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Ohio 1040ez Instructions

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Ohio 1040ez Instructions

Ohio 1040ez instructions 2. Ohio 1040ez instructions   Simplified Employee Pensions (SEPs) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Setting Up a SEPWhen not to use Form 5305-SEP. Ohio 1040ez instructions How Much Can I Contribute?Contribution Limits Deducting ContributionsDeduction Limit for Contributions for Participants Deduction Limit for Self-Employed Individuals Carryover of Excess SEP Contributions When To Deduct Contributions Where To Deduct Contributions Salary Reduction Simplified Employee Pensions (SARSEPs)SARSEP ADP test. Ohio 1040ez instructions Deferral percentage. Ohio 1040ez instructions Employee compensation. Ohio 1040ez instructions Compensation of self-employed individuals. Ohio 1040ez instructions Choice not to treat deferrals as compensation. Ohio 1040ez instructions Limit on Elective Deferrals Tax Treatment of Deferrals Distributions (Withdrawals) Additional TaxesEffects on employee. Ohio 1040ez instructions Reporting and Disclosure Requirements Topics - This chapter discusses: Setting up a SEP How much can I contribute Deducting contributions Salary reduction simplified employee pensions (SARSEPs) Distributions (withdrawals) Additional taxes Reporting and disclosure requirements Useful Items - You may want to see: Publication 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4285 SEP Checklist 4286 SARSEP Checklist 4333 SEP Retirement Plans for Small Businesses 4336 SARSEP for Small Businesses 4407 SARSEP—Key Issues and Assistance Forms (and Instructions) W-2 Wage and Tax Statement 1040 U. Ohio 1040ez instructions S. Ohio 1040ez instructions Individual Income Tax Return 5305-SEP Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 5305A-SEP Salary Reduction Simplified Employee Pension—Individual Retirement Accounts Contribution Agreement 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A SEP is a written plan that allows you to make contributions toward your own retirement and your employees' retirement without getting involved in a more complex qualified plan. Ohio 1040ez instructions Under a SEP, you make contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. Ohio 1040ez instructions A SEP-IRA is owned and controlled by the employee, and you make contributions to the financial institution where the SEP-IRA is maintained. Ohio 1040ez instructions SEP-IRAs are set up for, at a minimum, each eligible employee (defined below). Ohio 1040ez instructions A SEP-IRA may have to be set up for a leased employee (defined in chapter 1), but does not need to be set up for excludable employees (defined later). Ohio 1040ez instructions Eligible employee. Ohio 1040ez instructions   An eligible employee is an individual who meets all the following requirements. Ohio 1040ez instructions Has reached age 21. Ohio 1040ez instructions Has worked for you in at least 3 of the last 5 years. Ohio 1040ez instructions Has received at least $550 in compensation from you in 2013. Ohio 1040ez instructions This amount remains the same in 2014. Ohio 1040ez instructions    You can use less restrictive participation requirements than those listed, but not more restrictive ones. Ohio 1040ez instructions Excludable employees. Ohio 1040ez instructions   The following employees can be excluded from coverage under a SEP. Ohio 1040ez instructions Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. Ohio 1040ez instructions Nonresident alien employees who have received no U. Ohio 1040ez instructions S. Ohio 1040ez instructions source wages, salaries, or other personal services compensation from you. Ohio 1040ez instructions For more information about nonresident aliens, see Publication 519, U. Ohio 1040ez instructions S. Ohio 1040ez instructions Tax Guide for Aliens. Ohio 1040ez instructions Setting Up a SEP There are three basic steps in setting up a SEP. Ohio 1040ez instructions You must execute a formal written agreement to provide benefits to all eligible employees. Ohio 1040ez instructions You must give each eligible employee certain information about the SEP. Ohio 1040ez instructions A SEP-IRA must be set up by or for each eligible employee. Ohio 1040ez instructions Many financial institutions will help you set up a SEP. Ohio 1040ez instructions Formal written agreement. Ohio 1040ez instructions   You must execute a formal written agreement to provide benefits to all eligible employees under a SEP. Ohio 1040ez instructions You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP. Ohio 1040ez instructions However, see When not to use Form 5305-SEP, below. Ohio 1040ez instructions   If you adopt an IRS model SEP using Form 5305-SEP, no prior IRS approval or determination letter is required. Ohio 1040ez instructions Keep the original form. Ohio 1040ez instructions Do not file it with the IRS. Ohio 1040ez instructions Also, using Form 5305-SEP will usually relieve you from filing annual retirement plan information returns with the IRS and the Department of Labor. Ohio 1040ez instructions See the Form 5305-SEP instructions for details. Ohio 1040ez instructions If you choose not to use Form 5305-SEP, you should seek professional advice in adopting a SEP. Ohio 1040ez instructions When not to use Form 5305-SEP. Ohio 1040ez instructions   You cannot use Form 5305-SEP if any of the following apply. Ohio 1040ez instructions You currently maintain any other qualified retirement plan other than another SEP. Ohio 1040ez instructions You have any eligible employees for whom IRAs have not been set up. Ohio 1040ez instructions You use the services of leased employees, who are not your common-law employees (as described in chapter 1). Ohio 1040ez instructions You are a member of any of the following unless all eligible employees of all the members of these groups, trades, or businesses participate under the SEP. Ohio 1040ez instructions An affiliated service group described in section 414(m). Ohio 1040ez instructions A controlled group of corporations described in section 414(b). Ohio 1040ez instructions Trades or businesses under common control described in section 414(c). Ohio 1040ez instructions You do not pay the cost of the SEP contributions. Ohio 1040ez instructions Information you must give to employees. Ohio 1040ez instructions   You must give each eligible employee a copy of Form 5305-SEP, its instructions, and the other information listed in the Form 5305-SEP instructions. Ohio 1040ez instructions An IRS model SEP is not considered adopted until you give each employee this information. Ohio 1040ez instructions Setting up the employee's SEP-IRA. Ohio 1040ez instructions   A SEP-IRA must be set up by or for each eligible employee. Ohio 1040ez instructions SEP-IRAs can be set up with banks, insurance companies, or other qualified financial institutions. Ohio 1040ez instructions You send SEP contributions to the financial institution where the SEP-IRA is maintained. Ohio 1040ez instructions Deadline for setting up a SEP. Ohio 1040ez instructions   You can set up a SEP for any year as late as the due date (including extensions) of your income tax return for that year. Ohio 1040ez instructions Credit for startup costs. Ohio 1040ez instructions   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP that first became effective in 2013. Ohio 1040ez instructions For more information, see Credit for startup costs under Reminders, earlier. Ohio 1040ez instructions How Much Can I Contribute? The SEP rules permit you to contribute a limited amount of money each year to each employee's SEP-IRA. Ohio 1040ez instructions If you are self-employed, you can contribute to your own SEP-IRA. Ohio 1040ez instructions Contributions must be in the form of money (cash, check, or money order). Ohio 1040ez instructions You cannot contribute property. Ohio 1040ez instructions However, participants may be able to transfer or roll over certain property from one retirement plan to another. Ohio 1040ez instructions See Publication 590 for more information about rollovers. Ohio 1040ez instructions You do not have to make contributions every year. Ohio 1040ez instructions But if you make contributions, they must be based on a written allocation formula and must not discriminate in favor of highly compensated employees (defined in chapter 1). Ohio 1040ez instructions When you contribute, you must contribute to the SEP-IRAs of all participants who actually performed personal services during the year for which the contributions are made, including employees who die or terminate employment before the contributions are made. Ohio 1040ez instructions Contributions are deductible within limits, as discussed later, and generally are not taxable to the plan participants. Ohio 1040ez instructions A SEP-IRA cannot be a Roth IRA. Ohio 1040ez instructions Employer contributions to a SEP-IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. Ohio 1040ez instructions Unlike regular contributions to a traditional IRA, contributions under a SEP can be made to participants over age 70½. Ohio 1040ez instructions If you are self-employed, you can also make contributions under the SEP for yourself even if you are over 70½. Ohio 1040ez instructions Participants age 70½ or over must take required minimum distributions. Ohio 1040ez instructions Time limit for making contributions. Ohio 1040ez instructions   To deduct contributions for a year, you must make the contributions by the due date (including extensions) of your tax return for the year. Ohio 1040ez instructions Contribution Limits Contributions you make for 2013 to a common-law employee's SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000. Ohio 1040ez instructions Compensation generally does not include your contributions to the SEP. Ohio 1040ez instructions The SEP plan document will specify how the employer contribution is determined and how it will be allocated to participants. Ohio 1040ez instructions Example. Ohio 1040ez instructions Your employee, Mary Plant, earned $21,000 for 2013. Ohio 1040ez instructions The maximum contribution you can make to her SEP-IRA is $5,250 (25% x $21,000). Ohio 1040ez instructions Contributions for yourself. Ohio 1040ez instructions   The annual limits on your contributions to a common-law employee's SEP-IRA also apply to contributions you make to your own SEP-IRA. Ohio 1040ez instructions However, special rules apply when figuring your maximum deductible contribution. Ohio 1040ez instructions See Deduction Limit for Self-Employed Individuals , later. Ohio 1040ez instructions Annual compensation limit. Ohio 1040ez instructions   You cannot consider the part of an employee's compensation over $255,000 when figuring your contribution limit for that employee. Ohio 1040ez instructions However, $51,000 is the maximum contribution for an eligible employee. Ohio 1040ez instructions These limits are $260,000 and $52,000, respectively, in 2014. Ohio 1040ez instructions Example. Ohio 1040ez instructions Your employee, Susan Green, earned $210,000 for 2013. Ohio 1040ez instructions Because of the maximum contribution limit for 2013, you can only contribute $51,000 to her SEP-IRA. Ohio 1040ez instructions More than one plan. Ohio 1040ez instructions   If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $51,000 or 100% of the participant's compensation. Ohio 1040ez instructions When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Ohio 1040ez instructions Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. Ohio 1040ez instructions Tax treatment of excess contributions. Ohio 1040ez instructions   Excess contributions are your contributions to an employee's SEP-IRA (or to your own SEP-IRA) for 2013 that exceed the lesser of the following amounts. Ohio 1040ez instructions 25% of the employee's compensation (or, for you, 20% of your net earnings from self-employment). Ohio 1040ez instructions $51,000. Ohio 1040ez instructions Excess contributions are included in the employee's income for the year and are treated as contributions by the employee to his or her SEP-IRA. Ohio 1040ez instructions For more information on employee tax treatment of excess contributions, see chapter 1 in Publication 590. Ohio 1040ez instructions Reporting on Form W-2. Ohio 1040ez instructions   Do not include SEP contributions on your employee's Form W-2 unless contributions were made under a salary reduction arrangement (discussed later). Ohio 1040ez instructions Deducting Contributions Generally, you can deduct the contributions you make each year to each employee's SEP-IRA. Ohio 1040ez instructions If you are self-employed, you can deduct the contributions you make each year to your own SEP-IRA. Ohio 1040ez instructions Deduction Limit for Contributions for Participants The most you can deduct for your contributions to you or your employee's SEP-IRA is the lesser of the following amounts. Ohio 1040ez instructions Your contributions (including any excess contributions carryover). Ohio 1040ez instructions 25% of the compensation (limited to $255,000 per participant) paid to the participants during 2013 from the business that has the plan, not to exceed $51,000 per participant. Ohio 1040ez instructions In 2014, the amounts in (2) above are $260,000 and $52,000, respectively. Ohio 1040ez instructions Deduction Limit for Self-Employed Individuals If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for these contributions. Ohio 1040ez instructions When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment (defined in chapter 1), which takes into account both the following deductions. Ohio 1040ez instructions The deduction for the deductible part of your self-employment tax. Ohio 1040ez instructions The deduction for contributions to your own SEP-IRA. Ohio 1040ez instructions The deduction for contributions to your own SEP-IRA and your net earnings depend on each other. Ohio 1040ez instructions For this reason, you determine the deduction for contributions to your own SEP-IRA indirectly by reducing the contribution rate called for in your plan. Ohio 1040ez instructions To do this, use the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed, whichever is appropriate for your plan's contribution rate, in chapter 5. Ohio 1040ez instructions Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Ohio 1040ez instructions Carryover of Excess SEP Contributions If you made SEP contributions that are more than the deduction limit (nondeductible contributions), you can carry over and deduct the difference in later years. Ohio 1040ez instructions However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. Ohio 1040ez instructions If you also contributed to a defined benefit plan or defined contribution plan, see Carryover of Excess Contributions under Employer Deduction in chapter 4 for the carryover limit. Ohio 1040ez instructions Excise tax. Ohio 1040ez instructions   If you made nondeductible (excess) contributions to a SEP, you may be subject to a 10% excise tax. Ohio 1040ez instructions For information about the excise tax, see Excise Tax for Nondeductible (Excess) Contributions under Employer Deduction in chapter 4. Ohio 1040ez instructions When To Deduct Contributions When you can deduct contributions made for a year depends on the tax year on which the SEP is maintained. Ohio 1040ez instructions If the SEP is maintained on a calendar year basis, you deduct the yearly contributions on your tax return for the year within which the calendar year ends. Ohio 1040ez instructions If you file your tax return and maintain the SEP using a fiscal year or short tax year, you deduct contributions made for a year on your tax return for that year. Ohio 1040ez instructions Example. Ohio 1040ez instructions You are a fiscal year taxpayer whose tax year ends June 30. Ohio 1040ez instructions You maintain a SEP on a calendar year basis. Ohio 1040ez instructions You deduct SEP contributions made for calendar year 2013 on your tax return for your tax year ending June 30, 2014. Ohio 1040ez instructions Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Ohio 1040ez instructions For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040), Profit or Loss From Farming; partnerships deduct them on Form 1065, U. Ohio 1040ez instructions S. Ohio 1040ez instructions Return of Partnership Income; and corporations deduct them on Form 1120, U. Ohio 1040ez instructions S. Ohio 1040ez instructions Corporation Income Tax Return, or Form 1120S, U. Ohio 1040ez instructions S. Ohio 1040ez instructions Income Tax Return for an S Corporation. Ohio 1040ez instructions Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Ohio 1040ez instructions (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Ohio 1040ez instructions , you receive from the partnership. Ohio 1040ez instructions ) Remember that sole proprietors and partners can't deduct as a business expense contributions made to a SEP for themselves, only those made for their common-law employees. Ohio 1040ez instructions Salary Reduction Simplified Employee Pensions (SARSEPs) A SARSEP is a SEP set up before 1997 that includes a salary reduction arrangement. Ohio 1040ez instructions (See the Caution, next. Ohio 1040ez instructions ) Under a SARSEP, your employees can choose to have you contribute part of their pay to their SEP-IRAs rather than receive it in cash. Ohio 1040ez instructions This contribution is called an “elective deferral” because employees choose (elect) to set aside the money, and they defer the tax on the money until it is distributed to them. Ohio 1040ez instructions You are not allowed to set up a SARSEP after 1996. Ohio 1040ez instructions However, participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan. Ohio 1040ez instructions If you are interested in setting up a retirement plan that includes a salary reduction arrangement, see chapter 3. Ohio 1040ez instructions Who can have a SARSEP?   A SARSEP set up before 1997 is available to you and your eligible employees only if all the following requirements are met. Ohio 1040ez instructions At least 50% of your employees eligible to participate choose to make elective deferrals. Ohio 1040ez instructions You have 25 or fewer employees who were eligible to participate in the SEP at any time during the preceding year. Ohio 1040ez instructions The elective deferrals of your highly compensated employees meet the SARSEP ADP test. Ohio 1040ez instructions SARSEP ADP test. Ohio 1040ez instructions   Under the SARSEP ADP test, the amount deferred each year by each eligible highly compensated employee as a percentage of pay (the deferral percentage) cannot be more than 125% of the average deferral percentage (ADP) of all non-highly compensated employees eligible to participate. Ohio 1040ez instructions A highly compensated employee is defined in chapter 1. Ohio 1040ez instructions Deferral percentage. Ohio 1040ez instructions   The deferral percentage for an employee for a year is figured as follows. Ohio 1040ez instructions   The elective employer contributions (excluding certain catch-up contributions)  paid to the SEP for the employee for the year     The employee's compensation (limited to $255,000 in 2013)   The instructions for Form 5305A-SEP have a worksheet you can use to determine whether the elective deferrals of your highly compensated employees meet the SARSEP ADP test. Ohio 1040ez instructions Employee compensation. Ohio 1040ez instructions   For figuring the deferral percentage, compensation is generally the amount you pay to the employee for the year. Ohio 1040ez instructions Compensation includes the elective deferral and other amounts deferred in certain employee benefit plans. Ohio 1040ez instructions See Compensation in chapter 1. Ohio 1040ez instructions Elective deferrals under the SARSEP are included in figuring your employees' deferral percentage even though they are not included in the income of your employees for income tax purposes. Ohio 1040ez instructions Compensation of self-employed individuals. Ohio 1040ez instructions   If you are self-employed, compensation is your net earnings from self-employment as defined in chapter 1. Ohio 1040ez instructions   Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and housing cost amounts. Ohio 1040ez instructions Choice not to treat deferrals as compensation. Ohio 1040ez instructions   You can choose not to treat elective deferrals (and other amounts deferred in certain employee benefit plans) for a year as compensation under your SARSEP. Ohio 1040ez instructions Limit on Elective Deferrals The most a participant can choose to defer for calendar year 2013 is the lesser of the following amounts. Ohio 1040ez instructions 25% of the participant's compensation (limited to $255,000 of the participant's compensation). Ohio 1040ez instructions $17,500. Ohio 1040ez instructions The $17,500 limit applies to the total elective deferrals the employee makes for the year to a SEP and any of the following. Ohio 1040ez instructions Cash or deferred arrangement (section 401(k) plan). Ohio 1040ez instructions Salary reduction arrangement under a tax-sheltered annuity plan (section 403(b) plan). Ohio 1040ez instructions SIMPLE IRA plan. Ohio 1040ez instructions In 2014, the $255,000 limit increases to $260,000 and the $17,500 limit remains at $17,500. Ohio 1040ez instructions Catch-up contributions. Ohio 1040ez instructions   A SARSEP can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Ohio 1040ez instructions The catch-up contribution limit for 2013 is $5,500 and remains at $5,500 for 2014. Ohio 1040ez instructions Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the elective deferral limit (the lesser of 25% of compensation or $17,500), the SARSEP ADP test limit discussed earlier, or the plan limit (if any). Ohio 1040ez instructions However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Ohio 1040ez instructions The catch-up contribution limit. Ohio 1040ez instructions The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Ohio 1040ez instructions   Catch-up contributions are not subject to the elective deferral limit (the lesser of 25% of compensation or $17,500 in 2013 and in 2014). Ohio 1040ez instructions Overall limit on SEP contributions. Ohio 1040ez instructions   If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $51,000 for 2013 ($52,000 for 2014). Ohio 1040ez instructions The same rule applies to contributions you make to your own SEP-IRA. Ohio 1040ez instructions See Contribution Limits , earlier. Ohio 1040ez instructions Figuring the elective deferral. Ohio 1040ez instructions   For figuring the 25% limit on elective deferrals, compensation does not include SEP contributions, including elective deferrals or other amounts deferred in certain employee benefit plans. Ohio 1040ez instructions Tax Treatment of Deferrals Elective deferrals that are not more than the limits discussed earlier under Limit on Elective Deferrals are excluded from your employees' wages subject to federal income tax in the year of deferral. Ohio 1040ez instructions However, these deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Ohio 1040ez instructions Excess deferrals. Ohio 1040ez instructions   For 2013, excess deferrals are the elective deferrals for the year that are more than the $17,500 limit discussed earlier. Ohio 1040ez instructions For a participant who is eligible to make catch-up contributions, excess deferrals are the elective deferrals that are more than $23,000. Ohio 1040ez instructions The treatment of excess deferrals made under a SARSEP is similar to the treatment of excess deferrals made under a qualified plan. Ohio 1040ez instructions See Treatment of Excess Deferrals under Elective Deferrals (401(k) Plans) in chapter 4. Ohio 1040ez instructions Excess SEP contributions. Ohio 1040ez instructions   Excess SEP contributions are elective deferrals of highly compensated employees that are more than the amount permitted under the SARSEP ADP test. Ohio 1040ez instructions You must notify your highly compensated employees within 2½ months after the end of the plan year of their excess SEP contributions. Ohio 1040ez instructions If you do not notify them within this time period, you must pay a 10% tax on the excess. Ohio 1040ez instructions For an explanation of the notification requirements, see Rev. Ohio 1040ez instructions Proc. Ohio 1040ez instructions 91-44, 1991-2 C. Ohio 1040ez instructions B. Ohio 1040ez instructions 733. Ohio 1040ez instructions If you adopted a SARSEP using Form 5305A-SEP, the notification requirements are explained in the instructions for that form. Ohio 1040ez instructions Reporting on Form W-2. Ohio 1040ez instructions   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Ohio 1040ez instructions You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Ohio 1040ez instructions You must also include them in box 12. Ohio 1040ez instructions Mark the “Retirement plan” checkbox in box 13. Ohio 1040ez instructions For more information, see the Form W-2 instructions. Ohio 1040ez instructions Distributions (Withdrawals) As an employer, you cannot prohibit distributions from a SEP-IRA. Ohio 1040ez instructions Also, you cannot make your contributions on the condition that any part of them must be kept in the account after you have made your contributions to the employee's accounts. Ohio 1040ez instructions Distributions are subject to IRA rules. Ohio 1040ez instructions Generally, you or your employee must begin to receive distributions from a SEP-IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. Ohio 1040ez instructions For more information about IRA rules, including the tax treatment of distributions, rollovers, required distributions, and income tax withholding, see Publication 590. Ohio 1040ez instructions Additional Taxes The tax advantages of using SEP-IRAs for retirement savings can be offset by additional taxes that may be imposed for all the following actions. Ohio 1040ez instructions Making excess contributions. Ohio 1040ez instructions Making early withdrawals. Ohio 1040ez instructions Not making required withdrawals. Ohio 1040ez instructions For information about these taxes, see chapter 1 in Publication 590. Ohio 1040ez instructions Also, a SEP-IRA may be disqualified, or an excise tax may apply, if the account is involved in a prohibited transaction, discussed next. Ohio 1040ez instructions Prohibited transaction. Ohio 1040ez instructions   If an employee improperly uses his or her SEP-IRA, such as by borrowing money from it, the employee has engaged in a prohibited transaction. Ohio 1040ez instructions In that case, the SEP-IRA will no longer qualify as an IRA. Ohio 1040ez instructions For a list of prohibited transactions, see Prohibited Transactions in chapter 4. Ohio 1040ez instructions Effects on employee. Ohio 1040ez instructions   If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred. Ohio 1040ez instructions The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account. Ohio 1040ez instructions Also, the employee may have to pay the additional tax for making early withdrawals. Ohio 1040ez instructions Reporting and Disclosure Requirements If you set up a SEP using Form 5305-SEP, you must give your eligible employees certain information about the SEP when you set it up. Ohio 1040ez instructions See Setting Up a SEP , earlier. Ohio 1040ez instructions Also, you must give your eligible employees a statement each year showing any contributions to their SEP-IRAs. Ohio 1040ez instructions You must also give them notice of any excess contributions. Ohio 1040ez instructions For details about other information you must give them, see the instructions for Form 5305-SEP or Form 5305A-SEP (for a salary reduction SEP). Ohio 1040ez instructions Even if you did not use Form 5305-SEP or Form 5305A-SEP to set up your SEP, you must give your employees information similar to that described above. Ohio 1040ez instructions For more information, see the instructions for either Form 5305-SEP or Form 5305A-SEP. Ohio 1040ez instructions Prev  Up  Next   Home   More Online Publications
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A valid U.S. passport is required to enter and leave most foreign countries. Only the U.S. Department of State has the authority to grant, issue, or verify U.S. passports.

The Passport Services Office provides information and services to American citizens about how to obtain, replace or change a passport. To obtain a passport for the first time, you need to go in person to one of 7,000 passport acceptance facilities located throughout the United States with:

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Acceptance facilities include many Federal, state and probate courts, post offices, some public libraries and a number of county and municipal offices. There are also 20 regional passport agencies, and one Gateway City Agency, which serve customers who are traveling within two weeks (14 days), or who need foreign visas for travel. Appointments are required in such cases.

All American citizens must now have a valid U.S. passport to re-enter the country, regardless of what nations they have been visiting while traveling.

The Ohio 1040ez Instructions

Ohio 1040ez instructions Publication 559 - Main Content Table of Contents Personal RepresentativeDuties Fees Received by Personal Representatives Final Income Tax Return for Decedent—Form 1040Name, Address, and Signature When and Where To File Filing Requirements Income To Include Exemptions and Deductions Credits, Other Taxes, and Payments Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Filing Reminders Other Tax InformationTax Benefits for Survivors Income in Respect of a Decedent Deductions in Respect of a Decedent Estate Tax Deduction Gifts, Insurance, and Inheritances Other Items of Income Income Tax Return of an Estate— Form 1041Filing Requirements Income To Include Exemption and Deductions Credits, Tax, and Payments Name, Address, and Signature When and Where To File Distributions to BeneficiariesIncome That Must Be Distributed Currently Other Amounts Distributed Discharge of a Legal Obligation Character of Distributions How and When To Report Bequest Termination of Estate Estate and Gift TaxesApplicable Credit Amount Gift Tax Estate Tax Generation-Skipping Transfer Tax Comprehensive ExampleFinal Return for Decedent—Form 1040 Income Tax Return of an Estate—Form 1041 How To Get Tax HelpLow Income Taxpayer Clinics Personal Representative A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Ohio 1040ez instructions Generally, an executor (or executrix) is named in a decedent's will to administer the estate and distribute properties as the decedent has directed. Ohio 1040ez instructions An administrator (or administratrix) is usually appointed by the court if no will exists, if no executor was named in the will, or if the named executor cannot or will not serve. Ohio 1040ez instructions In general, an executor and an administrator perform the same duties and have the same responsibilities. Ohio 1040ez instructions For estate tax purposes, if there is no executor or administrator appointed, qualified, and acting within the United States, the term “executor” includes anyone in actual or constructive possession of any property of the decedent. Ohio 1040ez instructions It includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and other custodians of property in this country; brokers holding securities of the decedent as collateral; and the debtors of the decedent who are in this country. Ohio 1040ez instructions Duties The primary duties of a personal representative are to collect all the decedent's assets, pay his or her creditors, and distribute the remaining assets to the heirs or other beneficiaries. Ohio 1040ez instructions The personal representative also must perform the following duties. Ohio 1040ez instructions Apply for an employer identification number (EIN) for the estate. Ohio 1040ez instructions File all tax returns, including income, estate and gift tax returns, when due. Ohio 1040ez instructions Pay the tax determined up to the date of discharge from duties. Ohio 1040ez instructions Other duties of the personal representative in federal tax matters are discussed in other sections of this publication. Ohio 1040ez instructions If any beneficiary is a nonresident alien, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for information on the personal representative's duties as a withholding agent. Ohio 1040ez instructions Penalty. Ohio 1040ez instructions   There is a penalty for failure to file a tax return when due unless the failure is due to reasonable cause. Ohio 1040ez instructions Reliance on an agent (attorney, accountant, etc. Ohio 1040ez instructions ) is not reasonable cause for late filing. Ohio 1040ez instructions It is the personal representative's duty to file the returns for the decedent and the estate when due. Ohio 1040ez instructions Identification number. Ohio 1040ez instructions   The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. Ohio 1040ez instructions You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. Ohio 1040ez instructions You also must give the number to payers of interest and dividends and other payers who must file a return concerning the estate. Ohio 1040ez instructions   You can get an EIN by applying online at www. Ohio 1040ez instructions irs. Ohio 1040ez instructions gov (click on "Apply for an EIN Online" under the Tools heading). Ohio 1040ez instructions Generally, if you apply online, you will receive your EIN immediately upon completing the application. Ohio 1040ez instructions You can also apply using Form SS-4, Application for Employer Identification Number. Ohio 1040ez instructions Generally, if you apply by mail, it takes about 4 weeks to get your EIN. Ohio 1040ez instructions See the form instructions for other ways to apply. Ohio 1040ez instructions   Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. Ohio 1040ez instructions After a decedent's death, Forms 1099 must reflect the identification number of the estate or beneficiary to whom the amounts are payable. Ohio 1040ez instructions As the personal representative handling the estate, you must furnish this identification number to the payer. Ohio 1040ez instructions For example, if interest is payable to the estate, the estate's EIN must be provided to the payer and used to report the interest on Form 1099-INT, Interest Income. Ohio 1040ez instructions If the interest is payable to a surviving joint owner, the survivor's identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest. Ohio 1040ez instructions   If the estate or a survivor may receive interest or dividends after you inform the payer of the decedent's death, the payer should give you (or the survivor) a Form W-9, Request for Taxpayer Identification Number and Certification (or a similar substitute form). Ohio 1040ez instructions Complete this form to inform the payer of the estate's (or if completed by the survivor, the survivor's) identification number and return it to the payer. Ohio 1040ez instructions    Do not use the deceased individual's identifying number to file an individual income tax return after the decedent's final tax return. Ohio 1040ez instructions Also do not use it to make estimated tax payments for a tax year after the year of death. Ohio 1040ez instructions Penalty. Ohio 1040ez instructions   If you do not include the EIN or the taxpayer identification number of another person where it is required on a return, statement, or other document, you are liable for a penalty for each failure, unless you can show reasonable cause. Ohio 1040ez instructions You also are liable for a penalty if you do not give the taxpayer identification number of another person when required on a return, statement, or other document. Ohio 1040ez instructions Notice of fiduciary relationship. Ohio 1040ez instructions   The term fiduciary means any person acting for another person. Ohio 1040ez instructions It applies to persons who have positions of trust on behalf of others. Ohio 1040ez instructions A personal representative for a decedent's estate is a fiduciary. Ohio 1040ez instructions Form 56. Ohio 1040ez instructions   If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Ohio 1040ez instructions Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. Ohio 1040ez instructions See the Instructions for Form 56 for filing requirements and other information. Ohio 1040ez instructions   File Form 56 as soon as all the necessary information (including the EIN) is available. Ohio 1040ez instructions It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. Ohio 1040ez instructions The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated. Ohio 1040ez instructions Termination of fiduciary relationship. Ohio 1040ez instructions   Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. Ohio 1040ez instructions See Form 56 and its instructions for more information. Ohio 1040ez instructions   At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905, to wind up your duties as fiduciary. Ohio 1040ez instructions See below for a discussion of these forms. Ohio 1040ez instructions Request for prompt assessment (charge) of tax. Ohio 1040ez instructions   The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. Ohio 1040ez instructions However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. Ohio 1040ez instructions This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. Ohio 1040ez instructions This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. Ohio 1040ez instructions This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries. Ohio 1040ez instructions Form 4810. Ohio 1040ez instructions   Form 4810 can be used for making this request. Ohio 1040ez instructions It must be filed separately from any other document. Ohio 1040ez instructions   As the personal representative for the decedent's estate, you are responsible for any additional taxes that may be due. Ohio 1040ez instructions You can request prompt assessment of any of the decedent's taxes (other than federal estate taxes) for any years for which the statutory period for assessment is open. Ohio 1040ez instructions This applies even though the returns were filed before the decedent's death. Ohio 1040ez instructions Failure to report income. Ohio 1040ez instructions   If you or the decedent failed to report substantial amounts of gross income (more than 25% of the gross income reported on the return) or filed a false or fraudulent return, your request for prompt assessment will not shorten the period during which the IRS may assess the additional tax. Ohio 1040ez instructions However, such a request may relieve you of personal liability for the tax if you did not have knowledge of the unpaid tax. Ohio 1040ez instructions Request for discharge from personal liability for tax. Ohio 1040ez instructions   An executor can make a request for discharge from personal liability for a decedent's income, gift, and estate taxes. Ohio 1040ez instructions The request must be made after the returns for those taxes are filed. Ohio 1040ez instructions To make the request, file Form 5495. Ohio 1040ez instructions For this purpose, an executor is an executor or administrator that is appointed, qualified, and acting within the United States. Ohio 1040ez instructions   Within 9 months after receipt of the request, the IRS will notify the executor of the amount of taxes due. Ohio 1040ez instructions If this amount is paid, the executor will be discharged from personal liability for any future deficiencies. Ohio 1040ez instructions If the IRS has not notified the executor, he or she will be discharged from personal liability at the end of the 9-month period. Ohio 1040ez instructions    Even if the executor is discharged from personal liability, the IRS will still be able to assess tax deficiencies against the executor to the extent he or she still has any of the decedent's property. Ohio 1040ez instructions Insolvent estate. Ohio 1040ez instructions   Generally, if a decedent's estate is insufficient to pay all the decedent's debts, the debts due to the United States must be paid first. Ohio 1040ez instructions Both the decedent's federal income tax liabilities at the time of death and the estate's income tax liability are debts due to the United States. Ohio 1040ez instructions The personal representative of an insolvent estate is personally responsible for any tax liability of the decedent or of the estate if he or she had notice of such tax obligations or failed to exercise due care in determining if such obligations existed before distribution of the estate's assets and before being discharged from duties. Ohio 1040ez instructions The extent of such personal responsibility is the amount of any other payments made before paying the debts due to the United States, except where such other debt paid has priority over the debts due to the United States. Ohio 1040ez instructions Income tax liabilities need not be formally assessed for the personal representative to be liable if he or she was aware or should have been aware of their existence. Ohio 1040ez instructions Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. Ohio 1040ez instructions If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Form 1040, line 21. Ohio 1040ez instructions If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C or Schedule C-EZ of your Form 1040. Ohio 1040ez instructions If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (or Schedule C-EZ) of your Form 1040. Ohio 1040ez instructions Final Income Tax Return for Decedent—Form 1040 The personal representative (defined earlier) must file the final income tax return (Form 1040) of the decedent for the year of death and any returns not filed for preceding years. Ohio 1040ez instructions A surviving spouse, under certain circumstances, may have to file the returns for the decedent. Ohio 1040ez instructions See Joint Return, later. Ohio 1040ez instructions Return for preceding year. Ohio 1040ez instructions   If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. Ohio 1040ez instructions The return for that year will be a regular return and the personal representative must file it. Ohio 1040ez instructions Example. Ohio 1040ez instructions Samantha Smith died on March 21, 2013, before filing her 2012 tax return. Ohio 1040ez instructions Her personal representative must file her 2012 return by April 15, 2013. Ohio 1040ez instructions Her final tax return covering the period from January 1, 2013, to March 20, 2013, is due April 15, 2014. Ohio 1040ez instructions Name, Address, and Signature Write the word “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Ohio 1040ez instructions If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. Ohio 1040ez instructions If a joint return is not being filed, write the decedent's name in the name field and the personal representative's name and address in the address field. Ohio 1040ez instructions Third party designee. Ohio 1040ez instructions   You can check the “Yes” box in the Third Party Designee area on page 2 of the return to authorize the IRS to discuss the return with a friend, family member, or any other person you choose. Ohio 1040ez instructions This allows the IRS to call the person you identified as the designee to answer any questions that may arise during the processing of the return. Ohio 1040ez instructions It also allows the designee to perform certain actions. Ohio 1040ez instructions See the Instructions for Form 1040 for details. Ohio 1040ez instructions Signature. Ohio 1040ez instructions   If a personal representative has been appointed, that person must sign the return. Ohio 1040ez instructions If it is a joint return, the surviving spouse must also sign it. Ohio 1040ez instructions If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse. Ohio 1040ez instructions ” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Ohio 1040ez instructions ” Paid preparer. Ohio 1040ez instructions   If you pay someone to prepare, assist in preparing, or review the tax return, that person must sign the return and fill in the other blanks in the Paid Preparer Use Only area of the return. Ohio 1040ez instructions See the Form 1040 instructions for details. Ohio 1040ez instructions When and Where To File The final income tax return is due at the same time the decedent's return would have been due had death not occurred. Ohio 1040ez instructions A final return for a decedent who was a calendar year taxpayer is generally due on April 15 following the year of death, regardless of when during that year death occurred. Ohio 1040ez instructions However, when the due date falls on a Saturday, Sunday, or legal holiday, the return is filed timely if filed by the next business day. Ohio 1040ez instructions The tax return must be prepared for the year of death regardless of when during the year death occurred. Ohio 1040ez instructions Generally, you must file the final income tax return of the decedent with the Internal Revenue Service Center for the place where you live. Ohio 1040ez instructions A tax return for a decedent can be electronically filed. Ohio 1040ez instructions A personal representative may also obtain an income tax filing extension on behalf of a decedent. Ohio 1040ez instructions Filing Requirements The gross income, age, and filing status of a decedent generally determine whether a return must be filed. Ohio 1040ez instructions Gross income is all income received by an individual from any source in the form of money, goods, property, and services that is not tax-exempt. Ohio 1040ez instructions It includes gross receipts from self-employment, but if the business involves manufacturing, merchandising, or mining, subtract any cost of goods sold. Ohio 1040ez instructions In general, filing status depends on whether the decedent was considered single or married at the time of death. Ohio 1040ez instructions See the income tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Ohio 1040ez instructions Refund A return must be filed to obtain a refund if tax was withheld from salaries, wages, pensions, or annuities, or if estimated tax was paid, even if a return is not otherwise required to be filed. Ohio 1040ez instructions Also, the decedent may be entitled to other credits that result in a refund. Ohio 1040ez instructions These advance payments of tax and credits are discussed later under Credits, Other Taxes, and Payments. Ohio 1040ez instructions Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Ohio 1040ez instructions   Form 1310 does not have to be filed if you are claiming a refund and you are: A surviving spouse filing an original or amended joint return with the decedent, or A court-appointed or certified personal representative filing the decedent’s original return and a copy of the court certificate showing your appointment is attached to the return. Ohio 1040ez instructions   If the personal representative is filing a claim for refund on Form 1040X, Amended U. Ohio 1040ez instructions S. Ohio 1040ez instructions Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. Ohio 1040ez instructions Example. Ohio 1040ez instructions Edward Green died before filing his tax return. Ohio 1040ez instructions You were appointed the personal representative for Edward's estate, and you file his Form 1040 showing a refund due. Ohio 1040ez instructions You do not need Form 1310 to claim the refund if you attach a copy of the court certificate showing you were appointed the personal representative. Ohio 1040ez instructions    If you are a surviving spouse and you receive a tax refund check in both your name and your deceased spouse's name, you can have the check reissued in your name alone. Ohio 1040ez instructions Return the joint-name check marked “VOID” to your local IRS office or the service center where you mailed your return, along with a written request for reissuance of the refund check. Ohio 1040ez instructions A new check will be issued in your name and mailed to you. Ohio 1040ez instructions Death certificate. Ohio 1040ez instructions   When filing the decedent's final income tax return, do not attach the death certificate or other proof of death to the final return. Ohio 1040ez instructions Instead, keep it for your records and provide it if requested. Ohio 1040ez instructions Nonresident Alien If the decedent was a nonresident alien who would have had to file Form 1040NR, U. Ohio 1040ez instructions S. Ohio 1040ez instructions Nonresident Alien Income Tax Return, you must file that form for the decedent's final tax year. Ohio 1040ez instructions See the Instructions for Form 1040NR for the filing requirements, due date, and where to file. Ohio 1040ez instructions Joint Return Generally, the personal representative and the surviving spouse can file a joint return for the decedent and the surviving spouse. Ohio 1040ez instructions However, the surviving spouse alone can file the joint return if no personal representative has been appointed before the due date for filing the final joint return for the year of death. Ohio 1040ez instructions This also applies to the return for the preceding year if the decedent died after the close of the preceding tax year and before filing the return for that year. Ohio 1040ez instructions The income of the decedent that was includible on his or her return for the year up to the date of death (see Income To Include, later) and the income of the surviving spouse for the entire year must be included in the final joint return. Ohio 1040ez instructions A final joint return with the decedent cannot be filed if the surviving spouse remarried before the end of the year of the decedent's death. Ohio 1040ez instructions The filing status of the decedent in this instance is married filing a separate return. Ohio 1040ez instructions For information about tax benefits to which a surviving spouse may be entitled, see Tax Benefits for Survivors, later, under Other Tax Information. Ohio 1040ez instructions Personal representative may revoke joint return election. Ohio 1040ez instructions   A court-appointed personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. Ohio 1040ez instructions This is done by filing a separate return for the decedent within one year from the due date of the return (including any extensions). Ohio 1040ez instructions The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability. Ohio 1040ez instructions Relief from joint liability. Ohio 1040ez instructions   In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Ohio 1040ez instructions If the decedent qualified for this relief while alive, the personal representative can pursue an existing request, or file a request, for relief from joint liability. Ohio 1040ez instructions For information on requesting this relief, see Publication 971, Innocent Spouse Relief. Ohio 1040ez instructions Income To Include The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. Ohio 1040ez instructions The method of accounting regularly used by the decedent before death also determines the income includible on the final return. Ohio 1040ez instructions This section explains how some types of income are reported on the final return. Ohio 1040ez instructions For more information about accounting methods, see Publication 538, Accounting Periods and Methods. Ohio 1040ez instructions Cash Method If the decedent accounted for income under the cash method, only those items actually or constructively received before death are included on the final return. Ohio 1040ez instructions Constructive receipt of income. Ohio 1040ez instructions   Interest from coupons on the decedent's bonds is constructively received by the decedent if the coupons matured in the decedent's final tax year, but had not been cashed. Ohio 1040ez instructions Include the interest income on the final return. Ohio 1040ez instructions   Generally, a dividend is considered constructively received if it was available for use by the decedent without restriction. Ohio 1040ez instructions If the corporation customarily mailed its dividend checks, the dividend was includible when received. Ohio 1040ez instructions If the individual died between the time the dividend was declared and the time it was received in the mail, the decedent did not constructively receive it before death. Ohio 1040ez instructions Do not include the dividend in the final return. Ohio 1040ez instructions Accrual Method Generally, under an accrual method of accounting, income is reported when earned. Ohio 1040ez instructions If the decedent used an accrual method, only the income items normally accrued before death are included on the final return. Ohio 1040ez instructions Interest and Dividend Income (Forms 1099) Form(s) 1099 reporting interest and dividends earned by the decedent before death should be received and the amounts included on the decedent's final return. Ohio 1040ez instructions A separate Form 1099 should show the interest and dividends earned after the date of the decedent's death and paid to the estate or other recipient that must include those amounts on its return. Ohio 1040ez instructions You can request corrected Forms 1099 if these forms do not properly reflect the right recipient or amounts. Ohio 1040ez instructions For example, a Form 1099-INT, reporting interest payable to the decedent, may include income that should be reported on the final income tax return of the decedent, as well as income that the estate or other recipient should report, either as income earned after death or as income in respect of the decedent (discussed later). Ohio 1040ez instructions For income earned after death, you should ask the payer for a Form 1099 that properly identifies the recipient (by name and identification number) and the proper amount. Ohio 1040ez instructions If that is not possible, or if the form includes an amount that represents income in respect of the decedent, report the interest as shown next under How to report. Ohio 1040ez instructions See U. Ohio 1040ez instructions S. Ohio 1040ez instructions savings bonds acquired from decedent under Income in Respect of a Decedent, later, for information on savings bond interest that may have to be reported on the final return. Ohio 1040ez instructions How to report. Ohio 1040ez instructions   If you are preparing the decedent's final return and you have received a Form 1099-INT for the decedent that includes amounts belonging to the decedent and to another recipient (the decedent's estate or another beneficiary), report the total interest shown on Form 1099-INT on Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Ohio 1040ez instructions Next, enter a subtotal of the interest shown on Forms 1099, and the interest reportable from other sources for which you did not receive Forms 1099. Ohio 1040ez instructions Then, show any interest (including any interest you receive as a nominee) belonging to another recipient separately and subtract it from the subtotal. Ohio 1040ez instructions Identify the amount of this adjustment as “Nominee Distribution” or other appropriate designation. Ohio 1040ez instructions   Report dividend income for which you received a Form 1099-DIV, Dividends and Distributions, on the appropriate schedule using the same procedure. Ohio 1040ez instructions    Note. Ohio 1040ez instructions If the decedent received amounts as a nominee, you must give the actual owner a Form 1099, unless the owner is the decedent's spouse. Ohio 1040ez instructions See General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) for more information on filing Forms 1099. Ohio 1040ez instructions Partnership Income The death of a partner closes the partnership's tax year for that partner. Ohio 1040ez instructions Generally, it does not close the partnership's tax year for the remaining partners. Ohio 1040ez instructions The decedent's distributive share of partnership items must be figured as if the partnership's tax year ended on the date the partner died. Ohio 1040ez instructions To avoid an interim closing of the partnership books, the partners can agree to estimate the decedent's distributive share by prorating the amounts the partner would have included for the entire partnership tax year. Ohio 1040ez instructions On the decedent's final return, include the decedent's distributive share of partnership items for the following periods. Ohio 1040ez instructions The partnership's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Ohio 1040ez instructions The period, if any, from the end of the partnership's tax year in (1) to the decedent's date of death. Ohio 1040ez instructions Example. Ohio 1040ez instructions Mary Smith was a partner in XYZ partnership and reported her income on a tax year ending December 31. Ohio 1040ez instructions The partnership uses a tax year ending June 30. Ohio 1040ez instructions Mary died August 31, 2013, and her estate established its tax year through August 31. Ohio 1040ez instructions The distributive share of partnership items based on the decedent's partnership interest is reported as follows. Ohio 1040ez instructions Final Return for the Decedent—January 1 through August 31, 2013, includes XYZ partnership items from (a) the partnership tax year ending June 30, 2013, and (b) the partnership tax year beginning July 1, 2013, and ending August 31, 2013 (the date of death). Ohio 1040ez instructions Income Tax Return of the Estate—September 1, 2013, through August 31, 2014, includes XYZ partnership items for the period September 1, 2013, through June 30, 2014. Ohio 1040ez instructions S Corporation Income If the decedent was a shareholder in an S corporation, include on the final return the decedent's share of the S corporation's items of income, loss, deduction, and credit for the following periods. Ohio 1040ez instructions The corporation's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Ohio 1040ez instructions The period, if any, from the end of the corporation's tax year in (1) to the decedent's date of death. Ohio 1040ez instructions Self-Employment Income Include self-employment income actually or constructively received or accrued, depending on the decedent's accounting method. Ohio 1040ez instructions For self-employment tax purposes only, the decedent's self-employment income will include the decedent's distributive share of a partnership's income or loss through the end of the month in which death occurred. Ohio 1040ez instructions For this purpose, the partnership's income or loss is considered to be earned ratably over the partnership's tax year. Ohio 1040ez instructions Community Income If the decedent was married and domiciled in a community property state, half of the income received and half of the expenses paid during the decedent's tax year by either the decedent or spouse may be considered to be the income and expenses of the other. Ohio 1040ez instructions For more information, see Publication 555, Community Property. Ohio 1040ez instructions HSA, Archer MSA, or Medicare Advantage MSA The treatment of an HSA (health savings account), an Archer MSA (medical savings account), or a Medicare Advantage MSA at the death of the account holder, depends on who acquires the interest in the account. Ohio 1040ez instructions If the decedent's estate acquires the interest, the fair market value (FMV) of the assets in the account on the date of death is included in income on the decedent's final return. Ohio 1040ez instructions The estate tax deduction, discussed later, does not apply to this amount. Ohio 1040ez instructions If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Ohio 1040ez instructions For other information on HSAs, Archer MSAs, or Medicare Advantage MSAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Ohio 1040ez instructions Coverdell Education Savings Account (ESA) Generally, the balance in a Coverdell ESA must be distributed within 30 days after the individual for whom the account was established reaches age 30, or dies, whichever is earlier. Ohio 1040ez instructions The treatment of the Coverdell ESA at the death of an individual under age 30 depends on who acquires the interest in the account. Ohio 1040ez instructions If the decedent's estate acquires the interest, the earnings on the account must be included on the final income tax return of the decedent. Ohio 1040ez instructions The estate tax deduction, discussed later, does not apply to this amount. Ohio 1040ez instructions If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Ohio 1040ez instructions The age 30 limitation does not apply if the individual for whom the account was established or the beneficiary that acquires the account is an individual with special needs. Ohio 1040ez instructions This includes an individual who, because of a physical, mental, or emotional condition (including a learning disability), requires additional time to complete his or her education. Ohio 1040ez instructions For more information on Coverdell ESAs, see Publication 970, Tax Benefits for Education. Ohio 1040ez instructions Accelerated Death Benefits Accelerated death benefits are amounts received under a life insurance contract before the death of the insured individual. Ohio 1040ez instructions These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Ohio 1040ez instructions Generally, if the decedent received accelerated death benefits on the life of a terminally or chronically ill individual, whether on his or her own life or on the life of another person, those benefits are not included in the decedent's income. Ohio 1040ez instructions For more information, see the discussion under Gifts, Insurance, and Inheritances under Other Tax Information, later. Ohio 1040ez instructions Exemptions and Deductions Generally, the rules for exemptions and deductions allowed to an individual also apply to the decedent's final income tax return. Ohio 1040ez instructions Show on the final return deductible items the decedent paid (or accrued, if the decedent reported deductions on an accrual method) before death. Ohio 1040ez instructions This section contains a detailed discussion of medical expenses because the tax treatment of the decedent's medical expenses can be different. Ohio 1040ez instructions See Medical Expenses, later. Ohio 1040ez instructions Exemptions You can claim the decedent's personal exemption on the final income tax return. Ohio 1040ez instructions If the decedent was another person's dependent (for example, a parent's), you cannot claim the personal exemption on the decedent's final return. Ohio 1040ez instructions Standard Deduction If you do not itemize deductions on the final return, the full amount of the appropriate standard deduction is allowed regardless of the date of death. Ohio 1040ez instructions For information on the appropriate standard deduction, see the Form 1040 income tax return instructions or Publication 501. Ohio 1040ez instructions Medical Expenses Medical expenses paid before death by the decedent are deductible, subject to limits, on the final income tax return if deductions are itemized. Ohio 1040ez instructions This includes expenses for the decedent, as well as for the decedent's spouse and dependents. Ohio 1040ez instructions Beginning in 2013, medical expenses exceeding 10% of adjusted gross income (AGI) may be deducted, unless the decedent or their spouse is age 65 or older. Ohio 1040ez instructions In that case medical expenses exceeding 7. Ohio 1040ez instructions 5% of AGI may be deducted. Ohio 1040ez instructions Qualified medical expenses are not deductible if paid with a tax-free distribution from an HSA or an Archer MSA. Ohio 1040ez instructions Election for decedent's expenses. Ohio 1040ez instructions   Medical expenses not paid before death are liabilities of the estate and are shown on the federal estate tax return (Form 706). Ohio 1040ez instructions However, if medical expenses for the decedent are paid out of the estate during the 1-year period beginning with the day after death, you can elect to treat all or part of the expenses as paid by the decedent at the time they were incurred. Ohio 1040ez instructions   If you make the election, you can claim all or part of the expenses on the decedent's income tax return (if deductions are itemized) rather than on the federal estate tax return (Form 706). Ohio 1040ez instructions You can deduct expenses incurred in the year of death on the final income tax return. Ohio 1040ez instructions You should file an amended return (Form 1040X) for medical expenses incurred in an earlier year, unless the statutory period for filing a claim for that year has expired. Ohio 1040ez instructions   The amount you can deduct on the income tax return is the amount above 10% of adjusted gross income (or 7. Ohio 1040ez instructions 5% of adjusted gross income if the decedent or the decedent's spouse was born before January 2, 1949). Ohio 1040ez instructions Amounts not deductible because of this percentage cannot be claimed on the federal estate tax return. Ohio 1040ez instructions Making the election. Ohio 1040ez instructions   You make the election by attaching a statement, in duplicate, to the decedent's income tax return or amended return. Ohio 1040ez instructions The statement must state that you have not claimed the amount as an estate tax deduction, and that the estate waives the right to claim the amount as a deduction. Ohio 1040ez instructions This election applies only to expenses incurred for the decedent, not to expenses incurred to provide medical care for dependents. Ohio 1040ez instructions Example. Ohio 1040ez instructions Richard Brown used the cash method of accounting and filed his income tax return on a calendar year basis. Ohio 1040ez instructions Richard died on June 1, 2013, at the age of 78, after incurring $800 in medical expenses. Ohio 1040ez instructions Of that amount, $500 was incurred in 2012 and $300 was incurred in 2013. Ohio 1040ez instructions Richard itemized his deductions when he filed his 2012 income tax return. Ohio 1040ez instructions The personal representative of the estate paid the entire $800 liability in August 2013. Ohio 1040ez instructions The personal representative may file an amended return (Form 1040X) for 2012 claiming the $500 medical expense as a deduction, subject to the 7. Ohio 1040ez instructions 5% limit. Ohio 1040ez instructions The $300 of expenses incurred in 2013 can be deducted on the final income tax return if deductions are itemized, subject to the 7. Ohio 1040ez instructions 5% limit. Ohio 1040ez instructions The personal representative must file a statement in duplicate with each return stating that these amounts have not been claimed on the federal estate tax return (Form 706), and waiving the right to claim such a deduction on Form 706 in the future. Ohio 1040ez instructions Medical expenses not paid by estate. Ohio 1040ez instructions   If you paid medical expenses for your deceased spouse or dependent, claim the expenses on your tax return for the year in which you paid them, whether they are paid before or after the decedent's death. Ohio 1040ez instructions If the decedent was a child of divorced or separated parents, the medical expenses can usually be claimed by both the custodial and noncustodial parent to the extent paid by that parent during the year. Ohio 1040ez instructions Insurance reimbursements. Ohio 1040ez instructions   Insurance reimbursements of previously deducted medical expenses due a decedent at the time of death and later received by the decedent's estate are includible in the income tax return of the estate (Form 1041) for the year the reimbursements are received. Ohio 1040ez instructions The reimbursements are also includible in the decedent's gross estate. Ohio 1040ez instructions No deduction for funeral expenses can be taken on the final Form 1040 of a decedent. Ohio 1040ez instructions These expenses may be deductible for estate tax purposes on Form 706. Ohio 1040ez instructions Deduction for Losses A decedent's net operating loss deduction from a prior year and any capital losses (including capital loss carryovers) can be deducted only on the decedent's final income tax return. Ohio 1040ez instructions A net operating loss on the decedent's final income tax return can be carried back to prior years. Ohio 1040ez instructions (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Ohio 1040ez instructions ) You cannot deduct any unused net operating loss or capital loss on the estate's income tax return. Ohio 1040ez instructions At-risk loss limits. Ohio 1040ez instructions   Special at-risk rules apply to most activities that are engaged in as a trade or business or for the production of income. Ohio 1040ez instructions   These rules limit the deductible loss to the amount which the individual was considered at-risk in the activity. Ohio 1040ez instructions An individual generally will be considered at-risk to the extent of the money and the adjusted basis of property that he or she contributed to the activity and certain amounts the individual borrowed for use in the activity. Ohio 1040ez instructions An individual will be considered at-risk for amounts borrowed only if he or she was personally liable for the repayment or if the amounts borrowed were secured by property other than that used in the activity. Ohio 1040ez instructions The individual is not considered at-risk for borrowed amounts if the lender has an interest in the activity or if the lender is related to a person who has an interest in the activity. Ohio 1040ez instructions For more information, see Publication 925, Passive Activity and At-Risk Rules. Ohio 1040ez instructions Passive activity rules. Ohio 1040ez instructions   A passive activity is any trade or business activity in which the taxpayer does not materially participate. Ohio 1040ez instructions To determine material participation, see Publication 925. Ohio 1040ez instructions Rental activities are passive activities regardless of the taxpayer's participation, unless the taxpayer meets certain eligibility requirements. Ohio 1040ez instructions   Individuals, estates, and trusts can offset passive activity losses only against passive activity income. Ohio 1040ez instructions Passive activity losses or credits not allowed in one tax year can be carried forward to the next year. Ohio 1040ez instructions   If a passive activity interest is transferred because a taxpayer dies, the accumulated unused passive activity losses are allowed as a deduction against the decedent's income in the year of death. Ohio 1040ez instructions Losses are allowed only to the extent they are greater than the excess of the transferee's (recipient of the interest transferred) basis in the property over the decedent's adjusted basis in the property immediately before death. Ohio 1040ez instructions The part of the accumulated losses equal to the excess is not allowed as a deduction for any tax year. Ohio 1040ez instructions   Use Form 8582, Passive Activity Loss Limitations, to summarize losses and income from passive activities and to figure the amounts allowed. Ohio 1040ez instructions For more information, see Publication 925. Ohio 1040ez instructions Credits, Other Taxes, and Payments Discussed below are some of the tax credits, types of taxes that may be owed, income tax withheld, and estimated tax payments reported on the final return of a decedent. Ohio 1040ez instructions Credits On the final income tax return, you can claim any tax credits that applied to the decedent before death. Ohio 1040ez instructions Some of these credits are discussed next. Ohio 1040ez instructions Earned income credit. Ohio 1040ez instructions   If the decedent was an eligible individual, you can claim the earned income credit on the decedent's final return even though the return covers less than 12 months. Ohio 1040ez instructions If the allowable credit is more than the tax liability for the year, the excess is refunded. Ohio 1040ez instructions   For more information, see Publication 596, Earned Income Credit (EIC). Ohio 1040ez instructions Credit for the elderly or the disabled. Ohio 1040ez instructions   This credit is allowable on a decedent's final income tax return if the decedent met both of the following requirements in the year of death. Ohio 1040ez instructions The decedent: Was a “qualified individual,” and Had income (adjusted gross income (AGI) and nontaxable social security and pensions) less than certain limits. Ohio 1040ez instructions   For details on qualifying for or figuring the credit, see Publication 524, Credit for the Elderly or the Disabled. Ohio 1040ez instructions Child tax credit. Ohio 1040ez instructions   If the decedent had a qualifying child, you may be able to claim the child tax credit on the decedent's final return even though the return covers less than 12 months. Ohio 1040ez instructions You may be able to claim the additional child tax credit and get a refund if the credit is more than the decedent's liability. Ohio 1040ez instructions For more information, see the Instructions for Form 1040. Ohio 1040ez instructions Adoption credit. Ohio 1040ez instructions   Depending upon when the adoption was finalized, this credit may be taken on a decedent's final income tax return if the decedent: Adopted an eligible child and paid qualified adoption expenses, or Has a carryforward of an adoption credit from a prior year. Ohio 1040ez instructions   Also, if the decedent is survived by a spouse who meets the filing status of qualifying widow(er), unused adoption credit may be carried forward and used following the death of the decedent. Ohio 1040ez instructions See Form 8839, Qualified Adoption Expenses, and its instructions for more details. Ohio 1040ez instructions General business tax credit. Ohio 1040ez instructions   The general business credit available to a taxpayer is limited. Ohio 1040ez instructions Any credit arising in a tax year beginning before 1998 that has not been used up can be carried forward for up to 15 years. Ohio 1040ez instructions Any unused credit arising in a tax year beginning after 1997 has a 1-year carryback and a 20-year carryforward period. Ohio 1040ez instructions   After the carryforward period, a deduction may be allowed for any unused business credit. Ohio 1040ez instructions If the taxpayer dies before the end of the carryforward period, the deduction generally is allowed in the year of death. Ohio 1040ez instructions   For more information on the general business credit, see Publication 334, Tax Guide for Small Business. Ohio 1040ez instructions Other Taxes Taxes other than income tax that may be owed on the final return of a decedent include self-employment tax and alternative minimum tax, which are reported on Form 1040. Ohio 1040ez instructions Self-employment tax. Ohio 1040ez instructions   Self-employment tax may be owed on the final return if either of the following applied to the decedent in the year of death: Net earnings from self-employment (excluding income described in (2)) were $400 or more; or Wages from services performed as a church employee were $108. Ohio 1040ez instructions 28 or more. Ohio 1040ez instructions Alternative minimum tax (AMT). Ohio 1040ez instructions   The tax laws give special treatment to certain types of income and allow special deductions and credits for certain types of expenses. Ohio 1040ez instructions The alternative minimum tax (AMT) was enacted so taxpayers who benefit from these laws still pay at least a minimum amount of tax. Ohio 1040ez instructions In general, the AMT is the excess of the tentative minimum tax over the regular tax shown on the return. Ohio 1040ez instructions Form 6251. Ohio 1040ez instructions    Use Form 6251, Alternative Minimum Tax—Individuals, to determine if this tax applies to the decedent. Ohio 1040ez instructions See the form instructions for information on when you must attach Form 6251 to Form 1040. Ohio 1040ez instructions Form 8801. Ohio 1040ez instructions   If the decedent paid AMT in a previous year or had a credit carryforward, the decedent may be eligible for a minimum tax credit. Ohio 1040ez instructions See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts. Ohio 1040ez instructions Payments of Tax The income tax withheld from the decedent's salary, wages, pensions, or annuities, and the amount paid as estimated tax are credits (advance payments of tax) that must be claimed on the final return. Ohio 1040ez instructions Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Income tax liability may be forgiven for a decedent who dies due to service in a combat zone, due to military or terrorist actions, as a result of a terrorist attack, or while serving in the line of duty as an astronaut. Ohio 1040ez instructions Combat Zone If a member of the Armed Forces of the United States dies while in active service in a combat zone or from wounds, disease, or injury incurred in a combat zone, the decedent's income tax liability is abated (forgiven) for the entire year in which death occurred and for any prior tax year ending on or after the first day the person served in a combat zone in active service. Ohio 1040ez instructions For this purpose, a qualified hazardous duty area is treated as a combat zone. Ohio 1040ez instructions If the tax (including interest, additions to the tax, and additional amounts) for these years has been assessed, the assessment will be forgiven. Ohio 1040ez instructions If the tax has been collected (regardless of the date of collection), that tax will be credited or refunded. Ohio 1040ez instructions Any of the decedent's income tax for tax years before those mentioned above that remains unpaid as of the actual (or presumptive) date of death will not be assessed. Ohio 1040ez instructions If any unpaid tax (including interest, additions to the tax, and additional amounts) has been assessed, this assessment will be forgiven. Ohio 1040ez instructions Also, if any tax was collected after the date of death, that amount will be credited or refunded. Ohio 1040ez instructions The date of death of a member of the Armed Forces reported as missing in action or as a prisoner of war is the date his or her name is removed from missing status for military pay purposes. Ohio 1040ez instructions This is true even if death actually occurred earlier. Ohio 1040ez instructions For other tax information for members of the Armed Forces, see Publication 3, Armed Forces' Tax Guide. Ohio 1040ez instructions Military or Terrorist Actions The decedent's income tax liability is forgiven if, at death, he or she was a military or civilian employee of the United States who died because of wounds or injury incurred: While a U. Ohio 1040ez instructions S. Ohio 1040ez instructions employee, and In a military or terrorist action. Ohio 1040ez instructions The forgiveness applies to the tax year in which death occurred and for any earlier tax year, beginning with the year before the year in which the wounds or injury occurred. Ohio 1040ez instructions Example. Ohio 1040ez instructions The income tax liability of a civilian employee of the United States who died in 2013 because of wounds incurred while a U. Ohio 1040ez instructions S. Ohio 1040ez instructions employee in a terrorist attack that occurred in 2008 will be forgiven for 2013 and for all prior tax years in the period 2007 through 2012. Ohio 1040ez instructions Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended, as discussed later. Ohio 1040ez instructions Military or terrorist action defined. Ohio 1040ez instructions   A military or terrorist action means the following. Ohio 1040ez instructions Any terrorist activity that most of the evidence indicates was directed against the United States or any of its allies. Ohio 1040ez instructions Any military action involving the U. Ohio 1040ez instructions S. Ohio 1040ez instructions Armed Forces and resulting from violence or aggression against the United States or any of its allies, or the threat of such violence or aggression. Ohio 1040ez instructions   Terrorist activity includes criminal offenses intended to coerce, intimidate, or retaliate against the government or civilian population. Ohio 1040ez instructions Military action does not include training exercises. Ohio 1040ez instructions Any multinational force in which the United States is participating is treated as an ally of the United States. Ohio 1040ez instructions Determining if a terrorist activity or military action has occurred. Ohio 1040ez instructions   You may rely on published guidance from the IRS to determine if a particular event is considered a terrorist activity or military action. Ohio 1040ez instructions Specified Terrorist Victim The Victims of Terrorism Tax Relief Act of 2001 (the Act) provides tax relief for those injured or killed as a result of terrorist attacks, certain survivors of those killed as a result of terrorist attacks, and others who were affected by terrorist attacks. Ohio 1040ez instructions Under the Act, the federal income tax liability of those killed in the following attacks (specified terrorist victim) is forgiven for certain tax years. Ohio 1040ez instructions The April 19, 1995, terrorist attack on the Alfred P. Ohio 1040ez instructions Murrah Federal Building (Oklahoma City). Ohio 1040ez instructions The September 11, 2001, terrorist attacks. Ohio 1040ez instructions The terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002. Ohio 1040ez instructions The Act also exempts from federal income tax the following types of income. Ohio 1040ez instructions Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Ohio 1040ez instructions Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Ohio 1040ez instructions Certain death benefits paid by an employer to the survivor of an employee because the employee died as a result of a terrorist attack. Ohio 1040ez instructions Payments from the September 11th Victim Compensation Fund 2001. Ohio 1040ez instructions The Act also reduces the estate tax of individuals who die as a result of a terrorist attack. Ohio 1040ez instructions See Publication 3920, Tax Relief for Victims of Terrorist Attacks, for more information. Ohio 1040ez instructions Astronauts Legislation extended the tax relief available under the Victims of Terrorism Tax Relief Act of 2001 (the Act) to astronauts who died in the line of duty after December 31, 2002. Ohio 1040ez instructions The decedent's income tax liability is forgiven for the tax year in which death occurs, and for the tax year prior to death. Ohio 1040ez instructions For information on death benefit payments and the reduction of federal estate taxes, see Publication 3920. Ohio 1040ez instructions However, the discussions in that publication under Death Benefits and Estate Tax Reduction should be modified for astronauts (for example, by using the date of death of the astronaut instead of September 11, 2001). Ohio 1040ez instructions For more information on the Act, see Publication 3920. Ohio 1040ez instructions Claim for Credit or Refund If any of these tax-forgiveness situations applies to a prior year tax, any tax paid for which the period for filing a claim has not ended will be credited or refunded. Ohio 1040ez instructions If any tax is still due, it will be canceled. Ohio 1040ez instructions The normal period for filing a claim for credit or refund is 3 years after the return was filed or 2 years after the tax was paid, whichever is later. Ohio 1040ez instructions If death occurred in a combat zone or from wounds, disease, or injury incurred in a combat zone, the period for filing the claim is extended by: The amount of time served in the combat zone (including any period in which the individual was in missing status), plus The period of continuous qualified hospitalization for injury from service in the combat zone, if any, plus The next 180 days. Ohio 1040ez instructions Qualified hospitalization means any hospitalization outside the United States and any hospitalization in the United States of not more than 5 years. Ohio 1040ez instructions This extended period for filing the claim also applies to a member of the Armed Forces who was deployed outside the United States in a designated contingency operation. Ohio 1040ez instructions Filing a claim. Ohio 1040ez instructions   Use the following procedures to file a claim. Ohio 1040ez instructions If a U. Ohio 1040ez instructions S. Ohio 1040ez instructions individual income tax return (Form 1040, 1040A, or 1040EZ) has not been filed, you should make a claim for refund of any withheld income tax or estimated tax payments by filing Form 1040. Ohio 1040ez instructions Form W-2, Wage and Tax Statement, must accompany all returns. Ohio 1040ez instructions If a U. Ohio 1040ez instructions S. Ohio 1040ez instructions individual income tax return has been filed, you should make a claim for refund by filing Form 1040X. Ohio 1040ez instructions You must file a separate Form 1040X for each year in question. Ohio 1040ez instructions   You must file these returns and claims at the following address for regular mail (U. Ohio 1040ez instructions S. Ohio 1040ez instructions Postal Service). Ohio 1040ez instructions    Internal Revenue Service 333 W. Ohio 1040ez instructions Pershing, P5–6503 Kansas City, MO 64108   Identify all returns and claims for refund by writing “Iraq—KIA,” “Enduring Freedom—KIA,” “Kosovo Operation—KIA,” “Desert Storm—KIA,” or “Former Yugoslavia—KIA” in bold letters on the top of page 1 of the return or claim. Ohio 1040ez instructions On the applicable return, write the same phrase on the line for total tax. Ohio 1040ez instructions If the individual was killed in a terrorist or military action, put “KITA” on the front of the return and on the line for total tax. Ohio 1040ez instructions   Include an attachment showing the computation of the decedent's tax liability and a computation of the amount to be forgiven. Ohio 1040ez instructions On joint returns, make an allocation of the tax as described below under Joint returns. Ohio 1040ez instructions If you cannot make a proper allocation, attach a statement of all income and deductions allocable to each spouse and the IRS will make the proper allocation. Ohio 1040ez instructions   You must attach Form 1310 to all returns and claims for refund. Ohio 1040ez instructions However, for exceptions to filing Form 1310, see Form 1310. Ohio 1040ez instructions Statement of Person Claiming Refund Due a Deceased Taxpayer, under Refund, earlier. Ohio 1040ez instructions   You must also attach proof of death that includes a statement that the individual was a U. Ohio 1040ez instructions S. Ohio 1040ez instructions employee on the date of injury and on the date of death and died as the result of a military or terrorist action. Ohio 1040ez instructions For military and civilian employees of the Department of Defense, attach DD Form 1300, Report of Casualty. Ohio 1040ez instructions For other U. Ohio 1040ez instructions S. Ohio 1040ez instructions civilian employees killed in the United States, attach a death certificate and a certification (letter) from the federal employer. Ohio 1040ez instructions For other U. Ohio 1040ez instructions S. Ohio 1040ez instructions civilian employees killed overseas, attach a certification from the Department of State. Ohio 1040ez instructions   If you do not have enough tax information to file a timely claim for refund, you can suspend the period for filing a claim by filing Form 1040X. Ohio 1040ez instructions Attach Form 1310, any required documentation currently available, and a statement that you will file an amended claim as soon as you have the required tax information. Ohio 1040ez instructions Joint returns. Ohio 1040ez instructions   If a joint return was filed, only the decedent's part of the income tax liability is eligible for forgiveness. Ohio 1040ez instructions Determine the decedent's tax liability as follows. Ohio 1040ez instructions Figure the income tax for which the decedent would have been liable if a separate return had been filed. Ohio 1040ez instructions Figure the income tax for which the spouse would have been liable if a separate return had been filed. Ohio 1040ez instructions Multiply the joint tax liability by a fraction. Ohio 1040ez instructions The numerator of the fraction is the amount in (1), above. Ohio 1040ez instructions The denominator of the fraction is the total of (1) and (2). Ohio 1040ez instructions   The resulting amount from (3) above is the decedent's tax liability eligible for forgiveness. Ohio 1040ez instructions Filing Reminders To minimize the time needed to process the decedent's final return and issue any refund, be sure to follow these procedures. Ohio 1040ez instructions Write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Ohio 1040ez instructions If a personal representative has been appointed, the personal representative must sign the return. Ohio 1040ez instructions If it is a joint return, the surviving spouse must also sign it. Ohio 1040ez instructions If you are the decedent's spouse filing a joint return with the decedent and no personal representative has been appointed, write “Filing as surviving spouse” in the area where you sign the return. Ohio 1040ez instructions If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Ohio 1040ez instructions ” To claim a refund for the decedent, do the following. Ohio 1040ez instructions If you are the decedent's spouse filing a joint return with the decedent, file only the tax return to claim the refund. Ohio 1040ez instructions If you are the personal representative and the return is not a joint return filed with the decedent's surviving spouse, file the return and attach a copy of the certificate that shows your appointment by the court. Ohio 1040ez instructions (A power of attorney or a copy of the decedent's will is not acceptable evidence of your appointment as the personal representative. Ohio 1040ez instructions ) If you are filing an amended return, attach Form 1310 and a copy of the certificate of appointment (or, if you have already sent the certificate of appointment to IRS, write “Certificate Previously Filed” at the bottom of Form 1310). Ohio 1040ez instructions If you are not filing a joint return as the surviving spouse and a personal representative has not been appointed, file the return and attach Form 1310. Ohio 1040ez instructions Other Tax Information Discussed below is information about the effect of an individual's death on the income tax liability of the survivors (including widows and widowers), the beneficiaries, and the estate. Ohio 1040ez instructions Tax Benefits for Survivors Survivors can qualify for certain benefits when filing their own income tax returns. Ohio 1040ez instructions Joint return by surviving spouse. Ohio 1040ez instructions   A surviving spouse can file a joint return for the year of death and may qualify for special tax rates for the following 2 years, as explained under Qualifying widows and widowers, later. Ohio 1040ez instructions Decedent as your dependent. Ohio 1040ez instructions   If the decedent qualified as your dependent for a part of the year before death, you can claim the exemption for the dependent on your tax return, regardless of when death occurred during the year. Ohio 1040ez instructions   If the decedent was your qualifying child, you may be able to claim the child tax credit or the earned income credit. Ohio 1040ez instructions To determine if you qualify for the child tax credit, see the instructions for Form 1040, line 51; Form 1040A, line 33; or Form 1040NR, line 48. Ohio 1040ez instructions To determine if you qualify for the earned income credit, see the instructions for Form 1040, lines 64a and 64b or Form 1040A, lines 38a and 38b. Ohio 1040ez instructions Qualifying widows and widowers. Ohio 1040ez instructions   If your spouse died within the 2 tax years preceding the year for which your return is being filed, you may be eligible to claim the filing status of qualifying widow(er) with dependent child and qualify to use the married-filing-jointly tax rates. Ohio 1040ez instructions Requirements. Ohio 1040ez instructions   Generally, you qualify for this special benefit if you meet all of the following requirements. Ohio 1040ez instructions You were entitled to file a joint return with your spouse for the year of death—whether or not you actually filed jointly. Ohio 1040ez instructions You did not remarry before the end of the current tax year. Ohio 1040ez instructions You have a child, stepchild, or foster child who qualifies as your dependent for the tax year. Ohio 1040ez instructions You provide more than half the cost of maintaining your home, which is the principal residence of that child for the entire year except for temporary absences. Ohio 1040ez instructions Example. Ohio 1040ez instructions William Burns' wife died in 2010. Ohio 1040ez instructions William has not remarried and continued throughout 2011 and 2012 to maintain a home for himself and his dependent child. Ohio 1040ez instructions For 2010, he was entitled to file a joint return for himself and his deceased wife. Ohio 1040ez instructions For 2011 and 2012, he qualifies to file as a qualifying widower with dependent child. Ohio 1040ez instructions For later years, he may qualify to file as a head of household. Ohio 1040ez instructions Figuring your tax. Ohio 1040ez instructions   Check the box on line 5 (Form 1040 or 1040A) under Filing Status on your tax return. Ohio 1040ez instructions Use the Tax Rate Schedule or the column in the Tax Table for Married filing jointly, which gives you the split-income benefits. Ohio 1040ez instructions   The last year you can file jointly with, or claim an exemption for, your deceased spouse is the year of death. Ohio 1040ez instructions Joint return filing rules. Ohio 1040ez instructions   If you are the surviving spouse and a personal representative is handling the estate for the decedent, you should coordinate filing your return for the year of death with this personal representative. Ohio 1040ez instructions See Joint Return under Final Income Tax Return for Decedent—Form 1040, earlier. Ohio 1040ez instructions Income in Respect of a Decedent All income the decedent would have received had death not occurred that was not properly includible on the final return, discussed earlier, is income in respect of a decedent. Ohio 1040ez instructions If the decedent is a specified terrorist victim (see Specified Terrorist Victim, earlier), income received after the date of death and before the end of the decedent's tax year (determined without regard to death) is excluded from the recipient's gross income. Ohio 1040ez instructions This exclusion does not apply to certain income. Ohio 1040ez instructions For more information, see Publication 3920. Ohio 1040ez instructions How To Report Income in respect of a decedent must be included in the income of one of the following. Ohio 1040ez instructions The decedent's estate, if the estate receives it. Ohio 1040ez instructions The beneficiary, if the right to income is passed directly to the beneficiary and the beneficiary receives it. Ohio 1040ez instructions Any person to whom the estate properly distributes the right to receive it. Ohio 1040ez instructions If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. Ohio 1040ez instructions See Estate Tax Deduction, later. Ohio 1040ez instructions Example 1. Ohio 1040ez instructions Frank Johnson owned and operated an apple orchard. Ohio 1040ez instructions He used the cash method of accounting. Ohio 1040ez instructions He sold and delivered 1,000 bushels of apples to a canning factory for $2,000, but did not receive payment before his death. Ohio 1040ez instructions The proceeds from the sale are income in respect of a decedent. Ohio 1040ez instructions When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Ohio 1040ez instructions When Frank's widow collects the $2,000, she must include that amount in her return. Ohio 1040ez instructions It is not reported on the final return of the decedent or on the return of the estate. Ohio 1040ez instructions Example 2. Ohio 1040ez instructions Assume the same facts as in Example 1, except that Frank used the accrual method of accounting. Ohio 1040ez instructions The amount accrued from the sale of the apples would be included on his final return. Ohio 1040ez instructions Neither the estate nor the widow would realize income in respect of a decedent when the money is later paid. Ohio 1040ez instructions Example 3. Ohio 1040ez instructions On February 1, George High, a cash method taxpayer, sold his tractor for $3,000, payable March 1 of the same year. Ohio 1040ez instructions His adjusted basis in the tractor was $2,000. Ohio 1040ez instructions George died on February 15, before receiving payment. Ohio 1040ez instructions The gain to be reported as income in respect of a decedent is the $1,000 difference between the decedent's basis in the property and the sale proceeds. Ohio 1040ez instructions In other words, the income in respect of a decedent is the gain the decedent would have realized had he lived. Ohio 1040ez instructions Example 4. Ohio 1040ez instructions Cathy O'Neil was entitled to a large salary payment at the date of her death. Ohio 1040ez instructions The amount was to be paid in five annual installments. Ohio 1040ez instructions The estate, after collecting two installments, distributed the right to the remaining installments to you, the beneficiary. Ohio 1040ez instructions The payments are income in respect of a decedent. Ohio 1040ez instructions None of the payments were includible on Cathy's final return. Ohio 1040ez instructions The estate must include in its income the two installments it received, and you must include in your income each of the three installments as you receive them. Ohio 1040ez instructions Example 5. Ohio 1040ez instructions You inherited the right to receive renewal commissions on life insurance sold by your father before his death. Ohio 1040ez instructions You inherited the right from your mother, who acquired it by bequest from your father. Ohio 1040ez instructions Your mother died before she received all the commissions she had the right to receive, so you received the rest. Ohio 1040ez instructions The commissions are income in respect of a decedent. Ohio 1040ez instructions None of these commissions were includible in your father's final return. Ohio 1040ez instructions The commissions received by your mother were included in her income. Ohio 1040ez instructions The commissions you received are not includible in your mother's income, even on her final return. Ohio 1040ez instructions You must include them in your income. Ohio 1040ez instructions Character of income. Ohio 1040ez instructions   The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. Ohio 1040ez instructions If the income would have been a capital gain to the decedent, it will be a capital gain to you. Ohio 1040ez instructions Transfer of right to income. Ohio 1040ez instructions   If you transfer your right to income in respect of a decedent, you must include in your income the greater of: The amount you receive for the right, or The fair market value of the right you transfer. Ohio 1040ez instructions   If you make a gift of such a right, you must include in your income the fair market value of the right at the time of the gift. Ohio 1040ez instructions   If the right to income from an installment obligation is transferred, the amount you must include in income is reduced by the basis of the obligation. Ohio 1040ez instructions See Installment obligations, later. Ohio 1040ez instructions Transfer defined. Ohio 1040ez instructions   A transfer for this purpose includes a sale, exchange, or other disposition, the satisfaction of an installment obligation at other than face value, or the cancellation of an installment obligation. Ohio 1040ez instructions Installment obligations. Ohio 1040ez instructions   If the decedent sold property using the installment method and you are collecting payments on an installment obligation acquired from the decedent, use the same gross profit percentage the decedent used to figure the part of each payment that represents profit. Ohio 1040ez instructions Include in your income the same profit the decedent would have included had death not occurred. Ohio 1040ez instructions For more information, see Publication 537, Installment Sales. Ohio 1040ez instructions   If you dispose of an installment obligation acquired from a decedent (other than by transfer to the obligor), the rules explained in Publication 537 for figuring gain or loss on the disposition apply to you. Ohio 1040ez instructions Transfer to obligor. Ohio 1040ez instructions   A transfer of a right to income, discussed earlier, has occurred if the decedent (seller) sold property using the installment method and the installment obligation was transferred to the obligor (buyer or person legally obligated to pay the installments). Ohio 1040ez instructions A transfer also occurs if the obligation was canceled either at death or by the estate or person receiving the obligation from the decedent. Ohio 1040ez instructions An obligation that becomes unenforceable is treated as having been canceled. Ohio 1040ez instructions   If such a transfer occurs, the amount included in the income of the transferor (the estate or beneficiary) is the greater of the amount received or the fair market value of the installment obligation at the time of transfer, reduced by the basis of the obligation. Ohio 1040ez instructions The basis of the obligation is the decedent's basis, adjusted for all installment payments received after the decedent's death and before the transfer. Ohio 1040ez instructions   If the decedent and obligor were related persons, the fair market value of the obligation cannot be less than its face value. Ohio 1040ez instructions Specific Types of Income in Respect of a Decedent This section explains and provides examples of some specific types of income in respect of a decedent. Ohio 1040ez instructions Wages. Ohio 1040ez instructions   The entire amount of wages or other employee compensation earned by the decedent but unpaid at the time of death is income in respect of a decedent. Ohio 1040ez instructions The income is not reduced by any amounts withheld by the employer. Ohio 1040ez instructions If the income is $600 or more, the employer should report it in box 3 of Form 1099-MISC, Miscellaneous Income, and give the recipient a copy of the form or a similar statement. Ohio 1040ez instructions   Wages paid as income in respect of a decedent are not subject to federal income tax withholding. Ohio 1040ez instructions However, if paid during the calendar year of death, they are subject to withholding for social security and Medicare taxes. Ohio 1040ez instructions These taxes should be included on the decedent's Form W-2 along with the taxes withheld before death. Ohio 1040ez instructions These wages are not included in box 1 of Form W-2. Ohio 1040ez instructions   Wages paid as income in respect of a decedent after the year of death generally are not subject to withholding for any federal taxe