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H R Block Tax Preparation

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H R Block Tax Preparation

H r block tax preparation Publication 503 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. H r block tax preparation Tax questions. H r block tax preparation Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 503, such as legislation enacted after it was published, go to www. H r block tax preparation irs. H r block tax preparation gov/pub503. H r block tax preparation Reminders Taxpayer identification number needed for each qualifying person. H r block tax preparation  You must include on line 2 of Form 2441, Child and Dependent Care Expenses, the name and taxpayer identification number (generally the social security number) of each qualifying person. H r block tax preparation See Taxpayer identification number under Qualifying Person Test, later. H r block tax preparation You may have to pay employment taxes. H r block tax preparation  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. H r block tax preparation Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. H r block tax preparation See Employment Taxes for Household Employers, later. H r block tax preparation Photographs of missing children. H r block tax preparation  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. H r block tax preparation Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. H r block tax preparation You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. H r block tax preparation Introduction This publication explains the tests you must meet to claim the credit for child and dependent care expenses. H r block tax preparation It explains how to figure and claim the credit. H r block tax preparation You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. H r block tax preparation The credit can be up to 35% of your expenses. H r block tax preparation To qualify, you must pay these expenses so you can work or look for work. H r block tax preparation This publication also discusses some of the employment tax rules for household employers. H r block tax preparation Dependent care benefits. H r block tax preparation   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. H r block tax preparation You must complete Form 2441, Part III, before you can figure the amount of your credit. H r block tax preparation See Dependent Care Benefits under How To Figure the Credit, later. H r block tax preparation Comments and suggestions. H r block tax preparation   We welcome your comments about this publication and your suggestions for future editions. H r block tax preparation   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. H r block tax preparation NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. H r block tax preparation Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. H r block tax preparation   You can send your comments from www. H r block tax preparation irs. H r block tax preparation gov/formspubs/. H r block tax preparation Click on “More Information” and then on “Comment on Tax Forms and Publications. H r block tax preparation ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. H r block tax preparation Ordering forms and publications. H r block tax preparation   Visit www. H r block tax preparation irs. H r block tax preparation gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. H r block tax preparation Internal Revenue Service 1201 N. H r block tax preparation Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. H r block tax preparation   If you have a tax question, check the information available on IRS. H r block tax preparation gov or call 1-800-829-1040. H r block tax preparation We cannot answer tax questions sent to either of the above addresses. H r block tax preparation Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-10 Dependent Care Provider's Identification and Certification See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. H r block tax preparation Prev  Up  Next   Home   More Online Publications
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2014 Refunds Ahead of Last Year

 

IR-2014-23, March 6, 2014

WASHINGTON — By the end of February, more than 48 million tax refunds had been issued the IRS today announced – an increase of 5.6 percent compared to the same time last year. As of Feb. 28, the average refund this year is $3,034, up 3 percent compared to the average refund amount for the same time last year. Almost 88 percent of refunds to date have been directly deposited into the accounts of taxpayers, saving them time and a trip to the bank.

The number of returns filed electronically is up slightly from the same time last year however, the number of taxpayers filing from home computers is up 7.5 percent.

At the end of the fourth week of the filing season, the IRS had received almost 40 percent of the returns it expects to receive during 2014.

 

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2014 FILING SEASON STATISTICS

Cumulative statistics comparing 3/01/13 and 2/28/14

Individual Income Tax Returns:

2013

2014

% Change

Total Receipts

58,044,000

58,883,000

1.4

Total Processed

51,778,000

57,410,000

10.9

 

 

 

 

E-filing Receipts:

 

 

 

TOTAL           

53,612,000

54,942,000

2.5

Tax Professionals

30,466,000

30,053,000

-1.4

Self-prepared

23,146,000

24,889,000

7.5

 

 

 

 

Web Usage:

 

 

 

Visits to IRS.gov

180,140,998

165,204,642

-8.3

 

 

 

 

Total Refunds:

 

 

 

Number

45,862,000

48,429,000

5.6

Amount

$135.025

Billion

$146.918

Billion

8.8

Average refund

$2,944

$3,034

3.0

 

 

 

 

Direct Deposit Refunds:

 

 

 

Number

41,137,000

42,380,000

3.0

Amount

$126.032

Billion

$131.203

Billion

4.1

Average refund

$3,054

$3,096

1.1

 

Page Last Reviewed or Updated: 06-Mar-2014

The H R Block Tax Preparation

H r block tax preparation 7. H r block tax preparation   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. H r block tax preparation Costs not included. H r block tax preparation Intangible Drilling Costs Exploration CostsPartnerships and S corporations. H r block tax preparation Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. H r block tax preparation Film and Television Production Costs What's New Film and television productions costs. H r block tax preparation  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. H r block tax preparation See Film and Television Production Costs , later. H r block tax preparation Introduction This chapter discusses costs you can elect to deduct or capitalize. H r block tax preparation You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. H r block tax preparation If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. H r block tax preparation When you capitalize a cost, you add it to the basis of property to which it relates. H r block tax preparation A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. H r block tax preparation Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. H r block tax preparation You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. H r block tax preparation For more information on the alternative minimum tax, see the instructions for the following forms. H r block tax preparation Form 6251, Alternative Minimum Tax—Individuals. H r block tax preparation Form 4626, Alternative Minimum Tax—Corporations. H r block tax preparation Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. H r block tax preparation Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. H r block tax preparation Certain carrying charges must be capitalized under the uniform capitalization rules. H r block tax preparation (For information on capitalization of interest, see chapter 4 . H r block tax preparation ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. H r block tax preparation You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. H r block tax preparation For unimproved and unproductive real property, your election is good for only 1 year. H r block tax preparation You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. H r block tax preparation For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. H r block tax preparation For personal property, your election is effective until the date you install or first use it, whichever is later. H r block tax preparation How to make the election. H r block tax preparation   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. H r block tax preparation However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H r block tax preparation Attach the statement to the amended return and write “Filed pursuant to section 301. H r block tax preparation 9100-2” on the statement. H r block tax preparation File the amended return at the same address you filed the original return. H r block tax preparation Research and Experimental Costs The costs of research and experimentation are generally capital expenses. H r block tax preparation However, you can elect to deduct these costs as a current business expense. H r block tax preparation Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. H r block tax preparation If you meet certain requirements, you may elect to defer and amortize research and experimental costs. H r block tax preparation For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. H r block tax preparation Research and experimental costs defined. H r block tax preparation   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. H r block tax preparation Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. H r block tax preparation Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. H r block tax preparation      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. H r block tax preparation However, costs paid or incurred to obtain another's patent are not research and experimental costs. H r block tax preparation Product. H r block tax preparation   The term “product” includes any of the following items. H r block tax preparation Formula. H r block tax preparation Invention. H r block tax preparation Patent. H r block tax preparation Pilot model. H r block tax preparation Process. H r block tax preparation Technique. H r block tax preparation Property similar to the items listed above. H r block tax preparation It also includes products used by you in your trade or business or held for sale, lease, or license. H r block tax preparation Costs not included. H r block tax preparation   Research and experimental costs do not include expenses for any of the following activities. H r block tax preparation Advertising or promotions. H r block tax preparation Consumer surveys. H r block tax preparation Efficiency surveys. H r block tax preparation Management studies. H r block tax preparation Quality control testing. H r block tax preparation Research in connection with literary, historical, or similar projects. H r block tax preparation The acquisition of another's patent, model, production, or process. H r block tax preparation When and how to elect. H r block tax preparation   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. H r block tax preparation If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. H r block tax preparation Deducting or Amortizing Research and Experimentation Costs IF you . H r block tax preparation . H r block tax preparation . H r block tax preparation THEN . H r block tax preparation . H r block tax preparation . H r block tax preparation Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. H r block tax preparation Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. H r block tax preparation See Research and Experimental Costs in chapter 8. H r block tax preparation Research credit. H r block tax preparation   If you pay or incur qualified research expenses, you may be able to take the research credit. H r block tax preparation For more information see Form 6765, Credit for Increasing Research Activities and its instructions. H r block tax preparation Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. H r block tax preparation You can usually recover them through depreciation or depletion. H r block tax preparation However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. H r block tax preparation These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. H r block tax preparation You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. H r block tax preparation You can elect to deduct only the costs of items with no salvage value. H r block tax preparation These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. H r block tax preparation Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. H r block tax preparation However, see Amounts paid to contractor that must be capitalized , later. H r block tax preparation You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. H r block tax preparation It does not matter whether there is any intent to produce hydrocarbons. H r block tax preparation If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. H r block tax preparation Amounts paid to contractor that must be capitalized. H r block tax preparation   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. H r block tax preparation How to make the election. H r block tax preparation   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. H r block tax preparation No formal statement is required. H r block tax preparation If you file Schedule C (Form 1040), enter these costs under “Other expenses. H r block tax preparation ”   For oil and gas wells, your election is binding for the year it is made and for all later years. H r block tax preparation For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. H r block tax preparation You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. H r block tax preparation Energy credit for costs of geothermal wells. H r block tax preparation   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. H r block tax preparation See the Instructions for Form 3468 for more information. H r block tax preparation Nonproductive well. H r block tax preparation   If you capitalize your IDCs, you have another option if the well is nonproductive. H r block tax preparation You can deduct the IDCs of the nonproductive well as an ordinary loss. H r block tax preparation You must indicate and clearly state your election on your tax return for the year the well is completed. H r block tax preparation Once made, the election for oil and gas wells is binding for all later years. H r block tax preparation You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. H r block tax preparation Costs incurred outside the United States. H r block tax preparation   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. H r block tax preparation However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. H r block tax preparation If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. H r block tax preparation These rules do not apply to a nonproductive well. H r block tax preparation Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. H r block tax preparation You recover these costs through depletion as the mineral is removed from the ground. H r block tax preparation However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). H r block tax preparation How to make the election. H r block tax preparation   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. H r block tax preparation Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. H r block tax preparation The election applies to the tax year you make this election and all later tax years. H r block tax preparation Partnerships and S corporations. H r block tax preparation   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. H r block tax preparation Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. H r block tax preparation Reduced corporate deductions for exploration costs. H r block tax preparation   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. H r block tax preparation It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. H r block tax preparation A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. H r block tax preparation For more information on this method of amortization, see Internal Revenue Code section 59(e). H r block tax preparation   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. H r block tax preparation However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. H r block tax preparation See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. H r block tax preparation   These rules also apply to the deduction of development costs by corporations. H r block tax preparation See Development Costs , later. H r block tax preparation Recapture of exploration expenses. H r block tax preparation   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. H r block tax preparation Use either of the following methods. H r block tax preparation Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. H r block tax preparation Your election must be clearly indicated on the return. H r block tax preparation Increase your adjusted basis in the mine by the amount included in income. H r block tax preparation Generally, you must elect this recapture method by the due date (including extensions) of your return. H r block tax preparation However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H r block tax preparation Make the election on your amended return and write “Filed pursuant to section 301. H r block tax preparation 9100-2” on the form where you are including the income. H r block tax preparation File the amended return at the same address you filed the original return. H r block tax preparation Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. H r block tax preparation   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. H r block tax preparation Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. H r block tax preparation   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. H r block tax preparation Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. H r block tax preparation If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. H r block tax preparation Foreign exploration costs. H r block tax preparation   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. H r block tax preparation You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. H r block tax preparation (Cost depletion is discussed in chapter 9 . H r block tax preparation ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. H r block tax preparation These rules also apply to foreign development costs. H r block tax preparation Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. H r block tax preparation These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. H r block tax preparation Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. H r block tax preparation Development costs do not include the costs for the acquisition or improvement of depreciable property. H r block tax preparation Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. H r block tax preparation This election applies each tax year to expenses paid or incurred in that year. H r block tax preparation Once made, the election is binding for the year and cannot be revoked for any reason. H r block tax preparation How to make the election. H r block tax preparation   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. H r block tax preparation Generally, you must make the election by the due date of the return (including extensions). H r block tax preparation However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H r block tax preparation Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H r block tax preparation 9100-2. H r block tax preparation ” File the amended return at the same address you filed the original return. H r block tax preparation Foreign development costs. H r block tax preparation   The rules discussed earlier for foreign exploration costs apply to foreign development costs. H r block tax preparation Reduced corporate deductions for development costs. H r block tax preparation   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. H r block tax preparation Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. H r block tax preparation For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. H r block tax preparation Circulation costs are deductible even if they normally would be capitalized. H r block tax preparation This rule does not apply to the following costs that must be capitalized. H r block tax preparation The purchase of land or depreciable property. H r block tax preparation The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. H r block tax preparation Other treatment of circulation costs. H r block tax preparation   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. H r block tax preparation Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). H r block tax preparation Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. H r block tax preparation How to make the election. H r block tax preparation   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. H r block tax preparation Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. H r block tax preparation Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. H r block tax preparation However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. H r block tax preparation The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. H r block tax preparation Any remaining costs must be amortized. H r block tax preparation For information about amortizing start-up and organizational costs, see chapter 8 . H r block tax preparation Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. H r block tax preparation Organizational costs include the costs of creating a corporation. H r block tax preparation For more information on start-up and organizational costs, see chapter 8 . H r block tax preparation How to make the election. H r block tax preparation   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. H r block tax preparation However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H r block tax preparation Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H r block tax preparation 9100-2. H r block tax preparation ” File the amended return at the same address you filed the original return. H r block tax preparation The election applies when computing taxable income for the current tax year and all subsequent years. H r block tax preparation Reforestation Costs Reforestation costs are generally capital expenditures. H r block tax preparation However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. H r block tax preparation The remaining costs can be amortized over an 84-month period. H r block tax preparation For information about amortizing reforestation costs, see chapter 8 . H r block tax preparation Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. H r block tax preparation Qualified timber property is property that contains trees in significant commercial quantities. H r block tax preparation See chapter 8 for more information on qualifying reforestation costs and qualified timber property. H r block tax preparation If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. H r block tax preparation Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. H r block tax preparation How to make the election. H r block tax preparation   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. H r block tax preparation If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. H r block tax preparation If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. H r block tax preparation The unique stand identification numbers. H r block tax preparation The total number of acres reforested during the tax year. H r block tax preparation The nature of the reforestation treatments. H r block tax preparation The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. H r block tax preparation   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H r block tax preparation Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H r block tax preparation 9100-2. H r block tax preparation ” File the amended return at the same address you filed the original return. H r block tax preparation The election applies when computing taxable income for the current tax year and all subsequent years. H r block tax preparation   For additional information on reforestation costs, see chapter 8 . H r block tax preparation Recapture. H r block tax preparation   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. H r block tax preparation For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. H r block tax preparation Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. H r block tax preparation However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. H r block tax preparation Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. H r block tax preparation However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. H r block tax preparation You must own or lease the facility or vehicle for use in connection with your trade or business. H r block tax preparation A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. H r block tax preparation A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). H r block tax preparation You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. H r block tax preparation Deduction limit. H r block tax preparation   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. H r block tax preparation However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. H r block tax preparation Partners and partnerships. H r block tax preparation   The $15,000 limit applies to a partnership and also to each partner in the partnership. H r block tax preparation A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. H r block tax preparation If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. H r block tax preparation   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). H r block tax preparation If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. H r block tax preparation Example. H r block tax preparation Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. H r block tax preparation Emilio had $12,000 of similar expenses in his sole proprietorship. H r block tax preparation He elected to deduct $7,000 of them. H r block tax preparation Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. H r block tax preparation Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. H r block tax preparation Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. H r block tax preparation Qualification standards. H r block tax preparation   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. H r block tax preparation You can view the Americans with Disabilities Act at www. H r block tax preparation ada. H r block tax preparation gov/pubs/ada. H r block tax preparation htm. H r block tax preparation   The following is a list of some architectural barrier removal costs that can be deducted. H r block tax preparation Ground and floor surfaces. H r block tax preparation Walks. H r block tax preparation Parking lots. H r block tax preparation Ramps. H r block tax preparation Entrances. H r block tax preparation Doors and doorways. H r block tax preparation Stairs. H r block tax preparation Floors. H r block tax preparation Toilet rooms. H r block tax preparation Water fountains. H r block tax preparation Public telephones. H r block tax preparation Elevators. H r block tax preparation Controls. H r block tax preparation Signage. H r block tax preparation Alarms. H r block tax preparation Protruding objects. H r block tax preparation Symbols of accessibility. H r block tax preparation You can find the ADA guidelines and requirements for architectural barrier removal at www. H r block tax preparation usdoj. H r block tax preparation gov/crt/ada/reg3a. H r block tax preparation html. H r block tax preparation   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. H r block tax preparation You can find the guidelines and requirements for transportation barrier removal at www. H r block tax preparation fta. H r block tax preparation dot. H r block tax preparation gov. H r block tax preparation   Also, you can access the ADA website at www. H r block tax preparation ada. H r block tax preparation gov for additional information. H r block tax preparation Other barrier removals. H r block tax preparation   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. H r block tax preparation The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. H r block tax preparation The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). H r block tax preparation The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. H r block tax preparation How to make the election. H r block tax preparation   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. H r block tax preparation Identify the deduction as a separate item. H r block tax preparation The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. H r block tax preparation If you make this election, you must maintain adequate records to support your deduction. H r block tax preparation   For your election to be valid, you generally must file your return by its due date, including extensions. H r block tax preparation However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H r block tax preparation Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H r block tax preparation 9100-2. H r block tax preparation ” File the amended return at the same address you filed the original return. H r block tax preparation Your election is irrevocable after the due date, including extensions, of your return. H r block tax preparation Disabled access credit. H r block tax preparation   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. H r block tax preparation If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. H r block tax preparation   For more information, see Form 8826, Disabled Access Credit. H r block tax preparation Film and Television Production Costs Film and television production costs are generally capital expenses. H r block tax preparation However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. H r block tax preparation For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. H r block tax preparation Prev  Up  Next   Home   More Online Publications