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How can i file my 2012 taxes online for free Publication 587 - Main Content Table of Contents Qualifying for a DeductionExclusive Use Regular Use Trade or Business Use Principal Place of Business Place To Meet Patients, Clients, or Customers Separate Structure Figuring the DeductionUsing Actual Expenses Using the Simplified Method Daycare Facility Standard meal and snack rates. How can i file my 2012 taxes online for free Sale or Exchange of Your HomeGain on Sale Depreciation Basis Adjustment Reporting the Sale More Information Business Furniture and EquipmentListed Property Property Bought for Business Use Personal Property Converted to Business Use Recordkeeping Where To DeductSelf-Employed Persons Employees Partners How To Get Tax HelpLow Income Taxpayer Clinics Worksheet To Figure the Deduction for Business Use of Your HomeInstructions for the Worksheet Worksheets To Figure the Deduction for Business Use of Your Home (Simplified Method) Instructions for the Simplified Method Worksheet Instructions for the Daycare Facility Worksheet Instructions for the Area Adjustment Worksheet Qualifying for a Deduction Generally, you cannot deduct items related to your home, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. How can i file my 2012 taxes online for free However, you may be able to deduct expenses related to the business use of part of your home if you meet specific requirements. How can i file my 2012 taxes online for free Even then, the deductible amount of these types of expenses may be limited. How can i file my 2012 taxes online for free Use this section and Figure A, later, to decide if you can deduct expenses for the business use of your home. How can i file my 2012 taxes online for free To qualify to deduct expenses for business use of your home, you must use part of your home: Exclusively and regularly as your principal place of business (defined later), Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, In the case of a separate structure which is not attached to your home, in connection with your trade or business, On a regular basis for certain storage use (see Storage of inventory or product samples , later), For rental use (see Publication 527), or As a daycare facility (see Daycare Facility , later). How can i file my 2012 taxes online for free Additional tests for employee use. How can i file my 2012 taxes online for free   If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. How can i file my 2012 taxes online for free You must meet the tests discussed earlier plus: Your business use must be for the convenience of your employer, and You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer. How can i file my 2012 taxes online for free If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home. How can i file my 2012 taxes online for free Exclusive Use To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. How can i file my 2012 taxes online for free The area used for business can be a room or other separately identifiable space. How can i file my 2012 taxes online for free The space does not need to be marked off by a permanent partition. How can i file my 2012 taxes online for free You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. How can i file my 2012 taxes online for free Your family also uses the den for recreation. How can i file my 2012 taxes online for free The den is not used exclusively in your trade or business, so you cannot claim a deduction for the business use of the den. How can i file my 2012 taxes online for free Exceptions to Exclusive Use You do not have to meet the exclusive use test if either of the following applies. How can i file my 2012 taxes online for free You use part of your home for the storage of inventory or product samples (discussed next). How can i file my 2012 taxes online for free You use part of your home as a daycare facility, discussed later under Daycare Facility . How can i file my 2012 taxes online for free Note. How can i file my 2012 taxes online for free With the exception of these two uses, any portion of the home used for business purposes must meet the exclusive use test. How can i file my 2012 taxes online for free Storage of inventory or product samples. How can i file my 2012 taxes online for free    If you use part of your home for storage of inventory or product samples, you can deduct expenses for the business use of your home without meeting the exclusive use test. How can i file my 2012 taxes online for free However, you must meet all the following tests. How can i file my 2012 taxes online for free You sell products at wholesale or retail as your trade or business. How can i file my 2012 taxes online for free You keep the inventory or product samples in your home for use in your trade or business. How can i file my 2012 taxes online for free Your home is the only fixed location of your trade or business. How can i file my 2012 taxes online for free You use the storage space on a regular basis. How can i file my 2012 taxes online for free The space you use is a separately identifiable space suitable for storage. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free Your home is the only fixed location of your business of selling mechanics' tools at retail. How can i file my 2012 taxes online for free You regularly use half of your basement for storage of inventory and product samples. How can i file my 2012 taxes online for free You sometimes use the area for personal purposes. How can i file my 2012 taxes online for free The expenses for the storage space are deductible even though you do not use this part of your basement exclusively for business. How can i file my 2012 taxes online for free Regular Use To qualify under the regular use test, you must use a specific area of your home for business on a regular basis. How can i file my 2012 taxes online for free Incidental or occasional business use is not regular use. How can i file my 2012 taxes online for free You must consider all facts and circumstances in determining whether your use is on a regular basis. How can i file my 2012 taxes online for free Trade or Business Use To qualify under the trade-or-business-use test, you must use part of your home in connection with a trade or business. How can i file my 2012 taxes online for free If you use your home for a profit-seeking activity that is not a trade or business, you cannot take a deduction for its business use. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free You use part of your home exclusively and regularly to read financial periodicals and reports, clip bond coupons, and carry out similar activities related to your own investments. How can i file my 2012 taxes online for free You do not make investments as a broker or dealer. How can i file my 2012 taxes online for free So, your activities are not part of a trade or business and you cannot take a deduction for the business use of your home. How can i file my 2012 taxes online for free Principal Place of Business You can have more than one business location, including your home, for a single trade or business. How can i file my 2012 taxes online for free To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that trade or business. How can i file my 2012 taxes online for free To determine whether your home is your principal place of business, you must consider: The relative importance of the activities performed at each place where you conduct business, and The amount of time spent at each place where you conduct business. How can i file my 2012 taxes online for free Your home office will qualify as your principal place of business if you meet the following requirements. How can i file my 2012 taxes online for free You use it exclusively and regularly for administrative or management activities of your trade or business. How can i file my 2012 taxes online for free You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. How can i file my 2012 taxes online for free If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. How can i file my 2012 taxes online for free However, see the later discussions under Place To Meet Patients, Clients, or Customers and Separate Structure for other ways to qualify to deduct home office expenses. How can i file my 2012 taxes online for free Administrative or management activities. How can i file my 2012 taxes online for free   There are many activities that are administrative or managerial in nature. How can i file my 2012 taxes online for free The following are a few examples. How can i file my 2012 taxes online for free Billing customers, clients, or patients. How can i file my 2012 taxes online for free Keeping books and records. How can i file my 2012 taxes online for free Ordering supplies. How can i file my 2012 taxes online for free Setting up appointments. How can i file my 2012 taxes online for free Forwarding orders or writing reports. How can i file my 2012 taxes online for free Administrative or management activities performed at other locations. How can i file my 2012 taxes online for free   The following activities performed by you or others will not disqualify your home office from being your principal place of business. How can i file my 2012 taxes online for free You have others conduct your administrative or management activities at locations other than your home. How can i file my 2012 taxes online for free (For example, another company does your billing from its place of business. How can i file my 2012 taxes online for free ) You conduct administrative or management activities at places that are not fixed locations of your business, such as in a car or a hotel room. How can i file my 2012 taxes online for free You occasionally conduct minimal administrative or management activities at a fixed location outside your home. How can i file my 2012 taxes online for free You conduct substantial nonadministrative or nonmanagement business activities at a fixed location outside your home. How can i file my 2012 taxes online for free (For example, you meet with or provide services to customers, clients, or patients at a fixed location of the business outside your home. How can i file my 2012 taxes online for free ) You have suitable space to conduct administrative or management activities outside your home, but choose to use your home office for those activities instead. How can i file my 2012 taxes online for free Please click here for the text description of the image. How can i file my 2012 taxes online for free Can you deduct business use of the home expenses? Example 1. How can i file my 2012 taxes online for free John is a self-employed plumber. How can i file my 2012 taxes online for free Most of John's time is spent at customers' homes and offices installing and repairing plumbing. How can i file my 2012 taxes online for free He has a small office in his home that he uses exclusively and regularly for the administrative or management activities of his business, such as phoning customers, ordering supplies, and keeping his books. How can i file my 2012 taxes online for free John writes up estimates and records of work completed at his customers' premises. How can i file my 2012 taxes online for free He does not conduct any substantial administrative or management activities at any fixed location other than his home office. How can i file my 2012 taxes online for free John does not do his own billing. How can i file my 2012 taxes online for free He uses a local bookkeeping service to bill his customers. How can i file my 2012 taxes online for free John's home office qualifies as his principal place of business for deducting expenses for its use. How can i file my 2012 taxes online for free He uses the home office for the administrative or managerial activities of his plumbing business and he has no other fixed location where he conducts these administrative or managerial activities. How can i file my 2012 taxes online for free His choice to have his billing done by another company does not disqualify his home office from being his principal place of business. How can i file my 2012 taxes online for free He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. How can i file my 2012 taxes online for free Example 2. How can i file my 2012 taxes online for free Pamela is a self-employed sales representative for several different product lines. How can i file my 2012 taxes online for free She has an office in her home that she uses exclusively and regularly to set up appointments and write up orders and other reports for the companies whose products she sells. How can i file my 2012 taxes online for free She occasionally writes up orders and sets up appointments from her hotel room when she is away on business overnight. How can i file my 2012 taxes online for free Pamela's business is selling products to customers at various locations throughout her territory. How can i file my 2012 taxes online for free To make these sales, she regularly visits customers to explain the available products and take orders. How can i file my 2012 taxes online for free Pamela's home office qualifies as her principal place of business for deducting expenses for its use. How can i file my 2012 taxes online for free She conducts administrative or management activities there and she has no other fixed location where she conducts substantial administrative or management activities. How can i file my 2012 taxes online for free The fact that she conducts some administrative or management activities in her hotel room (not a fixed location) does not disqualify her home office from being her principal place of business. How can i file my 2012 taxes online for free She meets all the qualifications, including principal place of business, so she can deduct expenses (subject to certain limitations, explained later) for the business use of her home. How can i file my 2012 taxes online for free Example 3. How can i file my 2012 taxes online for free Paul is a self-employed anesthesiologist. How can i file my 2012 taxes online for free He spends the majority of his time administering anesthesia and postoperative care in three local hospitals. How can i file my 2012 taxes online for free One of the hospitals provides him with a small shared office where he could conduct administrative or management activities. How can i file my 2012 taxes online for free Paul very rarely uses the office the hospital provides. How can i file my 2012 taxes online for free He uses a room in his home that he has converted to an office. How can i file my 2012 taxes online for free He uses this room exclusively and regularly to conduct all the following activities. How can i file my 2012 taxes online for free Contacting patients, surgeons, and hospitals regarding scheduling. How can i file my 2012 taxes online for free Preparing for treatments and presentations. How can i file my 2012 taxes online for free Maintaining billing records and patient logs. How can i file my 2012 taxes online for free Satisfying continuing medical education requirements. How can i file my 2012 taxes online for free Reading medical journals and books. How can i file my 2012 taxes online for free Paul's home office qualifies as his principal place of business for deducting expenses for its use. How can i file my 2012 taxes online for free He conducts administrative or management activities for his business as an anesthesiologist there and he has no other fixed location where he conducts substantial administrative or management activities for this business. How can i file my 2012 taxes online for free His choice to use his home office instead of the one provided by the hospital does not disqualify his home office from being his principal place of business. How can i file my 2012 taxes online for free His performance of substantial nonadministrative or nonmanagement activities at fixed locations outside his home also does not disqualify his home office from being his principal place of business. How can i file my 2012 taxes online for free He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. How can i file my 2012 taxes online for free Example 4. How can i file my 2012 taxes online for free Kathleen is employed as a teacher. How can i file my 2012 taxes online for free She is required to teach and meet with students at the school and to grade papers and tests. How can i file my 2012 taxes online for free The school provides her with a small office where she can work on her lesson plans, grade papers and tests, and meet with parents and students. How can i file my 2012 taxes online for free The school does not require her to work at home. How can i file my 2012 taxes online for free Kathleen prefers to use the office she has set up in her home and does not use the one provided by the school. How can i file my 2012 taxes online for free She uses this home office exclusively and regularly for the administrative duties of her teaching job. How can i file my 2012 taxes online for free Kathleen must meet the convenience-of-the-employer test, even if her home qualifies as her principal place of business for deducting expenses for its use. How can i file my 2012 taxes online for free Her employer provides her with an office and does not require her to work at home, so she does not meet the convenience-of-the-employer test and cannot claim a deduction for the business use of her home. How can i file my 2012 taxes online for free More Than One Trade or Business The same home office can be the principal place of business for two or more separate business activities. How can i file my 2012 taxes online for free Whether your home office is the principal place of business for more than one business activity must be determined separately for each of your trade or business activities. How can i file my 2012 taxes online for free You must use the home office exclusively and regularly for one or more of the following purposes. How can i file my 2012 taxes online for free As the principal place of business for one or more of your trades or businesses. How can i file my 2012 taxes online for free As a place to meet or deal with patients, clients, or customers in the normal course of one or more of your trades or businesses. How can i file my 2012 taxes online for free If your home office is a separate structure, in connection with one or more of your trades or businesses. How can i file my 2012 taxes online for free You can use your home office for more than one business activity, but you cannot use it for any nonbusiness (i. How can i file my 2012 taxes online for free e. How can i file my 2012 taxes online for free , personal) activities. How can i file my 2012 taxes online for free If you are an employee, any use of the home office in connection with your employment must be for the convenience of your employer. How can i file my 2012 taxes online for free See Rental to employer , later, if you rent part of your home to your employer. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free Tracy White is employed as a teacher. How can i file my 2012 taxes online for free Her principal place of work is the school, which provides her office space to do her school work. How can i file my 2012 taxes online for free She also has a mail order jewelry business. How can i file my 2012 taxes online for free All her work in the jewelry business is done in her home office and the office is used exclusively for that business. How can i file my 2012 taxes online for free If she meets all the other tests, she can deduct expenses for the business use of her home for the jewelry business. How can i file my 2012 taxes online for free If Tracy also uses the office for work related to her teaching, she must meet the exclusive use test for both businesses to qualify for the deduction. How can i file my 2012 taxes online for free As an employee, Tracy must also meet the convenience-of-the-employer test to qualify for the deduction. How can i file my 2012 taxes online for free She does not meet this test for her work as a teacher, so she cannot claim a deduction for the business use of her home for either activity. How can i file my 2012 taxes online for free Place To Meet Patients, Clients, or Customers If you meet or deal with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business if you meet both the following tests. How can i file my 2012 taxes online for free You physically meet with patients, clients, or customers on your premises. How can i file my 2012 taxes online for free Their use of your home is substantial and integral to the conduct of your business. How can i file my 2012 taxes online for free Doctors, dentists, attorneys, and other professionals who maintain offices in their homes generally will meet this requirement. How can i file my 2012 taxes online for free Using your home for occasional meetings and telephone calls will not qualify you to deduct expenses for the business use of your home. How can i file my 2012 taxes online for free The part of your home you use exclusively and regularly to meet patients, clients, or customers does not have to be your principal place of business. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free June Quill, a self-employed attorney, works 3 days a week in her city office. How can i file my 2012 taxes online for free She works 2 days a week in her home office used only for business. How can i file my 2012 taxes online for free She regularly meets clients there. How can i file my 2012 taxes online for free Her home office qualifies for a business deduction because she meets clients there in the normal course of her business. How can i file my 2012 taxes online for free Separate Structure You can deduct expenses for a separate free-standing structure, such as a studio, workshop, garage, or barn, if you use it exclusively and regularly for your business. How can i file my 2012 taxes online for free The structure does not have to be your principal place of business or a place where you meet patients, clients, or customers. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free John Berry operates a floral shop in town. How can i file my 2012 taxes online for free He grows the plants for his shop in a greenhouse behind his home. How can i file my 2012 taxes online for free He uses the greenhouse exclusively and regularly in his business, so he can deduct the expenses for its use, subject to certain limitations, explained later. How can i file my 2012 taxes online for free Figuring the Deduction After you determine that you meet the tests under Qualifying for a Deduction , you can begin to figure how much you can deduct. How can i file my 2012 taxes online for free When figuring the amount you can deduct for the business use of your home, you will use either your actual expenses or a simplified method. How can i file my 2012 taxes online for free Electing to use the simplified method. How can i file my 2012 taxes online for free   The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. How can i file my 2012 taxes online for free You choose whether or not to figure your deduction using the simplified method each taxable year. How can i file my 2012 taxes online for free See Using the Simplified Method , later. How can i file my 2012 taxes online for free Rental to employer. How can i file my 2012 taxes online for free   If you rent part of your home to your employer and you use the rented part in performing services for your employer as an employee, your deduction for the business use of your home is limited. How can i file my 2012 taxes online for free You can deduct mortgage interest, qualified mortgage insurance premiums, real estate taxes, and personal casualty losses for the rented part, subject to any limitations. How can i file my 2012 taxes online for free However, you cannot deduct otherwise allowable trade or business expenses, business casualty losses, or depreciation related to the use of your home (or use the simplified method as an alternative to deducting these actual expenses) in performing services for your employer. How can i file my 2012 taxes online for free Using Actual Expenses If you do not or cannot elect to use the simplified method for a home, you will figure your deduction for that home using your actual expenses. How can i file my 2012 taxes online for free You will also need to figure the percentage of your home used for business and the limit on the deduction. How can i file my 2012 taxes online for free If you are an employee or a partner, or you use your home in your farming business and you file Schedule F (Form 1040), you can use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication, to help you figure your deduction. How can i file my 2012 taxes online for free If you use your home in a trade or business and you file Schedule C (Form 1040), you will use Form 8829 to figure your deduction. How can i file my 2012 taxes online for free Part-year use. How can i file my 2012 taxes online for free   You cannot deduct expenses for the business use of your home incurred during any part of the year you did not use your home for business purposes. How can i file my 2012 taxes online for free For example, if you begin using part of your home for business on July 1, and you meet all the tests from that date until the end of the year, consider only your expenses for the last half of the year in figuring your allowable deduction. How can i file my 2012 taxes online for free Expenses related to tax-exempt income. How can i file my 2012 taxes online for free   Generally, you cannot deduct expenses that are related to tax-exempt allowances. How can i file my 2012 taxes online for free However, if you receive a tax-exempt parsonage allowance or a tax-exempt military allowance, your expenses for mortgage interest and real estate taxes are deductible under the normal rules. How can i file my 2012 taxes online for free No deduction is allowed for other expenses related to the tax-exempt allowance. How can i file my 2012 taxes online for free   If your housing is provided free of charge and the value of the housing is tax exempt, you cannot deduct the rental value of any portion of the housing. How can i file my 2012 taxes online for free Actual Expenses You must divide the expenses of operating your home between personal and business use. How can i file my 2012 taxes online for free The part of a home operating expense you can use to figure your deduction depends on both of the following. How can i file my 2012 taxes online for free Whether the expense is direct, indirect, or unrelated. How can i file my 2012 taxes online for free The percentage of your home used for business. How can i file my 2012 taxes online for free Table 1, next, describes the types of expenses you may have and the extent to which they are deductible. How can i file my 2012 taxes online for free Table 1. How can i file my 2012 taxes online for free Types of Expenses  Expense  Description  Deductibility Direct Expenses only for  the business part  of your home. How can i file my 2012 taxes online for free Deductible in full. How can i file my 2012 taxes online for free *   Examples:  Painting or repairs  only in the area  used for business. How can i file my 2012 taxes online for free Exception: May be only partially  deductible in a daycare facility. How can i file my 2012 taxes online for free See Daycare Facility , later. How can i file my 2012 taxes online for free Indirect Expenses for  keeping up and running your  entire home. How can i file my 2012 taxes online for free Deductible based on the percentage of your home used for business. How can i file my 2012 taxes online for free *   Examples:  Insurance, utilities, and  general repairs. How can i file my 2012 taxes online for free   Unrelated Expenses only for  the parts of your  home not used  for business. How can i file my 2012 taxes online for free Not deductible. How can i file my 2012 taxes online for free   Examples:  Lawn care or painting  a room not used  for business. How can i file my 2012 taxes online for free   *Subject to the deduction limit, discussed later. How can i file my 2012 taxes online for free Form 8829 and the Worksheet To Figure the Deduction for Business Use of Your Home have separate columns for direct and indirect expenses. How can i file my 2012 taxes online for free Certain expenses are deductible whether or not you use your home for business. How can i file my 2012 taxes online for free If you qualify to deduct business use of the home expenses, use the business percentage of these expenses to figure your total business use of the home deduction. How can i file my 2012 taxes online for free These expenses include the following. How can i file my 2012 taxes online for free Real estate taxes. How can i file my 2012 taxes online for free Qualified mortgage insurance premiums. How can i file my 2012 taxes online for free Deductible mortgage interest. How can i file my 2012 taxes online for free Casualty losses. How can i file my 2012 taxes online for free Other expenses are deductible only if you use your home for business. How can i file my 2012 taxes online for free You can use the business percentage of these expenses to figure your total business use of the home deduction. How can i file my 2012 taxes online for free These expenses generally include (but are not limited to) the following. How can i file my 2012 taxes online for free Depreciation (covered under Depreciating Your Home , later). How can i file my 2012 taxes online for free Insurance. How can i file my 2012 taxes online for free Rent paid for the use of property you do not own but use in your trade or business. How can i file my 2012 taxes online for free Repairs. How can i file my 2012 taxes online for free Security system. How can i file my 2012 taxes online for free Utilities and services. How can i file my 2012 taxes online for free Real estate taxes. How can i file my 2012 taxes online for free   To figure the business part of your real estate taxes, multiply the real estate taxes paid by the percentage of your home used for business. How can i file my 2012 taxes online for free   For more information on the deduction for real estate taxes, see Publication 530, Tax Information for Homeowners. How can i file my 2012 taxes online for free Deductible mortgage interest. How can i file my 2012 taxes online for free   To figure the business part of your deductible mortgage interest, multiply this interest by the percentage of your home used for business. How can i file my 2012 taxes online for free You can include interest on a second mortgage in this computation. How can i file my 2012 taxes online for free If your total mortgage debt is more than $1,000,000 or your home equity debt is more than $100,000, your deduction may be limited. How can i file my 2012 taxes online for free For more information on what interest is deductible, see Publication 936, Home Mortgage Interest Deduction. How can i file my 2012 taxes online for free Qualified mortgage insurance premiums. How can i file my 2012 taxes online for free   To figure the business part of your qualified mortgage insurance premiums, multiply the premiums by the percentage of your home used for business. How can i file my 2012 taxes online for free You can include premiums for insurance on a second mortgage in this computation. How can i file my 2012 taxes online for free If your adjusted gross income is more than $100,000 ($50,000 if your filing status is married filing separately), your deduction may be limited. How can i file my 2012 taxes online for free For more information, see Publication 936, and Line 13 in the Instructions for Schedule A (Form 1040). How can i file my 2012 taxes online for free Casualty losses. How can i file my 2012 taxes online for free    If you have a casualty loss on your home that you use for business, treat the casualty loss as a direct expense, an indirect expense, or an unrelated expense, depending on the property affected. How can i file my 2012 taxes online for free A direct expense is the loss on the portion of the property you use only in your business. How can i file my 2012 taxes online for free Use the entire loss to figure the business use of the home deduction. How can i file my 2012 taxes online for free An indirect expense is the loss on property you use for both business and personal purposes. How can i file my 2012 taxes online for free Use only the business portion to figure the deduction. How can i file my 2012 taxes online for free An unrelated expense is the loss on property you do not use in your business. How can i file my 2012 taxes online for free Do not use any of the loss to figure the deduction. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free You meet the rules to take a deduction for an office in your home that is 10% of the total area of your house. How can i file my 2012 taxes online for free A storm damages your roof. How can i file my 2012 taxes online for free This is an indirect expense as the roof is part of the whole house and is considered to be used both for business and personal purposes. How can i file my 2012 taxes online for free You would complete Form 4684, Casualties and Thefts, to report your loss. How can i file my 2012 taxes online for free You complete both section A (Personal Use Property) and section B (Business and Income-Producing Property) as your home is used both for business and personal purposes. How can i file my 2012 taxes online for free Since you use 90% of your home for personal purposes, use 90% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 2, 3, 5, and 6 of Form 4684. How can i file my 2012 taxes online for free Since you use 10% of your home for business purposes, use 10% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 20, 21, 23, and 24 of Form 4684. How can i file my 2012 taxes online for free Forms and worksheets to use. How can i file my 2012 taxes online for free   If you are filing Schedule C (Form 1040), get Form 8829 and follow the instructions for casualty losses. How can i file my 2012 taxes online for free If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. How can i file my 2012 taxes online for free You will also need to get Form 4684. How can i file my 2012 taxes online for free More information. How can i file my 2012 taxes online for free   For more information on casualty losses, see Publication 547, Casualties, Disasters, and Thefts. How can i file my 2012 taxes online for free Insurance. How can i file my 2012 taxes online for free   You can deduct the cost of insurance that covers the business part of your home. How can i file my 2012 taxes online for free However, if your insurance premium gives you coverage for a period that extends past the end of your tax year, you can deduct only the business percentage of the part of the premium that gives you coverage for your tax year. How can i file my 2012 taxes online for free You can deduct the business percentage of the part that applies to the following year in that year. How can i file my 2012 taxes online for free Rent. How can i file my 2012 taxes online for free   If you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay. How can i file my 2012 taxes online for free To figure your deduction, multiply your rent payments by the percentage of your home used for business. How can i file my 2012 taxes online for free   If you own your home, you cannot deduct the fair rental value of your home. How can i file my 2012 taxes online for free However, see Depreciating Your Home , later. How can i file my 2012 taxes online for free Repairs. How can i file my 2012 taxes online for free   The cost of repairs that relate to your business, including labor (other than your own labor), is a deductible expense. How can i file my 2012 taxes online for free For example, a furnace repair benefits the entire home. How can i file my 2012 taxes online for free If you use 10% of your home for business, you can deduct 10% of the cost of the furnace repair. How can i file my 2012 taxes online for free   Repairs keep your home in good working order over its useful life. How can i file my 2012 taxes online for free Examples of common repairs are patching walls and floors, painting, wallpapering, repairing roofs and gutters, and mending leaks. How can i file my 2012 taxes online for free However, repairs are sometimes treated as a permanent improvement and are not deductible. How can i file my 2012 taxes online for free See Permanent improvements , later, under Depreciating Your Home. How can i file my 2012 taxes online for free Security system. How can i file my 2012 taxes online for free   If you install a security system that protects all the doors and windows in your home, you can deduct the business part of the expenses you incur to maintain and monitor the system. How can i file my 2012 taxes online for free You also can take a depreciation deduction for the part of the cost of the security system relating to the business use of your home. How can i file my 2012 taxes online for free Utilities and services. How can i file my 2012 taxes online for free   Expenses for utilities and services, such as electricity, gas, trash removal, and cleaning services, are primarily personal expenses. How can i file my 2012 taxes online for free However, if you use part of your home for business, you can deduct the business part of these expenses. How can i file my 2012 taxes online for free Generally, the business percentage for utilities is the same as the percentage of your home used for business. How can i file my 2012 taxes online for free Telephone. How can i file my 2012 taxes online for free   The basic local telephone service charge, including taxes, for the first telephone line into your home (i. How can i file my 2012 taxes online for free e. How can i file my 2012 taxes online for free , landline) is a nondeductible personal expense. How can i file my 2012 taxes online for free However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. How can i file my 2012 taxes online for free Do not include these expenses as a cost of using your home for business. How can i file my 2012 taxes online for free Deduct these charges separately on the appropriate form or schedule. How can i file my 2012 taxes online for free For example, if you file Schedule C (Form 1040), deduct these expenses on line 25, Utilities (instead of line 30, Expenses for business use of your home). How can i file my 2012 taxes online for free Depreciating Your Home If you own your home and qualify to deduct expenses for its business use, you can claim a deduction for depreciation. How can i file my 2012 taxes online for free Depreciation is an allowance for the wear and tear on the part of your home used for business. How can i file my 2012 taxes online for free You cannot depreciate the cost or value of the land. How can i file my 2012 taxes online for free You recover its cost when you sell or otherwise dispose of the property. How can i file my 2012 taxes online for free Before you figure your depreciation deduction, you need to know the following information. How can i file my 2012 taxes online for free The month and year you started using your home for business. How can i file my 2012 taxes online for free The adjusted basis and fair market value of your home (excluding land) at the time you began using it for business. How can i file my 2012 taxes online for free The cost of any improvements before and after you began using the property for business. How can i file my 2012 taxes online for free The percentage of your home used for business. How can i file my 2012 taxes online for free See Business Percentage , later. How can i file my 2012 taxes online for free Adjusted basis defined. How can i file my 2012 taxes online for free   The adjusted basis of your home is generally its cost, plus the cost of any permanent improvements you made to it, minus any casualty losses or depreciation deducted in earlier tax years. How can i file my 2012 taxes online for free For a discussion of adjusted basis, see Publication 551. How can i file my 2012 taxes online for free Permanent improvements. How can i file my 2012 taxes online for free   A permanent improvement increases the value of property, adds to its life, or gives it a new or different use. How can i file my 2012 taxes online for free Examples of improvements are replacing electric wiring or plumbing, adding a new roof or addition, paneling, or remodeling. How can i file my 2012 taxes online for free    You must carefully distinguish between repairs and improvements. How can i file my 2012 taxes online for free See Repairs , earlier, under Actual Expenses. How can i file my 2012 taxes online for free You also must keep accurate records of these expenses. How can i file my 2012 taxes online for free These records will help you decide whether an expense is a deductible or a capital (added to the basis) expense. How can i file my 2012 taxes online for free However, if you make repairs as part of an extensive remodeling or restoration of your home, the entire job is an improvement. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free You buy an older home and fix up two rooms as a beauty salon. How can i file my 2012 taxes online for free You patch the plaster on the ceilings and walls, paint, repair the floor, install an outside door, and install new wiring, plumbing, and other equipment. How can i file my 2012 taxes online for free Normally, the patching, painting, and floor work are repairs and the other expenses are permanent improvements. How can i file my 2012 taxes online for free However, because the work gives your property a new use, the entire remodeling job is a permanent improvement and its cost is added to the basis of the property. How can i file my 2012 taxes online for free You cannot deduct any portion of it as a repair expense. How can i file my 2012 taxes online for free Adjusting for depreciation deducted in earlier years. How can i file my 2012 taxes online for free   Decrease the basis of your property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you properly selected. How can i file my 2012 taxes online for free If you deducted less depreciation than you could have under the method you selected, decrease the basis by the amount you could have deducted under that method. How can i file my 2012 taxes online for free If you did not deduct any depreciation, decrease the basis by the amount you could have deducted. How can i file my 2012 taxes online for free   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted, plus the part of the excess depreciation you deducted that actually decreased your tax liability for any year. How can i file my 2012 taxes online for free   If you deducted the incorrect amount of depreciation, see Publication 946. How can i file my 2012 taxes online for free Fair market value defined. How can i file my 2012 taxes online for free   The fair market value of your home is the price at which the property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. How can i file my 2012 taxes online for free Sales of similar property, on or about the date you begin using your home for business, may be helpful in determining the property's fair market value. How can i file my 2012 taxes online for free Figuring the depreciation deduction for the current year. How can i file my 2012 taxes online for free   If you began using your home for business before 2013, continue to use the same depreciation method you used in past tax years. How can i file my 2012 taxes online for free   If you began using your home for business for the first time in 2013, depreciate the business part as nonresidential real property under the modified accelerated cost recovery system (MACRS). How can i file my 2012 taxes online for free Under MACRS, nonresidential real property is depreciated using the straight line method over 39 years. How can i file my 2012 taxes online for free For more information on MACRS and other methods of depreciation, see Publication 946. How can i file my 2012 taxes online for free   To figure the depreciation deduction, you must first figure the part of the cost of your home that can be depreciated (depreciable basis). How can i file my 2012 taxes online for free The depreciable basis is figured by multiplying the percentage of your home used for business by the smaller of the following. How can i file my 2012 taxes online for free The adjusted basis of your home (excluding land) on the date you began using your home for business. How can i file my 2012 taxes online for free The fair market value of your home (excluding land) on the date you began using your home for business. How can i file my 2012 taxes online for free Depreciation table. How can i file my 2012 taxes online for free   If 2013 was the first year you used your home for business, you can figure your 2013 depreciation for the business part of your home by using the appropriate percentage from the following table. How can i file my 2012 taxes online for free Table 2. How can i file my 2012 taxes online for free MACRS Percentage Table for 39-Year Nonresidential Real Property Month First Used for Business Percentage To Use 1 2. How can i file my 2012 taxes online for free 461% 2 2. How can i file my 2012 taxes online for free 247% 3 2. How can i file my 2012 taxes online for free 033% 4 1. How can i file my 2012 taxes online for free 819% 5 1. How can i file my 2012 taxes online for free 605% 6 1. How can i file my 2012 taxes online for free 391% 7 1. How can i file my 2012 taxes online for free 177% 8 0. How can i file my 2012 taxes online for free 963% 9 0. How can i file my 2012 taxes online for free 749% 10 0. How can i file my 2012 taxes online for free 535% 11 0. How can i file my 2012 taxes online for free 321% 12 0. How can i file my 2012 taxes online for free 107%   Multiply the depreciable basis of the business part of your home by the percentage from the table for the first month you use your home for business. How can i file my 2012 taxes online for free See Publication 946 for the percentages for the remaining tax years of the recovery period. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free In May, George Miller began to use one room in his home exclusively and regularly to meet clients. How can i file my 2012 taxes online for free This room is 8% of the square footage of his home. How can i file my 2012 taxes online for free He bought the home in 2003 for $125,000. How can i file my 2012 taxes online for free He determined from his property tax records that his adjusted basis in the house (exclusive of land) is $115,000. How can i file my 2012 taxes online for free In May, the house had a fair market value of $165,000. How can i file my 2012 taxes online for free He multiplies his adjusted basis of $115,000 (which is less than the fair market value) by 8%. How can i file my 2012 taxes online for free The result is $9,200, his depreciable basis for the business part of the house. How can i file my 2012 taxes online for free George files his return based on the calendar year. How can i file my 2012 taxes online for free May is the 5th month of his tax year. How can i file my 2012 taxes online for free He multiplies his depreciable basis of $9,200 by 1. How can i file my 2012 taxes online for free 605% (. How can i file my 2012 taxes online for free 01605), the percentage from the table for the 5th month. How can i file my 2012 taxes online for free His depreciation deduction is $147. How can i file my 2012 taxes online for free 66. How can i file my 2012 taxes online for free Depreciating permanent improvements. How can i file my 2012 taxes online for free   Add the costs of permanent improvements made before you began using your home for business to the basis of your property. How can i file my 2012 taxes online for free Depreciate these costs as part of the cost of your home as explained earlier. How can i file my 2012 taxes online for free The costs of improvements made after you begin using your home for business (that affect the business part of your home, such as a new roof) are depreciated separately. How can i file my 2012 taxes online for free Multiply the cost of the improvement by the business-use percentage and depreciate the result over the recovery period that would apply to your home if you began using it for business at the same time as the improvement. How can i file my 2012 taxes online for free For improvements made this year, the recovery period is 39 years. How can i file my 2012 taxes online for free For the percentage to use for the first year, see Table 2, earlier. How can i file my 2012 taxes online for free For more information on recovery periods, see Publication 946. How can i file my 2012 taxes online for free Business Percentage To find the business percentage, compare the size of the part of your home that you use for business to your whole house. How can i file my 2012 taxes online for free Use the resulting percentage to figure the business part of the expenses for operating your entire home. How can i file my 2012 taxes online for free You can use any reasonable method to determine the business percentage. How can i file my 2012 taxes online for free The following are two commonly used methods for figuring the percentage. How can i file my 2012 taxes online for free Divide the area (length multiplied by the width) used for business by the total area of your home. How can i file my 2012 taxes online for free If the rooms in your home are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home. How can i file my 2012 taxes online for free Example 1. How can i file my 2012 taxes online for free Your office is 240 square feet (12 feet × 20 feet). How can i file my 2012 taxes online for free Your home is 1,200 square feet. How can i file my 2012 taxes online for free Your office is 20% (240 ÷ 1,200) of the total area of your home. How can i file my 2012 taxes online for free Your business percentage is 20%. How can i file my 2012 taxes online for free Example 2. How can i file my 2012 taxes online for free You use one room in your home for business. How can i file my 2012 taxes online for free Your home has 10 rooms, all about equal size. How can i file my 2012 taxes online for free Your office is 10% (1 ÷ 10) of the total area of your home. How can i file my 2012 taxes online for free Your business percentage is 10%. How can i file my 2012 taxes online for free Use lines 1-7 of Form 8829, or lines 1-3 on the Worksheet To Figure the Deduction for Business Use of Your Home (near the end of this publication) to figure your business percentage. How can i file my 2012 taxes online for free Deduction Limit If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. How can i file my 2012 taxes online for free If your gross income from the business use of your home is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. How can i file my 2012 taxes online for free Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation of your home (with depreciation of your home taken last), that are allocable to the business, is limited to the gross income from the business use of your home minus the sum of the following. How can i file my 2012 taxes online for free The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). How can i file my 2012 taxes online for free These expenses are discussed in detail under Actual Expenses , earlier. How can i file my 2012 taxes online for free The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. How can i file my 2012 taxes online for free If you are self-employed, do not include in (2) above your deduction for one-half of your self-employment tax. How can i file my 2012 taxes online for free Carryover of unallowed expenses. How can i file my 2012 taxes online for free   If your deductions are greater than the current year's limit, you can carry over the excess to the next year in which you use actual expenses. How can i file my 2012 taxes online for free They are subject to the deduction limit for that year, whether or not you live in the same home during that year. How can i file my 2012 taxes online for free Figuring the deduction limit and carryover. How can i file my 2012 taxes online for free   If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. How can i file my 2012 taxes online for free If you file Schedule C (Form 1040), figure your deduction limit and carryover on Form 8829. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free You meet the requirements for deducting expenses for the business use of your home. How can i file my 2012 taxes online for free You use 20% of your home for business. How can i file my 2012 taxes online for free In 2013, your business expenses and the expenses for the business use of your home are deducted from your gross income in the following order. How can i file my 2012 taxes online for free    Gross income from business $6,000 Minus:   Deductible mortgage interest and real estate taxes (20%) 3,000 Business expenses not related to the use of your home (100%) (business phone, supplies, and depreciation on equipment) 2,000 Deduction limit $1,000 Minus other expenses allocable to business use of home:   Maintenance, insurance, and utilities (20%) 800 Depreciation allowed (20% = $1,600 allowable, but subject to balance of deduction limit) 200 Other expenses up to the deduction limit $1,000 Depreciation carryover to 2014 ($1,600 − $200) (subject to deduction limit in 2014) $1,400   You can deduct all of the business part of your deductible mortgage interest and real estate taxes ($3,000). How can i file my 2012 taxes online for free You also can deduct all of your business expenses not related to the use of your home ($2,000). How can i file my 2012 taxes online for free Additionally, you can deduct all of the business part of your expenses for maintenance, insurance, and utilities, because the total ($800) is less than the $1,000 deduction limit. How can i file my 2012 taxes online for free Your deduction for depreciation for the business use of your home is limited to $200 ($1,000 minus $800) because of the deduction limit. How can i file my 2012 taxes online for free You can carry over the $1,400 balance and add it to your depreciation for 2014, subject to your deduction limit in 2014. How can i file my 2012 taxes online for free More than one place of business. How can i file my 2012 taxes online for free   If part of the gross income from your trade or business is from the business use of part of your home and part is from a place other than your home, you must determine the part of your gross income from the business use of your home before you figure the deduction limit. How can i file my 2012 taxes online for free In making this determination, consider the time you spend at each location, the business investment in each location, and any other relevant facts and circumstances. How can i file my 2012 taxes online for free If your home office qualifies as your principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. How can i file my 2012 taxes online for free For more information on transportation costs, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. How can i file my 2012 taxes online for free Using the Simplified Method The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. How can i file my 2012 taxes online for free In most cases, you will figure your deduction by multiplying $5, the prescribed rate, by the area of your home used for a qualified business use. How can i file my 2012 taxes online for free The area you use to figure your deduction is limited to 300 square feet. How can i file my 2012 taxes online for free See Simplified Amount , later, for information about figuring the amount of the deduction. How can i file my 2012 taxes online for free For more information about the simplified method, see Revenue Procedure 2013-13, 2013-06 I. How can i file my 2012 taxes online for free R. How can i file my 2012 taxes online for free B. How can i file my 2012 taxes online for free 478, available at www. How can i file my 2012 taxes online for free irs. How can i file my 2012 taxes online for free gov/irb/2013-06_IRB/ar09. How can i file my 2012 taxes online for free html. How can i file my 2012 taxes online for free Actual expenses and depreciation of your home. How can i file my 2012 taxes online for free   If you elect to use the simplified method, you cannot deduct any actual expenses for the business except for business expenses that are not related to the use of the home. How can i file my 2012 taxes online for free You also cannot deduct any depreciation (including any additional first-year depreciation) or section 179 expense for the portion of the home that is used for a qualified business use. How can i file my 2012 taxes online for free The depreciation deduction allowable for that portion of the home is deemed to be zero for a year you use the simplified method. How can i file my 2012 taxes online for free If you figure your deduction for business use of the home using actual expenses in a subsequent year, you will have to use the appropriate optional depreciation table for MACRS to figure your depreciation. How can i file my 2012 taxes online for free More information. How can i file my 2012 taxes online for free   For more information about claiming depreciation in a subsequent year, see Revenue Procedure 2013-13, 2013-06 I. How can i file my 2012 taxes online for free R. How can i file my 2012 taxes online for free B. How can i file my 2012 taxes online for free 478, available at www. How can i file my 2012 taxes online for free irs. How can i file my 2012 taxes online for free gov/irb/2013-06_IRB/ar09. How can i file my 2012 taxes online for free html. How can i file my 2012 taxes online for free See Publication 946 for the optional depreciation tables Although you cannot deduct any depreciation or section 179 expense for the portion of your home used for a qualified business use, you may still claim depreciation or the section 179 expense deduction on other assets used in the business (for example, furniture and equipment). How can i file my 2012 taxes online for free Expenses deductible without regard to business use. How can i file my 2012 taxes online for free   When using the simplified method, treat as personal expenses those business expenses related to the use of the home that are deductible without regard to whether there is a qualified business use of the home. How can i file my 2012 taxes online for free These expenses include mortgage interest, real estate taxes, and casualty losses, subject to any limitations. How can i file my 2012 taxes online for free See Where To Deduct , later. How can i file my 2012 taxes online for free If you also rent part of your home, you must still allocate these expenses between rental use and personal use (for this purpose, personal use includes business use reported using the simplified method). How can i file my 2012 taxes online for free No deduction of carryover of actual expenses. How can i file my 2012 taxes online for free   If you used actual expenses to figure your deduction for business use of the home in a prior year and your deduction was limited, you cannot deduct the disallowed amount carried over from the prior year during a year you figure your deduction using the simplified method. How can i file my 2012 taxes online for free Instead, you will continue to carry over the disallowed amount to the next year that you use actual expenses to figure your deduction. How can i file my 2012 taxes online for free Electing the Simplified Method You choose whether or not to figure your deduction using the simplified method each taxable year. How can i file my 2012 taxes online for free Make the election for a home by using the simplified method to figure the deduction for the qualified business use of that home on a timely filed, original federal income tax return. How can i file my 2012 taxes online for free An election for a taxable year, once made, is irrevocable. How can i file my 2012 taxes online for free A change from using the simplified method in one year to actual expenses in a succeeding taxable year, or vice-versa, is not a change in method of accounting and does not require the consent of the Commissioner. How can i file my 2012 taxes online for free Shared use. How can i file my 2012 taxes online for free   If you share your home with someone else who also uses the home in a business that qualifies for this deduction, each of you make your own election. How can i file my 2012 taxes online for free More than one qualified business use. How can i file my 2012 taxes online for free   If you conduct more than one business that qualifies for this deduction in your home, your election to use the simplified method applies to all your qualified business uses of that home. How can i file my 2012 taxes online for free More than one home. How can i file my 2012 taxes online for free   If you used more than one home during the year (for example, you moved during the year), you can elect to use the simplified method for only one of the homes. How can i file my 2012 taxes online for free You must figure the deduction for any other home using actual expenses. How can i file my 2012 taxes online for free Simplified Amount Your deduction for the qualified business use of a home is the sum of each amount you figure for a separate qualified business use of your home. How can i file my 2012 taxes online for free To figure your deduction for the business use of a home using the simplified method, you will need to know the following information for each qualified business use of the home. How can i file my 2012 taxes online for free The allowable area of your home used in conducting the business. How can i file my 2012 taxes online for free If you did not conduct the business for the entire year in the home or the area changed during the year, you will need to know the allowable area you used and the number of days you conducted the business for each month. How can i file my 2012 taxes online for free The gross income from the business use of your home. How can i file my 2012 taxes online for free The amount of the business expenses that are not related to the use of your home. How can i file my 2012 taxes online for free If the qualified business use is for a daycare facility that uses space in your home on a regular (but not exclusive) basis, you will also need to know the percentage of time that part of your home is used for daycare. How can i file my 2012 taxes online for free To figure the amount you can deduct for qualified business use of your home using the simplified method, follow these 3 steps. How can i file my 2012 taxes online for free Multiply the allowable area by $5 (or less than $5 if the qualified business use is for a daycare that uses space in your home on a regular, but not exclusive, basis). How can i file my 2012 taxes online for free See Allowable area and Space used regularly for daycare , later. How can i file my 2012 taxes online for free Subtract the expenses from the business that are not related to the use of the home from the gross income related to the business use of the home. How can i file my 2012 taxes online for free If these expenses are greater than the gross income from the business use of the home, then you cannot take a deduction for this business use of the home. How can i file my 2012 taxes online for free See Gross income limitation , later. How can i file my 2012 taxes online for free Take the smaller of the amounts from (1) and (2). How can i file my 2012 taxes online for free This is the amount you can deduct for this qualified business use of your home using the simplified method. How can i file my 2012 taxes online for free If you are an employee or a partner, or you use your home in your farming business and file Schedule F (Form 1040), you can use the Simplified Method Worksheet, near the end of this publication, to help you figure your deduction. How can i file my 2012 taxes online for free If you use your home in a trade or business and you file Schedule C (Form 1040), you will use the Simplified Method Worksheet in your Instructions for Schedule C to figure your deduction. How can i file my 2012 taxes online for free Allowable area. How can i file my 2012 taxes online for free   In most cases, the allowable area is the smaller of the actual area (in square feet) of your home used in conducting the business and 300 square feet. How can i file my 2012 taxes online for free Your allowable area may be smaller if you conducted the business as a qualified joint venture with your spouse, the area used by the business was shared with another qualified business use, you used the home for the business for only part of the year, or the area used by the business changed during the year. How can i file my 2012 taxes online for free You can use the Area Adjustment Worksheet (for simplified method), near the end of this publication, to help you figure your allowable area for a qualified business use. How can i file my 2012 taxes online for free Area used by a qualified joint venture. How can i file my 2012 taxes online for free   If the qualified business use of the home is also a qualified joint venture, you and your spouse will figure the deduction for the business use separately. How can i file my 2012 taxes online for free Split the actual area used in conducting business between you and your spouse in the same manner you split your other tax attributes. How can i file my 2012 taxes online for free Then, each spouse will figure the allowable area separately. How can i file my 2012 taxes online for free For more information about qualified joint ventures, see Qualified Joint Venture in the Instructions for Schedule C. How can i file my 2012 taxes online for free Shared use. How can i file my 2012 taxes online for free   If you share your home with someone else who uses the home to conduct business that also qualifies for this deduction, you may not include the same square feet to figure your deduction as the other person. How can i file my 2012 taxes online for free You must allocate the shared space between you and the other person in a reasonable manner. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free Kristin and Lindsey are roommates. How can i file my 2012 taxes online for free Kristin uses 300 square feet of their home for a qualified business use. How can i file my 2012 taxes online for free Lindsey uses 200 square feet of their home for a separate qualified business use. How can i file my 2012 taxes online for free The qualified business uses share 100 square feet. How can i file my 2012 taxes online for free In addition to the portion that they do not share, Kristin and Lindsey can both claim 50 of the 100 square feet or divide the 100 square feet between them in any reasonable manner. How can i file my 2012 taxes online for free If divided evenly, Kristin could claim 250 square feet using the simplified method and Lindsey could claim 150 square feet. How can i file my 2012 taxes online for free More than one qualified business use. How can i file my 2012 taxes online for free   If you conduct more than one business qualifying for the deduction, you are limited to a maximum of 300 square feet for all of the businesses. How can i file my 2012 taxes online for free Allocate the actual square footage used (up to the maximum of 300 square feet) among your qualified business uses in a reasonable manner. How can i file my 2012 taxes online for free However, do not allocate more square feet to a qualified business use than you actually use for that business. How can i file my 2012 taxes online for free Rental use. How can i file my 2012 taxes online for free   The simplified method does not apply to rental use. How can i file my 2012 taxes online for free A rental use that qualifies for the deduction must be figured using actual expenses. How can i file my 2012 taxes online for free If the rental use and a qualified business use share the same area, you will have to allocate the actual area used between the two uses. How can i file my 2012 taxes online for free You cannot use the same area to figure a deduction for the qualified business use as you are using to figure the deduction for the rental use. How can i file my 2012 taxes online for free Part-year use or area changes. How can i file my 2012 taxes online for free   If your qualified business use was for a portion of the taxable year (for example, a seasonal business or a business that begins during the taxable year) or you changed the square footage of your qualified business use, your deduction is limited to the average monthly allowable square footage. How can i file my 2012 taxes online for free You calculate the average monthly allowable square footage by adding the amount of allowable square feet you used in each month and dividing the sum by 12. How can i file my 2012 taxes online for free When determining the average monthly allowable square footage, you cannot take more than 300 square feet into account for any one month. How can i file my 2012 taxes online for free Additionally, if your qualified business use was less than 15 days in a month, you must use -0- for that month. How can i file my 2012 taxes online for free Example 1. How can i file my 2012 taxes online for free Andy files his federal income tax return on a calendar year basis. How can i file my 2012 taxes online for free On July 20, he began using 420 square feet of his home for a qualified business use. How can i file my 2012 taxes online for free He continued to use the 420 square feet until the end of the year. How can i file my 2012 taxes online for free His average monthly allowable square footage is 125 square feet, which is figured using 300 square feet for each month August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 0 + 0 + 0 + 300 + 300 + 300 + 300 + 300)/12). How can i file my 2012 taxes online for free Example 2. How can i file my 2012 taxes online for free Amy files her federal income tax return on a calendar year basis. How can i file my 2012 taxes online for free On April 20, she began using 100 square feet of her home for a qualified business use. How can i file my 2012 taxes online for free On August 5, she expanded the area of her qualified use to 330 square feet. How can i file my 2012 taxes online for free Amy continued to use the 330 square feet until the end of the year. How can i file my 2012 taxes online for free Her average monthly allowable square footage is 150 square feet, which is figured using 100 square feet for May through July and 300 square feet for August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 100 + 100 +100 + 300 + 300 + 300 + 300 + 300)/12). How can i file my 2012 taxes online for free Gross income limitation. How can i file my 2012 taxes online for free   Your deduction for business use of the home is limited to an amount equal to the gross income derived from the qualified business use of the home reduced by the business deductions that are unrelated to the use of your home. How can i file my 2012 taxes online for free If the business deductions that are unrelated to the use of your home are greater than the gross income derived from the qualified business use of your home, then you cannot take a deduction for this qualified business use of your home. How can i file my 2012 taxes online for free Business expenses not related to use of the home. How can i file my 2012 taxes online for free   These expenses relate to the business activity in the home, but not to the use of the home itself. How can i file my 2012 taxes online for free You can still deduct business expenses that are unrelated to the use of the home. How can i file my 2012 taxes online for free See Where To Deduct , later. How can i file my 2012 taxes online for free Examples of business expenses that are unrelated to the use of the home are advertising, wages, supplies, dues, and depreciation for equipment. How can i file my 2012 taxes online for free Space used regularly for daycare. How can i file my 2012 taxes online for free   If you do not use the area of your home exclusively for daycare, you must reduce the prescribed rate (maximum $5 per square foot) before figuring your deduction. How can i file my 2012 taxes online for free The reduced rate will equal the prescribed rate times a fraction. How can i file my 2012 taxes online for free The numerator of the fraction is the number of hours that the space was used during the year for daycare and the denominator is the total number of hours during the year that the space was available for all uses. How can i file my 2012 taxes online for free You can use the Daycare Facility Worksheet (for simplified method), near the end of this publication, to help you figure the reduced rate. How can i file my 2012 taxes online for free    If you used at least 300 square feet for daycare regularly and exclusively during the year, then you do not need to reduce the prescribed rate or complete the Daycare Facility Worksheet. How can i file my 2012 taxes online for free Daycare Facility If you use space in your home on a regular basis for providing daycare, you may be able to claim a deduction for that part of your home even if you use the same space for nonbusiness purposes. How can i file my 2012 taxes online for free To qualify for this exception to the exclusive use rule, you must meet both of the following requirements. How can i file my 2012 taxes online for free You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves. How can i file my 2012 taxes online for free You must have applied for, been granted, or be exempt from having, a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. How can i file my 2012 taxes online for free You do not meet this requirement if your application was rejected or your license or other authorization was revoked. How can i file my 2012 taxes online for free Figuring the deduction. How can i file my 2012 taxes online for free   If you elect to use the simplified method for your home, figure your deduction as described earlier in Using the Simplified Method under Figuring the Deduction. How can i file my 2012 taxes online for free    If you are figuring your deduction using actual expenses and you regularly use part of your home for daycare, figure what part is used for daycare, as explained in Business Percentage , earlier, under Figuring the Deduction. How can i file my 2012 taxes online for free If you also use that part exclusively for daycare, deduct all the allocable expenses, subject to the deduction limit, as explained earlier. How can i file my 2012 taxes online for free   If the use of part of your home as a daycare facility is regular, but not exclusive, you must figure the percentage of time that part of your home is used for daycare. How can i file my 2012 taxes online for free A room that is available for use throughout each business day and that you regularly use in your business is considered to be used for daycare throughout each business day. How can i file my 2012 taxes online for free You do not have to keep records to show the specific hours the area was used for business. How can i file my 2012 taxes online for free You can use the area occasionally for personal reasons. How can i file my 2012 taxes online for free However, a room you use only occasionally for business does not qualify for the deduction. How can i file my 2012 taxes online for free To find the percentage of time you actually use your home for business, compare the total time used for business to the total time that part of your home can be used for all purposes. How can i file my 2012 taxes online for free You can compare the hours of business use in a week with the number of hours in a week (168). How can i file my 2012 taxes online for free Or you can compare the hours of business use for the year with the number of hours in the year (8,760 in 2013). How can i file my 2012 taxes online for free If you started or stopped using your home for daycare in 2013, you must prorate the number of hours based on the number of days the home was available for daycare. How can i file my 2012 taxes online for free Example 1. How can i file my 2012 taxes online for free Mary Lake used her basement to operate a daycare business for children. How can i file my 2012 taxes online for free She figures the business percentage of the basement as follows. How can i file my 2012 taxes online for free Square footage of the basement Square footage of her home = 1,600 3,200 = 50%           She used the basement for daycare an average of 12 hours a day, 5 days a week, for 50 weeks a year. How can i file my 2012 taxes online for free During the other 12 hours a day, the family could use the basement. How can i file my 2012 taxes online for free She figures the percentage of time the basement was used for daycare as follows. How can i file my 2012 taxes online for free Number of hours used for daycare (12 x 5 x 50) Total number of hours in the year (24 x 365) = 3,000 8,760 = 34. How can i file my 2012 taxes online for free 25%           Mary can deduct 34. How can i file my 2012 taxes online for free 25% of any direct expenses for the basement. How can i file my 2012 taxes online for free However, because her indirect expenses are for the entire house, she can deduct only 17. How can i file my 2012 taxes online for free 13% of the indirect expenses. How can i file my 2012 taxes online for free She figures the percentage for her indirect expenses as follows. How can i file my 2012 taxes online for free Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 34. How can i file my 2012 taxes online for free 25% Percentage for indirect expenses 17. How can i file my 2012 taxes online for free 13% Mary completes Form 8829, Part I, figuring the percentage of her home used for business, including the percentage of time the basement was used. How can i file my 2012 taxes online for free In Part II, Mary figures her deductible expenses. How can i file my 2012 taxes online for free She uses the following information to complete Part II. How can i file my 2012 taxes online for free Gross income from her daycare business $50,000 Expenses not related to the business use of the home $25,000 Tentative profit $25,000 Rent $8,400 Utilities $850 Painting the basement $500 Mary enters her tentative profit, $25,000, on line 8. How can i file my 2012 taxes online for free (This figure is the same as the amount on line 29 of her Schedule C (Form 1040). How can i file my 2012 taxes online for free ) The expenses she paid for rent and utilities relate to her entire home. How can i file my 2012 taxes online for free Therefore, she enters the amount paid for rent on line 18, column (b), and the amount paid for utilities on line 20, column (b). How can i file my 2012 taxes online for free She shows the total of these expenses on line 22, column (b). How can i file my 2012 taxes online for free For line 23, she multiplies the amount on line 22, column (b) by the percentage on line 7 and enters the result, $1,585. How can i file my 2012 taxes online for free Mary paid $500 to have the basement painted. How can i file my 2012 taxes online for free The painting is a direct expense. How can i file my 2012 taxes online for free However, because she did not use the basement exclusively for daycare, she must multiply $500 by the percentage of time the basement was used for daycare (34. How can i file my 2012 taxes online for free 25% – line 6). How can i file my 2012 taxes online for free She enters $171 (34. How can i file my 2012 taxes online for free 25% × $500) on line 19, column (a). How can i file my 2012 taxes online for free She adds line 22, column (a), and line 23 and enters $1,756 ($171 + $1,585) on line 25. How can i file my 2012 taxes online for free This is less than her deduction limit (line 15), so she can deduct the entire amount. How can i file my 2012 taxes online for free She follows the instructions to complete the rest of Part II and enters $1,756 on lines 33 and 35. How can i file my 2012 taxes online for free She then carries the $1,756 to line 30 of her Schedule C (Form 1040). How can i file my 2012 taxes online for free Example 2. How can i file my 2012 taxes online for free Assume the same facts as in Example 1 except that Mary also has another room that was available each business day for children to take naps in. How can i file my 2012 taxes online for free Although she did not keep a record of the number of hours the room was actually used for naps, it was used for part of each business day. How can i file my 2012 taxes online for free Since the room was available for business use during regular operating hours each business day and was used regularly in the business, it is considered used for daycare throughout each business day. How can i file my 2012 taxes online for free The basement and room are 60% of the total area of her home. How can i file my 2012 taxes online for free In figuring her expenses, 34. How can i file my 2012 taxes online for free 25% of any direct expenses for the basement and room are deductible. How can i file my 2012 taxes online for free In addition, 20. How can i file my 2012 taxes online for free 55% (34. How can i file my 2012 taxes online for free 25% × 60%) of her indirect expenses are deductible. How can i file my 2012 taxes online for free Example 3. How can i file my 2012 taxes online for free Assume the same facts as in Example 1 except that Mary stopped using her home for a daycare facility on June 24, 2013. How can i file my 2012 taxes online for free She used the basement for daycare an average of 12 hours a day, 5 days a week, but for only 25 weeks of the year. How can i file my 2012 taxes online for free During the other 12 hours a day, the family could still use the basement. How can i file my 2012 taxes online for free She figures the percentage of time the basement was used for business as follows. How can i file my 2012 taxes online for free Number of hours used for daycare (12 x 5 x 25) Total number of hours during period used (24 x 175) = 1,500 4,200 = 35. How can i file my 2012 taxes online for free 71%           Mary can deduct 35. How can i file my 2012 taxes online for free 71% of any direct expenses for the basement. How can i file my 2012 taxes online for free However, because her indirect expenses are for the entire house, she can deduct only 17. How can i file my 2012 taxes online for free 86% of the indirect expenses. How can i file my 2012 taxes online for free She figures the percentage for her indirect expenses as follows. How can i file my 2012 taxes online for free Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 35. How can i file my 2012 taxes online for free 71% Percentage for indirect expenses 17. How can i file my 2012 taxes online for free 86% Meals. How can i file my 2012 taxes online for free   If you provide food for your daycare recipients, do not include the expense as a cost of using your home for business. How can i file my 2012 taxes online for free Claim it as a separate deduction on your Schedule C (Form 1040). How can i file my 2012 taxes online for free You can never deduct the cost of food consumed by you or your family. How can i file my 2012 taxes online for free You can deduct as a business expense 100% of the actual cost of food consumed by your daycare recipients (see Standard meal and snack rates , later, for an optional method for eligible children) and generally only 50% of the cost of food consumed by your employees. How can i file my 2012 taxes online for free However, you can deduct 100% of the cost of food consumed by your employees if its value can be excluded from their wages as a de minimis fringe benefit. How can i file my 2012 taxes online for free For more information on meals that meet these requirements, see Meals in chapter 2 of Publication 15-B, Employer's Tax Guide to Fringe Benefits. How can i file my 2012 taxes online for free   If you deduct the actual cost of food for your daycare business, keep a separate record (with receipts) of your family's food costs. How can i file my 2012 taxes online for free   Reimbursements you receive from a sponsor under the Child and Adult Care Food Program of the Department of Agriculture are taxable only to the extent they exceed your expenses for food for eligible children. How can i file my 2012 taxes online for free If your reimbursements are more than your expenses for food, show the difference as income in Part I of Schedule C (Form 1040). How can i file my 2012 taxes online for free If your food expenses are greater than the reimbursements, show the difference as an expense in Part V of Schedule C (Form 1040). How can i file my 2012 taxes online for free Do not include payments or expenses for your own children if they are eligible for the program. How can i file my 2012 taxes online for free Follow this procedure even if you receive a Form 1099-MISC, Miscellaneous Income, reporting a payment from the sponsor. How can i file my 2012 taxes online for free Standard meal and snack rates. How can i file my 2012 taxes online for free   If you qualify as a family daycare provider, you can use the standard meal and snack rates, instead of actual costs, to compute the deductible cost of meals and snacks provided to eligible children. How can i file my 2012 taxes online for free For these purposes: A family daycare provider is a person engaged in the business of providing family daycare. How can i file my 2012 taxes online for free Family daycare is childcare provided to eligible children in the home of the family daycare provider. How can i file my 2012 taxes online for free The care must be non-medical, not involve a transfer of legal custody, and generally last less than 24 hours each day. How can i file my 2012 taxes online for free Eligible children are minor children receiving family daycare in the home of the family daycare provider. How can i file my 2012 taxes online for free Eligible children do not include children who are full-time or part-time residents in the home where the childcare is provided or children whose parents or guardians are residents of the same home. How can i file my 2012 taxes online for free Eligible children do not include children who receive daycare services for personal reasons of the provider. How can i file my 2012 taxes online for free For example, if a provider provides daycare services for a relative as a favor to that relative, that child is not an eligible child. How can i file my 2012 taxes online for free   You can compute the deductible cost of each meal and snack you actually purchased and served to an eligible child during the time period you provided family daycare using the standard meal and snack rates shown in Table 3, later. How can i file my 2012 taxes online for free You can use the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner, and three snacks per eligible child per day. How can i file my 2012 taxes online for free If you receive reimbursement for a particular meal or snack, you can deduct only the portion of the applicable standard meal or snack rate that is more than the amount of the reimbursement. How can i file my 2012 taxes online for free   You can use either the standard meal and snack rates or actual costs to calculate the deductible cost of food provided to eligible children in the family daycare for any particular tax year. How can i file my 2012 taxes online for free If you choose to use the standard meal and snack rates for a particular tax year, you must use the rates for all your deductible food costs for eligible children during that tax year. How can i file my 2012 taxes online for free However, if you use the standard meal and snack rates in any tax year, you can use actual costs to compute the deductible cost of food in any other tax year. How can i file my 2012 taxes online for free   If you use the standard meal and snack rates, you must maintain records to substantiate the computation of the total amount deducted for the cost of food provided to eligible children. How can i file my 2012 taxes online for free The records kept should include the name of each child, dates and hours of attendance in the daycare, and the type and quantity of meals and snacks served. How can i file my 2012 taxes online for free This information can be recorded in a log similar to the one shown in Exhibit A, near the end of this publication. How can i file my 2012 taxes online for free   The standard meal and snack rates include beverages, but do not include non-food supplies used for food preparation, service, or storage, such as containers, paper products, or utensils. How can i file my 2012 taxes online for free These expenses can be claimed as a separate deduction on your Schedule C (Form 1040). How can i file my 2012 taxes online for free     Table 3. How can i file my 2012 taxes online for free Standard Meal and Snack Rates1 Location of Family Daycare Provider Breakfast Lunch Dinner Snack States other than Alaska an
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The How Can I File My 2012 Taxes Online For Free

How can i file my 2012 taxes online for free 1. How can i file my 2012 taxes online for free   Bona Fide Residence Table of Contents Presence TestDays of Presence in the United States or Relevant Possession Significant Connection Tax HomeExceptions Closer ConnectionException for Year of Move Special Rules in the Year of a MoveYear of Moving to a Possession Year of Moving From a Possession Reporting a Change in Bona Fide ResidenceWho Must File Penalty for Not Filing Form 8898 In order to qualify for certain tax benefits (see chapter 3), you must be a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI for the entire tax year. How can i file my 2012 taxes online for free Generally, you are a bona fide resident of one of these possessions (the relevant possession) if, during the tax year, you: Meet the presence test, Do not have a tax home outside the relevant possession, and Do not have a closer connection to the United States or to a foreign country than to the relevant possession. How can i file my 2012 taxes online for free Special rule for members of the U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free Armed Forces. How can i file my 2012 taxes online for free   If you are a member of the U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free Armed Forces who qualified as a bona fide resident of the relevant possession in an earlier tax year, your absence from that possession during the current tax year in compliance with military orders will not affect your status as a bona fide resident. How can i file my 2012 taxes online for free Likewise, being in a possession solely in compliance with military orders will not qualify you for bona fide residency. How can i file my 2012 taxes online for free Also see the special income source rule for members of the U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free Armed Forces in chapter 2, under Compensation for Labor or Personal Services . How can i file my 2012 taxes online for free Special rule for civilian spouse of active duty member of the U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free Armed Forces. How can i file my 2012 taxes online for free   If you are the civilian spouse of an active duty servicemember, under Military Spouses Residency Relief Act (MSRRA) you can choose to keep your prior residence or domicile for tax purposes (tax residence) when accompanying the servicemember spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession. How can i file my 2012 taxes online for free Before relocating, you and your spouse must have the same tax residence. How can i file my 2012 taxes online for free If you are a civilian spouse and choose to keep your prior tax residence after such relocation, the source of income for services performed (for example, wages, salaries, tips, or self-employment) by you is considered to be (the jurisdiction of) the prior tax residence. How can i file my 2012 taxes online for free As a result, the amount of income tax withholding (from Form(s) W-2, Wage and Tax Statement) that you are able to claim on your federal return, as well as the need to file a state or U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession return, may be affected. How can i file my 2012 taxes online for free For more information, consult with state, local, or U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession tax authorities regarding your tax obligations under MSRRA. How can i file my 2012 taxes online for free Presence Test If you are a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen or resident alien, you will satisfy the presence test for the entire tax year if you meet one of the following conditions. How can i file my 2012 taxes online for free You were present in the relevant possession for at least 183 days during the tax year. How can i file my 2012 taxes online for free You were present in the relevant possession for at least 549 days during the 3-year period that includes the current tax year and the 2 immediately preceding tax years. How can i file my 2012 taxes online for free During each year of the 3-year period, you must be present in the relevant possession for at least 60 days. How can i file my 2012 taxes online for free You were present in the United States for no more than 90 days during the tax year. How can i file my 2012 taxes online for free You had earned income in the United States of no more than a total of $3,000 and were present for more days in the relevant possession than in the United States during the tax year. How can i file my 2012 taxes online for free Earned income is pay for personal services performed, such as wages, salaries, or professional fees. How can i file my 2012 taxes online for free You had no significant connection to the United States during the tax year. How can i file my 2012 taxes online for free Special rule for nonresident aliens. How can i file my 2012 taxes online for free   Conditions (1) through (5) above do not apply to nonresident aliens of the United States. How can i file my 2012 taxes online for free Instead, nonresident aliens must meet the substantial presence test discussed in chapter 1 of Publication 519. How can i file my 2012 taxes online for free In that discussion, substitute the name of the possession for “United States” and “U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free ” wherever they appear. How can i file my 2012 taxes online for free Disregard the discussion in that chapter about a Closer Connection to a Foreign Country. How can i file my 2012 taxes online for free Days of Presence in the United States or Relevant Possession Generally, you are treated as being present in the United States or in the relevant possession on any day that you are physically present in that location at any time during the day. How can i file my 2012 taxes online for free Days of presence in a possession. How can i file my 2012 taxes online for free   You are considered to be present in the relevant possession on any of the following days. How can i file my 2012 taxes online for free Any day you are physically present in that possession at any time during the day. How can i file my 2012 taxes online for free Any day you are outside of the relevant possession in order to receive, or to accompany any of the following family members to receive, qualifying medical treatment (see Qualifying Medical Treatment , later). How can i file my 2012 taxes online for free Your parent. How can i file my 2012 taxes online for free Your spouse. How can i file my 2012 taxes online for free Your child, who is your son, daughter, stepson, or stepdaughter. How can i file my 2012 taxes online for free This includes an adopted child or child lawfully placed with you for legal adoption. How can i file my 2012 taxes online for free This also includes a foster child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. How can i file my 2012 taxes online for free Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. How can i file my 2012 taxes online for free   If, during a single day, you are physically present: In the United States and in the relevant possession, that day is considered a day of presence in the relevant possession; or In two possessions, that day is considered a day of presence in the possession where your tax home is located (see Tax Home , later). How can i file my 2012 taxes online for free Days of presence in the United States. How can i file my 2012 taxes online for free   You are considered to be present in the United States on any day that you are physically present in the United States at any time during the day. How can i file my 2012 taxes online for free However, do not count the following days as days of presence in the United States. How can i file my 2012 taxes online for free Any day you are temporarily present in the United States in order to receive, or to accompany a parent, spouse, or child who is receiving, qualifying medical treatment. How can i file my 2012 taxes online for free “Child” is defined under item 2c earlier. How can i file my 2012 taxes online for free “Qualifying medical treatment” is defined later. How can i file my 2012 taxes online for free Any day you are temporarily present in the United States because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. How can i file my 2012 taxes online for free Any day you are in the United States for less than 24 hours when you are traveling between two places outside the United States. How can i file my 2012 taxes online for free Any day you are temporarily present in the United States as a professional athlete to compete in a charitable sports event (defined later). How can i file my 2012 taxes online for free Any day you are temporarily in the United States as a student (defined later). How can i file my 2012 taxes online for free Any day you are in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). How can i file my 2012 taxes online for free Qualifying Medical Treatment Such treatment is generally provided by (or under the supervision of) a physician for an illness, injury, impairment, or physical or mental condition. How can i file my 2012 taxes online for free The treatment generally involves: Any period of inpatient care that requires an overnight stay in a hospital or hospice, and any period immediately before or after that inpatient care to the extent it is medically necessary, or Any temporary period of inpatient care in a residential medical care facility for medically necessary rehabilitation services. How can i file my 2012 taxes online for free With respect to each qualifying medical treatment, you must prepare (or obtain) and maintain documentation supporting your claim that such treatment meets the criteria to be considered days of presence in the relevant possession. How can i file my 2012 taxes online for free You must be able to produce this documentation within 30 days if requested by the IRS or tax administrator for the relevant possession. How can i file my 2012 taxes online for free You must keep the following documentation. How can i file my 2012 taxes online for free Records that provide: The patient's name and relationship to you (if the medical treatment is provided to a person you accompany); The name and address of the hospital, hospice, or residential medical care facility where the medical treatment was provided; The name, address, and telephone number of the physician who provided the medical treatment; The date(s) on which the medical treatment was provided; and Receipt(s) of payment for the medical treatment. How can i file my 2012 taxes online for free Signed certification by the providing or supervising physician that the medical treatment met the requirements for being qualified medical treatment, and setting forth: The patient's name, A reasonably detailed description of the medical treatment provided by (or under the supervision of) the physician, The dates on which the medical treatment was provided, and The medical facts that support the physician's certification and determination that the treatment was medically necessary. How can i file my 2012 taxes online for free Charitable Sports Event A charitable sports event is one that meets all of the following conditions. How can i file my 2012 taxes online for free The main purpose is to benefit a qualified charitable organization. How can i file my 2012 taxes online for free The entire net proceeds go to charity. How can i file my 2012 taxes online for free Volunteers perform substantially all the work. How can i file my 2012 taxes online for free In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in the charitable sports event. How can i file my 2012 taxes online for free You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. How can i file my 2012 taxes online for free Student To qualify as a student, you must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by a school described in (1) above or by a state, county, or local government agency. How can i file my 2012 taxes online for free The 5 calendar months do not have to be consecutive. How can i file my 2012 taxes online for free Full-time student. How can i file my 2012 taxes online for free   A full-time student is a person who is enrolled for the number of hours or courses the school considers to be full-time attendance. How can i file my 2012 taxes online for free However, school attendance exclusively at night is not considered full-time attendance. How can i file my 2012 taxes online for free School. How can i file my 2012 taxes online for free   The term “school” includes elementary schools, middle schools, junior and senior high schools, colleges, universities, and technical, trade, and mechanical schools. How can i file my 2012 taxes online for free It does not include on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. How can i file my 2012 taxes online for free Significant Connection One way in which you can meet the presence test is to have no significant connection to the United States during the tax year. How can i file my 2012 taxes online for free This section looks at the factors that determine if a significant connection exists. How can i file my 2012 taxes online for free You are treated as having a significant connection to the United States if you: Have a permanent home in the United States, Are currently registered to vote in any political subdivision of the United States, or Have a spouse or child (see item 2c under Days of presence in a possession , earlier) who is under age 18 whose main home is in the United States, other than: A child who is in the United States because he or she is the child of divorced or legally separated parents and is living with a custodial parent under a custodial decree or multiple support agreement, or A child who is in the United States as a student. How can i file my 2012 taxes online for free For the purpose of determining if you have a significant connection to the United States, the term “spouse” does not include a spouse from whom you are legally separated under a decree of divorce or separate maintenance. How can i file my 2012 taxes online for free Permanent home. How can i file my 2012 taxes online for free   A permanent home generally includes an accommodation such as a house, an apartment, or a furnished room that is either owned or rented by you or your spouse. How can i file my 2012 taxes online for free The dwelling unit must be available at all times, continuously, not only for short stays. How can i file my 2012 taxes online for free Exception for rental property. How can i file my 2012 taxes online for free   If you or your spouse own the dwelling unit and at any time during the tax year it is rented to someone else at fair rental value, it will be considered your permanent home only if you or your spouse use that property for personal purposes for more than the greater of: 14 days, or 10% of the number of days during that tax year that the property is rented to others at a fair rental value. How can i file my 2012 taxes online for free   You are treated as using rental property for personal purposes on any day the property is not being rented to someone else at fair rental value for the entire day. How can i file my 2012 taxes online for free   A day of personal use of a dwelling unit is also any day that the unit is used by any of the following persons. How can i file my 2012 taxes online for free You or any other person who has an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement. How can i file my 2012 taxes online for free A member of your family or a member of the family of any other person who has an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. How can i file my 2012 taxes online for free Family includes only brothers and sisters, half-brothers and half-sisters, spouses, ancestors (parents, grandparents, etc. How can i file my 2012 taxes online for free ), and lineal descendants (children, grandchildren, etc. How can i file my 2012 taxes online for free ). How can i file my 2012 taxes online for free Anyone under an arrangement that lets you use some other dwelling unit. How can i file my 2012 taxes online for free Anyone at less than a fair rental price. How can i file my 2012 taxes online for free   However, any day you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. How can i file my 2012 taxes online for free Whether your property is used mainly for this purpose is determined in light of all the facts and circumstances, such as: The amount of time you devote to repair and maintenance work, How often during the tax year you perform repair and maintenance work on this property, and The presence and activities of companions. How can i file my 2012 taxes online for free   See Publication 527, Residential Rental Property, for more information about personal use of a dwelling unit. How can i file my 2012 taxes online for free Example—significant connection. How can i file my 2012 taxes online for free Ann Green, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, is a sales representative for a company based in Guam. How can i file my 2012 taxes online for free Ann lives with her spouse and young children in their house in Guam, where she is also registered to vote. How can i file my 2012 taxes online for free Her business travel requires her to spend 120 days in the United States and another 120 days in foreign countries. How can i file my 2012 taxes online for free When traveling on business, Ann generally stays at hotels but sometimes stays with her brother, who lives in the United States. How can i file my 2012 taxes online for free Ann's stays are always of short duration and she asks her brother's permission to stay with him. How can i file my 2012 taxes online for free Her brother's house is not her permanent home, nor does she have any other accommodations in the United States that would be considered her permanent home. How can i file my 2012 taxes online for free Ann satisfies the presence test because she has no significant connection to the United States. How can i file my 2012 taxes online for free Example—presence test. How can i file my 2012 taxes online for free Eric and Wanda Brown live for part of the year in a condominium, which they own, in the CNMI. How can i file my 2012 taxes online for free They also own a house in Maine where they live for 120 days every year to be near their grown children and grandchildren. How can i file my 2012 taxes online for free The Browns are retired and their only income is from pension payments, dividends, interest, and social security benefits. How can i file my 2012 taxes online for free In 2013, they spent only 175 days in the CNMI because of a 70-day vacation to Europe and Asia. How can i file my 2012 taxes online for free Thus, in 2013, the Browns were not present in the CNMI for at least 183 days, were present in the United States for more than 90 days, and had a significant connection to the United States because of their permanent home. How can i file my 2012 taxes online for free However, the Browns still satisfied the presence test with respect to the CNMI because they had no earned income in the United States and were physically present for more days in the CNMI than in the United States. How can i file my 2012 taxes online for free Tax Home You will have met the tax home test if you did not have a tax home outside the relevant possession during any part of the tax year. How can i file my 2012 taxes online for free Your tax home is your regular or main place of business, employment, or post of duty regardless of where you maintain your family home. How can i file my 2012 taxes online for free If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. How can i file my 2012 taxes online for free If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. How can i file my 2012 taxes online for free Exceptions There are some special rules regarding tax home that provide exceptions to the general rule stated above. How can i file my 2012 taxes online for free Students and Government Officials Disregard the following days when determining whether you have a tax home outside the relevant possession. How can i file my 2012 taxes online for free Days you were temporarily in the United States as a student (see Student under Days of Presence in the United States or Relevant Possession, earlier). How can i file my 2012 taxes online for free Days you were in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). How can i file my 2012 taxes online for free Seafarers You will not be considered to have a tax home outside the relevant possession solely because you are employed on a ship or other seafaring vessel that is predominantly used in local and international waters. How can i file my 2012 taxes online for free For this purpose, a vessel is considered to be predominantly used in local and international waters if, during the tax year, the total amount of time it is used in international waters and in the waters within 3 miles of the relevant possession exceeds the total amount of time it is used in the territorial waters of the United States, another possession, or any foreign country. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free In 2013, Sean Silverman, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, was employed by a fishery and spent 250 days at sea on a fishing vessel. How can i file my 2012 taxes online for free When not at sea, Sean lived with his spouse at a house they own in American Samoa. How can i file my 2012 taxes online for free The fishing vessel on which Sean works departs and arrives at various ports in American Samoa, other possessions, and foreign countries, but was in international or American Samoa's local waters for 225 days. How can i file my 2012 taxes online for free For purposes of determining bona fide residency of American Samoa, Sean will not be considered to have a tax home outside that possession solely because of his employment on board the fishing vessel. How can i file my 2012 taxes online for free Year of Move If you are moving to or from a possession during the year, you may still be able to meet the tax home test for that year. How can i file my 2012 taxes online for free See Special Rules in the Year of a Move , later in this chapter. How can i file my 2012 taxes online for free Closer Connection You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to the relevant U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession. How can i file my 2012 taxes online for free You will be considered to have a closer connection to a possession than to the United States or to a foreign country if you have maintained more significant contacts with the possession(s) than with the United States or foreign country. How can i file my 2012 taxes online for free In determining if you have maintained more significant contacts with the relevant possession, the facts and circumstances to be considered include, but are not limited to, the following. How can i file my 2012 taxes online for free The location of your permanent home. How can i file my 2012 taxes online for free The location of your family. How can i file my 2012 taxes online for free The location of personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family. How can i file my 2012 taxes online for free The location of social, political, cultural, professional, or religious organizations with which you have a current relationship. How can i file my 2012 taxes online for free The location where you conduct your routine personal banking activities. How can i file my 2012 taxes online for free The location where you conduct business activities (other than those that go into determining your tax home). How can i file my 2012 taxes online for free The location of the jurisdiction in which you hold a driver's license. How can i file my 2012 taxes online for free The location of the jurisdiction in which you vote. How can i file my 2012 taxes online for free The location of charitable organizations to which you contribute. How can i file my 2012 taxes online for free The country of residence you designate on forms and documents. How can i file my 2012 taxes online for free The types of official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification. How can i file my 2012 taxes online for free Your connections to the relevant possession will be compared to the total of your connections with the United States and foreign countries. How can i file my 2012 taxes online for free Your answers to the questions on Form 8898, Part III, will help establish the jurisdiction to which you have a closer connection. How can i file my 2012 taxes online for free Example—closer connection to the United States. How can i file my 2012 taxes online for free Marcos Reyes, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, moved to Puerto Rico in 2013 to start an investment consulting and venture capital business. How can i file my 2012 taxes online for free His spouse and two teenage children remained in California to allow the children to complete high school. How can i file my 2012 taxes online for free He traveled back to the United States regularly to see his spouse and children, to engage in business activities, and to take vacations. How can i file my 2012 taxes online for free Marcos had an apartment available for his full-time use in Puerto Rico, but remained a joint owner of the residence in California where his spouse and children lived. How can i file my 2012 taxes online for free Marcos and his family had automobiles and personal belongings such as furniture, clothing, and jewelry located at both residences. How can i file my 2012 taxes online for free Although Marcos was a member of the Puerto Rico Chamber of Commerce, he also belonged to and had current relationships with social, political, cultural, and religious organizations in California. How can i file my 2012 taxes online for free Marcos received mail in California, including bank and brokerage statements and credit card bills. How can i file my 2012 taxes online for free He conducted his personal banking activities in California. How can i file my 2012 taxes online for free He held a California driver's license and was also registered to vote there. How can i file my 2012 taxes online for free Based on all of the particular facts and circumstances pertaining to Marcos, he was not a bona fide resident of Puerto Rico in 2013 because he had a closer connection to the United States than to Puerto Rico. How can i file my 2012 taxes online for free Closer connection to another possession. How can i file my 2012 taxes online for free   Generally, possessions are not treated as foreign countries. How can i file my 2012 taxes online for free Therefore, a closer connection to a possession other than the relevant possession will not be treated as a closer connection to a foreign country. How can i file my 2012 taxes online for free Example—tax home and closer connection to possession. How can i file my 2012 taxes online for free Pearl Blackmon, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, is a permanent employee of a hotel in Guam, but works only during the tourist season. How can i file my 2012 taxes online for free For the remainder of each year, Pearl lives with her spouse and children in the CNMI, where she has no outside employment. How can i file my 2012 taxes online for free Most of Pearl's personal belongings, including her automobile, are located in the CNMI. How can i file my 2012 taxes online for free She is registered to vote in, and has a driver's license issued by, the CNMI. How can i file my 2012 taxes online for free She does her personal banking in the CNMI and routinely lists her CNMI address as her permanent address on forms and documents. How can i file my 2012 taxes online for free Pearl satisfies the presence test with respect to both Guam and the CNMI. How can i file my 2012 taxes online for free She satisfies the tax home test with respect to Guam, because her regular place of business is in Guam. How can i file my 2012 taxes online for free Pearl satisfies the closer connection test with respect to both Guam and the CNMI, because she does not have a closer connection to the United States or to any foreign country. How can i file my 2012 taxes online for free Pearl is considered a bona fide resident of Guam, the location of her tax home. How can i file my 2012 taxes online for free Exception for Year of Move If you are moving to or from a possession during the year, you may still be able to meet the closer connection test for that year. How can i file my 2012 taxes online for free See Special Rules in the Year of a Move , next. How can i file my 2012 taxes online for free Special Rules in the Year of a Move If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year. How can i file my 2012 taxes online for free Year of Moving to a Possession You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following. How can i file my 2012 taxes online for free You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move. How can i file my 2012 taxes online for free In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year. How can i file my 2012 taxes online for free You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free Dwight Wood, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, files returns on a calendar year basis. How can i file my 2012 taxes online for free He lived in the United States from January 2007 through May 2013. How can i file my 2012 taxes online for free In June 2013 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. How can i file my 2012 taxes online for free From July 1 through December 31, 2013 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. How can i file my 2012 taxes online for free If he is a bona fide resident of the USVI during all of 2014 through 2016, he will satisfy the tax home and closer connection tests for 2013. How can i file my 2012 taxes online for free If Dwight also satisfies the presence test in 2013, he will be considered a bona fide resident of the USVI for the entire 2013 tax year. How can i file my 2012 taxes online for free Year of Moving From a Possession In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following. How can i file my 2012 taxes online for free You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence. How can i file my 2012 taxes online for free In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year. How can i file my 2012 taxes online for free You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free Jean Aspen, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, files returns on a calendar year basis. How can i file my 2012 taxes online for free From January 2010 through December 2012, Jean was a bona fide resident of American Samoa. How can i file my 2012 taxes online for free Jean continued to live there until September 6, 2013, when she accepted new employment and moved to Hawaii. How can i file my 2012 taxes online for free Jean's principal place of business from January 1 through September 5, 2013 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. How can i file my 2012 taxes online for free If Jean continues to live and work in Hawaii for the rest of 2013 and throughout years 2014 through 2016, she will satisfy the tax home and closer connection tests for 2013 with respect to American Samoa. How can i file my 2012 taxes online for free If Jean also satisfies the presence test in 2013, she will be considered a bona fide resident for the entire 2013 tax year. How can i file my 2012 taxes online for free Puerto Rico You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you: Are a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move, Cease to be a bona fide resident of Puerto Rico during the tax year, Cease to have a tax home in Puerto Rico during the tax year, and Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free Randy White, a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen, files returns on a calendar year basis. How can i file my 2012 taxes online for free For all of 2011 and 2012, Randy was a bona fide resident of Puerto Rico. How can i file my 2012 taxes online for free From January through April 2013, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. How can i file my 2012 taxes online for free On May 5, 2013, Randy moved and changed his tax home to Nevada. How can i file my 2012 taxes online for free Later that year he established a closer connection to the United States than to Puerto Rico. How can i file my 2012 taxes online for free Randy did not satisfy the presence test for 2013 with respect to Puerto Rico, nor the tax home or closer connection tests. How can i file my 2012 taxes online for free However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2013, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2013. How can i file my 2012 taxes online for free Reporting a Change in Bona Fide Residence If you became or ceased to be a bona fide resident of a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession, you may need to file Form 8898. How can i file my 2012 taxes online for free This applies to the U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possessions of American Samoa, the CNMI, Guam, Puerto Rico, and the USVI. How can i file my 2012 taxes online for free Who Must File You must file Form 8898 for the tax year in which you meet both of the following conditions. How can i file my 2012 taxes online for free Your worldwide gross income (defined below) in that tax year is more than $75,000. How can i file my 2012 taxes online for free You meet one of the following. How can i file my 2012 taxes online for free You take a position for U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free tax purposes that you became a bona fide resident of a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession after a tax year for which you filed a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free income tax return as a citizen or resident alien of the United States but not as a bona fide resident of the possession. How can i file my 2012 taxes online for free You are a citizen or resident alien of the United States who takes the position for U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free tax purposes that you ceased to be a bona fide resident of a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free possession after a tax year for which you filed an income tax return (with the IRS, the possession tax authority, or both) as a bona fide resident of the possession. How can i file my 2012 taxes online for free You take the position for U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free tax purposes that you became a bona fide resident of Puerto Rico or American Samoa after a tax year for which you were required to file an income tax return as a bona fide resident of the CNMI, Guam, or the USVI. How can i file my 2012 taxes online for free Worldwide gross income. How can i file my 2012 taxes online for free   Worldwide gross income means all income you received in the form of money, goods, property, and services, including any income from sources outside the United States (even if you can exclude part or all of it) and before any deductions, credits, or rebates. How can i file my 2012 taxes online for free Example. How can i file my 2012 taxes online for free You are a U. How can i file my 2012 taxes online for free S. How can i file my 2012 taxes online for free citizen who moved to the CNMI in December 2012, but did not become a bona fide resident of that possession until the 2013 tax year. How can i file my 2012 taxes online for free You must file Form 8898 for the 2013 tax year if your worldwide gross income for that year was more than $75,000. How can i file my 2012 taxes online for free Penalty for Not Filing Form 8898 If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. How can i file my 2012 taxes online for free You may also owe this penalty if you do not include all the information required by the form or the form includes incorrect information. How can i file my 2012 taxes online for free In either case, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect. How can i file my 2012 taxes online for free This is in addition to any criminal penalty that may be imposed. How can i file my 2012 taxes online for free Prev  Up  Next   Home   More Online Publications