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Irs Form 1040 2012

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Irs Form 1040 2012

Irs form 1040 2012 Publication 583 - Main Content Table of Contents What New Business Owners Need To Know Forms of BusinessMore information. Irs form 1040 2012 More information. Irs form 1040 2012 Exception—Community Income. Irs form 1040 2012 Exception—Qualified joint venture. Irs form 1040 2012 More information. Irs form 1040 2012 More information. Irs form 1040 2012 Identification NumbersEmployer Identification Number (EIN) Payee's Identification Number Tax Year Accounting Method Business TaxesIncome Tax Self-Employment Tax Employment Taxes Excise Taxes Depositing Taxes Information Returns PenaltiesWaiver of penalty. Irs form 1040 2012 Business ExpensesBusiness Start-Up Costs Depreciation Business Use of Your Home Car and Truck Expenses RecordkeepingWhy Keep Records? Kinds of Records To Keep How Long To Keep Records Sample Record System How to Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What New Business Owners Need To Know As a new business owner, you need to know your federal tax responsibilities. Irs form 1040 2012 Table 1 can help you learn what those responsibilities are. Irs form 1040 2012 Ask yourself each question listed in the table, then see the related discussion to find the answer. Irs form 1040 2012 In addition to knowing about federal taxes, you need to make some basic business decisions. Irs form 1040 2012 Ask yourself: What are my financial resources? What products and services will I sell? How will I market my products and services? How will I develop a strategic business plan? How will I manage my business on a day-to-day basis? How will I recruit employees? The Small Business Administration (SBA) is a federal agency that can help you answer these types of questions. Irs form 1040 2012 For information on how to contact the SBA, see How to Get More Information, later. Irs form 1040 2012 Forms of Business The most common forms of business are the sole proprietorship, partnership, and corporation. Irs form 1040 2012 When beginning a business, you must decide which form of business to use. Irs form 1040 2012 Legal and tax considerations enter into this decision. Irs form 1040 2012 Only tax considerations are discussed in this publication. Irs form 1040 2012 Your form of business determines which income tax return form you have to file. Irs form 1040 2012 See Table 2 to find out which form you have to file. Irs form 1040 2012 Sole proprietorships. Irs form 1040 2012   A sole proprietorship is an unincorporated business that is owned by one individual. Irs form 1040 2012 It is the simplest form of business organization to start and maintain. Irs form 1040 2012 The business has no existence apart from you, the owner. Irs form 1040 2012 Its liabilities are your personal liabilities. Irs form 1040 2012 You undertake the risks of the business for all assets owned, whether or not used in the business. Irs form 1040 2012 You include the income and expenses of the business on your personal tax return. Irs form 1040 2012 More information. Irs form 1040 2012   For more information on sole proprietorships, see Publication 334, Tax Guide for Small Business. Irs form 1040 2012 If you are a farmer, see Publication 225, Farmer's Tax Guide. Irs form 1040 2012 Partnerships. Irs form 1040 2012   A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Irs form 1040 2012 Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the business. Irs form 1040 2012   A partnership must file an annual information return to report the income, deductions, gains, losses, etc. Irs form 1040 2012 , from its operations, but it does not pay income tax. Irs form 1040 2012 Instead, it “passes through” any profits or losses to its partners. Irs form 1040 2012 Each partner includes his or her share of the partnership's items on his or her tax return. Irs form 1040 2012 More information. Irs form 1040 2012   For more information on partnerships, see Publication 541, Partnerships. Irs form 1040 2012 Husband and wife business. Irs form 1040 2012   If you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Irs form 1040 2012 Do not use Schedule C or C-EZ. Irs form 1040 2012 Instead, file Form 1065, U. Irs form 1040 2012 S. Irs form 1040 2012 Return of Partnership Income. Irs form 1040 2012 For more information, see Publication 541, Partnerships. Irs form 1040 2012 Exception—Community Income. Irs form 1040 2012   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Irs form 1040 2012 S. Irs form 1040 2012 possession, you can treat the business either as a sole proprietorship or a partnership. Irs form 1040 2012 The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Irs form 1040 2012 A change in your reporting position will be treated as a conversion of the entity. Irs form 1040 2012 Exception—Qualified joint venture. Irs form 1040 2012   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Irs form 1040 2012 Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Irs form 1040 2012 For an explanation of "material participation," see the Instructions for Schedule C, line G. Irs form 1040 2012   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Irs form 1040 2012 Each of you must file a separate Schedule C or C-EZ and a separate Schedule SE. Irs form 1040 2012 For more information, see Qualified Joint Venture in the Instructions for Schedule SE. Irs form 1040 2012 Corporations. Irs form 1040 2012   In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. Irs form 1040 2012 A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. Irs form 1040 2012 A corporation can also take special deductions. Irs form 1040 2012   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. Irs form 1040 2012 However, shareholders cannot deduct any loss of the corporation. Irs form 1040 2012 More information. Irs form 1040 2012   For more information on corporations, see Publication 542, Corporations. Irs form 1040 2012 S corporations. Irs form 1040 2012   An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. Irs form 1040 2012 Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. Irs form 1040 2012 On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of nonseparately stated income or loss. Irs form 1040 2012 More information. Irs form 1040 2012   For more information on S corporations, see the instructions for Form 2553, Election by a Small Business Corporation, and Form 1120S, U. Irs form 1040 2012 S. Irs form 1040 2012 Income Tax Return for an S Corporation. Irs form 1040 2012 Limited liability company. Irs form 1040 2012   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Irs form 1040 2012 The members of an LLC are not personally liable for its debts. Irs form 1040 2012 An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in regulations section 301. Irs form 1040 2012 7701-3. Irs form 1040 2012 For more information, see the instructions for Form 8832, Entity Classification Election. Irs form 1040 2012 Identification Numbers You must have a taxpayer identification number so the IRS can process your returns. Irs form 1040 2012 The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN). Irs form 1040 2012 An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000. Irs form 1040 2012 An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. Irs form 1040 2012 You must include your taxpayer identification number (SSN or EIN) on all returns and other documents you send to the IRS. Irs form 1040 2012 You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. Irs form 1040 2012 This includes returns or documents filed to report the following information. Irs form 1040 2012 Interest, dividends, royalties, etc. Irs form 1040 2012 , paid to you. Irs form 1040 2012 Any amount paid to you as a dependent care provider. Irs form 1040 2012 Certain other amounts paid to you that total $600 or more for the year. Irs form 1040 2012 If you do not furnish your identification number as required, you may be subject to penalties. Irs form 1040 2012 See Penalties, later. Irs form 1040 2012 Employer Identification Number (EIN) EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities. Irs form 1040 2012 If you don't already have an EIN, you need to get one if you: Have employees, Have a qualified retirement plan, Operate your business as a corporation or partnership, or File returns for: Employment taxes, or Excise taxes. Irs form 1040 2012 Applying for an EIN. Irs form 1040 2012   You may apply for an EIN: Online—Click on the EIN link at www. Irs form 1040 2012 irs. Irs form 1040 2012 gov/businesses/small. Irs form 1040 2012 The EIN is issued immediately once the application information is validated. Irs form 1040 2012 By telephone at 1-800-829-4933. Irs form 1040 2012 By mailing or faxing Form SS-4, Application for Employer Identification Number. Irs form 1040 2012 When to apply. Irs form 1040 2012   You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. Irs form 1040 2012 If you apply by mail, file Form SS-4 at least 4 weeks before you need an EIN. Irs form 1040 2012 If you apply by telephone or through the IRS website, you can get an EIN immediately. Irs form 1040 2012 If you apply by fax, you can get an EIN within 4 business days. Irs form 1040 2012   If you do not receive your EIN by the time a return is due, file your return anyway. Irs form 1040 2012 Write “Applied for” and the date you applied for the number in the space for the EIN. Irs form 1040 2012 Do not use your social security number as a substitute for an EIN on your tax returns. Irs form 1040 2012 More than one EIN. Irs form 1040 2012   You should have only one EIN. Irs form 1040 2012 If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Irs form 1040 2012 Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Irs form 1040 2012 The IRS will tell you which number to use. Irs form 1040 2012 More information. Irs form 1040 2012   For more information about EINs, see Publication 1635, Understanding Your EIN. Irs form 1040 2012 Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). Irs form 1040 2012 The forms used to report these payments must include the payee's identification number. Irs form 1040 2012 Employee. Irs form 1040 2012   If you have employees, you must get an SSN from each of them. Irs form 1040 2012 Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Irs form 1040 2012 If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Irs form 1040 2012 This may occur, for example, if the employee's name has changed due to marriage or divorce. Irs form 1040 2012   If your employee does not have an SSN, he or she should file Form SS-5, Application for a Social Security Card, with the SSA. Irs form 1040 2012 This form is available at SSA offices or by calling 1-800-772-1213. Irs form 1040 2012 It is also available from the SSA website at www. Irs form 1040 2012 ssa. Irs form 1040 2012 gov. Irs form 1040 2012 Other payee. Irs form 1040 2012   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Irs form 1040 2012 If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. Irs form 1040 2012   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Irs form 1040 2012 This form is available from IRS offices or by calling 1-800-829-3676. Irs form 1040 2012 It is also available from the IRS website at IRS. Irs form 1040 2012 gov. Irs form 1040 2012    If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. Irs form 1040 2012 For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Irs form 1040 2012 Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. Irs form 1040 2012 A tax year is usually 12 consecutive months. Irs form 1040 2012 There are two kinds of tax years. Irs form 1040 2012 Calendar tax year. Irs form 1040 2012 A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Irs form 1040 2012 Fiscal tax year. Irs form 1040 2012 A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Irs form 1040 2012 A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Irs form 1040 2012 If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Irs form 1040 2012 You must use a calendar tax year if: You keep no books. Irs form 1040 2012 You have no annual accounting period. Irs form 1040 2012 Your present tax year does not qualify as a fiscal year. Irs form 1040 2012 You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations. Irs form 1040 2012 For more information, see Publication 538, Accounting Periods and Methods. Irs form 1040 2012 First-time filer. Irs form 1040 2012   If you have never filed an income tax return, you can adopt either a calendar tax year or a fiscal tax year. Irs form 1040 2012 You adopt a tax year by filing your first income tax return using that tax year. Irs form 1040 2012 You have not adopted a tax year if you merely did any of the following. Irs form 1040 2012 Filed an application for an extension of time to file an income tax return. Irs form 1040 2012 Filed an application for an employer identification number. Irs form 1040 2012 Paid estimated taxes for that tax year. Irs form 1040 2012 Changing your tax year. Irs form 1040 2012   Once you have adopted your tax year, you may have to get IRS approval to change it. Irs form 1040 2012 To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. Irs form 1040 2012 You may have to pay a fee. Irs form 1040 2012 For more information, see Publication 538. Irs form 1040 2012 Accounting Method An accounting method is a set of rules used to determine when and how income and expenses are reported. Irs form 1040 2012 You choose an accounting method for your business when you file your first income tax return. Irs form 1040 2012 There are two basic accounting methods. Irs form 1040 2012 Cash method. Irs form 1040 2012 Under the cash method, you report income in the tax year you receive it. Irs form 1040 2012 You usually deduct or capitalize expenses in the tax year you pay them. Irs form 1040 2012 Accrual method. Irs form 1040 2012 Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. Irs form 1040 2012 You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year. Irs form 1040 2012 For other methods, see Publication 538. Irs form 1040 2012 If you need inventories to show income correctly, you must generally use an accrual method of accounting for purchases and sales. Irs form 1040 2012 Inventories include goods held for sale in the normal course of business. Irs form 1040 2012 They also include raw materials and supplies that will physically become a part of merchandise intended for sale. Irs form 1040 2012 Inventories are explained in Publication 538. Irs form 1040 2012 Certain small business taxpayers can use the cash method of accounting and can also account for inventoriable items as materials and supplies that are not incidental. Irs form 1040 2012 For more information, see Publication 538. Irs form 1040 2012 You must use the same accounting method to figure your taxable income and to keep your books. Irs form 1040 2012 Also, you must use an accounting method that clearly shows your income. Irs form 1040 2012 In general, any accounting method that consistently uses accounting principles suitable for your trade or business clearly shows income. Irs form 1040 2012 An accounting method clearly shows income only if it treats all items of gross income and expense the same from year to year. Irs form 1040 2012 More than one business. Irs form 1040 2012   When you own more than one business, you can use a different accounting method for each business if the method you use for each clearly shows your income. Irs form 1040 2012 You must keep a complete and separate set of books and records for each business. Irs form 1040 2012 Changing your method of accounting. Irs form 1040 2012   Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Irs form 1040 2012 A change in accounting method not only includes a change in your overall system of accounting, but also a change in the treatment of any material item. Irs form 1040 2012 For examples of changes that require approval and information on how to get approval for the change, see Publication 538. Irs form 1040 2012 Business Taxes The form of business you operate determines what taxes you must pay and how you pay them. Irs form 1040 2012 The following are the four general kinds of business taxes. Irs form 1040 2012 Income tax. Irs form 1040 2012 Self-employment tax. Irs form 1040 2012 Employment taxes. Irs form 1040 2012 Excise taxes. Irs form 1040 2012 See Table 2 for the forms you file to report these taxes. Irs form 1040 2012 You may want to get Publication 509. Irs form 1040 2012 It has tax calendars that tell you when to file returns and make tax payments. Irs form 1040 2012 Income Tax All businesses except partnerships must file an annual income tax return. Irs form 1040 2012 Partnerships file an information return. Irs form 1040 2012 Which form you use depends on how your business is organized. Irs form 1040 2012 See Table 2 to find out which return you have to file. Irs form 1040 2012 The federal income tax is a pay-as-you-go tax. Irs form 1040 2012 You must pay the tax as you earn or receive income during the year. Irs form 1040 2012 An employee usually has income tax withheld from his or her pay. Irs form 1040 2012 If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Irs form 1040 2012 If you are not required to make estimated tax payments, you may pay any tax due when you file your return. Irs form 1040 2012 Table 2. Irs form 1040 2012 Which Forms Must I File? IF you are a. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012   THEN you may be liable for. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012   Use Form. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012 Sole proprietor   Income tax   1040 and Schedule C 1 or C-EZ (Schedule F 1 for farm business)     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES     Employment taxes:         • Social security and Medicare   taxes and income tax   withholding   941 or 944 (943 for farm employees)     • Federal unemployment (FUTA)   tax   940     Excise taxes   See Excise Taxes Partnership   Annual return of income   1065     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes Partner in a partnership (individual)   Income tax   1040 and Schedule E 2     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES Corporation or S corporation   Income tax   1120 (corporation) 2  1120S (S corporation) 2     Estimated tax   1120-W (corporation only)     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes S corporation shareholder   Income tax   1040 and Schedule E 2     Estimated tax   1040-ES 1 File a separate schedule for each business. Irs form 1040 2012 2 Various other schedules may be needed. Irs form 1040 2012 Estimated tax. Irs form 1040 2012   Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments of estimated tax during the year. Irs form 1040 2012 Sole proprietors, partners, and S corporation shareholders. Irs form 1040 2012   You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Irs form 1040 2012 Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. Irs form 1040 2012 For more information, see Publication 505, Tax Withholding and Estimated Tax. Irs form 1040 2012 Corporations. Irs form 1040 2012   You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Irs form 1040 2012 Use Form 1120-W, Estimated Tax for Corporations, to figure the estimated tax. Irs form 1040 2012 You must deposit the payments as explained later under Depositing Taxes. Irs form 1040 2012 For more information, see Publication 542. Irs form 1040 2012 Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Irs form 1040 2012 Your payments of SE tax contribute to your coverage under the social security system. Irs form 1040 2012 Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Irs form 1040 2012 You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Irs form 1040 2012 Your net earnings from self-employment were $400 or more. Irs form 1040 2012 You had church employee income of $108. Irs form 1040 2012 28 or more. Irs form 1040 2012 Use Schedule SE (Form 1040) to figure your SE tax. Irs form 1040 2012 For more information, see Publication 334, Tax Guide for Small Business. Irs form 1040 2012 You can deduct a portion of your SE tax as an adjustment to income on your Form 1040. Irs form 1040 2012 The Social Security Administration (SSA) time limit for posting self-employment income. Irs form 1040 2012   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Irs form 1040 2012 If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Irs form 1040 2012 The SSA will not change its records to increase your self-employment income. Irs form 1040 2012 Employment Taxes This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. Irs form 1040 2012 Employment taxes include the following. Irs form 1040 2012 Social security and Medicare taxes. Irs form 1040 2012 Federal income tax withholding. Irs form 1040 2012 Federal unemployment (FUTA) tax. Irs form 1040 2012 If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. Irs form 1040 2012 If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. Irs form 1040 2012 These publications explain your tax responsibilities as an employer. Irs form 1040 2012 If you are not sure whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Irs form 1040 2012 That publication has information to help you determine whether an individual is an employee or an independent contractor. Irs form 1040 2012 If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. Irs form 1040 2012 An independent contractor is someone who is self-employed. Irs form 1040 2012 Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. Irs form 1040 2012 Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. Irs form 1040 2012 To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 (discussed later under Hiring Employees) and the methods described in Publication 15. Irs form 1040 2012 Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Irs form 1040 2012 Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Irs form 1040 2012 Medicare tax pays for benefits under the hospital insurance part of FICA. Irs form 1040 2012 You withhold part of these taxes from your employee's wages and you pay a part yourself. Irs form 1040 2012 To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. Irs form 1040 2012 Which form do I file?   Report these taxes on Form 941, Employer's QUARTERLY Federal Tax Return, or Form 944, Employer's ANNUAL Federal Tax Return. Irs form 1040 2012 (Farm employers use Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Irs form 1040 2012 ) Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. Irs form 1040 2012 You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. Irs form 1040 2012 You pay FUTA tax only from your own funds. Irs form 1040 2012 Employees do not pay this tax or have it withheld from their pay. Irs form 1040 2012 Which form do I file?   Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Irs form 1040 2012 See Publication 15 to find out if you can use this form. Irs form 1040 2012 Hiring Employees Have the employees you hire fill out Form I-9 and Form W-4. Irs form 1040 2012 Form I-9. Irs form 1040 2012   You must verify that each new employee is legally eligible to work in the United States. Irs form 1040 2012 Both you and the employee must complete the U. Irs form 1040 2012 S. Irs form 1040 2012 Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. Irs form 1040 2012 You can get the form from USCIS offices or from the USCIS website at www. Irs form 1040 2012 uscis. Irs form 1040 2012 gov. Irs form 1040 2012 Call the USCIS at 1-800-375-5283 for more information about your responsibilities. Irs form 1040 2012 Form W-4. Irs form 1040 2012   Each employee must fill out Form W-4, Employee's Withholding Allowance Certificate. Irs form 1040 2012 You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. Irs form 1040 2012 For more information, see Publication 15. Irs form 1040 2012 Employees claiming more than 10 withholding allowances. Irs form 1040 2012   An employer of an employee who claims more than 10 withholding allowances for wages paid can use several methods of withholding. Irs form 1040 2012 See section 16 of Publication 15. Irs form 1040 2012 Form W-2 Wage Reporting After the calendar year is over, you must furnish copies of Form W-2, Wage and Tax Statement, to each employee to whom you paid wages during the year. Irs form 1040 2012 You must also send copies to the Social Security Administration. Irs form 1040 2012 See Information Returns, later, for more information on Form W-2. Irs form 1040 2012 Excise Taxes This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following. Irs form 1040 2012 Manufacture or sell certain products. Irs form 1040 2012 Operate certain kinds of businesses. Irs form 1040 2012 Use various kinds of equipment, facilities, or products. Irs form 1040 2012 Receive payment for certain services. Irs form 1040 2012 For more information on excise taxes, see Publication 510, Excise Taxes. Irs form 1040 2012 Form 720. Irs form 1040 2012   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Irs form 1040 2012 Environmental taxes. Irs form 1040 2012 Communications and air transportation taxes. Irs form 1040 2012 Fuel taxes. Irs form 1040 2012 Tax on the first retail sale of heavy trucks, trailers, and tractors. Irs form 1040 2012 Manufacturers taxes on the sale or use of a variety of different articles. Irs form 1040 2012 Form 2290. Irs form 1040 2012   There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. Irs form 1040 2012 The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Irs form 1040 2012 Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Irs form 1040 2012 For more information, see the instructions for Form 2290. Irs form 1040 2012 Form 730. Irs form 1040 2012   If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. Irs form 1040 2012 Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive. Irs form 1040 2012 Form 11-C. Irs form 1040 2012   Use Form 11-C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal occupational tax on wagering. Irs form 1040 2012 Depositing Taxes You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. Irs form 1040 2012 Generally, taxpayers are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS). Irs form 1040 2012 Any business that has a federal tax obligation and requests a new EIN will automatically be enrolled in EFTPS. Irs form 1040 2012 Through the mail, the business will receive an EFTPS PIN package that contains instructions for activating its EFTPS enrollment. Irs form 1040 2012 Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Irs form 1040 2012 The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Irs form 1040 2012 You must give a copy of each information return you are required to file to the recipient or payer. Irs form 1040 2012 In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Irs form 1040 2012 For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Irs form 1040 2012 Form 1099-MISC. Irs form 1040 2012   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your trade or business. Irs form 1040 2012 These payments include the following items. Irs form 1040 2012 Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors. Irs form 1040 2012 Rent payments of $600 or more, other than rents paid to real estate agents. Irs form 1040 2012 Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Irs form 1040 2012 Royalty payments of $10 or more. Irs form 1040 2012 Payments to certain crew members by operators of fishing boats. Irs form 1040 2012 You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Irs form 1040 2012 Form W-2. Irs form 1040 2012   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Irs form 1040 2012 For more information on what to report on Form W-2, see the Instructions for Forms W-2 and W-3. Irs form 1040 2012 Form 8300. Irs form 1040 2012   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction or two or more related business transactions. Irs form 1040 2012 Cash includes U. Irs form 1040 2012 S. Irs form 1040 2012 and foreign coin and currency. Irs form 1040 2012 It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Irs form 1040 2012 For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Irs form 1040 2012 Penalties The law provides penalties for not filing returns or paying taxes as required. Irs form 1040 2012 Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. Irs form 1040 2012 Failure to file tax returns. Irs form 1040 2012   If you do not file your tax return by the due date, you may have to pay a penalty. Irs form 1040 2012 The penalty is based on the tax not paid by the due date. Irs form 1040 2012 See your tax return instructions for more information about this penalty. Irs form 1040 2012 Failure to pay tax. Irs form 1040 2012   If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that your taxes are not paid. Irs form 1040 2012 For more information, see your tax return instructions. Irs form 1040 2012 Failure to withhold, deposit, or pay taxes. Irs form 1040 2012   If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to a penalty of the unpaid tax, plus interest. Irs form 1040 2012 You may also be subject to penalties if you deposit the taxes late. Irs form 1040 2012 For more information, see Publication 15. Irs form 1040 2012 Failure to follow information reporting requirements. Irs form 1040 2012   The following penalties apply if you are required to file information returns. Irs form 1040 2012 For more information, see the General Instructions for Certain Information Returns. Irs form 1040 2012 Failure to file information returns. Irs form 1040 2012 A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information. Irs form 1040 2012 Failure to furnish correct payee statements. Irs form 1040 2012 A penalty applies if you do not furnish a required statement to a payee by the due date, if you do not include all required information, or if you report incorrect information. Irs form 1040 2012 Waiver of penalty. Irs form 1040 2012   These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect. Irs form 1040 2012   In addition, there is no penalty for failure to include all the required information, or for including incorrect information, on a de minimis number of information returns if you correct the errors by August 1 of the year the returns are due. Irs form 1040 2012 (To be considered de minimis, the number of returns cannot exceed the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Irs form 1040 2012 ) Failure to supply taxpayer identification number. Irs form 1040 2012   If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another person where required on a return, statement, or other document, you may be subject to a penalty of $50 for each failure. Irs form 1040 2012 You may also be subject to the $50 penalty if you do not give your taxpayer identification number to another person when it is required on a return, statement, or other document. Irs form 1040 2012 Business Expenses You can deduct business expenses on your income tax return. Irs form 1040 2012 These are the current operating costs of running your business. Irs form 1040 2012 To be deductible, a business expense must be both ordinary and necessary. Irs form 1040 2012 An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Irs form 1040 2012 A necessary expense is one that is helpful and appropriate for your business, trade, or profession. Irs form 1040 2012 An expense does not have to be indispensable to be considered necessary. Irs form 1040 2012 The following are brief explanations of some expenses that are of interest to people starting a business. Irs form 1040 2012 There are many other expenses that you may be able to deduct. Irs form 1040 2012 See your form instructions and Publication 535, Business Expenses. Irs form 1040 2012 Business Start-Up Costs Business start-up costs are the expenses you incur before you actually begin business operations. Irs form 1040 2012 Your business start-up costs will depend on the type of business you are starting. Irs form 1040 2012 They may include costs for advertising, travel, surveys, and training. Irs form 1040 2012 These costs are generally capital expenses. Irs form 1040 2012 You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). Irs form 1040 2012 You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Irs form 1040 2012 The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Irs form 1040 2012 Any remaining cost must be amortized. Irs form 1040 2012 For more information about amortizing start-up and organizational costs, see chapter 7 in Publication 535. Irs form 1040 2012 Depreciation If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Irs form 1040 2012 You must spread the cost over more than one tax year and deduct part of it each year. Irs form 1040 2012 This method of deducting the cost of business property is called depreciation. Irs form 1040 2012 Business property you must depreciate includes the following items. Irs form 1040 2012 Office furniture. Irs form 1040 2012 Buildings. Irs form 1040 2012 Machinery and equipment. Irs form 1040 2012 You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Irs form 1040 2012 This deduction is known as the “section 179 deduction. Irs form 1040 2012 ” For more information about depreciation and the section 179 deduction, see Publication 946, How To Depreciate Property. Irs form 1040 2012 Depreciation must be taken in the year it is allowable. Irs form 1040 2012 Allowable depreciation not taken in a prior year cannot be taken in the current year. Irs form 1040 2012 If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U. Irs form 1040 2012 S. Irs form 1040 2012 Individual Income Tax Return, or by changing your accounting method. Irs form 1040 2012 For more information on how to correct depreciation deductions, see chapter 1 in Publication 946. Irs form 1040 2012 Business Use of Your Home To deduct expenses related to the business use of part of your home, you must meet specific requirements. Irs form 1040 2012 Even then, your deduction may be limited. Irs form 1040 2012 To qualify to claim expenses for business use of your home, you must meet both the following tests. Irs form 1040 2012 Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use, later), Regular, For your trade or business, AND The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) you use in connection with your trade or business. Irs form 1040 2012 Exclusive use. Irs form 1040 2012   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Irs form 1040 2012 The area used for business can be a room or other separately identifiable space. Irs form 1040 2012 The space does not need to be marked off by a permanent partition. Irs form 1040 2012   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Irs form 1040 2012 Exceptions to exclusive use. Irs form 1040 2012   You do not have to meet the exclusive use test if either of the following applies. Irs form 1040 2012 You use part of your home for the storage of inventory or product samples. Irs form 1040 2012 You use part of your home as a daycare facility. Irs form 1040 2012 For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Irs form 1040 2012 Principal place of business. Irs form 1040 2012   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Irs form 1040 2012 You use it exclusively and regularly for administrative or management activities of your trade or business. Irs form 1040 2012 You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Irs form 1040 2012   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Irs form 1040 2012 The relative importance of the activities performed at each location. Irs form 1040 2012 If the relative importance factor does not determine your principal place of business, the time spent at each location. Irs form 1040 2012    If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Irs form 1040 2012 However, for other ways to qualify to deduct home office expenses, see Publication 587. Irs form 1040 2012 Which form do I file?   If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Irs form 1040 2012 If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587. Irs form 1040 2012 More information. Irs form 1040 2012   For more information about business use of your home, see Publication 587. Irs form 1040 2012 Car and Truck Expenses If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. Irs form 1040 2012 You generally can deduct either your actual expenses or the standard mileage rate. Irs form 1040 2012 Actual expenses. Irs form 1040 2012   If you deduct actual expenses, you can deduct the cost of the following items: Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Irs form 1040 2012 You can divide your expenses based on the miles driven for each purpose. Irs form 1040 2012 Example. Irs form 1040 2012 You are the sole proprietor of a flower shop. Irs form 1040 2012 You drove your van 20,000 miles during the year. Irs form 1040 2012 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use. Irs form 1040 2012 You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Irs form 1040 2012 Standard mileage rate. Irs form 1040 2012   Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Irs form 1040 2012 You can use the standard mileage rate for a vehicle you own or lease. Irs form 1040 2012 The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. Irs form 1040 2012 It is announced annually by the IRS. Irs form 1040 2012 To figure your deduction, multiply your business miles by the standard mileage rate for the year. Irs form 1040 2012    Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. Irs form 1040 2012 However, you may be able to deduct business-related parking fees, tolls, interest on your car loan, and certain state and local taxes. Irs form 1040 2012 Choosing the standard mileage rate. Irs form 1040 2012   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Irs form 1040 2012 In later years, you can choose to use either the standard mileage rate or actual expenses. Irs form 1040 2012   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Irs form 1040 2012 Additional information. Irs form 1040 2012   For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Irs form 1040 2012 Recordkeeping This part explains why you must keep records, what kinds of records you must keep, and how to keep them. Irs form 1040 2012 It also explains how long you must keep your records for federal tax purposes. Irs form 1040 2012 A sample recordkeeping system is illustrated at the end of this part. Irs form 1040 2012 Why Keep Records? Everyone in business must keep records. Irs form 1040 2012 Good records will help you do the following. Irs form 1040 2012 Monitor the progress of your business. Irs form 1040 2012   You need good records to monitor the progress of your business. Irs form 1040 2012 Records can show whether your business is improving, which items are selling, or what changes you need to make. Irs form 1040 2012 Good records can increase the likelihood of business success. Irs form 1040 2012 Prepare your financial statements. Irs form 1040 2012   You need good records to prepare accurate financial statements. Irs form 1040 2012 These include income (profit and loss) statements and balance sheets. Irs form 1040 2012 These statements can help you in dealing with your bank or creditors and help you manage your business. Irs form 1040 2012 An income statement shows the income and expenses of the business for a given period of time. Irs form 1040 2012 A balance sheet shows the assets, liabilities, and your equity in the business on a given date. Irs form 1040 2012 Identify source of receipts. Irs form 1040 2012   You will receive money or property from many sources. Irs form 1040 2012 Your records can identify the source of your receipts. Irs form 1040 2012 You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. Irs form 1040 2012 Keep track of deductible expenses. Irs form 1040 2012   You may forget expenses when you prepare your tax return unless you record them when they occur. Irs form 1040 2012 Prepare your tax returns. Irs form 1040 2012   You need good records to prepare your tax returns. Irs form 1040 2012 These records must support the income, expenses, and credits you report. Irs form 1040 2012 Generally, these are the same records you use to monitor your business and prepare your financial statements. Irs form 1040 2012 Support items reported on tax returns. Irs form 1040 2012   You must keep your business records available at all times for inspection by the IRS. Irs form 1040 2012 If the IRS examines any of your tax returns, you may be asked to explain the items reported. Irs form 1040 2012 A complete set of records will speed up the examination. Irs form 1040 2012 Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Irs form 1040 2012 You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. Irs form 1040 2012 The business you are in affects the type of records you need to keep for federal tax purposes. Irs form 1040 2012 You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Irs form 1040 2012 See Accounting Method, earlier. Irs form 1040 2012 If you are in more than one business, you should keep a complete and separate set of records for each business. Irs form 1040 2012 A corporation should keep minutes of board of directors' meetings. Irs form 1040 2012 Your recordkeeping system should include a summary of your business transactions. Irs form 1040 2012 This summary is ordinarily made in your books (for example, accounting journals and ledgers). Irs form 1040 2012 Your books must show your gross income, as well as your deductions and credits. Irs form 1040 2012 For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. Irs form 1040 2012 In addition, you must keep supporting documents, explained later. Irs form 1040 2012 Electronic records. Irs form 1040 2012   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Irs form 1040 2012 When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Irs form 1040 2012 An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Irs form 1040 2012 The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Irs form 1040 2012 All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Irs form 1040 2012 Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Irs form 1040 2012   The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Irs form 1040 2012 You still have the responsibility of retaining any other books and records that are required to be retained. Irs form 1040 2012   The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Irs form 1040 2012 This test is not considered an examination and the results must be shared with you. Irs form 1040 2012 If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Irs form 1040 2012 If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copy books and records in a manner that allows you and the IRS to determine your correct tax. Irs form 1040 2012 For details on electronic storage system requirements, see Revenue Procedure 97-22, available in Internal Revenue Bulletin 1997-13. Irs form 1040 2012 Supporting Documents Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Irs form 1040 2012 Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Irs form 1040 2012 These documents contain information you need to record in your books. Irs form 1040 2012 It is important to keep these documents because they support the entries in your books and on your tax return. Irs form 1040 2012 Keep them in an orderly fashion and in a safe place. Irs form 1040 2012 For instance, organize them by year and type of income or expense. Irs form 1040 2012 Gross receipts. Irs form 1040 2012   Gross receipts are the income you receive from your business. Irs form 1040 2012 You should keep supporting documents that show the amounts and sources of your gross receipts. Irs form 1040 2012 Documents that show gross receipts include the following. Irs form 1040 2012 Cash register tapes. Irs form 1040 2012 Bank deposit slips. Irs form 1040 2012 Receipt books. Irs form 1040 2012 Invoices. Irs form 1040 2012 Credit card charge slips. Irs form 1040 2012 Forms 1099-MISC. Irs form 1040 2012 Purchases. Irs form 1040 2012   Purchases are the items you buy and resell to customers. Irs form 1040 2012 If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Irs form 1040 2012 Your supporting documents should show the amount paid and that the amount was for purchases. Irs form 1040 2012 Documents for purchases include the following. Irs form 1040 2012 Canceled checks. Irs form 1040 2012 Cash register tape receipts. Irs form 1040 2012 Credit card sales slips. Irs form 1040 2012 Invoices. Irs form 1040 2012 These records will help you determine the value of your inventory at the end of the year. Irs form 1040 2012 See Publication 538 for information on methods for valuing inventory. Irs form 1040 2012 Expenses. Irs form 1040 2012   Expenses are the costs you incur (other than purchases) to carry on your business. Irs form 1040 2012 Your supporting documents should show the amount paid and that the amount was for a business expense. Irs form 1040 2012 Documents for expenses include the following. Irs form 1040 2012 Canceled checks. Irs form 1040 2012 Cash register tapes. Irs form 1040 2012 Account statements. Irs form 1040 2012 Credit card sales slips. Irs form 1040 2012 Invoices. Irs form 1040 2012 Petty cash slips for small cash payments. Irs form 1040 2012    A petty cash fund allows you to make small payments without having to write checks for small amounts. Irs form 1040 2012 Each time you make a payment from this fund, you should make out a petty cash slip and attach it to your receipt as proof of payment. Irs form 1040 2012 Travel, transportation, entertainment, and gift expenses. Irs form 1040 2012   Specific recordkeeping rules apply to these expenses. Irs form 1040 2012 For more information, see Publication 463. Irs form 1040 2012 Employment taxes. Irs form 1040 2012   There are specific employment tax records you must keep. Irs form 1040 2012 For a list, see Publication 15. Irs form 1040 2012 Assets. Irs form 1040 2012   Assets are the property, such as machinery and furniture you own and use in your business. Irs form 1040 2012 You must keep records to verify certain information about your business assets. Irs form 1040 2012 You need records to figure the annual depreciation and the gain or loss when you sell the assets. Irs form 1040 2012 Your records should show the following information. Irs form 1040 2012 When and how you acquired the asset. Irs form 1040 2012 Purchase price. Irs form 1040 2012 Cost of any improvements. Irs form 1040 2012 Section 179 deduction taken. Irs form 1040 2012 Deductions taken for depreciation. Irs form 1040 2012 Deductions taken for casualty losses, such as losses resulting from fires or storms. Irs form 1040 2012 How you used the asset. Irs form 1040 2012 When and how you disposed of the asset. Irs form 1040 2012 Selling price. Irs form 1040 2012 Expenses of sale. Irs form 1040 2012   The following documents may show this information. Irs form 1040 2012 Purchase and sales invoices. Irs form 1040 2012 Real estate closing statements. Irs form 1040 2012 Canceled checks. Irs form 1040 2012 What if I don't have a canceled check?   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Irs form 1040 2012 These include account statements prepared for the financial institution by a third party. Irs form 1040 2012 These account statements must be highly legible. Irs form 1040 2012 The following table lists acceptable account statements. Irs form 1040 2012  IF payment is by. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012 THEN the statement must show the. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012 Check Check number. Irs form 1040 2012 Amount. Irs form 1040 2012 Payee's name. Irs form 1040 2012 Date the check amount was posted to the account by the financial institution. Irs form 1040 2012 Electronic funds transfer Amount transferred. Irs form 1040 2012 Payee's name. Irs form 1040 2012 Date the transfer was posted to the account by the financial institution. Irs form 1040 2012 Credit card Amount charged. Irs form 1040 2012 Payee's name. Irs form 1040 2012 Transaction date. Irs form 1040 2012    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Irs form 1040 2012 You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Irs form 1040 2012 Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. Irs form 1040 2012 (Your business transactions are shown on the supporting documents just discussed. Irs form 1040 2012 ) Business transactions are ordinarily summarized in books called journals and ledgers. Irs form 1040 2012 You can buy them at your local stationery or office supply store. Irs form 1040 2012 A journal is a book where you record each business transaction shown on your supporting documents. Irs form 1040 2012 You may have to keep separate journals for transactions that occur frequently. Irs form 1040 2012 A ledger is a book that contains the totals from all of your journals. Irs form 1040 2012 It is organized into different accounts. Irs form 1040 2012 Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. Irs form 1040 2012 For example, a recordkeeping system for a small business might include the following items. Irs form 1040 2012 Business checkbook. Irs form 1040 2012 Daily summary of cash receipts. Irs form 1040 2012 Monthly summary of cash receipts. Irs form 1040 2012 Check disbursements journal. Irs form 1040 2012 Depreciation worksheet. Irs form 1040 2012 Employee compensation record. Irs form 1040 2012 The business checkbook is explained next. Irs form 1040 2012 The other items are illustrated later under Sample Record System. Irs form 1040 2012 The system you use to record business transactions will be more effective if you follow good recordkeeping practices. Irs form 1040 2012 For example, record expenses when they occur, and identify the source of recorded receipts. Irs form 1040 2012 Generally, it is best to record transactions on a daily basis. Irs form 1040 2012 Business checkbook. Irs form 1040 2012   One of the first things you should do when you start a business is open a business checking account. Irs form 1040 2012 You should keep your business account separate from your personal checking account. Irs form 1040 2012   The business checkbook is your basic source of information for recording your business expenses. Irs form 1040 2012 You should deposit all daily receipts in your business checking account. Irs form 1040 2012 You should check your account for errors by reconciling it. Irs form 1040 2012 See Reconciling the checking account, later. Irs form 1040 2012   Consider using a checkbook that allows enough space to identify the source of deposits as business income, personal funds, or loans. Irs form 1040 2012 You should also note on the deposit slip the source of the deposit and keep copies of all slips. Irs form 1040 2012   You should make all payments by check to document business expenses. Irs form 1040 2012 Write checks payable to yourself only when making withdrawals from your business for personal use. Irs form 1040 2012 Avoid writing checks payable to cash. Irs form 1040 2012 If you must write a check for cash to pay a business expense, include the receipt for the cash payment in your records. Irs form 1040 2012 If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment. Irs form 1040 2012    Use the business account for business purposes only. Irs form 1040 2012 Indicate the source of deposits and the type of expense in the checkbook. Irs form 1040 2012 Reconciling the checking account. Irs form 1040 2012   When you receive your bank statement, make sure the statement, your checkbook, and your books agree. Irs form 1040 2012 The statement balance may not agree with the balance in your checkbook and books if the statement: Includes bank charges you did not enter in your books and subtract from your checkbook balance, or Does not include deposits made after the statement date or checks that did not clear your account before the statement date. Irs form 1040 2012   By reconciling your checking account, you will: Verify how much money you have in the account, Make sure that your checkbook and books reflect all bank charges and the correct balance in the checking account, and Correct any errors in your bank statement, checkbook, and books. Irs form 1040 2012    You should reconcile your checking account each month. Irs form 1040 2012     Before you reconcile your monthly bank statement, check your own figures. Irs form 1040 2012 Begin with the balance shown in your checkbook at the end of the previous month. Irs form 1040 2012 To this balance, add the total cash deposited during the month and subtract the total cash disbursements. Irs form 1040 2012   After checking your figures, the result should agree with your checkbook balance at the end of the month. Irs form 1040 2012 If the result does not agree, you may have made an error in recording a check or deposit. Irs form 1040 2012 You can find the error by doing the following. Irs form 1040 2012 Adding the amounts on your check stubs and comparing that total with the total in the “amount of check” column in your check disbursements journal. Irs form 1040 2012 If the totals do not agree, check the individual amounts to see if an error was made in your check stub record or in the related entry in your check disbursements journal. Irs form 1040 2012 Adding the deposit amounts in your checkbook. Irs form 1040 2012 Compare that total with the monthly total in your cash receipt book, if you have one. Irs form 1040 2012 If the totals do not agree, check the individual amounts to find any errors. Irs form 1040 2012   If your checkbook and journal entries still disagree, then refigure the running balance in your checkbook to make sure additions and subtractions are correct. Irs form 1040 2012   When your checkbook balance agrees with the balance figured from the journal entries, you may begin reconciling your checkbook with the bank statement. Irs form 1040 2012 Many banks print a reconciliation worksheet on the back of the statement. Irs form 1040 2012   To reconcile your account, follow these steps. Irs form 1040 2012 Compare the deposits listed on the bank statement with the deposits shown in your checkbook. Irs form 1040 2012 Note all differences in the dollar amounts. Irs form 1040 2012 Compare each canceled check, including both check number and dollar amount, with the entry in your checkbook. Irs form 1040 2012 Note all differences in the dollar amounts. Irs form 1040 2012 Mark the check number in the checkbook as having cleared the bank. Irs form 1040 2012 After accounting for all checks returned by the bank, those not marked in your checkbook are your outstanding checks. Irs form 1040 2012 Prepare a bank reconciliation. Irs form 1040 2012 One is illustrated later under Sample Record System. Irs form 1040 2012 Update your checkbook and journals for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly. Irs form 1040 2012 At this point, the adjusted bank statement balance should equal your adjusted checkbook balance. Irs form 1040 2012 If you still have differences, check the previous steps to find the errors. Irs form 1040 2012   Table 3. Irs form 1040 2012 Period of Limitations IF you. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012   THEN the period is. Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012 1. Irs form 1040 2012 Owe additional tax and situations (2), (3), and (4), below, do not apply to you   3 years 2. Irs form 1040 2012 Do not report income that you should report and it is more than 25% of the gross income shown on the return   6 years 3. Irs form 1040 2012 File a fraudulent return   Not limited 4. Irs form 1040 2012 Do not file a return   Not limited 5. Irs form 1040 2012 File a claim for credit or refund after you filed your return   Later of: 3 years or  2 years after tax   was paid 6. Irs form 1040 2012 File a claim for a loss from worthless securities or a bad debt deduction   7 years Bookkeeping System You must decide whether to use a single-entry or a double-entry bookkeeping system. Irs form 1040 2012 The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. Irs form 1040 2012 You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. Irs form 1040 2012 Single-entry. Irs form 1040 2012   A single-entry system is based on the income statement (profit or loss statement). Irs form 1040 2012 It can be a simple and practical system if you are starting a small business. Irs form 1040 2012 The system records the flow of income and expenses through the use of: A daily summary of cash receipts, and Monthly summaries of cash receipts and disbursements. Irs form 1040 2012 Double-entry. Irs form 1040 2012   A double-entry bookkeeping system uses journals and ledgers. Irs form 1040 2012 Transactions are first entered in a journal and then posted to ledger accounts. Irs form 1040 2012 These accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess of assets over liabilities). Irs form 1040 2012 You close income and expense accounts at the end of each tax year. Irs form 1040 2012 You keep asset, liability, and net worth accounts open on a permanent basis. Irs form 1040 2012   In the double-entry system, each account has a left side for debits and a right side for credits. Irs form 1040 2012 It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. Irs form 1040 2012   Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. Irs form 1040 2012 If the amounts do not balance, you have made an error and you must find and correct it. Irs form 1040 2012   An example of a journal entry exhibiting a payment of rent in October is shown next. Irs form 1040 2012 General Journal Date Description of Entry Debit  Credit Oct. Irs form 1040 2012 5 Rent expense 780. Irs form 1040 2012 00     Cash   780. Irs form 1040 2012 00                 Computerized System There are computer software packages you can use for recordkeeping. Irs form 1040 2012 They can be purchased in many retail stores. Irs form 1040 2012 These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. Irs form 1040 2012 If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. Irs form 1040 2012 To meet this qualification, the machine-sensible records must reconcile with your books and return. Irs form 1040 2012 These records must provide enough detail to identify the underlying source documents. Irs form 1040 2012 You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. Irs form 1040 2012 This documentation must be sufficiently detailed to show all of the following items. Irs form 1040 2012 Functions being performed as the data flows through the system. Irs form 1040 2012 Controls used to ensure accurate and reliable processing. Irs form 1040 2012 Controls used to prevent the unauthorized addition, alteration, or deletion of retained records. Irs form 1040 2012 Charts of accounts and detailed account descriptions. Irs form 1040 2012 See Revenue Procedure 98-25 in Cumulative Bulletin 1998-1 for more information. Irs form 1040 2012 How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Irs form 1040 2012 Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. Irs form 1040 2012 The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. Irs form 1040 2012 Table 3 contains the periods of limitations that apply to income tax returns. Irs form 1040 2012 Unless otherwise stated, the years refer to the period after the return was filed. Irs form 1040 2012 Returns filed before the due date are treated as filed on the due date. Irs form 1040 2012 Keep copies of your filed tax returns. Irs form 1040 2012 They help in preparing future tax returns and making computations if you file an amended return. Irs form 1040 2012 Employment taxes. Irs form 1040 2012   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Irs form 1040 2012 For more information about recordkeeping for employment taxes, see Publication 15. Irs form 1040 2012 Assets. Irs form 1040 2012   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Irs form 1040 2012 You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Irs form 1040 2012   Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. Irs form 1040 2012 You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Irs form 1040 2012 Records for nontax purposes. Irs form 1040 2012   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Irs form 1040 2012 For example, your insurance company or creditors may require you to keep them longer than the IRS does. Irs form 1040 2012 Sample Record System This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. Irs form 1040 2012 Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. Irs form 1040 2012 These sample records should not be viewed as a recommendation of how to keep your records. Irs form 1040 2012 They are intended only to show how one business keeps its records. Irs form 1040 2012 1. Irs form 1040 2012 Daily Summary of Cash Receipts This summary is a record of cash sales for the day. Irs form 1040 2012 It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. Irs form 1040 2012 Henry takes the cash sales entry from his cash register tape. Irs form 1040 2012 If he had no cash register, he would simply total his cash sale slips and any other cash received that day. Irs form 1040 2012 He carries the total receipts shown in this summary for January 3 ($267. Irs form 1040 2012 80), including cash sales ($263. Irs form 1040 2012 60) and sales tax ($4. Irs form 1040 2012 20), to the Monthly Summary of Cash Receipts. Irs form 1040 2012 Petty cash fund. Irs form 1040 2012   Henry uses a petty cash fund to make small payments without having to write checks for small amounts. Irs form 1040 2012 Each time he makes a payment from this fund, he makes out a petty cash slip and attaches it to his receipt as proof of payment. Irs form 1040 2012 He sets up a fixed amount ($50) in his petty cash fund. Irs form 1040 2012 The total of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. Irs form 1040 2012 When the totals on the petty cash slips approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the outstanding slips. Irs form 1040 2012 (See the Check Disbursements Journal entry for check number 92. Irs form 1040 2012 ) This restores the fund to its fixed amount of $50. Irs form 1040 2012 He then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal. Irs form 1040 2012 2. Irs form 1040 2012 Monthly Summary of Cash Receipts This shows the income activity for the month. Irs form 1040 2012 Henry carries the total monthly net sales shown in this summary for January ($4,865. Irs form 1040 2012 05) to his Annual Summary. Irs form 1040 2012 To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. Irs form 1040 2012 He cannot take a deduction for sales tax turned over to the state because he only collected the tax. Irs form 1040 2012 He does not include the tax in his income. Irs form 1040 2012 3. Irs form 1040 2012 Check Disbursements Journal Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. Irs form 1040 2012 All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. Irs form 1040 2012 Frequent expenses have their own headings across the sheet. Irs form 1040 2012 He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Irs form 1040 2012 Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. Irs form 1040 2012 Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. Irs form 1040 2012 If he did, he would record them in the journal, even though he could not deduct them as business expenses. Irs form 1040 2012 Henry carries the January total of expenses for materials ($1,083. Irs form 1040 2012 50) to the Annual Summary. Irs form 1040 2012 Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc. Irs form 1040 2012 , in the appropriate columns of that summary. Irs form 1040 2012 4. Irs form 1040 2012 Employee Compensation Record This record shows the following information. Irs form 1040 2012 The number of hours Henry's employee worked in a pay period. Irs form 1040 2012 The employee's total pay for the period. Irs form 1040 2012 The deductions Henry withheld in figuring the employee's net pay. Irs form 1040 2012 The monthly gross payroll. Irs form 1040 2012 Henry carries the January gross payroll ($520) to the Annual Summary. Irs form 1040 2012 5. Irs form 1040 2012 Annual Summary This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. Irs form 1040 2012 He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. Irs form 1040 2012 He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. Irs form 1040 2012 As in the journal, he keeps each major expense in a separate column. Irs form 1040 2012 Henry carries the cash receipts total shown in the annual summary ($47,440. Irs form 1040 2012 9
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The Irs Form 1040 2012

Irs form 1040 2012 2. Irs form 1040 2012   Filing Status Table of Contents What's New Introduction Useful Items - You may want to see: Marital StatusDivorced persons. Irs form 1040 2012 Divorce and remarriage. Irs form 1040 2012 Annulled marriages. Irs form 1040 2012 Head of household or qualifying widow(er) with dependent child. Irs form 1040 2012 Considered married. Irs form 1040 2012 Same-sex marriage. Irs form 1040 2012 Spouse died during the year. Irs form 1040 2012 Married persons living apart. Irs form 1040 2012 Single Married Filing JointlyFiling a Joint Return Married Filing SeparatelySpecial Rules Head of HouseholdConsidered Unmarried Keeping Up a Home Qualifying Person Qualifying Widow(er) With Dependent Child What's New Filing status for same-sex married couples. Irs form 1040 2012  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Irs form 1040 2012 See Same-sex marriage under Marital Status, later. Irs form 1040 2012 Introduction This chapter helps you determine which filing status to use. Irs form 1040 2012 There are five filing statuses. Irs form 1040 2012 Single. Irs form 1040 2012 Married Filing Jointly. Irs form 1040 2012 Married Filing Separately. Irs form 1040 2012 Head of Household. Irs form 1040 2012 Qualifying Widow(er) With Dependent Child. Irs form 1040 2012 If more than one filing status applies to you, choose the one that will give you the lowest tax. Irs form 1040 2012 You must determine your filing status before you can determine whether you must file a tax return (chapter 1), your standard deduction (chapter 20), and your tax (chapter 30). Irs form 1040 2012 You also use your filing status to determine whether you are eligible to claim certain deductions and credits. Irs form 1040 2012 Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 519 U. Irs form 1040 2012 S. Irs form 1040 2012 Tax Guide for Aliens 555 Community Property Marital Status In general, your filing status depends on whether you are considered unmarried or married. Irs form 1040 2012 Unmarried persons. Irs form 1040 2012   You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree. Irs form 1040 2012 State law governs whether you are married or legally separated under a divorce or separate maintenance decree. Irs form 1040 2012 Divorced persons. Irs form 1040 2012   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year. Irs form 1040 2012 Divorce and remarriage. Irs form 1040 2012   If you obtain a divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years. Irs form 1040 2012 Annulled marriages. Irs form 1040 2012    If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. Irs form 1040 2012 You must file Form 1040X, Amended U. Irs form 1040 2012 S. Irs form 1040 2012 Individual Income Tax Return, claiming single or head of household status for all tax years that are affected by the annulment and are not closed by the statute of limitations for filing a tax return. Irs form 1040 2012 Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. Irs form 1040 2012 If you filed your original return early (for example, March 1), your return is considered filed on the due date (generally April 15). Irs form 1040 2012 However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it on July 1, your return is considered filed on July 1. Irs form 1040 2012 Head of household or qualifying widow(er) with dependent child. Irs form 1040 2012   If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child. Irs form 1040 2012 See Head of Household and Qualifying Widow(er) With Dependent Child to see if you qualify. Irs form 1040 2012 Married persons. Irs form 1040 2012   If you are considered married, you and your spouse can file a joint return or separate returns. Irs form 1040 2012 Considered married. Irs form 1040 2012   You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests. Irs form 1040 2012 You are married and living together as a married couple. Irs form 1040 2012 You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began. Irs form 1040 2012 You are married and living apart, but not legally separated under a decree of divorce or separate maintenance. Irs form 1040 2012 You are separated under an interlocutory (not final) decree of divorce. Irs form 1040 2012 Same-sex marriage. Irs form 1040 2012   For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Irs form 1040 2012 The term “spouse” includes an individual married to a person of the same sex if the couple is lawfully married under state (or foreign) law. Irs form 1040 2012 However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered a marriage under state (or foreign) law are not considered married for federal tax purposes. Irs form 1040 2012 For more details, see Publication 501. Irs form 1040 2012 Spouse died during the year. Irs form 1040 2012   If your spouse died during the year, you are considered married for the whole year for filing status purposes. Irs form 1040 2012   If you did not remarry before the end of the tax year, you can file a joint return for yourself and your deceased spouse. Irs form 1040 2012 For the next 2 years, you may be entitled to the special benefits described later under Qualifying Widow(er) With Dependent Child . Irs form 1040 2012   If you remarried before the end of the tax year, you can file a joint return with your new spouse. Irs form 1040 2012 Your deceased spouse's filing status is married filing separately for that year. Irs form 1040 2012 Married persons living apart. Irs form 1040 2012   If you live apart from your spouse and meet certain tests, you may be able to file as head of household even if you are not divorced or legally separated. Irs form 1040 2012 If you qualify to file as head of household instead of married filing separately, your standard deduction will be higher. Irs form 1040 2012 Also, your tax may be lower, and you may be able to claim the earned income credit. Irs form 1040 2012 See Head of Household , later. Irs form 1040 2012 Single Your filing status is single if you are considered unmarried and you do not qualify for another filing status. Irs form 1040 2012 To determine your marital status, see Marital Status , earlier. Irs form 1040 2012 Widow(er). Irs form 1040 2012   Your filing status may be single if you were widowed before January 1, 2013, and did not remarry before the end of 2013. Irs form 1040 2012 You may, however, be able to use another filing status that will give you a lower tax. Irs form 1040 2012 See Head of Household and Qualifying Widow(er) With Dependent Child , later, to see if you qualify. Irs form 1040 2012 How to file. Irs form 1040 2012   You can file Form 1040. Irs form 1040 2012 If you have taxable income of less than $100,000, you may be able to file Form 1040A. Irs form 1040 2012 If, in addition, you have no dependents, and are under 65 and not blind, and meet other requirements, you can file Form 1040EZ. Irs form 1040 2012 If you file Form 1040A or Form 1040, show your filing status as single by checking the box on line 1. Irs form 1040 2012 Use the Single column of the Tax Table or Section A of the Tax Computation Worksheet to figure your tax. Irs form 1040 2012 Married Filing Jointly You can choose married filing jointly as your filing status if you are considered married and both you and your spouse agree to file a joint return. Irs form 1040 2012 On a joint return, you and your spouse report your combined income and deduct your combined allowable expenses. Irs form 1040 2012 You can file a joint return even if one of you had no income or deductions. Irs form 1040 2012 If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. Irs form 1040 2012 Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses. Irs form 1040 2012 If you and your spouse each have income, you may want to figure your tax both on a joint return and on separate returns (using the filing status of married filing separately). Irs form 1040 2012 You can choose the method that gives the two of you the lower combined tax. Irs form 1040 2012 How to file. Irs form 1040 2012   If you file as married filing jointly, you can use Form 1040. Irs form 1040 2012 If you and your spouse have taxable income of less than $100,000, you may be able to file Form 1040A. Irs form 1040 2012 If, in addition, you and your spouse have no dependents, are both under 65 and not blind, and meet other requirements, you can file Form 1040EZ. Irs form 1040 2012 If you file Form 1040 or Form 1040A, show this filing status by checking the box on line 2. Irs form 1040 2012 Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. Irs form 1040 2012 Spouse died. Irs form 1040 2012   If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly as your filing status. Irs form 1040 2012 See Spouse died during the year under Marital Status, earlier, for more information. Irs form 1040 2012   If your spouse died in 2014 before filing a 2013 return, you can choose married filing jointly as your filing status on your 2013 return. Irs form 1040 2012 Divorced persons. Irs form 1040 2012   If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year and you cannot choose married filing jointly as your filing status. Irs form 1040 2012 Filing a Joint Return Both you and your spouse must include all of your income, exemptions, and deductions on your joint return. Irs form 1040 2012 Accounting period. Irs form 1040 2012   Both of you must use the same accounting period, but you can use different accounting methods. Irs form 1040 2012 See Accounting Periods and Accounting Methods in chapter 1. Irs form 1040 2012 Joint responsibility. Irs form 1040 2012   Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. Irs form 1040 2012 This means that if one spouse does not pay the tax due, the other may have to. Irs form 1040 2012 Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. Irs form 1040 2012 One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse. Irs form 1040 2012 You may want to file separately if: You believe your spouse is not reporting all of his or her income, or You do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does not pay enough estimated tax. Irs form 1040 2012 Divorced taxpayer. Irs form 1040 2012   You may be held jointly and individually responsible for any tax, interest, and penalties due on a joint return filed before your divorce. Irs form 1040 2012 This responsibility may apply even if your divorce decree states that your former spouse will be responsible for any amounts due on previously filed joint returns. Irs form 1040 2012 Relief from joint responsibility. Irs form 1040 2012   In some cases, one spouse may be relieved of joint responsibility for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Irs form 1040 2012 You can ask for relief no matter how small the liability. Irs form 1040 2012   There are three types of relief available. Irs form 1040 2012 Innocent spouse relief. Irs form 1040 2012 Separation of liability (available only to joint filers who are divorced, widowed, legally separated, or have not lived together for the 12 months ending on the date the election for this relief is filed). Irs form 1040 2012 Equitable relief. Irs form 1040 2012    You must file Form 8857, Request for Innocent Spouse Relief, to request relief from joint responsibility. Irs form 1040 2012 Publication 971, Innocent Spouse Relief, explains these kinds of relief and who may qualify for them. Irs form 1040 2012 Signing a joint return. Irs form 1040 2012   For a return to be considered a joint return, both spouses generally must sign the return. Irs form 1040 2012 Spouse died before signing. Irs form 1040 2012   If your spouse died before signing the return, the executor or administrator must sign the return for your spouse. Irs form 1040 2012 If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse and enter “Filing as surviving spouse” in the area where you sign the return. Irs form 1040 2012 Spouse away from home. Irs form 1040 2012   If your spouse is away from home, you should prepare the return, sign it, and send it to your spouse to sign so that it can be filed on time. Irs form 1040 2012 Injury or disease prevents signing. Irs form 1040 2012   If your spouse cannot sign because of disease or injury and tells you to sign for him or her, you can sign your spouse's name in the proper space on the return followed by the words “By (your name), Husband (or Wife). Irs form 1040 2012 ” Be sure to also sign in the space provided for your signature. Irs form 1040 2012 Attach a dated statement, signed by you, to the return. Irs form 1040 2012 The statement should include the form number of the return you are filing, the tax year, and the reason your spouse cannot sign, and should state that your spouse has agreed to your signing for him or her. Irs form 1040 2012 Signing as guardian of spouse. Irs form 1040 2012   If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian. Irs form 1040 2012 Spouse in combat zone. Irs form 1040 2012   You can sign a joint return for your spouse if your spouse cannot sign because he or she is serving in a combat zone (such as the Persian Gulf Area, Serbia, Montenegro, Albania, or Afghanistan), even if you do not have a power of attorney or other statement. Irs form 1040 2012 Attach a signed statement to your return explaining that your spouse is serving in a combat zone. Irs form 1040 2012 For more information on special tax rules for persons who are serving in a combat zone, or who are in missing status as a result of serving in a combat zone, see Publication 3, Armed Forces' Tax Guide. Irs form 1040 2012 Other reasons spouse cannot sign. Irs form 1040 2012    If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given a valid power of attorney (a legal document giving you permission to act for your spouse). Irs form 1040 2012 Attach the power of attorney (or a copy of it) to your tax return. Irs form 1040 2012 You can use Form 2848, Power of Attorney and Declaration of Representative. Irs form 1040 2012 Nonresident alien or dual-status alien. Irs form 1040 2012   Generally, a married couple cannot file a joint return if either one is a nonresident alien at any time during the tax year. Irs form 1040 2012 However, if one spouse was a nonresident alien or dual-status alien who was married to a U. Irs form 1040 2012 S. Irs form 1040 2012 citizen or resident alien at the end of the year, the spouses can choose to file a joint return. Irs form 1040 2012 If you do file a joint return, you and your spouse are both treated as U. Irs form 1040 2012 S. Irs form 1040 2012 residents for the entire tax year. Irs form 1040 2012 See chapter 1 of Publication 519. Irs form 1040 2012 Married Filing Separately You can choose married filing separately as your filing status if you are married. Irs form 1040 2012 This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax than filing a joint return. Irs form 1040 2012 If you and your spouse do not agree to file a joint return, you must use this filing status unless you qualify for head of household status, discussed later. Irs form 1040 2012 You may be able to choose head of household filing status if you are considered unmarried because you live apart from your spouse and meet certain tests (explained later, under Head of Household ). Irs form 1040 2012 This can apply to you even if you are not divorced or legally separated. Irs form 1040 2012 If you qualify to file as head of household, instead of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other credits, and your standard deduction will be higher. Irs form 1040 2012 The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions. Irs form 1040 2012 See Head of Household , later, for more information. Irs form 1040 2012 You will generally pay more combined tax on separate returns than you would on a joint return for the reasons listed under Special Rules, later. Irs form 1040 2012 However, unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns). Irs form 1040 2012 This way you can make sure you are using the filing status that results in the lowest combined tax. Irs form 1040 2012 When figuring the combined tax of a married couple, you may want to consider state taxes as well as federal taxes. Irs form 1040 2012 How to file. Irs form 1040 2012   If you file a separate return, you generally report only your own income, exemptions, credits, and deductions. Irs form 1040 2012 You can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another person. Irs form 1040 2012 You can file Form 1040. Irs form 1040 2012 If your taxable income is less than $100,000, you may be able to file Form 1040A. Irs form 1040 2012 Select this filing status by checking the box on line 3 of either form. Irs form 1040 2012 Enter your spouse's full name and SSN or ITIN in the spaces provided. Irs form 1040 2012 If your spouse does not have and is not required to have an SSN or ITIN, enter “NRA” in the space for your spouse's SSN. Irs form 1040 2012 Use the Married filing separately column of the Tax Table or Section C of the Tax Computation Worksheet to figure your tax. Irs form 1040 2012 Special Rules If you choose married filing separately as your filing status, the following special rules apply. Irs form 1040 2012 Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for. Irs form 1040 2012   Your tax rate generally is higher than on a joint return. Irs form 1040 2012 Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return. Irs form 1040 2012 You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). Irs form 1040 2012 If you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. Irs form 1040 2012 For more information about these expenses, the credit, and the exclusion, see chapter 32. Irs form 1040 2012 You cannot take the earned income credit. Irs form 1040 2012 You cannot take the exclusion or credit for adoption expenses in most cases. Irs form 1040 2012 You cannot take the education credits (the American opportunity credit and lifetime learning credit), the deduction for student loan interest, or the tuition and fees deduction. Irs form 1040 2012 You cannot exclude any interest income from qualified U. Irs form 1040 2012 S. Irs form 1040 2012 savings bonds you used for higher education expenses. Irs form 1040 2012 If you lived with your spouse at any time during the tax year: You cannot claim the credit for the elderly or the disabled, and You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received. Irs form 1040 2012 The following credits and deductions are reduced at income levels half those for a joint return: The child tax credit, The retirement savings contributions credit, The deduction for personal exemptions, and Itemized deductions. Irs form 1040 2012 Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return). Irs form 1040 2012 If your spouse itemizes deductions, you cannot claim the standard deduction. Irs form 1040 2012 If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return. Irs form 1040 2012 Adjusted gross income (AGI) limits. Irs form 1040 2012   If your AGI on a separate return is lower than it would have been on a joint return, you may be able to deduct a larger amount for certain deductions that are limited by AGI, such as medical expenses. Irs form 1040 2012 Individual retirement arrangements (IRAs). Irs form 1040 2012   You may not be able to deduct all or part of your contributions to a traditional IRA if you or your spouse were covered by an employee retirement plan at work during the year. Irs form 1040 2012 Your deduction is reduced or eliminated if your income is more than a certain amount. Irs form 1040 2012 This amount is much lower for married individuals who file separately and lived together at any time during the year. Irs form 1040 2012 For more information, see How Much Can You Deduct in chapter 17. Irs form 1040 2012 Rental activity losses. Irs form 1040 2012   If you actively participated in a passive rental real estate activity that produced a loss, you generally can deduct the loss from your nonpassive income, up to $25,000. Irs form 1040 2012 This is called a special allowance. Irs form 1040 2012 However, married persons filing separate returns who lived together at any time during the year cannot claim this special allowance. Irs form 1040 2012 Married persons filing separate returns who lived apart at all times during the year are each allowed a $12,500 maximum special allowance for losses from passive real estate activities. Irs form 1040 2012 See Limits on Rental Losses in chapter 9. Irs form 1040 2012 Community property states. Irs form 1040 2012   If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. Irs form 1040 2012 See Publication 555. Irs form 1040 2012 Joint Return After Separate Returns You can change your filing status from a separate return to a joint return by filing an amended return using Form 1040X. Irs form 1040 2012 You generally can change to a joint return any time within 3 years from the due date of the separate return or returns. Irs form 1040 2012 This does not include any extensions. Irs form 1040 2012 A separate return includes a return filed by you or your spouse claiming married filing separately, single, or head of household filing status. Irs form 1040 2012 Separate Returns After Joint Return Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. Irs form 1040 2012 Exception. Irs form 1040 2012   A personal representative for a decedent can change from a joint return elected by the surviving spouse to a separate return for the decedent. Irs form 1040 2012 The personal representative has 1 year from the due date of the return (including extensions) to make the change. Irs form 1040 2012 See Publication 559, Survivors, Executors, and Administrators, for more information on filing a return for a decedent. Irs form 1040 2012 Head of Household You may be able to file as head of household if you meet all the following requirements. Irs form 1040 2012 You are unmarried or “considered unmarried” on the last day of the year. Irs form 1040 2012 See Marital Status , earlier, and Considered Unmarried , later. Irs form 1040 2012 You paid more than half the cost of keeping up a home for the year. Irs form 1040 2012 A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). Irs form 1040 2012 However, if the qualifying person is your dependent parent, he or she does not have to live with you. Irs form 1040 2012 See Special rule for parent , later, under Qualifying Person. Irs form 1040 2012 If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. Irs form 1040 2012 You will also receive a higher standard deduction than if you file as single or married filing separately. Irs form 1040 2012 Kidnapped child. Irs form 1040 2012   A child may qualify you to file as head of household even if the child has been kidnapped. Irs form 1040 2012 For more information, see Publication 501. Irs form 1040 2012 How to file. Irs form 1040 2012   If you file as head of household, you can use Form 1040. Irs form 1040 2012 If your taxable income is less than $100,000, you may be able to file Form 1040A. Irs form 1040 2012 Indicate your choice of this filing status by checking the box on line 4 of either form. Irs form 1040 2012 Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax. Irs form 1040 2012 Considered Unmarried To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. Irs form 1040 2012 You are considered unmarried on the last day of the tax year if you meet all the following tests. Irs form 1040 2012 You file a separate return (defined earlier under Joint Return After Separate Returns ). Irs form 1040 2012 You paid more than half the cost of keeping up your home for the tax year. Irs form 1040 2012 Your spouse did not live in your home during the last 6 months of the tax year. Irs form 1040 2012 Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. Irs form 1040 2012 See Temporary absences , under Qualifying Person, later. Irs form 1040 2012 Your home was the main home of your child, stepchild, or foster child for more than half the year. Irs form 1040 2012 (See Home of qualifying person , under Qualifying Person, later, for rules applying to a child's birth, death, or temporary absence during the year. Irs form 1040 2012 ) You must be able to claim an exemption for the child. Irs form 1040 2012 However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3, or in Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) under Qualifying Relative in chapter 3. Irs form 1040 2012 The general rules for claiming an exemption for a dependent are explained under Exemptions for Dependents in chapter 3. Irs form 1040 2012 If you were considered married for part of the year and lived in a community property state (listed earlier under Married Filing Separately), special rules may apply in determining your income and expenses. Irs form 1040 2012 See Publication 555 for more information. Irs form 1040 2012 Nonresident alien spouse. Irs form 1040 2012   You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. Irs form 1040 2012 However, your spouse is not a qualifying person for head of household purposes. Irs form 1040 2012 You must have another qualifying person and meet the other tests to be eligible to file as a head of household. Irs form 1040 2012 Choice to treat spouse as resident. Irs form 1040 2012   You are considered married if you choose to treat your spouse as a resident alien. Irs form 1040 2012 See Publication 519. Irs form 1040 2012 Keeping Up a Home To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year. Irs form 1040 2012 You can determine whether you paid more than half of the cost of keeping up a home by using Worksheet 2–1. Irs form 1040 2012 Worksheet 2-1. Irs form 1040 2012 Cost of Keeping Up a Home   Amount You Paid Total Cost Property taxes $ $ Mortgage interest expense     Rent     Utility charges     Repairs/maintenance     Property insurance     Food consumed on the premises     Other household expenses     Totals $ $ Minus total amount you paid   () Amount others paid   $ If the total amount you paid is more than the amount others paid, you meet the requirement of paying more than half the cost of keeping up the home. Irs form 1040 2012 Costs you include. Irs form 1040 2012   Include in the cost of keeping up a home expenses such as rent, mortgage interest, real estate taxes, insurance on the home, repairs, utilities, and food eaten in the home. Irs form 1040 2012   If you used payments you received under Temporary Assistance for Needy Families (TANF) or other public assistance programs to pay part of the cost of keeping up your home, you cannot count them as money you paid. Irs form 1040 2012 However, you must include them in the total cost of keeping up your home to figure if you paid over half the cost. Irs form 1040 2012 Costs you do not include. Irs form 1040 2012   Do not include the costs of clothing, education, medical treatment, vacations, life insurance, or transportation. Irs form 1040 2012 Also, do not include the rental value of a home you own or the value of your services or those of a member of your household. Irs form 1040 2012 Qualifying Person See Table 2-1 to see who is a qualifying person. Irs form 1040 2012 Any person not described in Table 2-1 is not a qualifying person. Irs form 1040 2012 Table 2-1. Irs form 1040 2012 Who Is a Qualifying Person Qualifying You To File as Head of Household?1 Caution. Irs form 1040 2012 See the text of this chapter for the other requirements you must meet to claim head of household filing status. Irs form 1040 2012 IF the person is your . Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012   AND . Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012   THEN that person is . Irs form 1040 2012 . Irs form 1040 2012 . Irs form 1040 2012 qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests)2   he or she is single   a qualifying person, whether or not you can claim an exemption for the person. Irs form 1040 2012   he or she is married and you can claim an exemption for him or her   a qualifying person. Irs form 1040 2012   he or she is married and you cannot claim an exemption for him or her   not a qualifying person. Irs form 1040 2012 3 qualifying relative4 who is your father or mother   you can claim an exemption for him or her5   a qualifying person. Irs form 1040 2012 6   you cannot claim an exemption for him or her   not a qualifying person. Irs form 1040 2012 qualifying relative4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests)   he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and you can claim an exemption for him or her5   a qualifying person. Irs form 1040 2012   he or she did not live with you more than half the year   not a qualifying person. Irs form 1040 2012   he or she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3 and is your qualifying relative only because he or she lived with you all year as a member of your household   not a qualifying person. Irs form 1040 2012   you cannot claim an exemption for him or her   not a qualifying person. Irs form 1040 2012 1A person cannot qualify more than one taxpayer to use the head of household filing status for the year. Irs form 1040 2012 2The term “qualifying child” is defined in chapter 3. Irs form 1040 2012 Note. Irs form 1040 2012 If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents (or parents who live apart) under Qualifying Child in chapter 3. Irs form 1040 2012 If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. Irs form 1040 2012 3This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else's return. Irs form 1040 2012 4The term “ qualifying relative ” is defined in chapter 3. Irs form 1040 2012 5If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. Irs form 1040 2012 See Multiple Support Agreement in chapter 3. Irs form 1040 2012 6See Special rule for parent . Irs form 1040 2012 Example 1—child. Irs form 1040 2012 Your unmarried son lived with you all year and was 18 years old at the end of the year. Irs form 1040 2012 He did not provide more than half of his own support and does not meet the tests to be a qualifying child of anyone else. Irs form 1040 2012 As a result, he is your qualifying child (see Qualifying Child in chapter 3) and, because he is single, your qualifying person for you to claim head of household filing status. Irs form 1040 2012 Example 2—child who is not qualifying person. Irs form 1040 2012 The facts are the same as in Example 1 except your son was 25 years old at the end of the year and his gross income was $5,000. Irs form 1040 2012 Because he does not meet the age test (explained under Qualifying Child in chapter 3), your son is not your qualifying child. Irs form 1040 2012 Because he does not meet the gross income test (explained later under Qualifying Relative in chapter 3), he is not your qualifying relative. Irs form 1040 2012 As a result, he is not your qualifying person for head of household purposes. Irs form 1040 2012 Example 3—girlfriend. Irs form 1040 2012 Your girlfriend lived with you all year. Irs form 1040 2012 Even though she may be your qualifying relative if the gross income and support tests (explained in chapter 3) are met, she is not your qualifying person for head of household purposes because she is not related to you in one of the ways listed under Relatives who do not have to live with you in chapter 3. Irs form 1040 2012 See Table 2-1. Irs form 1040 2012 Example 4—girlfriend's child. Irs form 1040 2012 The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. Irs form 1040 2012 He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test in chapter 3). Irs form 1040 2012 As a result, he is not your qualifying person for head of household purposes. Irs form 1040 2012 Home of qualifying person. Irs form 1040 2012   Generally, the qualifying person must live with you for more than half of the year. Irs form 1040 2012 Special rule for parent. Irs form 1040 2012   If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother does not live with you. Irs form 1040 2012 However, you must be able to claim an exemption for your father or mother. Irs form 1040 2012 Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother. Irs form 1040 2012   You are keeping up a main home for your father or mother if you pay more than half the cost of keeping your parent in a rest home or home for the elderly. Irs form 1040 2012 Death or birth. Irs form 1040 2012   You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. Irs form 1040 2012 If the individual is your qualifying child, the child must have lived with you for more than half the part of the year he or she was alive. Irs form 1040 2012 If the individual is anyone else, see Publication 501. Irs form 1040 2012 Temporary absences. Irs form 1040 2012   You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, or military service. Irs form 1040 2012 It must be reasonable to assume the absent person will return to the home after the temporary absence. Irs form 1040 2012 You must continue to keep up the home during the absence. Irs form 1040 2012 Qualifying Widow(er) With Dependent Child If your spouse died in 2013, you can use married filing jointly as your filing status for 2013 if you otherwise qualify to use that status. Irs form 1040 2012 The year of death is the last year for which you can file jointly with your deceased spouse. Irs form 1040 2012 See Married Filing Jointly , earlier. Irs form 1040 2012 You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. Irs form 1040 2012 For example, if your spouse died in 2012, and you have not remarried, you may be able to use this filing status for 2013 and 2014. Irs form 1040 2012 This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). Irs form 1040 2012 It does not entitle you to file a joint return. Irs form 1040 2012 How to file. Irs form 1040 2012   If you file as qualifying widow(er) with dependent child, you can use Form 1040. Irs form 1040 2012 If you also have taxable income of less than $100,000 and meet certain other conditions, you may be able to file Form 1040A. Irs form 1040 2012 Check the box on line 5 of either form. Irs form 1040 2012 Use the Married filing jointly column of the Tax Table or Section B of the Tax Computation Worksheet to figure your tax. Irs form 1040 2012 Eligibility rules. Irs form 1040 2012   You are eligible to file your 2013 return as a qualifying widow(er) with dependent child if you meet all of the following tests. Irs form 1040 2012 You were entitled to file a joint return with your spouse for the year your spouse died. Irs form 1040 2012 It does not matter whether you actually filed a joint return. Irs form 1040 2012 Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. Irs form 1040 2012 You have a child or stepchild for whom you can claim an exemption. Irs form 1040 2012 This does not include a foster child. Irs form 1040 2012 This child lived in your home all year, except for temporary absences. Irs form 1040 2012 See Temporary absences , earlier, under Head of Household. Irs form 1040 2012 There are also exceptions, described later, for a child who was born or died during the year and for a kidnapped child. Irs form 1040 2012 You paid more than half the cost of keeping up a home for the year. Irs form 1040 2012 See Keeping Up a Home , earlier, under Head of Household. Irs form 1040 2012 Example. Irs form 1040 2012 John's wife died in 2011. Irs form 1040 2012 John has not remarried. Irs form 1040 2012 During 2012 and 2013, he continued to keep up a home for himself and his child, who lives with him and for whom he can claim an exemption. Irs form 1040 2012 For 2011 he was entitled to file a joint return for himself and his deceased wife. Irs form 1040 2012 For 2012 and 2013, he can file as qualifying widower with a dependent child. Irs form 1040 2012 After 2013 he can file as head of household if he qualifies. Irs form 1040 2012 Death or birth. Irs form 1040 2012    You may be eligible to file as a qualifying widow(er) with dependent child if the child who qualifies you for this filing status is born or dies during the year. Irs form 1040 2012 You must have provided more than half of the cost of keeping up a home that was the child's main home during the entire part of the year he or she was alive. Irs form 1040 2012 Kidnapped child. Irs form 1040 2012   A child may qualify you for qualifying widow(er) with dependent child, even if the child has been kidnapped. Irs form 1040 2012 See Publication 501. Irs form 1040 2012    As mentioned earlier, this filing status is available for only 2 years following the year your spouse died. Irs form 1040 2012 Prev  Up  Next   Home   More Online Publications