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Free Tax Preparation For Low Income

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Free Tax Preparation For Low Income

Free tax preparation for low income 27. Free tax preparation for low income   Beneficios Tributarios para Estudios Relacionados con el Trabajo Table of Contents Qué Hay de Nuevo Introduction Useful Items - You may want to see: Estudios Relacionados con el Trabajo que Reúnen los Requisitos de la DeducciónEstudios Requeridos por el Empleador o por Ley Estudios para Mantener o Mejorar Destrezas Estudios para Satisfacer los Requisitos Mínimos Estudios que lo Capacitan para un Nuevo Oficio o Negocio Qué Gastos se Pueden Deducir Reembolso no reclamado. Free tax preparation for low income Gastos de Transporte Gastos de Viaje No se Permiten Beneficios Dobles Reembolsos Cómo Deducir Gastos de NegociosPersonas que Trabajan por Cuenta Propia Empleados Artistas del Espectáculo y Funcionarios a los que se les Pagan Honorarios Gastos de Trabajo Relacionados con un Impedimento Documentación Qué Hay de Nuevo Tarifa estándar por milla. Free tax preparation for low income  Por lo general, si reclama una deducción de negocios por estudios relacionados con el trabajo y maneja su automóvil a la escuela y de vuelta a casa, la cantidad que puede deducir por las millas recorridas desde el 1 de enero de 2013 al 31 de diciembre de 2013 es 56½ centavos por milla. Free tax preparation for low income Vea Gastos de Transporte bajo Qué Gastos se Pueden Deducir, para más información. Free tax preparation for low income Introduction Este capítulo explica los gastos de estudios relacionados con el trabajo que tal vez pueda deducir como gastos de negocios. Free tax preparation for low income Para reclamar tal deducción, tiene que: Detallar las deducciones en el Anexo A (Formulario 1040) si es empleado; Presentar el Anexo C (Formulario 1040), Anexo C-EZ (Formulario 1040) o el Anexo F (Formulario 1040) si trabaja por cuenta propia y Tener gastos de estudios calificados explicados bajo Estudios Relacionados con el Trabajo que Reúnen los Requisitos de la Deducción . Free tax preparation for low income Si es empleado y puede detallar las deducciones, tal vez pueda reclamar una deducción por los gastos pagados por estudios que se relacionen con el trabajo. Free tax preparation for low income Su deducción será la cantidad total de sus gastos de estudios relacionados con el trabajo que reúnen los requisitos más otros gastos relacionados con el trabajo y ciertos gastos misceláneos (con la excepción de los gastos del trabajo relacionados con el impedimento de personas discapacitadas) que sea mayor que el 2% de sus ingresos brutos ajustados (AGI, por sus siglas en inglés). Free tax preparation for low income Vea el capítulo 28. Free tax preparation for low income Si trabaja por cuenta propia, deduciría los gastos de estudios relacionados con el trabajo que reúnen los requisitos directamente de sus ingresos del trabajo por cuenta propia. Free tax preparation for low income Los gastos de estudios relacionados con el trabajo también podrían darle derecho a otros beneficios tributarios, tales como el crédito tributario de oportunidad para los estadounidenses y el crédito vitalicio por aprendizaje (vea el capítulo 35). Free tax preparation for low income Es posible que tenga derecho a estos beneficios incluso si no cumple los requisitos indicados anteriormente. Free tax preparation for low income Asimismo, debe tomar en consideración que es posible que sus gastos de estudios relacionados con el trabajo le podrían dar derecho a reclamar más de un beneficio tributario. Free tax preparation for low income Por lo general, puede reclamar cualquier cantidad de beneficios siempre que utilice diferentes gastos para calcular cada uno de ellos. Free tax preparation for low income Cuando calcule sus impuestos, tal vez desee comparar estos beneficios tributarios para elegir el (los) método(s) mediante el (los) cual(es) obtenga el menor impuesto por pagar. Free tax preparation for low income Useful Items - You may want to see: Publicación 463 Travel, Entertainment, Gift, and Car Expenses (Gastos de viaje, entretenimiento, regalos y automóvil), en inglés 970 Tax Benefits for Education (Beneficios tributarios por estudios), en inglés Formulario (e Instrucciones) 2106 Employee Business Expenses (Gastos de negocios del empleado), en inglés 2106-EZ Unreimbursed Employee Business Expenses (Gastos de negocios del empleado no reembolsados), en inglés Anexo A (Formulario 1040) Itemized Deductions (Deducciones detalladas), en inglés Estudios Relacionados con el Trabajo que Reúnen los Requisitos de la Deducción Puede deducir como gastos de negocio los costos de estudios relacionados con el trabajo si éstos reúnen los requisitos de la deducción. Free tax preparation for low income Éstos son estudios que cumplen al menos uno de los dos siguientes requisitos: Su empleador o la ley requiere dichos estudios para mantener su sueldo, situación o trabajo actual. Free tax preparation for low income Los estudios requeridos tienen que servir para un propósito comercial legítimo (bona fide) de su empleador. Free tax preparation for low income Los estudios mantienen o mejoran las destrezas necesarias en su trabajo actual. Free tax preparation for low income No obstante, aun si sus estudios cumplen uno o ambos de los requisitos anteriores, no se considera que dichos estudios estén relacionados con el trabajo ni que reúnen los requisitos de la deducción si: Se requieren para satisfacer los requisitos mínimos de educación de su oficio o negocio actual o Forman parte de un programa de estudios que lo capacitará para un nuevo oficio o negocio. Free tax preparation for low income Puede deducir los costos de los estudios relacionados con el trabajo que reúnen los requisitos de la deducción como gasto de negocios incluso si, al completar dichos estudios, tiene la posibilidad de obtener un título universitario. Free tax preparation for low income Utilice la Figura 27-A, más adelante, para verificar rápidamente si sus estudios reúnen los requisitos. Free tax preparation for low income Estudios Requeridos por el Empleador o por Ley Una vez que haya cumplido los requisitos mínimos de educación para su trabajo, es posible que su empleador o la ley le exija seguir sus estudios. Free tax preparation for low income Se considera que dichos estudios adicionales son estudios relacionados con el trabajo que reúnen los requisitos si se cumplen los tres siguientes requisitos: Se requieren para que mantenga su sueldo, situación o trabajo actual; El requisito sirve un propósito legítimo (bona fide) comercial de su empleador y Los estudios no forman parte de un programa que lo capacitará para un nuevo oficio o negocio. Free tax preparation for low income Si completa más estudios de los requeridos por su empleador o la ley, estos estudios adicionales sólo pueden ser estudios relacionados con el trabajo que reúnen los requisitos de la deducción si mantienen o mejoran las destrezas requeridas en su trabajo actual. Free tax preparation for low income Vea Estudios para Mantener o Mejorar Destrezas , más adelante. Free tax preparation for low income Ejemplo. Free tax preparation for low income Usted es un maestro que ha cumplido los requisitos mínimos para enseñar. Free tax preparation for low income Su empleador le exige que tome un curso universitario adicional cada año para poder seguir con su puesto actual de maestro. Free tax preparation for low income Si los cursos no lo capacitarán para un nuevo oficio o negocio, entonces serán estudios relacionados con el trabajo que reúnen los requisitos, incluso si en el futuro recibe una maestría y un aumento de sueldo debido a estos estudios adicionales. Free tax preparation for low income Estudios para Mantener o Mejorar Destrezas Si su empleador o la ley no requiere estudios, éstos pueden ser estudios relacionados con el trabajo que reúnen los requisitos de la deducción sólo si mantienen o mejoran las destrezas necesarias en su trabajo actual. Free tax preparation for low income Éstos pueden incluir cursos de actualización, cursos sobre avances profesionales y cursos académicos o vocacionales. Free tax preparation for low income Ejemplo. Free tax preparation for low income Usted repara televisores, radios y sistemas estereofónicos para la tienda XYZ. Free tax preparation for low income Para mantenerse al corriente de los últimos avances en su profesión, toma cursos especiales de servicios de radio y sistemas estereofónicos. Free tax preparation for low income Estos cursos mantienen y mejoran las destrezas requeridas en su trabajo. Free tax preparation for low income Mantenimiento de destrezas versus capacitación para un empleo nuevo. Free tax preparation for low income   Los estudios para mantener o mejorar destrezas que se requieren en su trabajo actual no son estudios que reúnen los requisitos de la deducción si también lo capacitarán para un nuevo oficio o negocio. Free tax preparation for low income Estudios durante ausencia temporal. Free tax preparation for low income   Si deja de trabajar durante un año o menos para cursar estudios con el fin de mantener o mejorar las destrezas necesarias en su trabajo actual y luego regresa a su trabajo y desempeña las mismas labores generales, su ausencia se considera temporal. Free tax preparation for low income Los estudios cursados durante una ausencia temporal son estudios relacionados con el trabajo que cumplen los requisitos de la deducción si mantienen o mejoran las destrezas necesarias en su trabajo actual. Free tax preparation for low income Ejemplo. Free tax preparation for low income Deja su trabajo de investigación en biología para convertirse en estudiante de posgrado de biología a tiempo completo durante un año. Free tax preparation for low income Si regresa a trabajar en investigación en biología después de concluir los cursos, los estudios se relacionan con su trabajo actual incluso si no regresa a trabajar para el mismo empleador. Free tax preparation for low income Estudios durante ausencia indefinida. Free tax preparation for low income   Si deja de trabajar durante más de un año, su ausencia del trabajo se considera indefinida. Free tax preparation for low income Se considera que los estudios cursados durante una ausencia indefinida, aun si mantienen o mejoran las destrezas necesarias en el trabajo del cual se ausenta, lo capacitan para un nuevo oficio o negocio. Free tax preparation for low income Por lo tanto, no son estudios relacionados con el trabajo que reúnan los requisitos de la deducción. Free tax preparation for low income Estudios para Satisfacer los Requisitos Mínimos Los estudios necesarios para cumplir los requisitos mínimos de educación para su oficio o negocio actual no son estudios relacionados con el trabajo que reúnan los requisitos de la deducción. Free tax preparation for low income Los requisitos mínimos de educación se determinan a través de: Leyes y reglamentos; Normas de su profesión, oficio o negocio y Su empleador. Free tax preparation for low income Una vez que haya cumplido los requisitos mínimos de educación vigentes cuando se le contrató, no tiene que cumplir nuevos requisitos mínimos de educación. Free tax preparation for low income Esto significa que si los requisitos mínimos cambian después de que haya sido contratado, los estudios necesarios para satisfacer los nuevos requisitos pueden ser estudios que reúnen los requisitos de la deducción. Free tax preparation for low income No ha cumplido los requisitos mínimos de educación de su oficio o negocio sólo porque ya está realizando el trabajo. Free tax preparation for low income Ejemplo 1. Free tax preparation for low income Es estudiante de ingeniería a tiempo completo. Free tax preparation for low income Aunque no ha recibido su título o certificación, trabaja a tiempo parcial como ingeniero en una empresa que lo contratará como ingeniero a tiempo completo después de que finalice sus estudios universitarios. Free tax preparation for low income Aunque sus cursos universitarios de ingeniería mejoran sus destrezas en su trabajo actual, también se requieren para cumplir los requisitos laborales mínimos para contratar a un ingeniero a tiempo completo. Free tax preparation for low income Estos estudios no son estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income Ejemplo 2. Free tax preparation for low income Es contador y ha cumplido con los requisitos mínimos de educación de su empleador. Free tax preparation for low income Posteriormente, éste cambia los requisitos mínimos de educación y requiere que tome cursos universitarios para mantener su trabajo. Free tax preparation for low income Estos cursos adicionales pueden ser estudios relacionados con el trabajo que reúnen los requisitos de la deducción porque ya ha cumplido los requisitos mínimos vigentes al momento de su contratación. Free tax preparation for low income Requisitos para los Docentes Por lo general, los estados o distritos escolares establecen los requisitos mínimos de educación para los docentes. Free tax preparation for low income El requisito es el título universitario o la cantidad mínima de horas de estudio universitario que suele exigirse para la contratación de una persona para dicho cargo. Free tax preparation for low income Si no existen requisitos, habrá cumplido los requisitos mínimos de educación cuando pase a ser miembro del cuerpo docente. Free tax preparation for low income La determinación de si usted es miembro del cuerpo docente de una institución educativa tiene que ser hecha en base de las prácticas particulares de dicha institución. Free tax preparation for low income Por lo general, se le considerará miembro del cuerpo docente si se da una o más de las siguientes condiciones: Es profesor titular o catedrático. Free tax preparation for low income Sus años de servicio se acreditan para obtener el cargo académico o cátedra. Free tax preparation for low income Tiene un voto en las decisiones del cuerpo docente. Free tax preparation for low income Su institución académica hace aportaciones en nombre suyo a un plan de jubilación que no sea el Seguro Social o un programa similar. Free tax preparation for low income Ejemplo 1. Free tax preparation for low income La ley en el estado donde vive exige que los maestros novatos de escuela secundaria tengan un título universitario, incluidos 10 cursos de educación profesional. Free tax preparation for low income Asimismo, para mantener su trabajo, un maestro tiene que realizar un quinto año de capacitación dentro de un plazo de 10 años a partir de la fecha de contratación. Free tax preparation for low income Si la escuela empleadora certifica ante el Departamento de Educación estatal que no puede encontrar maestros calificados, la escuela puede contratar a personas con sólo 3 años de estudios universitarios. Free tax preparation for low income No obstante, para mantener su trabajo, estos maestros tienen que obtener un título universitario y completar los cursos de educación profesional requeridos dentro de un plazo de 3 años. Free tax preparation for low income De acuerdo con lo anterior, el título universitario, incluya o no los 10 cursos de educación profesional, se considera el requisito mínimo de educación para calificar como maestro en el estado donde vive. Free tax preparation for low income Si posee toda la educación requerida, a excepción del quinto año, ha cumplido los requisitos mínimos de educación. Free tax preparation for low income El quinto año de capacitación se considera estudios relacionados con el trabajo que reúnen los requisitos de la deducción a menos que forme parte de un programa de estudios que lo capacitará para un nuevo oficio o negocio. Free tax preparation for low income Figura 27–A. Free tax preparation for low income ¿Reúnen los Requisitos sus Estudios Relacionados con el Trabajo? Please click here for the text description of the image. Free tax preparation for low income Figura 27−A. Free tax preparation for low income ¿Reúnen los requisitos sus estudios relacionados con el trabajo? Ejemplo 2. Free tax preparation for low income Suponga que se dan los mismos hechos que en el Ejemplo 1, excepto que tiene título universitario y sólo seis cursos de educación profesional. Free tax preparation for low income Los cuatro cursos adicionales pueden ser estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income Aunque no tiene todos los cursos requeridos, ya ha cumplido los requisitos mínimos de educación. Free tax preparation for low income Ejemplo 3. Free tax preparation for low income Suponga que se dan los mismos hechos que en el Ejemplo 1, excepto que lo han contratado con sólo 3 años de estudios universitarios. Free tax preparation for low income Los cursos que tome para lograr un título (incluso en el campo de enseñanza) no son estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income Éstos se requieren para cumplir los requisitos mínimos de educación para trabajar como maestro. Free tax preparation for low income Ejemplo 4. Free tax preparation for low income Tiene un título universitario y trabaja como instructor temporal en una universidad. Free tax preparation for low income Al mismo tiempo, toma cursos de posgrado para obtener un título superior. Free tax preparation for low income Las reglas de la universidad estipulan que puede pasar a ser miembro del cuerpo docente sólo si obtiene un posgrado. Free tax preparation for low income Además, puede mantener su trabajo como instructor sólo si demuestra un avance satisfactorio para obtener este título. Free tax preparation for low income No ha cumplido los requisitos mínimos de educación para ser miembro del cuerpo docente. Free tax preparation for low income Los cursos de posgrado no son estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income Licencia en un nuevo estado. Free tax preparation for low income   Una vez que haya cumplido los requisitos mínimos de educación para maestros de su estado, se considera que ha cumplido los requisitos mínimos de educación en todos los estados. Free tax preparation for low income Esto se aplica incluso si tiene que cursar estudios adicionales para recibir la licencia en otro estado. Free tax preparation for low income Los estudios adicionales que necesite son estudios relacionados con el trabajo que reúnen los requisitos para la deducción. Free tax preparation for low income Ya ha cumplido los requisitos mínimos de educación para enseñar. Free tax preparation for low income Enseñar en otro estado no constituye un nuevo oficio o negocio. Free tax preparation for low income Ejemplo. Free tax preparation for low income Posee una licencia permanente para enseñar en el Estado A y ha trabajado como maestro en ese estado durante varios años. Free tax preparation for low income Se muda al Estado B y lo contratan inmediatamente como maestro. Free tax preparation for low income Sin embargo, tiene que realizar ciertos cursos prescritos para obtener una licencia permanente para enseñar en el Estado B. Free tax preparation for low income Estos cursos adicionales son estudios relacionados con el trabajo que reúnen los requisitos de la deducción debido a que el puesto de maestro en el Estado B implica el mismo tipo de trabajo general para el cual reunía los requisitos en el Estado A. Free tax preparation for low income Estudios que lo Capacitan para un Nuevo Oficio o Negocio Los estudios que forman parte de un programa de estudios a fin de capacitarlo para un nuevo oficio o negocio no están relacionados con el trabajo y no reúnen los requisitos de la deducción. Free tax preparation for low income Esto es aplicable incluso si no tiene intención de ingresar en ese oficio o negocio. Free tax preparation for low income Si es empleado, un cambio de deberes que implique el mismo tipo de trabajo general no es un nuevo oficio o negocio. Free tax preparation for low income Ejemplo 1. Free tax preparation for low income Es contador. Free tax preparation for low income Su empleador le exige que saque un título en derecho corriendo con sus propios gastos. Free tax preparation for low income Se inscribe en una escuela de derecho con la intención de cursar el plan de estudios típico para lograr un título en derecho. Free tax preparation for low income Aun si su intención no es ser abogado, los estudios no reúnen los requisitos de la deducción debido a que el título en derecho lo capacitará para un nuevo oficio o negocio. Free tax preparation for low income Ejemplo 2. Free tax preparation for low income Es médico de medicina general. Free tax preparation for low income Toma un curso de dos semanas para revisar los avances en diversos campos especializados de la medicina. Free tax preparation for low income El curso no lo capacita para una nueva profesión. Free tax preparation for low income Se considera que está relacionado con el trabajo y reúne los requisitos de la deducción porque mantiene o mejora las destrezas requeridas en su profesión actual. Free tax preparation for low income Ejemplo 3. Free tax preparation for low income Durante su trabajo en la práctica privada de psiquiatría, ingresa a un programa para estudiar y capacitarse en un instituto de psicoanálisis acreditado. Free tax preparation for low income El programa lo capacitará para practicar el psicoanálisis. Free tax preparation for low income La formación en psicoanálisis no lo capacitará para una nueva profesión. Free tax preparation for low income Está relacionada con el trabajo y reúne los requisitos de la deducción porque mantiene o mejora las destrezas necesarias en su profesión actual. Free tax preparation for low income Curso de preparación para el examen de reválida de derecho o para el examen para contadores públicos autorizados Los cursos de preparación para el examen de reválida para ejercer la abogacía o el examen para contadores públicos autorizados (CPA, por sus siglas en inglés) no son estudios relacionados con el trabajo que cumplan los requisitos. Free tax preparation for low income Forman parte de un programa de estudios que puede capacitarlo para una nueva profesión. Free tax preparation for low income Deberes Magisteriales y Afines Todos los deberes magisteriales y deberes afines se consideran relativamente el mismo tipo de trabajo. Free tax preparation for low income Un cambio de deberes de cualquiera de las siguientes maneras no se considera un cambio a una nueva ocupación: Maestro de escuela primaria a maestro de escuela secundaria. Free tax preparation for low income Maestro de una asignatura, como biología, a maestro de otra asignatura, como arte. Free tax preparation for low income Maestro a consejero académico. Free tax preparation for low income Maestro a administrador escolar. Free tax preparation for low income Qué Gastos se Pueden Deducir Si sus estudios satisfacen los requisitos descritos anteriormente en Estudios Relacionados con el Trabajo que Reúnen los Requisitos de la Deducción , por lo general, puede deducir sus gastos de estudios como gastos de negocios. Free tax preparation for low income Si no trabaja por cuenta propia, puede deducir gastos de negocios sólo si detalla sus deducciones. Free tax preparation for low income No puede deducir gastos relacionados con ingresos exentos ni excluidos de impuestos. Free tax preparation for low income Gastos deducibles. Free tax preparation for low income   Se pueden deducir los siguientes gastos de estudios: Matrícula, libros, útiles escolares, cuotas de laboratorio y artículos similares. Free tax preparation for low income Ciertos costos de transporte y viajes. Free tax preparation for low income Otros gastos de estudios, como costos de investigación y de procesamiento de palabras (mecanografía) al escribir un ensayo o tésis como parte de un programa de estudios. Free tax preparation for low income Gastos no deducibles. Free tax preparation for low income   No puede deducir sus gastos personales o de capital. Free tax preparation for low income Por ejemplo, no puede deducir el valor en dólares de un período de vacaciones o permiso anual (vacaciones remuneradas) que toma para asistir a clases. Free tax preparation for low income Esta cantidad es un gasto personal. Free tax preparation for low income Reembolso no reclamado. Free tax preparation for low income   Aun si no reclama reembolsos a los que tiene derecho a recibir de su empleador, no puede deducir los gastos correspondientes a ese reembolso no reclamado. Free tax preparation for low income Ejemplo. Free tax preparation for low income Su empleador acuerda pagar sus gastos de estudios si usted presenta un vale que muestre sus gastos. Free tax preparation for low income Usted no presenta un vale y no se los reembolsan. Free tax preparation for low income Como no presentó un vale, no puede deducir los gastos en su declaración de impuestos. Free tax preparation for low income Gastos de Transporte Si sus estudios reúnen los requisitos, puede deducir los costos de transporte locales en los que tiene que incurrir para viajar directamente del trabajo a la escuela. Free tax preparation for low income Si tiene un trabajo habitual y asiste a la escuela de forma temporal, también puede deducir los costos de regreso de la escuela a su domicilio. Free tax preparation for low income Asistencia temporal. Free tax preparation for low income   Asiste a la escuela de manera temporal si alguna de las siguientes situaciones corresponde a su caso: Se espera de manera realista que su asistencia a la escuela dure 1 año o menos y en realidad dura 1 año o menos. Free tax preparation for low income Al principio, se espera de manera realista que su asistencia a la escuela dure 1 año o menos, pero posteriormente es factible que dure más de 1 año. Free tax preparation for low income Su asistencia es temporal hasta la fecha en la que determine que durará más de 1 año. Free tax preparation for low income Nota: Si se encuentra en la situación (1) o (2), su asistencia no es temporal si los hechos y las circunstancias indican lo contrario. Free tax preparation for low income Asistencia no temporal. Free tax preparation for low income   No asiste a la escuela de manera temporal si alguna de las siguientes situaciones le corresponde: Se espera de manera realista que su asistencia a la escuela dure más de 1 año. Free tax preparation for low income No importa cuánto tiempo de hecho asista. Free tax preparation for low income Al principio, se espera de manera realista que su asistencia a la escuela dure 1 año o menos, pero posteriormente se espera que dure más de 1 año. Free tax preparation for low income Su asistencia no es temporal después de la fecha en la que se determine que durará más de 1 año. Free tax preparation for low income Gastos de Transporte Deducibles Si trabaja de manera habitual y se dirige directamente de su domicilio a la escuela de manera temporal, puede deducir los costos del viaje de ida y regreso entre su domicilio y la escuela. Free tax preparation for low income Esto es aplicable sin importar la ubicación de dicho lugar, la distancia recorrida o si asiste a cursos en dicho lugar en días no laborables. Free tax preparation for low income Los gastos de transporte incluyen los costos reales de autobús, metro, taxi u otras tarifas, así como los costos del uso de su automóvil. Free tax preparation for low income Los gastos de transporte no incluyen cantidades gastadas por viaje, comidas o alojamiento cuando pasa la noche fuera de su casa. Free tax preparation for low income Ejemplo 1. Free tax preparation for low income Trabaja habitualmente en una ciudad cercana y viaja directamente del trabajo a su domicilio. Free tax preparation for low income Asimismo, asiste a la escuela cada noche entre semana durante 3 meses para tomar un curso que mejore sus destrezas laborales. Free tax preparation for low income Dado que asiste a una escuela de forma temporal, puede deducir sus gastos diarios de transporte de ida y regreso entre su domicilio y la escuela. Free tax preparation for low income Esto es aplicable independientemente de la distancia recorrida. Free tax preparation for low income Ejemplo 2. Free tax preparation for low income Suponga que se dan los mismos hechos que en el Ejemplo 1, salvo que algunas noches se dirige directamente del trabajo a la escuela y luego a su domicilio. Free tax preparation for low income Puede deducir sus gastos de transporte desde su lugar de trabajo habitual a la escuela y luego al domicilio. Free tax preparation for low income Ejemplo 3. Free tax preparation for low income Suponga que se dan los mismos hechos que en el Ejemplo 1, excepto que asiste a la escuela durante 9 meses todos los sábados, los cuales no son días laborables. Free tax preparation for low income Dado que asiste a la escuela de manera temporal, puede deducir sus gastos de transporte de ida y regreso entre su casa y la escuela. Free tax preparation for low income Ejemplo 4. Free tax preparation for low income Suponga que se dan los mismos hechos que en el Ejemplo 1, excepto que asiste a clases dos veces a la semana durante 15 meses. Free tax preparation for low income Dado que su asistencia a la escuela no se considera temporal, no puede deducir sus gastos de transporte entre su casa y la escuela. Free tax preparation for low income Si se dirige a la escuela directamente desde el trabajo, puede deducir los gastos de transporte de ida desde el trabajo a la escuela. Free tax preparation for low income Si del trabajo se dirige a su casa y luego a la escuela y regresa a su casa, sus gastos de transporte no pueden ser mayores que los gastos en los que hubiese incurrido de haber viajado directamente del trabajo a la escuela. Free tax preparation for low income Uso de su automóvil. Free tax preparation for low income   Si usa su automóvil (propio o arrendado) para viajar a la escuela, puede deducir sus gastos reales o utilizar la tarifa estándar de millaje para calcular la cantidad que puede deducir. Free tax preparation for low income La tarifa estándar por millas recorridas desde el 1 de enero de 2013 hasta el 31 de diciembre de 2013 es 56½ centavos por milla. Free tax preparation for low income Independientemente de los métodos que escoja, también puede deducir cargos de estacionamiento y peajes. Free tax preparation for low income Vea el capítulo 26 para obtener información acerca de la deducción de sus gastos reales por el uso de un automóvil. Free tax preparation for low income Gastos de Viaje Puede deducir gastos de viajes, comidas (vea Límite del 50% del costo de comidas , más adelante) y alojamiento si viaja de un día a otro principalmente para realizar estudios con derecho a deducción relacionados con el trabajo. Free tax preparation for low income Los gastos de viaje para estudios relacionados con el trabajo que reúnen los requisitos de la deducción reciben el mismo trato tributario que los gastos de viaje para otros propósitos de negocios del empleado. Free tax preparation for low income Para más información, vea el capítulo 26. Free tax preparation for low income No puede deducir gastos de actividades personales, como turismo, visitas o entretenimiento. Free tax preparation for low income Viajes principalmente con fines personales. Free tax preparation for low income   Si su viaje fuera de casa es principalmente con fines personales, no puede deducir todos sus gastos de viaje, comidas o alojamiento. Free tax preparation for low income Sólo puede deducir sus gastos de alojamiento y el 50% de sus gastos de comidas durante el período en el que asista a actividades de educación que reúnen los requisitos. Free tax preparation for low income   El determinar si el propósito del viaje es principalmente personal o para estudios depende de los hechos y las circunstancias. Free tax preparation for low income Un factor importante es la comparación del tiempo dedicado a actividades personales con el tiempo dedicado a actividades de educación. Free tax preparation for low income Si dedica más tiempo a actividades personales, el viaje se considera principalmente para estudios sólo si puede demostrar una razón importante y no personal de por qué viajó a un lugar específico. Free tax preparation for low income Ejemplo 1. Free tax preparation for low income Juan trabaja en Newark, Nueva Jersey. Free tax preparation for low income Viajó a Chicago para tomar un curso de una semana, a solicitud de su empleador, que puede deducir de sus impuestos. Free tax preparation for low income Su razón principal para viajar a Chicago fue el curso. Free tax preparation for low income Durante su estadía, realizó un viaje de turismo, salió a divertirse con algunos amigos y realizó un viaje adicional por el día a Pleasantville. Free tax preparation for low income Dado que el viaje era principalmente de negocios, Juan puede deducir su boleto aéreo de ida y vuelta a Chicago. Free tax preparation for low income No puede deducir los gastos de transporte de su viaje a Pleasantville. Free tax preparation for low income Sólo puede deducir las comidas (conforme al límite del 50%) y alojamiento relacionados con sus actividades educativas. Free tax preparation for low income Ejemplo 2. Free tax preparation for low income Susana trabaja en Boston. Free tax preparation for low income Asistió a una universidad en Michigan a fin de tomar un curso para su trabajo. Free tax preparation for low income El curso está relacionado con el trabajo y reúne los requisitos de la deducción. Free tax preparation for low income Tomó un curso, que corresponde a un cuarto de la carga de estudios a tiempo completo. Free tax preparation for low income El resto del tiempo lo dedicó a actividades personales. Free tax preparation for low income Sus razones para tomar el curso en Michigan fueron personales. Free tax preparation for low income El viaje de Susana es principalmente personal, ya que tres cuartos de su tiempo se consideran tiempo personal. Free tax preparation for low income No puede deducir el costo de su boleto de tren de ida y regreso a Michigan. Free tax preparation for low income Puede deducir un cuarto del costo de las comidas (conforme al límite del 50%) y del alojamiento del período en que asistió a la universidad. Free tax preparation for low income Ejemplo 3. Free tax preparation for low income David trabaja en Nashville y recientemente viajó a California para asistir a un seminario de 2 semanas. Free tax preparation for low income El seminario está relacionado con el trabajo y reúne los requisitos de la deducción. Free tax preparation for low income Durante su estadía, dedicó 8 semanas adicionales a actividades personales. Free tax preparation for low income Los hechos, incluida la estadía adicional de 8 semanas, demuestran que su finalidad principal era tomarse unas vacaciones. Free tax preparation for low income David no puede deducir su boleto de avión de ida y vuelta ni sus comidas y alojamiento durante las 8 semanas. Free tax preparation for low income Sólo puede deducir sus gastos por comida (sujeto al límite del 50%) y alojamiento durante las 2 semanas que asistió al seminario. Free tax preparation for low income Cruceros y congresos. Free tax preparation for low income   Algunos cruceros y congresos ofrecen seminarios o cursos como parte de su itinerario. Free tax preparation for low income Aun si los seminarios o cursos están relacionados con el trabajo, su deducción por viaje puede verse limitada. Free tax preparation for low income Esto es aplicable a: Viajes en buque transatlántico, crucero u otra forma de transporte marítimo de lujo y Congresos fuera del área de Norteamérica. Free tax preparation for low income   Si desea consultar más acerca de los límites de deducciones de gastos de viaje que sean aplicables a cruceros y congresos, vea Luxury Water Travel (Viajes en buques de lujo) y Conventions (Congresos) en el capítulo 1 de la Publicación 463, en inglés. Free tax preparation for low income Límite del 50% del costo de comidas. Free tax preparation for low income   Sólo puede deducir el 50% del costo de sus comidas cuando viaja fuera de casa para realizar estudios relacionados con el trabajo que reúnan los requisitos de la deducción. Free tax preparation for low income No se le pueden haber reembolsado los gastos por las comidas. Free tax preparation for low income   Los empleados tienen que usar el Formulario 2106 o el Formulario 2106-EZ para aplicar el límite del 50%. Free tax preparation for low income Viajes con Fines Educativos No puede deducir el costo de sus viajes con fines educativos, incluso si están directamente relacionados con los deberes de su trabajo o negocio. Free tax preparation for low income Ejemplo. Free tax preparation for low income Usted es maestro de francés. Free tax preparation for low income Durante una ausencia sabática otorgada para viajar, recorrió Francia para mejorar sus conocimientos del francés. Free tax preparation for low income Elige su itinerario y la mayoría de sus actividades con el fin de mejorar sus destrezas lingüísticas en francés. Free tax preparation for low income No puede deducir sus gastos de viaje como gastos de estudios. Free tax preparation for low income Esto es aplicable aunque haya dedicado la mayor parte del tiempo a aprender francés visitando escuelas y familias francesas, asistiendo a películas u obras de teatro y participando en actividades similares. Free tax preparation for low income No se Permiten Beneficios Dobles No se le permite hacer lo siguiente: Deducir los gastos de estudios relacionados con el trabajo como gastos de negocios si deduce estos gastos conforme con cualquier otra disposición de la ley, por ejemplo, la deducción de matrículas y cuotas (vea el capítulo 35). Free tax preparation for low income Deducir los gastos de estudios relacionados con el trabajo pagados con fondos de ayuda para los estudios provistos por el empleador, subvención o beca libre de impuestos. Free tax preparation for low income Vea Ajustes a Gastos de Estudios Relacionados con el Trabajo que Reúnen los Requisitos de la Deducción , a continuación. Free tax preparation for low income Ajustes a Gastos de Estudios Relacionados con el Trabajo que Reúnen los Requisitos de la Deducción Si paga gastos de estudios relacionados con el trabajo que reúnen los requisitos de la deducción con determinados fondos exentos de impuestos, no puede reclamar una deducción por estas cantidades. Free tax preparation for low income Tiene que reducir la cantidad de los gastos que reúnen los requisitos por la cantidad de tales gastos que le pueden corresponder a la asistencia para estudios exenta de impuestos. Free tax preparation for low income Para más información, vea el capítulo 12 de la Publicación 970, en inglés. Free tax preparation for low income La asistencia para estudios exenta de impuestos incluye: La parte exenta de impuestos de becas de estudios y becas de investigación (vea el capítulo 1 de la Publicación 970, en inglés); La parte exenta de impuestos de las subvenciones federales Pell (vea el capítulo 1 de la Publicación 970, en inglés); La parte exenta de impuestos de la asistencia para estudios provista por el empleador (vea el capítulo 11 de la Publicación 970, en inglés); Asistencia para estudios destinada a veteranos (vea el capítulo 1 de la Publicación 970, en inglés) y Cualquier otro pago no gravable (libre de impuestos) (que no sean regalos o herencias) que reciba como asistencia para los estudios. Free tax preparation for low income Cantidades que no reducen los gastos de estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income   No reduzca los gastos de estudios relacionados con el trabajo que reúnen los requisitos de la deducción las cantidades pagadas con fondos que el estudiante reciba como: Un pago por servicios, como salarios; Un préstamo; Un regalo; Una herencia o Un retiro de la cuenta de ahorros personal del estudiante. Free tax preparation for low income   Tampoco reduzca la cantidad de los gastos de estudios relacionados con el trabajo que reúnen los requisitos de la deducción por la cantidad de una beca de estudios o beca de investigación declarada como ingreso en la declaración de impuestos del estudiante ni becas que, según lo establecido, no se puedan aplicar a gastos de estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income Reembolsos El trato tributario que dé a los reembolsos depende del acuerdo que tenga con su empleador. Free tax preparation for low income Existen dos tipos básicos de acuerdos de reembolso: planes con rendición de cuentas y planes sin rendición de cuentas. Free tax preparation for low income Puede determinar el tipo de plan mediante el cual se le reembolsa según la manera en que se declara el reembolso en su Formulario W-2. Free tax preparation for low income Para información sobre cómo tratar los reembolsos bajo planes con rendición de cuentas y planes sin rendición de cuentas, vea Reembolsos en el capítulo 26. Free tax preparation for low income Cómo Deducir Gastos de Negocios Las personas que trabajan por cuenta propia y los empleados declaran los gastos de negocios de manera diferente. Free tax preparation for low income La siguiente información explica qué formularios tiene que usar para deducir como gasto de negocios el costo de sus estudios relacionados con el trabajo que reúnen los requisitos de la deducción. Free tax preparation for low income Personas que Trabajan por Cuenta Propia Si trabaja por cuenta propia, declare el costo de sus estudios relacionados con el trabajo que reúnen los requisitos de la deducción en el formulario correspondiente que se utilizó para declarar su ingreso de negocio y gastos (generalmente en el Anexo C, C-EZ o F). Free tax preparation for low income Si sus gastos de estudios incluyen gastos de automóvil o camión, viajes o comidas, declare estos gastos de la misma forma en la que declara los demás gastos de negocios para esas partidas. Free tax preparation for low income Vea las instrucciones del formulario que presente para obtener información acerca de cómo completarlo. Free tax preparation for low income Empleados Si es empleado, puede deducir el costo de estudios relacionados con el trabajo que reúnen los requisitos de la deducción sólo si: No recibió (y no tuvo derecho a recibir) reembolsos de su empleador; Se le reembolsó conforme a un plan sin rendición de cuentas (la cantidad se incluye en el recuadro 1 del Formulario W-2) o Recibió un reembolso conforme a un plan con rendición de cuentas, pero la cantidad recibida fue menor que sus gastos por los cuales usted reclamó un reembolso. Free tax preparation for low income Si le corresponde el punto (1) o (2), puede deducir la totalidad del costo que reúne los requisitos de la deducción. Free tax preparation for low income Si le corresponde el punto (3), puede deducir sólo los costos mayores que su reembolso que reúnen los requisitos de la deducción. Free tax preparation for low income Para deducir como gasto de negocios el costo de sus estudios relacionados con el trabajo que reúnen los requisitos de la deducción, incluya la cantidad con su deducción para todos los demás gastos de negocios del empleado en la línea 21 del Anexo A (Formulario 1040). Free tax preparation for low income (Más adelante se explican las reglas especiales para gastos de ciertos artistas del espectáculo y funcionarios a los que se les pagan honorarios y para gastos de trabajo relacionados con un impedimento). Free tax preparation for low income Esta deducción (con la excepción de los gastos del trabajo relacionados con el impedimento de personas discapacitadas) está sujeta al límite de ingreso bruto ajustado del 2% aplicable a la mayoría de las deducciones detalladas misceláneas. Free tax preparation for low income Vea el capítulo 28. Free tax preparation for low income Formulario 2106 o 2106-EZ. Free tax preparation for low income   Para calcular su deducción con respecto a los gastos de negocios del empleado, incluidos los estudios relacionados con el trabajo que reúnen los requisitos de la deducción, por lo general tiene que completar el Formulario 2106 o el Formulario 2106-EZ. Free tax preparation for low income No se requiere el formulario. Free tax preparation for low income   No complete el Formulario 2106 ni el Formulario 2106-EZ si: Las cantidades incluidas en el recuadro 1 de su Formulario W-2 no se consideran reembolsos y No declara gastos de viaje, transporte, comidas o entretenimiento. Free tax preparation for low income   Si cumple los dos requisitos anteriores, anote los gastos directamente en la línea 21 del Anexo A (Formulario 1040). Free tax preparation for low income (Más adelante se explican las reglas especiales para gastos de ciertos artistas del espectáculo y funcionarios a los que se les pagan honorarios y para gastos de trabajo relacionados con un impedimento). Free tax preparation for low income Uso del Formulario 2106-EZ. Free tax preparation for low income   Este formulario es más corto y fácil de usar que el Formulario 2106. Free tax preparation for low income Por lo general, puede usar este formulario si: Todos los reembolsos, si los hubiera, se incluyeron en el recuadro 1 de su Formulario W-2 y Utiliza la tarifa estándar por millas si declara gastos de vehículo. Free tax preparation for low income   Si no cumple estos dos requisitos, utilice el Formulario 2106. Free tax preparation for low income Artistas del Espectáculo y Funcionarios a los que se les Pagan Honorarios Si es artista del espectáculo que reúne los requisitos o funcionario del gobierno estatal (o local) que recibe su pago total o en parte de honorarios, puede deducir el costo de sus estudios relacionado con el trabajo que reúne los requisitos de la deducción como ajuste al ingreso bruto en lugar de una deducción detallada. Free tax preparation for low income Incluya el costo de sus estudios relacionados con el trabajo que reúnen los requisitos de la deducción junto con todos los demás gastos de negocios del empleado y anote el total en la línea 24 del Formulario 1040. Free tax preparation for low income No tiene que detallar sus deducciones en el Anexo A (Formulario 1040) y, por lo tanto, la deducción no está sujeta al límite de ingreso bruto ajustado del 2%. Free tax preparation for low income Tiene que completar el Formulario 2106 o 2106-EZ para calcular su deducción, incluso si cumple los requisitos descritos anteriormente bajo No se requiere el formulario . Free tax preparation for low income Para más información acerca de los artistas del espectáculo que reúnen los requisitos, vea el capítulo 6 de la Publicación 463, en inglés. Free tax preparation for low income Gastos de Trabajo Relacionados con un Impedimento Si está incapacitado y tiene gastos de trabajo relacionados con un impedimento que sean necesarios para permitirle realizar estudios relacionados con el trabajo, que reúnen los requisitos de la deducción, puede deducir estos gastos en la línea 28 del Anexo A (Formulario 1040). Free tax preparation for low income No están sujetos al límite del 2% del ingreso bruto ajustado. Free tax preparation for low income Para deducir estos gastos, tiene que completar el Formulario 2106 o 2106-EZ, aun si cumple los requisitos descritos anteriormente en No se requiere el formulario . Free tax preparation for low income Para más información acerca de gastos de trabajo relacionados con un impedimento, vea el capítulo 6 de la Publicación 463, en inglés. Free tax preparation for low income Documentación Tiene que mantener documentación como comprobante de las deducciones reclamadas en su declaración de impuestos. Free tax preparation for low income Por lo general, debe mantener su documentación durante 3 años desde la fecha de presentación de la declaración y de haber reclamado la deducción. Free tax preparation for low income Para obtener información específica acerca de cómo mantener documentación de los gastos de negocios, vea Mantenimiento de Documentación en el capítulo 26. Free tax preparation for low income Prev  Up  Next   Home   More Online Publications
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Understanding Your CP211B Notice

We denied your request to extend the time to file your Exempt Organization Return because your Form 8868, Application for Extension of Time To File an Exempt Organization Return, wasn't signed or was signed by someone who wasn’t authorized.


What you need to do

  • File Exempt Organization Return or a correct Form 8868 by the due date of the Exempt Organization Return. If the Exempt Organization Return is filed after the due date of the return (including any extension), the return is considered late and subject to late filing penalties.
  • We encourage you to use electronic filing – the fastest and easiest way to file.

You may want to

  • Visit www.irs.gov/Charities-&-Non-Profits to learn about approved e-File providers, what types of returns can be filed electronically, and whether you are required to file electronically.

Answers to Common Questions

Q. Where can I go for more information about tax-exempt organizations?

A. For more information on Employee Benefit Plans, see Tax Information for Charities & Other Non-Profits.

Q. Can I get help over the phone?

A. If you have questions and/or need help, you can call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.


Tips for next year

Be sure to sign and mail your Form 8868 on or before the due date of your return.

Page Last Reviewed or Updated: 24-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Free Tax Preparation For Low Income

Free tax preparation for low income 2. Free tax preparation for low income   Taxable and Nontaxable Income Table of Contents Compensation for Services Retirement Plan DistributionsIndividual Retirement Arrangements (IRAs) Pensions and Annuities Social Security and Equivalent Railroad Retirement BenefitsAre Any of Your Benefits Taxable? How Much Is Taxable? How To Report Your Benefits Lump-Sum Election Repayments More Than Gross Benefits Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Life Insurance ProceedsInstallments for life. Free tax preparation for low income Surviving spouse. Free tax preparation for low income Endowment Contract Proceeds Accelerated Death Benefits Sale of HomeMaximum Amount of Exclusion Ownership and Use Tests Married Persons Business Use or Rental of Home Reporting the Sale Reverse Mortgages Other ItemsWelfare benefits. Free tax preparation for low income Payments from a state fund for victims of crime. Free tax preparation for low income Home Affordable Modification Program (HAMP). Free tax preparation for low income Mortgage assistance payments. Free tax preparation for low income Payments to reduce cost of winter energy use. Free tax preparation for low income Nutrition Program for the Elderly. Free tax preparation for low income Reemployment Trade Adjustment Assistance (RTAA). Free tax preparation for low income Generally, income is taxable unless it is specifically exempt (not taxed) by law. Free tax preparation for low income Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. Free tax preparation for low income Under special provisions of the law, certain items are partially or fully exempt from tax. Free tax preparation for low income Provisions that are of special interest to older taxpayers are discussed in this chapter. Free tax preparation for low income Compensation for Services Generally, you must include in gross income everything you receive in payment for personal services. Free tax preparation for low income In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. Free tax preparation for low income You need not receive the compensation in cash for it to be taxable. Free tax preparation for low income Payments you receive in the form of goods or services generally must be included in gross income at their fair market value. Free tax preparation for low income Volunteer work. Free tax preparation for low income   Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs. Free tax preparation for low income Retired Senior Volunteer Program (RSVP). Free tax preparation for low income Foster Grandparent Program. Free tax preparation for low income Senior Companion Program. Free tax preparation for low income Service Corps of Retired Executives (SCORE). Free tax preparation for low income Unemployment compensation. Free tax preparation for low income   You must include in income all unemployment compensation you or your spouse (if married filing jointly) received. Free tax preparation for low income More information. Free tax preparation for low income   See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income. Free tax preparation for low income Retirement Plan Distributions This section summarizes the tax treatment of amounts you receive from traditional individual retirement arrangements (IRA), employee pensions or annuities, and disability pensions or annuities. Free tax preparation for low income A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. Free tax preparation for low income A Roth IRA is an individual retirement plan that can be either an account or an annuity and features nondeductible contributions and tax-free distributions. Free tax preparation for low income A SIMPLE IRA is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Free tax preparation for low income More detailed information can be found in Publication 590, Individual Retirement Arrangements (IRAs), and Publication 575, Pension and Annuity Income. Free tax preparation for low income Individual Retirement Arrangements (IRAs) In general, distributions from a traditional IRA are taxable in the year you receive them. Free tax preparation for low income Exceptions to the general rule are rollovers, tax-free withdrawals of contributions, and the return of nondeductible contributions. Free tax preparation for low income These are discussed in Publication 590. Free tax preparation for low income If you made nondeductible contributions to a traditional IRA, you must file Form 8606, Nondeductible IRAs. Free tax preparation for low income If you do not file Form 8606 with your return, you may have to pay a $50 penalty. Free tax preparation for low income Also, when you receive distributions from your traditional IRA, the amounts will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made. Free tax preparation for low income Early distributions. Free tax preparation for low income   Generally, early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59½, or amounts you receive when you cash in retirement bonds before you are age  59½. Free tax preparation for low income You must include early distributions of taxable amounts in your gross income. Free tax preparation for low income These taxable amounts are also subject to an additional 10% tax unless the distribution qualifies for an exception. Free tax preparation for low income For purposes of the additional 10% tax, an IRA is a qualified retirement plan. Free tax preparation for low income For more information about this tax, see Tax on Early Distributions under Pensions and Annuities, later. Free tax preparation for low income After age 59½ and before age 70½. Free tax preparation for low income   After you reach age 59½, you can receive distributions from your traditional IRA without having to pay the 10% additional tax. Free tax preparation for low income Even though you can receive distributions after you reach age 59½, distributions are not required until you reach  age 70½. Free tax preparation for low income Required distributions. Free tax preparation for low income   If you are the owner of a traditional IRA, you generally must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age 70½. Free tax preparation for low income See When Must You Withdraw Assets? (Required Minimum Distributions) in Publication 590. Free tax preparation for low income If distributions from your traditional IRA(s) are less than the required minimum distribution for the year, you may have to pay a 50% excise tax for that year on the amount not distributed as required. Free tax preparation for low income For purposes of the 50% excise tax, an IRA is a qualified retirement plan. Free tax preparation for low income For more information about this tax, see Tax on Excess Accumulation under Pensions and Annuities, later. Free tax preparation for low income See also Excess Accumulations (Insufficient Distributions) in Publication 590. Free tax preparation for low income Pensions and Annuities Generally, if you did not pay any part of the cost of your employee pension or annuity, and your employer did not withhold part of the cost of the contract from your pay while you worked, the amounts you receive each year are fully taxable. Free tax preparation for low income However, see Insurance Premiums for Retired Public Safety Officers , later. Free tax preparation for low income If you paid part of the cost of your pension or annuity plan (see Cost , later), you can exclude part of each annuity payment from income as a recovery of your cost (investment in the contract). Free tax preparation for low income This tax-free part of the payment is figured when your annuity starts and remains the same each year, even if the amount of the payment changes. Free tax preparation for low income The rest of each payment is taxable. Free tax preparation for low income However, see Insurance Premiums for Retired Public Safety Officers , later. Free tax preparation for low income You figure the tax-free part of the payment using one of the following methods. Free tax preparation for low income Simplified Method. Free tax preparation for low income You generally must use this method if your annuity is paid under a qualified plan (a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract). Free tax preparation for low income You cannot use this method if your annuity is paid under a nonqualified plan. Free tax preparation for low income General Rule. Free tax preparation for low income You must use this method if your annuity is paid under a nonqualified plan. Free tax preparation for low income You generally cannot use this method if your annuity is paid under a qualified plan. Free tax preparation for low income Contact your employer or plan administrator to find out if your pension or annuity is paid under a qualified or nonqualified plan. Free tax preparation for low income You determine which method to use when you first begin receiving your annuity, and you continue using it each year that you recover part of your cost. Free tax preparation for low income Exclusion limit. Free tax preparation for low income   If your annuity starting date is after 1986, the total amount of annuity income you can exclude over the years as a recovery of the cost cannot exceed your total cost. Free tax preparation for low income Any unrecovered cost at your (or the last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. Free tax preparation for low income This deduction is not subject to the 2%-of-adjusted-gross-income limit on miscellaneous deductions. Free tax preparation for low income   If you contributed to your pension or annuity and your annuity starting date is before 1987, you can continue to take your monthly exclusion for as long as you receive your annuity. Free tax preparation for low income If you chose a joint and survivor annuity, your survivor can continue to take the survivor's exclusion figured as of the annuity starting date. Free tax preparation for low income The total exclusion may be more than your cost. Free tax preparation for low income Cost. Free tax preparation for low income   Before you can figure how much, if any, of your pension or annuity benefits are taxable, you must determine your cost in the plan (your investment in the contract). Free tax preparation for low income Your total cost in the plan includes everything that you paid. Free tax preparation for low income It also includes amounts your employer contributed that were taxable to you when paid. Free tax preparation for low income However, see Foreign employment contributions , later. Free tax preparation for low income   From this total cost, subtract any refunded premiums, rebates, dividends, unrepaid loans, or other tax-free amounts you received by the later of the annuity starting date or the date on which you received your first payment. Free tax preparation for low income   The annuity starting date is the later of the first day of the first period for which you received a payment from the plan or the date on which the plan's obligations became fixed. Free tax preparation for low income    The amount of your contributions to the plan may be shown in box 9b of any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Free tax preparation for low income , that you receive. Free tax preparation for low income Foreign employment contributions. Free tax preparation for low income   If you worked abroad, certain amounts your employer paid into your retirement plan that were not includible in your gross income may be considered part of your cost. Free tax preparation for low income For details, see Foreign employment contributions in Publication 575. Free tax preparation for low income Withholding. Free tax preparation for low income   The payer of your pension, profit-sharing, stock bonus, annuity, or deferred compensation plan will withhold income tax on the taxable part of amounts paid to you. Free tax preparation for low income However, you can choose not to have tax withheld on the payments you receive, unless they are eligible rollover distributions. Free tax preparation for low income (These are distributions that are eligible for rollover treatment but are not paid directly to another qualified retirement plan or to a traditional IRA. Free tax preparation for low income ) See Withholding Tax and Estimated Tax and Rollovers in Publication 575 for more information. Free tax preparation for low income   For payments other than eligible rollover distributions, you can tell the payer how much to withhold by filing a Form W-4P, Withholding Certificate for Pension or Annuity Payments. Free tax preparation for low income Simplified Method. Free tax preparation for low income   Under the Simplified Method, you figure the tax-free part of each annuity payment by dividing your cost by the total number of anticipated monthly payments. Free tax preparation for low income For an annuity that is payable over the lives of the annuitants, this number is based on the annuitants' ages on the annuity starting date and is determined from a table. Free tax preparation for low income For any other annuity, this number is the number of monthly annuity payments under the contract. Free tax preparation for low income Who must use the Simplified Method. Free tax preparation for low income   You must use the Simplified Method if your annuity starting date is after November 18, 1996, and you receive your pension or annuity payments from a qualified plan or annuity, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments (defined next). Free tax preparation for low income   In addition, if your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use the Simplified Method for payments from a qualified plan, unless you were at least 75 years old and entitled to at least 5 years of guaranteed payments. Free tax preparation for low income If you chose to use the Simplified Method, you must continue to use it each year that you recover part of your cost. Free tax preparation for low income Guaranteed payments. Free tax preparation for low income   Your annuity contract provides guaranteed payments if a minimum number of payments or a minimum amount (for example, the amount of your investment) is payable even if you and any survivor annuitant do not live to receive the minimum. Free tax preparation for low income If the minimum amount is less than the total amount of the payments you are to receive, barring death, during the first 5 years after payments begin (figured by ignoring any payment increases), you are entitled to less than 5 years of guaranteed payments. Free tax preparation for low income Who cannot use the Simplified Method. Free tax preparation for low income   You cannot use the Simplified Method and must use the General Rule if you receive pension or annuity payments from: A nonqualified plan, such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan, or A qualified plan if you are age 75 or older on your annuity starting date and you are entitled to at least 5 years of guaranteed payments (defined above). Free tax preparation for low income   In addition, you had to use the General Rule for either circumstance described above if your annuity starting date is after July 1, 1986, and before November 19, 1996. Free tax preparation for low income If you did not have to use the General Rule, you could have chosen to use it. Free tax preparation for low income You also had to use the General Rule for payments from a qualified plan if your annuity starting date is before July 2, 1986, and you did not qualify to use the Three-Year Rule. Free tax preparation for low income   If you had to use the General Rule (or chose to use it), you must continue to use it each year that you recover your cost. Free tax preparation for low income   Unless your annuity starting date was before 1987, once you have recovered all of your non-taxable investment, all of each remaining payment you receive is fully taxable. Free tax preparation for low income Once your remaining payments are fully taxable, there is no longer a concern with the General Rule or Simplified Method. Free tax preparation for low income   Complete information on the General Rule, including the actuarial tables you need, is contained in Publication 939, General Rule for Pensions and Annuities. Free tax preparation for low income How to use the Simplified Method. Free tax preparation for low income   Complete the Simplified Method Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions or in Publication 575 to figure your taxable annuity for 2013. Free tax preparation for low income Be sure to keep the completed worksheet; it will help you figure your taxable annuity next year. Free tax preparation for low income   To complete line 3 of the worksheet, you must determine the total number of expected monthly payments for your annuity. Free tax preparation for low income How you do this depends on whether the annuity is for a single life, multiple lives, or a fixed period. Free tax preparation for low income For this purpose, treat an annuity that is payable over the life of an annuitant as payable for that annuitant's life even if the annuity has a fixed-period feature or also provides a temporary annuity payable to the annuitant's child under age 25. Free tax preparation for low income    You do not need to complete line 3 of the worksheet or make the computation on line 4 if you received annuity payments last year and used last year's worksheet to figure your taxable annuity. Free tax preparation for low income Instead, enter the amount from line 4 of last year's worksheet on line 4 of this year's worksheet. Free tax preparation for low income Single-life annuity. Free tax preparation for low income   If your annuity is payable for your life alone, use Table 1 at the bottom of the worksheet to determine the total number of expected monthly payments. Free tax preparation for low income Enter on line 3 the number shown for your age on your annuity starting date. Free tax preparation for low income This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Free tax preparation for low income Multiple-lives annuity. Free tax preparation for low income   If your annuity is payable for the lives of more than one annuitant, use Table 2 at the bottom of the worksheet to determine the total number of expected monthly payments. Free tax preparation for low income Enter on line 3 the number shown for the annuitants' combined ages on the annuity starting date. Free tax preparation for low income For an annuity payable to you as the primary annuitant and to more than one survivor annuitant, combine your age and the age of the youngest survivor annuitant. Free tax preparation for low income For an annuity that has no primary annuitant and is payable to you and others as survivor annuitants, combine the ages of the oldest and youngest annuitants. Free tax preparation for low income Do not treat as a survivor annuitant anyone whose entitlement to payments depends on an event other than the primary annuitant's death. Free tax preparation for low income   However, if your annuity starting date is before 1998, do not use Table 2 and do not combine the annuitants' ages. Free tax preparation for low income Instead, you must use Table 1 at the bottom of the worksheet and enter on line 3 the number shown for the primary annuitant's age on the annuity starting date. Free tax preparation for low income This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Free tax preparation for low income Fixed-period annuities. Free tax preparation for low income   If your annuity does not depend in whole or in part on anyone's life expectancy, the total number of expected monthly payments to enter on line 3 of the worksheet is the number of monthly annuity payments under the contract. Free tax preparation for low income Line 6. Free tax preparation for low income   The amount on line 6 should include all amounts that could have been recovered in prior years. Free tax preparation for low income If you did not recover an amount in a prior year, you may be able to amend your returns for the affected years. Free tax preparation for low income    Be sure to keep a copy of the completed worksheet; it will help you figure your taxable annuity in later years. Free tax preparation for low income Example. Free tax preparation for low income Bill Smith, age 65, began receiving retirement benefits in 2013, under a joint and survivor annuity. Free tax preparation for low income Bill's annuity starting date is January 1, 2013. Free tax preparation for low income The benefits are to be paid over the joint lives of Bill and his wife, Kathy, age 65. Free tax preparation for low income Bill had contributed $31,000 to a qualified plan and had received no distributions before the annuity starting date. Free tax preparation for low income Bill is to receive a retirement benefit of $1,200 a month, and Kathy is to receive a monthly survivor benefit of $600 upon Bill's death. Free tax preparation for low income Bill must use the Simplified Method to figure his taxable annuity because his payments are from a qualified plan and he is under age 75. Free tax preparation for low income See the illustrated Worksheet 2-A, Simplified Method Worksheet, later. Free tax preparation for low income You can find a blank version of this worksheet in Publication 575. Free tax preparation for low income (The references in the illustrated worksheet are to sections in Publication 575). Free tax preparation for low income His annuity is payable over the lives of more than one annuitant, so Bill uses his and Kathy's combined ages, 130 (65 + 65), and Table 2 at the bottom of the worksheet in completing line 3 of the worksheet and finds the line 3 amount to be 310. Free tax preparation for low income Bill's tax-free monthly amount is $100 ($31,000 ÷ 310 as shown on line 4 of the worksheet). Free tax preparation for low income Upon Bill's death, if Bill has not recovered the full $31,000 investment, Kathy will also exclude $100 from her $600 monthly payment. Free tax preparation for low income The full amount of any annuity payments received after 310 payments are paid must generally be included in gross income. Free tax preparation for low income If Bill and Kathy die before 310 payments are made, a miscellaneous itemized deduction will be allowed for the unrecovered cost on the final income tax return of the last to die. Free tax preparation for low income This deduction is not subject to the 2%-of-adjusted-gross-income limit. Free tax preparation for low income Worksheet 2-A. Free tax preparation for low income Simplified Method Worksheet—Illustrated 1. Free tax preparation for low income Enter the total pension or annuity payments received this year. Free tax preparation for low income Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Free tax preparation for low income $ 14,400 2. Free tax preparation for low income Enter your cost in the plan (contract) at the annuity starting date plus any death benefit exclusion* See Cost (Investment in the Contract), earlier 2. Free tax preparation for low income 31,000   Note. Free tax preparation for low income If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Free tax preparation for low income Otherwise, go to line 3. Free tax preparation for low income     3. Free tax preparation for low income Enter the appropriate number from Table 1 below. Free tax preparation for low income But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below 3. Free tax preparation for low income 310 4. Free tax preparation for low income Divide line 2 by the number on line 3 4. Free tax preparation for low income 100 5. Free tax preparation for low income Multiply line 4 by the number of months for which this year's payments were made. Free tax preparation for low income If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Free tax preparation for low income Otherwise, go to line 6 5. Free tax preparation for low income 1,200 6. Free tax preparation for low income Enter any amount previously recovered tax free in years after 1986. Free tax preparation for low income This is the amount shown on line 10 of your worksheet for last year 6. Free tax preparation for low income 0 7. Free tax preparation for low income Subtract line 6 from line 2 7. Free tax preparation for low income 31,000 8. Free tax preparation for low income Enter the smaller of line 5 or line 7 8. Free tax preparation for low income 1,200 9. Free tax preparation for low income Taxable amount for year. Free tax preparation for low income Subtract line 8 from line 1. Free tax preparation for low income Enter the result, but not less than zero. Free tax preparation for low income Also, add this amount to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Free tax preparation for low income Note. Free tax preparation for low income If your Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. Free tax preparation for low income If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers, earlier, before entering an amount on your tax return. Free tax preparation for low income 9. Free tax preparation for low income $ 13,200 10. Free tax preparation for low income Was your annuity starting date before 1987? □ Yes. Free tax preparation for low income STOP. Free tax preparation for low income Do not complete the rest of this worksheet. Free tax preparation for low income  ☑ No. Free tax preparation for low income Add lines 6 and 8. Free tax preparation for low income This is the amount you have recovered tax free through 2013. Free tax preparation for low income You will need this number if you need to fill out this worksheet next year. Free tax preparation for low income 10. Free tax preparation for low income 1,200 11. Free tax preparation for low income Balance of cost to be recovered. Free tax preparation for low income Subtract line 10 from line 2. Free tax preparation for low income If zero, you will not have to complete this worksheet next year. Free tax preparation for low income The payments you receive next year will generally be fully taxable 11. Free tax preparation for low income $ 29,800 * A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996. Free tax preparation for low income   Table 1 for Line 3 Above       AND your annuity starting date was—   IF your age on your annuity starting date was . Free tax preparation for low income . Free tax preparation for low income . Free tax preparation for low income   BEFORE November 19, 1996, enter on line 3 . Free tax preparation for low income . Free tax preparation for low income . Free tax preparation for low income AFTER November 18, 1996, enter on line 3 . Free tax preparation for low income . Free tax preparation for low income . Free tax preparation for low income   55 or under 300 360   56-60 260 310   61-65 240 260   66-70 170 210   71 or over 120 160 Table 2 for Line 3 Above   IF the annuitants' combined ages on your annuity starting date were . Free tax preparation for low income . Free tax preparation for low income . Free tax preparation for low income   THEN enter on line 3 . Free tax preparation for low income . Free tax preparation for low income . Free tax preparation for low income         110 or under   410         111-120   360         121-130   310         131-140   260         141 or over   210       Survivors of retirees. Free tax preparation for low income   Benefits paid to you as a survivor under a joint and survivor annuity must be included in your gross income in the same way the retiree would have included them in gross income. Free tax preparation for low income   If you receive a survivor annuity because of the death of a retiree who had reported the annuity under the Three-Year Rule, include the total received in your income. Free tax preparation for low income The retiree's cost has already been recovered tax free. Free tax preparation for low income   If the retiree was reporting the annuity payments under the General Rule, you must apply the same exclusion percentage the retiree used to your initial payment called for in the contract. Free tax preparation for low income The resulting tax-free amount will then remain fixed. Free tax preparation for low income Any increases in the survivor annuity are fully taxable. Free tax preparation for low income   If the retiree was reporting the annuity payments under the Simplified Method, the part of each payment that is tax free is the same as the tax-free amount figured by the retiree at the annuity starting date. Free tax preparation for low income See Simplified Method , earlier. Free tax preparation for low income How to report. Free tax preparation for low income   If you file Form 1040, report your total annuity on line 16a, and the taxable part on line 16b. Free tax preparation for low income If your pension or annuity is fully taxable, enter it on line 16b. Free tax preparation for low income Do not make an entry on line 16a. Free tax preparation for low income   If you file Form 1040A, report your total annuity on line 12a, and the taxable part on line 12b. Free tax preparation for low income If your pension or annuity is fully taxable, enter it on line 12b. Free tax preparation for low income Do not make an entry on line 12a. Free tax preparation for low income   If you file Form 1040NR, report your total annuity on line 17a, and the taxable part on line 17b. Free tax preparation for low income If your pension or annuity is fully taxable, enter it on line 17b. Free tax preparation for low income Do not make an entry on line 17a. Free tax preparation for low income Example. Free tax preparation for low income You are a Form 1040 filer and you received monthly payments totaling $1,200 (12 months x $100) during 2013 from a pension plan that was completely financed by your employer. Free tax preparation for low income You had paid no tax on the payments that your employer made to the plan, and the payments were not used to pay for accident, health, or long-term care insurance premiums (as discussed later under Insurance Premiums for Retired Public Safety Officers ). Free tax preparation for low income The entire $1,200 is taxable. Free tax preparation for low income You include $1,200 only on Form 1040, line 16b. Free tax preparation for low income Joint return. Free tax preparation for low income   If you file a joint return and you and your spouse each receive one or more pensions or annuities, report the total of the pensions and annuities on line 16a of Form 1040, line 12a of Form 1040A, or line 17a of Form 1040NR. Free tax preparation for low income Report the total of the taxable parts on line 16b of Form 1040, line 12b of Form 1040A, or line 17b of Form 1040NR. Free tax preparation for low income Form 1099-R. Free tax preparation for low income   You should receive a Form 1099-R for your pension or annuity. Free tax preparation for low income Form 1099-R shows your pension or annuity for the year and any income tax withheld. Free tax preparation for low income You should receive a Form W-2 if you receive distributions from certain nonqualified plans. Free tax preparation for low income You must attach Forms 1099-R or Forms W-2 to your 2013 tax return if federal income tax was withheld. Free tax preparation for low income Generally, you should be sent these forms by January 31, 2014. Free tax preparation for low income Nonperiodic Distributions If you receive a nonperiodic distribution from your retirement plan, you may be able to exclude all or part of it from your income as a recovery of your cost. Free tax preparation for low income Nonperiodic distributions include cash withdrawals, distributions of current earnings (dividends) on your investment, and certain loans. Free tax preparation for low income For information on how to figure the taxable amount of a nonperiodic distribution, see Taxation of Nonperiodic Payments in Publication 575. Free tax preparation for low income The taxable part of a nonperiodic distribution may be subject to an additional 10% tax. Free tax preparation for low income See Tax on Early Distributions, later. Free tax preparation for low income Lump-sum distributions. Free tax preparation for low income   If you receive a lump-sum distribution from a qualified employee plan or qualified employee annuity and the plan participant was born before January 2, 1936, you may be able to elect optional methods of figuring the tax on the distribution. Free tax preparation for low income The part from active participation in the plan before 1974 may qualify as capital gain subject to a 20% tax rate. Free tax preparation for low income The part from participation after 1973 (and any part from participation before 1974 that you do not report as capital gain) is ordinary income. Free tax preparation for low income You may be able to use the 10-year tax option to figure tax on the ordinary income part. Free tax preparation for low income Form 1099-R. Free tax preparation for low income   If you receive a total distribution from a plan, you should receive a Form 1099-R. Free tax preparation for low income If the distribution qualifies as a lump-sum distribution, box 3 shows the capital gain part of the distribution. Free tax preparation for low income The amount in box 2a, Taxable amount, minus the amount in box 3, Capital gain, is the ordinary income part. Free tax preparation for low income More information. Free tax preparation for low income   For more detailed information on lump-sum distributions, see Publication 575 or Form 4972, Tax on Lump-Sum Distributions. Free tax preparation for low income Tax on Early Distributions Most distributions you receive from your qualified retirement plan and nonqualified annuity contracts before you reach age 59½ are subject to an additional tax of 10%. Free tax preparation for low income The tax applies to the taxable part of the distribution. Free tax preparation for low income For this purpose, a qualified retirement plan is: A qualified employee plan (including a qualified cash or deferred arrangement (CODA) under Internal Revenue Code section 401(k)), A qualified employee annuity plan, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan (to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from one of the other plans listed here or an IRA). Free tax preparation for low income  An IRA is also a qualified retirement plan for purposes of this tax. Free tax preparation for low income General exceptions to tax. Free tax preparation for low income   The early distribution tax does not apply to any distributions that are: Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service), Made because you are totally and permanently disabled, or Made on or after the death of the plan participant or contract holder. Free tax preparation for low income Additional exceptions. Free tax preparation for low income   There are additional exceptions to the early distribution tax for certain distributions from qualified retirement plans and nonqualified annuity contracts. Free tax preparation for low income See Publication 575 for details. Free tax preparation for low income Reporting tax. Free tax preparation for low income   If you owe only the tax on early distributions and distribution code 1 (early distribution, no known exception) is correctly shown in Form 1099-R, box 7, multiply the taxable part of the early distribution by 10% (. Free tax preparation for low income 10) and enter the result on Form 1040, line 58, or Form 1040NR, line 56. Free tax preparation for low income See the instructions for line 58 of Form 1040 or line 56 of Form 1040NR for more information about reporting the early distribution tax. Free tax preparation for low income Tax on Excess Accumulation To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than your required beginning date. Free tax preparation for low income Unless the rule for 5% owners applies, this is generally April 1 of the year that follows the later of: The calendar year in which you reach age 70½, or The calendar year in which you retire from employment with the employer maintaining the plan. Free tax preparation for low income However, your plan may require you to begin to receive payments by April 1 of the year that follows the year in which you reach 70½, even if you have not retired. Free tax preparation for low income For this purpose, a qualified retirement plan includes: A qualified employee plan, A qualified employee annuity plan, An eligible section 457 deferred compensation plan, or A tax-sheltered annuity plan (403(b) plan) (for benefits accruing after 1986). Free tax preparation for low income  An IRA is also a qualified retirement plan for purposes of this tax. Free tax preparation for low income An excess accumulation is the undistributed remainder of the required minimum distribution that was left in your qualified retirement plan. Free tax preparation for low income 5% owners. Free tax preparation for low income   If you own (or are considered to own under section 318 of the Internal Revenue Code) more than 5% of the company maintaining your qualified retirement plan, you must begin to receive distributions from the plan by April 1 of the year after the calendar year in which you reach age 70½. Free tax preparation for low income See Publication 575 for more information. Free tax preparation for low income Amount of tax. Free tax preparation for low income   If you do not receive the required minimum distribution, you are subject to an additional tax. Free tax preparation for low income The tax equals 50% of the difference between the amount that must be distributed and the amount that was distributed during the tax year. Free tax preparation for low income You can get this excise tax excused if you establish that the shortfall in distributions was due to reasonable error and that you are taking reasonable steps to remedy the shortfall. Free tax preparation for low income Form 5329. Free tax preparation for low income   You must file a Form 5329 if you owe a tax because you did not receive a minimum required distribution from your qualified retirement plan. Free tax preparation for low income Additional information. Free tax preparation for low income   For more detailed information on the tax on excess accumulation, see Publication 575. Free tax preparation for low income Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. Free tax preparation for low income The premiums can be for coverage for you, your spouse, or dependent(s). Free tax preparation for low income The distribution must be made directly from the plan to the insurance provider. Free tax preparation for low income You can exclude from income the smaller of the amount of the insurance premiums or $3,000. Free tax preparation for low income You can only make this election for amounts that would otherwise be included in your income. Free tax preparation for low income The amount excluded from your income cannot be used to claim a medical expense deduction. Free tax preparation for low income An eligible retirement plan is a governmental plan that is a: Qualified trust, Section 403(a) plan, Section 403(b) annuity, or Section 457(b) plan. Free tax preparation for low income If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. Free tax preparation for low income The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. Free tax preparation for low income Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Free tax preparation for low income Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Free tax preparation for low income Enter “PSO” next to the appropriate line on which you report the taxable amount. Free tax preparation for low income Railroad Retirement Benefits Benefits paid under the Railroad Retirement Act fall into two categories. Free tax preparation for low income These categories are treated differently for income tax purposes. Free tax preparation for low income Social security equivalent benefits. Free tax preparation for low income   The first category is the amount of tier 1 railroad retirement benefits that equals the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. Free tax preparation for low income This part of the tier 1 benefit is the social security equivalent benefit (SSEB) and is treated for tax purposes like social security benefits. Free tax preparation for low income (See Social Security and Equivalent Railroad Retirement Benefits , later. Free tax preparation for low income ) Non-social security equivalent benefits. Free tax preparation for low income   The second category contains the rest of the tier 1 benefits, called the non-social security equivalent benefit (NSSEB). Free tax preparation for low income It also contains any tier 2 benefit, vested dual benefit (VDB), and supplemental annuity benefit. Free tax preparation for low income This category of benefits is treated as an amount received from a qualified employee plan. Free tax preparation for low income This allows for the tax-free (nontaxable) recovery of employee contributions from the tier 2 benefits and the NSSEB part of the tier 1 benefits. Free tax preparation for low income Vested dual benefits and supplemental annuity benefits are non-contributory pensions and are fully taxable. Free tax preparation for low income More information. Free tax preparation for low income   For more information about railroad retirement benefits, see Publication 575. Free tax preparation for low income Military Retirement Pay Military retirement pay based on age or length of service is taxable and must be included in income as a pension on Form 1040, lines 16a and 16b; on Form 1040A, lines 12a and 12b; or on Form 1040NR, lines 17a and 17b. Free tax preparation for low income But, certain military and government disability pensions that are based on a percentage of disability from active service in the Armed Forces of any country generally are not taxable. Free tax preparation for low income For more information, including information about veterans' benefits and insurance, see Publication 525. Free tax preparation for low income Social Security and Equivalent Railroad Retirement Benefits This discussion explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Free tax preparation for low income Social security benefits include monthly retirement, survivor, and disability benefits. Free tax preparation for low income They do not include supplemental security income (SSI) payments, which are not taxable. Free tax preparation for low income Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Free tax preparation for low income They commonly are called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Free tax preparation for low income If you received these benefits during 2013, you should have received a Form SSA-1099 or Form RRB-1099 (Form SSA-1042S or Form RRB-1042S if you are a nonresident alien), showing the amount of the benefits. Free tax preparation for low income Are Any of Your Benefits Taxable? Note. Free tax preparation for low income When the term “benefits” is used in this section, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Free tax preparation for low income  To find out whether any of your benefits may be taxable, compare the base amount for your filing status (explained later) with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Free tax preparation for low income When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Free tax preparation for low income S. Free tax preparation for low income savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned in American Samoa or Puerto Rico by bona fide residents. Free tax preparation for low income Figuring total income. Free tax preparation for low income   To figure the total of one-half of your benefits plus your other income, use Worksheet 2-B. Free tax preparation for low income If that total amount is more than your base amount, part of your benefits may be taxable. Free tax preparation for low income If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Free tax preparation for low income Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Free tax preparation for low income If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Free tax preparation for low income If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Free tax preparation for low income Worksheet 2-B. Free tax preparation for low income A Quick Way To Check if Your Benefits May Be Taxable A. Free tax preparation for low income Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Free tax preparation for low income Include  the full amount of any lump-sum benefit payments received in 2013, for 2013 and  earlier years. Free tax preparation for low income (If you received more than one form, combine the amounts from box 5  and enter the total. Free tax preparation for low income ) A. Free tax preparation for low income     Note. Free tax preparation for low income If the amount on line A is zero or less, stop here; none of your benefits are  taxable this year. Free tax preparation for low income     B. Free tax preparation for low income Enter one-half of the amount on line A B. Free tax preparation for low income   C. Free tax preparation for low income Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Free tax preparation for low income   D. Free tax preparation for low income Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income for: •Interest from qualified U. Free tax preparation for low income S. Free tax preparation for low income savings bonds, •Employer-provided adoption benefits, •Foreign earned income or foreign housing, or •Income earned in American Samoa or Puerto Rico by bona fide residents D. Free tax preparation for low income   E. Free tax preparation for low income Add lines B, C, and D and enter the total E. Free tax preparation for low income   F. Free tax preparation for low income If you are: •Married filing jointly, enter $32,000 •Single, head of household, qualifying widow(er), or married filing separately and you  lived apart from your spouse for all of 2013, enter $25,000 •Married filing separately and you lived with your spouse at any time during 2013,  enter -0- F. Free tax preparation for low income   G. Free tax preparation for low income Is the amount on line F less than or equal to the amount on line E? □ No. Free tax preparation for low income None of your benefits are taxable this year. Free tax preparation for low income  □ Yes. Free tax preparation for low income Some of your benefits may be taxable. Free tax preparation for low income To figure how much of your benefits  are taxable, see Which worksheet to use under How Much Is Taxable. Free tax preparation for low income     Base Amount Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er) with dependent child, $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $0 if you are married filing separately and lived with your spouse at any time during 2013. Free tax preparation for low income Repayment of Benefits Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Free tax preparation for low income It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Free tax preparation for low income If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Free tax preparation for low income Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Free tax preparation for low income Your repayments are shown in box 4. Free tax preparation for low income The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Free tax preparation for low income Use the amount in box 5 to figure whether any of your benefits are taxable. Free tax preparation for low income Tax Withholding and Estimated Tax You can choose to have federal income tax withheld from your social security and/or the SSEB portion of your tier 1 railroad retirement benefits. Free tax preparation for low income If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Request. Free tax preparation for low income If you do not choose to have income tax withheld, you may have to request additional withholding from other income, or pay estimated tax during the year. Free tax preparation for low income For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Free tax preparation for low income How Much Is Taxable? If part of your benefits is taxable, how much is taxable depends on the total amount of your benefits and other income. Free tax preparation for low income Generally, the higher that total amount, the greater the taxable part of your benefits. Free tax preparation for low income Maximum taxable part. Free tax preparation for low income   The taxable part of your benefits usually cannot be more than 50%. Free tax preparation for low income However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Free tax preparation for low income The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Free tax preparation for low income You are married filing separately and lived with your spouse at any time during 2013. Free tax preparation for low income   If you are a nonresident alien, 85% of your benefits are taxable. Free tax preparation for low income However, this income is exempt under some tax treaties. Free tax preparation for low income Which worksheet to use. Free tax preparation for low income   A worksheet to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Free tax preparation for low income However, you will need to use a different worksheet(s) if any of the following situations applies to you. Free tax preparation for low income You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse were covered by a retirement plan at work. Free tax preparation for low income In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Free tax preparation for low income Situation (1) does not apply and you take one or more of the following exclusions. Free tax preparation for low income Interest from qualified U. Free tax preparation for low income S. Free tax preparation for low income savings bonds (Form 8815). Free tax preparation for low income Employer-provided adoption benefits (Form 8839). Free tax preparation for low income Foreign earned income or housing (Form 2555 or Form 2555-EZ). Free tax preparation for low income Income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Free tax preparation for low income In these situations, you must use Worksheet 1 in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure your taxable benefits. Free tax preparation for low income You received a lump-sum payment for an earlier year. Free tax preparation for low income In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Free tax preparation for low income See Lump-Sum Election , later. Free tax preparation for low income How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040, Form 1040A, or Form 1040NR. Free tax preparation for low income You cannot use Form 1040EZ. Free tax preparation for low income Reporting on Form 1040. Free tax preparation for low income   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 20a and the taxable part on line 20b. Free tax preparation for low income If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Free tax preparation for low income Reporting on Form 1040A. Free tax preparation for low income   Report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on line 14a and the taxable part on line 14b. Free tax preparation for low income If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Free tax preparation for low income Reporting on Form 1040NR. Free tax preparation for low income   Report 85% of the total amount of your benefits (box 5 of your Form SSA-1042S or Form RRB-1042S) in the appropriate column of Form 1040NR, Schedule NEC, line 8. Free tax preparation for low income Benefits not taxable. Free tax preparation for low income   If you are filing Form 1040EZ, do not report any benefits on your tax return. Free tax preparation for low income If you are filing Form 1040 or Form 1040A, report your net benefits (the amount in box 5 of your Form SSA-1099 or Form RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Free tax preparation for low income Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Free tax preparation for low income If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Free tax preparation for low income Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Free tax preparation for low income This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Free tax preparation for low income No part of the lump-sum death benefit is subject to tax. Free tax preparation for low income For more information about the lump-sum death benefit, visit the Social Security Administration website at www. Free tax preparation for low income SSA. Free tax preparation for low income gov, and use keyword: death benefit. Free tax preparation for low income Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Free tax preparation for low income However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Free tax preparation for low income You can elect this method if it lowers your taxable benefits. Free tax preparation for low income See Publication 915 for more information. Free tax preparation for low income Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Free tax preparation for low income If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Free tax preparation for low income If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Free tax preparation for low income If you have any questions about this negative figure, contact your local Social Security Administration office or your local U. Free tax preparation for low income S. Free tax preparation for low income Railroad Retirement Board field office. Free tax preparation for low income Joint return. Free tax preparation for low income   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5 but your spouse's does not, subtract the box 5 amount on your form from the box 5 amount on your spouse's form. Free tax preparation for low income You do this to get your net benefits when figuring if your combined benefits are taxable. Free tax preparation for low income Repayment of benefits received in an earlier year. Free tax preparation for low income   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Free tax preparation for low income   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Free tax preparation for low income Claim it on Schedule A (Form 1040), line 23. Free tax preparation for low income   If this deduction is more than $3,000, you have to follow some special instructions. Free tax preparation for low income See Publication 915 for those instructions. Free tax preparation for low income Sickness and Injury Benefits Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Free tax preparation for low income If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Free tax preparation for low income However, certain payments may not be taxable to you. Free tax preparation for low income Some of these payments are discussed later in this section. Free tax preparation for low income Also, see Military and Government Disability Pensions and Other Sickness and Injury Benefits in Publication 525. Free tax preparation for low income Cost paid by you. Free tax preparation for low income   If you pay the entire cost of an accident or health plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Free tax preparation for low income If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Free tax preparation for low income Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Free tax preparation for low income You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A or on line 8 of Form 1040NR until you reach minimum retirement age. Free tax preparation for low income Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Free tax preparation for low income If you were 65 or older by the end of 2013 or you were retired on permanent and total disability and received taxable disability income, you may be able to claim the credit for the elderly or the disabled. Free tax preparation for low income See Credit for the Elderly or the Disabled, later. Free tax preparation for low income For more information on this credit, see Publication 524, Credit for the Elderly or the Disabled. Free tax preparation for low income Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Free tax preparation for low income Report the payments on lines 16a and 16b of Form 1040, on lines 12a and 12b of Form 1040A, or on lines 17a and 17b of Form 1040NR. Free tax preparation for low income For more information on pensions and annuities, see Publication 575. Free tax preparation for low income Retirement and profit-sharing plans. Free tax preparation for low income   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Free tax preparation for low income The payments must be reported as a pension or annuity. Free tax preparation for low income Accrued leave payment. Free tax preparation for low income   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Free tax preparation for low income The payment is not a disability payment. Free tax preparation for low income Include it in your income in the tax year you receive it. Free tax preparation for low income Long-Term Care Insurance Contracts In most cases, long-term care insurance contracts generally are treated as accident and health insurance contracts. Free tax preparation for low income Amounts you receive from them (other than policyholder dividends or premium refunds) generally are excludable from income as amounts received for personal injury or sickness. Free tax preparation for low income However, the amount you can exclude may be limited. Free tax preparation for low income Long-term care insurance contracts are discussed in more detail in Publication 525. Free tax preparation for low income Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Free tax preparation for low income The exemption also applies to your survivors. Free tax preparation for low income The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Free tax preparation for low income If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Free tax preparation for low income For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Free tax preparation for low income Return to work. Free tax preparation for low income   If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Free tax preparation for low income Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Free tax preparation for low income Federal Employees' Compensation Act (FECA). Free tax preparation for low income   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Free tax preparation for low income However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Free tax preparation for low income Report this income on Form 1040, line 7; Form 1040A, line 7; on Form 1040EZ, line 1; or Form 1040NR, line 8. Free tax preparation for low income Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Free tax preparation for low income    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Free tax preparation for low income For a discussion of the taxability of these benefits, see Social Security and Equivalent Railroad Retirement Benefits, earlier. Free tax preparation for low income Other compensation. Free tax preparation for low income   Many other amounts you receive as compensation for sickness or injury are not taxable. Free tax preparation for low income These include the following amounts. Free tax preparation for low income Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Free tax preparation for low income Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Free tax preparation for low income Compensation you receive for permanent loss or loss of use of a part or function of your body, for your permanent disfigurement, or for such loss or disfigurement suffered by your spouse or dependent(s). Free tax preparation for low income This compensation must be based only on the injury and not on the period of your absence from work. Free tax preparation for low income These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Free tax preparation for low income Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Free tax preparation for low income This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Free tax preparation for low income Proceeds not received in installments. Free tax preparation for low income   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Free tax preparation for low income If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Free tax preparation for low income Proceeds received in installments. Free tax preparation for low income   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Free tax preparation for low income   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Free tax preparation for low income Include anything over this excluded part in your income as interest. Free tax preparation for low income Installments for life. Free tax preparation for low income   If, as the beneficiary under an insurance contract, you are entitled to receive the proceeds in installments for the rest of your life without a refund or period-certain guarantee, you figure the excluded part of each installment by dividing the amount held by the insurance company by your life expectancy. Free tax preparation for low income If there is a refund or period-certain guarantee, the amount held by the insurance company for this purpose is reduced by the actuarial value of the guarantee. Free tax preparation for low income Surviving spouse. Free tax preparation for low income   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude, in any year, up to $1,000 of the interest included in the installments. Free tax preparation for low income If you remarry, you can continue to take the exclusion. Free tax preparation for low income Surrender of policy for cash. Free tax preparation for low income   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Free tax preparation for low income In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Free tax preparation for low income You should receive a Form 1099-R showing the total proceeds and the taxable part. Free tax preparation for low income Report these amounts on Form 1040, lines 16a and 16b; Form 1040A, lines 12a and 12b; or Form 1040NR, lines 17a and 17b. Free tax preparation for low income Endowment Contract Proceeds An endowment contract is a policy that pays over to you a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Free tax preparation for low income Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Free tax preparation for low income To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. Free tax preparation for low income Include in your income the part of the lump-sum payment that is more than your cost. Free tax preparation for low income Endowment proceeds that you choose to receive in installments instead of a lump-sum payment at the maturity of the policy are taxed as an annuity. Free tax preparation for low income The tax treatment of an annuity is explained in Publication 575. Free tax preparation for low income For this treatment to apply, you must choose to receive the proceeds in installments before receiving any part of the lump sum. Free tax preparation for low income This election must be made within 60 days after the lump-sum payment first becomes payable to you. Free tax preparation for low income Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are generally excluded from income if the insured is terminally or chronically ill. Free tax preparation for low income However, see Exception , later. Free tax preparation for low income For a chronically ill individual, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Free tax preparation for low income Accelerated death benefits paid on a per diem or other periodic basis without regard to the costs are excludable up to a limit. Free tax preparation for low income In addition, if any portion of a death benefit under a life insurance contract on the life of a terminally or chronically ill individual is sold or assigned to a viatical settlement provider, the amount received also is excluded from income. Free tax preparation for low income Generally, a viatical settlement provider is one who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill. Free tax preparation for low income To report taxable accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Free tax preparation for low income Terminally or chronically ill defined. Free tax preparation for low income   A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. Free tax preparation for low income A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions. Free tax preparation for low income The person is unable to perform (without substantial help) at least two activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more because of a loss of functional capacity. Free tax preparation for low income The person requires substantial supervision to protect himself or herself from threats to health and safety due to severe cognitive impairment. Free tax preparation for low income Exception. Free tax preparation for low income   The exclusion does not apply to any amount paid to a person other than the insured if that other person has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the other person, or Has a financial interest in the business of the other person. Free tax preparation for low income Sale of Home You may be able to exclude from income any gain up to $250,000 ($500,000 on a joint return in most cases) on the sale of your main home. Free tax preparation for low income Generally, if you can exclude all of the gain, you do not need to report the sale on your tax return. Free tax preparation for low income You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Free tax preparation for low income Main home. Free tax preparation for low income   Usually, your main home is the home you live in most of the time and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Free tax preparation for low income Repaying the first-time homebuyer credit because you sold your home. Free tax preparation for low income   If you claimed a first-time homebuyer credit for your main home and you sell it, you may have to repay the credit. Free tax preparation for low income For a home purchased in 2008 and used as your main home until sold in 2013, you must file Form 5405 and repay the balance of the unpaid credit on your 2013 tax return. Free tax preparation for low income   For a home purchased after 2008, you generally must repay the entire credit if the home was sold (or otherwise ceased to be your main home) within 36 months of the purchase date. Free tax preparation for low income If you purchased your home in 2009 and used it as your main home until sold in 2013, you do not have to repay the credit or file Form 5405. Free tax preparation for low income If you purchased your home in 2010 and used it as your main home until sold in 2013, you may have to file Form 5405 and repay the entire credit on your 2013 tax return. Free tax preparation for low income   See the Instructions for Form 5405 for more information about repaying the credit and exceptions to repayment that may apply to you. Free tax preparation for low income Maximum Amount of Exclusion You can generally exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Free tax preparation for low income You meet the ownership test. Free tax preparation for low income You meet the use test. Free tax preparation for low income During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Free tax preparation for low income You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Free tax preparation for low income Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Free tax preparation for low income This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Free tax preparation for low income Exception to ownership and use tests. Free tax preparation for low income   If you owned and lived in the property as your main home for less than 2 years, you still can claim an exclusion in some cases. Free tax preparation for low income Generally, you must have sold the home due to a change in place of employment, health, or unforeseen circumstances. Free tax preparation for low income The maximum amount you can exclude will be reduced. Free tax preparation for low income See Publication 523, Selling Your Home, for more information. Free tax preparation for low income Exception to use test for individuals with a disability. Free tax preparation for low income   There is an exception to the use test if, during the 5-year period before the sale of your home: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year. Free tax preparation for low income Under this exception, you are considered to live in your home during any time that you own the home and live in a facility (including a nursing home) that is licensed by a state or political subdivision to care for persons in your condition. Free tax preparation for low income   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Free tax preparation for low income Exception to ownership test for property acquired in a like-kind exchange. Free tax preparation for low income   You must have owned your main home for at least 5 years to qualify for the exclusion if you acquired your main home in a like-kind exchange. Free tax preparation for low income This special 5-year ownership rule continues to apply to a home you acquired in a like-kind exchange and gave to another person. Free tax preparation for low income A like-kind exchange is an exchange of property held for productive use in a trade or business or for investment. Free tax preparation for low income See Publication 523 for more information. Free tax preparation for low income Period of nonqualified use. Free tax preparation for low income   Generally, the gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gain is allocated to periods of nonqualified use. Free tax preparation for low income Nonqualified use is any period after December 31, 2008, during which the property is not used as the main home. Free tax preparation for low income See Publication 523 for more information. Free tax preparation for low income Married Persons In the special situations discussed below, if you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use test, you can exclude up to $250,000 of gain. Free tax preparation for low income However, see Special rules for joint returns , next. Free tax preparation for low income Special rules for joint returns. Free tax preparation for low income   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Free tax preparation for low income You are married and file a joint return for the year. Free tax preparation for low income Either you or your spouse meets the ownership test. Free tax preparation for low income Both you and your spouse meet the use test. Free tax preparation for low income During the 2-year period ending on the date of the sale, neither you nor your spouse exclude gain from the sale of another home. Free tax preparation for low income Sale of home by surviving spouse. Free tax preparation for low income   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Free tax preparation for low income   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2013. Free tax preparation for low income The sale or exchange took place no more than 2 years after the date of death of your spouse. Free tax preparation for low income You have not remarried. Free tax preparation for low income You and your spouse met the use test at the time of your spouse's death. Free tax preparation for low income You or your spouse met the ownership test at the time of your spouse's death. Free tax preparation for low income Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. Free tax preparation for low income Home transferred from spouse. Free tax preparation for low income   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Free tax preparation for low income Use of home after divorce. Free tax preparation for low income   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Free tax preparation for low income Business Use or Rental of Home You may be able to exclude gain from the sale of a home that you have used for business or to produce rental income. Free tax preparation for low income However, you must meet the ownership and use tests. Free tax preparation for low income See Publication 523 for more information. Free tax preparation for low income Depreciation after May 6, 1997. Free tax preparation for low income   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Free tax preparation for low income See Publication 523 for more information. Free tax preparation for low income Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and you do not qualify to exclude all of it, You have a gain and you choose not to exclude it, or You received Form 1099-S. Free tax preparation for low income If you have a gain that you cannot or choose not to exclude, if you received a Form 1099-S, or if you have a deductible loss, report the sale on your tax return. Free tax preparation for low income Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. Free tax preparation for low income If you used your home for business or to produce rental income, you may have to use Form 4797, Sales of Business Property, to report the sale of the business or rental part. Free tax preparation for low income See Publication 523 for more information. Free tax preparation for low income Reverse Mortgages A revers