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How Can I Amend My 2010 Tax Return

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How Can I Amend My 2010 Tax Return

How can i amend my 2010 tax return 2. How can i amend my 2010 tax return   Simplified Employee Pensions (SEPs) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Setting Up a SEPWhen not to use Form 5305-SEP. How can i amend my 2010 tax return How Much Can I Contribute?Contribution Limits Deducting ContributionsDeduction Limit for Contributions for Participants Deduction Limit for Self-Employed Individuals Carryover of Excess SEP Contributions When To Deduct Contributions Where To Deduct Contributions Salary Reduction Simplified Employee Pensions (SARSEPs)SARSEP ADP test. How can i amend my 2010 tax return Deferral percentage. How can i amend my 2010 tax return Employee compensation. How can i amend my 2010 tax return Compensation of self-employed individuals. How can i amend my 2010 tax return Choice not to treat deferrals as compensation. How can i amend my 2010 tax return Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. How can i amend my 2010 tax return Reporting and Disclosure Requirements Topics - This chapter discusses: Setting up a SEP How much can I contribute Deducting contributions Salary reduction simplified employee pensions (SARSEPs) Distributions (withdrawals) Additional taxes Reporting and disclosure requirements Useful Items - You may want to see: Publication 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4285 SEP Checklist 4286 SARSEP Checklist 4333 SEP Retirement Plans for Small Businesses 4336 SARSEP for Small Businesses 4407 SARSEP—Key Issues and Assistance Forms (and Instructions) W-2 Wage and Tax Statement 1040 U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return Individual Income Tax Return 5305-SEP Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 5305A-SEP Salary Reduction Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A SEP is a written plan that allows you to make contributions toward your own retirement and your employees' retirement without getting involved in a more complex qualified plan. How can i amend my 2010 tax return Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. How can i amend my 2010 tax return A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. How can i amend my 2010 tax return SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). How can i amend my 2010 tax return A SEP-IRA may have to be set up for a leased employee (defined in chapter 1), but does not need to be set up for excludable employees (defined later). How can i amend my 2010 tax return Eligible employee. How can i amend my 2010 tax return   An eligible employee is an individual who meets all the following requirements. How can i amend my 2010 tax return Has reached age 21. How can i amend my 2010 tax return Has worked for you in at least 3 of the last 5 years. How can i amend my 2010 tax return Has received at least $550 in compensation from you in 2013. How can i amend my 2010 tax return This amount remains the same in 2014. How can i amend my 2010 tax return    You can use less restrictive participation requirements than those listed, but not more restrictive ones. How can i amend my 2010 tax return Excludable employees. How can i amend my 2010 tax return   The following employees can be excluded from coverage under a SEP. How can i amend my 2010 tax return Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. How can i amend my 2010 tax return Nonresident alien employees who have received no U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return source wages, salaries, or other personal services compensation from you. How can i amend my 2010 tax return For more information about nonresident aliens, see Publication 519, U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return Tax Guide for Aliens. How can i amend my 2010 tax return Setting Up a SEP There are three basic steps in setting up a SEP. How can i amend my 2010 tax return You must execute a formal written agreement to provide benefits to all eligible employees. How can i amend my 2010 tax return You must give each eligible employee certain information about the SEP. How can i amend my 2010 tax return A SEP-IRA must be set up by or for each eligible employee. How can i amend my 2010 tax return Many financial institutions will help you set up a SEP. How can i amend my 2010 tax return Formal written agreement. How can i amend my 2010 tax return   You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. How can i amend my 2010 tax return You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. How can i amend my 2010 tax return However, see When not to use Form 5305-SEP, below. How can i amend my 2010 tax return   If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. How can i amend my 2010 tax return Keep the original form. How can i amend my 2010 tax return Do not file it with the IRS. How can i amend my 2010 tax return Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. How can i amend my 2010 tax return See the Form 5305-SEP instructions for details. How can i amend my 2010 tax return If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. How can i amend my 2010 tax return When not to use Form 5305-SEP. How can i amend my 2010 tax return   You cannot use Form 5305-SEP if any of the following apply. How can i amend my 2010 tax return You currently maintain any other qualified retirement plan other than another SEP. How can i amend my 2010 tax return You have any eligible employees for whom IRAs have not been set up. How can i amend my 2010 tax return You use the services of leased employees, who are not your common-law employees (as described in chapter 1). How can i amend my 2010 tax return You are a member of any of the following unless all eligible employees of all the members of these groups, trades, or businesses participate under the SEP. How can i amend my 2010 tax return An affiliated service group described in section 414(m). How can i amend my 2010 tax return A controlled group of corporations described in section 414(b). How can i amend my 2010 tax return Trades or businesses under common control described in section 414(c). How can i amend my 2010 tax return You do not pay the cost of the SEP contributions. How can i amend my 2010 tax return Information you must give to employees. How can i amend my 2010 tax return   You must give each eligible employee a copy of Form 5305-SEP, its instructions, and the other information listed in the Form 5305-SEP instructions. How can i amend my 2010 tax return An IRS model SEP is not considered adopted until you give each employee this information. How can i amend my 2010 tax return Setting up the employee's SEP-IRA. How can i amend my 2010 tax return   A SEP-IRA must be set up by or for each eligible employee. How can i amend my 2010 tax return SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. How can i amend my 2010 tax return You send SEP contributions to the financial institution where the SEP-IRA is maintained. How can i amend my 2010 tax return Deadline for setting up a SEP. How can i amend my 2010 tax return   You can set up a SEP for any year as late as the due date (including extensions) of your income tax return for that year. How can i amend my 2010 tax return Credit for startup costs. How can i amend my 2010 tax return   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP that first became effective in 2013. How can i amend my 2010 tax return For more information, see Credit for startup costs under Reminders, earlier. How can i amend my 2010 tax return How Much Can I Contribute? The SEP rules permit you to contribute a limited amount of money each year to each employee's SEP-IRA. How can i amend my 2010 tax return If you are self-employed, you can contribute to your own SEP-IRA. How can i amend my 2010 tax return Contributions must be in the form of money (cash, check, or money order). How can i amend my 2010 tax return You cannot contribute property. How can i amend my 2010 tax return However, participants may be able to transfer or roll over certain property from one retirement plan to another. How can i amend my 2010 tax return See Publication 590 for more information about rollovers. How can i amend my 2010 tax return You do not have to make contributions every year. How can i amend my 2010 tax return But if you make contributions, they must be based on a written allocation formula and must not discriminate in favor of highly compensated employees (defined in chapter 1). How can i amend my 2010 tax return When you contribute, you must contribute to the SEP-IRAs of all participants who actually performed personal services during the year for which the contributions are made, including employees who die or terminate employment before the contributions are made. How can i amend my 2010 tax return Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. How can i amend my 2010 tax return A SEP-IRA cannot be a Roth IRA. How can i amend my 2010 tax return Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. How can i amend my 2010 tax return Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. How can i amend my 2010 tax return If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. How can i amend my 2010 tax return Participants age 70½ or over must take required minimum distributions. How can i amend my 2010 tax return Time limit for making contributions. How can i amend my 2010 tax return   To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. How can i amend my 2010 tax return Contribution Limits Contributions you make for 2013 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000. How can i amend my 2010 tax return Compensation generally does not include your contributions to the SEP. How can i amend my 2010 tax return The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. How can i amend my 2010 tax return Example. How can i amend my 2010 tax return Your employee, Mary Plant, earned $21,000 for 2013. How can i amend my 2010 tax return The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). How can i amend my 2010 tax return Contributions for yourself. How can i amend my 2010 tax return   The annual limits on your contributions to a common-law employee's SEP-IRA also apply to contributions you make to your own SEP-IRA. How can i amend my 2010 tax return However, special rules apply when figuring your maximum deductible contribution. How can i amend my 2010 tax return See Deduction Limit for Self-Employed Individuals , later. How can i amend my 2010 tax return Annual compensation limit. How can i amend my 2010 tax return   You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. How can i amend my 2010 tax return However, $51,000 is the maximum contribution for an eligible employee. How can i amend my 2010 tax return These limits are $260,000 and $52,000, respectively, in 2014. How can i amend my 2010 tax return Example. How can i amend my 2010 tax return Your employee, Susan Green, earned $210,000 for 2013. How can i amend my 2010 tax return Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. How can i amend my 2010 tax return More than one plan. How can i amend my 2010 tax return   If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $51,000 or 100% of the participant's compensation. How can i amend my 2010 tax return When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. How can i amend my 2010 tax return Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. How can i amend my 2010 tax return Tax treatment of excess contributions. How can i amend my 2010 tax return   Excess contributions are your contributions to an employee's SEP-IRA (or to your own SEP-IRA) for 2013 that exceed the lesser of the following amounts. How can i amend my 2010 tax return 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). How can i amend my 2010 tax return $51,000. How can i amend my 2010 tax return Excess contributions are included in the employee's income for the year and are treated as contributions by the employee to his or her SEP-IRA. How can i amend my 2010 tax return For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. How can i amend my 2010 tax return Reporting on Form W-2. How can i amend my 2010 tax return   Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). How can i amend my 2010 tax return Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. How can i amend my 2010 tax return If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. How can i amend my 2010 tax return Deduction Limit for Contributions for Participants The most you can deduct for your contributions to you or your employee's SEP-IRA is the lesser of the following amounts. How can i amend my 2010 tax return Your contributions (including any excess contributions carryover). How can i amend my 2010 tax return 25% of the compensation (limited to $255,000 per participant) paid to the participants during 2013 from the business that has the plan, not to exceed $51,000 per participant. How can i amend my 2010 tax return In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. How can i amend my 2010 tax return Deduction Limit for Self-Employed Individuals If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for these contributions. How can i amend my 2010 tax return When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment (defined in chapter 1), which takes into account both the following deductions. How can i amend my 2010 tax return The deduction for the deductible part of your self-employment tax. How can i amend my 2010 tax return The deduction for contributions to your own SEP-IRA. How can i amend my 2010 tax return The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. How can i amend my 2010 tax return For this reason, you determine the deduction for contributions to your own SEP-IRA indirectly by reducing the contribution rate called for in your plan. How can i amend my 2010 tax return To do this, use the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed, whichever is appropriate for your plan's contribution rate, in chapter 5. How can i amend my 2010 tax return Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. How can i amend my 2010 tax return Carryover of Excess SEP Contributions If you made SEP contributions that are more than the deduction limit (nondeductible contributions), you can carry over and deduct the difference in later years. How can i amend my 2010 tax return However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. How can i amend my 2010 tax return If you also contributed to a defined benefit plan or defined contribution plan, see Carryover of Excess Contributions under Employer Deduction in chapter 4 for the carryover limit. How can i amend my 2010 tax return Excise tax. How can i amend my 2010 tax return   If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. How can i amend my 2010 tax return For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. How can i amend my 2010 tax return When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. How can i amend my 2010 tax return If the SEP is maintained on a calendar year basis, you deduct the yearly contributions on your tax return for the year within which the calendar year ends. How can i amend my 2010 tax return If you file your tax return and maintain the SEP using a fiscal year or short tax year, you deduct contributions made for a year on your tax return for that year. How can i amend my 2010 tax return Example. How can i amend my 2010 tax return You are a fiscal year taxpayer whose tax year ends June 30. How can i amend my 2010 tax return You maintain a SEP on a calendar year basis. How can i amend my 2010 tax return You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. How can i amend my 2010 tax return Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. How can i amend my 2010 tax return For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return Return of Partnership Income; and corporations deduct them on Form 1120, U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return Corporation Income Tax Return, or Form 1120S, U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return Income Tax Return for an S Corporation. How can i amend my 2010 tax return Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. How can i amend my 2010 tax return (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. How can i amend my 2010 tax return , you receive from the partnership. How can i amend my 2010 tax return ) Remember that sole proprietors and partners can't deduct as a business expense contributions made to a SEP for themselves, only those made for their common-law employees. How can i amend my 2010 tax return Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. How can i amend my 2010 tax return (See the Caution, next. How can i amend my 2010 tax return ) Under a SARSEP, your employees can choose to have you contribute part of their pay to their SEP-IRAs rather than receive it in cash. How can i amend my 2010 tax return This contribution is called an “elective deferral” because employees choose (elect) to set aside the money, and they defer the tax on the money until it is distributed to them. How can i amend my 2010 tax return You are not allowed to set up a SARSEP after 1996. How can i amend my 2010 tax return However, participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan. How can i amend my 2010 tax return If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. How can i amend my 2010 tax return Who can have a SARSEP?   A SARSEP set up before 1997 is available to you and your eligible employees only if all the following requirements are met. How can i amend my 2010 tax return At least 50% of your employees eligible to participate choose to make elective deferrals. How can i amend my 2010 tax return You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. How can i amend my 2010 tax return The elective deferrals of your highly compensated employees meet the SARSEP ADP test. How can i amend my 2010 tax return SARSEP ADP test. How can i amend my 2010 tax return   Under the SARSEP ADP test, the amount deferred each year by each eligible highly compensated employee as a percentage of pay (the deferral percentage) cannot be more than 125% of the average deferral percentage (ADP) of all non-highly compensated employees eligible to participate. How can i amend my 2010 tax return A highly compensated employee is defined in chapter 1. How can i amend my 2010 tax return Deferral percentage. How can i amend my 2010 tax return   The deferral percentage for an employee for a year is figured as follows. How can i amend my 2010 tax return   The elective employer contributions (excluding certain catch-up contributions)  paid to the SEP for the employee for the year     The employee's compensation (limited to $255,000 in 2013)   The instructions for Form 5305A-SEP have a worksheet you can use to determine whether the elective deferrals of your highly compensated employees meet the SARSEP ADP test. How can i amend my 2010 tax return Employee compensation. How can i amend my 2010 tax return   For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. How can i amend my 2010 tax return Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. How can i amend my 2010 tax return See Compensation in chapter 1. How can i amend my 2010 tax return Elective deferrals under the SARSEP are included in figuring your employees' deferral percentage even though they are not included in the income of your employees for income tax purposes. How can i amend my 2010 tax return Compensation of self-employed individuals. How can i amend my 2010 tax return   If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. How can i amend my 2010 tax return   Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. How can i amend my 2010 tax return Choice not to treat deferrals as compensation. How can i amend my 2010 tax return   You can choose not to treat elective deferrals (and other amounts deferred in certain employee benefit plans) for a year as compensation under your SARSEP. How can i amend my 2010 tax return Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. How can i amend my 2010 tax return 25% of the participant's compensation (limited to $255,000 of the participant's compensation). How can i amend my 2010 tax return $17,500. How can i amend my 2010 tax return The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. How can i amend my 2010 tax return Cash or deferred arrangement (section 401(k) plan). How can i amend my 2010 tax return Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). How can i amend my 2010 tax return SIMPLE IRA plan. How can i amend my 2010 tax return In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. How can i amend my 2010 tax return Catch-up contributions. How can i amend my 2010 tax return   A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. How can i amend my 2010 tax return The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. How can i amend my 2010 tax return Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the elective deferral limit (the lesser of 25% of compensation or $17,500), the SARSEP ADP test limit discussed earlier, or the plan limit (if any). How can i amend my 2010 tax return However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. How can i amend my 2010 tax return The catch-up contribution limit. How can i amend my 2010 tax return The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. How can i amend my 2010 tax return   Catch-up contributions are not subject to the elective deferral limit (the lesser of 25% of compensation or $17,500 in 2013 and in 2014). How can i amend my 2010 tax return Overall limit on SEP contributions. How can i amend my 2010 tax return   If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000 for 2013 ($52,000 for 2014). How can i amend my 2010 tax return The same rule applies to contributions you make to your own SEP-IRA. How can i amend my 2010 tax return See Contribution Limits , earlier. How can i amend my 2010 tax return Figuring the elective deferral. How can i amend my 2010 tax return   For figuring the 25% limit on elective deferrals, compensation does not include SEP contributions, including elective deferrals or other amounts deferred in certain employee benefit plans. How can i amend my 2010 tax return Tax Treatment of Deferrals Elective deferrals that are not more than the limits discussed earlier under Limit on Elective Deferrals are excluded from your employees' wages subject to federal income tax in the year of deferral. How can i amend my 2010 tax return However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. How can i amend my 2010 tax return Excess deferrals. How can i amend my 2010 tax return   For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. How can i amend my 2010 tax return For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. How can i amend my 2010 tax return The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. How can i amend my 2010 tax return See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. How can i amend my 2010 tax return Excess SEP contributions. How can i amend my 2010 tax return   Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. How can i amend my 2010 tax return You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. How can i amend my 2010 tax return If you do not notify them within this time period, you must pay a 10% tax on the excess. How can i amend my 2010 tax return For an explanation of the notification requirements, see Rev. How can i amend my 2010 tax return Proc. How can i amend my 2010 tax return 91-44, 1991-2 C. How can i amend my 2010 tax return B. How can i amend my 2010 tax return 733. How can i amend my 2010 tax return If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. How can i amend my 2010 tax return Reporting on Form W-2. How can i amend my 2010 tax return   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. How can i amend my 2010 tax return You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. How can i amend my 2010 tax return You must also include them in box 12. How can i amend my 2010 tax return Mark the “Retirement plan” checkbox in box 13. How can i amend my 2010 tax return For more information, see the Form W-2 instructions. How can i amend my 2010 tax return Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. How can i amend my 2010 tax return Also, you cannot make your contributions on the condition that any part of them must be kept in the account after you have made your contributions to the employee's accounts. How can i amend my 2010 tax return Distributions are subject to IRA rules. How can i amend my 2010 tax return Generally, you or your employee must begin to receive distributions from a SEP-IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. How can i amend my 2010 tax return For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. How can i amend my 2010 tax return Additional Taxes The tax advantages of using SEP-IRAs for retirement savings can be offset by additional taxes that may be imposed for all the following actions. How can i amend my 2010 tax return Making excess contributions. How can i amend my 2010 tax return Making early withdrawals. How can i amend my 2010 tax return Not making required withdrawals. How can i amend my 2010 tax return For information about these taxes, see chapter 1 in Publication 590. How can i amend my 2010 tax return Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. How can i amend my 2010 tax return Prohibited transaction. How can i amend my 2010 tax return   If an employee improperly uses his or her SEP-IRA, such as by borrowing money from it, the employee has engaged in a prohibited transaction. How can i amend my 2010 tax return In that case, the SEP-IRA will no longer qualify as an IRA. How can i amend my 2010 tax return For a list of prohibited transactions, see Prohibited Transactions in chapter 4. How can i amend my 2010 tax return Effects on employee. How can i amend my 2010 tax return   If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred. How can i amend my 2010 tax return The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account. How can i amend my 2010 tax return Also, the employee may have to pay the additional tax for making early withdrawals. How can i amend my 2010 tax return Reporting and Disclosure Requirements If you set up a SEP using Form 5305-SEP, you must give your eligible employees certain information about the SEP when you set it up. How can i amend my 2010 tax return See Setting Up a SEP , earlier. How can i amend my 2010 tax return Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. How can i amend my 2010 tax return You must also give them notice of any excess contributions. How can i amend my 2010 tax return For details about other information you must give them, see the instructions for Form 5305-SEP or Form 5305A-SEP (for a salary reduction SEP). How can i amend my 2010 tax return Even if you did not use Form 5305-SEP or Form 5305A-SEP to set up your SEP, you must give your employees information similar to that described above. How can i amend my 2010 tax return For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. How can i amend my 2010 tax return Prev  Up  Next   Home   More Online Publications
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The How Can I Amend My 2010 Tax Return

How can i amend my 2010 tax return 22. How can i amend my 2010 tax return   Taxes Table of Contents IntroductionIndian tribal government. How can i amend my 2010 tax return Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. How can i amend my 2010 tax return Real Estate TaxesReal estate taxes for prior years. How can i amend my 2010 tax return Examples. How can i amend my 2010 tax return Form 1099-S. How can i amend my 2010 tax return Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). How can i amend my 2010 tax return It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. How can i amend my 2010 tax return This chapter covers the following topics. How can i amend my 2010 tax return Income taxes (federal, state, local, and foreign). How can i amend my 2010 tax return General sales taxes (state and local). How can i amend my 2010 tax return Real estate taxes (state, local, and foreign). How can i amend my 2010 tax return Personal property taxes (state and local). How can i amend my 2010 tax return Taxes and fees you cannot deduct. How can i amend my 2010 tax return Use Table 22-1 as a guide to determine which taxes you can deduct. How can i amend my 2010 tax return The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. How can i amend my 2010 tax return Business taxes. How can i amend my 2010 tax return   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. How can i amend my 2010 tax return For information on these taxes, see Publication 535, Business Expenses. How can i amend my 2010 tax return State or local taxes. How can i amend my 2010 tax return   These are taxes imposed by the 50 states, U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. How can i amend my 2010 tax return Indian tribal government. How can i amend my 2010 tax return   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. How can i amend my 2010 tax return Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. How can i amend my 2010 tax return General sales taxes. How can i amend my 2010 tax return   These are taxes imposed at one rate on retail sales of a broad range of classes of items. How can i amend my 2010 tax return Foreign taxes. How can i amend my 2010 tax return   These are taxes imposed by a foreign country or any of its political subdivisions. How can i amend my 2010 tax return Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. How can i amend my 2010 tax return The tax must be imposed on you. How can i amend my 2010 tax return You must pay the tax during your tax year. How can i amend my 2010 tax return The tax must be imposed on you. How can i amend my 2010 tax return   In general, you can deduct only taxes imposed on you. How can i amend my 2010 tax return   Generally, you can deduct property taxes only if you are an owner of the property. How can i amend my 2010 tax return If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. How can i amend my 2010 tax return You must pay the tax during your tax year. How can i amend my 2010 tax return   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. How can i amend my 2010 tax return If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. How can i amend my 2010 tax return If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. How can i amend my 2010 tax return If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). How can i amend my 2010 tax return See Publication 538, Accounting Periods and Methods, for details. How can i amend my 2010 tax return    If you use an accrual method of accounting, see Publication 538 for more information. How can i amend my 2010 tax return Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. How can i amend my 2010 tax return State and Local Income Taxes You can deduct state and local income taxes. How can i amend my 2010 tax return However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. How can i amend my 2010 tax return See General Sales Taxes , later. How can i amend my 2010 tax return Exception. How can i amend my 2010 tax return    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. How can i amend my 2010 tax return For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. How can i amend my 2010 tax return What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. How can i amend my 2010 tax return Withheld taxes. How can i amend my 2010 tax return   You can deduct state and local income taxes withheld from your salary in the year they are withheld. How can i amend my 2010 tax return Your Form(s) W-2 will show these amounts. How can i amend my 2010 tax return Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. How can i amend my 2010 tax return Estimated tax payments. How can i amend my 2010 tax return   You can deduct estimated tax payments you made during the year to a state or local government. How can i amend my 2010 tax return However, you must have a reasonable basis for making the estimated tax payments. How can i amend my 2010 tax return Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. How can i amend my 2010 tax return For example, you made an estimated state income tax payment. How can i amend my 2010 tax return However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. How can i amend my 2010 tax return You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. How can i amend my 2010 tax return Refund applied to taxes. How can i amend my 2010 tax return   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. How can i amend my 2010 tax return    Do not reduce your deduction by either of the following items. How can i amend my 2010 tax return Any state or local income tax refund (or credit) you expect to receive for 2013. How can i amend my 2010 tax return Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. How can i amend my 2010 tax return   However, part or all of this refund (or credit) may be taxable. How can i amend my 2010 tax return See Refund (or credit) of state or local income taxes , later. How can i amend my 2010 tax return Separate federal returns. How can i amend my 2010 tax return   If you and your spouse file separate state, local, and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year. How can i amend my 2010 tax return Joint state and local returns. How can i amend my 2010 tax return   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. How can i amend my 2010 tax return You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. How can i amend my 2010 tax return However, you cannot deduct more than the amount you actually paid during the year. How can i amend my 2010 tax return You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. How can i amend my 2010 tax return If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. How can i amend my 2010 tax return Joint federal return. How can i amend my 2010 tax return   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. How can i amend my 2010 tax return Contributions to state benefit funds. How can i amend my 2010 tax return    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. How can i amend my 2010 tax return For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. How can i amend my 2010 tax return Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. How can i amend my 2010 tax return Alaska Unemployment Compensation Fund. How can i amend my 2010 tax return California Nonoccupational Disability Benefit Fund. How can i amend my 2010 tax return New Jersey Nonoccupational Disability Benefit Fund. How can i amend my 2010 tax return New Jersey Unemployment Compensation Fund. How can i amend my 2010 tax return New York Nonoccupational Disability Benefit Fund. How can i amend my 2010 tax return Pennsylvania Unemployment Compensation Fund. How can i amend my 2010 tax return Rhode Island Temporary Disability Benefit Fund. How can i amend my 2010 tax return Washington State Supplemental Workmen's Compensation Fund. How can i amend my 2010 tax return    Employee contributions to private or voluntary disability plans are not deductible. How can i amend my 2010 tax return Refund (or credit) of state or local income taxes. How can i amend my 2010 tax return   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. How can i amend my 2010 tax return This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. How can i amend my 2010 tax return If you did not itemize your deductions in the previous year, do not include the refund in income. How can i amend my 2010 tax return If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. How can i amend my 2010 tax return For a discussion of how much to include, see Recoveries in chapter 12. How can i amend my 2010 tax return Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return possession. How can i amend my 2010 tax return However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return tax under the foreign earned income exclusion or the foreign housing exclusion. How can i amend my 2010 tax return For information on these exclusions, see Publication 54, Tax Guide for U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return Citizens and Resident Aliens Abroad. How can i amend my 2010 tax return For information on the foreign tax credit, see Publication 514. How can i amend my 2010 tax return General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. How can i amend my 2010 tax return You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. How can i amend my 2010 tax return Actual expenses. How can i amend my 2010 tax return   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. How can i amend my 2010 tax return However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. How can i amend my 2010 tax return If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. How can i amend my 2010 tax return If you use the actual expenses method, you must have receipts to show the general sales taxes paid. How can i amend my 2010 tax return Do not include sales taxes paid on items used in your trade or business. How can i amend my 2010 tax return Motor vehicles. How can i amend my 2010 tax return   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. How can i amend my 2010 tax return This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. How can i amend my 2010 tax return Optional sales tax tables. How can i amend my 2010 tax return   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). How can i amend my 2010 tax return You may also be able to add the state and local general sales taxes paid on certain specified items. How can i amend my 2010 tax return   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. How can i amend my 2010 tax return Your income is your adjusted gross income plus any nontaxable items such as the following. How can i amend my 2010 tax return Tax-exempt interest. How can i amend my 2010 tax return Veterans' benefits. How can i amend my 2010 tax return Nontaxable combat pay. How can i amend my 2010 tax return Workers' compensation. How can i amend my 2010 tax return Nontaxable part of social security and railroad retirement benefits. How can i amend my 2010 tax return Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. How can i amend my 2010 tax return Public assistance payments. How can i amend my 2010 tax return If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. How can i amend my 2010 tax return See the Instructions for Schedule A (Form 1040), line 5, for details. How can i amend my 2010 tax return Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. How can i amend my 2010 tax return You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. How can i amend my 2010 tax return Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. How can i amend my 2010 tax return They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. How can i amend my 2010 tax return For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. How can i amend my 2010 tax return Tenant-shareholders in a cooperative housing corporation. How can i amend my 2010 tax return   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. How can i amend my 2010 tax return The corporation should provide you with a statement showing your share of the taxes. How can i amend my 2010 tax return For more information, see Special Rules for Cooperatives in Publication 530. How can i amend my 2010 tax return Division of real estate taxes between buyers and sellers. How can i amend my 2010 tax return   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. How can i amend my 2010 tax return   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. How can i amend my 2010 tax return The seller is treated as paying the taxes up to, but not including, the date of sale. How can i amend my 2010 tax return The buyer is treated as paying the taxes beginning with the date of sale. How can i amend my 2010 tax return This applies regardless of the lien dates under local law. How can i amend my 2010 tax return Generally, this information is included on the settlement statement provided at the closing. How can i amend my 2010 tax return    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. How can i amend my 2010 tax return This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. How can i amend my 2010 tax return However, you must also include the amount of that tax in the selling price of the property. How can i amend my 2010 tax return The buyer must include the same amount in his or her cost of the property. How can i amend my 2010 tax return   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. How can i amend my 2010 tax return Worksheet 22-1. How can i amend my 2010 tax return Figuring Your Real Estate Tax Deduction 1. How can i amend my 2010 tax return Enter the total real estate taxes for the real property tax year   2. How can i amend my 2010 tax return Enter the number of days in the real property tax year that you owned the property   3. How can i amend my 2010 tax return Divide line 2 by 365 (for leap years, divide line 2 by 366) . How can i amend my 2010 tax return 4. How can i amend my 2010 tax return Multiply line 1 by line 3. How can i amend my 2010 tax return This is your deduction. How can i amend my 2010 tax return Enter it on Schedule A (Form 1040), line 6   Note. How can i amend my 2010 tax return Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. How can i amend my 2010 tax return Your total deduction is the sum of the line 4 amounts for all of the properties. How can i amend my 2010 tax return Real estate taxes for prior years. How can i amend my 2010 tax return   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. How can i amend my 2010 tax return Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. How can i amend my 2010 tax return The buyer must add them to the cost of the property. How can i amend my 2010 tax return The seller can deduct these taxes paid by the buyer. How can i amend my 2010 tax return However, the seller must include them in the selling price. How can i amend my 2010 tax return Examples. How can i amend my 2010 tax return   The following examples illustrate how real estate taxes are divided between buyer and seller. How can i amend my 2010 tax return Example 1. How can i amend my 2010 tax return Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. How can i amend my 2010 tax return The tax on their old home, sold on May 7, was $620. How can i amend my 2010 tax return The tax on their new home, bought on May 3, was $732. How can i amend my 2010 tax return Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. How can i amend my 2010 tax return On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. How can i amend my 2010 tax return Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). How can i amend my 2010 tax return They figure their deduction for taxes on their old home as follows. How can i amend my 2010 tax return Worksheet 22-1. How can i amend my 2010 tax return Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. How can i amend my 2010 tax return Enter the total real estate taxes for the real property tax year $620 2. How can i amend my 2010 tax return Enter the number of days in the real property tax year that you owned the property 126 3. How can i amend my 2010 tax return Divide line 2 by 365 (for leap years, divide line 2 by 366) . How can i amend my 2010 tax return 3452 4. How can i amend my 2010 tax return Multiply line 1 by line 3. How can i amend my 2010 tax return This is your deduction. How can i amend my 2010 tax return Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. How can i amend my 2010 tax return (The buyers add the $214 to their cost of the home. How can i amend my 2010 tax return ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). How can i amend my 2010 tax return They figure their deduction for taxes on their new home as follows. How can i amend my 2010 tax return Worksheet 22-1. How can i amend my 2010 tax return Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. How can i amend my 2010 tax return Enter the total real estate taxes for the real property tax year $732 2. How can i amend my 2010 tax return Enter the number of days in the real property tax year that you owned the property 243 3. How can i amend my 2010 tax return Divide line 2 by 365 (for leap years, divide line 2 by 366) . How can i amend my 2010 tax return 6658 4. How can i amend my 2010 tax return Multiply line 1 by line 3. How can i amend my 2010 tax return This is your deduction. How can i amend my 2010 tax return Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. How can i amend my 2010 tax return (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. How can i amend my 2010 tax return ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. How can i amend my 2010 tax return They will enter this amount on Schedule A (Form 1040), line 6. How can i amend my 2010 tax return Example 2. How can i amend my 2010 tax return George and Helen Brown bought a new home on May 3, 2013. How can i amend my 2010 tax return Their real property tax year for the new home is the calendar year. How can i amend my 2010 tax return Real estate taxes for 2012 were assessed in their state on January 1, 2013. How can i amend my 2010 tax return The taxes became due on May 31, 2013, and October 31, 2013. How can i amend my 2010 tax return The Browns agreed to pay all taxes due after the date of purchase. How can i amend my 2010 tax return Real estate taxes for 2012 were $680. How can i amend my 2010 tax return They paid $340 on May 31, 2013, and $340 on October 31, 2013. How can i amend my 2010 tax return These taxes were for the 2012 real property tax year. How can i amend my 2010 tax return The Browns cannot deduct them since they did not own the property until 2013. How can i amend my 2010 tax return Instead, they must add $680 to the cost of their new home. How can i amend my 2010 tax return In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. How can i amend my 2010 tax return The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). How can i amend my 2010 tax return They will figure their 2014 deduction for taxes as follows. How can i amend my 2010 tax return Worksheet 22-1. How can i amend my 2010 tax return Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. How can i amend my 2010 tax return Enter the total real estate taxes for the real property tax year $752 2. How can i amend my 2010 tax return Enter the number of days in the real property tax year that you owned the property 243 3. How can i amend my 2010 tax return Divide line 2 by 365 (for leap years, divide line 2 by 366) . How can i amend my 2010 tax return 6658 4. How can i amend my 2010 tax return Multiply line 1 by line 3. How can i amend my 2010 tax return This is your deduction. How can i amend my 2010 tax return Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. How can i amend my 2010 tax return Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. How can i amend my 2010 tax return This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. How can i amend my 2010 tax return The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. How can i amend my 2010 tax return The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. How can i amend my 2010 tax return Form 1099-S. How can i amend my 2010 tax return   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. How can i amend my 2010 tax return Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. How can i amend my 2010 tax return The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. How can i amend my 2010 tax return   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. How can i amend my 2010 tax return The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. How can i amend my 2010 tax return See Refund (or rebate) , later. How can i amend my 2010 tax return Taxes placed in escrow. How can i amend my 2010 tax return   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. How can i amend my 2010 tax return You can deduct only the real estate tax that the third party actually paid to the taxing authority. How can i amend my 2010 tax return If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. How can i amend my 2010 tax return Tenants by the entirety. How can i amend my 2010 tax return   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. How can i amend my 2010 tax return Divorced individuals. How can i amend my 2010 tax return   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. How can i amend my 2010 tax return See Taxes and insurance in chapter 18 for more information. How can i amend my 2010 tax return Ministers' and military housing allowances. How can i amend my 2010 tax return   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. How can i amend my 2010 tax return Refund (or rebate). How can i amend my 2010 tax return   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. How can i amend my 2010 tax return If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. How can i amend my 2010 tax return However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. How can i amend my 2010 tax return For more information, see Recoveries in chapter 12. How can i amend my 2010 tax return Table 22-1. How can i amend my 2010 tax return Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. How can i amend my 2010 tax return Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). How can i amend my 2010 tax return     Fines and penalties. How can i amend my 2010 tax return Income Taxes State and local income taxes. How can i amend my 2010 tax return Federal income taxes. How can i amend my 2010 tax return   Foreign income taxes. How can i amend my 2010 tax return     Employee contributions to state funds listed under Contributions to state benefit funds . How can i amend my 2010 tax return Employee contributions to private or voluntary disability plans. How can i amend my 2010 tax return     State and local general sales taxes if you choose to deduct state and local income taxes. How can i amend my 2010 tax return General Sales Taxes State and local general sales taxes, including compensating use taxes. How can i amend my 2010 tax return State and local income taxes if you choose to deduct state and local general sales taxes. How can i amend my 2010 tax return Other Taxes Taxes that are expenses of your trade or business. How can i amend my 2010 tax return Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. How can i amend my 2010 tax return   Taxes on property producing rent or royalty income. How can i amend my 2010 tax return Per capita taxes. How can i amend my 2010 tax return   Occupational taxes. How can i amend my 2010 tax return See chapter 28. How can i amend my 2010 tax return     One-half of self-employment tax paid. How can i amend my 2010 tax return   Personal Property Taxes State and local personal property taxes. How can i amend my 2010 tax return Customs duties that are not expenses of your trade or business or of producing income. How can i amend my 2010 tax return Real Estate Taxes State and local real estate taxes. How can i amend my 2010 tax return Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). How can i amend my 2010 tax return   Foreign real estate taxes. How can i amend my 2010 tax return Taxes for local benefits (with exceptions). How can i amend my 2010 tax return See Real Estate-Related Items You Cannot Deduct . How can i amend my 2010 tax return   Tenant's share of real estate taxes paid by  cooperative housing corporation. How can i amend my 2010 tax return Trash and garbage pickup fees (with exceptions). How can i amend my 2010 tax return See Real Estate-Related Items You Cannot Deduct . How can i amend my 2010 tax return     Rent increase due to higher real estate taxes. How can i amend my 2010 tax return     Homeowners' association charges. How can i amend my 2010 tax return Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. How can i amend my 2010 tax return Taxes for local benefits. How can i amend my 2010 tax return Itemized charges for services (such as trash and garbage pickup fees). How can i amend my 2010 tax return Transfer taxes (or stamp taxes). How can i amend my 2010 tax return Rent increases due to higher real estate taxes. How can i amend my 2010 tax return Homeowners' association charges. How can i amend my 2010 tax return Taxes for local benefits. How can i amend my 2010 tax return   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. How can i amend my 2010 tax return These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. How can i amend my 2010 tax return You should increase the basis of your property by the amount of the assessment. How can i amend my 2010 tax return   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. How can i amend my 2010 tax return If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. How can i amend my 2010 tax return If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. How can i amend my 2010 tax return    Taxes for local benefits may be included in your real estate tax bill. How can i amend my 2010 tax return If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. How can i amend my 2010 tax return You should use the rules above to determine if the local benefit tax is deductible. How can i amend my 2010 tax return Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. How can i amend my 2010 tax return Itemized charges for services. How can i amend my 2010 tax return    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. How can i amend my 2010 tax return For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). How can i amend my 2010 tax return    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. How can i amend my 2010 tax return If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. How can i amend my 2010 tax return Exception. How can i amend my 2010 tax return   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. How can i amend my 2010 tax return Transfer taxes (or stamp taxes). How can i amend my 2010 tax return   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. How can i amend my 2010 tax return If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. How can i amend my 2010 tax return If paid by the buyer, they are included in the cost basis of the property. How can i amend my 2010 tax return Rent increase due to higher real estate taxes. How can i amend my 2010 tax return   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. How can i amend my 2010 tax return Homeowners' association charges. How can i amend my 2010 tax return   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. How can i amend my 2010 tax return Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. How can i amend my 2010 tax return A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. How can i amend my 2010 tax return For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. How can i amend my 2010 tax return If the tax is partly based on value and partly based on other criteria, it may qualify in part. How can i amend my 2010 tax return Example. How can i amend my 2010 tax return Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. How can i amend my 2010 tax return You paid $32 based on the value ($1,500) and weight (3,400 lbs. How can i amend my 2010 tax return ) of your car. How can i amend my 2010 tax return You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. How can i amend my 2010 tax return The remaining $17 ($. How can i amend my 2010 tax return 50 × 34), based on the weight, is not deductible. How can i amend my 2010 tax return Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. How can i amend my 2010 tax return Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. How can i amend my 2010 tax return See Table 22-1. How can i amend my 2010 tax return Taxes and fees that are generally not deductible include the following items. How can i amend my 2010 tax return Employment taxes. How can i amend my 2010 tax return This includes social security, Medicare, and railroad retirement taxes withheld from your pay. How can i amend my 2010 tax return However, one-half of self-employment tax you pay is deductible. How can i amend my 2010 tax return In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. How can i amend my 2010 tax return For more information, see chapters 21 and 32. How can i amend my 2010 tax return Estate, inheritance, legacy, or succession taxes. How can i amend my 2010 tax return However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. How can i amend my 2010 tax return In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. How can i amend my 2010 tax return For more information, see Publication 559, Survivors, Executors, and Administrators. How can i amend my 2010 tax return Federal income taxes. How can i amend my 2010 tax return This includes income taxes withheld from your pay. How can i amend my 2010 tax return Fines and penalties. How can i amend my 2010 tax return You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. How can i amend my 2010 tax return Gift taxes. How can i amend my 2010 tax return License fees. How can i amend my 2010 tax return You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). How can i amend my 2010 tax return Per capita taxes. How can i amend my 2010 tax return You cannot deduct state or local per capita taxes. How can i amend my 2010 tax return Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. How can i amend my 2010 tax return For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. How can i amend my 2010 tax return Where To Deduct You deduct taxes on the following schedules. How can i amend my 2010 tax return State and local income taxes. How can i amend my 2010 tax return    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. How can i amend my 2010 tax return Check box a on line 5. How can i amend my 2010 tax return General sales taxes. How can i amend my 2010 tax return   Sales taxes are deducted on Schedule A (Form 1040), line 5. How can i amend my 2010 tax return You must check box b on line 5. How can i amend my 2010 tax return If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. How can i amend my 2010 tax return Foreign income taxes. How can i amend my 2010 tax return   Generally, income taxes you pay to a foreign country or U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. How can i amend my 2010 tax return S. How can i amend my 2010 tax return income tax on Form 1040, line 47. How can i amend my 2010 tax return To claim the credit, you may have to complete and attach Form 1116. How can i amend my 2010 tax return For more information, see chapter 37, the Form 1040 instructions, or Publication 514. How can i amend my 2010 tax return Real estate taxes and personal property taxes. How can i amend my 2010 tax return    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). How can i amend my 2010 tax return Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). How can i amend my 2010 tax return Self-employment tax. How can i amend my 2010 tax return    Deduct one-half of your self-employment tax on Form 1040, line 27. How can i amend my 2010 tax return Other taxes. How can i amend my 2010 tax return    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. 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