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How To File An Amended Tax Return Online

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How To File An Amended Tax Return Online

How to file an amended tax return online 7. How to file an amended tax return online   Coverdell Education Savings Account (ESA) Table of Contents Introduction What Is a Coverdell ESAQualified Education Expenses ContributionsContribution Limits Additional Tax on Excess Contributions Rollovers and Other TransfersRollovers Changing the Designated Beneficiary Transfer Because of Divorce DistributionsTax-Free Distributions Taxable Distributions When Assets Must Be Distributed Introduction If your modified adjusted gross income (MAGI) is less than $110,000 ($220,000 if filing a joint return), you may be able to establish a Coverdell ESA to finance the qualified education expenses of a designated beneficiary. How to file an amended tax return online For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return. How to file an amended tax return online There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. How to file an amended tax return online However, total contributions for the beneficiary in any year cannot be more than $2,000, no matter how many accounts have been established. How to file an amended tax return online See Contributions , later. How to file an amended tax return online This benefit applies not only to higher education expenses, but also to elementary and secondary education expenses. How to file an amended tax return online What is the tax benefit of the Coverdell ESA. How to file an amended tax return online   Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. How to file an amended tax return online   If, for a year, distributions from an account are not more than a designated beneficiary's qualified education expenses at an eligible educational institution, the beneficiary will not owe tax on the distributions. How to file an amended tax return online See Tax-Free Distributions , later. How to file an amended tax return online    Table 7-1 summarizes the main features of the Coverdell ESA. How to file an amended tax return online Table 7-1. How to file an amended tax return online Coverdell ESA at a Glance Do not rely on this table alone. How to file an amended tax return online It provides only general highlights. How to file an amended tax return online See the text for definitions of terms in bold type and for more complete explanations. How to file an amended tax return online Question Answer What is a Coverdell ESA? A savings account that is set up to pay the qualified education expenses of a designated beneficiary. How to file an amended tax return online Where can it be established? It can be opened in the United States at any bank or other IRS-approved entity that offers Coverdell ESAs. How to file an amended tax return online Who can have a Coverdell ESA? Any beneficiary who is under age 18 or is a special needs beneficiary. How to file an amended tax return online Who can contribute to a Coverdell ESA? Generally, any individual (including the beneficiary) whose modified adjusted gross income for the year is less than $110,000 ($220,000 in the case of a joint return). How to file an amended tax return online Are distributions tax free? Yes, if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year. How to file an amended tax return online What Is a Coverdell ESA A Coverdell ESA is a trust or custodial account created or organized in the United States only for the purpose of paying the qualified education expenses of the Designated beneficiary (defined later) of the account. How to file an amended tax return online When the account is established, the designated beneficiary must be under age 18 or a special needs beneficiary. How to file an amended tax return online To be treated as a Coverdell ESA, the account must be designated as a Coverdell ESA when it is created. How to file an amended tax return online The document creating and governing the account must be in writing and must satisfy the following requirements. How to file an amended tax return online The trustee or custodian must be a bank or an entity approved by the IRS. How to file an amended tax return online The document must provide that the trustee or custodian can only accept a contribution that meets all of the following conditions. How to file an amended tax return online The contribution is in cash. How to file an amended tax return online The contribution is made before the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. How to file an amended tax return online The contribution would not result in total contributions for the year (not including rollover contributions) being more than $2,000. How to file an amended tax return online Money in the account cannot be invested in life insurance contracts. How to file an amended tax return online Money in the account cannot be combined with other property except in a common trust fund or common investment fund. How to file an amended tax return online The balance in the account generally must be distributed within 30 days after the earlier of the following events. How to file an amended tax return online The beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. How to file an amended tax return online The beneficiary's death. How to file an amended tax return online Qualified Education Expenses Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. How to file an amended tax return online For purposes of Coverdell ESAs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses. How to file an amended tax return online Designated beneficiary. How to file an amended tax return online   This is the individual named in the document creating the trust or custodial account to receive the benefit of the funds in the account. How to file an amended tax return online Contributions to a qualified tuition program (QTP). How to file an amended tax return online   A contribution to a QTP is a qualified education expense if the contribution is on behalf of the designated beneficiary of the Coverdell ESA. How to file an amended tax return online In the case of a change in beneficiary, this is a qualified expense only if the new beneficiary is a family member of that designated beneficiary. How to file an amended tax return online See chapter 8, Qualified Tuition Program . How to file an amended tax return online Eligible Educational Institution For purposes of Coverdell ESAs, an eligible educational institution can be either an eligible postsecondary school or an eligible elementary or secondary school. How to file an amended tax return online Eligible postsecondary school. How to file an amended tax return online   This is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. How to file an amended tax return online S. How to file an amended tax return online Department of Education. How to file an amended tax return online It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. How to file an amended tax return online The educational institution should be able to tell you if it is an eligible educational institution. How to file an amended tax return online   Certain educational institutions located outside the United States also participate in the U. How to file an amended tax return online S. How to file an amended tax return online Department of Education's Federal Student Aid (FSA) programs. How to file an amended tax return online Eligible elementary or secondary school. How to file an amended tax return online   This is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. How to file an amended tax return online Qualified Higher Education Expenses These are expenses related to enrollment or attendance at an eligible postsecondary school. How to file an amended tax return online As shown in the following list, to be qualified, some of the expenses must be required by the school and some must be incurred by students who are enrolled at least half-time. How to file an amended tax return online The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school. How to file an amended tax return online Tuition and fees. How to file an amended tax return online Books, supplies, and equipment. How to file an amended tax return online Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible postsecondary school. How to file an amended tax return online Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). How to file an amended tax return online The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. How to file an amended tax return online The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. How to file an amended tax return online The actual amount charged if the student is residing in housing owned or operated by the school. How to file an amended tax return online Half-time student. How to file an amended tax return online   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. How to file an amended tax return online Qualified Elementary and Secondary Education Expenses These are expenses related to enrollment or attendance at an eligible elementary or secondary school. How to file an amended tax return online As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. How to file an amended tax return online There are special rules for computer-related expenses. How to file an amended tax return online The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school. How to file an amended tax return online Tuition and fees. How to file an amended tax return online Books, supplies, and equipment. How to file an amended tax return online Academic tutoring. How to file an amended tax return online Special needs services for a special needs beneficiary. How to file an amended tax return online The following expenses must be required or provided by an eligible elementary or secondary school in connection with attendance or enrollment at the school. How to file an amended tax return online Room and board. How to file an amended tax return online Uniforms. How to file an amended tax return online Transportation. How to file an amended tax return online Supplementary items and services (including extended day programs). How to file an amended tax return online The purchase of computer technology, equipment, or Internet access and related services is a qualified elementary and secondary education expense if it is to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in elementary or secondary school. How to file an amended tax return online (This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. How to file an amended tax return online ) Contributions Any individual (including the designated beneficiary) can contribute to a Coverdell ESA if the individual's MAGI (defined later under Contribution Limits ) for the year is less than $110,000. How to file an amended tax return online For individuals filing joint returns, that amount is $220,000. How to file an amended tax return online Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. How to file an amended tax return online There is no requirement that an organization's income be below a certain level. How to file an amended tax return online Contributions must meet all of the following requirements. How to file an amended tax return online They must be in cash. How to file an amended tax return online They cannot be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. How to file an amended tax return online They must be made by the due date of the contributor's tax return (not including extensions). How to file an amended tax return online Contributions can be made to one or several Coverdell ESAs for the same designated beneficiary provided that the total contributions are not more than the contribution limits (defined later) for a year. How to file an amended tax return online Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary. How to file an amended tax return online Table 7-2 summarizes many of the features of contributing to a Coverdell ESA. How to file an amended tax return online When contributions considered made. How to file an amended tax return online   Contributions made to a Coverdell ESA for the preceding tax year are considered to have been made on the last day of the preceding year. How to file an amended tax return online They must be made by the due date (not including extensions) for filing your return for the preceding year. How to file an amended tax return online   For example, if you make a contribution to a Coverdell ESA in February 2014, and you designate it as a contribution for 2013, you are considered to have made that contribution on December 31, 2013. How to file an amended tax return online Contribution Limits There are two yearly limits: One on the total amount that can be contributed for each designated beneficiary in any year, and One on the amount that any individual can contribute for any one designated beneficiary for a year. How to file an amended tax return online Limit for each designated beneficiary. How to file an amended tax return online   For 2013, the total of all contributions to all Coverdell ESAs set up for the benefit of any one designated beneficiary cannot be more than $2,000. How to file an amended tax return online This includes contributions (other than rollovers) to all the beneficiary's Coverdell ESAs from all sources. How to file an amended tax return online Rollovers are discussed under Rollovers and Other Transfers , later. How to file an amended tax return online Example. How to file an amended tax return online When Maria Luna was born in 2012, three separate Coverdell ESAs were set up for her, one by her parents, one by her grandfather, and one by her aunt. How to file an amended tax return online In 2013, the total of all contributions to Maria's three Coverdell ESAs cannot be more than $2,000. How to file an amended tax return online For example, if her grandfather contributed $2,000 to one of her Coverdell ESAs, no one else could contribute to any of her three accounts. How to file an amended tax return online Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. How to file an amended tax return online These contributions could be put into any of Maria's Coverdell ESA accounts. How to file an amended tax return online Limit for each contributor. How to file an amended tax return online   Generally, you can contribute up to $2,000 for each designated beneficiary for 2013. How to file an amended tax return online This is the most you can contribute for the benefit of any one beneficiary for the year, regardless of the number of Coverdell ESAs set up for the beneficiary. How to file an amended tax return online Example. How to file an amended tax return online The facts are the same as in the previous example except that Maria Luna's older brother, Edgar, also has a Coverdell ESA. How to file an amended tax return online If their grandfather contributed $2,000 to Maria's Coverdell ESA in 2013, he could also contribute $2,000 to Edgar's Coverdell ESA. How to file an amended tax return online Reduced limit. How to file an amended tax return online   Your contribution limit may be reduced. How to file an amended tax return online If your MAGI (defined on this page) is between $95,000 and $110,000 (between $190,000 and $220,000 if filing a joint return), the $2,000 limit for each designated beneficiary is gradually reduced (see Figuring the limit , later). How to file an amended tax return online If your MAGI is $110,000 or more ($220,000 or more if filing a joint return), you cannot contribute to anyone's Coverdell ESA. How to file an amended tax return online Table 7-2. How to file an amended tax return online Coverdell ESA Contributions at a Glance Do not rely on this table alone. How to file an amended tax return online It provides only general highlights. How to file an amended tax return online See the text for more complete explanations. How to file an amended tax return online Question Answer Are contributions deductible? No. How to file an amended tax return online What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. How to file an amended tax return online What if more than one Coverdell ESA has been opened for the same designated beneficiary? The annual contribution limit is $2,000 for each beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. How to file an amended tax return online What if more than one individual makes contributions for the same designated beneficiary? The annual contribution limit is $2,000 per beneficiary, no matter how many individuals contribute. How to file an amended tax return online Can contributions other than cash be made to a Coverdell ESA? No. How to file an amended tax return online When must contributions stop? No contributions can be made to a beneficiary's Coverdell ESA after he or she reaches age 18, unless the beneficiary is a special needs beneficiary. How to file an amended tax return online Modified adjusted gross income (MAGI). How to file an amended tax return online   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. How to file an amended tax return online MAGI when using Form 1040A. How to file an amended tax return online   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. How to file an amended tax return online MAGI when using Form 1040. How to file an amended tax return online   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. How to file an amended tax return online MAGI when using Form 1040NR. How to file an amended tax return online   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form. How to file an amended tax return online MAGI when using Form 1040NR-EZ. How to file an amended tax return online   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form. How to file an amended tax return online   If you have any of these adjustments, you can use Worksheet 7-1. How to file an amended tax return online MAGI for a Coverdell ESA , later, to figure your MAGI for Form 1040. How to file an amended tax return online Worksheet 7-1. How to file an amended tax return online MAGI for a Coverdell ESA 1. How to file an amended tax return online Enter your adjusted gross income  (Form 1040, line 38)   1. How to file an amended tax return online   2. How to file an amended tax return online Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. How to file an amended tax return online       3. How to file an amended tax return online Enter your foreign housing deduction (Form 2555, line 50)   3. How to file an amended tax return online         4. How to file an amended tax return online Enter the amount of income from Puerto Rico you are excluding   4. How to file an amended tax return online       5. How to file an amended tax return online Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. How to file an amended tax return online       6. How to file an amended tax return online Add lines 2, 3, 4, and 5   6. How to file an amended tax return online   7. How to file an amended tax return online Add lines 1 and 6. How to file an amended tax return online This is your  modified adjusted gross income   7. How to file an amended tax return online   Figuring the limit. How to file an amended tax return online    To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. How to file an amended tax return online The numerator (top number) is your MAGI minus $95,000 ($190,000 if filing a joint return). How to file an amended tax return online The denominator (bottom number) is $15,000 ($30,000 if filing a joint return). How to file an amended tax return online Subtract the result from $2,000. How to file an amended tax return online This is the amount you can contribute for each beneficiary. How to file an amended tax return online You can use Worksheet 7-2. How to file an amended tax return online Coverdell ESA Contribution Limit to figure the limit on contributions. How to file an amended tax return online    Worksheet 7-2. How to file an amended tax return online Coverdell ESA Contribution Limit 1. How to file an amended tax return online Maximum contribution   1. How to file an amended tax return online $2,000 2. How to file an amended tax return online Enter your modified adjusted gross income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. How to file an amended tax return online   3. How to file an amended tax return online Enter $190,000 if married filing jointly; $95,000 for all other filers   3. How to file an amended tax return online   4. How to file an amended tax return online Subtract line 3 from line 2. How to file an amended tax return online If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. How to file an amended tax return online   5. How to file an amended tax return online Enter $30,000 if married filing jointly; $15,000 for all other filers   5. How to file an amended tax return online     Note. How to file an amended tax return online If the amount on line 4 is greater than or equal to the amount on line 5, stop here. How to file an amended tax return online You are not allowed to contribute to a Coverdell ESA for 2013. How to file an amended tax return online       6. How to file an amended tax return online Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. How to file an amended tax return online . How to file an amended tax return online 7. How to file an amended tax return online Multiply line 1 by line 6   7. How to file an amended tax return online   8. How to file an amended tax return online Subtract line 7 from line 1   8. How to file an amended tax return online   Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. How to file an amended tax return online Example. How to file an amended tax return online Paul, who is single, had a MAGI of $96,500 for 2013. How to file an amended tax return online Paul can contribute up to $1,800 in 2013 for each beneficiary, as shown in the illustrated Worksheet 7-2, Coverdell ESA Contribution Limit–Illustrated. How to file an amended tax return online Worksheet 7-2. How to file an amended tax return online Coverdell ESA Contribution Limit—Illustrated 1. How to file an amended tax return online Maximum contribution   1. How to file an amended tax return online $2,000 2. How to file an amended tax return online Enter your modified adjusted gross  income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. How to file an amended tax return online 96,500 3. How to file an amended tax return online Enter $190,000 if married filing jointly; $95,000 for all other filers   3. How to file an amended tax return online 95,000 4. How to file an amended tax return online Subtract line 3 from line 2. How to file an amended tax return online If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. How to file an amended tax return online 1,500 5. How to file an amended tax return online Enter $30,000 if married filing jointly; $15,000 for all other filers   5. How to file an amended tax return online 15,000   Note. How to file an amended tax return online If the amount on line 4 is greater than or equal to the amount on line 5,  stop here. How to file an amended tax return online You are not allowed to  contribute to a Coverdell ESA for 2013. How to file an amended tax return online       6. How to file an amended tax return online Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. How to file an amended tax return online . How to file an amended tax return online 100 7. How to file an amended tax return online Multiply line 1 by line 6   7. How to file an amended tax return online 200 8. How to file an amended tax return online Subtract line 7 from line 1   8. How to file an amended tax return online 1,800 Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. How to file an amended tax return online Additional Tax on Excess Contributions The beneficiary must pay a 6% excise tax each year on excess contributions that are in a Coverdell ESA at the end of the year. How to file an amended tax return online Excess contributions are the total of the following two amounts. How to file an amended tax return online Contributions to any designated beneficiary's Coverdell ESA for the year that are more than $2,000 (or, if less, the total of each contributor's limit for the year, as discussed earlier). How to file an amended tax return online Excess contributions for the preceding year, reduced by the total of the following two amounts: Distributions (other than those rolled over as discussed later) during the year, and The contribution limit for the current year minus the amount contributed for the current year. How to file an amended tax return online Exceptions. How to file an amended tax return online   The excise tax does not apply if excess contributions made during 2013 (and any earnings on them) are distributed before the first day of the sixth month of the following tax year (June 1, 2014, for a calendar year taxpayer). How to file an amended tax return online   However, you must include the distributed earnings in gross income for the year in which the excess contribution was made. How to file an amended tax return online You should receive Form 1099-Q, Payments From Qualified Education Programs, from each institution from which excess contributions were distributed. How to file an amended tax return online Box 2 of that form will show the amount of earnings on your excess contributions. How to file an amended tax return online Code “2” or “3” entered in the blank box below boxes 5 and 6 indicate the year in which the earnings are taxable. How to file an amended tax return online See Instructions for Recipient on the back of copy B of your Form 1099-Q. How to file an amended tax return online Enter the amount of earnings on line 21 of Form 1040 (or Form 1040NR) for the applicable tax year. How to file an amended tax return online For more information, see Taxable Distributions , later. How to file an amended tax return online   The excise tax does not apply to any rollover contribution. How to file an amended tax return online Note. How to file an amended tax return online Contributions made in one year for the preceding tax year are considered to have been made on the last day of the preceding year. How to file an amended tax return online Example. How to file an amended tax return online In 2012, Greta's parents and grandparents contributed a total of $2,300 to Greta's Coverdell ESA— an excess contribution of $300. How to file an amended tax return online Because Greta did not withdraw the excess before June 1, 2013, she had to pay an additional tax of $18 (6% × $300) when she filed her 2012 tax return. How to file an amended tax return online In 2013, excess contributions of $500 were made to Greta's account, however, she withdrew $250 from that account to use for qualified education expenses. How to file an amended tax return online Using the steps shown earlier under Additional Tax on Excess Contributions , Greta figures the excess contribution in her account at the end of 2013 as follows. How to file an amended tax return online (1)   $500 excess contributions made in 2013     + (2)   $300 excess contributions in ESA at end of 2012     − (2a)   $250 distribution during 2013         $550 excess at end of 2013   × 6%=$33           If Greta limits 2014 contributions to $1,450 ($2,000 maximum allowed − $550 excess contributions from 2013), she will not owe any additional tax in 2014 for excess contributions. How to file an amended tax return online Figuring and reporting the additional tax. How to file an amended tax return online   You figure this excise tax in Part V of Form 5329. How to file an amended tax return online Report the additional tax on Form 1040, line 58 (or Form 1040NR, line 56). How to file an amended tax return online Rollovers and Other Transfers Assets can be rolled over from one Coverdell ESA to another or the designated beneficiary can be changed. How to file an amended tax return online The beneficiary's interest can be transferred to a spouse or former spouse because of divorce. How to file an amended tax return online Rollovers Any amount distributed from a Coverdell ESA is not taxable if it is rolled over to another Coverdell ESA for the benefit of the same beneficiary or a member of the beneficiary's family (including the beneficiary's spouse) who is under age 30. How to file an amended tax return online This age limitation does not apply if the new beneficiary is a special needs beneficiary. How to file an amended tax return online An amount is rolled over if it is paid to another Coverdell ESA within 60 days after the date of the distribution. How to file an amended tax return online Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. How to file an amended tax return online These are not taxable distributions. How to file an amended tax return online Members of the beneficiary's family. How to file an amended tax return online   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. How to file an amended tax return online Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. How to file an amended tax return online Brother, sister, stepbrother, or stepsister. How to file an amended tax return online Father or mother or ancestor of either. How to file an amended tax return online Stepfather or stepmother. How to file an amended tax return online Son or daughter of a brother or sister. How to file an amended tax return online Brother or sister of father or mother. How to file an amended tax return online Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. How to file an amended tax return online The spouse of any individual listed above. How to file an amended tax return online First cousin. How to file an amended tax return online Example. How to file an amended tax return online When Aaron graduated from college last year he had $5,000 left in his Coverdell ESA. How to file an amended tax return online He wanted to give this money to his younger sister, who was still in high school. How to file an amended tax return online In order to avoid paying tax on the distribution of the amount remaining in his account, Aaron contributed the same amount to his sister's Coverdell ESA within 60 days of the distribution. How to file an amended tax return online Only one rollover per Coverdell ESA is allowed during the 12-month period ending on the date of the payment or distribution. How to file an amended tax return online This rule does not apply to the rollover of a military death gratuity or payment from Servicemembers' Group Life Insurance (SGLI). How to file an amended tax return online Military death gratuity. How to file an amended tax return online   If you received a military death gratuity or a payment from Servicemembers' Group Life Insurance (SGLI), you may roll over all or part of the amount received to one or more Coverdell ESAs for the benefit of members of the beneficiary's family (see Members of the beneficiary's family , earlier). How to file an amended tax return online Such payments are made to an eligible survivor upon the death of a member of the armed forces. How to file an amended tax return online The contribution to a Coverdell ESA from survivor benefits received cannot be made later than 1 year after the date on which you receive the gratuity or SGLI payment. How to file an amended tax return online   This rollover contribution is not subject to (but is in addition to) the contribution limits discussed earlier under Contribution Limits . How to file an amended tax return online The amount you roll over cannot exceed the total survivor benefits you received, reduced by contributions from these benefits to a Roth IRA or other Coverdell ESAs. How to file an amended tax return online   The amount contributed from the survivor benefits is treated as part of your basis (cost) in the Coverdell ESA, and will not be taxed when distributed. How to file an amended tax return online See Distributions , later. How to file an amended tax return online The limit of one rollover per Coverdell ESA during a 12-month period does not apply to a military death gratuity or SGLI payment. How to file an amended tax return online Changing the Designated Beneficiary The designated beneficiary can be changed. How to file an amended tax return online See Members of the beneficiary's family , earlier. How to file an amended tax return online There are no tax consequences if, at the time of the change, the new beneficiary is under age 30 or is a special needs beneficiary. How to file an amended tax return online Example. How to file an amended tax return online Assume the same situation for Aaron as in the last example (see Rollovers , earlier). How to file an amended tax return online Instead of closing his Coverdell ESA and paying the distribution into his sister's Coverdell ESA, Aaron could have instructed the trustee of his account to simply change the name of the beneficiary on his account to that of his sister. How to file an amended tax return online Transfer Because of Divorce If a spouse or former spouse receives a Coverdell ESA under a divorce or separation instrument, it is not a taxable transfer. How to file an amended tax return online After the transfer, the spouse or former spouse treats the Coverdell ESA as his or her own. How to file an amended tax return online Example. How to file an amended tax return online In their divorce settlement, Peg received her ex-husband's Coverdell ESA. How to file an amended tax return online In this process, the account was transferred into her name. How to file an amended tax return online Peg now treats the funds in this Coverdell ESA as if she were the original owner. How to file an amended tax return online Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. How to file an amended tax return online Whether the distributions are tax free depends, in part, on whether the distributions are equal to or less than the amount of Adjusted qualified education expenses (defined later) that the beneficiary has in the same tax year. How to file an amended tax return online See Table 7-3, Coverdell ESA Distributions at a Glance, for highlights. How to file an amended tax return online Table 7-3. How to file an amended tax return online Coverdell ESA Distributions at a Glance Do not rely on this table alone. How to file an amended tax return online It provides only general highlights. How to file an amended tax return online See the text for definitions of terms in bold type and for more complete explanations. How to file an amended tax return online Question Answer Is a distribution from a Coverdell ESA to pay for a designated beneficiary's qualified education expenses tax free? Generally, yes, to the extent the amount of the distribution is not more than the designated beneficiary's adjusted qualified education expenses. How to file an amended tax return online After the designated beneficiary completes his or her education at an eligible educational institution, can amounts remaining in the Coverdell ESA be distributed? Yes. How to file an amended tax return online Amounts must be distributed when the designated beneficiary reaches age 30, unless he or she is a special needs beneficiary. How to file an amended tax return online Also, certain transfers to members of the beneficiary's family are permitted. How to file an amended tax return online Does the designated beneficiary need to be enrolled for a minimum number of courses to take a tax-free distribution? No. How to file an amended tax return online Adjusted qualified education expenses. How to file an amended tax return online   To determine if total distributions for the year are more than the amount of qualified education expenses, reduce total qualified education expenses by any tax-free educational assistance. How to file an amended tax return online Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. How to file an amended tax return online The amount you get by subtracting tax-free educational assistance from your total qualified education expenses is your adjusted qualified education expenses. How to file an amended tax return online Tax-Free Distributions Generally, distributions are tax free if they are not more than the beneficiary's adjusted qualified education expenses for the year. How to file an amended tax return online Do not report tax-free distributions (including qualifying rollovers) on your tax return. How to file an amended tax return online Taxable Distributions A portion of the distributions is generally taxable to the beneficiary if the total distributions are more than the beneficiary's adjusted qualified education expenses for the year. How to file an amended tax return online Excess distribution. How to file an amended tax return online   This is the part of the total distribution that is more than the beneficiary's adjusted qualified education expenses for the year. How to file an amended tax return online Earnings and basis. How to file an amended tax return online   You will receive a Form 1099-Q for each of the Coverdell ESAs from which money was distributed in 2013. How to file an amended tax return online The amount of your gross distribution will be shown in box 1. How to file an amended tax return online For 2013, instead of dividing the gross distribution between your earnings (box 2) and your basis (already-taxed amount) (box 3), the payer or trustee may report the fair market value (account balance) of the Coverdell ESA as of December 31, 2013. How to file an amended tax return online This will be shown in the blank box below boxes 5 and 6. How to file an amended tax return online   The amount contributed from survivor benefits (see Military death gratuity , earlier) is treated as part of your basis and will not be taxed when distributed. How to file an amended tax return online Figuring the Taxable Portion of a Distribution The taxable portion is the amount of the excess distribution that represents earnings that have accumulated tax free in the account. How to file an amended tax return online Figure the taxable portion for 2013 as shown in the following steps. How to file an amended tax return online Multiply the total amount distributed by a fraction. How to file an amended tax return online The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the value (balance) of the account at the end of 2013 plus the amount distributed during 2013. How to file an amended tax return online Subtract the amount figured in (1) from the total amount distributed during 2013. How to file an amended tax return online The result is the amount of earnings included in the distribution(s). How to file an amended tax return online Multiply the amount of earnings figured in (2) by a fraction. How to file an amended tax return online The numerator is the adjusted qualified education expenses paid during 2013 and the denominator is the total amount distributed during 2013. How to file an amended tax return online Subtract the amount figured in (3) from the amount figured in (2). How to file an amended tax return online The result is the amount the beneficiary must include in income. How to file an amended tax return online The taxable amount must be reported on Form 1040 or Form 1040NR, line 21. How to file an amended tax return online Example. How to file an amended tax return online You received an $850 distribution from your Coverdell ESA, to which $1,500 had been contributed before 2013. How to file an amended tax return online There were no contributions in 2013. How to file an amended tax return online This is your first distribution from the account, so your basis in the account on December 31, 2012, was $1,500. How to file an amended tax return online The value (balance) of your account on December 31, 2013, was $950. How to file an amended tax return online You had $700 of adjusted qualified education expenses (AQEE) for the year. How to file an amended tax return online Using the steps in Figuring the Taxable Portion of a Distribution , earlier, figure the taxable portion of your distribution as follows. How to file an amended tax return online   1. How to file an amended tax return online $850 (distribution) × $1,500 basis + $0 contributions  $950 value + $850 distribution       =$708 (basis portion of distribution)     2. How to file an amended tax return online $850 (distribution)−$708 (basis portion of distribution)     =$142 (earnings included in distribution)   3. How to file an amended tax return online $142 (earnings) × $700 AQEE  $850 distribution           =$117 (tax-free earnings)     4. How to file an amended tax return online $142 (earnings)−$117 (tax-free earnings)=$25 (taxable earnings)                 You must include $25 in income as distributed earnings not used for qualified education expenses. How to file an amended tax return online Report this amount on Form 1040, line 21, listing the type and amount of income on the dotted line. How to file an amended tax return online Worksheet 7-3, Coverdell ESA–Taxable Distributions and Basis , at the end of this chapter, can help you figure your adjusted qualified education expenses, how much of your distribution must be included in income, and the remaining basis in your Coverdell ESA(s). How to file an amended tax return online Coordination With American Opportunity and Lifetime Learning Credits The American opportunity or lifetime learning credit can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits. How to file an amended tax return online This means the beneficiary must reduce qualified higher education expenses by tax-free educational assistance, and then further reduce them by any expenses taken into account in determining an American opportunity or lifetime learning credit. How to file an amended tax return online Example. How to file an amended tax return online Derek Green had $5,800 of qualified higher education expenses for 2013, his first year in college. How to file an amended tax return online He paid his college expenses from the following sources. How to file an amended tax return online     Partial tuition scholarship (tax free) $1,500     Coverdell ESA distribution 1,000     Gift from parents 2,100     Earnings from part-time job 1,200           Of his $5,800 of qualified higher education expenses, $4,000 was tuition and related expenses that also qualified for an American opportunity credit. How to file an amended tax return online Derek's parents claimed a $2,500 American opportunity credit (based on $4,000 expenses) on their tax return. How to file an amended tax return online Before Derek can determine the taxable portion of his Coverdell ESA distribution, he must reduce his total qualified higher education expenses. How to file an amended tax return online     Total qualified higher education expenses $5,800     Minus: Tax-free educational assistance −1,500     Minus: Expenses taken into account in  figuring American opportunity credit − 4,000     Equals: Adjusted qualified higher education  expenses (AQHEE) $ 300           Since the adjusted qualified higher education expenses ($300) are less than the Coverdell ESA distribution ($1,000), part of the distribution will be taxable. How to file an amended tax return online The balance in Derek's account was $1,800 on December 31, 2013. How to file an amended tax return online Prior to 2013, $2,100 had been contributed to this account. How to file an amended tax return online Contributions for 2013 totaled $400. How to file an amended tax return online Using the four steps outlined earlier, Derek figures the taxable portion of his distribution as shown below. How to file an amended tax return online   1. How to file an amended tax return online $1,000 (distribution) × $2,100 basis + $400 contributions  $1,800 value + $1,000 distribution           =$893 (basis portion of distribution)     2. How to file an amended tax return online $1,000 (distribution)−$893 (basis portion of distribution)     = $107 (earnings included in distribution)   3. How to file an amended tax return online $107 (earnings) × $300 AQHEE  $1,000 distribution       =$32 (tax-free earnings)     4. How to file an amended tax return online $107 (earnings)−$32 (tax-free earnings)=$75 (taxable earnings)                 Derek must include $75 in income (Form 1040, line 21). How to file an amended tax return online This is the amount of distributed earnings not used for adjusted qualified higher education expenses. How to file an amended tax return online Coordination With Qualified Tuition Program (QTP) Distributions If a designated beneficiary receives distributions from both a Coverdell ESA and a QTP in the same year, and the total distribution is more than the beneficiary's adjusted qualified higher education expenses, those expenses must be allocated between the distribution from the Coverdell ESA and the distribution from the QTP before figuring how much of each distribution is taxable. How to file an amended tax return online The following two examples illustrate possible allocations. How to file an amended tax return online Example 1. How to file an amended tax return online In 2013, Beatrice graduated from high school and began her first semester of college. How to file an amended tax return online That year, she had $1,000 of qualified elementary and secondary education expenses (QESEE) for high school and $3,000 of qualified higher education expenses (QHEE) for college. How to file an amended tax return online To pay these expenses, Beatrice withdrew $800 from her Coverdell ESA and $4,200 from her QTP. How to file an amended tax return online No one claimed Beatrice as a dependent, nor was she eligible for an education credit. How to file an amended tax return online She did not receive any tax-free educational assistance in 2013. How to file an amended tax return online Beatrice must allocate her total qualified education expenses between the two distributions. How to file an amended tax return online Beatrice knows that tax-free treatment will be available if she applies her $800 Coverdell ESA distribution toward her $1,000 of qualified education expenses for high school. How to file an amended tax return online The qualified expenses are greater than the distribution, making the $800 Coverdell ESA distribution tax free. How to file an amended tax return online Next, Beatrice matches her $4,200 QTP distribution to her $3,000 of QHEE, and finds she has an excess QTP distribution of $1,200 ($4,200 QTP − $3,000 QHEE). How to file an amended tax return online She cannot use the extra $200 of high school expenses (from (1) above) against the QTP distribution because those expenses do not qualify a QTP for tax-free treatment. How to file an amended tax return online Finally, Beatrice figures the taxable and tax-free portions of her QTP distribution based on her $3,000 of QHEE. How to file an amended tax return online (See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program for more information. How to file an amended tax return online ) Example 2. How to file an amended tax return online Assume the same facts as in Example 1 , except that Beatrice withdrew $1,800 from her Coverdell ESA and $3,200 from her QTP. How to file an amended tax return online In this case, she allocates her qualified education expenses as follows. How to file an amended tax return online Using the same reasoning as in Example 1, Beatrice matches $1,000 of her Coverdell ESA distribution to her $1,000 of QESEE—she has $800 of her distribution remaining. How to file an amended tax return online Because higher education expenses can also qualify a Coverdell ESA distribution for tax-free treatment, Beatrice allocates her $3,000 of QHEE between the remaining $800 Coverdell ESA and the $3,200 QTP distributions ($4,000 total). How to file an amended tax return online   $3,000 QHEE × $800 ESA distribution  $4,000 total distribution = $600 QHEE (ESA)     $3,000 QHEE × $3,200 QTP distribution  $4,000 total distribution = $2,400 QHEE (QTP)   Beatrice then figures the taxable part of her: Coverdell ESA distribution based on qualified education expenses of $1,600 ($1,000 QESEE + $600 QHEE). How to file an amended tax return online See Figuring the Taxable Portion of a Distribution , earlier, in this chapter. How to file an amended tax return online   QTP distribution based on her $2,400 of QHEE (see Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program). How to file an amended tax return online The above examples show two types of allocation between distributions from a Coverdell ESA and a QTP. How to file an amended tax return online However, you do not have to allocate your expenses in the same way. How to file an amended tax return online You can use any reasonable method. How to file an amended tax return online Losses on Coverdell ESA Investments If you have a loss on your investment in a Coverdell ESA, you may be able to deduct the loss on your income tax return. How to file an amended tax return online You can deduct the loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. How to file an amended tax return online Your basis is the total amount of contributions to that Coverdell ESA. How to file an amended tax return online You claim the loss as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23 (Schedule A (Form 1040NR), line 9), subject to the 2%-of-adjusted-gross-income limit. How to file an amended tax return online If you have distributions from more than one Coverdell ESA account during a year, you must combine the information (amount of distribution, basis, etc. How to file an amended tax return online ) from all such accounts in order to determine your taxable earnings for the year. How to file an amended tax return online By doing this, the loss from one ESA account reduces the distributed earnings (if any) from any other ESA account. How to file an amended tax return online For examples of the calculation, see Losses on QTP Investments in chapter 8, Qualified Tuition Program. How to file an amended tax return online Additional Tax on Taxable Distributions Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income. How to file an amended tax return online Exceptions. How to file an amended tax return online   The 10% additional tax does not apply to distributions: Paid to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary. How to file an amended tax return online Made because the designated beneficiary is disabled. How to file an amended tax return online A person is considered to be disabled if he or she shows proof that he or she cannot do any substantial gainful activity because of his or her physical or mental condition. How to file an amended tax return online A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration. How to file an amended tax return online Included in income because the designated beneficiary received: A tax-free scholarship or fellowship (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), or Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. How to file an amended tax return online Made on account of the attendance of the designated beneficiary at a U. How to file an amended tax return online S. How to file an amended tax return online military academy (such as the USMA at West Point). How to file an amended tax return online This exception applies only to the extent that the amount of the distribution does not exceed the costs of advanced education (as defined in section 2005(d)(3) of title 10 of the U. How to file an amended tax return online S. How to file an amended tax return online Code) attributable to such attendance. How to file an amended tax return online Included in income only because the qualified education expenses were taken into account in determining the American opportunity or lifetime learning credit (see Coordination With American Opportunity and Lifetime Learning Credits , earlier). How to file an amended tax return online Made before June 1, 2014, of an excess 2013 contribution (and any earnings on it). How to file an amended tax return online The distributed earnings must be included in gross income for the year in which the excess contribution was made. How to file an amended tax return online Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. How to file an amended tax return online Figuring the additional tax. How to file an amended tax return online    Use Part II of Form 5329, to figure any additional tax. How to file an amended tax return online Report the amount on Form 1040, line 58, or Form 1040NR, line 56. How to file an amended tax return online When Assets Must Be Distributed Any assets remaining in a Coverdell ESA must be distributed when either one of the following two events occurs. How to file an amended tax return online The designated beneficiary reaches age 30. How to file an amended tax return online In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. How to file an amended tax return online However, this rule does not apply if the beneficiary is a special needs beneficiary. How to file an amended tax return online The designated beneficiary dies before reaching age 30. How to file an amended tax return online In this case, the remaining assets must generally be distributed within 30 days after the date of death. How to file an amended tax return online Exception for Transfer to Surviving Spouse or Family Member If a Coverdell ESA is transferred to a surviving spouse or other family member as the result of the death of the designated beneficiary, the Coverdell ESA retains its status. How to file an amended tax return online (“Family member” was defined earlier under Rollovers . How to file an amended tax return online ) This means the spouse or other family member can treat the Coverdell ESA as his or her own and does not need to withdraw the assets until he or she reaches age 30. How to file an amended tax return online This age limitation does not apply if the new beneficiary is a special needs beneficiary. How to file an amended tax return online There are no tax consequences as a result of the transfer. How to file an amended tax return online How To Figure the Taxable Earnings When a total distribution is made because the designated beneficiary either reached age 30 or died, the earnings that accumulated tax free in the account must be included in taxable income. How to file an amended tax return online You determine these earnings as shown in the following two steps. How to file an amended tax return online Multiply the amount distributed by a fraction. How to file an amended tax return online The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the balance in the account at the end of 2013 plus the amount distributed during 2013. How to file an amended tax return online Subtract the amount figured in (1) from the total amount distributed during 2013. How to file an amended tax return online The result is the amount of earnings included in the distribution. How to file an amended tax return online For an example, see steps (1) and (2) of the Example under Figuring the Taxable Portion of a Distribution, earlier. How to file an amended tax return online The beneficiary or other person receiving the distribution must report this amount on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line. How to file an amended tax return online Worksheet 7-3 Instructions. How to file an amended tax return online Coverdell ESA—Taxable Distributions and Basis Line G. How to file an amended tax return online Enter the total distributions received from all Coverdell ESAs during 2013. How to file an amended tax return online Do not include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). How to file an amended tax return online Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year for which the contributions were made. How to file an amended tax return online Line 2. How to file an amended tax return online Your basis (amount already taxed) in this Coverdell ESA as of December 31, 2012, is the total of:   •All contributions to this Coverdell ESA before 2013 •Minus the tax-free portion of any distributions from this Coverdell ESA before 2013. How to file an amended tax return online   If your last distribution from this Coverdell ESA was before 2013, you must start with the basis in your account as of the end of the last year in which you took a distribution. How to file an amended tax return online For years before 2002, you can find that amount on the last line of the worksheet in the Instructions for Form 8606, Nondeductible IRAs, that you completed for that year. How to file an amended tax return online For years after 2001, you can find that amount by using the ending basis from the worksheet in Publication 970 for that year. How to file an amended tax return online You can determine your basis in this Coverdell ESA as of December 31, 2012, by adding to the basis as of the end of that year any contributions made to that account after the year of the distribution and before 2013. How to file an amended tax return online Line 4. How to file an amended tax return online Enter the total distributions received from this Coverdell ESA in 2013. How to file an amended tax return online Do not include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). How to file an amended tax return online   Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year of the contributions. How to file an amended tax return online Line 7. How to file an amended tax return online Enter the total value of this Coverdell ESA as of December 31, 2013, plus any outstanding rollovers contributed to the account after 2012, but before the end of the 60-day rollover period. How to file an amended tax return online A statement should be sent to you by January 31, 2014, for this Coverdell ESA showing the value on December 31, 2013. How to file an amended tax return online   A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. How to file an amended tax return online An outstanding rollover is any amount withdrawn within 60 days before the end of 2013 (November 2 through December 31) that was rolled over after December 31, 2013, but within the 60-day rollover period. How to file an amended tax return online Worksheet 7-3. How to file an amended tax return online Coverdell ESA—Taxable Distributions and Basis How to complete this worksheet. How to file an amended tax return online • • • Complete Part I, lines A through H, on only one worksheet. How to file an amended tax return online  Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. How to file an amended tax return online  Complete Part III, the Summary (line 16), on only one worksheet. How to file an amended tax return online Part I. How to file an amended tax return online Qualified Education Expenses (Complete for total expenses)       A. How to file an amended tax return online Enter your total qualified education expenses for 2013   A. How to file an amended tax return online   B. How to file an amended tax return online Enter those qualified education expenses paid for with tax-free educational assistance (for example, tax-free scholarships, veterans' educational benefits, Pell grants, employer-provided educational assistance)   B. How to file an amended tax return online         C. How to file an amended tax return online Enter those qualified higher education expenses deducted on Schedule C or C-EZ (Form 1040). How to file an amended tax return online Schedule F (Form 1040), or as a miscellaneous itemized deduction on Schedule A (Form 1040 or 1040NR)   C. How to file an amended tax return online         D. How to file an amended tax return online Enter those qualified higher education expenses on which  an American opportunity or lifetime learning credit was based   D. How to file an amended tax return online         E. How to file an amended tax return online Add lines B, C, and D   D. How to file an amended tax return online   F. How to file an amended tax return online Subtract line E from line A. How to file an amended tax return online This is your adjusted qualified education expense for 2013   E. How to file an amended tax return online   G. How to file an amended tax return online Enter your total distributions from all Coverdell ESAs during 2013. How to file an amended tax return online Do not include rollovers  or the return of excess contributions (see instructions)   F. How to file an amended tax return online   H. How to file an amended tax return online Divide line F by line G. How to file an amended tax return online Enter the result as a decimal (rounded to at least 3 places). How to file an amended tax return online If the  result is 1. How to file an amended tax return online 000 or more, enter 1. How to file an amended tax return online 000   G. How to file an amended tax return online . How to file an amended tax return online Part II. How to file an amended tax return online Taxable Distributions and Basis (Complete separately for each account) 1. How to file an amended tax return online Enter the amount contributed to this Coverdell ESA for 2013, including contributions made for 2013 from January 1, 2014, through April 15, 2014. How to file an amended tax return online Do not include rollovers or the return of excess contributions   1. How to file an amended tax return online   2. How to file an amended tax return online Enter your basis in this Coverdell ESA as of December 31, 2012 (see instructions)   2. How to file an amended tax return online   3. How to file an amended tax return online Add lines 1 and 2   3. How to file an amended tax return online   4. How to file an amended tax return online Enter the total distributions from this Coverdell ESA during 2013. How to file an amended tax return online Do not include rollovers  or the return of excess contributions (see instructions)   4. How to file an amended tax return online   5. How to file an amended tax return online Multiply line 4 by line H. How to file an amended tax return online This is the amount of adjusted qualified  education expense attributable to this Coverdell ESA   5. How to file an amended tax return online         6. How to file an amended tax return online Subtract line 5 from line 4   6. How to file an amended tax return online         7. How to file an amended tax return online Enter the total value of this Coverdell ESA as of December 31, 2013,  plus any outstanding rollovers (see instructions)   7. How to file an amended tax return online         8. How to file an amended tax return online Add lines 4 and 7   8. How to file an amended tax return online         9. How to file an amended tax return online Divide line 3 by line 8. How to file an amended tax return online Enter the result as a decimal (rounded to  at least 3 places). How to file an amended tax return online If the result is 1. How to file an amended tax return online 000 or more, enter 1. How to file an amended tax return online 000   9. How to file an amended tax return online . How to file an amended tax return online       10. How to file an amended tax return online Multiply line 4 by line 9. How to file an amended tax return online This is the amount of basis allocated to your  distributions, and is tax free   10. How to file an amended tax return online     Note. How to file an amended tax return online If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. How to file an amended tax return online       11. How to file an amended tax return online Subtract line 10 from line 4   11. How to file an amended tax return online   12. How to file an amended tax return online Divide line 5 by line 4. How to file an amended tax return online Enter the result as a decimal (rounded to  at least 3 places). How to file an amended tax return online If the result is 1. How to file an amended tax return online 000 or more, enter 1. How to file an amended tax return online 000   12. How to file an amended tax return online . How to file an amended tax return online       13. How to file an amended tax return online Multiply line 11 by line 12. How to file an amended tax return online This is the amount of qualified education  expenses allocated to your distributions, and is tax free   13. How to file an amended tax return online   14. How to file an amended tax return online Subtract line 13 from line 11. How to file an amended tax return online This is the portion of the distributions from this  Coverdell ESA in 2013 that you must include in income   14. How to file an amended tax return online   15. How to file an amended tax return online Subtract line 10 from line 3. How to file an amended tax return online This is your basis in this Coverdell ESA as of December 31, 2013   15. How to file an amended tax return online   Part III. How to file an amended tax return online Summary (Complete only once)       16. How to file an amended tax return online Taxable amount. How to file an amended tax return online Add together all amounts on line 14 for all your Coverdell ESAs. How to file an amended tax return online Enter here  and include on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line   16. How to file an amended tax return online   Prev  Up  Next   Home   More Online Publications
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Fact Sheets 2014

IRS Offers Advice on How to Choose a Tax Preparer
FS-2014-5, February 2014 — Many people hire a professional when it’s time to file their tax return. If you pay someone to prepare your federal income tax return, the IRS urges you to choose that person wisely. Even if you don’t prepare your own return, you’re still legally responsible for what is on it.

Earned Income Tax Credit; Do I Qualify?
FS-2014-4, January 2014 — The Earned Income Tax Credit (EITC) is a financial boost for people working hard to make ends meet. Millions of workers may qualify for the first time this year due to changes in their marital, parental or financial status.

IRS Criminal Investigation Combats Identity Theft Refund Fraud
FS-2014-3, January 2014 — The IRS has seen a significant increase in refund fraud that involves identity thieves who file false claims for refunds by stealing and using someone's Social Security number. The investigative work done by Criminal Investigation is a major component of the IRS’s efforts to combat tax-related identity theft. 

Tips for Taxpayers, Victims about Identity Theft and Tax Returns
FS-2014-2, January 2014 — Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. In 2014, the IRS continues to take new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.

IRS Combats Identity Theft and Refund Fraud on Many Fronts
FS-2014-1, January 2014 — Stopping identity theft and refund fraud is a top priority for the IRS. The agency’s work on identity theft and refund fraud continues to grow, touching nearly every part of the organization. For the 2014 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

News Release and Fact Sheet Archive
News releases and fact sheets from November 2002 forward and an archive of news releases and fact sheets in PDF format back to 1997.

Page Last Reviewed or Updated: 05-Mar-2014

The How To File An Amended Tax Return Online

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