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Income Tax Preparation

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Income Tax Preparation

Income tax preparation 4. Income tax preparation   Farm Business Expenses Table of Contents What's New for 2013 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Deductible ExpensesReasonable allocation. Income tax preparation Prepaid Farm Supplies Prepaid Livestock Feed Labor Hired Repairs and Maintenance Interest Breeding Fees Fertilizer and Lime Taxes Insurance Rent and Leasing Depreciation Business Use of Your Home Truck and Car Expenses Travel Expenses Marketing Quota Penalties Tenant House Expenses Items Purchased for Resale Other Expenses Domestic Production Activities Deduction Capital ExpensesForestation and reforestation costs. Income tax preparation Nondeductible ExpensesPersonal, Living, and Family Expenses Other Nondeductible Items Losses From Operating a FarmAt-Risk Limits Passive Activity Limits Excess Farm Loss Limit Not-for-Profit FarmingUsing the presumption later. Income tax preparation Category 1. Income tax preparation Category 2. Income tax preparation Category 3. Income tax preparation What's New for 2013 Standard mileage rate. Income tax preparation  For 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56. Income tax preparation 5 cents. Income tax preparation See Truck and Car Expenses , later. Income tax preparation Simplified method for business use of home deduction. Income tax preparation  The IRS now provides a simplified method to determine your expenses for business use of your home. Income tax preparation For more information, see Schedule C (Form 1040), Part II, and its instructions. Income tax preparation Introduction You can generally deduct the current costs of operating your farm. Income tax preparation Current costs are expenses you do not have to capitalize or include in inventory costs. Income tax preparation However, your deduction for the cost of livestock feed and certain other supplies may be limited. Income tax preparation If you have an operating loss, you may not be able to deduct all of it. Income tax preparation Topics - This chapter discusses: Deductible expenses Domestic production activities deduction Capital expenses Nondeductible expenses Losses from operating a farm Not-for-profit farming Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch F (Form 1040) Profit or Loss From Farming 1045 Application for Tentative Refund 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit 8903 Domestic Production Activities Deduction See chapter 16 for information about getting publications and forms. Income tax preparation Deductible Expenses The ordinary and necessary costs of operating a farm for profit are deductible business expenses. Income tax preparation “Ordinary” means what most farmers do and “necessary” means what is useful and helpful in farming. Income tax preparation Schedule F, Part II, lists some common farm expenses that are typically deductible. Income tax preparation This chapter discusses many of these expenses, as well as others not listed on Schedule F. Income tax preparation Reimbursed expenses. Income tax preparation   If the reimbursement is received in the same year that the expense is claimed, reduce the expense by the amount of the reimbursement. Income tax preparation If the reimbursement is received in a year after the expense is claimed, include the reimbursement amount in income. Income tax preparation See Refund or reimbursement under Income From Other Sources in chapter 3. Income tax preparation Personal and business expenses. Income tax preparation   Some expenses you pay during the tax year may be part personal and part business. Income tax preparation These may include expenses for gasoline, oil, fuel, water, rent, electricity, telephone, automobile upkeep, repairs, insurance, interest, and taxes. Income tax preparation   You must allocate these mixed expenses between their business and personal parts. Income tax preparation Generally, the personal part of these expenses is not deductible. Income tax preparation The business portion of the expenses is deductible on Schedule F. Income tax preparation Example. Income tax preparation You paid $1,500 for electricity during the tax year. Income tax preparation You used 1/3 of the electricity for personal purposes and 2/3 for farming. Income tax preparation Under these circumstances, you can deduct $1,000 (2/3 of $1,500) of your electricity expense as a farm business expense. Income tax preparation Reasonable allocation. Income tax preparation   It is not always easy to determine the business and nonbusiness parts of an expense. Income tax preparation There is no method of allocation that applies to all mixed expenses. Income tax preparation Any reasonable allocation is acceptable. Income tax preparation What is reasonable depends on the circumstances in each case. Income tax preparation Prepaid Farm Supplies Prepaid farm supplies include the following items if paid for during the year. Income tax preparation Feed, seed, fertilizer, and similar farm supplies not used or consumed during the year, but not including farm supplies that you would have consumed during the year if not for a fire, storm, flood, other casualty, disease, or drought. Income tax preparation Poultry (including egg-laying hens and baby chicks) bought for use (or for both use and resale) in your farm business. Income tax preparation However, include only the amount that would be deductible in the following year if you had capitalized the cost and deducted it ratably over the lesser of 12 months or the useful life of the poultry. Income tax preparation Poultry bought for resale and not resold during the year. Income tax preparation Deduction limit. Income tax preparation   If you use the cash method of accounting to report your income and expenses, your deduction for prepaid farm supplies in the year you pay for them may be limited to 50% of your other deductible farm expenses for the year (all Schedule F deductions except prepaid farm supplies). Income tax preparation This limit does not apply if you meet one of the exceptions described later. Income tax preparation See Chapter 2 for a discussion of the cash method of accounting. Income tax preparation   If the limit applies, you can deduct the excess cost of farm supplies other than poultry in the year you use or consume the supplies. Income tax preparation The excess cost of poultry bought for use (or for both use and resale) in your farm business is deductible in the year following the year you pay for it. Income tax preparation The excess cost of poultry bought for resale is deductible in the year you sell or otherwise dispose of that poultry. Income tax preparation Example. Income tax preparation You may not qualify for the exception described next. Income tax preparation During 2013, you bought fertilizer ($4,000), feed ($1,000), and seed ($500) for use on your farm in the following year. Income tax preparation Your total prepaid farm supplies expense for 2013 is $5,500. Income tax preparation Your other deductible farm expenses totaled $10,000 for 2013. Income tax preparation Therefore, your deduction for prepaid farm supplies cannot be more than $5,000 (50% of $10,000) for 2013. Income tax preparation The excess prepaid farm supplies expense of $500 ($5,500 − $5,000) is deductible in a later tax year when you use or consume the supplies. Income tax preparation Exceptions. Income tax preparation   This limit on the deduction for prepaid farm supplies expense does not apply if you are a farm-related taxpayer and either of the following apply. Income tax preparation Your prepaid farm supplies expense is more than 50% of your other deductible farm expenses because of a change in business operations caused by unusual circumstances. Income tax preparation Your total prepaid farm supplies expense for the preceding 3 tax years is less than 50% of your total other deductible farm expenses for those 3 tax years. Income tax preparation   You are a farm-related taxpayer if any of the following tests apply. Income tax preparation Your main home is on a farm. Income tax preparation Your principal business is farming. Income tax preparation A member of your family meets (1) or (2). Income tax preparation For this purpose, your family includes your brothers and sisters, half-brothers and half-sisters, spouse, parents, grandparents, children, grandchildren, and aunts and uncles and their children. Income tax preparation    Whether or not the deduction limit for prepaid farm supplies applies, your expenses for prepaid livestock feed may be subject to the rules for advance payment of livestock feed, discussed next. Income tax preparation Prepaid Livestock Feed If you report your income and expenses under the cash method of accounting, you cannot deduct in the year paid the cost of feed your livestock will consume in a later year unless you meet all the following tests. Income tax preparation The payment is for the purchase of feed rather than a deposit. Income tax preparation The prepayment has a business purpose and is not merely for tax avoidance. Income tax preparation Deducting the prepayment does not result in a material distortion of your income. Income tax preparation If you meet all three tests, you can deduct the prepaid feed, subject to the limit on prepaid farm supplies discussed earlier. Income tax preparation If you fail any of these tests, you can deduct the prepaid feed only in the year it is consumed. Income tax preparation This rule does not apply to the purchase of commodity futures contracts. Income tax preparation Payment for the purchase of feed. Income tax preparation   Whether a payment is for the purchase of feed or a deposit depends on the facts and circumstances in each case. Income tax preparation It is for the purchase of feed if you can show you made it under a binding commitment to accept delivery of a specific quantity of feed at a fixed price and you are not entitled, by contract or business custom, to a refund or repurchase. Income tax preparation   The following are some factors that show a payment is a deposit rather than for the purchase of feed. Income tax preparation The absence of specific quantity terms. Income tax preparation The right to a refund of any unapplied payment credit at the end of the contract. Income tax preparation The seller's treatment of the payment as a deposit. Income tax preparation The right to substitute other goods or products for those specified in the contract. Income tax preparation   A provision permitting substitution of ingredients to vary the particular feed mix to meet your livestock's current diet requirements will not suggest a deposit. Income tax preparation Further, a price adjustment to reflect market value at the date of delivery is not, by itself, proof of a deposit. Income tax preparation Business purpose. Income tax preparation   The prepayment has a business purpose only if you have a reasonable expectation of receiving some business benefit from prepaying the cost of livestock feed. Income tax preparation The following are some examples of business benefits. Income tax preparation Fixing maximum prices and securing an assured feed supply. Income tax preparation Securing preferential treatment in anticipation of a feed shortage. Income tax preparation   Other factors considered in determining the existence of a business purpose are whether the prepayment was a condition imposed by the seller and whether that condition was meaningful. Income tax preparation No material distortion of income. Income tax preparation   The following are some factors considered in determining whether deducting prepaid livestock feed materially distorts income. Income tax preparation Your customary business practice in conducting your livestock operations. Income tax preparation The expense in relation to past purchases. Income tax preparation The time of year you made the purchase. Income tax preparation The expense in relation to your income for the year. Income tax preparation Labor Hired You can deduct reasonable wages paid for regular farm labor, piecework, contract labor, and other forms of labor hired to perform your farming operations. Income tax preparation You can pay wages in cash or in noncash items such as inventory, capital assets, or assets used in your business. Income tax preparation The cost of boarding farm labor is a deductible labor cost. Income tax preparation Other deductible costs you incur for farm labor include health insurance, workers' compensation insurance, and other benefits. Income tax preparation If you must withhold social security, Medicare, and income taxes from your employees' cash wages, you can still deduct the full amount of wages before withholding. Income tax preparation See chapter 13 for more information on employment taxes. Income tax preparation Also, deduct the employer's share of the social security and Medicare taxes you must pay on your employees' wages as a farm business expense on Schedule F, line 29. Income tax preparation See Taxes , later. Income tax preparation Property for services. Income tax preparation   If you transfer property to an employee in payment for services, you can deduct as wages paid the fair market value of the property on the date of transfer. Income tax preparation If the employee pays you anything for the property, deduct as wages the fair market value of the property minus the payment by the employee for the property. Income tax preparation   Treat the wages deducted as an amount received for the property. Income tax preparation You may have a gain or loss to report if the property's adjusted basis on the date of transfer is different from its fair market value. Income tax preparation Any gain or loss has the same character the exchanged property had in your hands. Income tax preparation For more information, see chapter 8. Income tax preparation Child as an employee. Income tax preparation   You can deduct reasonable wages or other compensation you pay to your child for doing farmwork if a true employer-employee relationship exists between you and your child. Income tax preparation Include these wages in the child's income. Income tax preparation The child may have to file an income tax return. Income tax preparation These wages may also be subject to social security and Medicare taxes if your child is age 18 or older. Income tax preparation For more information, see Family Employees in chapter 13. Income tax preparation    A Form W-2, Wage and Tax Statement, should be issued to the child employee. Income tax preparation   The fact that your child spends the wages to buy clothes or other necessities you normally furnish does not prevent you from deducting your child's wages as a farm expense. Income tax preparation The amount of wages paid to the child could cause a loss of the dependency exemption depending on how the child uses the money. Income tax preparation Spouse as an employee. Income tax preparation   You can deduct reasonable wages or other compensation you pay to your spouse if a true employer-employee relationship exists between you and your spouse. Income tax preparation Wages you pay to your spouse are subject to social security and Medicare taxes. Income tax preparation For more information, see Family Employees in chapter 13. Income tax preparation Nondeductible Pay You cannot deduct wages paid for certain household work, construction work, and maintenance of your home. Income tax preparation However, those wages may be subject to the employment taxes discussed in chapter 13. Income tax preparation Household workers. Income tax preparation   Do not deduct amounts paid to persons engaged in household work, except to the extent their services are used in boarding or otherwise caring for farm laborers. Income tax preparation Construction labor. Income tax preparation   Do not deduct wages paid to hired help for the construction of new buildings or other improvements. Income tax preparation These wages are part of the cost of the building or other improvement. Income tax preparation You must capitalize them. Income tax preparation Maintaining your home. Income tax preparation   If your farm employee spends time maintaining or repairing your home, the wages and employment taxes you pay for that work are nondeductible personal expenses. Income tax preparation For example, assume you have a farm employee for the entire tax year and the employee spends 5% of the time maintaining your home. Income tax preparation The employee devotes the remaining time to work on your farm. Income tax preparation You cannot deduct 5% of the wages and employment taxes you pay for that employee. Income tax preparation Employment Credits Reduce your deduction for wages by the amount of any employment credits you claim such as the work opportunity credit for qualified tax-exempt organizations hiring qualified veterans (Form 5884-C). Income tax preparation Repairs and Maintenance You can deduct most expenses for the repair and maintenance of your farm property. Income tax preparation Common items of repair and maintenance are repainting, replacing shingles and supports on farm buildings, and periodic or routine maintenance of trucks, tractors, and other farm machinery. Income tax preparation However, repairs to, or overhauls of, depreciable property that substantially prolong the life of the property, increase its value, or adapt it to a different use are capital expenses. Income tax preparation For example, if you repair the barn roof, the cost is deductible. Income tax preparation But if you replace the roof, it is a capital expense. Income tax preparation For more information, see Capital Expenses , later. Income tax preparation Interest You can deduct as a farm business expense interest paid on farm mortgages and other obligations you incur in your farm business. Income tax preparation Cash method. Income tax preparation   If you use the cash method of accounting, you can generally deduct interest paid during the tax year. Income tax preparation You cannot deduct interest paid with funds received from the original lender through another loan, advance, or other arrangement similar to a loan. Income tax preparation You can, however, deduct the interest when you start making payments on the new loan. Income tax preparation For more information, see Cash Method in chapter 2. Income tax preparation Prepaid interest. Income tax preparation   Under the cash method, you generally cannot deduct any interest paid before the year it is due. Income tax preparation Interest paid in advance may be deducted only in the tax year in which it is due. Income tax preparation Accrual method. Income tax preparation   If you use an accrual method of accounting, you can deduct only interest that has accrued during the tax year. Income tax preparation However, you cannot deduct interest owed to a related person who uses the cash method until payment is made and the interest is includible in the gross income of that person. Income tax preparation For more information, see Accrual Method in chapter 2. Income tax preparation Allocation of interest. Income tax preparation   If you use the proceeds of a loan for more than one purpose, you must allocate the interest on that loan to each use. Income tax preparation Allocate the interest to the following categories. Income tax preparation Trade or business interest. Income tax preparation Passive activity interest. Income tax preparation Investment interest. Income tax preparation Portfolio interest. Income tax preparation Personal interest. Income tax preparation   You generally allocate interest on a loan the same way you allocate the loan proceeds. Income tax preparation You allocate loan proceeds by tracing disbursements to specific uses. Income tax preparation The easiest way to trace disbursements to specific uses is to keep the proceeds of a particular loan separate from any other funds. Income tax preparation Secured loan. Income tax preparation   The allocation of loan proceeds and the related interest is generally not affected by the use of property that secures the loan. Income tax preparation Example. Income tax preparation You secure a loan with property used in your farming business. Income tax preparation You use the loan proceeds to buy a car for personal use. Income tax preparation You must allocate interest expense on the loan to personal use (purchase of the car) even though the loan is secured by farm business property. Income tax preparation If the property that secures the loan is your home, you generally do not allocate the loan proceeds or the related interest. Income tax preparation The interest is usually deductible as qualified home mortgage interest, regardless of how the loan proceeds are used. Income tax preparation However, you can choose to treat the loan as not secured by your home. Income tax preparation For more information, see Publication 936. Income tax preparation Allocation period. Income tax preparation   The period for which a loan is allocated to a particular use begins on the date the proceeds are used and ends on the earlier of the following dates. Income tax preparation The date the loan is repaid. Income tax preparation The date the loan is reallocated to another use. Income tax preparation More information. Income tax preparation   For more information on interest, see chapter 4 in Publication 535. Income tax preparation Breeding Fees You can deduct breeding fees as a farm business expense. Income tax preparation However, if you use an accrual method of accounting, you must capitalize breeding fees and allocate them to the cost basis of the calf, foal, etc. Income tax preparation For more information on who must use an accrual method of accounting, see Accrual Method Required under Accounting Methods in chapter 2. Income tax preparation Fertilizer and Lime You can deduct in the year paid or incurred the cost of fertilizer, lime, and other materials applied to farmland to enrich, neutralize, or condition it if the benefits last a year or less. Income tax preparation You can also deduct the cost of applying these materials in the year you pay or incur it. Income tax preparation However, see Prepaid Farm Supplies , earlier, for a rule that may limit your deduction for these materials. Income tax preparation If the benefits of the fertilizer, lime, or other materials last substantially more than one year, you generally capitalize their cost and deduct a part each year the benefits last. Income tax preparation However, you can choose to deduct these expenses in the year paid or incurred. Income tax preparation If you make this choice, you will need IRS approval if you later decide to capitalize the cost of previously deducted items. Income tax preparation If you sell farmland on which fertilizer or lime has been applied and if the selling price of the land includes part or all of the cost of the fertilizer or lime, you report the sale amount attributable to the fertilizer or lime as ordinary income. Income tax preparation Farmland, for these purposes, is land used for producing crops, fruits, or other agricultural products or for sustaining livestock. Income tax preparation It does not include land you have never used previously for producing crops or sustaining livestock. Income tax preparation You cannot deduct initial land preparation costs. Income tax preparation (See Capital Expenses , later. Income tax preparation ) Include government payments you receive for lime or fertilizer in income. Income tax preparation See Fertilizer and Lime under Agricultural Program Payments in chapter 3. Income tax preparation Taxes You can deduct as a farm business expense the real estate and personal property taxes on farm business assets, such as farm equipment, animals, farmland, and farm buildings. Income tax preparation You also can deduct the social security and Medicare taxes you pay to match the amount withheld from the wages of farm employees and any federal unemployment tax you pay. Income tax preparation For information on employment taxes, see chapter 13. Income tax preparation Allocation of taxes. Income tax preparation   The taxes on the part of your farm you use as your home (including the furnishings and surrounding land not used for farming) are nonbusiness taxes. Income tax preparation You may be able to deduct these nonbusiness taxes as itemized deductions on Schedule A (Form 1040). Income tax preparation To determine the nonbusiness part, allocate the taxes between the farm assets and nonbusiness assets. Income tax preparation The allocation can be done from the assessed valuations. Income tax preparation If your tax statement does not show the assessed valuations, you can usually get them from the tax assessor. Income tax preparation State and local general sales taxes. Income tax preparation   State and local general sales taxes on nondepreciable farm business expense items are deductible as part of the cost of those items. Income tax preparation Include state and local general sales taxes imposed on the purchase of assets for use in your farm business as part of the cost you depreciate. Income tax preparation Also treat the taxes as part of your cost if they are imposed on the seller and passed on to you. Income tax preparation State and federal income taxes. Income tax preparation   Individuals cannot deduct state and federal income taxes as farm business expenses. Income tax preparation Individuals can deduct state and local income taxes only as an itemized deduction on Schedule A (Form 1040). Income tax preparation However, you cannot deduct federal income tax. Income tax preparation Highway use tax. Income tax preparation   You can deduct the federal use tax on highway motor vehicles paid on a truck or truck tractor used in your farm business. Income tax preparation For information on the tax itself, including information on vehicles subject to the tax, see the Instructions for Form 2290, Heavy Highway Vehicle Use Tax Return. Income tax preparation Self-employment tax deduction. Income tax preparation   You can deduct as an adjustment to income on Form 1040 one-half of your self-employment tax in figuring your adjusted gross income. Income tax preparation For more information, see chapter 12. Income tax preparation Insurance You generally can deduct the ordinary and necessary cost of insurance for your farm business as a business expense. Income tax preparation This includes premiums you pay for the following types of insurance. Income tax preparation Fire, storm, crop, theft, liability, and other insurance on farm business assets. Income tax preparation Health and accident insurance on your farm employees. Income tax preparation Workers' compensation insurance set by state law that covers any claims for job-related bodily injuries or diseases suffered by employees on your farm, regardless of fault. Income tax preparation Business interruption insurance. Income tax preparation State unemployment insurance on your farm employees (deductible as taxes if they are considered taxes under state law). Income tax preparation Insurance to secure a loan. Income tax preparation   If you take out a policy on your life or on the life of another person with a financial interest in your farm business to get or protect a business loan, you cannot deduct the premiums as a business expense. Income tax preparation In the event of death, the proceeds of the policy are not taxed as income even if they are used to liquidate the debt. Income tax preparation Advance premiums. Income tax preparation   Deduct advance payments of insurance premiums only in the year to which they apply, regardless of your accounting method. Income tax preparation Example. Income tax preparation On June 28, 2013, you paid a premium of $3,000 for fire insurance on your barn. Income tax preparation The policy will cover a period of 3 years beginning on July 1, 2013. Income tax preparation Only the cost for the 6 months in 2013 is deductible as an insurance expense on your 2013 calendar year tax return. Income tax preparation Deduct $500, which is the premium for 6 months of the 36-month premium period, or 6/36 of $3,000. Income tax preparation In both 2014 and 2015, deduct $1,000 (12/36 of $3,000). Income tax preparation Deduct the remaining $500 in 2016. Income tax preparation Had the policy been effective on January 1, 2013, the deductible expense would have been $1,000 for each of the years 2013, 2014, and 2015, based on one-third of the premium used each year. Income tax preparation Business interruption insurance. Income tax preparation   Use and occupancy and business interruption insurance premiums are deductible as a business expense. Income tax preparation This insurance pays for lost profits if your business is shut down due to a fire or other cause. Income tax preparation Report any proceeds in full on Schedule F, Part I. Income tax preparation Self-employed health insurance deduction. Income tax preparation   If you are self-employed, you can deduct as an adjustment to income on Form 1040 your payments for medical, dental, and qualified long-term care insurance coverage for yourself, your spouse, and your dependents when figuring your adjusted gross income on your Form 1040. Income tax preparation Effective March 30, 2010, the insurance can also cover any child of yours under age 27 at the end of 2013, even if the child was not your dependent. Income tax preparation Generally, this deduction cannot be more than the net profit from the business under which the plan was established. Income tax preparation   If you or your spouse is also an employee of another person, you cannot take the deduction for any month in which you are eligible to participate in a subsidized health plan maintained by your employer or your spouse's employer. Income tax preparation   Generally, use the Self-Employed Health Insurance Deduction Worksheet in the Instructions for Form 1040 to figure your deduction. Income tax preparation Include the remaining part of the insurance payment in your medical expenses on Schedule A (Form 1040) if you itemize your deductions. Income tax preparation   For more information, see Deductible Premiums in Publication 535, chapter 6. Income tax preparation Rent and Leasing If you lease property for use in your farm business, you can generally deduct the rent you pay on Schedule F. Income tax preparation However, you cannot deduct rent you pay in crop shares if you deduct the cost of raising the crops as farm expenses. Income tax preparation Advance payments. Income tax preparation   Deduct advance payments of rent only in the year to which they apply, regardless of your accounting method. Income tax preparation Farm home. Income tax preparation   If you rent a farm, do not deduct the part of the rental expense that represents the fair rental value of the farm home in which you live. Income tax preparation Lease or Purchase If you lease a farm building or equipment, you must determine whether or not the agreement must be treated as a conditional sales contract rather than a lease. Income tax preparation If the agreement is treated as a conditional sales contract, the payments under the agreement (so far as they do not represent interest or other charges) are payments for the purchase of the property. Income tax preparation Do not deduct these payments as rent, but capitalize the cost of the property and recover this cost through depreciation. Income tax preparation Conditional sales contract. Income tax preparation   Whether an agreement is a conditional sales contract depends on the intent of the parties. Income tax preparation Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. Income tax preparation No single test, or special combination of tests, always applies. Income tax preparation However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true. Income tax preparation The agreement applies part of each payment toward an equity interest you will receive. Income tax preparation You get title to the property after you make a stated amount of required payments. Income tax preparation The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property. Income tax preparation You pay much more than the current fair rental value of the property. Income tax preparation You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Income tax preparation Determine this value when you make the agreement. Income tax preparation You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement. Income tax preparation The agreement designates part of the payments as interest, or part of the payments can be easily recognized as interest. Income tax preparation Example. Income tax preparation You lease new farm equipment from a dealer who both sells and leases. Income tax preparation The agreement includes an option to purchase the equipment for a specified price. Income tax preparation The lease payments and the specified option price equal the sales price of the equipment plus interest. Income tax preparation Under the agreement, you are responsible for maintenance, repairs, and the risk of loss. Income tax preparation For federal income tax purposes, the agreement is a conditional sales contract. Income tax preparation You cannot deduct any of the lease payments as rent. Income tax preparation You can deduct interest, repairs, insurance, depreciation, and other expenses related to the equipment. Income tax preparation Motor vehicle leases. Income tax preparation   Special rules apply to lease agreements that have a terminal rental adjustment clause. Income tax preparation In general, this is a clause that provides for a rental price adjustment based on the amount the lessor is able to sell the vehicle for at the end of the lease. Income tax preparation If your rental agreement contains a terminal rental adjustment clause, treat the agreement as a lease if the agreement otherwise qualifies as a lease. Income tax preparation For more information, see Internal Revenue Code (IRC) section 7701(h). Income tax preparation Leveraged leases. Income tax preparation   Special rules apply to leveraged leases of equipment (arrangements in which the equipment is financed by a nonrecourse loan from a third party). Income tax preparation For more information, see Publication 535, chapter 3, and Revenue Procedure 2001-28, which begins on page 1156 of Internal Revenue Bulletin 2001-19 at www. Income tax preparation irs. Income tax preparation gov/pub/irs-irbs/irb01-19. Income tax preparation pdf. Income tax preparation Depreciation If property you acquire to use in your farm business is expected to last more than one year, you generally cannot deduct the entire cost in the year you acquire it. Income tax preparation You must recover the cost over more than one year and deduct part of it each year on Schedule F as depreciation or amortization. Income tax preparation However, you can choose to deduct part or all of the cost of certain qualifying property, up to a limit, as a section 179 deduction in the year you place it in service. Income tax preparation Depreciation, amortization, and the section 179 deduction are discussed in chapter 7. Income tax preparation Business Use of Your Home You can deduct expenses for the business use of your home if you use part of your home exclusively and regularly: As the principal place of business for any trade or business in which you engage, As a place to meet or deal with patients, clients, or customers in the normal course of your trade or business, or In connection with your trade or business, if you are using a separate structure that is not attached to your home. Income tax preparation Your home office will qualify as your principal place of business for deducting expenses for its use if you meet both of the following requirements. Income tax preparation You use it exclusively and regularly for the administrative or management activities of your trade or business. Income tax preparation You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Income tax preparation If you use part of your home for business, you must divide the expenses of operating your home between personal and business use. Income tax preparation The IRS now provides a simplified method to determine your expenses for business use of your home. Income tax preparation For more information, see Schedule C (Form 1040), Part II, and its instructions. Income tax preparation Deduction limit. Income tax preparation   If your gross income from farming equals or exceeds your total farm expenses (including expenses for the business use of your home), you can deduct all your farm expenses. Income tax preparation But if your gross income from farming is less than your total farm expenses, your deduction for certain expenses for the use of your home in your farming business is limited. Income tax preparation   Your deduction for otherwise nondeductible expenses, such as utilities, insurance, and depreciation (with depreciation taken last), cannot be more than the gross income from farming minus the following expenses. Income tax preparation The business part of expenses you could deduct even if you did not use your home for business (such as deductible mortgage interest, real estate taxes, and casualty and theft losses). Income tax preparation Farm expenses other than expenses that relate to the use of your home. Income tax preparation If you are self-employed, do not include your deduction for half of your self-employment tax. Income tax preparation   Deductions over the current year's limit can be carried over to your next tax year. Income tax preparation They are subject to the deduction limit for the next tax year. Income tax preparation More information. Income tax preparation   See Publication 587 for more information on deducting expenses for the business use of your home. Income tax preparation Telephone expense. Income tax preparation   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. Income tax preparation However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for your farm business, are deductible business expenses. Income tax preparation Cell phone charges for calls relating to your farm business are deductible. Income tax preparation If the cell phone you use for your farm business is part of a family cell phone plan, you must allocate and deduct only the portion of the charges attributable to farm business calls. Income tax preparation Truck and Car Expenses You can deduct the actual cost of operating a truck or car in your farm business. Income tax preparation Only expenses for business use are deductible. Income tax preparation These include such items as gasoline, oil, repairs, license tags, insurance, and depreciation (subject to certain limits). Income tax preparation Standard mileage rate. Income tax preparation   Instead of using actual costs, under certain conditions you can use the standard mileage rate. Income tax preparation The standard mileage rate for each mile of business use is 56. Income tax preparation 5 cents in 2013. Income tax preparation You can use the standard mileage rate for a car or a light truck, such as a van, pickup, or panel truck, you own or lease. Income tax preparation   You cannot use the standard mileage rate if you operate five or more cars or light trucks at the same time. Income tax preparation You are not using five or more vehicles at the same time if you alternate using the vehicles (you use them at different times) for business. Income tax preparation Example. Income tax preparation Maureen owns a car and four pickup trucks that are used in her farm business. Income tax preparation Her farm employees use the trucks and she uses the car for business. Income tax preparation Maureen cannot use the standard mileage rate for the car or the trucks. Income tax preparation This is because all five vehicles are used in Maureen's farm business at the same time. Income tax preparation She must use actual expenses for all vehicles. Income tax preparation Business use percentage. Income tax preparation   You can claim 75% of the use of a car or light truck as business use without any records if you used the vehicle during most of the normal business day directly in connection with the business of farming. Income tax preparation You choose this method of substantiating business use the first year the vehicle is placed in service. Income tax preparation Once you make this choice, you may not change to another method later. Income tax preparation The following are uses directly connected with the business of farming. Income tax preparation Cultivating land. Income tax preparation Raising or harvesting any agricultural or horticultural commodity. Income tax preparation Raising, shearing, feeding, caring for, training, and managing animals. Income tax preparation Driving to the feed or supply store. Income tax preparation   If you keep records and they show that your business use was more than 75%, you may be able to claim more. Income tax preparation See Recordkeeping requirements under Travel Expenses , below. Income tax preparation More information. Income tax preparation   For more information on deductible truck and car expenses, see Publication 463, chapter 4. Income tax preparation If you pay your employees for the use of their truck or car in your farm business, see Reimbursements to employees under Travel Expenses next. Income tax preparation Travel Expenses You can deduct ordinary and necessary expenses you incur while traveling away from home for your farm business. Income tax preparation You cannot deduct lavish or extravagant expenses. Income tax preparation Usually, the location of your farm business is considered your home for tax purposes. Income tax preparation You are traveling away from home if: Your duties require you to be absent from your farm substantially longer than an ordinary work day, and You need to get sleep or rest to meet the demands of your work while away from home. Income tax preparation If you meet these requirements and can prove the time, place, and business purpose of your travel, you can deduct your ordinary and necessary travel expenses. Income tax preparation The following are some types of deductible travel expenses. Income tax preparation Air, rail, bus, and car transportation; Meals and lodging; Dry cleaning and laundry; Telephone and fax; Transportation between your hotel and your temporary work or business meeting location; and Tips for any of the above expenses. Income tax preparation Meals. Income tax preparation   You ordinarily can deduct only 50% of your business-related meals expenses. Income tax preparation You can deduct the cost of your meals while traveling on business only if your business trip is overnight or long enough to require you to stop for sleep or rest to properly perform your duties. Income tax preparation You cannot deduct any of the cost of meals if it is not necessary for you to rest, unless you meet the rules for business entertainment. Income tax preparation For information on entertainment expenses, see Publication 463, chapter 2. Income tax preparation   The expense of a meal includes amounts you spend for your food, beverages, taxes, and tips relating to the meal. Income tax preparation You can deduct either 50% of the actual cost or 50% of a standard meal allowance that covers your daily meal and incidental expenses. Income tax preparation    Recordkeeping requirements. Income tax preparation You must be able to prove your deductions for travel by adequate records or other evidence that will support your own statement. Income tax preparation Estimates or approximations do not qualify as proof of an expense. Income tax preparation   You should keep an account book or similar record, supported by adequate documentary evidence, such as receipts, that together support each element of an expense. Income tax preparation Generally, it is best to record the expense and get documentation of it at the time you pay it. Income tax preparation   If you choose to deduct a standard meal allowance rather than the actual expense, you do not have to keep records to prove amounts spent for meals and incidental items. Income tax preparation However, you must still keep records to prove the actual amount of other travel expenses, and the time, place, and business purpose of your travel. Income tax preparation More information. Income tax preparation   For detailed information on travel, recordkeeping, and the standard meal allowance, see Publication 463. Income tax preparation Reimbursements to employees. Income tax preparation   You generally can deduct reimbursements you pay to your employees for travel and transportation expenses they incur in the conduct of your business. Income tax preparation Employees may be reimbursed under an accountable or nonaccountable plan. Income tax preparation Under an accountable plan, the employee must provide evidence of expenses. Income tax preparation Under a nonaccountable plan, no evidence of expenses is required. Income tax preparation If you reimburse expenses under an accountable plan, deduct them as travel and transportation expenses. Income tax preparation If you reimburse expenses under a nonaccountable plan, you must report the reimbursements as wages on Form W-2 and deduct them as wages. Income tax preparation For more information, see Publication 535, chapter 11. Income tax preparation Marketing Quota Penalties You can deduct as Other expenses on Schedule F penalties you pay for marketing crops in excess of farm marketing quotas. Income tax preparation However, if you do not pay the penalty, but instead the purchaser of your crop deducts it from the payment to you, include in gross income only the amount you received. Income tax preparation Do not take a separate deduction for the penalty. Income tax preparation Tenant House Expenses You can deduct the costs of maintaining houses and their furnishings for tenants or hired help as farm business expenses. Income tax preparation These costs include repairs, utilities, insurance, and depreciation. Income tax preparation The value of a dwelling you furnish to a tenant under the usual tenant-farmer arrangement is not taxable income to the tenant. Income tax preparation Items Purchased for Resale If you use the cash method of accounting, you ordinarily deduct the cost of livestock and other items purchased for resale only in the year of sale. Income tax preparation You deduct this cost, including freight charges for transporting the livestock to the farm, on Schedule F, Part I. Income tax preparation However, see Chickens, seeds, and young plants , below. Income tax preparation Example. Income tax preparation You use the cash method of accounting. Income tax preparation In 2013, you buy 50 steers you will sell in 2014. Income tax preparation You cannot deduct the cost of the steers on your 2013 tax return. Income tax preparation You deduct their cost on your 2014 Schedule F, Part I. Income tax preparation Chickens, seeds, and young plants. Income tax preparation   If you are a cash method farmer, you can deduct the cost of hens and baby chicks bought for commercial egg production, or for raising and resale, as an expense on Schedule F, Part I, in the year paid if you do it consistently and it does not distort income. Income tax preparation You also can deduct the cost of seeds and young plants bought for further development and cultivation before sale as an expense on Schedule F, Part I, when paid if you do this consistently and you do not figure your income on the crop method. Income tax preparation However, see Prepaid Farm Supplies , earlier, for a rule that may limit your deduction for these items. Income tax preparation   If you deduct the cost of chickens, seeds, and young plants as an expense, report their entire selling price as income. Income tax preparation You cannot also deduct the cost from the selling price. Income tax preparation   You cannot deduct the cost of seeds and young plants for Christmas trees and timber as an expense. Income tax preparation Deduct the cost of these seeds and plants through depletion allowances. Income tax preparation For more information, see Depletion in chapter 7. Income tax preparation   The cost of chickens and plants used as food for your family is never deductible. Income tax preparation   Capitalize the cost of plants with a preproductive period of more than 2 years, unless you can elect out of the uniform capitalization rules. Income tax preparation These rules are discussed in chapter 6. Income tax preparation Example. Income tax preparation You use the cash method of accounting. Income tax preparation In 2013, you buy 500 baby chicks to raise for resale in 2014. Income tax preparation You also buy 50 bushels of winter wheat seed in 2013 that you sow in the fall. Income tax preparation Unless you previously adopted the method of deducting these costs in the year you sell the chickens or the harvested crops, you can deduct the cost of both the baby chicks and the seed wheat in 2013. Income tax preparation Election to use crop method. Income tax preparation   If you use the crop method, you can delay deducting the cost of seeds and young plants until you sell them. Income tax preparation You must get IRS approval to use the crop method. Income tax preparation If you follow this method, deduct the cost from the selling price to determine your profit on Schedule F, Part I. Income tax preparation For more information, see Crop method under Special Methods of Accounting in chapter 2. Income tax preparation Choosing a method. Income tax preparation   You can adopt either the crop method or the cash method for deducting the cost in the first year you buy egg-laying hens, pullets, chicks, or seeds and young plants. Income tax preparation   Although you must use the same method for egg-laying hens, pullets, and chicks, you can use a different method for seeds and young plants. Income tax preparation Once you use a particular method for any of these items, use it for those items until you get IRS approval to change your method. Income tax preparation For more information, see Change in Accounting Method in chapter 2. Income tax preparation Other Expenses The following list, while not all-inclusive, shows some expenses you can deduct as other farm expenses on Schedule F, Part II. Income tax preparation These expenses must be for business purposes and  (1) paid, if you use the cash method of accounting, or (2) incurred, if you use an accrual method of accounting. Income tax preparation Accounting fees. Income tax preparation Advertising. Income tax preparation Business travel and meals. Income tax preparation Commissions. Income tax preparation Consultant fees. Income tax preparation Crop scouting expenses. Income tax preparation Dues to cooperatives. Income tax preparation Educational expenses (to maintain and improve farming skills). Income tax preparation Farm-related attorney fees. Income tax preparation Farm magazines. Income tax preparation Ginning. Income tax preparation Insect sprays and dusts. Income tax preparation Litter and bedding. Income tax preparation Livestock fees. Income tax preparation Marketing fees. Income tax preparation Milk assessment. Income tax preparation Recordkeeping expenses. Income tax preparation Service charges. Income tax preparation Small tools expected to last one year or less. Income tax preparation Stamps and stationery. Income tax preparation Subscriptions to professional, technical, and trade journals that deal with farming. Income tax preparation Tying material and containers. Income tax preparation Loan expenses. Income tax preparation   You prorate and deduct loan expenses, such as legal fees and commissions, you pay to get a farm loan over the term of the loan. Income tax preparation Tax preparation fees. Income tax preparation   You can deduct as a farm business expense on Schedule F the cost of preparing that part of your tax return relating to your farm business. Income tax preparation You may be able to deduct the remaining cost on Schedule A (Form 1040) if you itemize your deductions. Income tax preparation   You also can deduct on Schedule F the amount you pay or incur in resolving tax issues relating to your farm business. Income tax preparation Domestic Production Activities Deduction Generally, you are allowed a deduction for income attributable to domestic production activities. Income tax preparation You can deduct 9% of the lesser of your qualified production activities income or your taxable income (adjusted gross income for individuals) for the tax year. Income tax preparation Your deduction is limited to 50% of the Form W-2 wages you paid for the tax year that are properly allocable to domestic production gross receipts. Income tax preparation For this purpose, Form W-2 wages do not include noncash wages paid for agricultural labor, such as compensation paid as commodities. Income tax preparation Also, excluded from Form W-2 wages are wages paid to your children under age 18 and nontaxable fringe benefits. Income tax preparation Income from cooperatives. Income tax preparation   If you receive a patronage dividend or qualified per-unit retain allocation from a cooperative which is engaged in the manufacturing, production, growth, or extraction in whole or in significant part of any agricultural or horticultural product or in the marketing of agricultural or horticultural products, your income from the cooperative can give rise to a domestic production activities deduction. Income tax preparation This deduction amount is reported on Form 1099-PATR, box 6. Income tax preparation In order for you to qualify for the deduction, the cooperative is required to send you a written notice designating your portion of the domestic production activities deduction. Income tax preparation More information. Income tax preparation   For more information on the domestic production activities deduction, see the Instructions for Form 8903. Income tax preparation Capital Expenses A capital expense is a payment, or a debt incurred, for the acquisition, improvement, or restoration of an asset that is expected to last more than one year. Income tax preparation You include the expense in the basis of the asset. Income tax preparation Uniform capitalization rules also require you to capitalize or include in inventory certain other expenses. Income tax preparation See chapters 2  and 6. Income tax preparation Capital expenses are generally not deductible, but they may be depreciable. Income tax preparation However, you can elect to deduct certain capital expenses, such as the following. Income tax preparation The cost of fertilizer, lime, etc. Income tax preparation (See Fertilizer and Lime under Deductible Expenses , earlier. Income tax preparation ) Soil and water conservation expenses. Income tax preparation (See chapter 5. Income tax preparation ) The cost of property that qualifies for a deduction under section 179. Income tax preparation (See chapter 7. Income tax preparation ) Business start-up costs. Income tax preparation (See Business start-up and organizational costs , later. Income tax preparation ) Forestation and reforestation costs. Income tax preparation (See Forestation and reforestation costs , later. Income tax preparation ) Generally, the costs of the following items, including the costs of material, hired labor, and installation, are capital expenses. Income tax preparation Land and buildings. Income tax preparation Additions, alterations, and improvements to buildings, etc. Income tax preparation Cars and trucks. Income tax preparation Equipment and machinery. Income tax preparation Fences. Income tax preparation Draft, breeding, sport, and dairy livestock. Income tax preparation Repairs to machinery, equipment, trucks, and cars that prolong their useful life, increase their value, or adapt them to different use. Income tax preparation Water wells, including drilling and equipping costs. Income tax preparation Land preparation costs, such as: Clearing land for farming, Leveling and conditioning land, Purchasing and planting trees, Building irrigation canals and ditches, Laying irrigation pipes, Installing drain tile, Modifying channels or streams, Constructing earthen, masonry, or concrete tanks, reservoirs, or dams, and Building roads. Income tax preparation Business start-up and organizational costs. Income tax preparation   You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Income tax preparation The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Income tax preparation Any remaining costs must be amortized. Income tax preparation See chapter 7. Income tax preparation   You elect to deduct start-up or organizational costs by claiming the deduction on the income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Income tax preparation However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Income tax preparation Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Income tax preparation 9100-2” at the top of the amended return. Income tax preparation File the amended return at the same address you filed the original return. Income tax preparation The election applies when figuring taxable income for the current tax year and all subsequent years. Income tax preparation   You can choose to forgo the election by clearly electing to capitalize your start-up or organizational costs on an income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Income tax preparation For more information about start-up and organizational costs, see chapter 7. Income tax preparation Crop production expenses. Income tax preparation   The uniform capitalization rules generally require you to capitalize expenses incurred in producing plants. Income tax preparation However, except for certain taxpayers required to use an accrual method of accounting, the capitalization rules do not apply to plants with a preproductive period of 2 years or less. Income tax preparation For more information, see Uniform Capitalization Rules in chapter 6. Income tax preparation Timber. Income tax preparation   Capitalize the cost of acquiring timber. Income tax preparation Do not include the cost of land in the cost of the timber. Income tax preparation You must generally capitalize direct costs incurred in reforestation. Income tax preparation However, you can elect to deduct some forestation and reforestation costs. Income tax preparation See Forestation and reforestation costs next. Income tax preparation Reforestation costs include the following. Income tax preparation Site preparation costs, such as: Girdling, Applying herbicide, Baiting rodents, and Clearing and controlling brush. Income tax preparation The cost of seed or seedlings. Income tax preparation Labor and tool expenses. Income tax preparation Depreciation on equipment used in planting or seeding. Income tax preparation Costs incurred in replanting to replace lost seedlings. Income tax preparation You can choose to capitalize certain indirect reforestation costs. Income tax preparation   These capitalized amounts are your basis for the timber. Income tax preparation Recover your basis when you sell the timber or take depletion allowances when you cut the timber. Income tax preparation See Depletion in chapter 7. Income tax preparation Forestation and reforestation costs. Income tax preparation   You can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Income tax preparation Any remaining costs can be amortized over an 84-month period. Income tax preparation See chapter 7. Income tax preparation If you make an election to deduct or amortize qualifying reforestation costs, you should create and maintain separate timber accounts for each qualified timber property. Income tax preparation The accounts should include all reforestation treatments and the dates they were applied. Income tax preparation Any qualified timber property that is subject to the deduction or amortization election cannot be included in any other timber account for which depletion is allowed. Income tax preparation The timber account should be maintained until the timber is disposed of. Income tax preparation For more information, see Notice 2006-47, 2006-20 I. Income tax preparation R. Income tax preparation B. Income tax preparation 892, available at  www. Income tax preparation irs. Income tax preparation gov/irb/2006-20_IRB/ar11. Income tax preparation html. Income tax preparation   You elect to deduct forestation and reforestation costs by claiming the deduction on the income tax return filed by the due date (including extensions) for the tax year in which the expenses were paid or incurred. Income tax preparation If you are filing Form T (Timber), Forest Activities Schedule, also complete Form T (Timber), Part IV. Income tax preparation If you are not filing Form T (Timber), attach a statement to your return with the following information. Income tax preparation The unique stand identification numbers. Income tax preparation The total number of acres reforested during the tax year. Income tax preparation The nature of the reforestation treatments. Income tax preparation The total amounts of the qualified reforestation expenditures eligible to be amortized or deducted. Income tax preparation   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Income tax preparation Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Income tax preparation 9100-2” at the top of the amended return. Income tax preparation File the amended return at the same address you filed the original return. Income tax preparation    For more information about forestation and reforestation costs, see chapter 7. Income tax preparation    For more information about timber, see Agriculture Handbook Number 731, Forest Landowners' Guide to the Federal Income Tax. Income tax preparation You can view this publication on the Internet at  www. Income tax preparation fs. Income tax preparation fed. Income tax preparation us/publications. Income tax preparation Christmas tree cultivation. Income tax preparation   If you are in the business of planting and cultivating Christmas trees to sell when they are more than 6 years old, capitalize expenses incurred for planting and stump culture and add them to the basis of the standing trees. Income tax preparation Recover these expenses as part of your adjusted basis when you sell the standing trees or as depletion allowances when you cut the trees. Income tax preparation For more information, see Timber Depletion under Depletion in chapter 7. Income tax preparation   You can deduct as business expenses the costs incurred for shearing and basal pruning of these trees. Income tax preparation Expenses incurred for silvicultural practices, such as weeding or cleaning, and noncommercial thinning are also deductible as business expenses. Income tax preparation   Capitalize the cost of land improvements, such as road grading, ditching, and fire breaks, that have a useful life beyond the tax year. Income tax preparation If the improvements do not have a determinable useful life, add their cost to the basis of the land. Income tax preparation The cost is recovered when you sell or otherwise dispose of it. Income tax preparation If the improvements have a determinable useful life, recover their cost through depreciation. Income tax preparation Capitalize the cost of equipment and other depreciable assets, such as culverts and fences, to the extent you do not use them in planting Christmas trees. Income tax preparation Recover these costs through depreciation. Income tax preparation Nondeductible Expenses You cannot deduct personal expenses and certain other items on your tax return even if they relate to your farm. Income tax preparation Personal, Living, and Family Expenses You cannot deduct certain personal, living, and family expenses as business expenses. Income tax preparation These include rent and insurance premiums paid on property used as your home, life insurance premiums on yourself or your family, the cost of maintaining cars, trucks, or horses for personal use, allowances to minor children, attorneys' fees and legal expenses incurred in personal matters, and household expenses. Income tax preparation Likewise, the cost of purchasing or raising produce or livestock consumed by you or your family is not deductible. Income tax preparation Other Nondeductible Items You cannot deduct the following items on your tax return. Income tax preparation Loss of growing plants, produce, and crops. Income tax preparation   Losses of plants, produce, and crops raised for sale are generally not deductible. Income tax preparation However, you may have a deductible loss on plants with a preproductive period of more than 2 years. Income tax preparation See chapter 11 for more information. Income tax preparation Repayment of loans. Income tax preparation   You cannot deduct the repayment of a loan. Income tax preparation However, if you use the proceeds of a loan for farm business expenses, you can deduct the interest on the loan. Income tax preparation See Interest , earlier. Income tax preparation Estate, inheritance, legacy, succession, and gift taxes. Income tax preparation   You cannot deduct estate, inheritance, legacy, succession, and gift taxes. Income tax preparation Loss of livestock. Income tax preparation   You cannot deduct as a loss the value of raised livestock that die if you deducted the cost of raising them as an expense. Income tax preparation Losses from sales or exchanges between related persons. Income tax preparation   You cannot deduct losses from sales or exchanges of property between you and certain related persons, including your spouse, brother, sister, ancestor, or lineal descendant. Income tax preparation For more information, see chapter 2 of Publication 544, Sales and Other Dispositions of Assets. Income tax preparation Cost of raising unharvested crops. Income tax preparation   You cannot deduct the cost of raising unharvested crops sold with land owned more than one year if you sell both at the same time and to the same person. Income tax preparation Add these costs to the basis of the land to determine the gain or loss on the sale. Income tax preparation For more information, see Section 1231 Gains and Losses in chapter 9. Income tax preparation Cost of unharvested crops bought with land. Income tax preparation   Capitalize the purchase price of land, including the cost allocable to unharvested crops. Income tax preparation You cannot deduct the cost of the crops at the time of purchase. Income tax preparation However, you can deduct this cost in figuring net profit or loss in the tax year you sell the crops. Income tax preparation Cost related to gifts. Income tax preparation   You cannot deduct costs related to your gifts of agricultural products or property held for sale in the ordinary course of your business. Income tax preparation The costs are not deductible in the year of the gift or any later year. Income tax preparation For example, you cannot deduct the cost of raising cattle or the cost of planting and raising unharvested wheat on parcels of land given as a gift to your children. Income tax preparation Club dues and membership fees. Income tax preparation   Generally, you cannot deduct amounts you pay or incur for membership in any club organized for business, pleasure, recreation, or any other social purpose. Income tax preparation This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Income tax preparation Exception. Income tax preparation   The following organizations will not be treated as a club organized for business, pleasure, recreation, or other social purposes, unless one of its main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. Income tax preparation Boards of trade. Income tax preparation Business leagues. Income tax preparation Chambers of commerce. Income tax preparation Civic or public service organizations. Income tax preparation Professional associations. Income tax preparation Trade associations. Income tax preparation Real estate boards. Income tax preparation Fines and penalties. Income tax preparation   You cannot deduct fines and penalties, except penalties for exceeding marketing quotas, discussed earlier. Income tax preparation Losses From Operating a Farm If your deductible farm expenses are more than your farm income, you have a loss from the operation of your farm. Income tax preparation The amount of the loss you can deduct when figuring your taxable income may be limited. Income tax preparation To figure your deductible loss, you must apply the following limits. Income tax preparation The at-risk limits. Income tax preparation The passive activity limits. Income tax preparation The following discussions explain these limits. Income tax preparation If your deductible loss after applying these limits is more than your other income for the year, you may have a net operating loss. Income tax preparation See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Income tax preparation If you do not carry on your farming activity to make a profit, your loss deduction may be limited by the not-for-profit rules. Income tax preparation See Not-for-Profit Farming, later. Income tax preparation At-Risk Limits The at-risk rules limit your deduction for losses from most business or income-producing activities, including farming. Income tax preparation These rules limit the losses you can deduct when figuring your taxable income. Income tax preparation The deductible loss from an activity is limited to the amount you have at risk in the activity. Income tax preparation You are at risk in any activity for: The money and adjusted basis of property you contribute to the activity, and Amounts you borrow for use in the activity if: You are personally liable for repayment, or You pledge property (other than property used in the activity) as security for the loan. Income tax preparation You are not at risk, however, for amounts you borrow for use in a farming activity from a person who has an interest in the activity (other than as a creditor) or a person related to someone (other than you) having such an interest. Income tax preparation For more information, see Publication 925. Income tax preparation Passive Activity Limits A passive activity is generally any activity involving the conduct of any trade or business in which you do not materially participate. Income tax preparation Generally, a rental activity is a passive activity. Income tax preparation If you have a passive activity, special rules limit the loss you can deduct in the tax year. Income tax preparation You generally can deduct losses from passive activities only up to income from passive activities. Income tax preparation Credits are similarly limited. Income tax preparation For more information, see Publication 925. Income tax preparation Excess Farm Loss Limit For tax years beginning after 2009, excess farm losses (defined below) are not deductible if you received certain applicable subsidies. Income tax preparation This limit applies to any farming businesses, other than a C corporation, that received a direct or counter-cyclical payment (or any payment in lieu of such payments) under title I of the Food, Conservation, and Energy Act of 2008, or from a Commodity Credit Corporation loan. Income tax preparation Your farming losses are limited to the greater of: $300,000 ($150,000 for a married person filing a separate return), or The total net farm income for the prior five tax years. Income tax preparation Farming losses from casualty losses or losses by reason of disease or drought are disregarded for purposes of figuring this limitation. Income tax preparation Also, the limitation on farm losses should be applied before the passive activity loss rules are applied. Income tax preparation For more details, see IRC section 461(j). Income tax preparation Excess farm loss. Income tax preparation   Generally, an excess farm loss is the amount of your farming loss that exceeds the amount of the limitation (as described above). Income tax preparation This loss can be determined by taking the excess of: The total deductions for the tax year from your farming businesses, over The total gross income or gain for the tax year from your farming businesses, plus the greater of: $300,000 ($150,000 for a married person filing a separate return), or The excess (if any) of the total gross income or gain from your farming businesses for the prior five tax years over the total deductions from your farming businesses for the prior five tax years. Income tax preparation   Excess farm losses that are disallowed can be carried forward to the next tax year and treated as a deduction from that year. Income tax preparation Not-for-Profit Farming If you operate a farm for profit, you can deduct all the ordinary and necessary expenses of carrying on the business of farming on Schedule F. Income tax preparation However, if you do not carry on your farming activity, or other activity you engage or invest in, to make a profit, you report the income from the activity on Form 1040, line 21, and you can deduct expenses of carrying on the activity only if you itemize your deductions on Schedule A (Form 1040). Income tax preparation Also, there is a limit on the deductions you can take. Income tax preparation You cannot use a loss from that activity to offset income from other activities. Income tax preparation Activities you do as a hobby, or mainly for sport or recreation, come under this limit. Income tax preparation An investment activity intended only to produce tax losses for the investors also comes under this limit. Income tax preparation The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. Income tax preparation It does not apply to corporations other than S corporations. Income tax preparation In determining whether you are carrying on your farming activity for profit, all the facts are taken into account. Income tax preparation No one factor alone is decisive. Income tax preparation Among the factors to consider are whether: You operate your farm in a businesslike manner; The time and effort you spend on farming indicate you intend to make it profitable; You depend on income from farming for your livelihood; Your losses are due to circumstances beyond your control or are normal in the start-up phase of farming; You change your methods of operation in an attempt to improve profitability; You, or your advisors, have the knowledge needed to carry on the farming activity as a successful business; You were successful in making a profit in similar activities in the past; You make a profit from farming in some years and the amount of profit you make; and You can expect to make a future profit from the appreciation of the assets used in the farming activity. Income tax preparation Presumption of profit. Income tax preparation   Your farming or other activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Income tax preparation Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. Income tax preparation The activity must be substantially the same for each year within this period. Income tax preparation You have a profit when the gross income from an activity is more than the deductions for it. Income tax preparation   If a taxpayer dies before the end of the 5-year (or 7-year) period, the period ends on the date of the taxpayer's death. Income tax preparation   If your business or investment activity passes this 3- (or 2-) years-of-profit test, presume it is carried on for profit. Income tax preparation This means the limits discussed here do not apply. Income tax preparation You can take all your business deductions from the activity on Schedule F, even for the years that you have a loss. Income tax preparation You can rely on this presumption in every case, unless the IRS shows it is not valid. Income tax preparation   If you fail the 3- (or 2-) years-of-profit test, you still may be considered to operate your farm for profit by considering the factors listed earlier. Income tax preparation Using the presumption later. Income tax preparation   If you are starting out in farming and do not have 3 (or 2) years showing a profit, you may want to take advantage of this presumption later, after you have had the 5 (or 7) years of experience allowed by the test. Income tax preparation   You can choose to do this by filing Form 5213. Income tax preparation Filing this form postpones any determination that your farming activity is not carried on for profit until 5 (or 7) years have passed since you first started farming. Income tax preparation You must file Form 5213 within 3 years after the due date of your return for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving a written notice from the IRS proposing to disallow deductions attributable to the activity. Income tax preparation   The benefit gained by making this choice is that the IRS will not immediately question whether your farming activity is engaged in for profit. Income tax preparation Accordingly, it will not limit your deductions. Income tax preparation Rather, you will gain time to earn a profit in 3 (or 2) out of the first 5 (or 7) years you carry on the farming activity. Income tax preparation If you show 3 (or 2) years of profit at the end of this period, your deductions are not limited under these rules. Income tax preparation If you do not have 3 (or 2) years of profit (and cannot otherwise show that you operated your farm for profit), the limit applies retroactively to any year in the 5-year (or 7-year) period with a loss. Income tax preparation   Filing Form 5213 automatically extends the period of limitations on any year
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Better Business Bureaus (BBBs) are nonprofit organizations that encourage honest advertising and selling practices and are supported primarily by local businesses. They offer a variety of consumer services, including consumer education materials; business reports, particularly unanswered or unsettled complaints or other problems; mediation and arbitration services; and information about charities and other organizations that are seeking public donations. They also provide ratings (A, B, C, D, or F) of local companies to express the BBB's confidence that the company operates in a trustworthy manner and demonstrates a willingness to resolve customer concerns.

Phoenix, AZ

Website: Better Business Bureau

Email: complaints@arizonabbb.org

Address: Better Business Bureau
4428 N. 12th St.
Phoenix, AZ 85014

Phone Number: 602-264-1721

Toll-free: 1-877-291-6222

Prescott, AZ

Website: Better Business Bureau

Email: yco-info@arizonabbb.org

Address: Better Business Bureau
1569 W. Gurley St.
Prescott, AZ 86305

Phone Number: 928-772-3410

Tucson, AZ

Website: Better Business Bureau

Address: Better Business Bureau
5151 E. Broadway Blvd., Suite 100
Tucson, AZ 85711

Phone Number: 520-888-5353

Yuma, AZ

Website: Better Business Bureau

Email: yuma-info@arizonabbb.org

Address: Better Business Bureau
350 W. 16th St., Suite 205
Yuma, AZ 85364

Phone Number: 928-772-3410

The Income Tax Preparation

Income tax preparation Index A Affiliated corporations, Aircraft used by affiliated corporations. Income tax preparation Agri-biodiesel, defined, Agri-biodiesel. Income tax preparation Air transportation taxes, Air Transportation Taxes 225-mile-zone rule, Taxable transportation. Income tax preparation Alaska, Transportation between the continental U. Income tax preparation S. Income tax preparation and Alaska or Hawaii. Income tax preparation , Transportation within Alaska or Hawaii. Income tax preparation , Alaska and Hawaii. Income tax preparation Baggage, Excess baggage. Income tax preparation Bonus tickets, Bonus tickets. Income tax preparation Credits or refunds, Credits or refunds. Income tax preparation Exemptions, Exemptions. Income tax preparation Export, Exportation. Income tax preparation Fixed-wing aircraft, Fixed-wing aircraft uses. Income tax preparation Hawaii, Transportation between the continental U. Income tax preparation S. Income tax preparation and Alaska or Hawaii. Income tax preparation , Transportation within Alaska or Hawaii. Income tax preparation , Alaska and Hawaii. Income tax preparation Helicopters, Certain helicopter uses. Income tax preparation , Transportation of Property by Air International air travel facilities, International Air Travel Facilities Military personnel, Military personnel on international trips. Income tax preparation Package tours, Package tours. Income tax preparation Persons by air, Transportation of Persons by Air Persons liable, Liability for tax. Income tax preparation , Liability for tax. Income tax preparation Property by air, Transportation of Property by Air Tax rates, Transportation of Persons by Air Taxable transportation, Taxable transportation. Income tax preparation Travel agency, Liability for tax. Income tax preparation Uninterrupted international, Uninterrupted international air transportation. Income tax preparation Aircraft, Fixed-wing aircraft uses. Income tax preparation Affiliated corporations, Aircraft used by affiliated corporations. Income tax preparation Small planes, Small aircraft. Income tax preparation Aircraft museum, In an aircraft or vehicle owned by an aircraft museum (No. Income tax preparation 15). Income tax preparation Alaska Air transportation taxes, Transportation between the continental U. Income tax preparation S. Income tax preparation and Alaska or Hawaii. Income tax preparation Tax on diesel fuel or kerosene, Removal for sale or use in Alaska. Income tax preparation Alcohol and tobacco taxes, Excise Taxes Not Covered Alternative fuel credit, Alternative fuel credit. Income tax preparation Alternative fuel, defined, Other fuels. Income tax preparation American Red Cross, International organizations and the American Red Cross. Income tax preparation Answering service, Answering services. Income tax preparation Appeal procedures, Examination and Appeal Procedures Approved refinery, defined, Approved terminal or refinery. Income tax preparation Approved terminal, defined, Approved terminal or refinery. Income tax preparation Arrow shafts, Arrow Shafts Assistance (see Tax help) Aviation gasoline, defined, Aviation gasoline. Income tax preparation B Back-up tax, Back-up Tax Biodiesel, defined, Biodiesel. Income tax preparation Blended taxable fuel, defined, Blended taxable fuel. Income tax preparation Blender, defined, Blender. Income tax preparation Blocked pump, Blocked pump. Income tax preparation Blood collector organizations, qualified, Exclusive use by a qualified blood collector organization (No. Income tax preparation 11). Income tax preparation , Qualified blood collector organizations. Income tax preparation Boats, In a boat engaged in commercial fishing (No. Income tax preparation 4). Income tax preparation Bonus tickets, Bonus tickets. Income tax preparation Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Bulk transfer, defined, Bulk transfer. Income tax preparation Bulk transfer/terminal system, defined, Bulk transfer/terminal system. Income tax preparation Buses, In certain intercity and local buses (No. Income tax preparation 5). Income tax preparation , In a qualified local bus (No. Income tax preparation 6). Income tax preparation , In a school bus (No. Income tax preparation 7). Income tax preparation Tire tax, Qualifying intercity or local bus. Income tax preparation C Cellulosic biofuel, Cellulosic biofuel. Income tax preparation Chemicals, ozone-depleting, Environmental Taxes Claims Claiming a credit, Claiming a Credit on Form 4136 Claiming a refund, Claiming A Refund Filing claims, Filing Claims Coal Blending, Blending. Income tax preparation Exemptions, Exemption from tax. Income tax preparation Producer, Coal Production, Coal production. Income tax preparation Selling price, Determining tonnage or selling price. Income tax preparation Tax rates, Tax rates. Income tax preparation Coin-operated telephones, Coin-operated telephones. Income tax preparation Comments, Comments and suggestions. Income tax preparation Commercial aviation, In commercial aviation (other than foreign trade). Income tax preparation Commercial fishing, In a boat engaged in commercial fishing (No. Income tax preparation 4). Income tax preparation Commercial waterway transportation, Commercial waterway transportation. Income tax preparation Communications taxes Credits or refunds, Credits or Refunds Exemptions, Exemptions Figuring the tax, Figuring the tax. Income tax preparation Local telephone service, Local telephone service. Income tax preparation Local-only service, Local-only service. Income tax preparation Private communication service, Private communication service. Income tax preparation Teletypewriter exchange service, Teletypewriter exchange service. Income tax preparation Credit card purchases Aviation gasoline, Credit card purchases. Income tax preparation Gasoline, Credit card purchases. Income tax preparation Kerosene for use in aviation, Credit card purchases. Income tax preparation Undyed diesel fuel, Credit Card Purchases. Income tax preparation Undyed kerosene, Credit Card Purchases. Income tax preparation Credit or refund Gas guzzler tax, Credit or refund. Income tax preparation Manufacturers taxes, Credits or Refunds Resale of tax-paid semitrailers, Tax on resale of tax-paid trailers and semitrailers. Income tax preparation Retail tax, Credits or refunds. Income tax preparation Tire tax, Credit or refund. Income tax preparation Vaccines, Credit or refund. Income tax preparation Credits, Claiming a Credit on Form 4136 D Deposits Net tax liability, Amount of Deposits Deposits, How to make, How To Make Deposits Diesel fuel Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene Diesel-water fuel emulsion, defined, Diesel-water fuel emulsion. Income tax preparation Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E Electric outboard motors, Electric outboard boat motors. Income tax preparation Enterer, defined, Enterer. Income tax preparation Entry, defined, Entry. Income tax preparation Environmental taxes Credit or refund, Credits or refunds. Income tax preparation Exceptions, Exceptions. Income tax preparation Ozone-depleting chemicals (ODCs), Environmental Taxes United States (defined), Environmental Taxes Examination procedures, Examination and Appeal Procedures Excluded liquid, Diesel Fuel and Kerosene Exempt articles, retail tax, Articles exempt from tax. Income tax preparation Exempt communication services American Red Cross, International organizations and the American Red Cross. Income tax preparation Answering service, Answering services. Income tax preparation Coin-operated telephones, Coin-operated telephones. Income tax preparation Installation charges, Installation charges. Income tax preparation International organizations, International organizations and the American Red Cross. Income tax preparation Mobile radio telephone service, Mobile radio telephone service. Income tax preparation News services, News services. Income tax preparation Nonprofit educational organizations, Nonprofit educational organizations. Income tax preparation Nonprofit hospitals, Nonprofit hospitals. Income tax preparation Private communication service, Private communication service. Income tax preparation Qualified blood collector organizations, Qualified blood collector organizations. Income tax preparation Radio broadcasts, News services. Income tax preparation Security systems, Telephone-operated security systems. Income tax preparation Exempt sales, heavy trucks, Sales exempt from tax. Income tax preparation Exemptions Air transportation taxes, Exemptions. Income tax preparation Bonus tickets, Bonus tickets. Income tax preparation Coal, Exemption from tax. Income tax preparation Communications taxes, Exemptions Federal government, Federal, state, and local government. Income tax preparation Fixed-wing aircraft, Fixed-wing aircraft uses. Income tax preparation For export, Exemptions Further manufacturing, Exemptions Helicopters, Certain helicopter uses. Income tax preparation Indian handicrafts, Exemptions Indian tribal governments, Federal, state, and local government. Income tax preparation Military personnel, Military personnel on international trips. Income tax preparation Nonprofit educational organizations, Federal, state, and local government. Income tax preparation , Exemptions Qualified blood collector organizations, Exemptions State and local governments, Federal, state, and local government. Income tax preparation , Exemptions Taxable tires, Tires exempt from tax. Income tax preparation Vessel supplies, Exemptions Export, Export (No. Income tax preparation 3). Income tax preparation Exported taxable fuel, Exported taxable fuel. Income tax preparation F Farming, On a farm for farming purposes (No. Income tax preparation 1). Income tax preparation Federal government, Federal, state, and local government. Income tax preparation Fishing, In a boat engaged in commercial fishing (No. Income tax preparation 4). Income tax preparation Fishing rods and fishing poles. Income tax preparation , Fishing rods and fishing poles. Income tax preparation Fishing tackle boxes, Fishing tackle boxes. Income tax preparation Fixed-wing aircraft, Fixed-wing aircraft uses. Income tax preparation Floor stocks tax Ozone-depleting chemicals, Floor Stocks Tax Floor stocks, ODCs, Environmental Taxes Foreign trade, In foreign trade (No. Income tax preparation 9). Income tax preparation Form 1363, Exportation. Income tax preparation 4136, Claiming a Credit on Form 4136 6197, Gas Guzzler Tax, Form 6197. Income tax preparation , Attachments to Form 720. Income tax preparation 637, Reminders 6627, Environmental Taxes, Attachments to Form 720. Income tax preparation 720, Claiming A Refund, Form 6197. Income tax preparation , Filing Form 720 720X, Form 720X. Income tax preparation 8849, Claiming A Refund 8864, Biodiesel Sold as But Not Used as Fuel Form 720 Attachments, Attachments to Form 720. Income tax preparation Due dates, Due dates. Income tax preparation Final return, Final return. Income tax preparation Schedule A, Filing Form 720 Schedule C, Filing Form 720 Schedule T, Filing Form 720 Free tax services, How To Get Tax Help Fuels Alternative fuel, Other Fuels (Including Alternative Fuels) Diesel, Diesel Fuel and Kerosene Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion For use in aviation, Kerosene for Use in Aviation Gasoline, Gasoline and Aviation Gasoline Kerosene, Diesel Fuel and Kerosene Other Fuels, Other Fuels (Including Alternative Fuels) Used on inland waterways, Fuels Used on Inland Waterways G Gambling, Taxable situations. Income tax preparation Gas guzzler tax Automobiles, Automobiles. Income tax preparation Credit or refund, Credit or refund. Income tax preparation Limousines, Automobiles. Income tax preparation Vehicles not subject to tax, Vehicles not subject to tax. Income tax preparation Gasoline blendstocks, Gasoline Blendstocks Gasoline, defined, Gasoline. Income tax preparation H Hawaii, air transportation taxes, Transportation between the continental U. Income tax preparation S. Income tax preparation and Alaska or Hawaii. Income tax preparation Heavy Motor Vehicle User Fee, Excise Taxes Not Covered Heavy trucks First retail sale, defined, First retail sale defined. Income tax preparation Further manufacture, Further manufacture. Income tax preparation Installment sales, Installment sales. Income tax preparation Parts or accessories, Parts or accessories. Income tax preparation Presumptive retail sales price, Presumptive retail sales price. Income tax preparation Related persons, Related person. Income tax preparation Separate purchases, Separate purchase. Income tax preparation Tax base, Determination of tax base. Income tax preparation Tax rate, Retail Tax on Heavy Trucks, Trailers, and Tractors Helicopter, Certain helicopter uses. Income tax preparation Help (see Tax help) Highway vehicle, Highway vehicle. Income tax preparation , In a highway vehicle owned by the United States that is not used on a highway (No. Income tax preparation 12). Income tax preparation Highway vehicle (Diesel-powered), Diesel-powered highway vehicle. Income tax preparation I Identifying number, Taxpayer identification number. Income tax preparation Imported taxable products (ODCs), Imported Taxable Products Income, include in, Including the Credit or Refund in Income Indoor tanning services, Indoor Tanning Services Tax Information returns, liquid products, Information Returns Inland waterways, Fuels Used on Inland Waterways Intercity and local buses, In certain intercity and local buses (No. Income tax preparation 5). Income tax preparation Interest and penalties, Penalties and Interest International air travel facilities, International Air Travel Facilities K Kerosene Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene For use in aviation, Kerosene for Use in Aviation L Liquid products, information returns, Information Returns Local telephone service, Local telephone service. Income tax preparation Local-only service, Local-only service. Income tax preparation M Manufacturer, defined, Manufacturer. Income tax preparation Manufacturers taxes Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Coal Credits or refunds, Credits or Refunds Exemptions, Exemptions Gas guzzler tax, Gas Guzzler Tax Lease, Lease considered sale. Income tax preparation Lease payments, Partial payments. Income tax preparation Partial payments, Partial payments. Income tax preparation Registration, Registration requirements. Income tax preparation Related person, Related person. Income tax preparation Requirements for exempt sales, Requirements for Exempt Sales Sale, Sale. Income tax preparation Sport fishing equipment, Sport Fishing Equipment Taxable Tires, Taxable Tires Vaccines, Vaccines Medical device tax, Taxable medical devices. Income tax preparation Military aircraft, In military aircraft (No. Income tax preparation 16). Income tax preparation Mobile radio telephone service, Mobile radio telephone service. Income tax preparation N News services, News services. Income tax preparation Nonprofit educational organization, Exclusive use by a nonprofit educational organization (No. Income tax preparation 13). Income tax preparation Nonprofit educational organization use and state use, Nonprofit educational organization and state use. Income tax preparation Nonprofit educational organizations, Nonprofit educational organizations. Income tax preparation , Federal, state, and local government. Income tax preparation Nontaxable uses, definitions, Definitions of Nontaxable Uses Nontaxable uses, type of use table, Definitions of Nontaxable Uses O Obligations not in registered form, Obligations Not in Registered Form Off-highway use, Off-highway business use (No. Income tax preparation 2). Income tax preparation Oil spill liability, Environmental Taxes Other Fuels (Including Alternative Fuels), Other Fuels (Including Alternative Fuels) Other fuels, defined, Other fuels. Income tax preparation Ozone-depleting chemicals Floor stocks tax, Floor Stocks Tax Imported taxable products, Imported Taxable Products P Patient-centered outcomes research fee, Patient-Centered Outcomes Research Fee Payment of taxes, Payment of Taxes Penalties Dyed diesel fuel, Penalty. Income tax preparation Dyed kerosene, Penalty. Income tax preparation Pipeline operator, defined, Pipeline operator. Income tax preparation Position holder, defined, Position holder. Income tax preparation Publications (see Tax help) Q Qualified local bus, In a qualified local bus (No. Income tax preparation 6). Income tax preparation R Rack, defined, Rack. Income tax preparation Radio broadcasts, News services. Income tax preparation Records, Refiner, defined, Refiner. Income tax preparation Refinery, defined, Refinery. Income tax preparation Refunds, Claiming A Refund Refunds of second tax, Refunds of Second Tax Registered ultimate vendor, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Income tax preparation Registrant, Taxable fuel registrant. Income tax preparation Registrant, defined, Registrant. Income tax preparation Registration, Registration Requirements Form 637, Reminders Registration-required obligations, Obligations Not in Registered Form Related persons Heavy trucks, Related person. Income tax preparation Sport fishing equipment, Related person. Income tax preparation Removal, defined, Removal. Income tax preparation Retail tax Credits or refunds, Credits or refunds. Income tax preparation Heavy trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Rulings Program, Rulings Program Rural airports, Rural airports. Income tax preparation S Sale, defined, Sale. Income tax preparation Sales by registered ultimate vendors, gasoline, Sales by registered ultimate vendors. Income tax preparation Sales by registered ultimate vendors, kerosene for use in aviation, Sales by Registered Ultimate Vendors Sales price Bonus goods, Bonus goods. Income tax preparation Cost of transportation, Manufacturers taxes based on sale price. Income tax preparation Delivery costs, Manufacturers taxes based on sale price. Income tax preparation Discounts, Manufacturers taxes based on sale price. Income tax preparation Installation costs, Manufacturers taxes based on sale price. Income tax preparation Insurance costs, Manufacturers taxes based on sale price. Income tax preparation Local advertising charges, Manufacturers taxes based on sale price. Income tax preparation Manufacturers excise tax, Manufacturers taxes based on sale price. Income tax preparation Rebates, Manufacturers taxes based on sale price. Income tax preparation Retail dealer preparation costs, Manufacturers taxes based on sale price. Income tax preparation Warranty charges, Manufacturers taxes based on sale price. Income tax preparation School bus, In a school bus (No. Income tax preparation 7). Income tax preparation Second generation biofuel, Second generation biofuel. Income tax preparation Security systems, Telephone-operated security systems. Income tax preparation Ship passenger tax, Ship Passenger Tax Special September rule, When to deposit, Special rule for deposits of taxes in September. Income tax preparation Sport fishing equipment List of equipment, Sport Fishing Equipment Resales, Certain equipment resale. Income tax preparation State and local governments, Federal, state, and local government. Income tax preparation State or local governments, Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Income tax preparation 14). Income tax preparation State or nonprofit educational organization use, Sales by registered ultimate vendors. Income tax preparation State use, Registered ultimate vendor (state use). Income tax preparation , State use. Income tax preparation State, defined, State. Income tax preparation Suggestions, Comments and suggestions. Income tax preparation T Tanning tax, Indoor Tanning Services Tax Tax help, How To Get Tax Help Tax rate, Electric outboard boat motors. Income tax preparation Air transportation of persons, Transportation of Persons by Air Air transportation of property, Transportation of Property by Air Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Tax rates. Income tax preparation Electric outboard motor, Electric outboard boat motors. Income tax preparation International air travel facilities, International Air Travel Facilities Obligations not in registered form, Obligations Not in Registered Form Policies issued by foreign persons, Foreign Insurance Taxes Ship passenger tax, Ship Passenger Tax Sport fishing equipment, Sport Fishing Equipment Trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Taxable fuel registrant, Taxable fuel registrant. Income tax preparation Taxable Tires Manufacturers taxes, Taxable Tires Taxable tires Exemptions, Tires exempt from tax. Income tax preparation Taxes, Payment of, Payment of Taxes Taxpayer identification number, Taxpayer identification number. Income tax preparation Teletypewriter exchange service, Teletypewriter exchange service. Income tax preparation Terminal operator, defined, Terminal operator. Income tax preparation Terminal, defined, Terminal. Income tax preparation Throughputter, defined, Throughputter. Income tax preparation Tires Credit against heavy truck tax, Tire credit. Income tax preparation Credit or refund of tax, Credit or refund. Income tax preparation Train, Use in a train. Income tax preparation Train (Diesel-powered), Diesel-powered train. Income tax preparation Transmix, Diesel Fuel and Kerosene Travel agency, Liability for tax. Income tax preparation TTY/TDD information, How To Get Tax Help Two-party exchanges, Two-party exchanges. Income tax preparation , Two-party exchanges. Income tax preparation U Ultimate purchaser, Ultimate purchaser. Income tax preparation Uninterrupted international air transportation, Uninterrupted international air transportation. Income tax preparation , Military personnel on international trips. Income tax preparation Used other than as a fuel Diesel fuel and kerosene, For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Income tax preparation 8). Income tax preparation Uses, nontaxable Alternative fuels, Other Fuels (Including Alternative Fuels) Aviation gasoline, Gasoline and Aviation Gasoline Diesel fuel, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion Gasoline, Gasoline and Aviation Gasoline Kerosene, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Kerosene for use in aviation, Ultimate purchasers. Income tax preparation Liquefied petroleum gas (LPG), Other Fuels (Including Alternative Fuels) Other Fuels, Other Fuels (Including Alternative Fuels) V Vaccines Credit or refund, Credit or refund. Income tax preparation Manufacturers tax, What's New, Vaccines Vehicles Gas guzzler, Gas Guzzler Tax Imported, Imported automobiles. Income tax preparation Law enforcement, Vehicles not subject to tax. Income tax preparation Vendors, registered ultimate, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Income tax preparation Vessel operator, defined, Vessel operator. Income tax preparation W Wagering and occupational wagering fee, Excise Taxes Not Covered When to deposit, When To Make Deposits Prev  Up     Home   More Online Publications