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Tax unemployed 1. Tax unemployed   Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. Tax unemployed Business associate. Tax unemployed Bona fide business purpose. Tax unemployed Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. Tax unemployed This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. Tax unemployed It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. Tax unemployed Travel expenses defined. Tax unemployed   For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Tax unemployed   An ordinary expense is one that is common and accepted in your trade or business. Tax unemployed A necessary expense is one that is helpful and appropriate for your business. Tax unemployed An expense does not have to be required to be considered necessary. Tax unemployed   You will find examples of deductible travel expenses in Table 1-1 , later. Tax unemployed Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Tax unemployed This rest requirement is not satisfied by merely napping in your car. Tax unemployed You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Tax unemployed Example 1. Tax unemployed You are a railroad conductor. Tax unemployed You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Tax unemployed During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Tax unemployed You are considered to be away from home. Tax unemployed Example 2. Tax unemployed You are a truck driver. Tax unemployed You leave your terminal and return to it later the same day. Tax unemployed You get an hour off at your turnaround point to eat. Tax unemployed Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Tax unemployed Members of the Armed Forces. Tax unemployed   If you are a member of the U. Tax unemployed S. Tax unemployed Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Tax unemployed You cannot deduct your expenses for meals and lodging. Tax unemployed You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Tax unemployed If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Tax unemployed   A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. Tax unemployed Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Tax unemployed Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Tax unemployed It includes the entire city or general area in which your business or work is located. Tax unemployed If you have more than one regular place of business, your tax home is your main place of business. Tax unemployed See Main place of business or work , later. Tax unemployed If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Tax unemployed See No main place of business or work , later. Tax unemployed If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Tax unemployed As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Tax unemployed Main place of business or work. Tax unemployed   If you have more than one place of work, consider the following when determining which one is your main place of business or work. Tax unemployed The total time you ordinarily spend in each place. Tax unemployed The level of your business activity in each place. Tax unemployed Whether your income from each place is significant or insignificant. Tax unemployed Example. Tax unemployed You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Tax unemployed You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Tax unemployed Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Tax unemployed No main place of business or work. Tax unemployed   You may have a tax home even if you do not have a regular or main place of work. Tax unemployed Your tax home may be the home where you regularly live. Tax unemployed Factors used to determine tax home. Tax unemployed   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Tax unemployed You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Tax unemployed You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Tax unemployed You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Tax unemployed   If you satisfy all three factors, your tax home is the home where you regularly live. Tax unemployed If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Tax unemployed If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Tax unemployed Example 1. Tax unemployed You are single and live in Boston in an apartment you rent. Tax unemployed You have worked for your employer in Boston for a number of years. Tax unemployed Your employer enrolls you in a 12-month executive training program. Tax unemployed You do not expect to return to work in Boston after you complete your training. Tax unemployed During your training, you do not do any work in Boston. Tax unemployed Instead, you receive classroom and on-the-job training throughout the United States. Tax unemployed You keep your apartment in Boston and return to it frequently. Tax unemployed You use your apartment to conduct your personal business. Tax unemployed You also keep up your community contacts in Boston. Tax unemployed When you complete your training, you are transferred to Los Angeles. Tax unemployed You do not satisfy factor (1) because you did not work in Boston. Tax unemployed You satisfy factor (2) because you had duplicate living expenses. Tax unemployed You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Tax unemployed Therefore, you have a tax home in Boston. Tax unemployed Example 2. Tax unemployed You are an outside salesperson with a sales territory covering several states. Tax unemployed Your employer's main office is in Newark, but you do not conduct any business there. Tax unemployed Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. Tax unemployed You have a room in your married sister's house in Dayton. Tax unemployed You stay there for one or two weekends a year, but you do no work in the area. Tax unemployed You do not pay your sister for the use of the room. Tax unemployed You do not satisfy any of the three factors listed earlier. Tax unemployed You are an itinerant and have no tax home. Tax unemployed Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Tax unemployed You also cannot deduct the cost of meals and lodging while at your tax home. Tax unemployed See Example 1 , later. Tax unemployed If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Tax unemployed See Example 2 , later. Tax unemployed Example 1. Tax unemployed You are a truck driver and you and your family live in Tucson. Tax unemployed You are employed by a trucking firm that has its terminal in Phoenix. Tax unemployed At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Tax unemployed You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Tax unemployed This is because Phoenix is your tax home. Tax unemployed Example 2. Tax unemployed Your family home is in Pittsburgh, where you work 12 weeks a year. Tax unemployed The rest of the year you work for the same employer in Baltimore. Tax unemployed In Baltimore, you eat in restaurants and sleep in a rooming house. Tax unemployed Your salary is the same whether you are in Pittsburgh or Baltimore. Tax unemployed Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Tax unemployed You cannot deduct any expenses you have for meals and lodging there. Tax unemployed However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Tax unemployed You can deduct the cost of your round trip between Baltimore and Pittsburgh. Tax unemployed You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Tax unemployed Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Tax unemployed It may not be practical to return to your tax home from this other location at the end of each work day. Tax unemployed Temporary assignment vs. Tax unemployed indefinite assignment. Tax unemployed   If your assignment or job away from your main place of work is temporary, your tax home does not change. Tax unemployed You are considered to be away from home for the whole period you are away from your main place of work. Tax unemployed You can deduct your travel expenses if they otherwise qualify for deduction. Tax unemployed Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Tax unemployed    However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Tax unemployed An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Tax unemployed   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Tax unemployed You may be able to deduct the cost of relocating to your new tax home as a moving expense. Tax unemployed See Publication 521 for more information. Tax unemployed Exception for federal crime investigations or prosecutions. Tax unemployed   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Tax unemployed This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. Tax unemployed   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Tax unemployed Determining temporary or indefinite. Tax unemployed   You must determine whether your assignment is temporary or indefinite when you start work. Tax unemployed If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Tax unemployed An assignment or job that is initially temporary may become indefinite due to changed circumstances. Tax unemployed A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Tax unemployed   The following examples illustrate whether an assignment or job is temporary or indefinite. Tax unemployed Example 1. Tax unemployed You are a construction worker. Tax unemployed You live and regularly work in Los Angeles. Tax unemployed You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Tax unemployed Your tax home is Los Angeles. Tax unemployed Because of a shortage of work, you took a job on a construction project in Fresno. Tax unemployed Your job was scheduled to end in 8 months. Tax unemployed The job actually lasted 10 months. Tax unemployed You realistically expected the job in Fresno to last 8 months. Tax unemployed The job actually did last less than 1 year. Tax unemployed The job is temporary and your tax home is still in Los Angeles. Tax unemployed Example 2. Tax unemployed The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. Tax unemployed The job actually was completed in 10 months. Tax unemployed Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. Tax unemployed You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. Tax unemployed Example 3. Tax unemployed The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. Tax unemployed After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). Tax unemployed Initially, you realistically expected the job in Fresno to last for only 9 months. Tax unemployed However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. Tax unemployed You can only deduct your travel expenses for the first 8 months. Tax unemployed You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. Tax unemployed Going home on days off. Tax unemployed   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Tax unemployed You cannot deduct the cost of your meals and lodging there. Tax unemployed However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Tax unemployed You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Tax unemployed   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Tax unemployed In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Tax unemployed Probationary work period. Tax unemployed   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Tax unemployed You cannot deduct any of your expenses for meals and lodging during the probationary period. Tax unemployed What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Tax unemployed You can deduct ordinary and necessary expenses you have when you travel away from home on business. Tax unemployed The type of expense you can deduct depends on the facts and your circumstances. Tax unemployed Table 1-1 summarizes travel expenses you may be able to deduct. Tax unemployed You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Tax unemployed When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Tax unemployed You can use a log, diary, notebook, or any other written record to keep track of your expenses. Tax unemployed The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). Tax unemployed Separating costs. Tax unemployed   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Tax unemployed You must have a reasonable basis for making this allocation. Tax unemployed For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Tax unemployed Travel expenses for another individual. Tax unemployed    If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Tax unemployed Employee. Tax unemployed   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Tax unemployed Business associate. Tax unemployed   If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. Tax unemployed A business associate is someone with whom you could reasonably expect to actively conduct business. Tax unemployed A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Tax unemployed Bona fide business purpose. Tax unemployed   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Tax unemployed Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Tax unemployed Table 1-1. Tax unemployed Travel Expenses You Can Deduct   This chart summarizes expenses you can deduct when you travel away from home for business purposes. Tax unemployed IF you have expenses for. Tax unemployed . Tax unemployed . Tax unemployed THEN you can deduct the cost of. Tax unemployed . Tax unemployed . Tax unemployed transportation travel by airplane, train, bus, or car between your home and your business destination. Tax unemployed If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Tax unemployed If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. Tax unemployed taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Tax unemployed baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Tax unemployed car operating and maintaining your car when traveling away from home on business. Tax unemployed You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. Tax unemployed If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Tax unemployed lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Tax unemployed Meals include amounts spent for food, beverages, taxes, and related tips. Tax unemployed See Meals for additional rules and limits. Tax unemployed cleaning dry cleaning and laundry. Tax unemployed telephone business calls while on your business trip. Tax unemployed This includes business communication by fax machine or other communication devices. Tax unemployed tips tips you pay for any expenses in this chart. Tax unemployed other other similar ordinary and necessary expenses related to your business travel. Tax unemployed These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Tax unemployed Example. Tax unemployed Jerry drives to Chicago on business and takes his wife, Linda, with him. Tax unemployed Linda is not Jerry's employee. Tax unemployed Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Tax unemployed The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Tax unemployed Her expenses are not deductible. Tax unemployed Jerry pays $199 a day for a double room. Tax unemployed A single room costs $149 a day. Tax unemployed He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Tax unemployed If he uses public transportation, he can deduct only his fare. Tax unemployed Meals You can deduct the cost of meals in either of the following situations. Tax unemployed It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Tax unemployed The meal is business-related entertainment. Tax unemployed Business-related entertainment is discussed in chapter 2 . Tax unemployed The following discussion deals only with meals that are not business-related entertainment. Tax unemployed Lavish or extravagant. Tax unemployed   You cannot deduct expenses for meals that are lavish or extravagant. Tax unemployed An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Tax unemployed Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Tax unemployed 50% limit on meals. Tax unemployed   You can figure your meals expense using either of the following methods. Tax unemployed Actual cost. Tax unemployed The standard meal allowance. Tax unemployed Both of these methods are explained below. Tax unemployed But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Tax unemployed   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Tax unemployed If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Tax unemployed Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. Tax unemployed Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Tax unemployed If you use this method, you must keep records of your actual cost. Tax unemployed Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Tax unemployed It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Tax unemployed The set amount varies depending on where and when you travel. Tax unemployed In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Tax unemployed If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Tax unemployed See the recordkeeping rules for travel in chapter 5 . Tax unemployed Incidental expenses. Tax unemployed   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Tax unemployed   Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Tax unemployed Incidental-expenses-only method. Tax unemployed   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Tax unemployed The amount of the deduction is $5 a day. Tax unemployed You can use this method only if you did not pay or incur any meal expenses. Tax unemployed You cannot use this method on any day that you use the standard meal allowance. Tax unemployed This method is subject to the proration rules for partial days. Tax unemployed See Travel for days you depart and return , later in this chapter. Tax unemployed Note. Tax unemployed The incidental-expenses-only method is not subject to the 50% limit discussed below. Tax unemployed Federal employees should refer to the Federal Travel Regulations at www. Tax unemployed gsa. Tax unemployed gov. Tax unemployed Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Tax unemployed 50% limit may apply. Tax unemployed   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Tax unemployed If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Tax unemployed The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. Tax unemployed There is no optional standard lodging amount similar to the standard meal allowance. Tax unemployed Your allowable lodging expense deduction is your actual cost. Tax unemployed Who can use the standard meal allowance. Tax unemployed   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Tax unemployed Use of the standard meal allowance for other travel. Tax unemployed   You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Tax unemployed You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Tax unemployed You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Tax unemployed Amount of standard meal allowance. Tax unemployed   The standard meal allowance is the federal M&IE rate. Tax unemployed For travel in 2013, the rate for most small localities in the United States is $46 a day. Tax unemployed    Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Tax unemployed    You can find this information (organized by state) on the Internet at www. Tax unemployed gsa. Tax unemployed gov/perdiem. Tax unemployed Enter a zip code or select a city and state for the per diem rates for the current fiscal year. Tax unemployed Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. Tax unemployed ”   Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. Tax unemployed You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. Tax unemployed   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Tax unemployed If you work in the transportation industry, however, see Special rate for transportation workers , later. Tax unemployed Standard meal allowance for areas outside the continental United States. Tax unemployed   The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Tax unemployed The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Tax unemployed S. Tax unemployed Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Tax unemployed The Department of State establishes per diem rates for all other foreign areas. Tax unemployed    You can access per diem rates for non-foreign areas outside the continental United States at: www. Tax unemployed defensetravel. Tax unemployed dod. Tax unemployed mil/site/perdiemCalc. Tax unemployed cfm. Tax unemployed You can access all other foreign per diem rates at: www. Tax unemployed state. Tax unemployed gov/travel/. Tax unemployed Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. Tax unemployed Special rate for transportation workers. Tax unemployed   You can use a special standard meal allowance if you work in the transportation industry. Tax unemployed You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Tax unemployed If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Tax unemployed   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Tax unemployed If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Tax unemployed Travel for days you depart and return. Tax unemployed   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Tax unemployed You can do so by one of two methods. Tax unemployed Method 1: You can claim 3/4 of the standard meal allowance. Tax unemployed Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Tax unemployed Example. Tax unemployed Jen is employed in New Orleans as a convention planner. Tax unemployed In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Tax unemployed She left her home in New Orleans at 10 a. Tax unemployed m. Tax unemployed on Wednesday and arrived in Washington, DC, at 5:30 p. Tax unemployed m. Tax unemployed After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Tax unemployed m. Tax unemployed Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Tax unemployed Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Tax unemployed Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Tax unemployed For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Tax unemployed Travel in the United States The following discussion applies to travel in the United States. Tax unemployed For this purpose, the United States includes the 50 states and the District of Columbia. Tax unemployed The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Tax unemployed See Part of Trip Outside the United States , later. Tax unemployed Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. Tax unemployed If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. Tax unemployed These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Tax unemployed Example. Tax unemployed You work in Atlanta and take a business trip to New Orleans in May. Tax unemployed Your business travel totals 850 miles round trip. Tax unemployed On your way, you stop in Mobile to visit your parents. Tax unemployed You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Tax unemployed If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. Tax unemployed You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. Tax unemployed The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Tax unemployed Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Tax unemployed However, you can deduct any expenses you have while at your destination that are directly related to your business. Tax unemployed A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Tax unemployed The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Tax unemployed Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. Tax unemployed For the part of your trip that is inside the United States, use the rules for travel in the United States. Tax unemployed Travel outside the United States does not include travel from one point in the United States to another point in the United States. Tax unemployed The following discussion can help you determine whether your trip was entirely within the United States. Tax unemployed Public transportation. Tax unemployed   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Tax unemployed Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Tax unemployed Example. Tax unemployed You fly from New York to Puerto Rico with a scheduled stop in Miami. Tax unemployed You return to New York nonstop. Tax unemployed The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Tax unemployed Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Tax unemployed Private car. Tax unemployed   Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. Tax unemployed Example. Tax unemployed You travel by car from Denver to Mexico City and return. Tax unemployed Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Tax unemployed The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Tax unemployed Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Tax unemployed For this purpose, the United States includes the 50 states and the District of Columbia. Tax unemployed How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Tax unemployed Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Tax unemployed Travel entirely for business. Tax unemployed   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Tax unemployed Travel considered entirely for business. Tax unemployed   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Tax unemployed Exception 1 - No substantial control. Tax unemployed   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Tax unemployed The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Tax unemployed   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. Tax unemployed    “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . Tax unemployed   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Tax unemployed   A self-employed person generally has substantial control over arranging business trips. Tax unemployed Exception 2 - Outside United States no more than a week. Tax unemployed   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Tax unemployed One week means 7 consecutive days. Tax unemployed In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Tax unemployed Example. Tax unemployed You traveled to Brussels primarily for business. Tax unemployed You left Denver on Tuesday and flew to New York. Tax unemployed On Wednesday, you flew from New York to Brussels, arriving the next morning. Tax unemployed On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. Tax unemployed You flew back to New York, arriving Wednesday afternoon. Tax unemployed On Thursday, you flew back to Denver. Tax unemployed Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. Tax unemployed This is because the day you depart does not count as a day outside the United States. Tax unemployed You can deduct your cost of the round-trip flight between Denver and Brussels. Tax unemployed You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. Tax unemployed However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. Tax unemployed Exception 3 - Less than 25% of time on personal activities. Tax unemployed   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Tax unemployed For this purpose, count both the day your trip began and the day it ended. Tax unemployed Example. Tax unemployed You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. Tax unemployed You then flew back to Seattle. Tax unemployed You spent 1 day flying in each direction. Tax unemployed Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. Tax unemployed The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. Tax unemployed Exception 4 - Vacation not a major consideration. Tax unemployed   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Tax unemployed Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. Tax unemployed You can only deduct the business portion of your cost of getting to and from your destination. Tax unemployed You must allocate the costs between your business and other activities to determine your deductible amount. Tax unemployed See Travel allocation rules , later. Tax unemployed You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . Tax unemployed In those cases, you can deduct the total cost of getting to and from your destination. Tax unemployed Travel allocation rules. Tax unemployed   If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. Tax unemployed The days you depart from and return to the United States are both counted as days outside the United States. Tax unemployed   To figure the deductible amount of your round-trip travel expenses, use the following fraction. Tax unemployed The numerator (top number) is the total number of business days outside the United States. Tax unemployed The denominator (bottom number) is the total number of business and nonbusiness days of travel. Tax unemployed Counting business days. Tax unemployed   Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. Tax unemployed Transportation day. Tax unemployed   Count as a business day any day you spend traveling to or from a business destination. Tax unemployed However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. Tax unemployed Extra days for side trips or nonbusiness activities cannot be counted as business days. Tax unemployed Presence required. Tax unemployed   Count as a business day any day your presence is required at a particular place for a specific business purpose. Tax unemployed Count it as a business day even if you spend most of the day on nonbusiness activities. Tax unemployed Day spent on business. Tax unemployed   If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. Tax unemployed Also, count as a business day any day you are prevented from working because of circumstances beyond your control. Tax unemployed Certain weekends and holidays. Tax unemployed   Count weekends, holidays, and other necessary standby days as business days if they fall between business days. Tax unemployed But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. Tax unemployed Example 1. Tax unemployed Your tax home is New York City. Tax unemployed You travel to Quebec, where you have a business appointment on Friday. Tax unemployed You have another appointment on the following Monday. Tax unemployed Because your presence was required on both Friday and Monday, they are business days. Tax unemployed Because the weekend is between business days, Saturday and Sunday are counted as business days. Tax unemployed This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. Tax unemployed Example 2. Tax unemployed If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. Tax unemployed Nonbusiness activity on the way to or from your business destination. Tax unemployed   If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Tax unemployed   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. Tax unemployed   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Tax unemployed The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Tax unemployed Example. Tax unemployed You live in New York. Tax unemployed On May 4 you flew to Paris to attend a business conference that began on May 5. Tax unemployed The conference ended at noon on May 14. Tax unemployed That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. Tax unemployed The primary purpose for the trip was to attend the conference. Tax unemployed If you had not stopped in Dublin, you would have arrived home the evening of May 14. Tax unemployed You do not meet any of the exceptions that would allow you to consider your travel entirely for business. Tax unemployed May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. Tax unemployed You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. Tax unemployed You cannot deduct your expenses while in Dublin. Tax unemployed You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. Tax unemployed You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. Tax unemployed Round-trip airfare from New York to Dublin would have been $1,250. Tax unemployed You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). Tax unemployed Your deductible air travel expense is $1,364 ($1,850 − $486). Tax unemployed Nonbusiness activity at, near, or beyond business destination. Tax unemployed   If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Tax unemployed   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. Tax unemployed   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Tax unemployed The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Tax unemployed   None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. Tax unemployed Example. Tax unemployed Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. Tax unemployed You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. Tax unemployed In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. Tax unemployed You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. Tax unemployed (Assume these expenses total $4,939. Tax unemployed ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. Tax unemployed Other methods. Tax unemployed   You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. Tax unemployed Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Tax unemployed However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Tax unemployed Example. Tax unemployed The university from which you graduated has a continuing education program for members of its alumni association. Tax unemployed This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. Tax unemployed However, none of the conferences are directed toward specific occupations or professions. Tax unemployed It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. Tax unemployed Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. Tax unemployed These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. Tax unemployed Professional conference directors schedule and conduct the sessions. Tax unemployed Participants can choose those sessions they wish to attend. Tax unemployed You can participate in this program since you are a member of the alumni association. Tax unemployed You and your family take one of the trips. Tax unemployed You spend about 2 hours at each of the planned sessions. Tax unemployed The rest of the time you go touring and sightseeing with your family. Tax unemployed The trip lasts less than 1 week. Tax unemployed Your travel expenses for the trip are not deductible since the trip was primarily a vacation. Tax unemployed However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. Tax unemployed These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. Tax unemployed Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. Tax unemployed The limit is twice the highest federal per diem rate allowable at the time of your travel. Tax unemployed (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. Tax unemployed ) Daily limit on luxury water travel. Tax unemployed   The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. Tax unemployed   2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel   Jan. Tax unemployed 1 – Mar. Tax unemployed 31 $367 $734   Apr. Tax unemployed 1 – June 30 312 624   July 1 – Aug. Tax unemployed 31 310 620   Sept. Tax unemployed 1 – Sept. Tax unemployed 30 366 732   Oct. Tax unemployed 1 – Dec. Tax unemployed 31 374 748 Example. Tax unemployed Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. Tax unemployed Her expense for the 6-day cruise was $5,200. Tax unemployed Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). Tax unemployed Meals and entertainment. Tax unemployed   If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. Tax unemployed For a discussion of the 50% Limit , see chapter 2. Tax unemployed Example. Tax unemployed In the previous example, Caroline's luxury water travel had a total cost of $5,200. Tax unemployed Of that amount, $3,700 was separately stated as meals and entertainment. Tax unemployed Caroline, who is self-employed, is not reimbursed for any of her travel expenses. Tax unemployed Caroline figures her deductible travel expenses as follows. Tax unemployed Meals and entertainment $3,700   50% limit × . Tax unemployed 50   Allowable meals &     entertainment $1,850   Other travel expenses + 1,800   Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624   Times number of days × 6   Maximum luxury water travel     deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. Tax unemployed Not separately stated. Tax unemployed   If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. Tax unemployed Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. Tax unemployed See Cruise Ships under Conventions. Tax unemployed Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Tax unemployed You cannot deduct the travel expenses for your family. Tax unemployed If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Tax unemployed Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Tax unemployed You can deduct your travel expenses only if your attendance is connected to your own trade or business. Tax unemployed Convention agenda. Tax unemployed   The convention agenda or program generally shows the purpose of the convention. Tax unemployed You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Tax unemployed The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Tax unemployed Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. Tax unemployed See Reasonableness test , later. Tax unemployed If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . Tax unemployed North American area. Tax unemployed   The North American area includes the following locations. Tax unemployed American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. Tax unemployed S. Tax unemployed Virgin Islands Jamaica Wake Island Jarvis Island   The North American area also includes U. Tax unemployed S. Tax unemployed islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. Tax unemployed Reasonableness test. Tax unemployed   The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. Tax unemployed The purpose of the meeting and the activities taking place at the meeting. Tax unemployed The purposes and activities of the sponsoring organizations or groups. Tax unemployed The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. Tax unemployed Other relevant factors you may present. Tax unemployed Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. Tax unemployed All ships that sail are considered cruise ships. Tax unemployed You can deduct these expenses only if all of the following requirements are met. Tax unemployed The convention, seminar, or meeting is directly related to your trade or business. Tax unemployed The cruise ship is a vessel registered in the United States. Tax unemployed All of the cruise ship's ports of call are in the United States or in possessions of the United States. Tax unemployed You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. Tax unemployed You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. Tax unemployed Prev  Up  Next   Home   More Online Publications
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The Tax Unemployed

Tax unemployed 11. Tax unemployed   Social Security and Equivalent Railroad Retirement Benefits Table of Contents Introduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits Introduction This chapter explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits. Tax unemployed It explains the following topics. Tax unemployed How to figure whether your benefits are taxable. Tax unemployed How to use the social security benefits worksheet (with examples). Tax unemployed How to report your taxable benefits. Tax unemployed How to treat repayments that are more than the benefits you received during the year. Tax unemployed Social security benefits include monthly retirement, survivor, and disability benefits. Tax unemployed They do not include supplemental security income (SSI) payments, which are not taxable. Tax unemployed Equivalent tier 1 railroad retirement benefits are the part of tier 1 benefits that a railroad employee or beneficiary would have been entitled to receive under the social security system. Tax unemployed They are commonly called the social security equivalent benefit (SSEB) portion of tier 1 benefits. Tax unemployed If you received these benefits during 2013, you should have received a Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Payments by the Railroad Retirement Board. Tax unemployed These forms show the amounts received and repaid, and taxes withheld for the year. Tax unemployed You may receive more than one of these forms for the same year. Tax unemployed You should add the amounts shown on all the Forms SSA-1099 and Forms RRB-1099 you receive for the year to determine the total amounts received and repaid, and taxes withheld for that year. Tax unemployed See the Appendix at the end of Publication 915 for more information. Tax unemployed Note. Tax unemployed When the term “benefits” is used in this chapter, it applies to both social security benefits and the SSEB portion of tier 1 railroad retirement benefits. Tax unemployed What is not covered in this chapter. Tax unemployed   This chapter does not cover the tax rules for the following railroad retirement benefits. Tax unemployed Non-social security equivalent benefit (NSSEB) portion of tier 1 benefits. Tax unemployed Tier 2 benefits. Tax unemployed Vested dual benefits. Tax unemployed Supplemental annuity benefits. Tax unemployed For information on these benefits, see Publication 575, Pension and Annuity Income. Tax unemployed   This chapter does not cover the tax rules for social security benefits reported on Form SSA-1042S, Social Security Benefit Statement, or Form RRB-1042S, Statement for Nonresident Alien Recipients of: Payments by the Railroad Retirement Board. Tax unemployed For information about these benefits, see Publication 519, U. Tax unemployed S. Tax unemployed Tax Guide for Aliens, and Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Tax unemployed   This chapter also does not cover the tax rules for foreign social security benefits. Tax unemployed These benefits are taxable as annuities, unless they are exempt from U. Tax unemployed S. Tax unemployed tax or treated as a U. Tax unemployed S. Tax unemployed social security benefit under a tax treaty. Tax unemployed Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 915 Social Security and Equivalent Railroad Retirement Benefits Forms (and Instructions) 1040-ES Estimated Tax for Individuals SSA-1099 Social Security Benefit Statement RRB-1099 Payments by the Railroad Retirement Board W-4V Voluntary Withholding Request Are Any of Your Benefits Taxable? To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Tax unemployed When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Tax unemployed S. Tax unemployed savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. Tax unemployed Children's benefits. Tax unemployed   The rules in this chapter apply to benefits received by children. Tax unemployed See Who is taxed , later. Tax unemployed Figuring total income. Tax unemployed   To figure the total of one-half of your benefits plus your other income, use Worksheet 11-1 later in this discussion. Tax unemployed If the total is more than your base amount, part of your benefits may be taxable. Tax unemployed    If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Tax unemployed Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Tax unemployed    If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Tax unemployed If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Tax unemployed Base amount. Tax unemployed   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Tax unemployed Worksheet 11-1. Tax unemployed   You can use Worksheet 11-1 to figure the amount of income to compare with your base amount. Tax unemployed This is a quick way to check whether some of your benefits may be taxable. Tax unemployed Worksheet 11-1. Tax unemployed A Quick Way To Check if Your Benefits May Be Taxable A. Tax unemployed Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Tax unemployed Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Tax unemployed (If you received more than one form, combine the amounts from box 5 and enter the total. Tax unemployed ) A. Tax unemployed   Note. Tax unemployed If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Tax unemployed B. Tax unemployed Enter one-half of the amount on line A B. Tax unemployed   C. Tax unemployed Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Tax unemployed   D. Tax unemployed Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Tax unemployed   E. Tax unemployed Add lines B, C, and D E. Tax unemployed   Note. Tax unemployed Compare the amount on line E to your base amount for your filing status. Tax unemployed If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Tax unemployed If the amount on line E is more than your base amount, some of your benefits may be taxable. Tax unemployed You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). Tax unemployed If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits. Tax unemployed Example. Tax unemployed You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. Tax unemployed In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Tax unemployed Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. Tax unemployed You also received a taxable pension of $22,800 and interest income of $500. Tax unemployed You did not have any tax-exempt interest income. Tax unemployed Your benefits are not taxable for 2013 because your income, as figured in Worksheet 11-1, is not more than your base amount ($32,000) for married filing jointly. Tax unemployed Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. Tax unemployed Filled-in Worksheet 11-1. Tax unemployed A Quick Way To Check if Your Benefits May Be Taxable A. Tax unemployed Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Tax unemployed Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Tax unemployed (If you received more than one form, combine the amounts from box 5 and enter the total. Tax unemployed ) A. Tax unemployed $11,000 Note. Tax unemployed If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Tax unemployed B. Tax unemployed Enter one-half of the amount on line A B. Tax unemployed 5,500 C. Tax unemployed Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Tax unemployed 23,300 D. Tax unemployed Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Tax unemployed -0- E. Tax unemployed Add lines B, C, and D E. Tax unemployed $28,800 Note. Tax unemployed Compare the amount on line E to your base amount for your filing status. Tax unemployed If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Tax unemployed If the amount on line E is more than your base amount, some of your benefits may be taxable. Tax unemployed You need to complete Worksheet 1 in Publication 915 (or the Social Security Benefits Worksheet in your tax form instructions). Tax unemployed If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits. Tax unemployed Who is taxed. Tax unemployed   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. Tax unemployed For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. Tax unemployed One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. Tax unemployed Repayment of benefits. Tax unemployed   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Tax unemployed It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Tax unemployed If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Tax unemployed   Your gross benefits are shown in box 3 of Form SSA-1099 or RRB-1099. Tax unemployed Your repayments are shown in box 4. Tax unemployed The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Tax unemployed Use the amount in box 5 to figure whether any of your benefits are taxable. Tax unemployed Tax withholding and estimated tax. Tax unemployed   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. Tax unemployed If you choose to do this, you must complete a Form W-4V. Tax unemployed   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. Tax unemployed For details, see Publication 505 or the instructions for Form 1040-ES. Tax unemployed How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. Tax unemployed You cannot use Form 1040EZ. Tax unemployed Reporting on Form 1040. Tax unemployed   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. Tax unemployed If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Tax unemployed Reporting on Form 1040A. Tax unemployed   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. Tax unemployed If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Tax unemployed Benefits not taxable. Tax unemployed   If you are filing Form 1040EZ, do not report any benefits on your tax return. Tax unemployed If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Tax unemployed Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Tax unemployed If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Tax unemployed How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Tax unemployed Generally, the higher that total amount, the greater the taxable part of your benefits. Tax unemployed Maximum taxable part. Tax unemployed   Generally, up to 50% of your benefits will be taxable. Tax unemployed However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Tax unemployed The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Tax unemployed You are married filing separately and lived with your spouse at any time during 2013. Tax unemployed Which worksheet to use. Tax unemployed   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or Form 1040A. Tax unemployed You can use either that worksheet or Worksheet 1 in Publication 915, unless any of the following situations applies to you. Tax unemployed You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. Tax unemployed In this situation, you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Tax unemployed Situation (1) does not apply and you take an exclusion for interest from qualified U. Tax unemployed S. Tax unemployed savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Tax unemployed In this situation, you must use Worksheet 1 in Publication 915 to figure your taxable benefits. Tax unemployed You received a lump-sum payment for an earlier year. Tax unemployed In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in Publication 915. Tax unemployed See Lump-sum election next. Tax unemployed Lump-sum election. Tax unemployed   You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Tax unemployed    This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Tax unemployed No part of the lump-sum death benefit is subject to tax. Tax unemployed   Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Tax unemployed However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Tax unemployed You can elect this method if it lowers your taxable benefits. Tax unemployed Making the election. Tax unemployed   If you received a lump-sum benefit payment in 2013 that includes benefits for one or more earlier years, follow the instructions in Publication 915 under Lump-Sum Election to see whether making the election will lower your taxable benefits. Tax unemployed That discussion also explains how to make the election. Tax unemployed    Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. Tax unemployed Do not file an amended return for the earlier year. Tax unemployed Examples The following are a few examples you can use as a guide to figure the taxable part of your benefits. Tax unemployed Example 1. Tax unemployed George White is single and files Form 1040 for 2013. Tax unemployed He received the following income in 2013: Fully taxable pension $18,600 Wages from part-time job 9,400 Taxable interest income 990 Total $28,990 George also received social security benefits during 2013. Tax unemployed The Form SSA-1099 he received in January 2014 shows $5,980 in box 5. Tax unemployed To figure his taxable benefits, George completes the worksheet shown here. Tax unemployed Filled-in Worksheet 1. Tax unemployed Figuring Your Taxable Benefits 1. Tax unemployed Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Tax unemployed Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,980 2. Tax unemployed Enter one-half of line 1 2,990 3. Tax unemployed Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Tax unemployed     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 28,990 4. Tax unemployed Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Tax unemployed Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Tax unemployed Combine lines 2, 3, 4, and 5 31,980 7. Tax unemployed Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Tax unemployed     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. Tax unemployed Is the amount on line 7 less than the amount on line 6?     No. Tax unemployed None of your social security benefits are taxable. Tax unemployed Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Tax unemployed   Yes. Tax unemployed Subtract line 7 from line 6 31,980 9. Tax unemployed If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 25,000   Note. Tax unemployed If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Tax unemployed 85) and enter the result on line 17. Tax unemployed Then go to line 18. Tax unemployed   10. Tax unemployed Is the amount on line 9 less than the amount on line 8?     No. Tax unemployed None of your benefits are taxable. Tax unemployed Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Tax unemployed If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Tax unemployed     Yes. Tax unemployed Subtract line 9 from line 8 6,980 11. Tax unemployed Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 9,000 12. Tax unemployed Subtract line 11 from line 10. Tax unemployed If zero or less, enter -0- -0- 13. Tax unemployed Enter the smaller of line 10 or line 11 6,980 14. Tax unemployed Enter one-half of line 13 3,490 15. Tax unemployed Enter the smaller of line 2 or line 14 2,990 16. Tax unemployed Multiply line 12 by 85% (. Tax unemployed 85). Tax unemployed If line 12 is zero, enter -0- -0- 17. Tax unemployed Add lines 15 and 16 2,990 18. Tax unemployed Multiply line 1 by 85% (. Tax unemployed 85) 5,083 19. Tax unemployed Taxable benefits. Tax unemployed Enter the smaller of line 17 or line 18. Tax unemployed Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $2,990 The amount on line 19 of George's worksheet shows that $2,990 of his social security benefits is taxable. Tax unemployed On line 20a of his Form 1040, George enters his net benefits of $5,980. Tax unemployed On line 20b, he enters his taxable benefits of $2,990. Tax unemployed Example 2. Tax unemployed Ray and Alice Hopkins file a joint return on Form 1040A for 2013. Tax unemployed Ray is retired and received a fully taxable pension of $15,500. Tax unemployed He also received social security benefits, and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. Tax unemployed Alice worked during the year and had wages of $14,000. Tax unemployed She made a deductible payment to her IRA account of $1,000. Tax unemployed Ray and Alice have two savings accounts with a total of $250 in taxable interest income. Tax unemployed They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. Tax unemployed They find none of Ray's social security benefits are taxable. Tax unemployed On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. Tax unemployed Filled-in Worksheet 1. Tax unemployed Figuring Your Taxable Benefits 1. Tax unemployed Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Tax unemployed Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $5,600 2. Tax unemployed Enter one-half of line 1 2,800 3. Tax unemployed Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Tax unemployed     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 29,750 4. Tax unemployed Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Tax unemployed Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Tax unemployed Combine lines 2, 3, 4, and 5 32,550 7. Tax unemployed Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Tax unemployed     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 1,000 8. Tax unemployed Is the amount on line 7 less than the amount on line 6?     No. Tax unemployed None of your social security benefits are taxable. Tax unemployed Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Tax unemployed   Yes. Tax unemployed Subtract line 7 from line 6 31,550 9. Tax unemployed If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 32,000   Note. Tax unemployed If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Tax unemployed 85) and enter the result on line 17. Tax unemployed Then go to line 18. Tax unemployed   10. Tax unemployed Is the amount on line 9 less than the amount on line 8?     No. Tax unemployed None of your benefits are taxable. Tax unemployed Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Tax unemployed If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Tax unemployed     Yes. Tax unemployed Subtract line 9 from line 8   11. Tax unemployed Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013   12. Tax unemployed Subtract line 11 from line 10. Tax unemployed If zero or less, enter -0-   13. Tax unemployed Enter the smaller of line 10 or line 11   14. Tax unemployed Enter one-half of line 13   15. Tax unemployed Enter the smaller of line 2 or line 14   16. Tax unemployed Multiply line 12 by 85% (. Tax unemployed 85). Tax unemployed If line 12 is zero, enter -0-   17. Tax unemployed Add lines 15 and 16   18. Tax unemployed Multiply line 1 by 85% (. Tax unemployed 85)   19. Tax unemployed Taxable benefits. Tax unemployed Enter the smaller of line 17 or line 18. Tax unemployed Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b   Example 3. Tax unemployed Joe and Betty Johnson file a joint return on Form 1040 for 2013. Tax unemployed Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Tax unemployed Joe's Form RRB-1099 shows $10,000 in box 5. Tax unemployed Betty is a retired government worker and receives a fully taxable pension of $38,000. Tax unemployed They had $2,300 in taxable interest income plus interest of $200 on a qualified U. Tax unemployed S. Tax unemployed savings bond. Tax unemployed The savings bond interest qualified for the exclusion. Tax unemployed They figure their taxable benefits by completing Worksheet 1. Tax unemployed Because they have qualified U. Tax unemployed S. Tax unemployed savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. Tax unemployed On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). Tax unemployed Filled-in Worksheet 1. Tax unemployed Figuring Your Taxable Benefits Before you begin: • If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Tax unemployed • Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Tax unemployed None of your benefits are taxable for 2013. Tax unemployed For more information, see Repayments More Than Gross Benefits. Tax unemployed • If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Tax unemployed S. Tax unemployed Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Tax unemployed Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Tax unemployed 1. Tax unemployed Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Tax unemployed Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a $10,000 2. Tax unemployed Enter one-half of line 1 5,000 3. Tax unemployed Combine the amounts from:     Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21. Tax unemployed     Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 40,500 4. Tax unemployed Enter the amount, if any, from Form 1040 or 1040A, line 8b -0-       5. Tax unemployed Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico -0-       6. Tax unemployed Combine lines 2, 3, 4, and 5 45,500 7. Tax unemployed Form 1040 filers: Enter the amount from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Tax unemployed     Form 1040A filers: Enter the amount from Form 1040A, lines 16 and 17 -0- 8. Tax unemployed Is the amount on line 7 less than the amount on line 6?     No. Tax unemployed None of your social security benefits are taxable. Tax unemployed Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Tax unemployed   Yes. Tax unemployed Subtract line 7 from line 6 45,500 9. Tax unemployed If you are: Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 32,000   Note. Tax unemployed If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Tax unemployed 85) and enter the result on line 17. Tax unemployed Then go to line 18. Tax unemployed   10. Tax unemployed Is the amount on line 9 less than the amount on line 8?     No. Tax unemployed None of your benefits are taxable. Tax unemployed Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Tax unemployed If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Tax unemployed     Yes. Tax unemployed Subtract line 9 from line 8 13,500 11. Tax unemployed Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 12,000 12. Tax unemployed Subtract line 11 from line 10. Tax unemployed If zero or less, enter -0- 1,500 13. Tax unemployed Enter the smaller of line 10 or line 11 12,000 14. Tax unemployed Enter one-half of line 13 6,000 15. Tax unemployed Enter the smaller of line 2 or line 14 5,000 16. Tax unemployed Multiply line 12 by 85% (. Tax unemployed 85). Tax unemployed If line 12 is zero, enter -0- 1,275 17. Tax unemployed Add lines 15 and 16 6,275 18. Tax unemployed Multiply line 1 by 85% (. Tax unemployed 85) 8,500 19. Tax unemployed Taxable benefits. Tax unemployed Enter the smaller of line 17 or line 18. Tax unemployed Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b $6,275 More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Tax unemployed Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. Tax unemployed Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Tax unemployed Disability payments. Tax unemployed   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. Tax unemployed If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. Tax unemployed If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Tax unemployed Claim the deduction or credit in the same way explained under Repayments More Than Gross Benefits , later. Tax unemployed Legal expenses. Tax unemployed   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. Tax unemployed   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Tax unemployed Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Tax unemployed If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Tax unemployed Do not use a worksheet in this case. Tax unemployed If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Tax unemployed If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Tax unemployed Joint return. Tax unemployed   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. Tax unemployed You do this to get your net benefits when figuring if your combined benefits are taxable. Tax unemployed Example. Tax unemployed John and Mary file a joint return for 2013. Tax unemployed John received Form SSA-1099 showing $3,000 in box 5. Tax unemployed Mary also received Form SSA-1099 and the amount in box 5 was ($500). Tax unemployed John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. Tax unemployed Repayment of benefits received in an earlier year. Tax unemployed   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Tax unemployed Deduction $3,000 or less. Tax unemployed   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Tax unemployed Claim it on Schedule A (Form 1040), line 23. Tax unemployed Deduction more than $3,000. Tax unemployed    If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. Tax unemployed Figure your tax for 2013 in the following steps. Tax unemployed Figure the tax without the itemized deduction included on Schedule A, line 28. Tax unemployed For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Tax unemployed Then refigure the tax for that year. Tax unemployed Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. Tax unemployed Subtract the result in (c) from the result in (a). Tax unemployed Compare the tax figured in methods (1) and (2). Tax unemployed Your tax for 2013 is the smaller of the two amounts. Tax unemployed If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. Tax unemployed If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. Tax unemployed Check box d and enter “I. Tax unemployed R. Tax unemployed C. Tax unemployed 1341” in the space next to that box. Tax unemployed If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. Tax unemployed Prev  Up  Next   Home   More Online Publications