Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Hr Block Efile

State Income Tax Tables1040x Forms2011 Tax ScheduleCan I Still File My 2011 Tax ReturnHrblockfreeFilemy2010taxreturnforfreeAmended Tax Return FormAmend A Tax Return1040ez Form 2012Irs Gov 2012 Tax Forms2011 Tax ReturnsOnline Tax AmendmentAmended Tax FormsIrs Tax Form 2010Tax Software 2011Amended Irs ReturnWww Irs GovFree Turbo Tax For Low IncomeFiling 2009 Taxes Late Online For FreeHow To Do Amended Tax ReturnAmending My Tax ReturnI Need To File My 2009 TaxesHr Block TaxState Tax Return FilingIrs 1040ezFree 1040ez Tax FormAmended TaxHow Do I Amend My 2011 Tax ReturnTaxes HrblockCan I File 2012 And 2013 Taxes TogetherFederal Tax Ez FormFree Irs And State Tax FilingIrs 1040 Ez Online FilingTax Deductions For College Students2012 Federal Tax Forms 1040aFree 1040ez Tax Return1040nr Ez InstructionsFiling Taxes 2014Free Tax FilingHr Block 1040x

Hr Block Efile

Hr block efile Index A Abroad, citizens living, filing requirements, U. Hr block efile S. Hr block efile Citizens or Resident Aliens Living Abroad Absence, temporary, Temporary absences. Hr block efile , Temporary absences. Hr block efile , Temporary absences. Hr block efile Accounting periods, joint returns, Accounting period. Hr block efile Adopted child, Exception for adopted child. Hr block efile , Adopted child. Hr block efile , Adopted child. Hr block efile Taxpayer identification number, Taxpayer identification numbers for adoptees. Hr block efile Age Filing status determination, Age. Hr block efile Gross income and filing requirements (Table 1), Table 1. Hr block efile 2013 Filing Requirements Chart for Most Taxpayers Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Test, Age Test Aliens Dual-status (see Dual-status taxpayers) Nonresident (see Nonresident aliens) Alimony, Alimony. Hr block efile Alternative minimum tax (AMT), effect on filing requirements (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Amended returns, Joint Return After Separate Returns, Changing your mind. Hr block efile (see also Form 1040X) Change from itemized to standard deduction (or vice versa), Electing to itemize for state tax or other purposes. Hr block efile American citizens abroad, U. Hr block efile S. Hr block efile Citizens or Resident Aliens Living Abroad Annulled marriages, filing status, Annulled marriages. Hr block efile Armed forces Combat zone, signing return for spouse, Spouse in combat zone. Hr block efile Dependency allotments, Armed Forces dependency allotments. Hr block efile GI Bill benefits, Tuition payments and allowances under the GI Bill. Hr block efile Military quarters allotments, Tax-exempt military quarters allowances. Hr block efile Assistance (see Tax help) ATINs (Adoption taxpayer identification numbers), Taxpayer identification numbers for adoptees. Hr block efile B Birth of child, Death or birth. Hr block efile Blind persons, standard deduction, Higher Standard Deduction for Blindness C Canada, resident of, U. Hr block efile S. Hr block efile citizen or resident alien. Hr block efile , Citizen or Resident Test, Child in Canada or Mexico. Hr block efile Capital expenses, Capital expenses. Hr block efile Child born alive, Child born alive. Hr block efile Child care expenses, Child care expenses. Hr block efile Child custody, Custodial parent and noncustodial parent. Hr block efile Child support under pre-1985 agreement, Child support under pre-1985 agreement. Hr block efile Child tax credit, Child tax credit. Hr block efile Child, qualifying, Qualifying Child Children Adopted child (see Adoption) Adoption (see Adopted child) Birth of child, Death or birth. Hr block efile , Death or birth. Hr block efile Claiming parent, when child is head of household, Special rule for parent. Hr block efile Custody of, Custodial parent and noncustodial parent. Hr block efile Death of child, Death or birth. Hr block efile , Death or birth. Hr block efile Dividends of, Unearned income. Hr block efile Filing requirements as dependents (Table 2), Table 2. Hr block efile 2013 Filing Requirements for Dependents Investment income of child under age 18, Table 2. Hr block efile 2013 Filing Requirements for Dependents , Unearned income. Hr block efile Kidnapped, Kidnapped child. Hr block efile , Kidnapped child. Hr block efile Social security number, Social Security Numbers for Dependents Stillborn, Stillborn child. Hr block efile Church employees, filing requirements (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Citizen or resident test, Citizen or Resident Test Citizens outside U. Hr block efile S. Hr block efile , filing requirements, U. Hr block efile S. Hr block efile Citizens or Resident Aliens Living Abroad Common law marriage, Considered married. Hr block efile Community property states, Community property states. Hr block efile Cousin, Cousin. Hr block efile Custody of child, Custodial parent and noncustodial parent. Hr block efile D Death Of child, Death or birth of child. Hr block efile Of dependent, Death or birth. Hr block efile , Death or birth. Hr block efile Of spouse, Spouse died during the year. Hr block efile , Spouse died. Hr block efile , Spouse died before signing. Hr block efile , Death of spouse. Hr block efile Decedents, Spouse died during the year. Hr block efile , Decedent's final return. Hr block efile (see also Death of spouse) Filing requirements, Deceased Persons Deductions Personal exemption, Personal Exemptions Standard deduction, Standard Deduction Dependent taxpayer test, Dependent Taxpayer Test Dependents Birth of, Death or birth. Hr block efile Born and died within year, Born and died in 2013. Hr block efile Child's earnings, Child's earnings. Hr block efile Death of, Death or birth. Hr block efile Earned income, Earned income. Hr block efile Exemption for, Exemptions for Dependents Filing requirements, Table 2. Hr block efile 2013 Filing Requirements for Dependents , Dependents Married, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Not allowed to claim dependents, Dependent Taxpayer Test Qualifying child, Qualifying Child Qualifying relative, Qualifying Relative Social security number, Social Security Numbers for Dependents, Taxpayer identification numbers for adoptees. Hr block efile Standard deduction for, Standard Deduction for Dependents Unearned income, Unearned income. Hr block efile Disabled Child, Permanently and totally disabled. Hr block efile Dependent, Disabled dependent working at sheltered workshop. Hr block efile Divorced parents, Children of divorced or separated parents (or parents who live apart). Hr block efile Divorced taxpayers Child custody, Custodial parent and noncustodial parent. Hr block efile Filing status, Divorced persons. Hr block efile , Divorce and remarriage. Hr block efile , Divorced persons. Hr block efile Joint returns, responsibility for, Divorced taxpayer. Hr block efile Personal exemption, Divorced or separated spouse. Hr block efile Domestic help, no exemption for, Housekeepers, maids, or servants. Hr block efile Dual-status taxpayers Exemptions, Dual-status taxpayers. Hr block efile Joint returns not available, Nonresident alien or dual-status alien. Hr block efile E Earned income Defined for purposes of standard deduction, Earned income defined. Hr block efile Dependent filing requirements (Table 2), Table 2. Hr block efile 2013 Filing Requirements for Dependents Earned income credit Two persons with same qualifying child, Special Rule for Qualifying Child of More Than One Person Elderly persons Home for the aged, Home for the aged. Hr block efile Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Equitable relief, Innocent spouse, Relief from joint responsibility. Hr block efile Exemptions, Exemptions, Taxpayer identification numbers for adoptees. Hr block efile Dependents, Exemptions for Dependents Personal (see Personal exemption) F Fair rental value, Fair rental value defined. Hr block efile Figures (see Tables and figures) Filing requirements, Who Must File, Filing Status Filing status, Filing Status, Qualifying Widow(er) With Dependent Child Annulled marriages, Annulled marriages. Hr block efile Change to Joint return after separate returns, Joint Return After Separate Returns Separate returns after joint return, Separate Returns After Joint Return, Kidnapped child. Hr block efile Determination of, Filing status. Hr block efile , Filing Status Head of household, Head of household or qualifying widow(er) with dependent child. Hr block efile , Head of Household Marital status, determination of, Marital Status Married filing jointly (see Joint returns) Married filing separately (see Married filing separately) Unmarried persons (see Single taxpayers) Food benefits, Support provided by the state (welfare, food benefits, housing, etc. Hr block efile ). Hr block efile Foreign employment, filing requirements, U. Hr block efile S. Hr block efile Citizens or Resident Aliens Living Abroad Foreign students, Foreign students' place of residence. Hr block efile Form 1040 Personal exemption, Form 1040 filers. Hr block efile Social security numbers, Social Security Numbers for Dependents Use of, How to file. Hr block efile , How to file. Hr block efile , How to file. Hr block efile Form 1040A Personal exemption, Form 1040A filers. Hr block efile Social security numbers, Social Security Numbers for Dependents Use of, How to file. Hr block efile , How to file. Hr block efile , How to file. Hr block efile Form 1040EZ Personal exemption, Form 1040EZ filers. Hr block efile Use of, How to file. Hr block efile , How to file. Hr block efile Form 1040X Change of filing status, Joint Return After Separate Returns Itemized deductions, change to standard deduction, Changing your mind. Hr block efile Standard deduction, change to itemized deductions, Changing your mind. Hr block efile Form 1099-B, Form 1099-B received. Hr block efile Form 8814, parents' election to report child's interest and dividends, Election to report child's unearned income on parent's return. Hr block efile Form 8857, innocent spouse relief, Relief from joint responsibility. Hr block efile Form SS-5, social security number request, No SSN. Hr block efile Form W-7, individual taxpayer identification number request, Taxpayer identification numbers for aliens. Hr block efile Form W-7A, adoption taxpayer identification number request, Taxpayer identification numbers for adoptees. Hr block efile Foster care payments and expenses, Foster care payments and expenses. Hr block efile , Foster care. Hr block efile Foster child, Foster child. Hr block efile , Foster care payments and expenses. Hr block efile , Foster child. Hr block efile , Foster care. Hr block efile Free tax services, Free help with your tax return. Hr block efile Funeral expenses, Do Not Include in Total Support G GI Bill benefits, Tuition payments and allowances under the GI Bill. Hr block efile Gross income Defined, Gross income. Hr block efile Filing requirements (Table 1), Table 1. Hr block efile 2013 Filing Requirements Chart for Most Taxpayers Dependent filing requirements (Table 2), Table 2. Hr block efile 2013 Filing Requirements for Dependents Test, Gross Income Test Group-term life insurance, Table 3. Hr block efile Other Situations When You Must File a 2013 Return H Head of household, Head of Household, Kidnapped child. Hr block efile Exemption for spouse, Head of household. Hr block efile Filing requirements (Table 1), Table 1. Hr block efile 2013 Filing Requirements Chart for Most Taxpayers Health insurance premiums, Medical insurance premiums. Hr block efile Help (see Tax help) Home Aged, home for, Home for the aged. Hr block efile Cost of keeping up, Keeping Up a Home Household workers, no exemption for, Housekeepers, maids, or servants. Hr block efile I Income Gross, Gross Income Test Tax exempt, Tax-exempt income. Hr block efile Individual retirement arrangements (IRAs) Filing requirements (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Married filing separately, Individual retirement arrangements (IRAs). Hr block efile Individual taxpayer identification numbers (ITINs), Reminders, Taxpayer identification numbers for aliens. Hr block efile Innocent spouse relief, Relief from joint responsibility. Hr block efile Insurance premiums Life, Do Not Include in Total Support Medical, Medical insurance premiums. Hr block efile IRAs (see Individual retirement arrangements (IRAs)) Itemized deductions Changing from standard to itemized deduction (or vice versa), Changing your mind. Hr block efile Choosing to itemize, Who Should Itemize Married filing separately, Married persons who filed separate returns. Hr block efile When to itemize, When to itemize. Hr block efile ITINs (Individual taxpayer identification numbers), Taxpayer identification numbers for aliens. Hr block efile J Joint return test, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Joint returns, Married Filing Jointly, Nonresident alien or dual-status alien. Hr block efile Dependents on, Joint return. Hr block efile Personal exemption, Joint return. Hr block efile K Kidnapped children Qualifying child, Kidnapped child. Hr block efile Qualifying relative, Kidnapped child. Hr block efile Widow(er) with dependent child, Death or birth. Hr block efile L Life insurance premiums, Do Not Include in Total Support Local income taxes, itemized deductions, Electing to itemize for state tax or other purposes. Hr block efile Local law violated, Local law violated. Hr block efile Lodging, Lodging. Hr block efile Losses, rental real estate, Rental activity losses. Hr block efile M Marital status, determination of, Marital Status Married dependents, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Married filing jointly (see Joint returns) Married filing separately, Married Filing Separately Changing method from or to itemized deductions, Changing your mind. Hr block efile Exemption for spouse, Separate return. Hr block efile Itemized deductions, Married persons who filed separate returns. Hr block efile Married taxpayers, Married Filing Jointly (see also Joint returns) Age 65 or older spouse, standard deduction, Higher Standard Deduction for Age (65 or Older), Spouse 65 or Older or Blind Blind spouse, standard deduction, Higher Standard Deduction for Blindness, Spouse 65 or Older or Blind Dual-status alien spouse, Nonresident alien or dual-status alien. Hr block efile Filing status, Married persons. Hr block efile Medical insurance premiums, Medical insurance premiums. Hr block efile Medical savings accounts (MSAs, effect on filing requirements (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Medicare taxes, not support, Do Not Include in Total Support Member of household or relationship test, Member of Household or Relationship Test Mexico, resident of, U. Hr block efile S. Hr block efile citizen or resident alien. Hr block efile , Citizen or Resident Test, Child in Canada or Mexico. Hr block efile Military (see Armed forces) Missing children, photographs of in IRS publications, Reminders Multiple support agreement, Multiple Support Agreement N National of the United States, U. Hr block efile S. Hr block efile national. Hr block efile Nonresident aliens, Nonresident aliens. Hr block efile Dependents, Taxpayer identification numbers for aliens. Hr block efile Exemptions, Nonresident aliens. Hr block efile Joint return, Nonresident alien or dual-status alien. Hr block efile Spouse, Nonresident alien spouse. Hr block efile Taxpayer identification number, Taxpayer identification numbers for aliens. Hr block efile O Overseas taxpayers, U. Hr block efile S. Hr block efile Citizens or Resident Aliens Living Abroad P Parent, claiming head of household for, Special rule for parent. Hr block efile Parents who never married, Parents who never married. Hr block efile Parents, divorced or separated, Children of divorced or separated parents (or parents who live apart). Hr block efile Penalty, failure to file, Who Must File Personal exemption, Personal Exemptions Photographs of missing children in IRS publications, Reminders Publications (see Tax help) Puerto Rico, residents of, Residents of Puerto Rico Q Qualifying Child, Qualifying Child Relative, Qualifying Relative Surviving spouse, Qualifying Widow(er) With Dependent Child Widow/widower, Qualifying Widow(er) With Dependent Child R Recapture taxes, Table 3. Hr block efile Other Situations When You Must File a 2013 Return Relationship test, Relationship Test, Member of Household or Relationship Test Relative, qualifying, Qualifying Relative Remarriage after divorce, Divorce and remarriage. Hr block efile Rental losses, Rental activity losses. Hr block efile Residency test, Residency Test S Same-sex marriage Filing status, Same-sex marriage. Hr block efile Scholarships, Earned income. Hr block efile , Scholarships. Hr block efile , Gross income defined. Hr block efile , Do Not Include in Total Support , Earned income defined. Hr block efile Self-employed persons Filing requirements (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Gross income, Self-employed persons. Hr block efile Separate returns (see Married filing separately) Separated parents, Children of divorced or separated parents (or parents who live apart). Hr block efile Separated taxpayers Filing status, Considered married. Hr block efile , Married persons living apart. Hr block efile Living apart but not legally separated, Considered married. Hr block efile Personal exemption, Divorced or separated spouse. Hr block efile Signatures, joint returns, Signing a joint return. Hr block efile Single taxpayers Filing status, Unmarried persons. Hr block efile , Single Gross income filing requirements (Table 1), Table 1. Hr block efile 2013 Filing Requirements Chart for Most Taxpayers How to file and forms, How to file. Hr block efile Personal exemption, Your Own Exemption Social security and Medicare taxes Reporting of (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Support, not included in, Do Not Include in Total Support Social security benefits, Social security benefits. Hr block efile Social security numbers (SSNs) for dependents, Social Security Numbers for Dependents Spouse Deceased, Spouse died. Hr block efile , Spouse died before signing. Hr block efile , Death of spouse. Hr block efile Dual-status alien spouse, Nonresident alien or dual-status alien. Hr block efile Exemption for, Your Spouse's Exemption Innocent spouse relief, Relief from joint responsibility. Hr block efile Nonresident alien, Nonresident alien spouse. Hr block efile Signing joint returns, Signing a joint return. Hr block efile Surviving (see Surviving spouse) SSNs (see Social security numbers (SSNs) for dependents) Standard deduction, What's New, Standard Deduction, Married persons who filed separate returns. Hr block efile Married filing jointly, Married Filing Jointly State or local income taxes, Electing to itemize for state tax or other purposes. Hr block efile Stillborn child, Stillborn child. Hr block efile Students Defined, Student defined. Hr block efile Foreign, Foreign students' place of residence. Hr block efile Support test Qualifying child, Support Test (To Be a Qualifying Child) Qualifying relative, Support Test (To Be a Qualifying Relative) Surviving spouse Death of spouse (see Death of spouse) Gross income filing requirements (Table 1), Table 1. Hr block efile 2013 Filing Requirements Chart for Most Taxpayers Single filing status, Widow(er). Hr block efile Widow(er) with dependent child, Qualifying Widow(er) With Dependent Child, How to file. Hr block efile , Death or birth. Hr block efile T Tables and figures, Keeping Up a Home, Worksheet 2. Hr block efile Worksheet for Determining Support (see also Worksheets) Filing requirements Dependents (Table 2), Table 2. Hr block efile 2013 Filing Requirements for Dependents Gross income levels (Table 1), Table 1. Hr block efile 2013 Filing Requirements Chart for Most Taxpayers Other situations requiring filing (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Tax help, How To Get Tax Help Tax returns Amended (see Form 1040X) Filing of (see Filing requirements) Joint returns (see Joint returns) Who must file, What's New, Who Must File, Filing Requirements for Most Taxpayers, Who Should File Tax-exempt income, Tax-exempt income. Hr block efile Taxes, not support, Do Not Include in Total Support Temporary absences, Temporary absences. Hr block efile , Temporary absences. Hr block efile Tiebreaker rules, Tiebreaker rules. Hr block efile Tips, reporting of (Table 3), Table 3. Hr block efile Other Situations When You Must File a 2013 Return Total support, Total Support Tuition, benefits under GI Bill, Tuition payments and allowances under the GI Bill. Hr block efile U U. Hr block efile S. Hr block efile citizen or resident, Citizen or Resident Test U. Hr block efile S. Hr block efile citizens filing abroad, filing requirements Filing requirements, U. Hr block efile S. Hr block efile Citizens or Resident Aliens Living Abroad U. Hr block efile S. Hr block efile national, U. Hr block efile S. Hr block efile national. Hr block efile U. Hr block efile S. Hr block efile possessions, income from, Individuals With Income From U. Hr block efile S. Hr block efile Possessions Unmarried persons (see Single taxpayers) W Welfare benefits, Support provided by the state (welfare, food benefits, housing, etc. Hr block efile ). Hr block efile What's New, What's New Widow/widower (see Surviving spouse) Worksheets Exemption Phaseout, Worksheet 3. Hr block efile Worksheet for Determining the Deduction for Exemptions Head of household status and cost of keeping up home, Keeping Up a Home Support test, Worksheet 2. Hr block efile Worksheet for Determining Support Prev  Up     Home   More Online Publications
Print - Click this link to Print this page

Form 8903, Domestic Production Activities Deduction

Use this form to figure your domestic production activities deduction (DPAD).


Current Products


Recent Developments

 

Other Items You May Find Useful:


Comment on Form 8903

Use the Comment on Tax Forms and Publications web form to provide feedback on the content of this product. Although we cannot respond individually to each comment, we do appreciate your feedback and will consider all comments submitted.

CAUTION: We cannot respond to tax-related questions submitted using this page. Instead, please visit Tax Law Questions or call our toll-free number at 1-800-829-1040 (Individuals) or 1-800-829-4933 (Business).

Page Last Reviewed or Updated: 07-Feb-2014

The Hr Block Efile

Hr block efile Publication 525 - Main Content Table of Contents Employee CompensationBabysitting. Hr block efile Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Business and Investment IncomeRents From Personal Property Royalties Partnership Income S Corporation Income Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Miscellaneous IncomeBartering Canceled Debts Host or Hostess Life Insurance Proceeds Recoveries Survivor Benefits Unemployment Benefits Welfare and Other Public Assistance Benefits Other Income RepaymentsMethod 1. Hr block efile Method 2. Hr block efile How To Get Tax HelpLow Income Taxpayer Clinics Employee Compensation In most cases, you must include in gross income everything you receive in payment for personal services. Hr block efile In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. Hr block efile You should receive a Form W-2 from your employer or former employer showing the pay you received for your services. Hr block efile Include all your pay on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ, even if you do not receive Form W-2, or you receive a Form W-2 that does not include all pay that should be included on the Form W-2. Hr block efile If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. Hr block efile These wages must be included on line 7 of Form 1040. Hr block efile See Form 8919 for more information. Hr block efile Childcare providers. Hr block efile   If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. Hr block efile If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Hr block efile You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. Hr block efile Babysitting. Hr block efile   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. Hr block efile Bankruptcy. Hr block efile   If you filed for bankruptcy under Chapter 11 of the Bankruptcy Code, you must allocate your wages and withheld income tax. Hr block efile Your W-2 will show your total wages and withheld income tax for the year. Hr block efile On your tax return, you report the wages and withheld income tax for the period before you filed for bankruptcy. Hr block efile Your bankruptcy estate reports the wages and withheld income tax for the period after you filed for bankruptcy. Hr block efile If you receive other information returns (such as Form 1099-DIV, Dividends and Distributions, or 1099-INT, Interest Income) that report gross income to you, rather than to the bankruptcy estate, you must allocate that income. Hr block efile   The only exception is for purposes of figuring your self-employment tax, if you are self-employed. Hr block efile For that purpose, you must take into account all your self-employment income for the year from services performed both before and after the beginning of the case. Hr block efile   You must file a statement with your income tax return stating you filed a Chapter 11 bankruptcy case. Hr block efile The statement must show the allocation and describe the method used to make the allocation. Hr block efile For a sample of this statement and other information, see Notice 2006-83, 2006-40 I. Hr block efile R. Hr block efile B. Hr block efile 596, available at www. Hr block efile irs. Hr block efile gov/irb/2006-40_IRB/ar12. Hr block efile html. Hr block efile Miscellaneous Compensation This section discusses many types of employee compensation. Hr block efile The subjects are arranged in alphabetical order. Hr block efile Advance commissions and other earnings. Hr block efile   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. Hr block efile    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. Hr block efile If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), Itemized Deductions, or you may be able to take a credit for that year. Hr block efile See Repayments , later. Hr block efile Allowances and reimbursements. Hr block efile    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Hr block efile If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. Hr block efile Back pay awards. Hr block efile   Include in income amounts you are awarded in a settlement or judgment for back pay. Hr block efile These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. Hr block efile They should be reported to you by your employer on Form W-2. Hr block efile Bonuses and awards. Hr block efile    Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. Hr block efile These include prizes such as vacation trips for meeting sales goals. Hr block efile If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. Hr block efile However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. Hr block efile Employee achievement award. Hr block efile   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. Hr block efile However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. Hr block efile Your employer can tell you whether your award is a qualified plan award. Hr block efile Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. Hr block efile   However, the exclusion does not apply to the following awards. Hr block efile A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. Hr block efile A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. Hr block efile Example. Hr block efile Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. Hr block efile Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. Hr block efile However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 − $1,600) in his income. Hr block efile Differential wage payments. Hr block efile   This is any payment made by an employer to an individual for any period during which the individual is, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages the individual would have received from the employer for that period. Hr block efile These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. Hr block efile The payments are reported as wages on Form W-2. Hr block efile Government cost-of-living allowances. Hr block efile   Most payments received by U. Hr block efile S. Hr block efile Government civilian employees for working abroad are taxable. Hr block efile However, certain cost-of-living allowances are tax free. Hr block efile Publication 516, U. Hr block efile S. Hr block efile Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. Hr block efile Nonqualified deferred compensation plans. Hr block efile   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. Hr block efile This amount is shown on Form W-2, box 12, using code Y. Hr block efile This amount is not included in your income. Hr block efile   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. Hr block efile This amount is included in your wages shown on Form W-2, box 1. Hr block efile It is also shown on Form W-2, box 12, using code Z. Hr block efile Nonqualified deferred compensation plans of nonqualified entities. Hr block efile   In most cases, any compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is included in gross income when there is no substantial risk of forfeiture of the rights to such compensation. Hr block efile For this purpose, a nonqualified entity is: A foreign corporation unless substantially all of its income is: Effectively connected with the conduct of a trade or business in the United States, or Subject to a comprehensive foreign income tax. Hr block efile A partnership unless substantially all of its income is allocated to persons other than: Foreign persons for whom the income is not subject to a comprehensive foreign income tax, and Tax-exempt organizations. Hr block efile Note received for services. Hr block efile   If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. Hr block efile When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. Hr block efile Do not include that part again in your income. Hr block efile Include the rest of the payment in your income in the year of payment. Hr block efile   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. Hr block efile Severance pay. Hr block efile   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. Hr block efile Accrued leave payment. Hr block efile   If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. Hr block efile   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. Hr block efile You can reduce gross wages by the amount you repaid in the same tax year in which you received it. Hr block efile Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on your return and the wages on your Forms W-2. Hr block efile Outplacement services. Hr block efile   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. Hr block efile    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). Hr block efile Sick pay. Hr block efile   Pay you receive from your employer while you are sick or injured is part of your salary or wages. Hr block efile In addition, you must include in your income sick pay benefits received from any of the following payers. Hr block efile A welfare fund. Hr block efile A state sickness or disability fund. Hr block efile An association of employers or employees. Hr block efile An insurance company, if your employer paid for the plan. Hr block efile However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. Hr block efile For more information, see Other Sickness and Injury Benefits under Sickness and Injury Benefits, later. Hr block efile Social security and Medicare taxes paid by employer. Hr block efile   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. Hr block efile The payment is also treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. Hr block efile However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. Hr block efile Stock appreciation rights. Hr block efile   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. Hr block efile When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. Hr block efile You include the cash payment in income in the year you use the right. Hr block efile Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. Hr block efile Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. Hr block efile See Valuation of Fringe Benefits , later in this discussion, for information on how to determine the amount to include in income. Hr block efile Recipient of fringe benefit. Hr block efile   You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided. Hr block efile You are considered to be the recipient even if it is given to another person, such as a member of your family. Hr block efile An example is a car your employer gives to your spouse for services you perform. Hr block efile The car is considered to have been provided to you and not to your spouse. Hr block efile   You do not have to be an employee of the provider to be a recipient of a fringe benefit. Hr block efile If you are a partner, director, or independent contractor, you also can be the recipient of a fringe benefit. Hr block efile Provider of benefit. Hr block efile   Your employer or another person for whom you perform services is the provider of a fringe benefit regardless of whether that person actually provides the fringe benefit to you. Hr block efile The provider can be a client or customer of an independent contractor. Hr block efile Accounting period. Hr block efile   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. Hr block efile Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. Hr block efile The general rule: benefits are reported for a full calendar year (January 1–December 31). Hr block efile The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. Hr block efile For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. Hr block efile Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. Hr block efile   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). Hr block efile Form W-2. Hr block efile   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. Hr block efile Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). Hr block efile However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). Hr block efile Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. Hr block efile Benefits you receive from the plan may be taxable, as explained, later, under Sickness and Injury Benefits . Hr block efile For information on the items covered in this section, other than Long-term care coverage , see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Hr block efile Long-term care coverage. Hr block efile   Contributions by your employer to provide coverage for long-term care services generally are not included in your income. Hr block efile However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. Hr block efile This amount will be reported as wages in box 1 of your Form W-2. Hr block efile Archer MSA contributions. Hr block efile    Contributions by your employer to your Archer MSA generally are not included in your income. Hr block efile Their total will be reported in box 12 of Form W-2, with code R. Hr block efile You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Hr block efile File the form with your return. Hr block efile Health flexible spending arrangement (health FSA). Hr block efile   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. Hr block efile   Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. Hr block efile The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. Hr block efile For more information, see Notice 2012-40, 2012-26 I. Hr block efile R. Hr block efile B. Hr block efile 1046, available at www. Hr block efile irs. Hr block efile gov/irb/2012-26 IRB/ar09. Hr block efile html. Hr block efile Health reimbursement arrangement (HRA). Hr block efile   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. Hr block efile Health savings accounts (HSA). Hr block efile   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. Hr block efile Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. Hr block efile Contributions made by your employer are not included in your income. Hr block efile Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. Hr block efile Distributions not used for qualified medical expenses are included in your income. Hr block efile See Publication 969 for the requirements of an HSA. Hr block efile   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Hr block efile The contributions are treated as a distribution of money and are not included in the partner's gross income. Hr block efile Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. Hr block efile In both situations, the partner can deduct the contribution made to the partner's HSA. Hr block efile   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. Hr block efile The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Hr block efile Qualified HSA funding distribution. Hr block efile   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. Hr block efile See Publication 590, Individual Retirement Arrangements (IRAs), for the requirements for these qualified HSA funding distributions. Hr block efile Failure to maintain eligibility. Hr block efile   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. Hr block efile If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. Hr block efile This income is also subject to an additional 10% tax. Hr block efile Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. Hr block efile See Instructions for Form 8839, Qualified Adoption Expenses, for more information. Hr block efile Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. Hr block efile They also are included as social security and Medicare wages in boxes 3 and 5. Hr block efile However, they are not included as wages in box 1. Hr block efile To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. Hr block efile File the form with your return. Hr block efile Athletic Facilities If your employer provides you with the free or low-cost use of an employer-operated gym or other athletic club on your employer's premises, the value is not included in your compensation. Hr block efile The gym must be used primarily by employees, their spouses, and their dependent children. Hr block efile If your employer pays for a fitness program provided to you at an off-site resort hotel or athletic club, the value of the program is included in your compensation. Hr block efile De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. Hr block efile In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. Hr block efile Also see Employee Discounts , later. Hr block efile Holiday gifts. Hr block efile   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. Hr block efile However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. Hr block efile Dependent Care Benefits If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Hr block efile Dependent care benefits include: Amounts your employer pays directly to either you or your care provider for the care of your qualifying person while you work, and The fair market value of care in a daycare facility provided or sponsored by your employer. Hr block efile The amount you can exclude is limited to the lesser of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). Hr block efile Your employer must show the total amount of dependent care benefits provided to you during the year under a qualified plan in box 10 of your Form W-2. Hr block efile Your employer also will include any dependent care benefits over $5,000 in your wages shown in box 1 of your Form W-2. Hr block efile To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses. Hr block efile See the Instructions for Form 2441 for more information. Hr block efile Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. Hr block efile For more information, see Publication 970. Hr block efile Employee Discounts If your employer sells you property or services at a discount, you may be able to exclude the amount of the discount from your income. Hr block efile The exclusion applies to discounts on property or services offered to customers in the ordinary course of the line of business in which you work. Hr block efile However, it does not apply to discounts on real property or property commonly held for investment (such as stocks or bonds). Hr block efile The exclusion is limited to the price charged nonemployee customers multiplied by the following percentage. Hr block efile For a discount on property, your employer's gross profit percentage (gross profit divided by gross sales) on all property sold during the employer's previous tax year. Hr block efile (Ask your employer for this percentage. Hr block efile ) For a discount on services, 20%. Hr block efile Financial Counseling Fees Financial counseling fees paid for you by your employer are included in your income and must be reported as part of wages. Hr block efile If the fees are for tax or investment counseling, they can be deducted on Schedule A (Form 1040) as a miscellaneous deduction (subject to the 2%-of-AGI limit). Hr block efile Qualified retirement planning services paid for you by your employer may be excluded from your income. Hr block efile For more information, see Retirement Planning Services , later. Hr block efile Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. Hr block efile However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. Hr block efile For exceptions to this rule, see Entire cost excluded , and Entire cost taxed , later. Hr block efile If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. Hr block efile Also, it is shown separately in box 12 with code C. Hr block efile Group-term life insurance. Hr block efile   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. Hr block efile Permanent benefits. Hr block efile   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. Hr block efile Your employer should be able to tell you the amount to include in your income. Hr block efile Accidental death benefits. Hr block efile   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. Hr block efile Former employer. Hr block efile   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. Hr block efile Also, it is shown separately in box 12 with code C. Hr block efile Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. Hr block efile You must pay these taxes with your income tax return. Hr block efile Include them on line 60, Form 1040, and follow the instructions forline 60. Hr block efile For more information, see the Instructions for Form 1040. Hr block efile Two or more employers. Hr block efile   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. Hr block efile If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. Hr block efile You must figure how much to include in your income. Hr block efile Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. Hr block efile Figuring the taxable cost. Hr block efile    Use the following worksheet to figure the amount to include in your income. Hr block efile   If you pay any part of the cost of the insurance, your entire payment reduces, dollar for dollar, the amount you otherwise would include in your income. Hr block efile However, you cannot reduce the amount to include in your income by: Payments for coverage in a different tax year, Payments for coverage through a cafeteria plan, unless the payments are after-tax contributions, or Payments for coverage not taxed to you because of the exceptions discussed later under Entire cost excluded . Hr block efile Worksheet 1. Hr block efile Figuring the Cost of Group-Term Life Insurance To Include in Income 1. Hr block efile Enter the total amount of your insurance coverage from your employer(s) 1. Hr block efile   2. Hr block efile Limit on exclusion for employer-provided group-term life insurance coverage 2. Hr block efile 50,000 3. Hr block efile Subtract line 2 from line 1 3. Hr block efile   4. Hr block efile Divide line 3 by $1,000. Hr block efile Figure to the nearest tenth 4. Hr block efile   5. Hr block efile Go to Table 1. Hr block efile Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Hr block efile   6. Hr block efile Multiply line 4 by line 5 6. Hr block efile     7. Hr block efile Enter the number of full months of coverage at this cost 7. Hr block efile   8. Hr block efile Multiply line 6 by line 7 8. Hr block efile   9. Hr block efile Enter the premiums you paid per month 9. Hr block efile       10. Hr block efile Enter the number of months you paid the  premiums 10. Hr block efile       11. Hr block efile Multiply line 9 by line 10. Hr block efile 11. Hr block efile   12. Hr block efile Subtract line 11 from line 8. Hr block efile Include this amount in your income as wages 12. Hr block efile   Table 1. Hr block efile Cost of $1,000 of Group-Term Life Insurance for One Month   Age Cost     Under 25 $ . Hr block efile 05     25 through 29 . Hr block efile 06     30 through 34 . Hr block efile 08     35 through 39 . Hr block efile 09     40 through 44 . Hr block efile 10     45 through 49 . Hr block efile 15     50 through 54 . Hr block efile 23     55 through 59 . Hr block efile 43     60 through 64 . Hr block efile 66     65 through 69 1. Hr block efile 27     70 and older 2. Hr block efile 06   Example. Hr block efile You are 51 years old and work for employers A and B. Hr block efile Both employers provide group-term life insurance coverage for you for the entire year. Hr block efile Your coverage is $35,000 with employer A and $45,000 with employer B. Hr block efile You pay premiums of $4. Hr block efile 15 a month under the employer B group plan. Hr block efile You figure the amount to include in your income as follows. Hr block efile   Worksheet 1. Hr block efile Figuring the Cost of Group-Term Life Insurance To Include in Income—Illustrated 1. Hr block efile Enter the total amount of your insurance coverage from your employer(s) 1. Hr block efile 80,000 2. Hr block efile Limit on exclusion for employer-provided group-term life insurance coverage 2. Hr block efile 50,000 3. Hr block efile Subtract line 2 from line 1 3. Hr block efile 30,000 4. Hr block efile Divide line 3 by $1,000. Hr block efile Figure to the nearest tenth 4. Hr block efile 30. Hr block efile 0 5. Hr block efile Go to Table 1. Hr block efile Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Hr block efile . Hr block efile 23 6. Hr block efile Multiply line 4 by line 5 6. Hr block efile 6. Hr block efile 90 7. Hr block efile Enter the number of full months of coverage at this cost. Hr block efile 7. Hr block efile 12 8. Hr block efile Multiply line 6 by line 7 8. Hr block efile 82. Hr block efile 80 9. Hr block efile Enter the premiums you paid per month 9. Hr block efile 4. Hr block efile 15     10. Hr block efile Enter the number of months you paid the premiums 10. Hr block efile 12     11. Hr block efile Multiply line 9 by line 10. Hr block efile 11. Hr block efile 49. Hr block efile 80 12. Hr block efile Subtract line 11 from line 8. Hr block efile Include this amount in your income as wages 12. Hr block efile 33. Hr block efile 00 The total amount to include in income for the cost of excess group-term life insurance is $33. Hr block efile Neither employer provided over $50,000 insurance coverage, so the wages shown on your Forms W-2 do not include any part of that $33. Hr block efile You must add it to the wages shown on your Forms W-2 and include the total on your return. Hr block efile Entire cost excluded. Hr block efile   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. Hr block efile You are permanently and totally disabled and have ended your employment. Hr block efile Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. Hr block efile A charitable organization to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. Hr block efile (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. Hr block efile ) The plan existed on January 1, 1984, and: You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. Hr block efile Entire cost taxed. Hr block efile   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply. Hr block efile The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. Hr block efile You are a key employee and your employer's plan discriminates in favor of key employees. Hr block efile Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. Hr block efile The meals are: Furnished on the business premises of your employer, and Furnished for the convenience of your employer. Hr block efile The lodging is: Furnished on the business premises of your employer, Furnished for the convenience of your employer, and A condition of your employment. Hr block efile (You must accept it in order to be able to properly perform your duties. Hr block efile ) You also do not include in your income the value of meals or meal money that qualifies as a de minimis fringe benefit. Hr block efile See De Minimis (Minimal) Benefits , earlier. Hr block efile Faculty lodging. Hr block efile   If you are an employee of an educational institution or an academic health center and you are provided with lodging that does not meet the three conditions given earlier, you still may not have to include the value of the lodging in income. Hr block efile However, the lodging must be qualified campus lodging, and you must pay an adequate rent. Hr block efile Academic health center. Hr block efile   This is an organization that meets the following conditions. Hr block efile Its principal purpose or function is to provide medical or hospital care or medical education or research. Hr block efile It receives payments for graduate medical education under the Social Security Act. Hr block efile One of its principal purposes or functions is to provide and teach basic and clinical medical science and research using its own faculty. Hr block efile Qualified campus lodging. Hr block efile   Qualified campus lodging is lodging furnished to you, your spouse, or one of your dependents by, or on behalf of, the institution or center for use as a home. Hr block efile The lodging must be located on or near a campus of the educational institution or academic health center. Hr block efile Adequate rent. Hr block efile   The amount of rent you pay for the year for qualified campus lodging is considered adequate if it is at least equal to the lesser of: 5% of the appraised value of the lodging, or The average of rentals paid by individuals (other than employees or students) for comparable lodging held for rent by the educational institution. Hr block efile If the amount you pay is less than the lesser of these amounts, you must include the difference in your income. Hr block efile   The lodging must be appraised by an independent appraiser and the appraisal must be reviewed on an annual basis. Hr block efile Example. Hr block efile Carl Johnson, a sociology professor for State University, rents a home from the university that is qualified campus lodging. Hr block efile The house is appraised at $200,000. Hr block efile The average rent paid for comparable university lodging by persons other than employees or students is $14,000 a year. Hr block efile Carl pays an annual rent of $11,000. Hr block efile Carl does not include in his income any rental value because the rent he pays equals at least 5% of the appraised value of the house (5% × $200,000 = $10,000). Hr block efile If Carl paid annual rent of only $8,000, he would have to include $2,000 in his income ($10,000 − $8,000). Hr block efile Moving Expense Reimbursements In most cases, if your employer pays for your moving expenses (either directly or indirectly) and the expenses would have been deductible if you paid them yourself, the value is not included in your income. Hr block efile See Publication 521 for more information. Hr block efile No-Additional-Cost Services The value of services you receive from your employer for free, at cost, or for a reduced price is not included in your income if your employer: Offers the same service for sale to customers in the ordinary course of the line of business in which you work, and Does not have a substantial additional cost (including any sales income given up) to provide you with the service (regardless of what you paid for the service). Hr block efile In most cases, no-additional-cost services are excess capacity services, such as airline, bus, or train tickets, hotel rooms, and telephone services. Hr block efile Example. Hr block efile You are employed as a flight attendant for a company that owns both an airline and a hotel chain. Hr block efile Your employer allows you to take personal flights (if there is an unoccupied seat) and stay in any one of their hotels (if there is an unoccupied room) at no cost to you. Hr block efile The value of the personal flight is not included in your income. Hr block efile However, the value of the hotel room is included in your income because you do not work in the hotel business. Hr block efile Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. Hr block efile Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. Hr block efile You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. Hr block efile Also, see Financial Counseling Fees , earlier. Hr block efile Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. Hr block efile A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. Hr block efile Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. Hr block efile However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. Hr block efile Exclusion limit. Hr block efile   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. Hr block efile   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. Hr block efile   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. Hr block efile   If the benefits have a value that is more than these limits, the excess must be included in your income. Hr block efile You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. Hr block efile Commuter highway vehicle. Hr block efile   This is a highway vehicle that seats at least six adults (not including the driver). Hr block efile At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). Hr block efile Transit pass. Hr block efile   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. Hr block efile Qualified parking. Hr block efile   This is parking provided to an employee at or near the employer's place of business. Hr block efile It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. Hr block efile It does not include parking at or near the employee's home. Hr block efile Qualified bicycle commuting. Hr block efile   This is reimbursement based on the number of qualified bicycle commuting months for the year. Hr block efile A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. Hr block efile The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. Hr block efile Tuition Reduction You can exclude a qualified tuition reduction from your income. Hr block efile This is the amount of a reduction in tuition: For education (below graduate level) furnished by an educational institution to an employee, former employee who retired or became disabled, or his or her spouse and dependent children. Hr block efile For education furnished to a graduate student at an educational institution if the graduate student is engaged in teaching or research activities for that institution. Hr block efile Representing payment for teaching, research, or other services if you receive the amount under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance program. Hr block efile For more information, see Publication 970. Hr block efile Working Condition Benefits If your employer provides you with a product or service and the cost of it would have been allowable as a business or depreciation deduction if you paid for it yourself, the cost is not included in your income. Hr block efile Example. Hr block efile You work as an engineer and your employer provides you with a subscription to an engineering trade magazine. Hr block efile The cost of the subscription is not included in your income because the cost would have been allowable to you as a business deduction if you had paid for the subscription yourself. Hr block efile Valuation of Fringe Benefits If a fringe benefit is included in your income, the amount included is generally its value determined under the general valuation rule or under the special valuation rules. Hr block efile For an exception, see Group-Term Life Insurance , earlier. Hr block efile General valuation rule. Hr block efile   You must include in your income the amount by which the fair market value of the fringe benefit is more than the sum of: The amount, if any, you paid for the benefit, plus The amount, if any, specifically excluded from your income by law. Hr block efile If you pay fair market value for a fringe benefit, no amount is included in your income. Hr block efile Fair market value. Hr block efile   The fair market value of a fringe benefit is determined by all the facts and circumstances. Hr block efile It is the amount you would have to pay a third party to buy or lease the benefit. Hr block efile This is determined without regard to: Your perceived value of the benefit, or The amount your employer paid for the benefit. Hr block efile Employer-provided vehicles. Hr block efile   If your employer provides a car (or other highway motor vehicle) to you, your personal use of the car is usually a taxable noncash fringe benefit. Hr block efile   Under the general valuation rules, the value of an employer-provided vehicle is the amount you would have to pay a third party to lease the same or a similar vehicle on the same or comparable terms in the same geographic area where you use the vehicle. Hr block efile An example of a comparable lease term is the amount of time the vehicle is available for your use, such as a 1-year period. Hr block efile The value cannot be determined by multiplying a cents-per-mile rate times the number of miles driven unless you prove the vehicle could have been leased on a cents-per-mile basis. Hr block efile Flights on employer-provided aircraft. Hr block efile   Under the general valuation rules, if your flight on an employer-provided piloted aircraft is primarily personal and you control the use of the aircraft for the flight, the value is the amount it would cost to charter the flight from a third party. Hr block efile   If there is more than one employee on the flight, the cost to charter the aircraft must be divided among those employees. Hr block efile The division must be based on all the facts, including which employee or employees control the use of the aircraft. Hr block efile Special valuation rules. Hr block efile   You generally can use a special valuation rule for a fringe benefit only if your employer uses the rule. Hr block efile If your employer uses a special valuation rule, you cannot use a different special rule to value that benefit. Hr block efile You always can use the general valuation rule discussed earlier, based on facts and circumstances, even if your employer uses a special rule. Hr block efile   If you and your employer use a special valuation rule, you must include in your income the amount your employer determines under the special rule minus the sum of: Any amount you repaid your employer, plus Any amount specifically excluded from income by law. Hr block efile The special valuation rules are the following. Hr block efile The automobile lease rule. Hr block efile The vehicle cents-per-mile rule. Hr block efile The commuting rule. Hr block efile The unsafe conditions commuting rule. Hr block efile The employer-operated eating-facility rule. Hr block efile   For more information on these rules, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Hr block efile    For information on the non-commercial flight and commercial flight valuation rules, see sections 1. Hr block efile 61-21(g) and 1. Hr block efile 61-21(h) of the regulations. Hr block efile Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. Hr block efile (Your employer can tell you whether your retirement plan is qualified. Hr block efile ) However, the cost of life insurance coverage included in the plan may have to be included. Hr block efile See Group-Term Life Insurance , earlier, under Fringe Benefits. Hr block efile If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. Hr block efile However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. Hr block efile For information on distributions from retirement plans, see Publication 575 (or Publication 721, Tax Guide to U. Hr block efile S. Hr block efile Civil Service Retirement Benefits, if you are a federal employee or retiree). Hr block efile Elective Deferrals If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. Hr block efile The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. Hr block efile An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. Hr block efile However, it is included in wages subject to social security and Medicare taxes. Hr block efile Elective deferrals include elective contributions to the following retirement plans. Hr block efile Cash or deferred arrangements (section 401(k) plans). Hr block efile The Thrift Savings Plan for federal employees. Hr block efile Salary reduction simplified employee pension plans (SARSEP). Hr block efile Savings incentive match plans for employees (SIMPLE plans). Hr block efile Tax-sheltered annuity plans (403(b) plans). Hr block efile Section 501(c)(18)(D) plans. Hr block efile (But see Reporting by employer , later. Hr block efile ) Section 457 plans. Hr block efile Qualified automatic contribution arrangements. Hr block efile   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. Hr block efile You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. Hr block efile The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. Hr block efile   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. Hr block efile Overall limit on deferrals. Hr block efile   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3), earlier. Hr block efile The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later. Hr block efile Amounts deferred under specific plan limits are part of the overall limit on deferrals. Hr block efile   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. Hr block efile However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. Hr block efile Catch-up contributions. Hr block efile   You may be allowed catch-up contributions (additional elective deferrals) if you are age 50 or older by the end of your tax year. Hr block efile For more information about catch-up contributions to 403(b) plans, see chapter 6 of Publication 571, Tax Sheltered Annuity Plans. Hr block efile   For more information about additional elective deferrals to: SEPs (SARSEPs), see Salary Reduction Simplified Employee Pension in chapter 2 of Publication 560, Retirement Plans for Small Business. Hr block efile SIMPLE plans, see How Much Can Be Contributed on Your Behalf? in chapter 3 of Publication 590. Hr block efile Section 457 plans, see Limit for deferrals under section 457 plans , later. Hr block efile Limit for deferrals under SIMPLE plans. Hr block efile   If you are a participant in a SIMPLE plan, you generally should not have deferred more than $12,000 in 2013. Hr block efile Amounts you defer under a SIMPLE plan count toward the overall limit ($17,500 for 2013) and may affect the amount you can defer under other elective deferral plans. Hr block efile Limit for tax-sheltered annuities. Hr block efile   If you are a participant in a tax-sheltered annuity plan (403(b) plan), the limit on elective deferrals for 2013 generally is $17,500. Hr block efile However, if you have at least 15 years of service with a public school system, a hospital, a home health service agency, a health and welfare service agency, a church, or a convention or association of churches (or associated organization), the limit on elective deferrals is increased by the least of the following amounts. Hr block efile $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in earlier years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior tax years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. Hr block efile   If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013. Hr block efile   For more information, see Publication 571. Hr block efile Limit for deferral under section 501(c)(18) plans. Hr block efile   If you are a participant in a section 501(c)(18) plan (a trust created before June 25, 1959, funded only by employee contributions), you should have deferred no more than the lesser of $7,000 or 25% of your compensation. Hr block efile Amounts you defer under a section 501(c)(18) plan count toward the overall limit ($17,500 in 2013) and may affect the amount you can defer under other elective deferral plans. Hr block efile Limit for deferrals under section 457 plans. Hr block efile   If you are a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt organizations), you should have deferred no more than the lesser of your includible compensation or $17,500 in 2013. Hr block efile However, if you are within 3 years of normal retirement age, you may be allowed an increased limit if the plan allows it. Hr block efile See Increased limit , later. Hr block efile Includible compensation. Hr block efile   This is the pay you received for the year from the employer who maintained the section 457 plan. Hr block efile In most cases, it includes all the following payments. Hr block efile Wages and salaries. Hr block efile Fees for professional services. Hr block efile The value of any employer-provided qualified transportation fringe benefit (defined under Transportation , earlier) that is not included in your income. Hr block efile Other amounts received (cash or noncash) for personal services you performed, including, but not limited to, the following items. Hr block efile Commissions and tips. Hr block efile Fringe benefits. Hr block efile Bonuses. Hr block efile Employer contributions (elective deferrals) to: The section 457 plan. Hr block efile Qualified cash or deferred arrangements (section 401(k) plans) that are not included in your income. Hr block efile A salary reduction simplified employee pension (SARSEP). Hr block efile A tax-sheltered annuity (section 403(b) plan). Hr block efile A savings incentive match plan for employees (SIMPLE plan). Hr block efile A section 125 cafeteria plan. Hr block efile   Instead of using the amounts listed earlier to determine your includible compensation, your employer can use any of the following amounts. Hr block efile Your wages as defined for income tax withholding purposes. Hr block efile Your wages as reported in box 1 of Form W-2. Hr block efile Your wages that are subject to social security withholding (including elective deferrals). Hr block efile Increased limit. Hr block efile   During any, or all, of the last 3 years ending before you reach normal retirement age under the plan, your plan may provide that your limit is the lesser of: Twice the annual limit ($35,000 for 2013), or The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions). Hr block efile Catch-up contributions. Hr block efile   You generally can have additional elective deferrals made to your governmental section 457 plan if: You reached age 50 by the end of the year, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. Hr block efile If you qualify, your limit can be the lesser of your includible compensation or $17,500, plus $5,500. Hr block efile However, if you are within 3 years of retirement age and your plan provides the increased limit, discussed earlier, that limit may be higher. Hr block efile Designated Roth contributions. Hr block efile   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. Hr block efile Designated Roth contributions are treated as elective deferrals, except that they are included in income. Hr block efile Your retirement plan must maintain separate accounts and recordkeeping for the designated Roth contributions. Hr block efile   Qualified distributions from a Roth plan are not included in income. Hr block efile In most cases, a distribution made before the end of the 5-tax-year period beginning with the first tax year for which you made a designated Roth contribution to the plan is not a qualified distribution. Hr block efile Reporting by employer. Hr block efile   Your employer generally should not include elective deferrals in your wages in box 1 of Form W-2. Hr block efile Instead, your employer should mark the Retirement plan checkbox in box 13 and show the total amount deferred in box 12. Hr block efile Section 501(c)(18)(D) contributions. Hr block efile   Wages shown in box 1 of your Form W-2 should not have been reduced for contributions you made to a section 501(c)(18)(D) retirement plan. Hr block efile The amount you contributed should be identified with code “H” in box 12. Hr block efile You may deduct the amount deferred subject to the limits that apply. Hr block efile Include your deduction in the total on Form 1040, line 36. Hr block efile Enter the amount and “501(c)(18)(D)” on the dotted line next to line 36. Hr block efile Designated Roth contributions. Hr block efile    These contributions are elective deferrals but are included in your wages in box 1 of Form W-2. Hr block efile Designated Roth contributions to a section 401(k) plan are reported using code AA in box 12, or, for section 403(b) plans, code BB in box 12. Hr block efile Excess deferrals. Hr block efile   If your deferrals exceed the limit, you must notify your plan by the date required by the plan. Hr block efile If the plan permits, the excess amount will be distributed to you. Hr block efile If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. Hr block efile You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. Hr block efile The plan then must pay you the amount of the excess, along with any income earned on that amount, by April 15 of the following year. Hr block efile   You must include the excess deferral in your income for the year of the deferral unless you have an excess deferral of a designated Roth contribution. Hr block efile File Form 1040 to add the excess deferral amount to your wages on line 7. Hr block efile Do not use Form 1040A or Form 1040EZ to report excess deferral amounts. Hr block efile Excess not distributed. Hr block efile   If you do not take out the excess amount, you cannot include it in the cost of the contract even though you included it in your income. Hr block efile Therefore, you are taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution. Hr block efile Excess distributed to you. Hr block efile   If you take out the excess after the year of the deferral and you receive the corrective distribution by April 15 of the following year, do not include it in income again in the year you receive it. Hr block efile If you receive it later, you must include it in income in both the year of the deferral and the year you receive it. Hr block efile Any income on the excess deferral taken out is taxable in the tax year in which you take it out. Hr block efile If you take out part of the excess deferral and the income on it, allocate the distribution proportionately between the excess deferral and the income. Hr block efile    You should receive a Form 1099-R for the year in which the excess deferral is distributed to you. Hr block efile Use the following rules to report a corrective distribution shown on Form 1099-R for 2013. Hr block efile If the distribution was for a 2013 excess deferral, your Form 1099-R should have the code “8” in box 7. Hr block efile Add the excess deferral amount to your wages on your 2013 tax return. Hr block efile If the distribution was for a 2013 excess deferral to a designated Roth account, your Form 1099-R should have code “B” in box 7. Hr block efile Do not add this amount to your wages on your 2013 return. Hr block efile If the distribution was for a 2012 excess deferral, your Form 1099-R should have the code “P” in box 7. Hr block efile If you did not add the excess deferral amount to your wages on your 2012 tax return, you must file an amended return on Form 1040X, Amended U. Hr block efile S. Hr block efile Individual Income Tax Return. Hr block efile If you did not receive the distribution by April 15, 2013, you also must add it to your wages on your 2013 tax return. Hr block efile If the distribution was for the income earned on an excess deferral, your Form 1099-R should have the code “8” in box 7. Hr block efile Add the income amount to your wages on your 2013 income tax return, regardless of when the excess deferral was made. Hr block efile Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Hr block efile Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution. Hr block efile ”    Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. Hr block efile It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. Hr block efile Excess Contributions If you are a highly compensated employee, the total of your elective deferrals and other contributions made for you for any year under a section 401(k) plan or SARSEP can be, as a percentage of pay, no more than 125% of the average deferral percentage (ADP) of all eligible non-highly compensated employees. Hr block efile If the total contributed to the plan is more than the amount allowed under the ADP test, the excess contributions must be either distributed to you or recharacterized as after-tax employee contributions by treating them as distributed to you and then contributed by you to the plan. Hr block efile You must include the excess contributions in your income as wages on Form 1040, line 7. Hr block efile You cannot use Form 1040A or Form 1040EZ to report excess contribution amounts. Hr block efile If you receive a corrective distribution of excess contributions (and allocable income), it is included in your income in the year of the distribution. Hr block efile The allocable income is the amount of gain or loss through the end of the plan year for which the contribution was made that is allocable to the excess contributions. Hr block efile You should receive a Form 1099-R for the year the excess contributions are distributed to you. Hr block efile Add the distribution to your wages for that year. Hr block efile Even though a corrective distribution of excess contributions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. Hr block efile It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. Hr block efile Excess Annual Additions The amount contributed in 2013 to a defined contribution plan is generally limited to the lesser of 100% of your compensation or $51,000. Hr block efile Under certain circumstances, contributions that exceed these limits (excess annual additions) may be corrected by a distribution of your elective deferrals or a return of your after-tax contributions and earnings from these contributions. Hr block efile A corrective payment of excess annual additions consisting of elective deferrals or earnings from your after-tax contributions is fully taxable in the year paid. Hr block efile A corrective payment consisting of your after-tax contributions is not taxable. Hr block efile If you received a corrective payment of excess annual additions, you should receive a separate Form 1099-R for the year of the payment with the code “E” in box 7. Hr block efile Report the total payment shown in box 1 of Form 1099-R on line 16a of Form 1040 or line 12a of Form 1040A. Hr block efile Report the taxable amount shown in box 2a of Form 1099-R on line 16b of Form 1040 or line 12b of Form 1040A. Hr block efile Even though a corrective distribution of excess annual additions is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. Hr block efile It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions. Hr block efile Stock Options If you receive an option to buy or sell stock or other property as payment for your services, you may have income when you receive the option (the grant), when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option or property acquired through exercise of the option. Hr block efile The timing, type, and amount of income inclusion depend on whether you receive a nonstatutory stock option or a statutory stock option. Hr block efile Your employer can tell you which kind of option you hold. Hr block efile Nonstatutory Stock Options Grant of option. Hr block efile   If you are granted a nonstatutory stock option, you may have income when you receive the option. Hr block efile The amount of income to include and the time to include it depend on whether the fair market value of the option can be readily determined. Hr block efile The fair market value of an option can be readily determined if it is actively traded on an established market. Hr block efile    The fair market value of an option that is not traded on an established market can be readily determined only if all of the following conditions exist. Hr block efile You can transfer the option. Hr block efile You can exercise the option immediately in full. Hr block efile The option or the property subject to the option is not subject to any condition or restriction (other than a condition to secure payment of the purchase price) that has a significant effect on the fair market value of the option. Hr block efile The fair market value of the option privilege can be readily determined. Hr block efile The option privilege for an option to buy is the opportunity to benefit during the option's exercise period from any increase in the value of property subject to the option without risking any capital. Hr block efile For example, if during the exercise period the fair market value of stock subject to an option is greater than the option's exercise price, a profit may be realized by exercising the option and immediately selling the stock at its higher value. Hr block efile The option privilege for an option to sell is the opportunity to benefit during the exercise period from a decrease in the value of the property subject to the option. Hr block efile If you or a member of your family is an officer, director, or more-than-10% owner of an expatriated corporation, you may owe an excise tax on the value of nonstatutory options and other stock-based compensation from that corporation. Hr block efile For more information on the excise tax, see Internal Revenue Code section 4985. Hr block efile Option with readily determinable value. Hr block efile   If you receive a nonstatutory stock option that has a readily determinable fair market value at the time it is granted to you, the option is treated like other property received as compensation. Hr block efile See Restricted Property , later, for rules on how much income to include and when to include it. Hr block efile However, the rule described in that discussion for choosing to include the value of property in your income for the year of the transfer does not apply to a nonstatutory option. Hr block efile Option without readily determinable value. Hr block efile   If the fair market value of the option is not readily determinable at the time it is granted to you (even if it is determined later), you do not have income until you exercise or transfer the option. Hr block efile    Exercise or transfer of option. Hr block efile   When you exercise a nonstatutory stock option, the amount to include in your income depends on whether the option had a readily determinable value. Hr block efile Option with readily determinable value. Hr block efile   When you exercise a nonstatutory stock option that had a readily determinable value at the time the option was granted, you do not have to include any amount in income. Hr block efile Option without readily determinable value. Hr block efile   When you exercise a nonstatutory stock option that did not have a readily determinable value at the time the option was granted, the restricted prope