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Irs Ez Tax Form

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

Did you know that life events like marriage, divorce and retirement may have a significant tax impact? Organized by type of event, this page provides resources that explain the tax impact of each. 

Taxpayer Rights
 

From Birth through Childhood

 

Marriage

Divorce or Separations

Job Loss or Starting a new Career or Job

 

Disasters and Casualties

Persons with Disabilities

Planning for Retirement?

Mutual Fund Distributions

First-time Home Owner

Moving?

Bankruptcy

Decedents

  • Publication 559, Survivors, Executors and Administrators
  • Form 56, Notice Concerning Fiduciary Relationship
  • Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer
  • Form 4810, Request For Prompt Assessment Under Internal Revenue Code Section 6501(d)

Did you receive a Notice?

Filing or paying late - Information Taxpayers should know!

Many people today need more time to prepare their federal tax return. They may want to consider an  for time to file. However, extension of time to file a return does not grant any extension of time to pay a tax liability.

Additional Assistance

We want to remind military families that many of you may also qualify for EITC.

News Releases and Tax Tips


 

Page Last Reviewed or Updated: 18-Feb-2014

The Irs Ez Tax Form

Irs ez tax form Publication 502 - Main Content Table of Contents What Are Medical Expenses? What Expenses Can You Include This Year?Community property states. Irs ez tax form How Much of the Expenses Can You Deduct? Whose Medical Expenses Can You Include?Spouse Dependent Decedent What Medical Expenses Are Includible?Abortion Acupuncture Alcoholism Ambulance Annual Physical Examination Artificial Limb Artificial Teeth Bandages Birth Control Pills Body Scan Braille Books and Magazines Breast Pumps and Supplies Breast Reconstruction Surgery Capital Expenses Car Chiropractor Christian Science Practitioner Contact Lenses Crutches Dental Treatment Diagnostic Devices Disabled Dependent Care Expenses Drug Addiction Drugs Eye Exam Eyeglasses Eye Surgery Fertility Enhancement Founder's Fee Guide Dog or Other Service Animal Health Institute Health Maintenance Organization (HMO) Hearing Aids Home Care Home Improvements Hospital Services Insurance Premiums Intellectually and Developmentally Disabled, Special Home for Laboratory Fees Lactation Expenses Lead-Based Paint Removal Learning Disability Legal Fees Lifetime Care—Advance Payments Lodging Long-Term Care Meals Medical Conferences Medical Information Plan Medicines Nursing Home Nursing Services Operations Optometrist Organ Donors Osteopath Oxygen Physical Examination Pregnancy Test Kit Prosthesis Psychiatric Care Psychoanalysis Psychologist Special Education Sterilization Stop-Smoking Programs Surgery Telephone Television Therapy Transplants Transportation Trips Tuition Vasectomy Vision Correction Surgery Weight-Loss Program Wheelchair Wig X-ray What Expenses Are Not Includible?Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Controlled Substances Cosmetic Surgery Dancing Lessons Diaper Service Electrolysis or Hair Removal Flexible Spending Account Funeral Expenses Future Medical Care Hair Transplant Health Club Dues Health Coverage Tax Credit Health Savings Accounts Household Help Illegal Operations and Treatments Insurance Premiums Maternity Clothes Medical Savings Account (MSA) Medicines and Drugs From Other Countries Nonprescription Drugs and Medicines Nutritional Supplements Personal Use Items Swimming Lessons Teeth Whitening Veterinary Fees Weight-Loss Program How Do You Treat Reimbursements?Insurance Reimbursement How Do You Figure and Report the Deduction on Your Tax Return?What Tax Form Do You Use? Sale of Medical Equipment or Property Damages for Personal Injuries Impairment-Related Work Expenses Health Insurance Costs for Self-Employed Persons COBRA Premium Assistance Health Coverage Tax CreditWho Can Take This Credit? Qualifying Family Member Qualified Health Insurance Nonqualified Health Insurance Eligible Coverage Month How To Take the Credit How To Get Tax HelpLow Income Taxpayer Clinics What Are Medical Expenses? Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. Irs ez tax form These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. Irs ez tax form They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. Irs ez tax form Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Irs ez tax form They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation. Irs ez tax form Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. Irs ez tax form Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract. Irs ez tax form What Expenses Can You Include This Year? You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. Irs ez tax form (But see Decedent under Whose Medical Expenses Can You Include, for an exception. Irs ez tax form ) If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. Irs ez tax form If you use a “pay-by-phone” or “online” account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. Irs ez tax form If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged. Irs ez tax form If you did not claim a medical or dental expense that would have been deductible in an earlier year, you can file Form 1040X, Amended U. Irs ez tax form S. Irs ez tax form Individual Income Tax Return, for the year in which you overlooked the expense. Irs ez tax form Do not claim the expense on this year's return. Irs ez tax form Generally, an amended return must be filed within 3 years from the date the original return was filed or within 2 years from the time the tax was paid, whichever is later. Irs ez tax form You cannot include medical expenses that were paid by insurance companies or other sources. Irs ez tax form This is true whether the payments were made directly to you, to the patient, or to the provider of the medical services. Irs ez tax form Separate returns. Irs ez tax form   If you and your spouse live in a noncommunity property state and file separate returns, each of you can include only the medical expenses each actually paid. Irs ez tax form Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise. Irs ez tax form Community property states. Irs ez tax form   If you and your spouse live in a community property state and file separate returns or are registered domestic partners in Nevada, Washington, or California, any medical expenses paid out of community funds are divided equally. Irs ez tax form Generally, each of you should include half the expenses. Irs ez tax form If medical expenses are paid out of the separate funds of one individual, only the individual who paid the medical expenses can include them. Irs ez tax form If you live in a community property state and are not filing a joint return, see Publication 555, Community Property. Irs ez tax form How Much of the Expenses Can You Deduct? Generally, you can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 10% of your AGI. Irs ez tax form But if either you or your spouse was born before January 2, 1949, you can deduct the amount of your medical and dental expenses that is more than 7. Irs ez tax form 5% of your AGI. Irs ez tax form Example. Irs ez tax form You are unmarried and were born after January 2, 1949, and your AGI is $40,000, 10% of which is $4,000. Irs ez tax form You paid medical expenses of $2,500. Irs ez tax form You cannot deduct any of your medical expenses because they are not more than 10% of your AGI. Irs ez tax form Whose Medical Expenses Can You Include? You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. Irs ez tax form There are different rules for decedents and for individuals who are the subject of multiple support agreements. Irs ez tax form See Support claimed under a multiple support agreement , later under Qualifying Relative. Irs ez tax form Spouse You can include medical expenses you paid for your spouse. Irs ez tax form To include these expenses, you must have been married either at the time your spouse received the medical services or at the time you paid the medical expenses. Irs ez tax form Example 1. Irs ez tax form Mary received medical treatment before she married Bill. Irs ez tax form Bill paid for the treatment after they married. Irs ez tax form Bill can include these expenses in figuring his medical expense deduction even if Bill and Mary file separate returns. Irs ez tax form If Mary had paid the expenses, Bill could not include Mary's expenses in his separate return. Irs ez tax form Mary would include the amounts she paid during the year in her separate return. Irs ez tax form If they filed a joint return, the medical expenses both paid during the year would be used to figure their medical expense deduction. Irs ez tax form Example 2. Irs ez tax form This year, John paid medical expenses for his wife Louise, who died last year. Irs ez tax form John married Belle this year and they file a joint return. Irs ez tax form Because John was married to Louise when she received the medical services, he can include those expenses in figuring his medical expense deduction for this year. Irs ez tax form Dependent You can include medical expenses you paid for your dependent. Irs ez tax form For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses. Irs ez tax form A person generally qualifies as your dependent for purposes of the medical expense deduction if both of the following requirements are met. Irs ez tax form The person was a qualifying child (defined later) or a qualifying relative (defined later), and The person was a U. Irs ez tax form S. Irs ez tax form citizen or national or a resident of the United States, Canada, or Mexico. Irs ez tax form If your qualifying child was adopted, see Exception for adopted child , later. Irs ez tax form You can include medical expenses you paid for an individual that would have been your dependent except that: He or she received gross income of $3,900 or more in 2013, He or she filed a joint return for 2013, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Irs ez tax form Exception for adopted child. Irs ez tax form   If you are a U. Irs ez tax form S. Irs ez tax form citizen or national and your adopted child lived with you as a member of your household for 2013, that child does not have to be a U. Irs ez tax form S. Irs ez tax form citizen or national, or a resident of the United States, Canada, or Mexico. Irs ez tax form Qualifying Child A qualifying child is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a full-time student, and younger than you (or your spouse, if filing jointly), or Any age and permanently and totally disabled, Lived with you for more than half of 2013, Did not provide over half of his or her own support for 2013, and Did not file a joint return, other than to claim a refund. Irs ez tax form Adopted child. Irs ez tax form   A legally adopted child is treated as your own child. Irs ez tax form This child includes a child lawfully placed with you for legal adoption. Irs ez tax form   You can include medical expenses that you paid for a child before adoption if the child qualified as your dependent when the medical services were provided or when the expenses were paid. Irs ez tax form   If you pay back an adoption agency or other persons for medical expenses they paid under an agreement with you, you are treated as having paid those expenses provided you clearly substantiate that the payment is directly attributable to the medical care of the child. Irs ez tax form   But if you pay the agency or other person for medical care that was provided and paid for before adoption negotiations began, you cannot include them as medical expenses. Irs ez tax form    You may be able to take a credit for other expenses related to an adoption. Irs ez tax form See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. Irs ez tax form Child of divorced or separated parents. Irs ez tax form   For purposes of the medical and dental expenses deduction, a child of divorced or separated parents can be treated as a dependent of both parents. Irs ez tax form Each parent can include the medical expenses he or she pays for the child, even if the other parent claims the child's dependency exemption, if: The child is in the custody of one or both parents for more than half the year, The child receives over half of his or her support during the year from his or her parents, and The child's parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Live apart at all times during the last 6 months of the year. Irs ez tax form This does not apply if the child's exemption is being claimed under a multiple support agreement (discussed later). Irs ez tax form Qualifying Relative A qualifying relative is a person: Who is your: Son, daughter, stepchild, or foster child, or a descendant of any of them (for example, your grandchild), Brother, sister, half brother, half sister, or a son or daughter of any of them, Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle), Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law, Who was not a qualifying child (see Qualifying Child, earlier) of any taxpayer for 2013, and For whom you provided over half of the support in 2013. Irs ez tax form But see Child of divorced or separated parents , earlier, Support claimed under a multiple support agreement, next, and Kidnapped child under Qualifying Relative in Publication 501. Irs ez tax form Support claimed under a multiple support agreement. Irs ez tax form   If you are considered to have provided more than half of a qualifying relative's support under a multiple support agreement, you can include medical expenses you pay for that person. Irs ez tax form A multiple support agreement is used when two or more people provide more than half of a person's support, but no one alone provides more than half. Irs ez tax form   Any medical expenses paid by others who joined you in the agreement cannot be included as medical expenses by anyone. Irs ez tax form However, you can include the entire unreimbursed amount you paid for medical expenses. Irs ez tax form Example. Irs ez tax form You and your three brothers each provide one-fourth of your mother's total support. Irs ez tax form Under a multiple support agreement, you treat your mother as your dependent. Irs ez tax form You paid all of her medical expenses. Irs ez tax form Your brothers repaid you for three-fourths of these expenses. Irs ez tax form In figuring your medical expense deduction, you can include only one-fourth of your mother's medical expenses. Irs ez tax form Your brothers cannot include any part of the expenses. Irs ez tax form However, if you and your brothers share the nonmedical support items and you separately pay all of your mother's medical expenses, you can include the unreimbursed amount you paid for her medical expenses in your medical expenses. Irs ez tax form Decedent Medical expenses paid before death by the decedent are included in figuring any deduction for medical and dental expenses on the decedent's final income tax return. Irs ez tax form This includes expenses for the decedent's spouse and dependents as well as for the decedent. Irs ez tax form The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. Irs ez tax form The expenses must be paid within the 1-year period beginning with the day after the date of death. Irs ez tax form If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return. Irs ez tax form Qualified medical expenses paid before death by the decedent are not deductible if paid with a tax-free distribution from any Archer MSA, Medicare Advantage MSA, or health savings account. Irs ez tax form What if the decedent's return had been filed and the medical expenses were not included?   Form 1040X can be filed for the year or years the expenses are treated as paid, unless the period for filing an amended return for that year has passed. Irs ez tax form Generally, an amended return must be filed within 3 years of the date the original return was filed, or within 2 years from the time the tax was paid, whichever date is later. Irs ez tax form Example. Irs ez tax form John properly filed his 2012 income tax return. Irs ez tax form He died in 2013 with unpaid medical expenses of $1,500 from 2012 and $1,800 in 2013. Irs ez tax form If the expenses are paid within the 1-year period, his survivor or personal representative can file an amended return for 2012 claiming a deduction based on the $1,500 medical expenses. Irs ez tax form The $1,800 of medical expenses from 2013 can be included on the decedent's final return for 2013. Irs ez tax form What if you pay medical expenses of a deceased spouse or dependent?   If you paid medical expenses for your deceased spouse or dependent, include them as medical expenses on your Form 1040 in the year paid, whether they are paid before or after the decedent's death. Irs ez tax form The expenses can be included if the person was your spouse or dependent either at the time the medical services were provided or at the time you paid the expenses. Irs ez tax form What Medical Expenses Are Includible? Following is a list of items that you can include in figuring your medical expense deduction. Irs ez tax form The items are listed in alphabetical order. Irs ez tax form This list does not include all possible medical expenses. Irs ez tax form To determine if an expense not listed can be included in figuring your medical expense deduction, see What Are Medical Expenses , earlier. Irs ez tax form Abortion You can include in medical expenses the amount you pay for a legal abortion. Irs ez tax form Acupuncture You can include in medical expenses the amount you pay for acupuncture. Irs ez tax form Alcoholism You can include in medical expenses amounts you pay for an inpatient's treatment at a therapeutic center for alcohol addiction. Irs ez tax form This includes meals and lodging provided by the center during treatment. Irs ez tax form You can also include in medical expenses amounts you pay for transportation to and from Alcoholics Anonymous meetings in your community if the attendance is pursuant to medical advice that membership in Alcoholics Anonymous is necessary for the treatment of a disease involving the excessive use of alcoholic liquors. Irs ez tax form Ambulance You can include in medical expenses amounts you pay for ambulance service. Irs ez tax form Annual Physical Examination See Physical Examination , later. Irs ez tax form Artificial Limb You can include in medical expenses the amount you pay for an artificial limb. Irs ez tax form Artificial Teeth You can include in medical expenses the amount you pay for artificial teeth. Irs ez tax form Bandages You can include in medical expenses the cost of medical supplies such as bandages. Irs ez tax form Birth Control Pills You can include in medical expenses the amount you pay for birth control pills prescribed by a doctor. Irs ez tax form Body Scan You can include in medical expenses the cost of an electronic body scan. Irs ez tax form Braille Books and Magazines You can include in medical expenses the part of the cost of Braille books and magazines for use by a visually impaired person that is more than the cost of regular printed editions. Irs ez tax form Breast Pumps and Supplies You can include in medical expenses the cost of breast pumps and supplies that assist lactation. Irs ez tax form Breast Reconstruction Surgery You can include in medical expenses the amounts you pay for breast reconstruction surgery, as well as breast prosthesis, following a mastectomy for cancer. Irs ez tax form See Cosmetic Surgery , later. Irs ez tax form Capital Expenses You can include in medical expenses amounts you pay for special equipment installed in a home, or for improvements, if their main purpose is medical care for you, your spouse, or your dependent. Irs ez tax form The cost of permanent improvements that increase the value of your property may be partly included as a medical expense. Irs ez tax form The cost of the improvement is reduced by the increase in the value of your property. Irs ez tax form The difference is a medical expense. Irs ez tax form If the value of your property is not increased by the improvement, the entire cost is included as a medical expense. Irs ez tax form Certain improvements made to accommodate a home to your disabled condition, or that of your spouse or your dependents who live with you, do not usually increase the value of the home and the cost can be included in full as medical expenses. Irs ez tax form These improvements include, but are not limited to, the following items. Irs ez tax form Constructing entrance or exit ramps for your home. Irs ez tax form Widening doorways at entrances or exits to your home. Irs ez tax form Widening or otherwise modifying hallways and interior doorways. Irs ez tax form Installing railings, support bars, or other modifications to bathrooms. Irs ez tax form Lowering or modifying kitchen cabinets and equipment. Irs ez tax form Moving or modifying electrical outlets and fixtures. Irs ez tax form Installing porch lifts and other forms of lifts (but elevators generally add value to the house). Irs ez tax form Modifying fire alarms, smoke detectors, and other warning systems. Irs ez tax form Modifying stairways. Irs ez tax form Adding handrails or grab bars anywhere (whether or not in bathrooms). Irs ez tax form Modifying hardware on doors. Irs ez tax form Modifying areas in front of entrance and exit doorways. Irs ez tax form Grading the ground to provide access to the residence. Irs ez tax form Only reasonable costs to accommodate a home to a disabled condition are considered medical care. Irs ez tax form Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses. Irs ez tax form Capital expense worksheet. Irs ez tax form   Use Worksheet A to figure the amount of your capital expense to include in your medical expenses. Irs ez tax form Worksheet A. Irs ez tax form Capital Expense Worksheet Instructions: Use this worksheet to figure the amount, if any, of your medical expenses due to a home improvement. Irs ez tax form 1. Irs ez tax form Enter the amount you paid for the home improvement 1. Irs ez tax form   2. Irs ez tax form Enter the value of your home immediately after the improvement 2. Irs ez tax form       3. Irs ez tax form Enter the value of your home immediately before the improvement 3. Irs ez tax form       4. Irs ez tax form Subtract line 3 from line 2. Irs ez tax form This is the increase in the value of your home due to the improvement 4. Irs ez tax form     • If line 4 is more than or equal to line 1, you have no medical expenses due to the home improvement; stop here. Irs ez tax form       • If line 4 is less than line 1, go to line 5. Irs ez tax form     5. Irs ez tax form Subtract line 4 from line 1. Irs ez tax form These are your medical expenses due to the home improvement 5. Irs ez tax form   Operation and upkeep. Irs ez tax form   Amounts you pay for operation and upkeep of a capital asset qualify as medical expenses, as long as the main reason for them is medical care. Irs ez tax form This rule applies even if none or only part of the original cost of the capital asset qualified as a medical care expense. Irs ez tax form Improvements to property rented by a person with a disability. Irs ez tax form   Amounts paid to buy and install special plumbing fixtures for a person with a disability, mainly for medical reasons, in a rented house are medical expenses. Irs ez tax form Example. Irs ez tax form John has arthritis and a heart condition. Irs ez tax form He cannot climb stairs or get into a bathtub. Irs ez tax form On his doctor's advice, he installs a bathroom with a shower stall on the first floor of his two-story rented house. Irs ez tax form The landlord did not pay any of the cost of buying and installing the special plumbing and did not lower the rent. Irs ez tax form John can include in medical expenses the entire amount he paid. Irs ez tax form Car You can include in medical expenses the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability. Irs ez tax form Special design. Irs ez tax form   You can include in medical expenses the difference between the cost of a regular car and a car specially designed to hold a wheelchair. Irs ez tax form Cost of operation. Irs ez tax form   The includible costs of using a car for medical reasons are explained under Transportation , later. Irs ez tax form Chiropractor You can include in medical expenses fees you pay to a chiropractor for medical care. Irs ez tax form Christian Science Practitioner You can include in medical expenses fees you pay to Christian Science practitioners for medical care. Irs ez tax form Contact Lenses You can include in medical expenses amounts you pay for contact lenses needed for medical reasons. Irs ez tax form You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner. Irs ez tax form See Eyeglasses and Eye Surgery , later. Irs ez tax form Crutches You can include in medical expenses the amount you pay to buy or rent crutches. Irs ez tax form Dental Treatment You can include in medical expenses the amounts you pay for the prevention and alleviation of dental disease. Irs ez tax form Preventive treatment includes the services of a dental hygienist or dentist for such procedures as teeth cleaning, the application of sealants, and fluoride treatments to prevent tooth decay. Irs ez tax form Treatment to alleviate dental disease include services of a dentist for procedures such as X-rays, fillings, braces, extractions, dentures, and other dental ailments. Irs ez tax form But see Teeth Whitening under What Expenses Are Not Includible, later. Irs ez tax form Diagnostic Devices You can include in medical expenses the cost of devices used in diagnosing and treating illness and disease. Irs ez tax form Example. Irs ez tax form You have diabetes and use a blood sugar test kit to monitor your blood sugar level. Irs ez tax form You can include the cost of the blood sugar test kit in your medical expenses. Irs ez tax form Disabled Dependent Care Expenses Some disabled dependent care expenses may qualify as either: Medical expenses, or Work-related expenses for purposes of taking a credit for dependent care. Irs ez tax form (See Publication 503, Child and Dependent Care Expenses. Irs ez tax form ) You can choose to apply them either way as long as you do not use the same expenses to claim both a credit and a medical expense deduction. Irs ez tax form Drug Addiction You can include in medical expenses amounts you pay for an inpatient's treatment at a therapeutic center for drug addiction. Irs ez tax form This includes meals and lodging at the center during treatment. Irs ez tax form Drugs See Medicines , later. Irs ez tax form Eye Exam You can include in medical expenses the amount you pay for eye examinations. Irs ez tax form Eyeglasses You can include in medical expenses amounts you pay for eyeglasses and contact lenses needed for medical reasons. Irs ez tax form See Contact Lenses , earlier, for more information. Irs ez tax form Eye Surgery You can include in medical expenses the amount you pay for eye surgery to treat defective vision, such as laser eye surgery or radial keratotomy. Irs ez tax form Fertility Enhancement You can include in medical expenses the cost of the following procedures to overcome an inability to have children. Irs ez tax form Procedures such as in vitro fertilization (including temporary storage of eggs or sperm). Irs ez tax form Surgery, including an operation to reverse prior surgery that prevented the person operated on from having children. Irs ez tax form Founder's Fee See Lifetime Care—Advance Payments , later. Irs ez tax form Guide Dog or Other Service Animal You can include in medical expenses the costs of buying, training, and maintaining a guide dog or other service animal to assist a visually impaired or hearing disabled person, or a person with other physical disabilities. Irs ez tax form In general, this includes any costs, such as food, grooming, and veterinary care, incurred in maintaining the health and vitality of the service animal so that it may perform its duties. Irs ez tax form Health Institute You can include in medical expenses fees you pay for treatment at a health institute only if the treatment is prescribed by a physician and the physician issues a statement that the treatment is necessary to alleviate a physical or mental defect or illness of the individual receiving the treatment. Irs ez tax form Health Maintenance Organization (HMO) You can include in medical expenses amounts you pay to entitle you, your spouse, or a dependent to receive medical care from an HMO. Irs ez tax form These amounts are treated as medical insurance premiums. Irs ez tax form See Insurance Premiums , later. Irs ez tax form Hearing Aids You can include in medical expenses the cost of a hearing aid and batteries, repairs, and maintenance needed to operate it. Irs ez tax form Home Care See Nursing Services , later. Irs ez tax form Home Improvements See Capital Expenses , earlier. Irs ez tax form Hospital Services You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. Irs ez tax form This includes amounts paid for meals and lodging. Irs ez tax form Also see Lodging , later. Irs ez tax form Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. Irs ez tax form Medical care policies can provide payment for treatment that includes: Hospitalization, surgical services, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Long-term care (subject to additional limitations). Irs ez tax form See Qualified Long-Term Care Insurance Contracts under Long-Term Care, later. Irs ez tax form If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. Irs ez tax form The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement. Irs ez tax form Health coverage tax credit. Irs ez tax form   If, during 2013, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient, you must complete Form 8885 before completing Schedule A. Irs ez tax form When figuring the amount of insurance premiums you can deduct on Schedule A, do not include: Any amounts you included on Form 8885, Any qualified health insurance premiums you paid to “U. Irs ez tax form S. Irs ez tax form Treasury–HCTC,” or Any health coverage tax credit advance payments shown on Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. Irs ez tax form Employer-Sponsored Health Insurance Plan Do not include in your medical and dental expenses any insurance premiums paid by an employer-sponsored health insurance plan unless the premiums are included on your Form W-2, Wage and Tax Statement. Irs ez tax form Also, do not include any other medical and dental expenses paid by the plan unless the amount paid is included on your Form W-2. Irs ez tax form Example. Irs ez tax form You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. Irs ez tax form Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. Irs ez tax form Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you cannot deduct the premiums paid with that money. Irs ez tax form Long-term care services. Irs ez tax form   Contributions made by your employer to provide coverage for qualified long-term care services under a flexible spending or similar arrangement must be included in your income. Irs ez tax form This amount will be reported as wages on your Form W-2. Irs ez tax form Retired public safety officers. Irs ez tax form   If you are a retired public safety officer, do not include as medical expenses any health or long-term care insurance premiums that you elected to have paid with tax-free distributions from a retirement plan. Irs ez tax form This applies only to distributions that would otherwise be included in income. Irs ez tax form Health reimbursement arrangement (HRA). Irs ez tax form   If you have medical expenses that are reimbursed by a health reimbursement arrangement, you cannot include those expenses in your medical expenses. Irs ez tax form This is because an HRA is funded solely by the employer. Irs ez tax form Medicare A If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare A. Irs ez tax form The payroll tax paid for Medicare A is not a medical expense. Irs ez tax form If you are not covered under social security (or were not a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. Irs ez tax form In this situation you can include the premiums you paid for Medicare A as a medical expense. Irs ez tax form Medicare B Medicare B is a supplemental medical insurance. Irs ez tax form Premiums you pay for Medicare B are a medical expense. Irs ez tax form Check the information you received from the Social Security Administration to find out your premium. Irs ez tax form Medicare D Medicare D is a voluntary prescription drug insurance program for persons with Medicare A or B. Irs ez tax form You can include as a medical expense premiums you pay for Medicare D. Irs ez tax form Prepaid Insurance Premiums Premiums you pay before you are age 65 for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). Irs ez tax form Unused Sick Leave Used To Pay Premiums You must include in gross income cash payments you receive at the time of retirement for unused sick leave. Irs ez tax form You also must include in gross income the value of unused sick leave that, at your option, your employer applies to the cost of your continuing participation in your employer's health plan after you retire. Irs ez tax form You can include this cost of continuing participation in the health plan as a medical expense. Irs ez tax form If you participate in a health plan where your employer automatically applies the value of unused sick leave to the cost of your continuing participation in the health plan (and you do not have the option to receive cash), do not include the value of the unused sick leave in gross income. Irs ez tax form You cannot include this cost of continuing participation in that health plan as a medical expense. Irs ez tax form Insurance Premiums You Cannot Include You cannot include premiums you pay for: Life insurance policies, Policies providing payment for loss of earnings, Policies for loss of life, limb, sight, etc. Irs ez tax form , Policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness or injury, The part of your car insurance that provides medical insurance coverage for all persons injured in or by your car because the part of the premium providing insurance for you, your spouse, and your dependents is not stated separately from the part of the premium providing insurance for medical care for others, or Health or long-term care insurance if you elected to pay these premiums with tax-free distributions from a retirement plan made directly to the insurance provider and these distributions would otherwise have been included in income. Irs ez tax form Taxes imposed by any governmental unit, such as Medicare taxes, are not insurance premiums. Irs ez tax form Coverage for nondependents. Irs ez tax form   Generally, you cannot deduct any additional premium you pay as the result of including on your policy someone who is not your spouse or dependent, even if that person is your child under age 27. Irs ez tax form However, you can deduct the additional premium if that person is: Your child whom you do not claim as a dependent because of the rules for children of divorced or separated parents, Any person you could have claimed as a dependent on your return except that person received $3,900 or more of gross income or filed a joint return, or Any person you could have claimed as a dependent except that you, or your spouse if filing jointly, can be claimed as a dependent on someone else's 2013 return. Irs ez tax form  Also, if you had family coverage when you added this individual to your policy and your premiums did not increase, you can enter on Schedule A (Form 1040) the full amount of your medical and dental insurance premiums. Irs ez tax form Intellectually and Developmentally Disabled, Special Home for You can include in medical expenses the cost of keeping a person who is intellectually and developmentally disabled in a special home, not the home of a relative, on the recommendation of a psychiatrist to help the person adjust from life in a mental hospital to community living. Irs ez tax form Laboratory Fees You can include in medical expenses the amounts you pay for laboratory fees that are part of medical care. Irs ez tax form Lactation Expenses See Breast Pumps and Supplies , earlier. Irs ez tax form Lead-Based Paint Removal You can include in medical expenses the cost of removing lead-based paints from surfaces in your home to prevent a child who has or had lead poisoning from eating the paint. Irs ez tax form These surfaces must be in poor repair (peeling or cracking) or within the child's reach. Irs ez tax form The cost of repainting the scraped area is not a medical expense. Irs ez tax form If, instead of removing the paint, you cover the area with wallboard or paneling, treat these items as capital expenses. Irs ez tax form See Capital Expenses , earlier. Irs ez tax form Do not include the cost of painting the wallboard as a medical expense. Irs ez tax form Learning Disability See Special Education , later. Irs ez tax form Legal Fees You can include in medical expenses legal fees you paid that are necessary to authorize treatment for mental illness. Irs ez tax form However, you cannot include in medical expenses fees for the management of a guardianship estate, fees for conducting the affairs of the person being treated, or other fees that are not necessary for medical care. Irs ez tax form Lifetime Care—Advance Payments You can include in medical expenses a part of a life-care fee or “founder's fee” you pay either monthly or as a lump sum under an agreement with a retirement home. Irs ez tax form The part of the payment you include is the amount properly allocable to medical care. Irs ez tax form The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. Irs ez tax form You can use a statement from the retirement home to prove the amount properly allocable to medical care. Irs ez tax form The statement must be based either on the home's prior experience or on information from a comparable home. Irs ez tax form Dependents with disabilities. Irs ez tax form   You can include in medical expenses advance payments to a private institution for lifetime care, treatment, and training of your physically or mentally impaired child upon your death or when you become unable to provide care. Irs ez tax form The payments must be a condition for the institution's future acceptance of your child and must not be refundable. Irs ez tax form Payments for future medical care. Irs ez tax form   Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. Irs ez tax form This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care of the type described earlier. Irs ez tax form Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to receive medical care. Irs ez tax form See Nursing Home , later. Irs ez tax form You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. Irs ez tax form You can include the cost of such lodging while away from home if all of the following requirements are met. Irs ez tax form The lodging is primarily for and essential to medical care. Irs ez tax form The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. Irs ez tax form The lodging is not lavish or extravagant under the circumstances. Irs ez tax form There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. Irs ez tax form The amount you include in medical expenses for lodging cannot be more than $50 for each night for each person. Irs ez tax form You can include lodging for a person traveling with the person receiving the medical care. Irs ez tax form For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Irs ez tax form Meals are not included. Irs ez tax form Do not include the cost of lodging while away from home for medical treatment if that treatment is not received from a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital or if that lodging is not primarily for or essential to the medical care received. Irs ez tax form Long-Term Care You can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts. Irs ez tax form Qualified Long-Term Care Services Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are: Required by a chronically ill individual, and Provided pursuant to a plan of care prescribed by a licensed health care practitioner. Irs ez tax form Chronically ill individual. Irs ez tax form   An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions. Irs ez tax form He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Irs ez tax form Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Irs ez tax form He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Irs ez tax form Maintenance and personal care services. Irs ez tax form    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). Irs ez tax form Qualified Long-Term Care Insurance Contracts A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. Irs ez tax form The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses. Irs ez tax form The amount of qualified long-term care premiums you can include is limited. Irs ez tax form You can include the following as medical expenses on Schedule A (Form 1040). Irs ez tax form Qualified long-term care premiums up to the following amounts. Irs ez tax form Age 40 or under – $360. Irs ez tax form Age 41 to 50 – $680. Irs ez tax form Age 51 to 60 – $1,360. Irs ez tax form Age 61 to 70 – $3,640. Irs ez tax form Age 71 or over – $4,550. Irs ez tax form Unreimbursed expenses for qualified long-term care services. Irs ez tax form Note. Irs ez tax form The limit on premiums is for each person. Irs ez tax form Also, if you are an eligible retired public safety officer, you cannot include premiums for long-term care insurance if you elected to pay these premiums with tax-free distributions from a qualified retirement plan made directly to the insurance provider and these distributions would otherwise have been included in your income. Irs ez tax form Meals You can include in medical expenses the cost of meals at a hospital or similar institution if a principal reason for being there is to get medical care. Irs ez tax form You cannot include in medical expenses the cost of meals that are not part of inpatient care. Irs ez tax form Also see Weight-Loss Program and Nutritional Supplements , later. Irs ez tax form Medical Conferences You can include in medical expenses amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent. Irs ez tax form The costs of the medical conference must be primarily for and necessary to the medical care of you, your spouse, or your dependent. Irs ez tax form The majority of the time spent at the conference must be spent attending sessions on medical information. Irs ez tax form The cost of meals and lodging while attending the conference is not deductible as a medical expense. Irs ez tax form Medical Information Plan You can include in medical expenses amounts paid to a plan that keeps medical information in a computer data bank and retrieves and furnishes the information upon request to an attending physician. Irs ez tax form Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. Irs ez tax form A prescribed drug is one that requires a prescription by a doctor for its use by an individual. Irs ez tax form You can also include amounts you pay for insulin. Irs ez tax form Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Irs ez tax form Imported medicines and drugs. Irs ez tax form   If you imported medicines or drugs from other countries, see Medicines and Drugs From Other Countries , under What Expenses Are Not Includible, later. Irs ez tax form Nursing Home You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. Irs ez tax form This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care. Irs ez tax form Do not include the cost of meals and lodging if the reason for being in the home is personal. Irs ez tax form You can, however, include in medical expenses the part of the cost that is for medical or nursing care. Irs ez tax form Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. Irs ez tax form The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. Irs ez tax form This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. Irs ez tax form These services can be provided in your home or another care facility. Irs ez tax form Generally, only the amount spent for nursing services is a medical expense. Irs ez tax form If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. Irs ez tax form For example, because of your medical condition you pay a visiting nurse $300 per week for medical and household services. Irs ez tax form She spends 10% of her time doing household services such as washing dishes and laundry. Irs ez tax form You can include only $270 per week as medical expenses. Irs ez tax form The $30 (10% × $300) allocated to household services cannot be included. Irs ez tax form However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Irs ez tax form See Maintenance and personal care services under Long-Term Care, earlier. Irs ez tax form Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. Irs ez tax form See Publication 503. Irs ez tax form You can also include in medical expenses part of the amount you pay for that attendant's meals. Irs ez tax form Divide the food expense among the household members to find the cost of the attendant's food. Irs ez tax form Then divide that cost in the same manner as in the preceding paragraph. Irs ez tax form If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. Irs ez tax form This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. Irs ez tax form Employment taxes. Irs ez tax form   You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for an attendant who provides medical care. Irs ez tax form If the attendant also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services as explained earlier. Irs ez tax form For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. Irs ez tax form Operations You can include in medical expenses amounts you pay for legal operations that are not for unnecessary cosmetic surgery. Irs ez tax form See Cosmetic Surgery under What Expenses Are Not Includible, later. Irs ez tax form Optometrist See Eyeglasses , earlier. Irs ez tax form Organ Donors See Transplants , later. Irs ez tax form Osteopath You can include in medical expenses amounts you pay to an osteopath for medical care. Irs ez tax form Oxygen You can include in medical expenses amounts you pay for oxygen and oxygen equipment to relieve breathing problems caused by a medical condition. Irs ez tax form Physical Examination You can include in medical expenses the amount you pay for an annual physical examination and diagnostic tests by a physician. Irs ez tax form You do not have to be ill at the time of the examination. Irs ez tax form Pregnancy Test Kit You can include in medical expenses the amount you pay to purchase a pregnancy test kit to determine if you are pregnant. Irs ez tax form Prosthesis See Artificial Limb and Breast Reconstruction Surgery , earlier. Irs ez tax form Psychiatric Care You can include in medical expenses amounts you pay for psychiatric care. Irs ez tax form This includes the cost of supporting a mentally ill dependent at a specially equipped medical center where the dependent receives medical care. Irs ez tax form See Psychoanalysis, next, and Transportation , later. Irs ez tax form Psychoanalysis You can include in medical expenses payments for psychoanalysis. Irs ez tax form However, you cannot include payments for psychoanalysis that is part of required training to be a psychoanalyst. Irs ez tax form Psychologist You can include in medical expenses amounts you pay to a psychologist for medical care. Irs ez tax form Special Education You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders. Irs ez tax form You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. Irs ez tax form A doctor must recommend that the child attend the school. Irs ez tax form Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Irs ez tax form Special education includes: Teaching Braille to a visually impaired person, Teaching lip reading to a hearing disabled person, or Giving remedial language training to correct a condition caused by a birth defect. Irs ez tax form Sterilization You can include in medical expenses the cost of a legal sterilization (a legally performed operation to make a person unable to have children). Irs ez tax form Also see Vasectomy , later. Irs ez tax form Stop-Smoking Programs You can include in medical expenses amounts you pay for a program to stop smoking. Irs ez tax form However, you cannot include in medical expenses amounts you pay for drugs that do not require a prescription, such as nicotine gum or patches, that are designed to help stop smoking. Irs ez tax form Surgery See Operations , earlier. Irs ez tax form Telephone You can include in medical expenses the cost of special telephone equipment that lets a person who is deaf, hard of hearing or has a speech disability communicate over a regular telephone. Irs ez tax form This includes teletypewriter (TTY) and telecommunications device for the deaf (TDD) equipment. Irs ez tax form You can also include the cost of repairing the equipment. Irs ez tax form Television You can include in medical expenses the cost of equipment that displays the audio part of television programs as subtitles for persons with a hearing disability. Irs ez tax form This may be the cost of an adapter that attaches to a regular set. Irs ez tax form It also may be the part of the cost of a specially equipped television that exceeds the cost of the same model regular television set. Irs ez tax form Therapy You can include in medical expenses amounts you pay for therapy received as medical treatment. Irs ez tax form Transplants You can include in medical expenses amounts paid for medical care you receive because you are a donor or a possible donor of a kidney or other organ. Irs ez tax form This includes transportation. Irs ez tax form You can include any expenses you pay for the medical care of a donor in connection with the donating of an organ. Irs ez tax form This includes transportation. Irs ez tax form Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. Irs ez tax form You can include:    Bus, taxi, train, or plane fares or ambulance service, Transportation expenses of a parent who must go with a child who needs medical care, Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment. Irs ez tax form Car expenses. Irs ez tax form   You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. Irs ez tax form You cannot include depreciation, insurance, general repair, or maintenance expenses. Irs ez tax form   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents a mile. Irs ez tax form    You can also include parking fees and tolls. Irs ez tax form You can add these fees and tolls to your medical expenses whether you use actual expenses or the standard mileage rate. Irs ez tax form Example. Irs ez tax form In 2013, Bill Jones drove 2,800 miles for medical reasons. Irs ez tax form He spent $500 for gas, $30 for oil, and $100 for tolls and parking. Irs ez tax form He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction. Irs ez tax form He figures the actual expenses first. Irs ez tax form He adds the $500 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $630. Irs ez tax form He then figures the standard mileage amount. Irs ez tax form He multiplies 2,800 miles by 24 cents a mile for a total of $672. Irs ez tax form He then adds the $100 tolls and parking for a total of $772. Irs ez tax form Bill includes the $772 of car expenses with his other medical expenses for the year because the $772 is more than the $630 he figured using actual expenses. Irs ez tax form Transportation expenses you cannot include. Irs ez tax form    You cannot include in medical expenses the cost of transportation in the following situations. Irs ez tax form Going to and from work, even if your condition requires an unusual means of transportation. Irs ez tax form Travel for purely personal reasons to another city for an operation or other medical care. Irs ez tax form Travel that is merely for the general improvement of one's health. Irs ez tax form The costs of operating a specially equipped car for other than medical reasons. Irs ez tax form Trips You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. Irs ez tax form You may be able to include up to $50 for each night for each person. Irs ez tax form You can include lodging for a person traveling with the person receiving the medical care. Irs ez tax form For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Irs ez tax form Meals are not included. Irs ez tax form See Lodging , earlier. Irs ez tax form You cannot include in medical expenses a trip or vacation taken merely for a change in environment, improvement of morale, or general improvement of health, even if the trip is made on the advice of a doctor. Irs ez tax form However, see Medical Conferences , earlier. Irs ez tax form Tuition Under special circumstances, you can include charges for tuition in medical expenses. Irs ez tax form See Special Education , earlier. Irs ez tax form You can include charges for a health plan included in a lump-sum tuition fee if the charges are separately stated or can easily be obtained from the school. Irs ez tax form Vasectomy You can include in medical expenses the amount you pay for a vasectomy. Irs ez tax form Vision Correction Surgery See Eye Surgery , earlier. Irs ez tax form Weight-Loss Program You can include in medical expenses amounts you pay to lose weight if it is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). Irs ez tax form This includes fees you pay for membership in a weight reduction group as well as fees for attendance at periodic meetings. Irs ez tax form You cannot include membership dues in a gym, health club, or spa as medical expenses, but you can include separate fees charged there for weight loss activities. Irs ez tax form You cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. Irs ez tax form You can include the cost of special food in medical expenses only if: The food does not satisfy normal nutritional needs, The food alleviates or treats an illness, and The need for the food is substantiated by a physician. Irs ez tax form The amount you can include in medical expenses is limited to the amount by which the cost of the special food exceeds the cost of a normal diet. Irs ez tax form See also Weight-Loss Program under What Expenses Are Not Includible, later. Irs ez tax form Wheelchair You can include in medical expenses amounts you pay for a wheelchair used mainly for the relief of sickness or disability, and not just to provide transportation to and from work. Irs ez tax form The cost of operating and maintaining the wheelchair is also a medical expense. Irs ez tax form Wig You can include in medical expenses the cost of a wig purchased upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease. Irs ez tax form X-ray You can include in medical expenses amounts you pay for X-rays for medical reasons. Irs ez tax form What Expenses Are Not Includible? Following is a list of some items that you cannot include in figuring your medical expense deduction. Irs ez tax form The items are listed in alphabetical order. Irs ez tax form Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby You cannot include in medical expenses amounts you pay for the care of children, even if the expenses enable you, your spouse, or your dependent to get medical or dental treatment. Irs ez tax form Also, any expense allowed as a childcare credit cannot be treated as an expense paid for medical care. Irs ez tax form Controlled Substances You cannot include in medical expenses amounts you pay for controlled substances (such as marijuana, laetrile, etc. Irs ez tax form ), even if such substances are legalized by state law. Irs ez tax form Such substances are not legal under federal law and cannot be included in medical expenses. Irs ez tax form Cosmetic Surgery Generally, you cannot include in medical expenses the amount you pay for unnecessary cosmetic surgery. Irs ez tax form This includes any procedure that is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. Irs ez tax form You generally cannot include in medical expenses the amount you pay for procedures such as face lifts, hair transplants, hair removal (electrolysis), and liposuction. Irs ez tax form You can include in medical expenses the amount you pay for cosmetic surgery if it is necessary to improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease. Irs ez tax form Example. Irs ez tax form An individual undergoes surgery that removes a breast as part of treatment for cancer. Irs ez tax form She pays a surgeon to reconstruct the breast. Irs ez tax form The surgery to reconstruct the breast corrects a deformity directly related to the disease. Irs ez tax form The cost of the surgery is includible in her medical expenses. Irs ez tax form Dancing Lessons You cannot include in medical expenses the cost of dancing lessons, swimming lessons, etc. Irs ez tax form , even if they are recommended by a doctor, if they are only for the improvement of general health. Irs ez tax form Diaper Service You cannot include in medical expenses the amount you pay for diapers or diaper services, unless they are needed to relieve the effects of a particular disease. Irs ez tax form Electrolysis or Hair Removal See Cosmetic Surgery , earlier. Irs ez tax form Flexible Spending Account You cannot include in medical expenses amounts for which you are fully reimbursed by your flexible spending account if you contribute a part of your income on a pre-tax basis to pay for the qualified benefit. Irs ez tax form Funeral Expenses You cannot include in medical expenses amounts you pay for funerals. Irs ez tax form Future Medical Care Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. Irs ez tax form This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care or long-term care of the type described at Lifetime Care—Advance Payments or Long-Term Care, earlier under What Medical Expenses Are Includible. Irs ez tax form Hair Transplant See Cosmetic Surgery , earlier. Irs ez tax form Health Club Dues You cannot include in medical expenses health club dues or amounts paid to improve one's general health or to relieve physical or mental discomfort not related to a particular medical condition. Irs ez tax form You cannot include in medical expenses the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Irs ez tax form Health Coverage Tax Credit You cannot include in medical expenses amounts you pay for health insurance that you use in figuring your health coverage tax credit. Irs ez tax form For more information, see Health Coverage Tax Credit , later. Irs ez tax form Health Savings Accounts You cannot include in medical expenses any payment or distribution for medical expenses out of a health savings account. Irs ez tax form Contributions to health savings accounts are deducted separately. Irs ez tax form See Publication 969. Irs ez tax form Household Help You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. Irs ez tax form This is a personal expense that is not deductible. Irs ez tax form However, you may be able to include certain expenses paid to a person providing nursing-type services. Irs ez tax form For more information, see Nursing Services , earlier under What Medical Expenses Are Includible. Irs ez tax form Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Irs ez tax form For more information, see Long-Term Care , earlier under What Medical Expenses Are Includible. Irs ez tax form Illegal Operations and Treatments You cannot include in medical expenses amounts you pay for illegal operations, treatments, or controlled substances whether rendered or prescribed by licensed or unlicensed practitioners. Irs ez tax form Insurance Premiums See Insurance Premiums under What Medical Expenses Are Includible, earlier. Irs ez tax form Maternity Clothes You cannot include in medical expenses amounts you pay for maternity clothes. Irs ez tax form Medical Savings Account (MSA) You cannot include in medical expenses amounts you contribute to an Archer MSA. Irs ez tax form You cannot include expenses you pay for with a tax-free distribution from your Archer MSA. Irs ez tax form You also cannot use other funds equal to the amount of the distribution and include the expenses. Irs ez tax form For more information on Archer MSAs, see Publication 969. Irs ez tax form Medicines and Drugs From Other Countries In general, you cannot include in your medical expenses the cost of a prescribed drug brought in (or ordered shipped) from another country. Irs ez tax form You can only include the cost of a drug that was imported legally. Irs ez tax form For example, you can include the cost of a prescribed drug the Food and Drug Administration announces can be legally imported by individuals. Irs ez tax form You can include the cost of a prescribed drug you purchase and consume in another country if the drug is legal in both the other country and the United States. Irs ez tax form Nonprescription Drugs and Medicines Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Irs ez tax form Example. Irs ez tax form Your doctor recommends that you take aspirin. Irs ez tax form Because aspirin is a drug that does not require a physician's prescription, you cannot include its cost in your medical expenses. Irs ez tax form Nutritional Supplements You cannot include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. Irs ez tax form unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Irs ez tax form Otherwise, these items are taken to maintain your ordinary good health, and are not for medical care. Irs ez tax form Personal Use Items You cannot include in medical expenses the cost of an item ordinarily used for personal, living, or family purposes unless it is used primarily to prevent or alleviate a physical or mental defect or illness. Irs ez tax form For example, the cost of a toothbrush and toothpaste is a nondeductible personal expense. Irs ez tax form In order to accommodate an individual with a physical defect, you may have to purchase an item ordinarily used as a personal, living, or family item in a special form. Irs ez tax form You can include the excess of the cost of the item in a special form over the cost of the item in normal form as a medical expense. Irs ez tax form (See Braille Books and Magazines under What Medical Expenses Are Includible, earlier. Irs ez tax form ) Swimming Lessons See Dancing Lessons , earlier. Irs ez tax form Teeth Whitening You cannot include in medical expenses amounts paid to whiten teeth. Irs ez tax form See Cosmetic Surgery , earlier. Irs ez tax form Veterinary Fees You generally cannot include veterinary fees in your medical expenses, but see Guide Dog or Other Service Animal under What Medical Expenses Are Includible, earlier. Irs ez tax form Weight-Loss Program You cannot include in medical expenses the cost of a weight-loss program if the purpose of the weight loss is the improvement of appearance, general health, or sense of well-being. Irs ez tax form You cannot include amounts you pay to lose weight unless the weight loss is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). Irs ez tax form If the weight-loss treatment is not for a specific disease diagnosed by a physician, you cannot include either the fees you pay for membership in a weight reduction group or fees for attendance at periodic meetings. Irs ez tax form Also, you cannot include membership dues in a gym, health club, or spa. Irs ez tax form You cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. Irs ez tax form See Weight-Loss Program under What Medical Expenses Are Includible, earlier. Irs ez tax form How Do You Treat Reimbursements? You can include in medical expenses only those amounts paid during the tax year for which you received no insurance or other reimbursement. Irs ez tax form Insurance Reimbursement You must reduce your total medical expenses for the year by all reimbursements for medical expenses that you receive from insurance or other sources during the year. Irs ez tax form This includes payments from Medicare. Irs ez tax form Even if a policy provides reimbursement only for certain specific medical expenses, you must use amounts you receive from that policy to reduce your total medical expenses, including those it does not reimburse. Irs ez tax form Example. Irs ez tax form You have insurance policies that cover your hospital and doctors' bills but not your nursing bills. Irs ez tax form The insurance you receive for the hospital and doctors' bills is more than their charges. Irs ez tax form In figuring your medical deduction, you must reduce the total amount you spent for medical care by the total amount of insurance you received, even if the policies do not cover some of your medical expenses. Irs ez tax form Health reimbursement arrange