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How Do I File My 2010 Tax Return

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How Do I File My 2010 Tax Return

How do i file my 2010 tax return Publication 583 - Main Content Table of Contents What New Business Owners Need To Know Forms of BusinessMore information. How do i file my 2010 tax return More information. How do i file my 2010 tax return Exception—Community Income. How do i file my 2010 tax return Exception—Qualified joint venture. How do i file my 2010 tax return More information. How do i file my 2010 tax return More information. How do i file my 2010 tax return Identification NumbersEmployer Identification Number (EIN) Payee's Identification Number Tax Year Accounting Method Business TaxesIncome Tax Self-Employment Tax Employment Taxes Excise Taxes Depositing Taxes Information Returns PenaltiesWaiver of penalty. How do i file my 2010 tax return Business ExpensesBusiness Start-Up Costs Depreciation Business Use of Your Home Car and Truck Expenses RecordkeepingWhy Keep Records? Kinds of Records To Keep How Long To Keep Records Sample Record System How to Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What New Business Owners Need To Know As a new business owner, you need to know your federal tax responsibilities. How do i file my 2010 tax return Table 1 can help you learn what those responsibilities are. How do i file my 2010 tax return Ask yourself each question listed in the table, then see the related discussion to find the answer. How do i file my 2010 tax return In addition to knowing about federal taxes, you need to make some basic business decisions. How do i file my 2010 tax return Ask yourself: What are my financial resources? What products and services will I sell? How will I market my products and services? How will I develop a strategic business plan? How will I manage my business on a day-to-day basis? How will I recruit employees? The Small Business Administration (SBA) is a federal agency that can help you answer these types of questions. How do i file my 2010 tax return For information on how to contact the SBA, see How to Get More Information, later. How do i file my 2010 tax return Forms of Business The most common forms of business are the sole proprietorship, partnership, and corporation. How do i file my 2010 tax return When beginning a business, you must decide which form of business to use. How do i file my 2010 tax return Legal and tax considerations enter into this decision. How do i file my 2010 tax return Only tax considerations are discussed in this publication. How do i file my 2010 tax return Your form of business determines which income tax return form you have to file. How do i file my 2010 tax return See Table 2 to find out which form you have to file. How do i file my 2010 tax return Sole proprietorships. How do i file my 2010 tax return   A sole proprietorship is an unincorporated business that is owned by one individual. How do i file my 2010 tax return It is the simplest form of business organization to start and maintain. How do i file my 2010 tax return The business has no existence apart from you, the owner. How do i file my 2010 tax return Its liabilities are your personal liabilities. How do i file my 2010 tax return You undertake the risks of the business for all assets owned, whether or not used in the business. How do i file my 2010 tax return You include the income and expenses of the business on your personal tax return. How do i file my 2010 tax return More information. How do i file my 2010 tax return   For more information on sole proprietorships, see Publication 334, Tax Guide for Small Business. How do i file my 2010 tax return If you are a farmer, see Publication 225, Farmer's Tax Guide. How do i file my 2010 tax return Partnerships. How do i file my 2010 tax return   A partnership is the relationship existing between two or more persons who join to carry on a trade or business. How do i file my 2010 tax return Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the business. How do i file my 2010 tax return   A partnership must file an annual information return to report the income, deductions, gains, losses, etc. How do i file my 2010 tax return , from its operations, but it does not pay income tax. How do i file my 2010 tax return Instead, it “passes through” any profits or losses to its partners. How do i file my 2010 tax return Each partner includes his or her share of the partnership's items on his or her tax return. How do i file my 2010 tax return More information. How do i file my 2010 tax return   For more information on partnerships, see Publication 541, Partnerships. How do i file my 2010 tax return Husband and wife business. How do i file my 2010 tax return   If you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. How do i file my 2010 tax return Do not use Schedule C or C-EZ. How do i file my 2010 tax return Instead, file Form 1065, U. How do i file my 2010 tax return S. How do i file my 2010 tax return Return of Partnership Income. How do i file my 2010 tax return For more information, see Publication 541, Partnerships. How do i file my 2010 tax return Exception—Community Income. How do i file my 2010 tax return   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. How do i file my 2010 tax return S. How do i file my 2010 tax return possession, you can treat the business either as a sole proprietorship or a partnership. How do i file my 2010 tax return The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. How do i file my 2010 tax return A change in your reporting position will be treated as a conversion of the entity. How do i file my 2010 tax return Exception—Qualified joint venture. How do i file my 2010 tax return   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. How do i file my 2010 tax return Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. How do i file my 2010 tax return For an explanation of "material participation," see the Instructions for Schedule C, line G. How do i file my 2010 tax return   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. How do i file my 2010 tax return Each of you must file a separate Schedule C or C-EZ and a separate Schedule SE. How do i file my 2010 tax return For more information, see Qualified Joint Venture in the Instructions for Schedule SE. How do i file my 2010 tax return Corporations. How do i file my 2010 tax return   In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. How do i file my 2010 tax return A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. How do i file my 2010 tax return A corporation can also take special deductions. How do i file my 2010 tax return   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. How do i file my 2010 tax return However, shareholders cannot deduct any loss of the corporation. How do i file my 2010 tax return More information. How do i file my 2010 tax return   For more information on corporations, see Publication 542, Corporations. How do i file my 2010 tax return S corporations. How do i file my 2010 tax return   An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. How do i file my 2010 tax return Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. How do i file my 2010 tax return On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of nonseparately stated income or loss. How do i file my 2010 tax return More information. How do i file my 2010 tax return   For more information on S corporations, see the instructions for Form 2553, Election by a Small Business Corporation, and Form 1120S, U. How do i file my 2010 tax return S. How do i file my 2010 tax return Income Tax Return for an S Corporation. How do i file my 2010 tax return Limited liability company. How do i file my 2010 tax return   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. How do i file my 2010 tax return The members of an LLC are not personally liable for its debts. How do i file my 2010 tax return An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in regulations section 301. How do i file my 2010 tax return 7701-3. How do i file my 2010 tax return For more information, see the instructions for Form 8832, Entity Classification Election. How do i file my 2010 tax return Identification Numbers You must have a taxpayer identification number so the IRS can process your returns. How do i file my 2010 tax return The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN). How do i file my 2010 tax return An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000. How do i file my 2010 tax return An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. How do i file my 2010 tax return You must include your taxpayer identification number (SSN or EIN) on all returns and other documents you send to the IRS. How do i file my 2010 tax return You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. How do i file my 2010 tax return This includes returns or documents filed to report the following information. How do i file my 2010 tax return Interest, dividends, royalties, etc. How do i file my 2010 tax return , paid to you. How do i file my 2010 tax return Any amount paid to you as a dependent care provider. How do i file my 2010 tax return Certain other amounts paid to you that total $600 or more for the year. How do i file my 2010 tax return If you do not furnish your identification number as required, you may be subject to penalties. How do i file my 2010 tax return See Penalties, later. How do i file my 2010 tax return Employer Identification Number (EIN) EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities. How do i file my 2010 tax return If you don't already have an EIN, you need to get one if you: Have employees, Have a qualified retirement plan, Operate your business as a corporation or partnership, or File returns for: Employment taxes, or Excise taxes. How do i file my 2010 tax return Applying for an EIN. How do i file my 2010 tax return   You may apply for an EIN: Online—Click on the EIN link at www. How do i file my 2010 tax return irs. How do i file my 2010 tax return gov/businesses/small. How do i file my 2010 tax return The EIN is issued immediately once the application information is validated. How do i file my 2010 tax return By telephone at 1-800-829-4933. How do i file my 2010 tax return By mailing or faxing Form SS-4, Application for Employer Identification Number. How do i file my 2010 tax return When to apply. How do i file my 2010 tax return   You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. How do i file my 2010 tax return If you apply by mail, file Form SS-4 at least 4 weeks before you need an EIN. How do i file my 2010 tax return If you apply by telephone or through the IRS website, you can get an EIN immediately. How do i file my 2010 tax return If you apply by fax, you can get an EIN within 4 business days. How do i file my 2010 tax return   If you do not receive your EIN by the time a return is due, file your return anyway. How do i file my 2010 tax return Write “Applied for” and the date you applied for the number in the space for the EIN. How do i file my 2010 tax return Do not use your social security number as a substitute for an EIN on your tax returns. How do i file my 2010 tax return More than one EIN. How do i file my 2010 tax return   You should have only one EIN. How do i file my 2010 tax return If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. How do i file my 2010 tax return Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. How do i file my 2010 tax return The IRS will tell you which number to use. How do i file my 2010 tax return More information. How do i file my 2010 tax return   For more information about EINs, see Publication 1635, Understanding Your EIN. How do i file my 2010 tax return Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). How do i file my 2010 tax return The forms used to report these payments must include the payee's identification number. How do i file my 2010 tax return Employee. How do i file my 2010 tax return   If you have employees, you must get an SSN from each of them. How do i file my 2010 tax return Record the name and SSN of each employee exactly as they are shown on the employee's social security card. How do i file my 2010 tax return If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. How do i file my 2010 tax return This may occur, for example, if the employee's name has changed due to marriage or divorce. How do i file my 2010 tax return   If your employee does not have an SSN, he or she should file Form SS-5, Application for a Social Security Card, with the SSA. How do i file my 2010 tax return This form is available at SSA offices or by calling 1-800-772-1213. How do i file my 2010 tax return It is also available from the SSA website at www. How do i file my 2010 tax return ssa. How do i file my 2010 tax return gov. How do i file my 2010 tax return Other payee. How do i file my 2010 tax return   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. How do i file my 2010 tax return If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. How do i file my 2010 tax return   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. How do i file my 2010 tax return This form is available from IRS offices or by calling 1-800-829-3676. How do i file my 2010 tax return It is also available from the IRS website at IRS. How do i file my 2010 tax return gov. How do i file my 2010 tax return    If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. How do i file my 2010 tax return For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. How do i file my 2010 tax return Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. How do i file my 2010 tax return A tax year is usually 12 consecutive months. How do i file my 2010 tax return There are two kinds of tax years. How do i file my 2010 tax return Calendar tax year. How do i file my 2010 tax return A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. How do i file my 2010 tax return Fiscal tax year. How do i file my 2010 tax return A fiscal tax year is 12 consecutive months ending on the last day of any month except December. How do i file my 2010 tax return A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. How do i file my 2010 tax return If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. How do i file my 2010 tax return You must use a calendar tax year if: You keep no books. How do i file my 2010 tax return You have no annual accounting period. How do i file my 2010 tax return Your present tax year does not qualify as a fiscal year. How do i file my 2010 tax return You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations. How do i file my 2010 tax return For more information, see Publication 538, Accounting Periods and Methods. How do i file my 2010 tax return First-time filer. How do i file my 2010 tax return   If you have never filed an income tax return, you can adopt either a calendar tax year or a fiscal tax year. How do i file my 2010 tax return You adopt a tax year by filing your first income tax return using that tax year. How do i file my 2010 tax return You have not adopted a tax year if you merely did any of the following. How do i file my 2010 tax return Filed an application for an extension of time to file an income tax return. How do i file my 2010 tax return Filed an application for an employer identification number. How do i file my 2010 tax return Paid estimated taxes for that tax year. How do i file my 2010 tax return Changing your tax year. How do i file my 2010 tax return   Once you have adopted your tax year, you may have to get IRS approval to change it. How do i file my 2010 tax return To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. How do i file my 2010 tax return You may have to pay a fee. How do i file my 2010 tax return For more information, see Publication 538. How do i file my 2010 tax return Accounting Method An accounting method is a set of rules used to determine when and how income and expenses are reported. How do i file my 2010 tax return You choose an accounting method for your business when you file your first income tax return. How do i file my 2010 tax return There are two basic accounting methods. How do i file my 2010 tax return Cash method. How do i file my 2010 tax return Under the cash method, you report income in the tax year you receive it. How do i file my 2010 tax return You usually deduct or capitalize expenses in the tax year you pay them. How do i file my 2010 tax return Accrual method. How do i file my 2010 tax return Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. How do i file my 2010 tax return You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year. How do i file my 2010 tax return For other methods, see Publication 538. How do i file my 2010 tax return If you need inventories to show income correctly, you must generally use an accrual method of accounting for purchases and sales. How do i file my 2010 tax return Inventories include goods held for sale in the normal course of business. How do i file my 2010 tax return They also include raw materials and supplies that will physically become a part of merchandise intended for sale. How do i file my 2010 tax return Inventories are explained in Publication 538. How do i file my 2010 tax return Certain small business taxpayers can use the cash method of accounting and can also account for inventoriable items as materials and supplies that are not incidental. How do i file my 2010 tax return For more information, see Publication 538. How do i file my 2010 tax return You must use the same accounting method to figure your taxable income and to keep your books. How do i file my 2010 tax return Also, you must use an accounting method that clearly shows your income. How do i file my 2010 tax return In general, any accounting method that consistently uses accounting principles suitable for your trade or business clearly shows income. How do i file my 2010 tax return An accounting method clearly shows income only if it treats all items of gross income and expense the same from year to year. How do i file my 2010 tax return More than one business. How do i file my 2010 tax return   When you own more than one business, you can use a different accounting method for each business if the method you use for each clearly shows your income. How do i file my 2010 tax return You must keep a complete and separate set of books and records for each business. How do i file my 2010 tax return Changing your method of accounting. How do i file my 2010 tax return   Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. How do i file my 2010 tax return A change in accounting method not only includes a change in your overall system of accounting, but also a change in the treatment of any material item. How do i file my 2010 tax return For examples of changes that require approval and information on how to get approval for the change, see Publication 538. How do i file my 2010 tax return Business Taxes The form of business you operate determines what taxes you must pay and how you pay them. How do i file my 2010 tax return The following are the four general kinds of business taxes. How do i file my 2010 tax return Income tax. How do i file my 2010 tax return Self-employment tax. How do i file my 2010 tax return Employment taxes. How do i file my 2010 tax return Excise taxes. How do i file my 2010 tax return See Table 2 for the forms you file to report these taxes. How do i file my 2010 tax return You may want to get Publication 509. How do i file my 2010 tax return It has tax calendars that tell you when to file returns and make tax payments. How do i file my 2010 tax return Income Tax All businesses except partnerships must file an annual income tax return. How do i file my 2010 tax return Partnerships file an information return. How do i file my 2010 tax return Which form you use depends on how your business is organized. How do i file my 2010 tax return See Table 2 to find out which return you have to file. How do i file my 2010 tax return The federal income tax is a pay-as-you-go tax. How do i file my 2010 tax return You must pay the tax as you earn or receive income during the year. How do i file my 2010 tax return An employee usually has income tax withheld from his or her pay. How do i file my 2010 tax return If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. How do i file my 2010 tax return If you are not required to make estimated tax payments, you may pay any tax due when you file your return. How do i file my 2010 tax return Table 2. How do i file my 2010 tax return Which Forms Must I File? IF you are a. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return   THEN you may be liable for. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return   Use Form. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return Sole proprietor   Income tax   1040 and Schedule C 1 or C-EZ (Schedule F 1 for farm business)     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES     Employment taxes:         • Social security and Medicare   taxes and income tax   withholding   941 or 944 (943 for farm employees)     • Federal unemployment (FUTA)   tax   940     Excise taxes   See Excise Taxes Partnership   Annual return of income   1065     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes Partner in a partnership (individual)   Income tax   1040 and Schedule E 2     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES Corporation or S corporation   Income tax   1120 (corporation) 2  1120S (S corporation) 2     Estimated tax   1120-W (corporation only)     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes S corporation shareholder   Income tax   1040 and Schedule E 2     Estimated tax   1040-ES 1 File a separate schedule for each business. How do i file my 2010 tax return 2 Various other schedules may be needed. How do i file my 2010 tax return Estimated tax. How do i file my 2010 tax return   Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments of estimated tax during the year. How do i file my 2010 tax return Sole proprietors, partners, and S corporation shareholders. How do i file my 2010 tax return   You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. How do i file my 2010 tax return Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. How do i file my 2010 tax return For more information, see Publication 505, Tax Withholding and Estimated Tax. How do i file my 2010 tax return Corporations. How do i file my 2010 tax return   You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. How do i file my 2010 tax return Use Form 1120-W, Estimated Tax for Corporations, to figure the estimated tax. How do i file my 2010 tax return You must deposit the payments as explained later under Depositing Taxes. How do i file my 2010 tax return For more information, see Publication 542. How do i file my 2010 tax return Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. How do i file my 2010 tax return Your payments of SE tax contribute to your coverage under the social security system. How do i file my 2010 tax return Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. How do i file my 2010 tax return You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. How do i file my 2010 tax return Your net earnings from self-employment were $400 or more. How do i file my 2010 tax return You had church employee income of $108. How do i file my 2010 tax return 28 or more. How do i file my 2010 tax return Use Schedule SE (Form 1040) to figure your SE tax. How do i file my 2010 tax return For more information, see Publication 334, Tax Guide for Small Business. How do i file my 2010 tax return You can deduct a portion of your SE tax as an adjustment to income on your Form 1040. How do i file my 2010 tax return The Social Security Administration (SSA) time limit for posting self-employment income. How do i file my 2010 tax return   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. How do i file my 2010 tax return If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. How do i file my 2010 tax return The SSA will not change its records to increase your self-employment income. How do i file my 2010 tax return Employment Taxes This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. How do i file my 2010 tax return Employment taxes include the following. How do i file my 2010 tax return Social security and Medicare taxes. How do i file my 2010 tax return Federal income tax withholding. How do i file my 2010 tax return Federal unemployment (FUTA) tax. How do i file my 2010 tax return If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. How do i file my 2010 tax return If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. How do i file my 2010 tax return These publications explain your tax responsibilities as an employer. How do i file my 2010 tax return If you are not sure whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. How do i file my 2010 tax return That publication has information to help you determine whether an individual is an employee or an independent contractor. How do i file my 2010 tax return If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. How do i file my 2010 tax return An independent contractor is someone who is self-employed. How do i file my 2010 tax return Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. How do i file my 2010 tax return Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. How do i file my 2010 tax return To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 (discussed later under Hiring Employees) and the methods described in Publication 15. How do i file my 2010 tax return Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). How do i file my 2010 tax return Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. How do i file my 2010 tax return Medicare tax pays for benefits under the hospital insurance part of FICA. How do i file my 2010 tax return You withhold part of these taxes from your employee's wages and you pay a part yourself. How do i file my 2010 tax return To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. How do i file my 2010 tax return Which form do I file?   Report these taxes on Form 941, Employer's QUARTERLY Federal Tax Return, or Form 944, Employer's ANNUAL Federal Tax Return. How do i file my 2010 tax return (Farm employers use Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. How do i file my 2010 tax return ) Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. How do i file my 2010 tax return You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. How do i file my 2010 tax return You pay FUTA tax only from your own funds. How do i file my 2010 tax return Employees do not pay this tax or have it withheld from their pay. How do i file my 2010 tax return Which form do I file?   Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. How do i file my 2010 tax return See Publication 15 to find out if you can use this form. How do i file my 2010 tax return Hiring Employees Have the employees you hire fill out Form I-9 and Form W-4. How do i file my 2010 tax return Form I-9. How do i file my 2010 tax return   You must verify that each new employee is legally eligible to work in the United States. How do i file my 2010 tax return Both you and the employee must complete the U. How do i file my 2010 tax return S. How do i file my 2010 tax return Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. How do i file my 2010 tax return You can get the form from USCIS offices or from the USCIS website at www. How do i file my 2010 tax return uscis. How do i file my 2010 tax return gov. How do i file my 2010 tax return Call the USCIS at 1-800-375-5283 for more information about your responsibilities. How do i file my 2010 tax return Form W-4. How do i file my 2010 tax return   Each employee must fill out Form W-4, Employee's Withholding Allowance Certificate. How do i file my 2010 tax return You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. How do i file my 2010 tax return For more information, see Publication 15. How do i file my 2010 tax return Employees claiming more than 10 withholding allowances. How do i file my 2010 tax return   An employer of an employee who claims more than 10 withholding allowances for wages paid can use several methods of withholding. How do i file my 2010 tax return See section 16 of Publication 15. How do i file my 2010 tax return Form W-2 Wage Reporting After the calendar year is over, you must furnish copies of Form W-2, Wage and Tax Statement, to each employee to whom you paid wages during the year. How do i file my 2010 tax return You must also send copies to the Social Security Administration. How do i file my 2010 tax return See Information Returns, later, for more information on Form W-2. How do i file my 2010 tax return Excise Taxes This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following. How do i file my 2010 tax return Manufacture or sell certain products. How do i file my 2010 tax return Operate certain kinds of businesses. How do i file my 2010 tax return Use various kinds of equipment, facilities, or products. How do i file my 2010 tax return Receive payment for certain services. How do i file my 2010 tax return For more information on excise taxes, see Publication 510, Excise Taxes. How do i file my 2010 tax return Form 720. How do i file my 2010 tax return   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. How do i file my 2010 tax return Environmental taxes. How do i file my 2010 tax return Communications and air transportation taxes. How do i file my 2010 tax return Fuel taxes. How do i file my 2010 tax return Tax on the first retail sale of heavy trucks, trailers, and tractors. How do i file my 2010 tax return Manufacturers taxes on the sale or use of a variety of different articles. How do i file my 2010 tax return Form 2290. How do i file my 2010 tax return   There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. How do i file my 2010 tax return The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. How do i file my 2010 tax return Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. How do i file my 2010 tax return For more information, see the instructions for Form 2290. How do i file my 2010 tax return Form 730. How do i file my 2010 tax return   If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. How do i file my 2010 tax return Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive. How do i file my 2010 tax return Form 11-C. How do i file my 2010 tax return   Use Form 11-C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal occupational tax on wagering. How do i file my 2010 tax return Depositing Taxes You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. How do i file my 2010 tax return Generally, taxpayers are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS). How do i file my 2010 tax return Any business that has a federal tax obligation and requests a new EIN will automatically be enrolled in EFTPS. How do i file my 2010 tax return Through the mail, the business will receive an EFTPS PIN package that contains instructions for activating its EFTPS enrollment. How do i file my 2010 tax return Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. How do i file my 2010 tax return The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. How do i file my 2010 tax return You must give a copy of each information return you are required to file to the recipient or payer. How do i file my 2010 tax return In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. How do i file my 2010 tax return For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. How do i file my 2010 tax return Form 1099-MISC. How do i file my 2010 tax return   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your trade or business. How do i file my 2010 tax return These payments include the following items. How do i file my 2010 tax return Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors. How do i file my 2010 tax return Rent payments of $600 or more, other than rents paid to real estate agents. How do i file my 2010 tax return Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. How do i file my 2010 tax return Royalty payments of $10 or more. How do i file my 2010 tax return Payments to certain crew members by operators of fishing boats. How do i file my 2010 tax return You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. How do i file my 2010 tax return Form W-2. How do i file my 2010 tax return   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. How do i file my 2010 tax return For more information on what to report on Form W-2, see the Instructions for Forms W-2 and W-3. How do i file my 2010 tax return Form 8300. How do i file my 2010 tax return   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction or two or more related business transactions. How do i file my 2010 tax return Cash includes U. How do i file my 2010 tax return S. How do i file my 2010 tax return and foreign coin and currency. How do i file my 2010 tax return It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. How do i file my 2010 tax return For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). How do i file my 2010 tax return Penalties The law provides penalties for not filing returns or paying taxes as required. How do i file my 2010 tax return Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. How do i file my 2010 tax return Failure to file tax returns. How do i file my 2010 tax return   If you do not file your tax return by the due date, you may have to pay a penalty. How do i file my 2010 tax return The penalty is based on the tax not paid by the due date. How do i file my 2010 tax return See your tax return instructions for more information about this penalty. How do i file my 2010 tax return Failure to pay tax. How do i file my 2010 tax return   If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that your taxes are not paid. How do i file my 2010 tax return For more information, see your tax return instructions. How do i file my 2010 tax return Failure to withhold, deposit, or pay taxes. How do i file my 2010 tax return   If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to a penalty of the unpaid tax, plus interest. How do i file my 2010 tax return You may also be subject to penalties if you deposit the taxes late. How do i file my 2010 tax return For more information, see Publication 15. How do i file my 2010 tax return Failure to follow information reporting requirements. How do i file my 2010 tax return   The following penalties apply if you are required to file information returns. How do i file my 2010 tax return For more information, see the General Instructions for Certain Information Returns. How do i file my 2010 tax return Failure to file information returns. How do i file my 2010 tax return A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information. How do i file my 2010 tax return Failure to furnish correct payee statements. How do i file my 2010 tax return A penalty applies if you do not furnish a required statement to a payee by the due date, if you do not include all required information, or if you report incorrect information. How do i file my 2010 tax return Waiver of penalty. How do i file my 2010 tax return   These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect. How do i file my 2010 tax return   In addition, there is no penalty for failure to include all the required information, or for including incorrect information, on a de minimis number of information returns if you correct the errors by August 1 of the year the returns are due. How do i file my 2010 tax return (To be considered de minimis, the number of returns cannot exceed the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. How do i file my 2010 tax return ) Failure to supply taxpayer identification number. How do i file my 2010 tax return   If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another person where required on a return, statement, or other document, you may be subject to a penalty of $50 for each failure. How do i file my 2010 tax return You may also be subject to the $50 penalty if you do not give your taxpayer identification number to another person when it is required on a return, statement, or other document. How do i file my 2010 tax return Business Expenses You can deduct business expenses on your income tax return. How do i file my 2010 tax return These are the current operating costs of running your business. How do i file my 2010 tax return To be deductible, a business expense must be both ordinary and necessary. How do i file my 2010 tax return An ordinary expense is one that is common and accepted in your field of business, trade, or profession. How do i file my 2010 tax return A necessary expense is one that is helpful and appropriate for your business, trade, or profession. How do i file my 2010 tax return An expense does not have to be indispensable to be considered necessary. How do i file my 2010 tax return The following are brief explanations of some expenses that are of interest to people starting a business. How do i file my 2010 tax return There are many other expenses that you may be able to deduct. How do i file my 2010 tax return See your form instructions and Publication 535, Business Expenses. How do i file my 2010 tax return Business Start-Up Costs Business start-up costs are the expenses you incur before you actually begin business operations. How do i file my 2010 tax return Your business start-up costs will depend on the type of business you are starting. How do i file my 2010 tax return They may include costs for advertising, travel, surveys, and training. How do i file my 2010 tax return These costs are generally capital expenses. How do i file my 2010 tax return You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). How do i file my 2010 tax return You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. How do i file my 2010 tax return The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. How do i file my 2010 tax return Any remaining cost must be amortized. How do i file my 2010 tax return For more information about amortizing start-up and organizational costs, see chapter 7 in Publication 535. How do i file my 2010 tax return Depreciation If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. How do i file my 2010 tax return You must spread the cost over more than one tax year and deduct part of it each year. How do i file my 2010 tax return This method of deducting the cost of business property is called depreciation. How do i file my 2010 tax return Business property you must depreciate includes the following items. How do i file my 2010 tax return Office furniture. How do i file my 2010 tax return Buildings. How do i file my 2010 tax return Machinery and equipment. How do i file my 2010 tax return You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. How do i file my 2010 tax return This deduction is known as the “section 179 deduction. How do i file my 2010 tax return ” For more information about depreciation and the section 179 deduction, see Publication 946, How To Depreciate Property. How do i file my 2010 tax return Depreciation must be taken in the year it is allowable. How do i file my 2010 tax return Allowable depreciation not taken in a prior year cannot be taken in the current year. How do i file my 2010 tax return If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U. How do i file my 2010 tax return S. How do i file my 2010 tax return Individual Income Tax Return, or by changing your accounting method. How do i file my 2010 tax return For more information on how to correct depreciation deductions, see chapter 1 in Publication 946. How do i file my 2010 tax return Business Use of Your Home To deduct expenses related to the business use of part of your home, you must meet specific requirements. How do i file my 2010 tax return Even then, your deduction may be limited. How do i file my 2010 tax return To qualify to claim expenses for business use of your home, you must meet both the following tests. How do i file my 2010 tax return Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use, later), Regular, For your trade or business, AND The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) you use in connection with your trade or business. How do i file my 2010 tax return Exclusive use. How do i file my 2010 tax return   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. How do i file my 2010 tax return The area used for business can be a room or other separately identifiable space. How do i file my 2010 tax return The space does not need to be marked off by a permanent partition. How do i file my 2010 tax return   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 do i file my 2010 tax return Exceptions to exclusive use. How do i file my 2010 tax return   You do not have to meet the exclusive use test if either of the following applies. How do i file my 2010 tax return You use part of your home for the storage of inventory or product samples. How do i file my 2010 tax return You use part of your home as a daycare facility. How do i file my 2010 tax return For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). How do i file my 2010 tax return Principal place of business. How do i file my 2010 tax return   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. How do i file my 2010 tax return You use it exclusively and regularly for administrative or management activities of your trade or business. How do i file my 2010 tax return You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. How do i file my 2010 tax return   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. How do i file my 2010 tax return The relative importance of the activities performed at each location. How do i file my 2010 tax return If the relative importance factor does not determine your principal place of business, the time spent at each location. How do i file my 2010 tax return    If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. How do i file my 2010 tax return However, for other ways to qualify to deduct home office expenses, see Publication 587. How do i file my 2010 tax return Which form do I file?   If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. How do i file my 2010 tax return If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587. How do i file my 2010 tax return More information. How do i file my 2010 tax return   For more information about business use of your home, see Publication 587. How do i file my 2010 tax return Car and Truck Expenses If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. How do i file my 2010 tax return You generally can deduct either your actual expenses or the standard mileage rate. How do i file my 2010 tax return Actual expenses. How do i file my 2010 tax return   If you deduct actual expenses, you can deduct the cost of the following items: Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. How do i file my 2010 tax return You can divide your expenses based on the miles driven for each purpose. How do i file my 2010 tax return Example. How do i file my 2010 tax return You are the sole proprietor of a flower shop. How do i file my 2010 tax return You drove your van 20,000 miles during the year. How do i file my 2010 tax return 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use. How do i file my 2010 tax return You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. How do i file my 2010 tax return Standard mileage rate. How do i file my 2010 tax return   Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. How do i file my 2010 tax return You can use the standard mileage rate for a vehicle you own or lease. How do i file my 2010 tax return The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. How do i file my 2010 tax return It is announced annually by the IRS. How do i file my 2010 tax return To figure your deduction, multiply your business miles by the standard mileage rate for the year. How do i file my 2010 tax return    Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. How do i file my 2010 tax return However, you may be able to deduct business-related parking fees, tolls, interest on your car loan, and certain state and local taxes. How do i file my 2010 tax return Choosing the standard mileage rate. How do i file my 2010 tax return   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. How do i file my 2010 tax return In later years, you can choose to use either the standard mileage rate or actual expenses. How do i file my 2010 tax return   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). How do i file my 2010 tax return Additional information. How do i file my 2010 tax return   For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. How do i file my 2010 tax return Recordkeeping This part explains why you must keep records, what kinds of records you must keep, and how to keep them. How do i file my 2010 tax return It also explains how long you must keep your records for federal tax purposes. How do i file my 2010 tax return A sample recordkeeping system is illustrated at the end of this part. How do i file my 2010 tax return Why Keep Records? Everyone in business must keep records. How do i file my 2010 tax return Good records will help you do the following. How do i file my 2010 tax return Monitor the progress of your business. How do i file my 2010 tax return   You need good records to monitor the progress of your business. How do i file my 2010 tax return Records can show whether your business is improving, which items are selling, or what changes you need to make. How do i file my 2010 tax return Good records can increase the likelihood of business success. How do i file my 2010 tax return Prepare your financial statements. How do i file my 2010 tax return   You need good records to prepare accurate financial statements. How do i file my 2010 tax return These include income (profit and loss) statements and balance sheets. How do i file my 2010 tax return These statements can help you in dealing with your bank or creditors and help you manage your business. How do i file my 2010 tax return An income statement shows the income and expenses of the business for a given period of time. How do i file my 2010 tax return A balance sheet shows the assets, liabilities, and your equity in the business on a given date. How do i file my 2010 tax return Identify source of receipts. How do i file my 2010 tax return   You will receive money or property from many sources. How do i file my 2010 tax return Your records can identify the source of your receipts. How do i file my 2010 tax return You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. How do i file my 2010 tax return Keep track of deductible expenses. How do i file my 2010 tax return   You may forget expenses when you prepare your tax return unless you record them when they occur. How do i file my 2010 tax return Prepare your tax returns. How do i file my 2010 tax return   You need good records to prepare your tax returns. How do i file my 2010 tax return These records must support the income, expenses, and credits you report. How do i file my 2010 tax return Generally, these are the same records you use to monitor your business and prepare your financial statements. How do i file my 2010 tax return Support items reported on tax returns. How do i file my 2010 tax return   You must keep your business records available at all times for inspection by the IRS. How do i file my 2010 tax return If the IRS examines any of your tax returns, you may be asked to explain the items reported. How do i file my 2010 tax return A complete set of records will speed up the examination. How do i file my 2010 tax return Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. How do i file my 2010 tax return You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. How do i file my 2010 tax return The business you are in affects the type of records you need to keep for federal tax purposes. How do i file my 2010 tax return You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. How do i file my 2010 tax return See Accounting Method, earlier. How do i file my 2010 tax return If you are in more than one business, you should keep a complete and separate set of records for each business. How do i file my 2010 tax return A corporation should keep minutes of board of directors' meetings. How do i file my 2010 tax return Your recordkeeping system should include a summary of your business transactions. How do i file my 2010 tax return This summary is ordinarily made in your books (for example, accounting journals and ledgers). How do i file my 2010 tax return Your books must show your gross income, as well as your deductions and credits. How do i file my 2010 tax return For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. How do i file my 2010 tax return In addition, you must keep supporting documents, explained later. How do i file my 2010 tax return Electronic records. How do i file my 2010 tax return   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. How do i file my 2010 tax return When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. How do i file my 2010 tax return An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. How do i file my 2010 tax return The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. How do i file my 2010 tax return All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. How do i file my 2010 tax return Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. How do i file my 2010 tax return   The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. How do i file my 2010 tax return You still have the responsibility of retaining any other books and records that are required to be retained. How do i file my 2010 tax return   The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. How do i file my 2010 tax return This test is not considered an examination and the results must be shared with you. How do i file my 2010 tax return If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. How do i file my 2010 tax return If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copy books and records in a manner that allows you and the IRS to determine your correct tax. How do i file my 2010 tax return For details on electronic storage system requirements, see Revenue Procedure 97-22, available in Internal Revenue Bulletin 1997-13. How do i file my 2010 tax return Supporting Documents Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. How do i file my 2010 tax return Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. How do i file my 2010 tax return These documents contain information you need to record in your books. How do i file my 2010 tax return It is important to keep these documents because they support the entries in your books and on your tax return. How do i file my 2010 tax return Keep them in an orderly fashion and in a safe place. How do i file my 2010 tax return For instance, organize them by year and type of income or expense. How do i file my 2010 tax return Gross receipts. How do i file my 2010 tax return   Gross receipts are the income you receive from your business. How do i file my 2010 tax return You should keep supporting documents that show the amounts and sources of your gross receipts. How do i file my 2010 tax return Documents that show gross receipts include the following. How do i file my 2010 tax return Cash register tapes. How do i file my 2010 tax return Bank deposit slips. How do i file my 2010 tax return Receipt books. How do i file my 2010 tax return Invoices. How do i file my 2010 tax return Credit card charge slips. How do i file my 2010 tax return Forms 1099-MISC. How do i file my 2010 tax return Purchases. How do i file my 2010 tax return   Purchases are the items you buy and resell to customers. How do i file my 2010 tax return If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. How do i file my 2010 tax return Your supporting documents should show the amount paid and that the amount was for purchases. How do i file my 2010 tax return Documents for purchases include the following. How do i file my 2010 tax return Canceled checks. How do i file my 2010 tax return Cash register tape receipts. How do i file my 2010 tax return Credit card sales slips. How do i file my 2010 tax return Invoices. How do i file my 2010 tax return These records will help you determine the value of your inventory at the end of the year. How do i file my 2010 tax return See Publication 538 for information on methods for valuing inventory. How do i file my 2010 tax return Expenses. How do i file my 2010 tax return   Expenses are the costs you incur (other than purchases) to carry on your business. How do i file my 2010 tax return Your supporting documents should show the amount paid and that the amount was for a business expense. How do i file my 2010 tax return Documents for expenses include the following. How do i file my 2010 tax return Canceled checks. How do i file my 2010 tax return Cash register tapes. How do i file my 2010 tax return Account statements. How do i file my 2010 tax return Credit card sales slips. How do i file my 2010 tax return Invoices. How do i file my 2010 tax return Petty cash slips for small cash payments. How do i file my 2010 tax return    A petty cash fund allows you to make small payments without having to write checks for small amounts. How do i file my 2010 tax return Each time you make a payment from this fund, you should make out a petty cash slip and attach it to your receipt as proof of payment. How do i file my 2010 tax return Travel, transportation, entertainment, and gift expenses. How do i file my 2010 tax return   Specific recordkeeping rules apply to these expenses. How do i file my 2010 tax return For more information, see Publication 463. How do i file my 2010 tax return Employment taxes. How do i file my 2010 tax return   There are specific employment tax records you must keep. How do i file my 2010 tax return For a list, see Publication 15. How do i file my 2010 tax return Assets. How do i file my 2010 tax return   Assets are the property, such as machinery and furniture you own and use in your business. How do i file my 2010 tax return You must keep records to verify certain information about your business assets. How do i file my 2010 tax return You need records to figure the annual depreciation and the gain or loss when you sell the assets. How do i file my 2010 tax return Your records should show the following information. How do i file my 2010 tax return When and how you acquired the asset. How do i file my 2010 tax return Purchase price. How do i file my 2010 tax return Cost of any improvements. How do i file my 2010 tax return Section 179 deduction taken. How do i file my 2010 tax return Deductions taken for depreciation. How do i file my 2010 tax return Deductions taken for casualty losses, such as losses resulting from fires or storms. How do i file my 2010 tax return How you used the asset. How do i file my 2010 tax return When and how you disposed of the asset. How do i file my 2010 tax return Selling price. How do i file my 2010 tax return Expenses of sale. How do i file my 2010 tax return   The following documents may show this information. How do i file my 2010 tax return Purchase and sales invoices. How do i file my 2010 tax return Real estate closing statements. How do i file my 2010 tax return Canceled checks. How do i file my 2010 tax return What if I don't have a canceled check?   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. How do i file my 2010 tax return These include account statements prepared for the financial institution by a third party. How do i file my 2010 tax return These account statements must be highly legible. How do i file my 2010 tax return The following table lists acceptable account statements. How do i file my 2010 tax return  IF payment is by. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return THEN the statement must show the. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return Check Check number. How do i file my 2010 tax return Amount. How do i file my 2010 tax return Payee's name. How do i file my 2010 tax return Date the check amount was posted to the account by the financial institution. How do i file my 2010 tax return Electronic funds transfer Amount transferred. How do i file my 2010 tax return Payee's name. How do i file my 2010 tax return Date the transfer was posted to the account by the financial institution. How do i file my 2010 tax return Credit card Amount charged. How do i file my 2010 tax return Payee's name. How do i file my 2010 tax return Transaction date. How do i file my 2010 tax return    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. How do i file my 2010 tax return You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. How do i file my 2010 tax return Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. How do i file my 2010 tax return (Your business transactions are shown on the supporting documents just discussed. How do i file my 2010 tax return ) Business transactions are ordinarily summarized in books called journals and ledgers. How do i file my 2010 tax return You can buy them at your local stationery or office supply store. How do i file my 2010 tax return A journal is a book where you record each business transaction shown on your supporting documents. How do i file my 2010 tax return You may have to keep separate journals for transactions that occur frequently. How do i file my 2010 tax return A ledger is a book that contains the totals from all of your journals. How do i file my 2010 tax return It is organized into different accounts. How do i file my 2010 tax return Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. How do i file my 2010 tax return For example, a recordkeeping system for a small business might include the following items. How do i file my 2010 tax return Business checkbook. How do i file my 2010 tax return Daily summary of cash receipts. How do i file my 2010 tax return Monthly summary of cash receipts. How do i file my 2010 tax return Check disbursements journal. How do i file my 2010 tax return Depreciation worksheet. How do i file my 2010 tax return Employee compensation record. How do i file my 2010 tax return The business checkbook is explained next. How do i file my 2010 tax return The other items are illustrated later under Sample Record System. How do i file my 2010 tax return The system you use to record business transactions will be more effective if you follow good recordkeeping practices. How do i file my 2010 tax return For example, record expenses when they occur, and identify the source of recorded receipts. How do i file my 2010 tax return Generally, it is best to record transactions on a daily basis. How do i file my 2010 tax return Business checkbook. How do i file my 2010 tax return   One of the first things you should do when you start a business is open a business checking account. How do i file my 2010 tax return You should keep your business account separate from your personal checking account. How do i file my 2010 tax return   The business checkbook is your basic source of information for recording your business expenses. How do i file my 2010 tax return You should deposit all daily receipts in your business checking account. How do i file my 2010 tax return You should check your account for errors by reconciling it. How do i file my 2010 tax return See Reconciling the checking account, later. How do i file my 2010 tax return   Consider using a checkbook that allows enough space to identify the source of deposits as business income, personal funds, or loans. How do i file my 2010 tax return You should also note on the deposit slip the source of the deposit and keep copies of all slips. How do i file my 2010 tax return   You should make all payments by check to document business expenses. How do i file my 2010 tax return Write checks payable to yourself only when making withdrawals from your business for personal use. How do i file my 2010 tax return Avoid writing checks payable to cash. How do i file my 2010 tax return If you must write a check for cash to pay a business expense, include the receipt for the cash payment in your records. How do i file my 2010 tax return If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment. How do i file my 2010 tax return    Use the business account for business purposes only. How do i file my 2010 tax return Indicate the source of deposits and the type of expense in the checkbook. How do i file my 2010 tax return Reconciling the checking account. How do i file my 2010 tax return   When you receive your bank statement, make sure the statement, your checkbook, and your books agree. How do i file my 2010 tax return The statement balance may not agree with the balance in your checkbook and books if the statement: Includes bank charges you did not enter in your books and subtract from your checkbook balance, or Does not include deposits made after the statement date or checks that did not clear your account before the statement date. How do i file my 2010 tax return   By reconciling your checking account, you will: Verify how much money you have in the account, Make sure that your checkbook and books reflect all bank charges and the correct balance in the checking account, and Correct any errors in your bank statement, checkbook, and books. How do i file my 2010 tax return    You should reconcile your checking account each month. How do i file my 2010 tax return     Before you reconcile your monthly bank statement, check your own figures. How do i file my 2010 tax return Begin with the balance shown in your checkbook at the end of the previous month. How do i file my 2010 tax return To this balance, add the total cash deposited during the month and subtract the total cash disbursements. How do i file my 2010 tax return   After checking your figures, the result should agree with your checkbook balance at the end of the month. How do i file my 2010 tax return If the result does not agree, you may have made an error in recording a check or deposit. How do i file my 2010 tax return You can find the error by doing the following. How do i file my 2010 tax return Adding the amounts on your check stubs and comparing that total with the total in the “amount of check” column in your check disbursements journal. How do i file my 2010 tax return If the totals do not agree, check the individual amounts to see if an error was made in your check stub record or in the related entry in your check disbursements journal. How do i file my 2010 tax return Adding the deposit amounts in your checkbook. How do i file my 2010 tax return Compare that total with the monthly total in your cash receipt book, if you have one. How do i file my 2010 tax return If the totals do not agree, check the individual amounts to find any errors. How do i file my 2010 tax return   If your checkbook and journal entries still disagree, then refigure the running balance in your checkbook to make sure additions and subtractions are correct. How do i file my 2010 tax return   When your checkbook balance agrees with the balance figured from the journal entries, you may begin reconciling your checkbook with the bank statement. How do i file my 2010 tax return Many banks print a reconciliation worksheet on the back of the statement. How do i file my 2010 tax return   To reconcile your account, follow these steps. How do i file my 2010 tax return Compare the deposits listed on the bank statement with the deposits shown in your checkbook. How do i file my 2010 tax return Note all differences in the dollar amounts. How do i file my 2010 tax return Compare each canceled check, including both check number and dollar amount, with the entry in your checkbook. How do i file my 2010 tax return Note all differences in the dollar amounts. How do i file my 2010 tax return Mark the check number in the checkbook as having cleared the bank. How do i file my 2010 tax return After accounting for all checks returned by the bank, those not marked in your checkbook are your outstanding checks. How do i file my 2010 tax return Prepare a bank reconciliation. How do i file my 2010 tax return One is illustrated later under Sample Record System. How do i file my 2010 tax return Update your checkbook and journals for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly. How do i file my 2010 tax return At this point, the adjusted bank statement balance should equal your adjusted checkbook balance. How do i file my 2010 tax return If you still have differences, check the previous steps to find the errors. How do i file my 2010 tax return   Table 3. How do i file my 2010 tax return Period of Limitations IF you. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return   THEN the period is. How do i file my 2010 tax return . How do i file my 2010 tax return . How do i file my 2010 tax return 1. How do i file my 2010 tax return Owe additional tax and situations (2), (3), and (4), below, do not apply to you   3 years 2. How do i file my 2010 tax return Do not report income that you should report and it is more than 25% of the gross income shown on the return   6 years 3. How do i file my 2010 tax return File a fraudulent return   Not limited 4. How do i file my 2010 tax return Do not file a return   Not limited 5. How do i file my 2010 tax return File a claim for credit or refund after you filed your return   Later of: 3 years or  2 years after tax   was paid 6. How do i file my 2010 tax return File a claim for a loss from worthless securities or a bad debt deduction   7 years Bookkeeping System You must decide whether to use a single-entry or a double-entry bookkeeping system. How do i file my 2010 tax return The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. How do i file my 2010 tax return You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. How do i file my 2010 tax return Single-entry. How do i file my 2010 tax return   A single-entry system is based on the income statement (profit or loss statement). How do i file my 2010 tax return It can be a simple and practical system if you are starting a small business. How do i file my 2010 tax return The system records the flow of income and expenses through the use of: A daily summary of cash receipts, and Monthly summaries of cash receipts and disbursements. How do i file my 2010 tax return Double-entry. How do i file my 2010 tax return   A double-entry bookkeeping system uses journals and ledgers. How do i file my 2010 tax return Transactions are first entered in a journal and then posted to ledger accounts. How do i file my 2010 tax return These accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess of assets over liabilities). How do i file my 2010 tax return You close income and expense accounts at the end of each tax year. How do i file my 2010 tax return You keep asset, liability, and net worth accounts open on a permanent basis. How do i file my 2010 tax return   In the double-entry system, each account has a left side for debits and a right side for credits. How do i file my 2010 tax return It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. How do i file my 2010 tax return   Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. How do i file my 2010 tax return If the amounts do not balance, you have made an error and you must find and correct it. How do i file my 2010 tax return   An example of a journal entry exhibiting a payment of rent in October is shown next. How do i file my 2010 tax return General Journal Date Description of Entry Debit  Credit Oct. How do i file my 2010 tax return 5 Rent expense 780. How do i file my 2010 tax return 00     Cash   780. How do i file my 2010 tax return 00                 Computerized System There are computer software packages you can use for recordkeeping. How do i file my 2010 tax return They can be purchased in many retail stores. How do i file my 2010 tax return These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. How do i file my 2010 tax return If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. How do i file my 2010 tax return To meet this qualification, the machine-sensible records must reconcile with your books and return. How do i file my 2010 tax return These records must provide enough detail to identify the underlying source documents. How do i file my 2010 tax return You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. How do i file my 2010 tax return This documentation must be sufficiently detailed to show all of the following items. How do i file my 2010 tax return Functions being performed as the data flows through the system. How do i file my 2010 tax return Controls used to ensure accurate and reliable processing. How do i file my 2010 tax return Controls used to prevent the unauthorized addition, alteration, or deletion of retained records. How do i file my 2010 tax return Charts of accounts and detailed account descriptions. How do i file my 2010 tax return See Revenue Procedure 98-25 in Cumulative Bulletin 1998-1 for more information. How do i file my 2010 tax return How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. How do i file my 2010 tax return Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. How do i file my 2010 tax return The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. How do i file my 2010 tax return Table 3 contains the periods of limitations that apply to income tax returns. How do i file my 2010 tax return Unless otherwise stated, the years refer to the period after the return was filed. How do i file my 2010 tax return Returns filed before the due date are treated as filed on the due date. How do i file my 2010 tax return Keep copies of your filed tax returns. How do i file my 2010 tax return They help in preparing future tax returns and making computations if you file an amended return. How do i file my 2010 tax return Employment taxes. How do i file my 2010 tax return   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. How do i file my 2010 tax return For more information about recordkeeping for employment taxes, see Publication 15. How do i file my 2010 tax return Assets. How do i file my 2010 tax return   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. How do i file my 2010 tax return You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. How do i file my 2010 tax return   Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. How do i file my 2010 tax return You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. How do i file my 2010 tax return Records for nontax purposes. How do i file my 2010 tax return   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. How do i file my 2010 tax return For example, your insurance company or creditors may require you to keep them longer than the IRS does. How do i file my 2010 tax return Sample Record System This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. How do i file my 2010 tax return Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. How do i file my 2010 tax return These sample records should not be viewed as a recommendation of how to keep your records. How do i file my 2010 tax return They are intended only to show how one business keeps its records. How do i file my 2010 tax return 1. How do i file my 2010 tax return Daily Summary of Cash Receipts This summary is a record of cash sales for the day. How do i file my 2010 tax return It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. How do i file my 2010 tax return Henry takes the cash sales entry from his cash register tape. How do i file my 2010 tax return If he had no cash register, he would simply total his cash sale slips and any other cash received that day. How do i file my 2010 tax return He carries the total receipts shown in this summary for January 3 ($267. How do i file my 2010 tax return 80), including cash sales ($263. How do i file my 2010 tax return 60) and sales tax ($4. How do i file my 2010 tax return 20), to the Monthly Summary of Cash Receipts. How do i file my 2010 tax return Petty cash fund. How do i file my 2010 tax return   Henry uses a petty cash fund to make small payments without having to write checks for small amounts. How do i file my 2010 tax return Each time he makes a payment from this fund, he makes out a petty cash slip and attaches it to his receipt as proof of payment. How do i file my 2010 tax return He sets up a fixed amount ($50) in his petty cash fund. How do i file my 2010 tax return The total of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. How do i file my 2010 tax return When the totals on the petty cash slips approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the outstanding slips. How do i file my 2010 tax return (See the Check Disbursements Journal entry for check number 92. How do i file my 2010 tax return ) This restores the fund to its fixed amount of $50. How do i file my 2010 tax return He then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal. How do i file my 2010 tax return 2. How do i file my 2010 tax return Monthly Summary of Cash Receipts This shows the income activity for the month. How do i file my 2010 tax return Henry carries the total monthly net sales shown in this summary for January ($4,865. How do i file my 2010 tax return 05) to his Annual Summary. How do i file my 2010 tax return To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. How do i file my 2010 tax return He cannot take a deduction for sales tax turned over to the state because he only collected the tax. How do i file my 2010 tax return He does not include the tax in his income. How do i file my 2010 tax return 3. How do i file my 2010 tax return Check Disbursements Journal Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. How do i file my 2010 tax return All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. How do i file my 2010 tax return Frequent expenses have their own headings across the sheet. How do i file my 2010 tax return He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. How do i file my 2010 tax return Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. How do i file my 2010 tax return Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. How do i file my 2010 tax return If he did, he would record them in the journal, even though he could not deduct them as business expenses. How do i file my 2010 tax return Henry carries the January total of expenses for materials ($1,083. How do i file my 2010 tax return 50) to the Annual Summary. How do i file my 2010 tax return Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc. How do i file my 2010 tax return , in the appropriate columns of that summary. How do i file my 2010 tax return 4. How do i file my 2010 tax return Employee Compensation Record This record shows the following information. How do i file my 2010 tax return The number of hours Henry's employee worked in a pay period. How do i file my 2010 tax return The employee's total pay for the period. How do i file my 2010 tax return The deductions Henry withheld in figuring the employee's net pay. How do i file my 2010 tax return The monthly gross payroll. How do i file my 2010 tax return Henry carries the January gross payroll ($520) to the Annual Summary. How do i file my 2010 tax return 5. How do i file my 2010 tax return Annual Summary This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. How do i file my 2010 tax return He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. How do i file my 2010 tax return He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. How do i file my 2010 tax return As in the journal, he keeps each major expense in a separate column. How do i file my 2010 tax return Henry carries the cash receipts total shown in the annual summary ($47,440. How do i file my 2010 tax return 9
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The How Do I File My 2010 Tax Return

How do i file my 2010 tax return 2. How do i file my 2010 tax return   Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. How do i file my 2010 tax return Employment Tax ReturnsException. How do i file my 2010 tax return FUTA tax exception. How do i file my 2010 tax return FICA tax exemption election. How do i file my 2010 tax return Revoking the election. How do i file my 2010 tax return Definitions. How do i file my 2010 tax return Effect on employees. How do i file my 2010 tax return Political Organization Income Tax ReturnExempt function. How do i file my 2010 tax return Political organization taxable income. How do i file my 2010 tax return Separate fund. How do i file my 2010 tax return Failure to file. How do i file my 2010 tax return Failure to pay on time. How do i file my 2010 tax return Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. How do i file my 2010 tax return Publicly traded securities. How do i file my 2010 tax return Exceptions. How do i file my 2010 tax return Form 8283. How do i file my 2010 tax return Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. How do i file my 2010 tax return Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. How do i file my 2010 tax return S. How do i file my 2010 tax return Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. How do i file my 2010 tax return Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. How do i file my 2010 tax return S. How do i file my 2010 tax return Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. How do i file my 2010 tax return B. How do i file my 2010 tax return 418, www. How do i file my 2010 tax return irs. How do i file my 2010 tax return gov/pub/irs-tege/rp1995-48. How do i file my 2010 tax return pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. How do i file my 2010 tax return S. How do i file my 2010 tax return possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. How do i file my 2010 tax return Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. How do i file my 2010 tax return If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. How do i file my 2010 tax return On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). How do i file my 2010 tax return Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. How do i file my 2010 tax return Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. How do i file my 2010 tax return Form 990-N is due by the 15th day of the fifth month after the close of the tax year. How do i file my 2010 tax return For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. How do i file my 2010 tax return To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. How do i file my 2010 tax return Exceptions. How do i file my 2010 tax return   This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. How do i file my 2010 tax return Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. How do i file my 2010 tax return Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. How do i file my 2010 tax return The following political organizations are not required to file Form 990 or Form 990-EZ. How do i file my 2010 tax return A state or local committee of a political party. How do i file my 2010 tax return A political committee of a state or local candidate. How do i file my 2010 tax return A caucus or association of state or local officials. How do i file my 2010 tax return A political organization that is required to report as a political committee under the Federal Election Campaign Act. How do i file my 2010 tax return A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. How do i file my 2010 tax return Form 990-EZ. How do i file my 2010 tax return   This is a shortened version of Form 990. How do i file my 2010 tax return It is designed for use by small exempt organizations and nonexempt charitable trusts. How do i file my 2010 tax return   Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. How do i file my 2010 tax return Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. How do i file my 2010 tax return If your organization does not meet either of these conditions, you cannot file Form 990-EZ. How do i file my 2010 tax return Instead you must file Form 990. How do i file my 2010 tax return Group return. How do i file my 2010 tax return   A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. How do i file my 2010 tax return This return is in addition to the central organization's separate annual return if it must file a return. How do i file my 2010 tax return It cannot be included in the group return. How do i file my 2010 tax return See the instructions for Form 990 for the conditions under which this procedure may be used. How do i file my 2010 tax return    In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. How do i file my 2010 tax return Schedule A (Form 990 or 990-EZ). How do i file my 2010 tax return   Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. How do i file my 2010 tax return Schedule B (Form 990, Form 990-EZ, or 990-PF). How do i file my 2010 tax return   Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. How do i file my 2010 tax return Schedule O (Form 990). How do i file my 2010 tax return   Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. How do i file my 2010 tax return   Other schedules may be required to be filed with Form 990 or 990-EZ. How do i file my 2010 tax return See the instructions for Form 990 or the instructions for Form 990-EZ for more information. How do i file my 2010 tax return Report significant new or changed program services and changes to organizational documents. How do i file my 2010 tax return    An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. How do i file my 2010 tax return EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. How do i file my 2010 tax return See Miscellaneous Rules, Organization Changes and Exempt Status, later. How do i file my 2010 tax return Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. How do i file my 2010 tax return These organizations are discussed in chapter 3. How do i file my 2010 tax return Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. How do i file my 2010 tax return If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. How do i file my 2010 tax return See Regulations section 301. How do i file my 2010 tax return 6033-4 for more information. How do i file my 2010 tax return The IRS may waive the requirement to file electronically in cases of undue hardship. How do i file my 2010 tax return For information on filing a waiver, see Notice 2010-13, 2010-4 I. How do i file my 2010 tax return R. How do i file my 2010 tax return B. How do i file my 2010 tax return 327, available at www. How do i file my 2010 tax return irs. How do i file my 2010 tax return gov/ir/2010-04_IRSB/ar14. How do i file my 2010 tax return html. How do i file my 2010 tax return Form 990. How do i file my 2010 tax return   An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. How do i file my 2010 tax return Form 990-PF. How do i file my 2010 tax return   An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. How do i file my 2010 tax return Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. How do i file my 2010 tax return Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. How do i file my 2010 tax return Extension of time to file. How do i file my 2010 tax return   Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. How do i file my 2010 tax return   Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. How do i file my 2010 tax return For more information, see Form 8868 and its instructions. How do i file my 2010 tax return   When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. How do i file my 2010 tax return However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. How do i file my 2010 tax return Application for exemption pending. How do i file my 2010 tax return   An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. How do i file my 2010 tax return If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. How do i file my 2010 tax return For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. How do i file my 2010 tax return State reporting requirements. How do i file my 2010 tax return   Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. How do i file my 2010 tax return See the instructions for those forms. How do i file my 2010 tax return Form 8870. How do i file my 2010 tax return   Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. How do i file my 2010 tax return For more information, see Form 8870 and the instructions for that form. How do i file my 2010 tax return Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. How do i file my 2010 tax return The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. How do i file my 2010 tax return gov. How do i file my 2010 tax return This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. How do i file my 2010 tax return The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. How do i file my 2010 tax return It also includes the effective date of the automatic revocation and the date it was posted to the list. How do i file my 2010 tax return The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. How do i file my 2010 tax return Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. How do i file my 2010 tax return S. How do i file my 2010 tax return Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. How do i file my 2010 tax return S. How do i file my 2010 tax return Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. How do i file my 2010 tax return In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). How do i file my 2010 tax return An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). How do i file my 2010 tax return In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. How do i file my 2010 tax return For more information about automatic revocation, go to IRS. How do i file my 2010 tax return gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. How do i file my 2010 tax return Penalties Penalties for failure to file. How do i file my 2010 tax return   Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. How do i file my 2010 tax return The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. How do i file my 2010 tax return Maximum penalty. How do i file my 2010 tax return   The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. How do i file my 2010 tax return Organization with gross receipts over $1 million. How do i file my 2010 tax return   For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. How do i file my 2010 tax return Managers. How do i file my 2010 tax return   If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. How do i file my 2010 tax return Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. How do i file my 2010 tax return The penalty is $10 a day for each day that a return is not filed after the period given for filing. How do i file my 2010 tax return The maximum penalty imposed on all persons with respect to any one return is $5,000. How do i file my 2010 tax return Exception for reasonable cause. How do i file my 2010 tax return   No penalty will be imposed if reasonable cause for failure to file timely can be shown. How do i file my 2010 tax return Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. How do i file my 2010 tax return Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. How do i file my 2010 tax return If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. How do i file my 2010 tax return Estimated tax. How do i file my 2010 tax return   Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. How do i file my 2010 tax return Use Form 990-W to figure your organization's estimated tax payments. How do i file my 2010 tax return Travel tour programs. How do i file my 2010 tax return   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. How do i file my 2010 tax return   Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. How do i file my 2010 tax return Example. How do i file my 2010 tax return ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). How do i file my 2010 tax return As part of its activities, ABC operates a travel tour program. How do i file my 2010 tax return The program is open to all current members of ABC and their guests. How do i file my 2010 tax return ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. How do i file my 2010 tax return Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. How do i file my 2010 tax return XYZ pays ABC a per person fee for each participant. How do i file my 2010 tax return Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. How do i file my 2010 tax return The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. How do i file my 2010 tax return Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. How do i file my 2010 tax return Therefore, ABC's tour program is an unrelated trade or business. How do i file my 2010 tax return For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. How do i file my 2010 tax return Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. How do i file my 2010 tax return For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. How do i file my 2010 tax return Small Business Health Care Tax Credit. How do i file my 2010 tax return   If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. How do i file my 2010 tax return Go to IRS. How do i file my 2010 tax return gov and select Affordable Care Act Tax Provisions for more details. How do i file my 2010 tax return See Small Business Health Care Tax Credit at www. How do i file my 2010 tax return irs. How do i file my 2010 tax return gov/newsroom/article/0,,id=223666,00. How do i file my 2010 tax return html. How do i file my 2010 tax return Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. How do i file my 2010 tax return   The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). How do i file my 2010 tax return The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. How do i file my 2010 tax return The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. How do i file my 2010 tax return This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. How do i file my 2010 tax return   The credit can be as high as $6,240 for qualified tax-exempt organizations. How do i file my 2010 tax return The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. How do i file my 2010 tax return The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. How do i file my 2010 tax return   All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. How do i file my 2010 tax return The process for certifying veterans for this credit is the same for all employers. How do i file my 2010 tax return For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. How do i file my 2010 tax return Notice 2012-13, 2012-9 I. How do i file my 2010 tax return R. How do i file my 2010 tax return B. How do i file my 2010 tax return 421, also provides additional guidance on submission Form 8850. How do i file my 2010 tax return   Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. How do i file my 2010 tax return 22, 2011, and before January 1, 2013. How do i file my 2010 tax return After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. How do i file my 2010 tax return File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. How do i file my 2010 tax return It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. How do i file my 2010 tax return In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. How do i file my 2010 tax return Trust fund recovery penalty. How do i file my 2010 tax return   If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. How do i file my 2010 tax return The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. How do i file my 2010 tax return The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. How do i file my 2010 tax return Exception. How do i file my 2010 tax return   The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. How do i file my 2010 tax return   This exception does not apply if it results in no one being liable for the penalty. How do i file my 2010 tax return FICA and FUTA tax exceptions. How do i file my 2010 tax return   Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. How do i file my 2010 tax return FUTA tax exception. How do i file my 2010 tax return   Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. How do i file my 2010 tax return FICA tax exemption election. How do i file my 2010 tax return   Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. How do i file my 2010 tax return   To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. How do i file my 2010 tax return The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. How do i file my 2010 tax return   The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. How do i file my 2010 tax return Revoking the election. How do i file my 2010 tax return   The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. How do i file my 2010 tax return Such revocation will apply retroactively to the beginning of the 2-year period. How do i file my 2010 tax return Definitions. How do i file my 2010 tax return   For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. How do i file my 2010 tax return   The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. How do i file my 2010 tax return Effect on employees. How do i file my 2010 tax return   If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. How do i file my 2010 tax return However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. How do i file my 2010 tax return The tax applies to income of $108. How do i file my 2010 tax return 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. How do i file my 2010 tax return   Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. How do i file my 2010 tax return Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. How do i file my 2010 tax return Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. How do i file my 2010 tax return S. How do i file my 2010 tax return Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. How do i file my 2010 tax return A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. How do i file my 2010 tax return See Forms 990 and 990-EZ , earlier. How do i file my 2010 tax return Political organization. How do i file my 2010 tax return   A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. How do i file my 2010 tax return Exempt function. How do i file my 2010 tax return   An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. How do i file my 2010 tax return It also includes certain office expenses of a holder of public office or an office in a political organization. How do i file my 2010 tax return Certain political organizations are required to notify the IRS that they are section 527 organizations. How do i file my 2010 tax return These organizations must use Form 8871. How do i file my 2010 tax return Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. How do i file my 2010 tax return For a discussion on these forms, see Reporting Requirements for a Political Organization, later. How do i file my 2010 tax return Political organization taxable income. How do i file my 2010 tax return   Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. How do i file my 2010 tax return To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. How do i file my 2010 tax return Exempt organization not a political organization. How do i file my 2010 tax return   An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. How do i file my 2010 tax return These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. How do i file my 2010 tax return Separate fund. How do i file my 2010 tax return   A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. How do i file my 2010 tax return The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. How do i file my 2010 tax return Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. How do i file my 2010 tax return Due date. How do i file my 2010 tax return   Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. How do i file my 2010 tax return Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. How do i file my 2010 tax return If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. How do i file my 2010 tax return    Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. How do i file my 2010 tax return Extension of time to file. How do i file my 2010 tax return    Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. How do i file my 2010 tax return The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. How do i file my 2010 tax return Failure to file. How do i file my 2010 tax return   A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. How do i file my 2010 tax return For more information about filing Form 1120-POL, refer to the instructions accompanying the form. How do i file my 2010 tax return Failure to pay on time. How do i file my 2010 tax return   An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. How do i file my 2010 tax return The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. How do i file my 2010 tax return Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. How do i file my 2010 tax return The organization is also required to periodically report certain contributions received and expenditures made by the organization. How do i file my 2010 tax return To notify the IRS of section 527 treatment, an organization must file Form 8871. How do i file my 2010 tax return To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. How do i file my 2010 tax return Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. How do i file my 2010 tax return However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. How do i file my 2010 tax return It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. How do i file my 2010 tax return S. How do i file my 2010 tax return C. How do i file my 2010 tax return 431(4)). How do i file my 2010 tax return It is a state or local candidate committee. How do i file my 2010 tax return It is a state or local committee of a political party. How do i file my 2010 tax return It is a section 501(c) organization that has made an “exempt function expenditure. How do i file my 2010 tax return ” All other political organizations are required to file Form 8871. How do i file my 2010 tax return An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. How do i file my 2010 tax return Employer identification number. How do i file my 2010 tax return   If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. How do i file my 2010 tax return IRS. How do i file my 2010 tax return gov/businesses/small. How do i file my 2010 tax return By telephone at 1-800-829-4933 from 7:00 a. How do i file my 2010 tax return m. How do i file my 2010 tax return to 10:00 p. How do i file my 2010 tax return m. How do i file my 2010 tax return in the organization's local time zone. How do i file my 2010 tax return By mailing or faxing Form SS-4. How do i file my 2010 tax return   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. How do i file my 2010 tax return Due dates. How do i file my 2010 tax return   The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. How do i file my 2010 tax return If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. How do i file my 2010 tax return When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. How do i file my 2010 tax return   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. How do i file my 2010 tax return How to file. How do i file my 2010 tax return   An organization must file Form 8871 electronically via the IRS Internet website at www. How do i file my 2010 tax return IRS. How do i file my 2010 tax return gov/polorgs (Keyword: political orgs). How do i file my 2010 tax return Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. How do i file my 2010 tax return   After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. How do i file my 2010 tax return Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. How do i file my 2010 tax return Penalties Failure to file. How do i file my 2010 tax return   An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. How do i file my 2010 tax return Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. How do i file my 2010 tax return   Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. How do i file my 2010 tax return If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. How do i file my 2010 tax return    The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. How do i file my 2010 tax return Fraudulent returns. How do i file my 2010 tax return   Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. How do i file my 2010 tax return Waiver of penalties. How do i file my 2010 tax return   The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. How do i file my 2010 tax return Additional information. How do i file my 2010 tax return   For more information on Form 8871, see the form and its instructions. How do i file my 2010 tax return For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. How do i file my 2010 tax return Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). How do i file my 2010 tax return A political organization that is subject to tax on its income because it did not file or amend Form 8871. How do i file my 2010 tax return A qualified state or local political organization (QSLPO), discussed below. How do i file my 2010 tax return All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. How do i file my 2010 tax return Qualified state or local political organization. How do i file my 2010 tax return   A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). How do i file my 2010 tax return It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. How do i file my 2010 tax return The state agency and the organization make the reports publicly available. How do i file my 2010 tax return No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. How do i file my 2010 tax return Information required on Form 8872. How do i file my 2010 tax return   If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. How do i file my 2010 tax return   If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. How do i file my 2010 tax return   For additional information that is required, see Form 8872. How do i file my 2010 tax return Due dates. How do i file my 2010 tax return   The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). How do i file my 2010 tax return   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. How do i file my 2010 tax return Election year filing. How do i file my 2010 tax return    In election years, Form 8872 must be filed on either a quarterly or a monthly basis. How do i file my 2010 tax return Both a pre-election report and a post-election report are also required to be filed in an election year. How do i file my 2010 tax return An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). How do i file my 2010 tax return Nonelection year filing. How do i file my 2010 tax return    In nonelection years, the form must be filed on a semiannual or monthly basis. How do i file my 2010 tax return A complete listing of these filing periods are in the Form 8872 Instructions. How do i file my 2010 tax return A nonelection year is any odd-numbered year. How do i file my 2010 tax return How to file. How do i file my 2010 tax return   Form 8872 can be filed either electronically or by mail. How do i file my 2010 tax return However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. How do i file my 2010 tax return    To file by mail, send Form 8872 to the:   Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. How do i file my 2010 tax return   File electronically via the IRS internet website at www. How do i file my 2010 tax return IRS. How do i file my 2010 tax return gov/polorgs. How do i file my 2010 tax return You will need a user ID and password to electronically file Form 8872. How do i file my 2010 tax return Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. How do i file my 2010 tax return   Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. How do i file my 2010 tax return   If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. How do i file my 2010 tax return You can also fax your request to (801) 620-3249. How do i file my 2010 tax return It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. How do i file my 2010 tax return Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. How do i file my 2010 tax return The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. How do i file my 2010 tax return Fraudulent returns. How do i file my 2010 tax return   Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. How do i file my 2010 tax return Waiver of penalties. How do i file my 2010 tax return   The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. How do i file my 2010 tax return Donee Information Return Dispositions of donated property. How do i file my 2010 tax return   If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. How do i file my 2010 tax return However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. How do i file my 2010 tax return   Form 8282 must be filed with the IRS within 125 days after the disposition. How do i file my 2010 tax return Additionally, a copy of Form 8282 must be given to the donor. How do i file my 2010 tax return If the organization fails to file the required information return, penalties may apply. How do i file my 2010 tax return Charitable deduction property. How do i file my 2010 tax return   This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. How do i file my 2010 tax return Publicly traded securities. How do i file my 2010 tax return   These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. How do i file my 2010 tax return Appraisal summary. How do i file my 2010 tax return   If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. How do i file my 2010 tax return below. How do i file my 2010 tax return Exceptions. How do i file my 2010 tax return   A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. How do i file my 2010 tax return 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. How do i file my 2010 tax return   The donee organization is not a qualified appraiser for the purpose of valuing the donated property. How do i file my 2010 tax return For more information, get Publication 561, Determining the Value of Donated Property. How do i file my 2010 tax return Form 8283. How do i file my 2010 tax return   For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. How do i file my 2010 tax return The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. How do i file my 2010 tax return The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. How do i file my 2010 tax return The signature does not represent concurrence in the appraised value of the contributed property. How do i file my 2010 tax return A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. How do i file my 2010 tax return The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. How do i file my 2010 tax return A copy of Form 8283 must be given to the donee. How do i file my 2010 tax return Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. How do i file my 2010 tax return In other situations, the donee organization is required to provide information to the donor. How do i file my 2010 tax return A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. How do i file my 2010 tax return (See Disclosure statement. How do i file my 2010 tax return later. How do i file my 2010 tax return ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. How do i file my 2010 tax return See Quid pro quo contribution below for an example. How do i file my 2010 tax return Failure to make the required disclosure may result in a penalty to the organization. How do i file my 2010 tax return A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. How do i file my 2010 tax return In certain circumstances, an organization may be able to meet both of these requirements with the same written document. How do i file my 2010 tax return Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. How do i file my 2010 tax return Quid pro quo contribution. How do i file my 2010 tax return   A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. How do i file my 2010 tax return Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. How do i file my 2010 tax return Generally, a written statement is required for each payment, whenever the contribution portion is over $75. How do i file my 2010 tax return Example. How do i file my 2010 tax return If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. How do i file my 2010 tax return In this example, the charitable part of the payment is $60. How do i file my 2010 tax return Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. How do i file my 2010 tax return If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. How do i file my 2010 tax return Disclosure statement. How do i file my 2010 tax return   The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. How do i file my 2010 tax return The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. How do i file my 2010 tax return If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. How do i file my 2010 tax return   No disclosure statement is required if any of the following are true. How do i file my 2010 tax return The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. How do i file my 2010 tax return B. How do i file my 2010 tax return 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. How do i file my 2010 tax return B. How do i file my 2010 tax return 507 (as adjusted for inflation), Revenue Procedure 92-49. How do i file my 2010 tax return There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). How do i file my 2010 tax return There is only an intangible religious benefit provided to the donor. How do i file my 2010 tax return The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. How do i file my 2010 tax return For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. How do i file my 2010 tax return A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. How do i file my 2010 tax return The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. How do i file my 2010 tax return Good faith estimate of fair market value (FMV). How do i file my 2010 tax return   An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. How do i file my 2010 tax return   The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. How do i file my 2010 tax return Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. How do i file my 2010 tax return Example 1. How do i file my 2010 tax return A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. How do i file my 2010 tax return The tennis professional provides 1-hour lessons on a commercial basis for $100. How do i file my 2010 tax return A good faith estimate of the lesson's FMV is $100. How do i file my 2010 tax return Example 2. How do i file my 2010 tax return For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. How do i file my 2010 tax return A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. How do i file my 2010 tax return If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. How do i file my 2010 tax return Example 3. How do i file my 2010 tax return For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. How do i file my 2010 tax return The artist does not provide tours on a commercial basis. How do i file my 2010 tax return Tours of the museum normally are free to the public. How do i file my 2010 tax return A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. How do i file my 2010 tax return Penalty for failure to disclose. How do i file my 2010 tax return   A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. How do i file my 2010 tax return The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. How do i file my 2010 tax return The charity can avoid the penalty if it can show that the failure was due to reasonable cause. How do i file my 2010 tax return Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. How do i file my 2010 tax return The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. How do i file my 2010 tax return The donor is responsible for requesting and obtaining the written acknowledgment from the donee. How do i file my 2010 tax return A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. How do i file my 2010 tax return Quid pro quo contribution. How do i file my 2010 tax return   If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. How do i file my 2010 tax return See Disclosure of Quid Pro Quo Contributions earlier. How do i file my 2010 tax return Form of acknowledgment. How do i file my 2010 tax return   Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. How do i file my 2010 tax return For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. How do i file my 2010 tax return Cash contributions. How do i file my 2010 tax return   To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. How do i file my 2010 tax return In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. How do i file my 2010 tax return Contributions by payroll deduction. How do i file my 2010 tax return   An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. How do i file my 2010 tax return   For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. How do i file my 2010 tax return The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. How do i file my 2010 tax return Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. How do i file my 2010 tax return The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. How do i file my 2010 tax return See section 3. How do i file my 2010 tax return 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. How do i file my 2010 tax return Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. How do i file my 2010 tax return The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. How do i file my 2010 tax return The organization must file the report on Copy A of Form 1098-C. How do i file my 2010 tax return An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. How do i file my 2010 tax return S. How do i file my 2010 tax return Information Returns. How do i file my 2010 tax return See the Instructions for Form 1096 for the correct filing location. How do i file my 2010 tax return An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. How do i file my 2010 tax return Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. How do i file my 2010 tax return IRS. How do i file my 2010 tax return gov/pub/irs-pdf/p1220. How do i file my 2010 tax return pdf. How do i file my 2010 tax return Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. How do i file my 2010 tax return However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. How do i file my 2010 tax return See the Instructions for Form 1098-C. How do i file my 2010 tax return Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. How do i file my 2010 tax return The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. How do i file my 2010 tax return For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. How do i file my 2010 tax return R. How do i file my 2010 tax return B. How do i file my 2010 tax return 1287, at www. How do i file my 2010 tax return irs. How do i file my 2010 tax return gov/irb/2005-25_IRB/2005-25_IRB/ar09. How do i file my 2010 tax return html. How do i file my 2010 tax return Material improvements or significant intervening use. How do i file my 2010 tax return   To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. How do i file my 2010 tax return Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. How do i file my 2010 tax return For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. How do i file my 2010 tax return Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. How do i file my 2010 tax return Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. How do i file my 2010 tax return Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. How do i file my 2010 tax return   Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. How do i file my 2010 tax return To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. How do i file my 2010 tax return Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. How do i file my 2010 tax return Penalties. How do i file my 2010 tax return   If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. How do i file my 2010 tax return    Other penalties may apply. How do i file my 2010 tax return See Part O in the 2012 General Instructions for Certain Information Returns. How do i file my 2010 tax return   An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. How do i file my 2010 tax return   If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. How do i file my 2010 tax return Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. How do i file my 2010 tax return   The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. How do i file my 2010 tax return 6%. How do i file my 2010 tax return   The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. How do i file my 2010 tax return 6%. How do i file my 2010 tax return Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. How do i file my 2010 tax return The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. How do i file my 2010 tax return To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. How do i file my 2010 tax return Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. How do i file my 2010 tax return Form 8899. How do i file my 2010 tax return   Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. How do i file my 2010 tax return This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. How do i file my 2010 tax return Qualified donee income. How do i file my 2010 tax return   Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. How do i file my 2010 tax return Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of