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How To File An Amended Tax Return For 2012

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How To File An Amended Tax Return For 2012

How to file an amended tax return for 2012 13. How to file an amended tax return for 2012   Employment Taxes Table of Contents What's New for 2013 What's New for 2014 Reminders Important Dates for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Farm Employment Family Employees Crew Leaders Social Security and Medicare TaxesReligious exemption. How to file an amended tax return for 2012 Wage limit. How to file an amended tax return for 2012 Federal Income Tax WithholdingNew Form W-4 for 2014. How to file an amended tax return for 2012 Required Notice to Employees About Earned Income Credit (EIC) Reporting and Paying Social Security, Medicare, and Withheld Federal Income TaxesElectronic deposit requirement. How to file an amended tax return for 2012 Federal Unemployment (FUTA) TaxReporting and Paying FUTA Tax What's New for 2013 Social security and Medicare tax for 2013. How to file an amended tax return for 2012  The employee tax rate for social security is 6. How to file an amended tax return for 2012 2%. How to file an amended tax return for 2012 Previously, the employee tax rate for social security was 4. How to file an amended tax return for 2012 2%. How to file an amended tax return for 2012 The employer tax rate for social security remains unchanged at 6. How to file an amended tax return for 2012 2%. How to file an amended tax return for 2012 The social security wage base limit is $113,700. How to file an amended tax return for 2012 The Medicare tax rate is 1. How to file an amended tax return for 2012 45% each for the employee and employer, unchanged from 2012. How to file an amended tax return for 2012 There is no wage base limit for Medicare tax. How to file an amended tax return for 2012 Additional Medicare Tax. How to file an amended tax return for 2012  In addition to withholding Medicare tax at 1. How to file an amended tax return for 2012 45%, you must withhold a 0. How to file an amended tax return for 2012 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. How to file an amended tax return for 2012 You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. How to file an amended tax return for 2012 Additional Medicare Tax is only imposed on the employee. How to file an amended tax return for 2012 There is no employer share of Additional Medicare Tax. How to file an amended tax return for 2012 All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. How to file an amended tax return for 2012 For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E), Employer's Tax Guide. How to file an amended tax return for 2012 For more information on Additional Medicare Tax, visit IRS. How to file an amended tax return for 2012 gov and enter “Additional Medicare Tax” in the search box. How to file an amended tax return for 2012 Leave-based donation programs to aid victims of Hurricane Sandy. How to file an amended tax return for 2012  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. How to file an amended tax return for 2012 The donated leave will not be included in the income or wages of the employee. How to file an amended tax return for 2012 The employer may deduct the cash payments as business expenses or charitable contributions. How to file an amended tax return for 2012 For more information, see Notice 2012-69, 2012-51 I. How to file an amended tax return for 2012 R. How to file an amended tax return for 2012 B. How to file an amended tax return for 2012 712, available at www. How to file an amended tax return for 2012 irs. How to file an amended tax return for 2012 gov/irb/2012-51_IRB/ar09. How to file an amended tax return for 2012 html. How to file an amended tax return for 2012 Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. How to file an amended tax return for 2012  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. How to file an amended tax return for 2012 Previously, the credit was available for unemployed veterans who began work on or after November 22, 2011, and before January 1, 2013. How to file an amended tax return for 2012 Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. How to file an amended tax return for 2012 For more information, visit IRS. How to file an amended tax return for 2012 gov and enter “work opportunity credit” in the search box. How to file an amended tax return for 2012 What's New for 2014 Social security and Medicare tax for 2014. How to file an amended tax return for 2012  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). How to file an amended tax return for 2012 The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). How to file an amended tax return for 2012 There is no limit on the amount of wages subject to Medicare tax. How to file an amended tax return for 2012 Reminders Additional employment tax information for farmers. How to file an amended tax return for 2012  See Publication 51 (Circular A) for more detailed guidance on employment taxes. How to file an amended tax return for 2012 For the latest information about employment tax developments impacting farmers, go to www. How to file an amended tax return for 2012 irs. How to file an amended tax return for 2012 gov/pub51. How to file an amended tax return for 2012 Correcting a previously filed Form 943. How to file an amended tax return for 2012  If you discover an error on a previously filed Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, make the correction using Form 943-X, Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund. How to file an amended tax return for 2012 Form 943-X is filed separately from Form 943. How to file an amended tax return for 2012 For more information on correcting Form 943, see the Instructions for Form 943-X. How to file an amended tax return for 2012 Federal tax deposits must be made by electronic funds transfer. How to file an amended tax return for 2012  You must use electronic funds transfer to make all federal tax deposits. How to file an amended tax return for 2012 Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). How to file an amended tax return for 2012 If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. How to file an amended tax return for 2012 Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. How to file an amended tax return for 2012 EFTPS is a free service provided by the Department of Treasury. How to file an amended tax return for 2012 Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. How to file an amended tax return for 2012 For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). How to file an amended tax return for 2012 To get more information about EFTPS or to enroll in EFTPS, visit www. How to file an amended tax return for 2012 eftps. How to file an amended tax return for 2012 gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). How to file an amended tax return for 2012 Additional information about EFTPS is also available in Publication 966, Electronic Federal Tax Payment System: A Guide To Getting Started. How to file an amended tax return for 2012 Important Dates for 2014 You should take the action indicated by the dates listed. How to file an amended tax return for 2012 See By February 15 and On February 16 for Form W-4, Employee's Withholding Allowance Certificate, information. How to file an amended tax return for 2012 Due dates for deposits of withheld federal income taxes, social security taxes, and Medicare taxes are not listed here. How to file an amended tax return for 2012 For these dates, see Publication 509, Tax Calendars (For use in 2014). How to file an amended tax return for 2012 Note. How to file an amended tax return for 2012  If any date shown below for filing a return, furnishing a form, or depositing taxes falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. How to file an amended tax return for 2012 A statewide legal holiday delays a filing or furnishing due date only if the IRS office where you are required to file a return or furnish a form is located in that state. How to file an amended tax return for 2012 For any due date, you will meet the “file” or “furnish” date requirement if the envelope containing the tax return or form is properly addressed, contains sufficient postage, and is postmarked by the U. How to file an amended tax return for 2012 S. How to file an amended tax return for 2012 Postal Service by the due date, or sent by an IRS-designated delivery service by the due date. How to file an amended tax return for 2012 See Private delivery services in Publication 51 (Circular A). How to file an amended tax return for 2012 Federal tax deposits can only be made by electronic funds transfer and are governed by legal holidays in the District of Columbia. How to file an amended tax return for 2012 Statewide holidays no longer apply. How to file an amended tax return for 2012 For a list of legal holidays that delay the due date of a federal tax deposit, see section 7 of Publication 51 (Circular A). How to file an amended tax return for 2012 Fiscal year taxpayers. How to file an amended tax return for 2012  The due dates listed below apply whether you use a calendar or a fiscal year. How to file an amended tax return for 2012 By January 31. How to file an amended tax return for 2012   File Form 943 with the IRS. How to file an amended tax return for 2012 If you deposited all Form 943 taxes when due, you have 10 additional days to file. How to file an amended tax return for 2012 Furnish each employee with a completed Form W-2, Wage and Tax Statement. How to file an amended tax return for 2012 Furnish each recipient to whom you paid $600 or more in nonemployee compensation with a completed Form 1099 (for example, Form 1099-MISC). How to file an amended tax return for 2012 File Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, with the IRS. How to file an amended tax return for 2012 If you deposited all the FUTA tax when due, you have 10 additional days to file. How to file an amended tax return for 2012 File Form 945, Annual Return of Withheld Federal Income Tax, with the IRS to report any nonpayroll income tax withheld during 2013. How to file an amended tax return for 2012 If you deposited all Form 945 taxes when due, you have 10 additional days to file. How to file an amended tax return for 2012 By February 15. How to file an amended tax return for 2012  Ask for a new Form W-4 or Formulario W-4(SP), Certificado de Exención de Retenciones del Empleado, from each employee who claimed exemption from federal income tax withholding last year. How to file an amended tax return for 2012 On February 16. How to file an amended tax return for 2012  Any Form W-4 claiming exemption from withholding for the previous year has now expired. How to file an amended tax return for 2012 Begin withholding for any employee who previously claimed exemption from withholding but has not given you a new Form W-4 for the current year. How to file an amended tax return for 2012 If the employee does not give you a new Form W-4, withhold taxes based on the last valid Form W-4 you have for the employee that does not claim exemption from withholding or, if one does not exist, as if he or she is single with zero withholding allowances. How to file an amended tax return for 2012 If the employee furnishes a new Form W-4 claiming exemption from withholding after February 15, you may apply the exemption to future wages, but do not refund taxes withheld while the exempt status was not in place. How to file an amended tax return for 2012 By February 28. How to file an amended tax return for 2012   File paper Forms 1099 and 1096. How to file an amended tax return for 2012 File Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U. How to file an amended tax return for 2012 S. How to file an amended tax return for 2012 Information Returns, with the IRS. How to file an amended tax return for 2012 For electronically filed returns, see By March 31 below. How to file an amended tax return for 2012 File paper Forms W-2 and W-3. How to file an amended tax return for 2012 File Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration (SSA). How to file an amended tax return for 2012 For electronically filed returns, see By March 31 below. How to file an amended tax return for 2012 By March 31. How to file an amended tax return for 2012   File electronic Forms W-2 and 1099. How to file an amended tax return for 2012 File electronic Forms W-2 with the SSA and Forms 1099 with the IRS. How to file an amended tax return for 2012 For more information on reporting Form W-2 information to the SSA electronically, visit the SSA's Employer W-2 Filing Instructions & Information webpage at www. How to file an amended tax return for 2012 socialsecurity. How to file an amended tax return for 2012 gov/employer. How to file an amended tax return for 2012 For information on filing information returns electronically with the IRS, see Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically. How to file an amended tax return for 2012 By April 30, July 31, October 31, and January 31. How to file an amended tax return for 2012   Deposit FUTA taxes. How to file an amended tax return for 2012 Deposit FUTA tax due if it is more than $500. How to file an amended tax return for 2012 Before December 1. How to file an amended tax return for 2012  Remind employees to submit a new Form W-4 if their withholding allowances have changed or will change for the next year. How to file an amended tax return for 2012 Introduction You are generally required to withhold federal income tax from the wages of your employees. How to file an amended tax return for 2012 You may also be subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA) and federal unemployment tax under the Federal Unemployment Tax Act (FUTA). How to file an amended tax return for 2012 You must also withhold Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. How to file an amended tax return for 2012 This chapter includes information about these taxes. How to file an amended tax return for 2012 You must also pay self-employment tax on your net earnings from farming. How to file an amended tax return for 2012 See chapter 12 for information on self-employment tax. How to file an amended tax return for 2012 Topics - This chapter discusses: Farm employment, Family employees, Crew leaders, Social security and Medicare taxes, Additional Medicare Tax withholding, Federal income tax withholding, Reporting and paying social security, Medicare, and withheld federal income taxes, and FUTA tax. How to file an amended tax return for 2012 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 51 (Circular A), Agricultural Employer's Tax Guide 926 Household Employer's Tax Guide Form (and Instructions) W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 943 Employer's Annual Federal Tax Return for Agricultural Employees 943-X Adjusted Employer's Annual Federal Tax Return for Agricultural Employees or Claim for Refund See chapter 16 for information about getting publications and forms. How to file an amended tax return for 2012 Farm Employment In general, you are an employer of farmworkers if your employees do any of the following types of work. How to file an amended tax return for 2012 Raising or harvesting agricultural or horticultural products on a farm, including raising and feeding of livestock. How to file an amended tax return for 2012 Operating, managing, conserving, improving, or maintaining your farm and its tools and equipment. How to file an amended tax return for 2012 Services performed in salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor). How to file an amended tax return for 2012 Handling, processing, or packaging any agricultural or horticultural commodity if you produced more than half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity). How to file an amended tax return for 2012 Work related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. How to file an amended tax return for 2012 For more information, see Publication 51 (Circular A). How to file an amended tax return for 2012 Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. How to file an amended tax return for 2012 This is so even when you give the employee freedom of action. How to file an amended tax return for 2012 What matters is that you have the right to control the details of how the services are performed. How to file an amended tax return for 2012 You are responsible for withholding and paying employment taxes for your employees. How to file an amended tax return for 2012 You are also required to file employment tax returns. How to file an amended tax return for 2012 These requirements do not apply to amounts that you pay to independent contractors. How to file an amended tax return for 2012 See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. How to file an amended tax return for 2012 If you employ a family of workers, each worker subject to your control (not just the head of the family) is an employee. How to file an amended tax return for 2012 Special rules apply to crew leaders. How to file an amended tax return for 2012 See Crew Leaders , later. How to file an amended tax return for 2012 Employer identification number (EIN). How to file an amended tax return for 2012   If you have employees, you must have an EIN. How to file an amended tax return for 2012 If you do not have an EIN, you may apply for one online. How to file an amended tax return for 2012 Go to IRS. How to file an amended tax return for 2012 gov and click on the Apply for an EIN Online link under Tools. How to file an amended tax return for 2012 You may also apply for an EIN by calling 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability). How to file an amended tax return for 2012 The hours of operation for both numbers are Monday–Friday form 7:00 a. How to file an amended tax return for 2012 m. How to file an amended tax return for 2012 –7:00 p. How to file an amended tax return for 2012 m. How to file an amended tax return for 2012 local time (Alaska and Hawaii follow Pacific time). How to file an amended tax return for 2012 You can also fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. How to file an amended tax return for 2012 Employee's social security number (SSN). How to file an amended tax return for 2012   An employee who does not have an SSN should submit Form SS-5, Application for a Social Security Card, to the Social Security Administration (SSA). How to file an amended tax return for 2012 Form SS-5 is available from any SSA office or by calling 1-800-772-1213 (operates 24 hours per day). How to file an amended tax return for 2012 It is also available from the SSA's website at www. How to file an amended tax return for 2012 socialsecurity. How to file an amended tax return for 2012 gov. How to file an amended tax return for 2012   The employee must furnish evidence of age, identity, and U. How to file an amended tax return for 2012 S. How to file an amended tax return for 2012 citizenship or lawful immigration status permitting employment with the Form SS-5. How to file an amended tax return for 2012 An employee who is age 18 or older must appear in person with this evidence at an SSA office. How to file an amended tax return for 2012 Form I-9. How to file an amended tax return for 2012    You must verify that each new employee is legally eligible to work in the United States. How to file an amended tax return for 2012 This includes completing the Form I-9, Employment Eligibility Verification. How to file an amended tax return for 2012 Form I-9 is available from the U. How to file an amended tax return for 2012 S. How to file an amended tax return for 2012 Citizenship and Immigration Services (USCIS) offices or by calling the Bureau of Citizenship and Immigration Services Forms Request Line at 1-800-870-3676. How to file an amended tax return for 2012 Form I-9 is also available from the USCIS website at www. How to file an amended tax return for 2012 uscis. How to file an amended tax return for 2012 gov. How to file an amended tax return for 2012 You can also contact the USCIS at 1-800-375-5283 for more information. How to file an amended tax return for 2012 New hire reporting. How to file an amended tax return for 2012   You are required to report any new employee to a designated state new hire registry. How to file an amended tax return for 2012 Many states accept a copy of Form W-4 with employer information added. How to file an amended tax return for 2012 Visit the Office of Child Support Enforcement website at www. How to file an amended tax return for 2012 acf. How to file an amended tax return for 2012 hhs. How to file an amended tax return for 2012 gov/programs/cse/newhire for more information. How to file an amended tax return for 2012 Family Employees Generally, the wages you pay to family members who are your employees are subject to employment taxes. How to file an amended tax return for 2012 However, certain exemptions may apply to wages paid to your child, spouse, or parent. How to file an amended tax return for 2012 Exemptions for your child. How to file an amended tax return for 2012   Payments for the services of your child under age 18 who works for you in your trade or business (including a farm) are not subject to social security and Medicare taxes. How to file an amended tax return for 2012 However, see Nonexempt services of a child or spouse , later. How to file an amended tax return for 2012 Payments for the services of your child under age 21 employed by you in other than a trade or business, such as payments for household services in your home, are also not subject to social security or Medicare taxes. How to file an amended tax return for 2012 Payments for the services of your child under age 21 employed by you, whether or not in your trade or business, are not subject to FUTA tax. How to file an amended tax return for 2012 Although not subject to social security, Medicare, or FUTA tax, the child's wages still may be subject to federal income tax withholding. How to file an amended tax return for 2012 Exemptions for your spouse. How to file an amended tax return for 2012   Payments for the services of your spouse who works for you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes, but not FUTA tax. How to file an amended tax return for 2012   Payments for the services of your spouse employed by you in other than a trade or business, such as payments for household services in your home, are not subject to social security, Medicare, or FUTA taxes. How to file an amended tax return for 2012 Nonexempt services of a child or spouse. How to file an amended tax return for 2012   Payments for the services of your child or spouse are subject to federal income tax withholding as well as social security, Medicare, and FUTA taxes if he or she works for any of the following entities. How to file an amended tax return for 2012 A corporation, even if it is controlled by you. How to file an amended tax return for 2012 A partnership, even if you are a partner. How to file an amended tax return for 2012 This does not apply to wages paid to your child if each partner is a parent of the child. How to file an amended tax return for 2012 An estate or trust, even if it is the estate of a deceased parent. How to file an amended tax return for 2012 In these situations, the child or spouse is considered to work for the corporation, partnership, or estate, not you. How to file an amended tax return for 2012 Exemptions for your parent. How to file an amended tax return for 2012   Payments for the services of your parent employed by you in your trade or business are subject to federal income tax withholding and social security and Medicare taxes. How to file an amended tax return for 2012 Social security and Medicare taxes do not apply to wages paid to your parent for services not in your trade or business, but they do apply to payments for household services in your home if both the following conditions are satisfied. How to file an amended tax return for 2012 You have a child living in your home who is under age 18 or has a physical or mental condition that requires care by an adult for at least 4 continuous weeks in a calendar quarter. How to file an amended tax return for 2012 You are a widow or widower; or divorced and not remarried; or have a spouse in the home who, because of a physical or mental condition, cannot care for your child for at least 4 continuous weeks in the quarter. How to file an amended tax return for 2012   Wages you pay to your parent are not subject to FUTA tax, regardless of the type of services provided. How to file an amended tax return for 2012 Qualified joint venture. How to file an amended tax return for 2012   If spouses elect to be treated as a qualified joint venture instead of a partnership, either spouse may report and pay the employment taxes due on the wages paid to employees using the EIN of that spouse's sole proprietorship. How to file an amended tax return for 2012 For more information about qualified joint ventures, see chapter 12. How to file an amended tax return for 2012 Crew Leaders If farmworkers are provided by a crew leader, the crew leader may be the employer of the workers. How to file an amended tax return for 2012 Social security and Medicare taxes. How to file an amended tax return for 2012   For social security and Medicare tax purposes, the crew leader is the employer of the workers if both of the following requirements are met. How to file an amended tax return for 2012 The crew leader pays (either on his or her own behalf or on behalf of the farmer) the workers for their farm labor. How to file an amended tax return for 2012 The crew leader has not entered into a written agreement with the farmer under which the crew leader is designated as an employee of the farmer. How to file an amended tax return for 2012 Federal income tax withholding. How to file an amended tax return for 2012   If the crew leader is the employer for social security and Medicare tax purposes, the crew leader is the employer for federal income tax withholding purposes. How to file an amended tax return for 2012 Federal unemployment (FUTA) tax. How to file an amended tax return for 2012   For FUTA tax purposes, the crew leader is the employer of the workers if, in addition to the earlier requirements, either of the following requirements are met. How to file an amended tax return for 2012 The crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act. How to file an amended tax return for 2012 Substantially all crew members operate or maintain mechanized equipment provided by the crew leader as part of the service to the farmer. How to file an amended tax return for 2012   The farmer is the employer of workers furnished by a crew leader in all other situations. How to file an amended tax return for 2012 In addition, the farmer is the employer of workers furnished by a registered crew leader if the workers are the employees of the farmer under the common-law test. How to file an amended tax return for 2012 For example, some farmers employ individuals to recruit farmworkers exclusively for them. How to file an amended tax return for 2012 Although these individuals may be required to register under the Migrant and Seasonal Agricultural Worker Protection Act, the workers are employed directly by the farmer. How to file an amended tax return for 2012 The farmer is the employer in these cases. How to file an amended tax return for 2012 For information about common-law employees, see section 1 of Publication 15-A. How to file an amended tax return for 2012 For information about crew leaders, see the Department of Labor website at www. How to file an amended tax return for 2012 dol. How to file an amended tax return for 2012 gov/whd/regs/compliance/whdfs49. How to file an amended tax return for 2012 htm. How to file an amended tax return for 2012 Social Security and Medicare Taxes All cash wages you pay to an employee during the year for farmwork are subject to social security and Medicare taxes if you meet either of the following tests. How to file an amended tax return for 2012 You pay the employee $150 or more in cash wages (count all wages paid on a time, piecework, or other basis) during the year for farmwork (the $150 test). How to file an amended tax return for 2012 The $150 test applies separately to each farmworker that you employ. How to file an amended tax return for 2012 If you employ a family of workers, each member is treated separately. How to file an amended tax return for 2012 Do not count wages paid by other employers. How to file an amended tax return for 2012 You pay cash and noncash wages of $2,500 or more during the year to all your employees for farmwork (the $2,500 test). How to file an amended tax return for 2012 If the $2,500 test for the group is not met, the $150 test for an employee still applies. How to file an amended tax return for 2012 Exceptions. How to file an amended tax return for 2012   Annual cash wages of less than $150 you pay to a seasonal farmworker are not subject to social security and Medicare taxes, even if you pay $2,500 or more to all your farmworkers. How to file an amended tax return for 2012 However, these wages count toward the $2,500 test for determining whether other farmworkers' wages are subject to social security and Medicare taxes. How to file an amended tax return for 2012   A seasonal farmworker is a worker who: Works as a hand-harvest laborer, Is paid piece rates in an operation usually paid on this basis in the region of employment, Commutes daily from his or her permanent home to the farm, and Worked in agriculture less than 13 weeks in the preceding calendar year. How to file an amended tax return for 2012   See Family Employees , earlier, for certain exemptions from social security and Medicare taxes that apply to your child, spouse, and parent. How to file an amended tax return for 2012 Religious exemption. How to file an amended tax return for 2012   An exemption from social security and Medicare taxes is available to members of a recognized religious group or division opposed to public insurance. How to file an amended tax return for 2012 This exemption is available only if both the employee and the employer are members of the group or division. How to file an amended tax return for 2012   For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. How to file an amended tax return for 2012 Cash wages. How to file an amended tax return for 2012   Only cash wages paid to farmworkers are subject to social security and Medicare taxes. How to file an amended tax return for 2012 Cash wages include checks, money orders, and any kind of money or cash. How to file an amended tax return for 2012   Only cash wages subject to social security and Medicare taxes are credited to your employees for social security benefit purposes. How to file an amended tax return for 2012 Payments not subject to these taxes, such as commodity wages, do not contribute to your employees' social security coverage. How to file an amended tax return for 2012 For information about social security benefits, contact the SSA at 1-800-772-1213 or online at www. How to file an amended tax return for 2012 socialsecurity. How to file an amended tax return for 2012 gov. How to file an amended tax return for 2012 Noncash wages. How to file an amended tax return for 2012    Noncash wages include food, lodging, clothing, transportation passes, and other goods and services. How to file an amended tax return for 2012 Noncash wages paid to farmworkers, including commodity wages, are not subject to social security and Medicare taxes. How to file an amended tax return for 2012 However, they are subject to these taxes if the substance of the transaction is a cash payment. How to file an amended tax return for 2012 For information on lodging provided as a condition of employment, see Publication 15-B. How to file an amended tax return for 2012   Report the value of noncash wages in box 1 of Form W-2 together with cash wages. How to file an amended tax return for 2012 Do not show noncash wages in box 3 or in box 5, (unless the substance of the transaction is a cash payment). How to file an amended tax return for 2012 Tax rates and social security wage limit. How to file an amended tax return for 2012   For 2013, the employer and the employee will pay the following taxes. How to file an amended tax return for 2012 The employer and employee each pay 6. How to file an amended tax return for 2012 2% of cash wages for social security tax (old-age, survivors, and disability insurance). How to file an amended tax return for 2012 The employer and employee each pay 1. How to file an amended tax return for 2012 45% of cash wages for Medicare tax (hospital insurance). How to file an amended tax return for 2012 The employee pays 0. How to file an amended tax return for 2012 9% of cash wages in excess of $200,000 for Additional Medicare Tax. How to file an amended tax return for 2012 Wage limit. How to file an amended tax return for 2012   The limit on wages subject to the social security tax for 2013 is $113,700. How to file an amended tax return for 2012 There is no limit on wages subject to the Medicare tax. How to file an amended tax return for 2012 All covered wages are subject to the Medicare tax. How to file an amended tax return for 2012 Additionally, all wages in excess of $200,000 are subject to Additional Medicare Tax withholding. How to file an amended tax return for 2012 Paying employee's share. How to file an amended tax return for 2012   If you would rather pay the employee's share of social security and Medicare taxes without deducting it from his or her wages, you may do so. How to file an amended tax return for 2012 It is additional income to the employee. How to file an amended tax return for 2012 You must include it in box 1 of the employee's Form W-2, but do not count it as social security and Medicare wages (boxes 3 and 5 on Form W-2) or as wages for federal unemployment (FUTA) tax purposes. How to file an amended tax return for 2012 Example. How to file an amended tax return for 2012 Jane operates a small family fruit farm. How to file an amended tax return for 2012 She employs day laborers in the picking season to enable her to timely get her crop to market. How to file an amended tax return for 2012 She does not deduct the employees' share of social security and Medicare taxes from their pay; instead, she pays it on their behalf. How to file an amended tax return for 2012 When her accountant, Susan, prepares the employees' Forms W-2, she adds each employee's share of social security and Medicare taxes paid by Jane to the employee's wage income (box 1 of Form W-2), but does not include it in box 3 (social security wages) or box 5 (Medicare wages and tips). How to file an amended tax return for 2012 For 2013, Jane paid Mary $1,000 during the year. How to file an amended tax return for 2012 Susan enters $1,076. How to file an amended tax return for 2012 50 in box 1 of Mary's Form W-2 ($1,000 wages plus $76. How to file an amended tax return for 2012 50 social security and Medicare taxes paid for Mary). How to file an amended tax return for 2012 She enters $1,000 in boxes 3 and 5 of Mary's Form W-2. How to file an amended tax return for 2012 Additional Medicare Tax. How to file an amended tax return for 2012   In addition to withholding Medicare tax at 1. How to file an amended tax return for 2012 45%, you must withhold a 0. How to file an amended tax return for 2012 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. How to file an amended tax return for 2012 You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. How to file an amended tax return for 2012 Additional Medicare Tax is only imposed on the employee. How to file an amended tax return for 2012 There is no employer share of Additional Medicare Tax. How to file an amended tax return for 2012 All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 threshold. How to file an amended tax return for 2012   For more information on what wages are subject to Medicare tax, see the chart, Special Rules for Various Types of Services and Payments, in section 15 of Publication 15 (Circular E). How to file an amended tax return for 2012 For more information on Additional Medicare Tax, visit IRS. How to file an amended tax return for 2012 gov and enter “Additional Medicare Tax” in the search box. How to file an amended tax return for 2012 Federal Income Tax Withholding If the cash wages you pay to farmworkers are subject to social security and Medicare taxes, they are also subject to federal income tax withholding. How to file an amended tax return for 2012 Although noncash wages are subject to federal income tax, withhold income tax only if you and the employee agree to do so. How to file an amended tax return for 2012 The amount to withhold is figured on gross wages without taking out social security and Medicare taxes, union dues, insurance, etc. How to file an amended tax return for 2012 Form W-4. How to file an amended tax return for 2012   Generally, the amount of federal income tax you withhold is based on the employee's marital status and withholding allowances claimed on the employee's Form W-4. How to file an amended tax return for 2012 In general, an employee can claim withholding allowances on Form W-4 equal to the number of exemptions the employee will be entitled to claim on his or her tax return. How to file an amended tax return for 2012 An employee may also be able to claim a special withholding allowance and allowances for estimated deductions and credits. How to file an amended tax return for 2012   Do not withhold federal income tax from the wages of an employee who, by filing Form W-4, certifies that he or she had no federal income tax liability last year and anticipates no liability for the current year. How to file an amended tax return for 2012   You should give each new employee a Form W-4 as soon as you hire the employee. How to file an amended tax return for 2012 For Spanish-speaking employees, you may use Formulario W-4(SP) which is the Spanish translation of Form W-4. How to file an amended tax return for 2012 Have the employee complete and return the form to you before the first payday. How to file an amended tax return for 2012 If the employee does not return the completed form, you must withhold federal income tax as if the employee is single and claims no withholding allowances. How to file an amended tax return for 2012 New Form W-4 for 2014. How to file an amended tax return for 2012   You should make the 2014 Form W-4 available to your employees and encourage them to check their income tax withholding for 2014. How to file an amended tax return for 2012 Those employees who owed a large amount of tax or received a large refund for 2013 may want to submit a new Form W-4. How to file an amended tax return for 2012 You cannot accept substitute Forms W-4 developed by employees. How to file an amended tax return for 2012 How to figure withholding. How to file an amended tax return for 2012   You can use one of several methods to determine the amount to withhold. How to file an amended tax return for 2012 The methods are described in Publication 51 (Circular A), which contains tables showing the correct amount of federal income tax you should withhold. How to file an amended tax return for 2012 Publication 51 (Circular A) also contains additional information about federal income tax withholding. How to file an amended tax return for 2012 Nonemployee compensation. How to file an amended tax return for 2012   Generally, you do not have to withhold federal income tax on payments for services to individuals who are not your employees. How to file an amended tax return for 2012 However, you may be required to report these payments on Form 1099-MISC, Miscellaneous Income, and to withhold under the backup withholding rules. How to file an amended tax return for 2012 For more information, see the Instructions for Form 1099-MISC. How to file an amended tax return for 2012 Required Notice to Employees About Earned Income Credit (EIC) You must provide notification about EIC to each employee who worked for you at any time during the year and from whom you did not withhold any federal income tax. How to file an amended tax return for 2012 However, you do not have to notify employees who claim exemption from federal income tax withholding on Form W-4. How to file an amended tax return for 2012 You meet the notification requirement by giving each employee any of the following. How to file an amended tax return for 2012 Form W-2, which contains EIC notification on the back of Copy B. How to file an amended tax return for 2012 A substitute Form W-2 with the exact EIC wording shown on the back of copy B of Form W-2. How to file an amended tax return for 2012 Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). How to file an amended tax return for 2012 Your own written statement with the exact wording of Notice 797. How to file an amended tax return for 2012 For more information, see Publication 51 (Circular A). How to file an amended tax return for 2012 Reporting and Paying Social Security, Medicare, and Withheld Federal Income Taxes You must withhold federal income, social security, and Medicare taxes required to be withheld from the salaries and wages of your employees. How to file an amended tax return for 2012 You are liable for the payment of these taxes to the federal government whether or not you collect them from your employees. How to file an amended tax return for 2012 If, for example, you withhold less than the correct tax from an employee's wages, you are still liable for the full amount. How to file an amended tax return for 2012 You must also pay the employer's share of social security and Medicare taxes. How to file an amended tax return for 2012 There is no employer share of Additional Medicare Tax. How to file an amended tax return for 2012 Form 943. How to file an amended tax return for 2012   Report withheld federal income tax, social security tax, and Medicare tax on Form 943. How to file an amended tax return for 2012 Your 2013 Form 943 is due by January 31, 2014 (or February 10, 2014, if you made deposits on time in full payment of the taxes due for the year). How to file an amended tax return for 2012 Deposits. How to file an amended tax return for 2012   Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld during the year. How to file an amended tax return for 2012 However, you may make payments with Form 943 instead of depositing them if you accumulate less than a $2,500 tax liability (“Total taxes after adjustments” line on Form 943) during the year and you pay in full with a timely filed return. How to file an amended tax return for 2012   For more information on deposit rules, see Publication 51 (Circular A). How to file an amended tax return for 2012 Electronic deposit requirement. How to file an amended tax return for 2012   You must use electronic funds transfer to make all federal tax deposits. How to file an amended tax return for 2012 Generally, electronic funds transfers are made using EFTPS. How to file an amended tax return for 2012 If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. How to file an amended tax return for 2012 Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. How to file an amended tax return for 2012 EFTPS is a free service provided by the Department of Treasury. How to file an amended tax return for 2012 Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. How to file an amended tax return for 2012   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). How to file an amended tax return for 2012 To get more information about EFTPS or to enroll in EFTPS, visit www. How to file an amended tax return for 2012 eftps. How to file an amended tax return for 2012 gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). How to file an amended tax return for 2012 Additional information about EFTPS is also available in Publication 966. How to file an amended tax return for 2012 Form W-2. How to file an amended tax return for 2012   By January 31, you must furnish each employee a Form W-2 showing total wages for the previous year and total federal income tax, social security tax, and Medicare tax withheld. How to file an amended tax return for 2012 However, if an employee stops working for you and requests the form earlier, you must give it to the employee within 30 days of the later of the following dates. How to file an amended tax return for 2012 The date the employee requests the form. How to file an amended tax return for 2012 The date you make your final payment of wages to the employee. How to file an amended tax return for 2012 Compensation paid to H-2A visa holders. How to file an amended tax return for 2012   Report compensation of $600 or more paid to foreign agricultural workers who entered the country on H-2A visas in box 1 of Form W-2. How to file an amended tax return for 2012 Compensation paid to H-2A workers for agricultural labor performed in connection with this visa is not subject to social security and Medicare taxes, and therefore should not be reported as wages subject to social security tax (line 2), Medicare tax (line 4), or Additional Medicare Tax (line 6) on Form 943, and should not be reported as social security wages (box 3) or Medicare wages (box 5) on Form W-2. How to file an amended tax return for 2012   An employer is not required to withhold federal income tax from compensation it pays to an H-2A worker for agricultural labor performed in connection with this visa unless the worker asks for withholding and the employer agrees. How to file an amended tax return for 2012 In this case, the worker must give the employer a completed Form W-4. How to file an amended tax return for 2012 Federal income tax withheld should be reported on Form 943, line 8, and in box 2 of Form W-2. How to file an amended tax return for 2012   These reporting rules apply when the H-2A worker provides his or her taxpayer identification number (TIN) to the employer. How to file an amended tax return for 2012 For the rules relating to backup withholding and reporting when the H-2A worker does not provide a TIN, see the Instructions for Form 1099-MISC and the Instructions for Form 945. How to file an amended tax return for 2012 Trust fund recovery penalty. How to file an amended tax return for 2012   If you are responsible for withholding, accounting for, depositing, or paying federal withholding taxes and willfully fail to do so, you can be held liable for a penalty equal to the withheld tax not paid. How to file an amended tax return for 2012 A responsible person can be an officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. How to file an amended tax return for 2012 A trustee or agent with authority over the funds of the business can also be held responsible for the penalty. How to file an amended tax return for 2012   Willfully means voluntarily, consciously, and intentionally. How to file an amended tax return for 2012 Paying other expenses of the business instead of the taxes due is acting willfully. How to file an amended tax return for 2012 Consequences of treating an employee as an independent contractor. How to file an amended tax return for 2012   If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. How to file an amended tax return for 2012 See Publication 15-A for more information. How to file an amended tax return for 2012 Federal Unemployment (FUTA) Tax You must pay FUTA tax if you meet either of the following tests. How to file an amended tax return for 2012 You paid cash wages of $20,000 or more to farmworkers in any calendar quarter during the current or preceding calendar year. How to file an amended tax return for 2012 You employed 10 or more farmworkers for some part of at least 1 day during any 20 or more different calendar weeks during the current or preceding calendar year. How to file an amended tax return for 2012 These rules do not apply to exempt services of your spouse, your parents, or your children under age 21. How to file an amended tax return for 2012 See Family Employees , earlier. How to file an amended tax return for 2012 Alien farmworkers. How to file an amended tax return for 2012   Wages paid to aliens admitted on a temporary basis to the United States to perform farmwork (also known as “H-2A visa workers”) are exempt from FUTA tax. How to file an amended tax return for 2012 However, include your employment of these workers and the wages you paid them to determine whether you meet either of the above tests. How to file an amended tax return for 2012 Commodity wages. How to file an amended tax return for 2012   Payments in kind for farm labor are not cash wages. How to file an amended tax return for 2012 Do not count them to figure whether you are subject to FUTA tax or to figure how much tax you owe. How to file an amended tax return for 2012 Tax rate and credit. How to file an amended tax return for 2012   The gross FUTA tax rate is 6. How to file an amended tax return for 2012 0% of the first $7,000 cash wages you pay to each employee during the year. How to file an amended tax return for 2012 However, you are given a credit of up to 5. How to file an amended tax return for 2012 4% of the first $7,000 cash wages you pay to each employee for the state unemployment tax you pay. How to file an amended tax return for 2012 If your state tax rate (experience rate) is less than 5. How to file an amended tax return for 2012 4%, you may still be allowed the full 5. How to file an amended tax return for 2012 4% credit. How to file an amended tax return for 2012   If you do not pay the state tax, you cannot take the credit. How to file an amended tax return for 2012 If you are exempt from state unemployment tax for any reason, the full 6. How to file an amended tax return for 2012 0% rate applies. How to file an amended tax return for 2012 See the Instructions for Form 940 for additional information. How to file an amended tax return for 2012 More information. How to file an amended tax return for 2012   For more information on FUTA tax, see Publication 51 (Circular A). How to file an amended tax return for 2012 Reporting and Paying FUTA Tax The FUTA tax is imposed on you as the employer. How to file an amended tax return for 2012 It must not be collected or deducted from the wages of your employees. How to file an amended tax return for 2012 Form 940. How to file an amended tax return for 2012   Report FUTA tax on Form 940. How to file an amended tax return for 2012 The 2013 Form 940 is due January 31, 2014 (or February 10, 2014, if you timely deposited the full amount of your 2013 FUTA tax). How to file an amended tax return for 2012 Deposits. How to file an amended tax return for 2012   If at the end of any calendar quarter you owe, but have not yet deposited, more than $500 in FUTA tax for the year, you must make a deposit by the end of the following month. How to file an amended tax return for 2012 If the undeposited tax is $500 or less at the end of a quarter, you do not have to deposit it. How to file an amended tax return for 2012 You can add it to the tax for the next quarter. How to file an amended tax return for 2012 If the total undeposited tax is more than $500 at the end of the next quarter, a deposit will be required. How to file an amended tax return for 2012 If the total undeposited tax at the end of the 4th quarter is $500 or less, you can either make a deposit or pay it with your return by the January 31, 2014, due date. How to file an amended tax return for 2012 Electronic deposit requirement. How to file an amended tax return for 2012   You must use electronic funds transfer to make all federal tax deposits. How to file an amended tax return for 2012 Generally, electronic funds transfers are made using EFTPS. How to file an amended tax return for 2012 If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. How to file an amended tax return for 2012 Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. How to file an amended tax return for 2012 EFTPS is a free service provided by the Department of Treasury. How to file an amended tax return for 2012 Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. How to file an amended tax return for 2012   For more information on making federal tax deposits, see section 7 of Publication 51 (Circular A). How to file an amended tax return for 2012 To get more information about EFTPS or to enroll in EFTPS, visit www. How to file an amended tax return for 2012 eftps. How to file an amended tax return for 2012 gov or call 1-800-555-4477 or 1-800-733-4829 (TDD). How to file an amended tax return for 2012 Additional information about EFTPS is also available in Publication 966. 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Understanding your CP259G Notice

We sent you this notice because our records indicate you did not file a required Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • Disregard this notice if you have filed the return within the last four weeks using the same name and EIN listed on the notice.
  • Otherwise, file your required Form 1120-POL immediately according to the instructions on the notice.
    • If you don't think you need to file, complete the Response form enclosed with your notice and mail it to us using the envelope provided.
    • If you filed more than four weeks ago or used a different name or EIN, complete the Response form enclosed with your notice and mail it to us in the envelope provided along with a signed and dated copy of the return.

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Answers to Common Questions

Which organizations must file a Form 1120-POL?
A political organization, whether or not it is tax-exempt, must file Form 1120-POL if it has taxable income for any year in excess of the $100 specific deduction allowed under section 527. An exempt organization that is not a political organization must file Form 1120-POL if it is treated as having political organization taxable income under section 527(f)(1).

When is Form 1120-POL due?
Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. If any due date falls on a Saturday, Sunday or legal holiday, the organization can file the return on the next business day.

More information can be found at Political Organizations - Annual Income Tax Returns.

Can I get help over the phone?
If you have questions and/or need help completing the form, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

Where can I go for more information about tax-exempt organizations?
For more information on tax-exempt organizations see Tax Information for Charities & Other Non-Profits.


Tips for next year

Review the political organization resources at Tax Information for Political Organizations.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

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Page Last Reviewed or Updated: 29-Mar-2014

The How To File An Amended Tax Return For 2012

How to file an amended tax return for 2012 23. How to file an amended tax return for 2012   Interest Expense Table of Contents Introduction Useful Items - You may want to see: Home Mortgage InterestAmount Deductible Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement Investment InterestInvestment Property Allocation of Interest Expense Limit on Deduction Items You Cannot DeductPersonal Interest Allocation of Interest How To ReportMore than one borrower. How to file an amended tax return for 2012 Mortgage proceeds used for business or investment. How to file an amended tax return for 2012 Introduction This chapter discusses what interest expenses you can deduct. How to file an amended tax return for 2012 Interest is the amount you pay for the use of borrowed money. How to file an amended tax return for 2012 The following are types of interest you can deduct as itemized deductions on Schedule A (Form 1040). How to file an amended tax return for 2012 Home mortgage interest, including certain points and mortgage insurance premiums. How to file an amended tax return for 2012 Investment interest. How to file an amended tax return for 2012 This chapter explains these deductions. How to file an amended tax return for 2012 It also explains where to deduct other types of interest and lists some types of interest you cannot deduct. How to file an amended tax return for 2012 Use Table 23-1 to find out where to get more information on various types of interest, including investment interest. How to file an amended tax return for 2012 Useful Items - You may want to see: Publication 936 Home Mortgage Interest Deduction 550 Investment Income and Expenses Home Mortgage Interest Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). How to file an amended tax return for 2012 The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. How to file an amended tax return for 2012 You can deduct home mortgage interest if all the following conditions are met. How to file an amended tax return for 2012 You file Form 1040 and itemize deductions on Schedule A (Form 1040). How to file an amended tax return for 2012 The mortgage is a secured debt on a qualified home in which you have an ownership interest. How to file an amended tax return for 2012 (Generally, your mortgage is a secured debt if you put your home up as collateral to protect the interest of the lender. How to file an amended tax return for 2012 The term “qualified home” means your main home or second home. How to file an amended tax return for 2012 For details, see Publication 936. How to file an amended tax return for 2012 )  Both you and the lender must intend that the loan be repaid. How to file an amended tax return for 2012 Amount Deductible In most cases, you can deduct all of your home mortgage interest. How to file an amended tax return for 2012 How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. How to file an amended tax return for 2012 Fully deductible interest. How to file an amended tax return for 2012   If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on those mortgages. How to file an amended tax return for 2012 (If any one mortgage fits into more than one category, add the debt that fits in each category to your other debt in the same category. How to file an amended tax return for 2012 )   The three categories are as follows: Mortgages you took out on or before October 13, 1987 (called grandfathered debt). How to file an amended tax return for 2012 Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately). How to file an amended tax return for 2012 Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2013 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2). How to file an amended tax return for 2012 The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. How to file an amended tax return for 2012   See Part II of Publication 936 for more detailed definitions of grandfathered, home acquisition, and home equity debt. How to file an amended tax return for 2012    You can use Figure 23-A to check whether your home mortgage interest is fully deductible. How to file an amended tax return for 2012 Figure 23-A. How to file an amended tax return for 2012 Is My Home Mortgage Interest Fully Deductible? Please click here for the text description of the image. How to file an amended tax return for 2012 Figure 23-A. How to file an amended tax return for 2012 Is My Interest Fully Deductible? Limits on deduction. How to file an amended tax return for 2012   You cannot fully deduct interest on a mortgage that does not fit into any of the three categories listed earlier. How to file an amended tax return for 2012 If this applies to you, see Part II of Publication 936 to figure the amount of interest you can deduct. How to file an amended tax return for 2012 Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. How to file an amended tax return for 2012 It also describes certain special situations that may affect your deduction. How to file an amended tax return for 2012 Late payment charge on mortgage payment. How to file an amended tax return for 2012   You can deduct as home mortgage interest a late payment charge if it was not for a specific service performed in connection with your mortgage loan. How to file an amended tax return for 2012 Mortgage prepayment penalty. How to file an amended tax return for 2012   If you pay off your home mortgage early, you may have to pay a penalty. How to file an amended tax return for 2012 You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. How to file an amended tax return for 2012 Sale of home. How to file an amended tax return for 2012   If you sell your home, you can deduct your home mortgage interest (subject to any limits that apply) paid up to, but not including, the date of sale. How to file an amended tax return for 2012 Example. How to file an amended tax return for 2012 John and Peggy Harris sold their home on May 7. How to file an amended tax return for 2012 Through April 30, they made home mortgage interest payments of $1,220. How to file an amended tax return for 2012 The settlement sheet for the sale of the home showed $50 interest for the 6-day period in May up to, but not including, the date of sale. How to file an amended tax return for 2012 Their mortgage interest deduction is $1,270 ($1,220 + $50). How to file an amended tax return for 2012 Prepaid interest. How to file an amended tax return for 2012   If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. How to file an amended tax return for 2012 You can deduct in each year only the interest that qualifies as home mortgage interest for that year. How to file an amended tax return for 2012 However, there is an exception that applies to points, discussed later. How to file an amended tax return for 2012 Mortgage interest credit. How to file an amended tax return for 2012   You may be able to claim a mortgage interest credit if you were issued a mortgage credit certificate (MCC) by a state or local government. How to file an amended tax return for 2012 Figure the credit on Form 8396, Mortgage Interest Credit. How to file an amended tax return for 2012 If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. How to file an amended tax return for 2012   For more information on the credit, see chapter 37. How to file an amended tax return for 2012 Ministers' and military housing allowance. How to file an amended tax return for 2012   If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you can still deduct your home mortgage interest. How to file an amended tax return for 2012 Hardest Hit Fund and Emergency Homeowners' Loan Programs. How to file an amended tax return for 2012   You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions. How to file an amended tax return for 2012 You received assistance under: A State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest, or An Emergency Homeowners' Loan Program administered by the Department of Housing and Urban Development (HUD) or a state. How to file an amended tax return for 2012 You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home. How to file an amended tax return for 2012 If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098-MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received from payer(s) / borrower(s)), box 4 (mortgage insurance premiums) and box 5 (real property taxes). How to file an amended tax return for 2012 However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home. How to file an amended tax return for 2012 Mortgage assistance payments under section 235 of the National Housing Act. How to file an amended tax return for 2012   If you qualify for mortgage assistance payments for lower-income families under section 235 of the National Housing Act, part or all of the interest on your mortgage may be paid for you. How to file an amended tax return for 2012 You cannot deduct the interest that is paid for you. How to file an amended tax return for 2012 No other effect on taxes. How to file an amended tax return for 2012   Do not include these mortgage assistance payments in your income. How to file an amended tax return for 2012 Also, do not use these payments to reduce other deductions, such as real estate taxes. How to file an amended tax return for 2012 Divorced or separated individuals. How to file an amended tax return for 2012   If a divorce or separation agreement requires you or your spouse or former spouse to pay home mortgage interest on a home owned by both of you, the payment of interest may be alimony. How to file an amended tax return for 2012 See the discussion of Payments for jointly-owned home in chapter 18. How to file an amended tax return for 2012 Redeemable ground rents. How to file an amended tax return for 2012   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. How to file an amended tax return for 2012   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. How to file an amended tax return for 2012 For more information, see Publication 936. How to file an amended tax return for 2012 Nonredeemable ground rents. How to file an amended tax return for 2012   Payments on a nonredeemable ground rent are not mortgage interest. How to file an amended tax return for 2012 You can deduct them as rent if they are a business expense or if they are for rental property. How to file an amended tax return for 2012 Reverse mortgages. How to file an amended tax return for 2012   A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. How to file an amended tax return for 2012 With a reverse mortgage, you retain title to your home. How to file an amended tax return for 2012 Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die. How to file an amended tax return for 2012 Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. How to file an amended tax return for 2012 Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until the loan is paid in full. How to file an amended tax return for 2012 Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Publication 936. How to file an amended tax return for 2012 Rental payments. How to file an amended tax return for 2012   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. How to file an amended tax return for 2012 This is true even if the settlement papers call them interest. How to file an amended tax return for 2012 You cannot deduct these payments as home mortgage interest. How to file an amended tax return for 2012 Mortgage proceeds invested in tax-exempt securities. How to file an amended tax return for 2012   You cannot deduct the home mortgage interest on grandfathered debt or home equity debt if you used the proceeds of the mortgage to buy securities or certificates that produce tax-free income. How to file an amended tax return for 2012 “Grandfathered debt” and “home equity debt” are defined earlier under Amount Deductible. How to file an amended tax return for 2012 Refunds of interest. How to file an amended tax return for 2012   If you receive a refund of interest in the same tax year you paid it, you must reduce your interest expense by the amount refunded to you. How to file an amended tax return for 2012 If you receive a refund of interest you deducted in an earlier year, you generally must include the refund in income in the year you receive it. How to file an amended tax return for 2012 However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. How to file an amended tax return for 2012 This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. How to file an amended tax return for 2012    If you received a refund of interest you overpaid in an earlier year, you generally will receive a Form 1098, Mortgage Interest Statement, showing the refund in box 3. How to file an amended tax return for 2012 For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. How to file an amended tax return for 2012   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in chapter 12. How to file an amended tax return for 2012 Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. How to file an amended tax return for 2012 Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. How to file an amended tax return for 2012 A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. How to file an amended tax return for 2012 See Points paid by the seller , later. How to file an amended tax return for 2012 General Rule You generally cannot deduct the full amount of points in the year paid. How to file an amended tax return for 2012 Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. How to file an amended tax return for 2012 See Deduction Allowed Ratably , next. How to file an amended tax return for 2012 For exceptions to the general rule, see Deduction Allowed in Year Paid , later. How to file an amended tax return for 2012 Deduction Allowed Ratably If you do not meet the tests listed under Deduction Allowed in Year Paid , later, the loan is not a home improvement loan, or you choose not to deduct your points in full in the year paid, you can deduct the points ratably (equally) over the life of the loan if you meet all the following tests. How to file an amended tax return for 2012 You use the cash method of accounting. How to file an amended tax return for 2012 This means you report income in the year you receive it and deduct expenses in the year you pay them. How to file an amended tax return for 2012 Most individuals use this method. How to file an amended tax return for 2012 Your loan is secured by a home. How to file an amended tax return for 2012 (The home does not need to be your main home. How to file an amended tax return for 2012 ) Your loan period is not more than 30 years. How to file an amended tax return for 2012 If your loan period is more than 10 years, the terms of your loan are the same as other loans offered in your area for the same or longer period. How to file an amended tax return for 2012 Either your loan amount is $250,000 or less, or the number of points is not more than: 4, if your loan period is 15 years or less, or 6, if your loan period is more than 15 years. How to file an amended tax return for 2012 Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. How to file an amended tax return for 2012 (You can use Figure 23-B as a quick guide to see whether your points are fully deductible in the year paid. How to file an amended tax return for 2012 ) Your loan is secured by your main home. How to file an amended tax return for 2012 (Your main home is the one you ordinarily live in most of the time. How to file an amended tax return for 2012 ) Paying points is an established business practice in the area where the loan was made. How to file an amended tax return for 2012 The points paid were not more than the points generally charged in that area. How to file an amended tax return for 2012 You use the cash method of accounting. How to file an amended tax return for 2012 This means you report income in the year you receive it and deduct expenses in the year you pay them. How to file an amended tax return for 2012 (If you want more information about this method, see Accounting Methods in chapter 1. How to file an amended tax return for 2012 ) The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. How to file an amended tax return for 2012 The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. How to file an amended tax return for 2012 The funds you provided are not required to have been applied to the points. How to file an amended tax return for 2012 They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. How to file an amended tax return for 2012 You cannot have borrowed these funds from your lender or mortgage broker. How to file an amended tax return for 2012 You use your loan to buy or build your main home. How to file an amended tax return for 2012 The points were computed as a percentage of the principal amount of the mortgage. How to file an amended tax return for 2012 The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. How to file an amended tax return for 2012 The points may be shown as paid from either your funds or the seller's. How to file an amended tax return for 2012 Figure 23-B. How to file an amended tax return for 2012 Are My Points Fully Deductible This Year? Please click here for the text description of the image. How to file an amended tax return for 2012 Figure 23-B. How to file an amended tax return for 2012 Are My Points Fully Deductible This Year? Note. How to file an amended tax return for 2012 If you meet all of these tests, you can choose to either fully deduct the points in the year paid, or deduct them over the life of the loan. How to file an amended tax return for 2012 Home improvement loan. How to file an amended tax return for 2012   You can also fully deduct in the year paid points paid on a loan to improve your main home, if tests (1) through (6) are met. How to file an amended tax return for 2012 Second home. How to file an amended tax return for 2012 You cannot fully deduct in the year paid points you pay on loans secured by your second home. How to file an amended tax return for 2012 You can deduct these points only over the life of the loan. How to file an amended tax return for 2012 Refinancing. How to file an amended tax return for 2012   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. How to file an amended tax return for 2012 This is true even if the new mortgage is secured by your main home. How to file an amended tax return for 2012   However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first 6 tests listed under Deduction Allowed in Year Paid , earlier, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. How to file an amended tax return for 2012 You can deduct the rest of the points over the life of the loan. How to file an amended tax return for 2012 Example 1. How to file an amended tax return for 2012 In 1998, Bill Fields got a mortgage to buy a home. How to file an amended tax return for 2012 In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. How to file an amended tax return for 2012 The mortgage is secured by his home. How to file an amended tax return for 2012 To get the new loan, he had to pay three points ($3,000). How to file an amended tax return for 2012 Two points ($2,000) were for prepaid interest, and one point ($1,000) was charged for services, in place of amounts that ordinarily are stated separately on the settlement statement. How to file an amended tax return for 2012 Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. How to file an amended tax return for 2012 The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. How to file an amended tax return for 2012 Bill's first payment on the new loan was due July 1. How to file an amended tax return for 2012 He made six payments on the loan in 2013 and is a cash basis taxpayer. How to file an amended tax return for 2012 Bill used the funds from the new mortgage to repay his existing mortgage. How to file an amended tax return for 2012 Although the new mortgage loan was for Bill's continued ownership of his main home, it was not for the purchase or improvement of that home. How to file an amended tax return for 2012 He cannot deduct all of the points in 2013. How to file an amended tax return for 2012 He can deduct two points ($2,000) ratably over the life of the loan. How to file an amended tax return for 2012 He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. How to file an amended tax return for 2012 The other point ($1,000) was a fee for services and is not deductible. How to file an amended tax return for 2012 Example 2. How to file an amended tax return for 2012 The facts are the same as in Example 1, except that Bill used $25,000 of the loan proceeds to improve his home and $75,000 to repay his existing mortgage. How to file an amended tax return for 2012 Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. How to file an amended tax return for 2012 His deduction is $500 ($2,000 × 25%). How to file an amended tax return for 2012 Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. How to file an amended tax return for 2012 This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. How to file an amended tax return for 2012 The total amount Bill deducts in 2013 is $550 ($500 + $50). How to file an amended tax return for 2012 Special Situations This section describes certain special situations that may affect your deduction of points. How to file an amended tax return for 2012 Original issue discount. How to file an amended tax return for 2012   If you do not qualify to either deduct the points in the year paid or deduct them ratably over the life of the loan, or if you choose not to use either of these methods, the points reduce the issue price of the loan. How to file an amended tax return for 2012 This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. How to file an amended tax return for 2012 Amounts charged for services. How to file an amended tax return for 2012   Amounts charged by the lender for specific services connected to the loan are not interest. How to file an amended tax return for 2012 Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. How to file an amended tax return for 2012 You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. How to file an amended tax return for 2012 Points paid by the seller. How to file an amended tax return for 2012   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. How to file an amended tax return for 2012 Treatment by seller. How to file an amended tax return for 2012   The seller cannot deduct these fees as interest. How to file an amended tax return for 2012 But they are a selling expense that reduces the amount realized by the seller. How to file an amended tax return for 2012 See chapter 15 for information on selling your home. How to file an amended tax return for 2012 Treatment by buyer. How to file an amended tax return for 2012    The buyer reduces the basis of the home by the amount of the seller-paid points and treats the points as if he or she had paid them. How to file an amended tax return for 2012 If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. How to file an amended tax return for 2012 If any of those tests are not met, the buyer deducts the points over the life of the loan. How to file an amended tax return for 2012   For information about basis, see chapter 13. How to file an amended tax return for 2012 Funds provided are less than points. How to file an amended tax return for 2012   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the funds you provided were less than the points charged to you (test (6)), you can deduct the points in the year paid, up to the amount of funds you provided. How to file an amended tax return for 2012 In addition, you can deduct any points paid by the seller. How to file an amended tax return for 2012 Example 1. How to file an amended tax return for 2012 When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). How to file an amended tax return for 2012 You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. How to file an amended tax return for 2012 Of the $1,000 charged for points, you can deduct $750 in the year paid. How to file an amended tax return for 2012 You spread the remaining $250 over the life of the mortgage. How to file an amended tax return for 2012 Example 2. How to file an amended tax return for 2012 The facts are the same as in Example 1, except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. How to file an amended tax return for 2012 In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). How to file an amended tax return for 2012 You spread the remaining $250 over the life of the mortgage. How to file an amended tax return for 2012 You must reduce the basis of your home by the $1,000 paid by the seller. How to file an amended tax return for 2012 Excess points. How to file an amended tax return for 2012   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the points paid were more than generally paid in your area (test (3)), you deduct in the year paid only the points that are generally charged. How to file an amended tax return for 2012 You must spread any additional points over the life of the mortgage. How to file an amended tax return for 2012 Mortgage ending early. How to file an amended tax return for 2012   If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. How to file an amended tax return for 2012 However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. How to file an amended tax return for 2012 Instead, deduct the remaining balance over the term of the new loan. How to file an amended tax return for 2012    A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. How to file an amended tax return for 2012 Example. How to file an amended tax return for 2012 Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. How to file an amended tax return for 2012 He deducts $200 points per year. How to file an amended tax return for 2012 Through 2012, Dan has deducted $2,200 of the points. How to file an amended tax return for 2012 Dan prepaid his mortgage in full in 2013. How to file an amended tax return for 2012 He can deduct the remaining $800 of points in 2013. How to file an amended tax return for 2012 Limits on deduction. How to file an amended tax return for 2012   You cannot fully deduct points paid on a mortgage unless the mortgage fits into one of the categories listed earlier under Fully deductible interest . How to file an amended tax return for 2012 See Publication 936 for details. How to file an amended tax return for 2012 Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. How to file an amended tax return for 2012 The insurance must be in connection with home acquisition debt and the insurance contract must have been issued after 2006. How to file an amended tax return for 2012 Qualified mortgage insurance. How to file an amended tax return for 2012   Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006). How to file an amended tax return for 2012   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. How to file an amended tax return for 2012 If provided by the Rural Housing Service, it is commonly known as a guarantee fee. How to file an amended tax return for 2012 These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. How to file an amended tax return for 2012 Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. How to file an amended tax return for 2012 Special rules for prepaid mortgage insurance. How to file an amended tax return for 2012   Generally, if you paid premiums for qualified mortgage insurance that are allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. How to file an amended tax return for 2012 You must allocate the premiums over the shorter of the stated term of the mortgage or 84 months, beginning with the month the insurance was obtained. How to file an amended tax return for 2012 No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. How to file an amended tax return for 2012 This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. How to file an amended tax return for 2012 See the Example below. How to file an amended tax return for 2012 Example. How to file an amended tax return for 2012 Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. How to file an amended tax return for 2012 Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. How to file an amended tax return for 2012 Since the $9,240 in private mortgage insurance is allocable to periods after 2012, Ryan must allocate the $9,240 over the shorter of the life of the mortgage or 84 months. How to file an amended tax return for 2012 Ryan's adjusted gross income (AGI) for 2012 is $76,000. How to file an amended tax return for 2012 Ryan can deduct $880 ($9,240 ÷ 84 × 8 months) for qualified mortgage insurance premiums in 2012. How to file an amended tax return for 2012 For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 × 12 months) if his AGI is $100,000 or less. How to file an amended tax return for 2012 In this example, the mortgage insurance premiums are allocated over 84 months, which is shorter than the life of the mortgage of 15 years (180 months). How to file an amended tax return for 2012 Limit on deduction. How to file an amended tax return for 2012   If your adjusted gross income on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated. How to file an amended tax return for 2012 See Line 13 in the instructions for Schedule A (Form 1040) and complete the Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. How to file an amended tax return for 2012 If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. How to file an amended tax return for 2012 Form 1098, Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points and mortgage insurance premiums) during the year on any one mortgage, you generally will receive a Form 1098 or a similar statement from the mortgage holder. How to file an amended tax return for 2012 You will receive the statement if you pay interest to a person (including a financial institution or a cooperative housing corporation) in the course of that person's trade or business. How to file an amended tax return for 2012 A governmental unit is a person for purposes of furnishing the statement. How to file an amended tax return for 2012 The statement for each year should be sent to you by January 31 of the following year. How to file an amended tax return for 2012 A copy of this form will also be sent to the IRS. How to file an amended tax return for 2012 The statement will show the total interest you paid during the year, any mortgage insurance premiums you paid, and if you purchased a main home during the year, it also will show the deductible points paid during the year, including seller-paid points. How to file an amended tax return for 2012 However, it should not show any interest that was paid for you by a government agency. How to file an amended tax return for 2012 As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. How to file an amended tax return for 2012 However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. How to file an amended tax return for 2012 See Points , earlier, to determine whether you can deduct points not shown on Form 1098. How to file an amended tax return for 2012 Prepaid interest on Form 1098. How to file an amended tax return for 2012   If you prepaid interest in 2013 that accrued in full by January 15, 2014, this prepaid interest may be included in box 1 of Form 1098. How to file an amended tax return for 2012 However, you cannot deduct the prepaid amount for January 2014 in 2013. How to file an amended tax return for 2012 (See Prepaid interest , earlier. How to file an amended tax return for 2012 ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. How to file an amended tax return for 2012 You will include the interest for January 2014 with the other interest you pay for 2014. How to file an amended tax return for 2012 See How To Report , later. How to file an amended tax return for 2012 Refunded interest. How to file an amended tax return for 2012   If you received a refund of mortgage interest you overpaid in an earlier year, you generally will receive a Form 1098 showing the refund in box 3. How to file an amended tax return for 2012 See Refunds of interest , earlier. How to file an amended tax return for 2012 Mortgage insurance premiums. How to file an amended tax return for 2012   The amount of mortgage insurance premiums you paid during 2013 may be shown in box 4 of Form 1098. How to file an amended tax return for 2012 See Mortgage Insurance Premiums, earlier. How to file an amended tax return for 2012 Investment Interest This section discusses interest expenses you may be able to deduct as an investor. How to file an amended tax return for 2012 If you borrow money to buy property you hold for investment, the interest you pay is investment interest. How to file an amended tax return for 2012 You can deduct investment interest subject to the limit discussed later. How to file an amended tax return for 2012 However, you cannot deduct interest you incurred to produce tax-exempt income. How to file an amended tax return for 2012 Nor can you deduct interest expenses on straddles. How to file an amended tax return for 2012 Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. How to file an amended tax return for 2012 Investment Property Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. How to file an amended tax return for 2012 It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). How to file an amended tax return for 2012 Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). How to file an amended tax return for 2012 Partners, shareholders, and beneficiaries. How to file an amended tax return for 2012   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. How to file an amended tax return for 2012 Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. How to file an amended tax return for 2012 Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. How to file an amended tax return for 2012 The allocation is not affected by the use of property that secures the debt. How to file an amended tax return for 2012 Limit on Deduction Generally, your deduction for investment interest expense is limited to the amount of your net investment income. How to file an amended tax return for 2012 You can carry over the amount of investment interest that you could not deduct because of this limit to the next tax year. How to file an amended tax return for 2012 The interest carried over is treated as investment interest paid or accrued in that next year. How to file an amended tax return for 2012 You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. How to file an amended tax return for 2012 Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. How to file an amended tax return for 2012 Investment income. How to file an amended tax return for 2012    This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). How to file an amended tax return for 2012 Investment income does not include Alaska Permanent Fund dividends. How to file an amended tax return for 2012 It also does not include qualified dividends or net capital gain unless you choose to include them. How to file an amended tax return for 2012 Choosing to include qualified dividends. How to file an amended tax return for 2012   Investment income generally does not include qualified dividends, discussed in chapter 8. How to file an amended tax return for 2012 However, you can choose to include all or part of your qualified dividends in investment income. How to file an amended tax return for 2012   You make this choice by completing Form 4952, line 4g, according to its instructions. How to file an amended tax return for 2012   If you choose to include any amount of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. How to file an amended tax return for 2012 Choosing to include net capital gain. How to file an amended tax return for 2012   Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). How to file an amended tax return for 2012 However, you can choose to include all or part of your net capital gain in investment income. How to file an amended tax return for 2012    You make this choice by completing Form 4952, line 4g, according to its instructions. How to file an amended tax return for 2012   If you choose to include any amount of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. How to file an amended tax return for 2012    Before making either choice, consider the overall effect on your tax liability. How to file an amended tax return for 2012 Compare your tax if you make one or both of these choices with your tax if you do not. How to file an amended tax return for 2012 Investment income of child reported on parent's return. How to file an amended tax return for 2012    Investment income includes the part of your child's interest and dividend income that you choose to report on your return. How to file an amended tax return for 2012 If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814, Parents' Election To Report Child's Interest and Dividends. How to file an amended tax return for 2012 Child's qualified dividends. How to file an amended tax return for 2012   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. How to file an amended tax return for 2012 However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. How to file an amended tax return for 2012   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). How to file an amended tax return for 2012 Child's Alaska Permanent Fund dividends. How to file an amended tax return for 2012   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. How to file an amended tax return for 2012 To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. How to file an amended tax return for 2012 Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. How to file an amended tax return for 2012 Subtract the result from the amount on Form 8814, line 12. How to file an amended tax return for 2012 Child's capital gain distributions. How to file an amended tax return for 2012    If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D, line 13, or Form 1040, line 13) generally does not count as investment income. How to file an amended tax return for 2012 However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. How to file an amended tax return for 2012   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). How to file an amended tax return for 2012 Investment expenses. How to file an amended tax return for 2012   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. How to file an amended tax return for 2012 Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. How to file an amended tax return for 2012 Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A, line 27. How to file an amended tax return for 2012 Losses from passive activities. How to file an amended tax return for 2012   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). How to file an amended tax return for 2012 See Publication 925, Passive Activity and At-Risk Rules, for information about passive activities. How to file an amended tax return for 2012 Form 4952 Use Form 4952, Investment Interest Expense Deduction, to figure your deduction for investment interest. How to file an amended tax return for 2012 Exception to use of Form 4952. How to file an amended tax return for 2012   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. How to file an amended tax return for 2012 Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. How to file an amended tax return for 2012 You do not have any other deductible investment expenses. How to file an amended tax return for 2012 You have no carryover of investment interest expense from 2012. How to file an amended tax return for 2012 If you meet all of these tests, you can deduct all of your investment interest. How to file an amended tax return for 2012 More Information For more information on investment interest, see Interest Expenses in chapter 3 of Publication 550. How to file an amended tax return for 2012 Items You Cannot Deduct Some interest payments are not deductible. How to file an amended tax return for 2012 Certain expenses similar to interest also are not deductible. How to file an amended tax return for 2012 Nondeductible expenses include the following items. How to file an amended tax return for 2012 Personal interest (discussed later). How to file an amended tax return for 2012 Service charges (however, see Other Expenses (Line 23) in chapter 28). How to file an amended tax return for 2012 Annual fees for credit cards. How to file an amended tax return for 2012 Loan fees. How to file an amended tax return for 2012 Credit investigation fees. How to file an amended tax return for 2012 Interest to purchase or carry tax-exempt securities. How to file an amended tax return for 2012 Penalties. How to file an amended tax return for 2012   You cannot deduct fines and penalties paid to a government for violations of law, regardless of their nature. How to file an amended tax return for 2012 Personal Interest Personal interest is not deductible. How to file an amended tax return for 2012 Personal interest is any interest that is not home mortgage interest, investment interest, business interest, or other deductible interest. How to file an amended tax return for 2012 It includes the following items. How to file an amended tax return for 2012 Interest on car loans (unless you use the car for business). How to file an amended tax return for 2012 Interest on federal, state, or local income tax. How to file an amended tax return for 2012 Finance charges on credit cards, retail installment contracts, and revolving charge accounts incurred for personal expenses. How to file an amended tax return for 2012 Late payment charges by a public utility. How to file an amended tax return for 2012 You may be able to deduct interest you pay on a qualified student loan. How to file an amended tax return for 2012 For details, see Publication 970, Tax Benefits for Education. How to file an amended tax return for 2012 Allocation of Interest If you use the proceeds of a loan for more than one purpose (for example, personal and business), you must allocate the interest on the loan to each use. How to file an amended tax return for 2012 However, you do not have to allocate home mortgage interest if it is fully deductible, regardless of how the funds are used. How to file an amended tax return for 2012 You allocate interest (other than fully deductible home mortgage interest) on a loan in the same way as the loan itself is allocated. How to file an amended tax return for 2012 You do this by tracing disbursements of the debt proceeds to specific uses. How to file an amended tax return for 2012 For details on how to do this, see chapter 4 of Publication 535. How to file an amended tax return for 2012 How To Report You must file Form 1040 to deduct any home mortgage interest expense on your tax return. How to file an amended tax return for 2012 Where you deduct your interest expense generally depends on how you use the loan proceeds. How to file an amended tax return for 2012 See Table 23-1 for a summary of where to deduct your interest expense. How to file an amended tax return for 2012 Home mortgage interest and points. How to file an amended tax return for 2012   Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. How to file an amended tax return for 2012 If you paid more deductible interest to the financial institution than the amount shown on Form 1098, show the larger deductible amount on line 10. How to file an amended tax return for 2012 Attach a statement explaining the difference and print “See attached” next to line 10. How to file an amended tax return for 2012    Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. How to file an amended tax return for 2012 If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and taxpayer identification number (TIN) on the dotted lines next to line 11. How to file an amended tax return for 2012 The seller must give you this number and you must give the seller your TIN. How to file an amended tax return for 2012 A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. How to file an amended tax return for 2012 Failure to meet any of these requirements may result in a $50 penalty for each failure. How to file an amended tax return for 2012 The TIN can be either a social security number, an individual taxpayer identification number (issued by the Internal Revenue Service), or an employer identification number. How to file an amended tax return for 2012 See Social Security Number (SSN) in chapter 1 for more information about TINs. How to file an amended tax return for 2012    If you can take a deduction for points that were not reported to you on Form 1098, deduct those points on Schedule A (Form 1040), line 12. How to file an amended tax return for 2012   Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. How to file an amended tax return for 2012 More than one borrower. How to file an amended tax return for 2012   If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. How to file an amended tax return for 2012 Show how much of the interest each of you paid, and give the name and address of the person who received the form. How to file an amended tax return for 2012 Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. How to file an amended tax return for 2012 Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. How to file an amended tax return for 2012   Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. How to file an amended tax return for 2012 You should let each of the other borrowers know what his or her share is. How to file an amended tax return for 2012 Mortgage proceeds used for business or investment. How to file an amended tax return for 2012    If your home mortgage interest deduction is limited, but all or part of the mortgage proceeds were used for business, investment, or other deductible activities, see Table 23-1. How to file an amended tax return for 2012 It shows where to deduct the part of your excess interest that is for those activities. How to file an amended tax return for 2012 Investment interest. How to file an amended tax return for 2012    Deduct investment interest, subject to certain limits discussed in Publication 550, on Schedule A (Form 1040), line 14. How to file an amended tax return for 2012 Amortization of bond premium. How to file an amended tax return for 2012   There are various ways to treat the premium you pay to buy taxable bonds. How to file an amended tax return for 2012 See Bond Premium Amortization in Publication 550. How to file an amended tax return for 2012 Income-producing rental or royalty interest. How to file an amended tax return for 2012   Deduct interest on a loan for income-producing rental or royalty property that is not used in your business in Part I of Schedule E (Form 1040). How to file an amended tax return for 2012 Example. How to file an amended tax return for 2012 You rent out part of your home and borrow money to make repairs. How to file an amended tax return for 2012 You can deduct only the interest payment for the rented part in Part I of Schedule E (Form 1040). How to file an amended tax return for 2012 Deduct the rest of the interest payment on Schedule A (Form 1040) if it is deductible home mortgage interest. How to file an amended tax return for 2012 Table 23-1. How to file an amended tax return for 2012 Where To Deduct Your Interest Expense IF you have . How to file an amended tax return for 2012 . How to file an amended tax return for 2012 . How to file an amended tax return for 2012 THEN deduct it on . How to file an amended tax return for 2012 . How to file an amended tax return for 2012 . How to file an amended tax return for 2012 AND for more information go to . How to file an amended tax return for 2012 . How to file an amended tax return for 2012 . How to file an amended tax return for 2012 deductible student loan interest Form 1040, line 33, or Form 1040A, line 18 Publication 970. How to file an amended tax return for 2012 deductible home mortgage interest and points reported on Form 1098 Schedule A (Form 1040), line 10 Publication 936. How to file an amended tax return for 2012 deductible home mortgage interest not reported on Form 1098 Schedule A (Form 1040), line 11 Publication 936. How to file an amended tax return for 2012 deductible points not reported on Form 1098 Schedule A (Form 1040), line 12 Publication 936. How to file an amended tax return for 2012 deductible mortgage insurance premiums Schedule A (Form 1040), line 13 Publication 936. How to file an amended tax return for 2012 deductible investment interest (other than incurred to produce rents or royalties) Schedule A (Form 1040), line 14 Publication 550. How to file an amended tax return for 2012 deductible business interest (non-farm) Schedule C or C-EZ (Form 1040) Publication 535. How to file an amended tax return for 2012 deductible farm business interest Schedule F (Form 1040) Publications 225 and 535. How to file an amended tax return for 2012 deductible interest incurred to produce rents or royalties Schedule E (Form 1040) Publications 527 and 535. How to file an amended tax return for 2012 personal interest not deductible. How to file an amended tax return for 2012 Prev  Up  Next   Home   More Online Publications