6,000 − ($40,000 × 7. Free tax efile 5%)] $3,000   State income tax + 2,000   Real estate tax + 4,000   Home mortgage interest + 5,000   Total itemized deductions −14,000 Less:     Exemption − 3,700 2011 Taxable income after carryback $22,300 Martha then completes lines 10 through 25, using the “After carryback” column under the column for the second preceding tax year ended 12/31/11. Free tax efile On line 10, Martha enters her $10,000 NOL deduction. Free tax efile Her new adjusted gross income on line 11 is $40,000 ($50,000 − $10,000). Free tax efile To complete line 12, she must refigure her medical expense deduction using her new adjusted gross income. Free tax efile Her refigured medical expense deduction is $3,000 [$6,000 − ($40,000 × 7. Free tax efile 5%)]. Free tax efile This increases her total itemized deductions to $14,000 [$13,250 + ($3,000 − $2,250)]. Free tax efile Martha uses her refigured taxable income ($22,300) from line 15, and the tax tables in her 2011 Form 1040 instructions to find her income tax. Free tax efile She enters the new amount, $2,924, on line 16, and her new total tax liability, $9,044, on line 25. Free tax efile Martha used up her $10,000 NOL in 2011 so she does not complete a column for the first preceding tax year ended 12/31/2012. Free tax efile The decrease in tax because of her NOL deduction (line 27) is $1,612. Free tax efile Martha files Form 1045 after filing her 2013 return, but no later than December 31, 2014. Free tax efile She mails it to the Internal Revenue Service Center for the place where she lives as shown in the 2013 instructions for Form 1040 and attaches a copy of her 2013 return (including the applicable forms and schedules). Free tax efile This image is too large to be displayed in the current screen. Free tax efile Please click the link to view the image. Free tax efile Form 1045, page 1 How To Figure an NOL Carryover If your NOL is more than your taxable income for the year to which you carry it (figured before deducting the NOL), you may have an NOL carryover. Free tax efile You must make certain modifications to your taxable income to determine how much NOL you will use up in that year and how much you can carry over to the next tax year. Free tax efile Your carryover is the excess of your NOL deduction over your modified taxable income for the carryback or carryforward year. Free tax efile If your NOL deduction includes more than one NOL, apply the NOLs against your modified taxable income in the same order in which you incurred them, starting with the earliest. Free tax efile Modified taxable income. Free tax efile   Your modified taxable income is your taxable income figured with the following changes. Free tax efile You cannot claim an NOL deduction for the NOL carryover you are figuring or for any later NOL. Free tax efile You cannot claim a deduction for capital losses in excess of your capital gains. Free tax efile Also, you must increase your taxable income by the amount of any section 1202 exclusion. Free tax efile You cannot claim the domestic production activities deduction. Free tax efile You cannot claim a deduction for your exemptions for yourself, your spouse, or dependents. Free tax efile You must figure any item affected by the amount of your adjusted gross income after making the changes in (1), (2), and (3), above, and certain other changes to your adjusted gross income that result from (1), (2), and (3). Free tax efile This includes income and deduction items used to figure adjusted gross income (for example, IRA deductions), as well as certain itemized deductions. Free tax efile To figure a charitable contribution deduction, do not include deductions for NOL carrybacks in the change in (1) but do include deductions for NOL carryforwards from tax years before the NOL year. Free tax efile   Your taxable income as modified cannot be less than zero. Free tax efile Form 1045, Schedule B. Free tax efile   You can use Form 1045, Schedule B, to figure your modified taxable income for carryback years and your carryover from each of those years. Free tax efile Do not use Form 1045, Schedule B, for a carryforward year. Free tax efile If your 2013 return includes an NOL deduction from an NOL year before 2013 that reduced your taxable income to zero (to less than zero, if an estate or trust), see NOL Carryover From 2013 to 2014 , later. Free tax efile Illustrated Form 1045, Schedule B The following example illustrates how to figure an NOL carryover from a carryback year. Free tax efile It includes a filled-in Form 1045, Schedule B. Free tax efile Example. Free tax efile Ida Brown runs a small clothing shop. Free tax efile In 2013, she has an NOL of $36,000 that she carries back to 2011. Free tax efile She has no other carrybacks or carryforwards to 2011. Free tax efile Ida's adjusted gross income in 2011 was $35,000, consisting of her salary of $36,000 minus a $1,000 capital loss deduction. Free tax efile She is single and claimed only one personal exemption of $3,700. Free tax efile During that year, she gave $1,450 in charitable contributions. Free tax efile Her medical expenses were $3,000. Free tax efile She also deducted $1,650 in taxes and $3,125 in home mortgage interest. Free tax efile Her deduction for charitable contributions was not limited because her contributions, $1,450, were less than 50% of her adjusted gross income. Free tax efile The deduction for medical expenses was limited to expenses over 7. Free tax efile 5% of adjusted gross income (. Free tax efile 075 × $35,000 = $2,625; $3,000 − $2,625 = $375). Free tax efile The deductions for taxes and home mortgage interest were not subject to any limits. Free tax efile She was able to claim $6,600 ($1,450 + $375 + $1,650 + $3,125) in itemized deductions and a personal exemption deduction of $3,700 for 2011. Free tax efile She had no other deductions in 2011 (except the NOL deduction). Free tax efile Her taxable income (figured without the NOL deduction) for the year was $24,700. Free tax efile Ida's adjusted gross income in 2012 was $9,325, consisting of net business income from the clothing shop of $12,325 and a net capital loss of $3,000. Free tax efile She did not itemize her deductions in 2012. Free tax efile She deducted the standard deduction of $5,950 and the personal exemption deduction of $3,800. Free tax efile She had no other deductions in 2012 (other than the NOL deduction). Free tax efile Her taxable income, therefore, was ($425). Free tax efile Ida's $36,000 carryback will result in her having 2011 taxable income of zero. Free tax efile She then completes the column for the second preceding tax year ended 12/31/11 on Form 1045, Schedule B, to figure how much of her NOL she uses up in 2011 and how much she can carry over to 2012. Free tax efile She completes the column for the first preceding tax year ended 12/31/12. Free tax efile See the illustrated Form 1045, Schedule B , shown later. Free tax efile Column 1, line 1. Free tax efile Ida enters $36,000, her 2013 net operating loss, on line 1. Free tax efile Column 1, line 2. Free tax efile She enters $24,700, her 2011 taxable income (figured without the NOL deduction), on line 2. Free tax efile Column 1, line 3. Free tax efile Ida enters her net capital loss deduction of $1,000 on line 3. Free tax efile Column 1, lines 4 and 5. Free tax efile Ida had no section 1202 exclusion or domestic production activities deduction in 2011. Free tax efile She enters zero on lines 4 and 5. Free tax efile Column 1, line 6. Free tax efile Although Ida's entry on line 3 modifies her adjusted gross income, that does not affect any other items included in her adjusted gross income. Free tax efile Ida enters zero on line 6. Free tax efile Column 1, line 7. Free tax efile Ida had itemized deductions and entered $1,000 on line 3, so she completes lines 11 through 38 to figure her adjustment to itemized deductions. Free tax efile On line 7, she enters the total adjustment from line 38. Free tax efile Column 1, line 8. Free tax efile Ida enters the deduction for her personal exemption of $3,700 for 2011. Free tax efile Column 1, line 9. Free tax efile After combining lines 2 through 8, Ida's modified taxable income is $29,475. Free tax efile Column 1, line 10. Free tax efile Ida figures her carryover to 2012 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). Free tax efile She enters the $6,525 carryover on line 10. Free tax efile She also enters the $6,525 as her NOL deduction for 2012 on Form 1045, page 1, line 10, in the “After carryback” column under the column for the first preceding tax year ended 12/31/12. Free tax efile (For an illustrated example of page 1 of Form 1045, see Illustrated Form 1045 under How To Claim an NOL Deduction , earlier. Free tax efile ) Next, Ida completes column 2 for the first preceding tax year ended 12/31/12. Free tax efile Column 1, line 11. Free tax efile Ida's adjusted gross income for 2011 was $35,000. Free tax efile Column 1, line 12. Free tax efile She adds lines 3 through 6 and enters $1,000 on line 12. Free tax efile (This is her net capital loss deduction added back, which modifies her adjusted gross income. Free tax efile ) Column 1, line 13. Free tax efile Her modified adjusted gross income for 2011 is now $36,000. Free tax efile Column 1, line 14. Free tax efile On her 2011 tax return, she deducted $375 as medical expenses. Free tax efile Column 1, line 15. Free tax efile Her actual medical expenses were $3,000. Free tax efile Column 1, line 16. Free tax efile She multiplies her modified adjusted gross income, $36,000, by . Free tax efile 075. Free tax efile She enters $2,700 on line 16. Free tax efile Column 1, line 17. Free tax efile She substracts $2,700 from her actual medical expenses, $3,000. Free tax efile She enters $300 on line 17. Free tax efile This is her modified medical deduction. Free tax efile Column 1, line 18. Free tax efile The difference between her medical deduction and her modified medical deduction is $75. Free tax efile She enters this on line 18. Free tax efile Column 1, lines 19 through 21. Free tax efile Ida had no deduction for qualified mortgage insurance premiums in 2011. Free tax efile She skips lines 19 and 20 and enters zero on line 21. Free tax efile Column 1, line 22. Free tax efile She enters her modified adjusted gross income of $36,000 on line 22. Free tax efile Column 1, line 23. Free tax efile She had no other carrybacks to 2011 and enters zero on line 23. Free tax efile Column 1, line 24. Free tax efile Her modified adjusted gross income remains $36,000. Free tax efile Column 1, line 25. Free tax efile Her actual contributions for 2011 were $1,450, which she enters on line 25. Free tax efile Column 1, line 26. Free tax efile She now refigures her charitable contributions based on her modified adjusted gross income. Free tax efile Her contributions are well below the 50% limit, so she enters $1,450 on line 26. Free tax efile Column 1, line 27. Free tax efile The difference is zero. Free tax efile Column 1, lines 28 through 37. Free tax efile Ida had no casualty losses or deductions for miscellaneous items in 2011. Free tax efile She skips lines 28 through 31 and lines 33 through 36. Free tax efile Ida enters zero on lines 32 and 37. Free tax efile Column 1, line 38. Free tax efile She combines lines 18, 21, 27, 32, and 37 and enters $75 on line 38. Free tax efile She carries this figure to line 7. Free tax efile Column 2, line 1. Free tax efile Ida enters $6,525, the carryback of her 2013 NOL to 2012, from column 1, line 10, on line 1. Free tax efile Column 2, line 2. Free tax efile She enters ($425), her 2012 taxable income, on line 2. Free tax efile Column 2, line 3. Free tax efile Ida enters her net capital loss deduction of $3,000 on line 3. Free tax efile Column 2, lines 4 and 5. Free tax efile Ida had no section 1202 exclusion or domestic production activities deduction in 2012. Free tax efile She enters zero on lines 4 and 5. Free tax efile Column 2, line 6. Free tax efile Although Ida's entry on line 3 modifies her adjusted gross income, that does not affect any other items included in her adjusted gross income. Free tax efile Ida enters zero on line 6. Free tax efile Column 2, line 7. Free tax efile Because Ida did not itemize deductions on her 2012 tax return, she enters zero on line 7. Free tax efile Column 2, line 8. Free tax efile Ida enters the deduction for her personal exemption of $3,800 for 2012. Free tax efile Column 2, line 9. Free tax efile After combining lines 2 through 8, Ida's modified taxable income is $6,375. Free tax efile Column 2, line 10. Free tax efile Ida figures her carryforward to 2014 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). Free tax efile She enters the $150 carryover on line 10. Free tax efile This image is too large to be displayed in the current screen. Free tax efile Please click the link to view the image. Free tax efile Form 1045, page 3 This image is too large to be displayed in the current screen. Free tax efile Please click the link to view the image. Free tax efile Form 1045, page 4 NOL Carryover From 2013 to 2014 If you had an NOL deduction carried forward from a year prior to 2013 that resulted in your having taxable income on your 2013 return of zero (of less than zero, if an estate or trust), complete Table 1 , Worksheet for NOL Carryover From 2013 to 2014, on the following pages. Free tax efile It will help you figure your NOL to carry to 2014. Free tax efile Keep the worksheet for your records. Free tax efile Worksheet Instructions At the top of the worksheet, enter the NOL year for which you are figuring the carryover. Free tax efile More than one NOL. Free tax efile   If your 2013 NOL deduction includes amounts for more than one loss year, complete this worksheet only for one loss year. Free tax efile To determine which year, start with your earliest NOL and subtract each NOL separately from your taxable income figured without the NOL deduction. Free tax efile Complete this worksheet for the earliest NOL that results in your having taxable income below zero. Free tax efile Your NOL carryover to 2014 is the total of the amount on line 10 of the worksheet and all later NOL amounts. Free tax efile Example. Free tax efile Your taxable income for 2013 is $5,000 without your $9,000 NOL deduction. Free tax efile Your NOL deduction includes a $2,000 carryover from 2011 and a $7,000 carryover from 2012. Free tax efile Subtract your 2011 NOL of $2,000 from $5,000. Free tax efile This gives you taxable income of $3,000. Free tax efile Your 2011 NOL is now completely used up. Free tax efile Subtract your $7,000 2012 NOL from $3,000. Free tax efile This gives you taxable income of ($4,000). Free tax efile You now complete the worksheet for your 2012 NOL. Free tax efile Your NOL carryover to 2014 is the unused part of your 2012 NOL from line 10 of the worksheet. Free tax efile Line 2. Free tax efile   Treat your NOL deduction for the NOL year entered at the top of the worksheet and later years as a positive amount. Free tax efile Add it to your negative taxable income (figured without the NOL deduction). Free tax efile Enter the result on line 2. Free tax efile Line 6. Free tax efile   You must refigure the following income and deductions based on adjusted gross income. Free tax efile The special allowance for passive activity losses from rental real estate activities. Free tax efile Taxable social security and tier 1 railroad retirement benefits. Free tax efile IRA deductions. Free tax efile Excludable savings bond interest. Free tax efile Excludable employer-provided adoption benefits. Free tax efile The student loan interest deduction. Free tax efile The tuition and fees deduction. Free tax efile   If none of these items apply to you, enter zero on line 6. Free tax efile Otherwise, increase your adjusted gross income by the total of lines 3 through 5 and your NOL deduction for the NOL year entered at the top of the worksheet and later years. Free tax efile Using this increased adjusted gross income, refigure the items that apply, in the order listed above. Free tax efile Your adjustment for each item is the difference between the refigured amount and the amount included on your return. Free tax efile Combine the adjustments for previous items with your adjusted gross income before refiguring the next item. Free tax efile Keep a record of your computations. Free tax efile   Enter your total adjustments for the above items on line 6. Free tax efile Line 7. Free tax efile   Enter zero if you claimed the standard deduction or the amounts on lines 3 through 5 are zero. Free tax efile Otherwise, use lines 11 through 33 of the worksheet to figure the amount to enter on this line. Free tax efile Complete only those sections that apply to you. Free tax efile Estates and trusts. Free tax efile   Enter zero on line 7 if you did not claim any miscellaneous deductions on Form 1041, line 15c, or a casualty or theft loss. Free tax efile Otherwise, refigure these deductions by substituting modified adjusted gross income (see below ) for adjusted gross income. Free tax efile Subtract the recomputed deductions from those claimed on the return. Free tax efile Enter the result on line 7. Free tax efile Modified adjusted gross income. Free tax efile   To refigure miscellaneous itemized deductions of an estate or trust (Form 1041, line 15c), modified adjusted gross income is the total of the following amounts. Free tax efile The adjusted gross income on the return. Free tax efile The amounts from lines 3 through 5 of the worksheet. Free tax efile The exemption amount from Form 1041, line 20. Free tax efile The NOL deduction for the NOL year entered at the top of the worksheet and for later years. Free tax efile   To refigure the casualty and theft loss deduction of an estate or trust, modified adjusted gross income is the total of the following amounts. Free tax efile The adjusted gross income amount you used to figure the deduction claimed on the return. Free tax efile The amounts from lines 3 through 5 of the worksheet. Free tax efile The NOL deduction for the NOL year entered at the top of the worksheet and for later years. Free tax efile Line 11. Free tax efile   Treat your NOL deduction for the NOL year entered at the top of the worksheet and for later years as a positive amount. Free tax efile Add it to your adjusted gross income. Free tax efile Enter the result on line 11. Free tax efile Line 20. Free tax efile   Is your modified adjusted gross income from line 13 of this worksheet more than $100,000 ($50,000 if married filing separately)?   □ Yes. Free tax efile Your deduction is limited. Free tax efile Refigure your deduction using the Mortgage Insurance Premiums Deduction Worksheet in the 2013 Instructions for Form 1045. Free tax efile On line 2 of the Mortgage Insurance Premiums Deduction Worksheet, enter the amount from line 13 of this worksheet. Free tax efile   □ No. Free tax efile Your deduction is not limited. Free tax efile Enter the amount from line 19 on line 20 and enter -0- on line 21. Free tax efile Line 23. Free tax efile   If you had a contributions carryover from 2012 to 2013 and your NOL deduction includes an amount from an NOL year before 2012, you may have to reduce your contributions carryover. Free tax efile Reduce the contributions carryover by the amount of any adjustment you made to your 2012 charitable contributions deduction when figuring your NOL carryover to 2013. Free tax efile Use the reduced contributions carryover to figure the amount to enter on line 23. Free tax efile Please click here for the text description of the image. Free tax efile Worksheet for NOL Carryover Worksheet for NOL Carryover (Continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Free tax efile Free help with your tax return. Free tax efile   You can get free help preparing your return nationwide from IRS-certified volunteers. Free tax efile The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Free tax efile The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free tax efile Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free tax efile In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Free tax efile To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Free tax efile gov, download the IRS2Go app, or call 1-800-906-9887. Free tax efile   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free tax efile To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free tax efile aarp. Free tax efile org/money/taxaide or call 1-888-227-7669. Free tax efile For more information on these programs, go to IRS. Free tax efile gov and enter “VITA” in the search box. Free tax efile Internet. Free tax efile    IRS. Free tax efile gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Free tax efile Download the free IRS2Go app from the iTunes app store or from Google Play. Free tax efile Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free tax efile Check the status of your 2013 refund with the Where's My Refund? application on IRS. Free tax efile gov or download the IRS2Go app and select the Refund Status option. Free tax efile The IRS issues more than 9 out of 10 refunds in less than 21 days. Free tax efile Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Free tax efile You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free tax efile The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free tax efile Use the Interactive Tax Assistant (ITA) to research your tax questions. Free tax efile No need to wait on the phone or stand in line. Free tax efile The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Free tax efile When you reach the response screen, you can print the entire interview and the final response for your records. Free tax efile New subject areas are added on a regular basis. Free tax efile  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Free tax efile gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Free tax efile You can use the IRS Tax Map to search publications and instructions by topic or keyword. Free tax efile The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Free tax efile When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Free tax efile Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Free tax efile You can also ask the IRS to mail a return or an account transcript to you. Free tax efile Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Free tax efile gov or by calling 1-800-908-9946. Free tax efile Tax return and tax account transcripts are generally available for the current year and the past three years. Free tax efile Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Free tax efile Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Free tax efile If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Free tax efile Check the status of your amended return using Where's My Amended Return? Go to IRS. Free tax efile gov and enter Where's My Amended Return? in the search box. Free tax efile You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free tax efile It can take up to 3 weeks from the date you mailed it to show up in our system. Free tax efile Make a payment using one of several safe and convenient electronic payment options available on IRS. Free tax efile gov. Free tax efile Select the Payment tab on the front page of IRS. Free tax efile gov for more information. Free tax efile Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Free tax efile Figure your income tax withholding with the IRS Withholding Calculator on IRS. Free tax efile gov. Free tax efile Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Free tax efile Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Free tax efile gov. Free tax efile Request an Electronic Filing PIN by going to IRS. Free tax efile gov and entering Electronic Filing PIN in the search box. Free tax efile Download forms, instructions and publications, including accessible versions for people with disabilities. Free tax efile Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Free tax efile gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Free tax efile An employee can answer questions about your tax account or help you set up a payment plan. Free tax efile Before you visit, check the Office Locator on IRS. Free tax efile gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Free tax efile If you have a special need, such as a disability, you can request an appointment. Free tax efile Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free tax efile Apply for an Employer Identification Number (EIN). Free tax efile Go to IRS. Free tax efile gov and enter Apply for an EIN in the search box. Free tax efile Read the Internal Revenue Code, regulations, or other official guidance. Free tax efile Read Internal Revenue Bulletins. Free tax efile Sign up to receive local and national tax news and more by email. Free tax efile Just click on “subscriptions” above the search box on IRS. Free tax efile gov and choose from a variety of options. Free tax efile Phone. Free tax efile    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free tax efile Download the free IRS2Go app from the iTunes app store or from Google Play. Free tax efile Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Free tax efile gov, or download the IRS2Go app. Free tax efile Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free tax efile The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free tax efile Most VITA and TCE sites offer free electronic filing. Free tax efile Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free tax efile Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free tax efile Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Free tax efile If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free tax efile The IRS issues more than 9 out of 10 refunds in less than 21 days. Free tax efile Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free tax efile Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Free tax efile The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free tax efile Note, the above information is for our automated hotline. Free tax efile Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Free tax efile Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free tax efile You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free tax efile It can take up to 3 weeks from the date you mailed it to show up in our system. Free tax efile Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Free tax efile You should receive your order within 10 business days. Free tax efile Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Free tax efile If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Free tax efile Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free tax efile The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free tax efile These individuals can also contact the IRS through relay services such as the Federal Relay Service. Free tax efile Walk-in. Free tax efile   You can find a selection of forms, publications and services — in person. Free tax efile Products. Free tax efile You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free tax efile Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free tax efile Services. Free tax efile You can walk in to your local TAC for face-to-face tax help. Free tax efile An employee can answer questions about your tax account or help you set up a payment plan. Free tax efile Before visiting, use the Office Locator tool on IRS. Free tax efile gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Free tax efile Mail. Free tax efile   You can send your order for forms, instructions, and publications to the address below. Free tax efile You should receive a response within 10 business days after your request is received. Free tax efile Internal Revenue Service 1201 N. Free tax efile Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Free tax efile The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free tax efile Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free tax efile   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Free tax efile We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free tax efile You face (or your business is facing) an immediate threat of adverse action. Free tax efile You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free tax efile   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free tax efile Here's why we can help: TAS is an independent organization within the IRS. Free tax efile Our advocates know how to work with the IRS. Free tax efile Our services are free and tailored to meet your needs. Free tax efile We have offices in every state, the District of Columbia, and Puerto Rico. Free tax efile   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Free tax efile   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free tax efile If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Free tax efile Low Income Taxpayer Clinics Low Income
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Understanding your CP259E Notice

We sent you this notice because our records indicate you did not file a required Form 990-N, e-Postcard.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 990-N, 990, or 990-EZ immediately according to the instructions on the notice.
    • If you don't think you need to file, complete the Response form enclosed with your notice and mail it to us using the envelope provided.
    • If you filed more than four weeks ago or used a different name or EIN, complete the Response form enclosed with your notice and mail it to us in the envelope provided along with a signed and dated copy of the return.

You may want to...


Answers to Common Questions

Which organizations are eligible to file Form 990-N?
Small tax-exempt organizations whose annual gross receipts are $50,000 or less for 2010 ($25,000 or less for 2009) are eligible to electronically submit Form 990-N, also known as the e-Postcard. The organization may choose to file a complete Form 990 or Form 990-EZ instead.

When is Form 990-N due?
Form 990-N is due by the 15th day of the 5th month following the close of the organization's accounting period. Thus, for a calendar year taxpayer, Form 990-N is due on May 15 of the following year. If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day.

Which organizations must file a Form 990 or 990-EZ?
Form 990 must be filed by an organization exempt from income tax under section 501(a) (including an organization that has not applied for recognition of exemption) if it has either (1) gross receipts greater than or equal to $500,000 or (2) total assets greater than or equal to $1,250,000 at the end of the tax year. This includes:

  • Organizations described in section 501 (c)(3) (other than private foundations), and
  • Organizations described in other 501 (c) subsections (other than black lung benefit trusts).

Other exempt organizations can file Form 990-EZ instead. If gross receipts are $50,000 or lower in 2010 ($25,000 for 2009), organizations are eligible to file Form 990-N.

When is Form 990 or 990-EZ due?
Form 990 or 990-EZ is due by the 15th day of the 5th month after the end of the tax year. Thus, for a calendar year taxpayer, Form 990 or Form 990-EZ is due on May 15 of the following year. If any due date falls on a Saturday, Sunday or legal holiday, the organization can file the return on the next business day.

More information can be found at Form 990 Resources and Tools for Exempt Organizations.

Can I get help over the phone?
If you have questions and/or need help completing the form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the tax-exempt organization resources at Form 990 Resources and Tools for Exempt Organizations.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP259E, Page 1

Notice CP259E, Page 2

Notice CP259E, Page 3

Notice CP259E, Page 4

Page Last Reviewed or Updated: 29-Mar-2014

The Free Tax Efile

Free tax efile Publication 4492-B - Main Content Table of Contents DefinitionsMidwestern Disaster Areas Applicable Disaster Date Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Casualty and Theft LossesTime limit for making election. Free tax efile Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesEmployee Retention Credit Employer Housing Credit and Exclusion Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Free tax efile Definitions The following definitions are used throughout this publication. Free tax efile Midwestern Disaster Areas A Midwestern disaster area is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin, as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. Free tax efile See Tables 1 and 2 for a list of the counties included in the Midwestern disaster areas. Free tax efile Applicable Disaster Date The term “applicable disaster date” as used in this publication, refers to the date on which the severe storms, tornadoes, or flooding occurred in the Midwestern disaster areas. Free tax efile You will need to know this date when using this publication for the various tax provisions. Free tax efile Table 1 The counties listed in Table 1 below are eligible for all tax provisions shown in this publication. Free tax efile Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 05/02/2008through05/12/2008 Arkansas Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline, and Van Buren. Free tax efile 06/01/2008through07/22/2008 Illinois Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago. Free tax efile 05/30/2008through06/27/2008 Indiana Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne. Free tax efile 05/25/2008through08/13/2008 Iowa Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler, Cass, Cedar, Cerro Gordo, Chickasaw, Clarke, Clayton, Clinton, Crawford, Dallas, Davis, Decatur, Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie, Hamilton, Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Iowa, Jackson, Jasper, Johnson, Jones, Keokuk, Kossuth, Lee, Linn, Louisa, Lucas, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona, Monroe, Montgomery, Muscatine, Page, Polk, Pottawattamie, Poweshiek, Ringgold, Scott, Story, Tama, Union, Van Buren, Wapello, Warren, Washington, Webster, Winnebago, Winneshiek, Worth, and Wright. Free tax efile 05/10/2008through05/11/2008 Missouri Barry, Jasper, and Newton. Free tax efile 06/01/2008through08/13/2008 Missouri Adair, Andrew, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Johnson, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Monroe, Nodaway, Pike, Putnam, Ralls, St. Free tax efile Charles, Stone, Taney, Vernon, and Webster. Free tax efile 05/22/2008through06/24/2008 Nebraska Buffalo, Butler, Colfax, Custer, Dawson, Douglas, Gage, Hamilton, Holt, Jefferson, Kearney, Lancaster, Platte, Richardson, Sarpy, and Saunders. Free tax efile 06/05/2008through07/25/2008 Wisconsin Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha, and Winnebago. Free tax efile *For more details, go to www. Free tax efile fema. Free tax efile gov Table 2 The counties listed in Table 2 below are eligible for all of the special tax provisions shown in this publication except the following. Free tax efile Charitable Giving Incentives. Free tax efile Net Operating Losses. Free tax efile Education Credits. Free tax efile Recapture of Federal Mortgage Subsidy. Free tax efile Tax Relief for Temporary Relocation. Free tax efile Employee Retention Credit. Free tax efile Employer Housing Credit and Exclusion. Free tax efile Demolition and Clean-up Costs. Free tax efile Increase in Rehabilitation Credit. Free tax efile Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 06/01/2008through07/22/2008 Illinois Greene, Madison, Monroe, Pike, Randolph, St. Free tax efile Clair, and Scott. Free tax efile 05/30/2008through06/27/2008 Indiana Benton, Boone, Fountain, Franklin, Jay, Montgomery, Ohio, Switzerland, Union, and Wabash. Free tax efile 05/25/2008through08/13/2008 Iowa Carroll, Cherokee, Lyon, Palo Alto, Pocahontas, Taylor, and Wayne. Free tax efile 05/22/2008through06/16/2008 Kansas Barber, Barton, Bourbon, Brown, Butler, Chautauqua, Cherokee, Clark, Clay, Comanche, Cowley, Crawford, Decatur, Dickinson, Edwards, Elk, Ellis, Ellsworth, Franklin, Gove, Graham, Harper, Haskell, Hodgeman, Jackson, Jewell, Kingman, Kiowa, Lane, Linn, Logan, Mitchell, Montgomery, Ness, Norton, Osborne, Pawnee, Phillips, Pratt, Reno, Republic, Riley, Rooks, Rush, Saline, Seward, Sheridan, Smith, Stafford, Sumner, Thomas, Trego, Wallace, and Wilson. Free tax efile 06/06/2008through06/13/2008 Michigan Allegan, Barry, Eaton, Ingham, Lake, Manistee, Mason, Missaukee, Osceola, Ottawa, Saginaw, and Wexford. Free tax efile 06/06/2008through06/12/2008 Minnesota Cook, Fillmore, Freeborn, Houston, Mower, and Nobles. Free tax efile 06/01/2008through08/13/2008 Missouri Atchison, Audrain, Bates, Buchanan, Cape Girardeau, Carroll, Christian, Daviess, Grundy, Howard, Jefferson, Knox, Mercer, Miller, Mississippi, Morgan, New Madrid, Pemiscot, Perry, Pettis, Platte, Polk, Randolph, Ray, Saline, Schuyler, Scotland, Shelby, St. Free tax efile Genevieve, St. Free tax efile Louis, the Independent City of St. Free tax efile Louis, Scott, Sullivan, and Worth. Free tax efile 04/23/2008through04/26/2008 Nebraska Gage, Johnson, Morrill, Nemaha, and Pawnee. Free tax efile 05/22/2008through06/24/2008 Nebraska Adams, Blaine, Boone, Boyd, Brown, Burt, Cass, Chase, Cherry, Cuming, Dundy, Fillmore, Frontier, Furnas, Garfield, Gosper, Greeley, Hall, Hayes, Howard, Johnson, Keya Paha, Lincoln, Logan, Loup, Merrick, McPherson, Morrill, Nance, Nemaha, Otoe, Phelps, Polk, Red Willow, Rock, Saline, Seward, Sherman, Stanton, Thayer, Thomas, Thurston, Valley, Webster, Wheeler, and York. Free tax efile 06/27/2008 Nebraska Dodge, Douglas, Sarpy, and Saunders. Free tax efile 06/05/2008through07/25/2008 Wisconsin Lafayette. Free tax efile * For more details, go to www. Free tax efile fema. Free tax efile gov Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions This benefit applies only to the counties in Table 1. Free tax efile Individuals. Free tax efile   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% of adjusted gross income (AGI) limit. Free tax efile A qualified contribution is a charitable contribution paid in cash or by check to a 50% limit organization if you make an election to have the 50% limit not apply to these contributions. Free tax efile   A qualified contribution must also meet all of the following requirements. Free tax efile Be paid after May 1, 2008, and before January 1, 2009. Free tax efile The contribution must be for relief efforts in one or more Midwestern disaster areas. Free tax efile Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. Free tax efile   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. Free tax efile You can carry over any contributions you are not able to deduct for 2008 because of this limit. Free tax efile In 2009, the carryover of your unused qualified contributions is subject to the 50% of AGI limit. Free tax efile Exception. Free tax efile   Qualified contributions do not include contributions to certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund. Free tax efile Corporations. Free tax efile   A corporation can elect to deduct qualified cash contributions without regard to the 10% of taxable income limit if the contributions were paid after May 1, 2008, and before January 1, 2009, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund), for relief efforts in one or more Midwestern disaster areas. Free tax efile Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. Free tax efile The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. Free tax efile Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% of taxable income limit. Free tax efile Partners and shareholders. Free tax efile   Each partner in a partnership and each shareholder in an S corporation must make a separate election to have the appropriate limit not apply. Free tax efile More information. Free tax efile   For more information, see Publication 526 or Publication 542, Corporations. Free tax efile Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. Free tax efile Standard Mileage Rate for Charitable Use of Vehicles This benefit applies only to the counties in Table 1. Free tax efile The following are special standard mileage rates in effect for 2008 for the cost of operating your vehicle for providing charitable services related only to the severe storms, tornadoes, or flooding. Free tax efile 36 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. Free tax efile 41 cents per mile for the period July 1 through December 31, 2008. Free tax efile Mileage Reimbursements to Charitable Volunteers This benefit applies only to the counties in Table 1. Free tax efile You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger vehicle for the benefit of a qualified charitable organization in providing relief related to the severe storms, tornadoes, or flooding during the period beginning on the applicable disaster date, and ending on December 31, 2008. Free tax efile You cannot claim a deduction or credit for amounts you exclude. Free tax efile You must keep records of miles driven, time, place (or use), and purpose of the mileage. Free tax efile The amount you can exclude cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. Free tax efile 50. Free tax efile 5 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. Free tax efile 58. Free tax efile 5 cents per mile for the period July 1 through December 31, 2008. Free tax efile Casualty and Theft Losses This benefit applies to the counties in both Tables 1 and 2. Free tax efile The following paragraphs explain changes to casualty and theft losses that were caused by the severe storms, tornadoes, or flooding in the Midwestern disaster areas. Free tax efile For more information, see Publication 547. Free tax efile Limits on personal casualty or theft losses. Free tax efile   Losses of personal use property that arose in a Midwestern disaster area on or after the applicable disaster date are not subject to the $100 or 10% of AGI limits. Free tax efile Qualifying losses include losses from casualties and thefts that arose in a Midwestern disaster area that were attributable to the severe storms, tornadoes, or flooding. Free tax efile When completing Form 4684, do not include on line 17 any losses that arose in a Midwestern disaster area. Free tax efile A loss arising in a Midwestern disaster area is not considered a loss attributable to a federally declared disaster for purposes of that line and cannot be added to your standard deduction. Free tax efile When to deduct the loss. Free tax efile   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. Free tax efile However, you can elect to deduct losses caused by the severe storms, tornadoes, or flooding on your return for the prior year. Free tax efile Special instructions for individuals who elect to claim a Midwestern disaster area casualty or theft loss for 2007. Free tax efile   Individuals filing or amending their 2007 tax return for casualty or theft losses that were attributable to the severe storms, tornadoes, or flooding should: Enter “Midwestern Disaster Area” at the top of Form 1040 or Form 1040X, and Complete the 2008 version of Form 4684. Free tax efile Cross out “2008” and enter “2007” at the top of Form 4684. Free tax efile Time limit for making election. Free tax efile   You must make this election to claim your casualty or theft loss in 2007 by the later of the following dates. Free tax efile The due date (without extensions) for filing your 2008 income tax return. Free tax efile The due date (with extensions) for filing your 2007 income tax return. Free tax efile Example. Free tax efile If you are a calendar year individual taxpayer, you have until April 15, 2009, to amend your 2007 tax return to claim a casualty or theft loss that occurred during 2008. Free tax efile Replacement Period for Nonrecognition of Gain This benefit applies to the counties in both Tables 1 and 2. Free tax efile Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Free tax efile Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a federally declared disaster area). Free tax efile However, for property that was involuntarily converted on or after the applicable disaster date, as a result of the severe storms, tornadoes, or flooding, a 5-year replacement period applies if substantially all of the use of the replacement property is in a Midwestern disaster area. Free tax efile For more information, see the Instructions for Form 4684. Free tax efile Net Operating Losses This benefit applies only to the counties in Table 1. Free tax efile Qualified disaster recovery assistance loss. Free tax efile   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Free tax efile However, the portion of an NOL that is a qualified disaster recovery assistance loss can be carried back to the 5 tax years before the NOL year. Free tax efile In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Free tax efile   A qualified disaster recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified disaster recovery assistance casualty loss (as defined below), Moving expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the employment of an individual whose main home was in a Midwestern disaster area before the applicable disaster date, who was unable to remain in that home because of the severe storms, tornadoes, or flooding, and whose main job location (after the move) is in a Midwestern disaster area, Temporary housing expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, to house employees of the taxpayer whose main job location is in a Midwestern disaster area, Depreciation or amortization allowable for any qualified disaster recovery assistance property (even if you elected not to claim the special disaster recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred on or after the applicable disaster date, and before January 1, 2011, for any damage from the severe storms, tornadoes, or flooding to property located in a Midwestern disaster area. Free tax efile Qualified disaster recovery assistance casualty loss. Free tax efile   A qualified disaster recovery assistance casualty loss is any deductible section 1231 loss of property located in a Midwestern disaster area if the loss was caused by the severe storms, tornadoes, or flooding. Free tax efile For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the severe storms, tornadoes, or flooding of property located in a Midwestern disaster area. Free tax efile Any such loss taken into account in figuring your qualified disaster recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. Free tax efile More information. Free tax efile   For more information on NOLs, see Publication 536 or Publication 542, Corporations. Free tax efile IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of the severe storms, tornadoes, or flooding. Free tax efile Definitions Qualified disaster recovery assistance distribution. Free tax efile   A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan if all of the following apply. Free tax efile The distribution was made on or after the applicable disaster date and before January 1, 2010. Free tax efile Your main home was located in a Midwestern disaster area on the applicable disaster date. Free tax efile You sustained an economic loss because of the severe storms, tornadoes, or flooding and your main home was in a Midwestern disaster area on the applicable disaster date. Free tax efile Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Free tax efile   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified disaster recovery assistance distribution, regardless of whether the distribution was made on account of the severe storms, tornadoes, or flooding. Free tax efile Qualified disaster recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. Free tax efile   The total of your qualified disaster recovery assistance distributions from all plans is limited to $100,000. Free tax efile If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you can allocate the $100,000 limit among the plans any way you choose. Free tax efile   A reduction or offset (on or after the applicable disaster date) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified disaster recovery assistance distribution. Free tax efile Eligible retirement plan. Free tax efile   An eligible retirement plan can be any of the following. Free tax efile A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Free tax efile A qualified annuity plan. Free tax efile A tax-sheltered annuity contract. Free tax efile A governmental section 457 deferred compensation plan. Free tax efile A traditional, SEP, SIMPLE, or Roth IRA. Free tax efile Main home. Free tax efile   Generally, your main home is the home where you live most of the time. Free tax efile A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Free tax efile Taxation of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. Free tax efile Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. Free tax efile However, if you elect, you can include the entire distribution in your income in the year it was received. Free tax efile Qualified disaster recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Free tax efile However, any distributions you receive in excess of the $100,000 qualified disaster recovery assistance distribution limit may be subject to the additional tax on early distributions. Free tax efile For more information, see Form 8930. Free tax efile Repayment of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. Free tax efile If you choose, you generally can repay any portion of a qualified disaster recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Free tax efile Also, you can repay a qualified disaster recovery assistance distribution made on account of a hardship from a retirement plan. Free tax efile However, see Exceptions later for qualified disaster recovery assistance distributions you cannot repay. Free tax efile You have three years from the day after the date you received the distribution to make a repayment. Free tax efile Amounts that are repaid are treated as a qualified rollover and are not included in income. Free tax efile Also, a repayment of a qualified disaster recovery assistance distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. Free tax efile See Form 8930 for more information on how to report repayments. Free tax efile Exceptions. Free tax efile   You cannot repay the following types of distributions. Free tax efile Qualified disaster recovery assistance distributions received as a beneficiary (other than a surviving spouse). Free tax efile Required minimum distributions. Free tax efile Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Free tax efile Repayment of Qualified Distributions for the Purchase or Construction of a Main Home This benefit applies to the counties in both Tables 1 and 2. Free tax efile If you received a qualified distribution to purchase or construct a main home in a Midwestern disaster area, you can repay part or all of that distribution on or after the applicable disaster date, but no later than March 3, 2009, to an eligible retirement plan. Free tax efile For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Free tax efile To be a qualified distribution, the distribution must meet all of the following requirements. Free tax efile The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Free tax efile The distribution was received after the date that was 6 months before the day after the applicable disaster date. Free tax efile The distribution was to be used to purchase or construct a main home in a Midwestern disaster area that was not purchased or constructed because of the severe storms, tornadoes, or flooding. Free tax efile Amounts that are repaid before March 4, 2009, are treated as a qualified rollover and are not included in income. Free tax efile Also, a repayment of a qualified distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. Free tax efile A qualified distribution not repaid before March 4, 2009, may be taxable for 2007 or 2008 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Free tax efile You must file Form 8930 if you received a qualified distribution that you repaid, in whole or in part, before March 4, 2009. Free tax efile Loans From Qualified Plans This benefit applies to the counties in both Tables 1 and 2. Free tax efile The following benefits are available to qualified individuals. Free tax efile Increases to the limits for distributions treated as loans from employer plans. Free tax efile A 1-year suspension for payments due on plan loans. Free tax efile Qualified individual. Free tax efile   You are a qualified individual if your main home was located in a Midwestern disaster area on the applicable disaster date and you had an economic loss because of the severe storms, tornadoes, or flooding. Free tax efile Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Free tax efile Limits on plan loans. Free tax efile   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Free tax efile In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Free tax efile If your main home was located in a Midwestern disaster area, the higher limits apply only to loans received during the period beginning on October 3, 2008, and ending on December 31, 2009. Free tax efile One-year suspension of loan payments. Free tax efile   Payments on plan loans outstanding on or after the applicable disaster date, may be suspended for 1 year by the plan administrator. Free tax efile To qualify for the suspension, the due date for any loan payment must occur during the period beginning on the applicable disaster date and ending on December 31, 2009. Free tax efile Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit This benefit applies to the counties in both Tables 1 and 2. Free tax efile You can elect to use your 2007 earned income to figure your earned income credit (EIC) and additional child tax credit for 2008 if: Your 2008 earned income is less than your 2007 earned income, and At least one of the following statements is true. Free tax efile Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 1. Free tax efile Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 2, and you were displaced from that home because of the severe storms, tornadoes, or flooding. Free tax efile Earned income. Free tax efile    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. Free tax efile If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. Free tax efile Joint returns. Free tax efile   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. Free tax efile If you make the election, your 2007 earned income is the sum of your 2007 earned income and your spouse's 2007 earned income. Free tax efile Making the election. Free tax efile   If you make the election to use your 2007 earned income, the election applies for figuring both the EIC and the additional child tax credit. Free tax efile However, you can make the election for the additional child tax credit even if you do not take the EIC. Free tax efile   Electing to use your 2007 earned income can increase or decrease your EIC. Free tax efile Take the following steps to decide whether to make the election. Free tax efile Figure your 2008 EIC using your 2007 earned income. Free tax efile Figure your 2008 additional child tax credit using your 2007 earned income for EIC purposes. Free tax efile Add the results of (1) and (2). Free tax efile Figure your 2008 EIC using your 2008 earned income. Free tax efile Figure your 2008 additional child tax credit using your 2008 earned income for additional child tax credit purposes. Free tax efile Add the results of (4) and (5). Free tax efile Compare the results of (3) and (6). Free tax efile If (3) is larger than (6), it is to your benefit to make the election. Free tax efile If (3) is equal to or smaller than (6), making the election will not help you. Free tax efile   If you elect to use your 2007 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2007 earned income on the dotted line next to line 64a of Form 1040, on the line next to line 40a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. Free tax efile   If you elect to use your 2007 earned income and you are claiming the additional child tax credit, enter your 2007 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. Free tax efile Getting your 2007 tax return information. Free tax efile   If you do not have your 2007 tax records, you can get the amount of earned income used to figure your 2007 EIC by calling 1-866-562-5227. Free tax efile You can also get this information by visiting the IRS website at www. Free tax efile irs. Free tax efile gov. Free tax efile   If you prefer to figure your 2007 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. Free tax efile See Request for Copy or Transcript of Tax Return on page 11. Free tax efile Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. Free tax efile You can claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by the severe storms, tornadoes, or flooding. Free tax efile The additional exemption amount is claimed on Form 8914. Free tax efile You can claim an additional exemption amount only one time for a specific individual. Free tax efile If you claimed an additional exemption amount for an individual in 2008, you cannot claim that amount again for the same individual in 2009. Free tax efile The maximum additional exemption amount you can claim for all displaced individuals is $2,000. Free tax efile Any additional exemption amount you claimed for displaced individuals in 2008 will reduce the $2,000 maximum for 2009. Free tax efile The $2,000 limit applies to a husband and wife, whether the husband and wife file joint returns or separate returns. Free tax efile If married filing separately, the $2,000 can be divided in $500 increments between the spouses. Free tax efile For example, if one spouse claims an additional exemption amount for one displaced individual, the other spouse, if otherwise eligible, can claim additional exemption amounts for three different displaced individuals. Free tax efile If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. Free tax efile In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). Free tax efile To qualify as a displaced individual, the individual: Must have had his or her main home in a Midwestern disaster area on the applicable disaster date, and he or she must have been displaced from that home. Free tax efile If the individual's main home was located in a Midwestern disaster area as shown in Table 2, that home must have been damaged by the severe storms, tornadoes, or flooding or the individual must have been evacuated from that home because of the severe storms, tornadoes, or flooding, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. Free tax efile You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. Free tax efile You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. Free tax efile Food, clothing, or personal items consumed or used by the displaced individual. Free tax efile Reimbursement for the cost of any long distance telephone calls made by the displaced individual. Free tax efile Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. Free tax efile However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. Free tax efile Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. Free tax efile For more information, see Form 8914. Free tax efile Education Credits This benefit applies only to the counties in Table 1. Free tax efile The education credits have been expanded for students attending an eligible educational institution located in a Midwestern disaster area (Midwestern disaster area students) for any tax year beginning in 2008 or 2009. Free tax efile The Hope credit for a Midwestern disaster area student is increased to 100% of the first $2,400 in qualified education expenses and 50% of the next $2,400 of qualified education expenses for a maximum credit of $3,600 per student. Free tax efile The lifetime learning credit rate for a Midwestern disaster area student is increased from 20% to 40%. Free tax efile The definition of qualified education expenses for a Midwestern disaster area student also has been expanded. Free tax efile This expanded definition also applies to the tuition and fees deduction claimed on Form 8917. Free tax efile In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a Midwestern disaster area student include the following. Free tax efile Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Free tax efile For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. Free tax efile For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. Free tax efile The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. Free tax efile The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. Free tax efile You will need to contact the eligible educational institution for qualified room and board costs. Free tax efile For more information, see Form 8863. Free tax efile See Form 8917 for the tuition and fees deduction. Free tax efile Recapture of Federal Mortgage Subsidy This benefit applies only to the counties in Table 1. Free tax efile Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Free tax efile However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. Free tax efile This amount is increased to $150,000 if the loan was provided before 2011 and was used to alter, repair, or improve an existing owner-occupied residence in a Midwestern disaster area as shown in Table 1. Free tax efile Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. Free tax efile Generally, discharges of nonbusiness debts (such as mortgages) made on or after the applicable disaster date and before January 1, 2010, are excluded from income for individuals whose main home was in a Midwestern disaster area on the applicable disaster date. Free tax efile If the individual's main home was located in a Midwestern disaster area as shown in Table 2, the individual also must have had an economic loss because of the severe storms, tornadoes, or flooding. Free tax efile Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Free tax efile This relief does not apply to any debt secured by real property located outside a Midwestern disaster area. Free tax efile You may also have to reduce certain tax attributes by the amount excluded. Free tax efile For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Free tax efile Tax Relief for Temporary Relocation This benefit applies only to the counties in Table 1. Free tax efile The IRS can adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2008 or 2009 as a result of a temporary relocation caused by the severe storms, tornadoes, or flooding. Free tax efile However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. Free tax efile The IRS has exercised this authority as follows. Free tax efile In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. Free tax efile In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. Free tax efile You can treat as a student an individual who enrolled in school before the applicable disaster date, and who is unable to attend classes because of the severe storms, tornadoes, or flooding, for each month of the enrollment period that individual is prevented by the severe storms, tornadoes, or flooding from attending school as planned. Free tax efile Additional Tax Relief for Businesses Employee Retention Credit This benefit applies only to the counties in Table 1. Free tax efile An eligible employer who conducted an active trade or business in a Midwestern disaster area can claim the employee retention credit. Free tax efile The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Free tax efile Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Free tax efile Use Form 5884-A to claim the credit. Free tax efile Employers affected by the severe storms, tornadoes, or flooding. Free tax efile   The following definitions apply to employers affected by the severe storms, tornadoes, or flooding. Free tax efile Eligible employer. Free tax efile   For this purpose, an eligible employer is any employer who meets all of the following. Free tax efile Employed an average of not more than 200 employees on business days during the tax year before the applicable disaster date. Free tax efile Conducted an active trade or business on the applicable disaster date in a Midwestern disaster area. Free tax efile Whose trade or business was inoperable on any day after the applicable disaster date and before January 1, 2009, because of the damage caused by the severe storms, tornadoes, or flooding. Free tax efile Eligible employee. Free tax efile   For this purpose, an eligible employee is an employee whose principal place of employment on the applicable disaster date with such eligible employer was in a Midwestern disaster area. Free tax efile An employee is not an eligible employee for purposes of the severe storms, tornadoes, or flooding if the employee is treated as an eligible employee for the work opportunity credit. Free tax efile Qualified wages. Free tax efile   Qualified wages are wages (up to $6,000 per employee) you paid or incurred before January 1, 2009, for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable disaster, and ending on the date your trade or business resumed significant operations at that place. Free tax efile In addition, the wages must have been paid or incurred after the applicable disaster date. Free tax efile    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Free tax efile    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Free tax efile Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Free tax efile Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Free tax efile   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Free tax efile For a special rule that applies to railroad employees, see section 51(h)(1)(B). Free tax efile   Qualified wages do not include the following. Free tax efile Wages paid to your dependent or a related individual. Free tax efile See section 51(i)(1). Free tax efile Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Free tax efile Wages for services of replacement workers during a strike or lockout. Free tax efile   For more information, see Form 5884-A. Free tax efile Employer Housing Credit and Exclusion This benefit applies only to the counties in Table 1. Free tax efile An employer who conducted an active trade or business in a Midwestern disaster area can claim the employer housing credit. Free tax efile The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from November 1, 2008, through May 1, 2009. Free tax efile The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). Free tax efile Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Free tax efile The employer must use Form 5884-A to claim the credit. Free tax efile A qualified employee is an individual who had a main home in a Midwestern disaster area on the applicable disaster date, and who performs substantially all employment services in a Midwestern disaster area for the employer furnishing the lodging. Free tax efile The employee cannot be your dependent or a related individual. Free tax efile See section 51(i)(1). Free tax efile For more information, see Form 5884-A. Free tax efile Demolition and Clean-up Costs This benefit applies only to the counties in Table 1. Free tax efile You can elect to deduct 50% of any qualified disaster recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Free tax efile Qualified disaster recovery assistance clean-up costs are any amounts paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the removal of debris from, or the demolition of structures on, real property located in a Midwestern disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Free tax efile Qualified disaster recovery assistance clean-up costs are limited to amounts necessary due to damage attributable to the severe storms, tornadoes, or flooding in the Midwestern disaster areas. Free tax efile Increase in Rehabilitation Tax Credit This benefit applies only to the counties in Table 1. Free tax efile The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred on or after the applicable disaster date, and before January 1, 2012, on buildings located in a Midwestern disaster area as follows. Free tax efile For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. Free tax efile For certified historic structures, the credit percentage is increased from 20% to 26%. Free tax efile For more information, see Form 3468, Investment Credit. Free tax efile Request for Copy or Transcript of Tax Return Request for copy of tax return. Free tax efile   You can use Form 4506 to order a copy of your tax return. Free tax efile Generally, there is a $57 fee for requesting each copy of a tax return. Free tax efile If your main home, principal place of business, or tax records are located in a Midwestern disaster area, the fee will be waived if “Midwestern Disaster Area” is written in red across the top of the form when filed. Free tax efile Request for transcript of tax return. Free tax efile   You can use Form 4506-T to order a free transcript of your tax return. Free tax efile A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Free tax efile You can also call 1-800-829-1040 to order a transcript. Free tax efile How To Get Tax Help Special IRS assistance. Free tax efile   The IRS is providing special help for those affected by the severe storms, tornadoes, or flooding, as well as survivors and personal representatives of the victims. Free tax efile We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by recent federally declared disasters, or who have other tax issues related to the severe storms, tornadoes, or flooding. Free tax efile Call 1-866-562-5227 Monday through FridayIn English–7 a. Free tax efile m. Free tax efile to 10 p. Free tax efile m. Free tax efile local timeIn Spanish–8 a. Free tax efile m. Free tax efile to 9:30 p. Free tax efile m. Free tax efile local time   The IRS website at www. Free tax efile irs. Free tax efile gov has notices and other tax relief information. Free tax efile Check it periodically for any new guidance. Free tax efile You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Free tax efile By selecting the method that is best for you, you will have quick and easy access to tax help. Free tax efile Contacting your Taxpayer Advocate. Free tax efile   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Free tax efile Here are seven things every taxpayer should know about TAS: TAS is your voice at the IRS. Free tax efile Our service is free, confidential, and tailored to meet your needs. Free tax efile You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. Free tax efile TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. Free tax efile This includes businesses as well as individuals. Free tax efile TAS employees know the IRS and how to navigate it. Free tax efile We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. Free tax efile TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. Free tax efile You can call your local advocate, whose number is in your phone book, in Pub. Free tax efile 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. Free tax efile irs. Free tax efile gov/advocate. Free tax efile You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Free tax efile You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. Free tax efile taxtoolkit. Free tax efile irs. Free tax efile gov. Free tax efile Low Income Taxpayer Clinics (LITCs). Free tax efile   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. Free tax efile LITCs are independent from the IRS. Free tax efile Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. Free tax efile If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. Free tax efile For more information, see Publication 4134, Low Income Taxpayer Clinic List. Free tax efile This publication is available at www. Free tax efile irs. Free tax efile gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. Free tax efile Free tax services. Free tax efile   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Free tax efile It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. Free tax efile It also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone. Free tax efile   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Free tax efile Free help with your return. Free tax efile   Free help in preparing your return is available nationwide from IRS-trained volunteers. Free tax efile The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Free tax efile Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free tax efile To find the nearest VITA or TCE site, call 1-800-829-1040. Free tax efile   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free tax efile To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website atwww. Free tax efile aarp. Free tax efile org/money/taxaide. Free tax efile   For more information on these programs, go to www. Free tax efile irs. Free tax efile gov and enter keyword “VITA” in the upper right-hand corner. Free tax efile Internet. Free tax efile You can access the IRS website at www. Free tax efile irs. Free tax efile gov 24 hours a day, 7 days a week to: E-file your return. Free tax efile Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Free tax efile Check the status of your 2009 refund. Free tax efile Go to www. Free tax efile irs. Free tax efile gov and click on Where's My Refund. Free tax efile Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Free tax efile If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Free tax efile Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Free tax efile Download forms, instructions, and publications. Free tax efile Order IRS products online. Free tax efile Research your tax questions online. Free tax efile Search publications online by topic or keyword. Free tax efile Use the online Internal Revenue Code, Regulations, or other official guidance. Free tax efile View Internal Revenue Bulletins (IRBs) published in the last few years. Free tax efile Figure your withholding allowances using the withholding calculator online at www. Free tax efile irs. Free tax efile gov/individuals. Free tax efile Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant. Free tax efile Sign up to receive local and national tax news by email. Free tax efile Get information on starting and operating a small business. Free tax efile Phone. Free tax efile Many services are available by phone. Free tax efile Ordering forms, instructions, and publications. Free tax efile Call 1-800-TAX FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. Free tax efile You should receive your order within 10 days. Free tax efile Asking tax questions. Free tax efile Call the IRS with your tax questions at 1-800-829-1040. Free tax efile Solving problems. Free tax efile You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Free tax efile An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Free tax efile Call your local Taxpayer Assistance Center for an appointment. Free tax efile To find the number, go to www. Free tax efile irs. Free tax efile gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Free tax efile TTY/TDD equipment. Free tax efile If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Free tax efile TeleTax topics. Free tax efile Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Free tax efile Refund information. Free tax efile To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Free tax efile Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Free tax efile If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Free tax efile Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Free tax efile Refunds are sent out weekly on Fridays. Free tax efile If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. Free tax efile Other refund information. Free tax efile To check the status of a prior year refund or amended return refund, call 1-800-829-1954. Free tax efile Evaluating the quality of our telephone services. Free tax efile To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Free tax efile One method is for a second IRS representative to listen in on or record random telephone calls. Free tax efile Another is to ask some callers to complete a short survey at the end of the call. Free tax efile Walk-in. Free tax efile Many products and services are available on a walk-in basis. Free tax efile Products. Free tax efile You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free tax efile Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Free tax efile Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Free tax efile Services. Free tax efile You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Free tax efile An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Free tax efile If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Free tax efile No appointment is necessary—just walk in. Free tax efile If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Free tax efile A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Free tax efile If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. Free tax efile All other issues will be handled without an appointment. Free tax efile To find the number of your local office, go to www. Free tax efile irs. Free tax efile gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Free tax efile Mail. Free tax efile You can send your order for forms, instructions, and publications to the address below. Free tax efile You should receive a response within 10 days after your request is received. Free tax efile Internal Revenue Service1201 N. Free tax efile Mitsubishi MotorwayBloomington, IL 61705-6613 DVD for tax products. Free tax efile You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Free tax efile Prior-year forms, instructions, and publications. Free tax efile Tax Map: an electronic research tool and finding aid. Free tax efile Tax law frequently asked questions. Free tax efile Tax Topics from the IRS telephone response system. Free tax efile Internal Revenue Code—Title 26 of the U. Free tax efile S. Free tax efile Code. Free tax efile Fill-in, print, and save features for most tax forms. Free tax efile Internal Revenue Bulletins. Free tax efile Toll-free and email technical support. Free tax efile Two releases during the year. Free tax efile – The first release will ship the beginning of January 2010. Free tax efile – The final release will ship the beginning of March 2010. Free tax efile Purchase the DVD from National Technical Information Service (NTIS) at www. Free tax efile irs. Free tax efile gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Free tax efile Prev  Up  Next   Home   More Online Publications