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Taxact 2010 free Publication 929 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics This image is too large to be displayed in the current screen. Taxact 2010 free Please click the link to view the image. Taxact 2010 free Form 1040A, page 1, for Joshua A. Taxact 2010 free Blake This image is too large to be displayed in the current screen. Taxact 2010 free Please click the link to view the image. Taxact 2010 free Form 1040A, page 2, for Joshua A. Taxact 2010 free Blake This image is too large to be displayed in the current screen. Taxact 2010 free Please click the link to view the image. Taxact 2010 free Form 8615 for Joshua A. Taxact 2010 free Blake Filled-in Qualified Dividends and Capital Gain Tax Worksheet #1 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. Taxact 2010 free Enter the amount from Form 1040A, line 27 1. Taxact 2010 free 48,800*       2. Taxact 2010 free Enter the amount from Form 1040A, line 9b 2. Taxact 2010 free 300*           3. Taxact 2010 free Enter the amount from Form 1040A, line 10 3. Taxact 2010 free 200*           4. Taxact 2010 free Add lines 2 and 3 4. Taxact 2010 free 500       5. Taxact 2010 free Subtract line 4 from line 1. Taxact 2010 free If zero or less, enter -0- 5. Taxact 2010 free 48,300       6. Taxact 2010 free Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying widow(er),   or 6. Taxact 2010 free 48,800*         $48,600 if head of household. Taxact 2010 free                   7. Taxact 2010 free Enter the smaller of line 5 or line 6 7. Taxact 2010 free 48,300       8. Taxact 2010 free Subtract line 7 from line 6. Taxact 2010 free This amount is taxed at 0% 8. Taxact 2010 free   500       9. Taxact 2010 free Enter the smaller of line 1 or line 4 9. Taxact 2010 free 500       10. Taxact 2010 free Enter the amount from line 8 10. Taxact 2010 free   500       11. Taxact 2010 free Subtract line 10 from line 9 11. Taxact 2010 free  -0-       12. Taxact 2010 free Multiply line 11 by 15% (. Taxact 2010 free 15) 12. Taxact 2010 free -0-   13. Taxact 2010 free Use the Tax Table to figure the tax on the amount on line 5. Taxact 2010 free Enter the tax here 13. Taxact 2010 free 6,356   14. Taxact 2010 free Add lines 12 and 13 14. Taxact 2010 free 6,356   15. Taxact 2010 free Use the Tax Table to figure the tax on the amount on line 1. Taxact 2010 free Enter the tax here 15. Taxact 2010 free 6,431   16. Taxact 2010 free Tax on all taxable income. Taxact 2010 free Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. Taxact 2010 free 6,356       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 9 tax in the Form 8615 instructions. Taxact 2010 free Filled-in Qualified Dividends and Capital Gain Tax Worksheet #2 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. Taxact 2010 free Enter the amount from Form 1040A, line 27 1. Taxact 2010 free 1,650*       2. Taxact 2010 free Enter the amount from Form 1040A, line 9b 2. Taxact 2010 free 750*           3. Taxact 2010 free Enter the amount from Form 1040A, line 10 3. Taxact 2010 free 500*           4. Taxact 2010 free Add lines 2 and 3 4. Taxact 2010 free 1,250       5. Taxact 2010 free Subtract line 4 from line 1. Taxact 2010 free If zero or less, enter -0- 5. Taxact 2010 free  400       6. Taxact 2010 free Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. Taxact 2010 free 1,650*         $48,600 if head of household. Taxact 2010 free                   7. Taxact 2010 free Enter the smaller of line 5 or line 6 7. Taxact 2010 free   400       8. Taxact 2010 free Subtract line 7 from line 6. Taxact 2010 free This amount is taxed at 0% 8. Taxact 2010 free 1,250       9. Taxact 2010 free Enter the smaller of line 1 or line 4 9. Taxact 2010 free 1,250       10. Taxact 2010 free Enter the amount from line 8 10. Taxact 2010 free 1,250       11. Taxact 2010 free Subtract line 10 from line 9 11. Taxact 2010 free -0-       12. Taxact 2010 free Multiply line 11 by 15% (. Taxact 2010 free 15) 12. Taxact 2010 free -0-   13. Taxact 2010 free Use the Tax Table to figure the tax on the amount on line 5. Taxact 2010 free Enter the tax here 13. Taxact 2010 free 41*   14. Taxact 2010 free Add lines 12 and 13 14. Taxact 2010 free 41   15. Taxact 2010 free Use the Tax Table to figure the tax on the amount on line 1. Taxact 2010 free Enter the tax here 15. Taxact 2010 free 166*   16. Taxact 2010 free Tax on all taxable income. Taxact 2010 free Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. Taxact 2010 free 41       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 15 tax in the Form 8615 instructions. Taxact 2010 free Filled-in Qualified Dividends and Capital Gain Tax Worksheet #3 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. Taxact 2010 free Enter the amount from Form 1040A, line 27 1. Taxact 2010 free 2,450       2. Taxact 2010 free Enter the amount from Form 1040A, line 9b 2. Taxact 2010 free 1,050           3. Taxact 2010 free Enter the amount from Form 1040A, line 10 3. Taxact 2010 free 700           4. Taxact 2010 free Add lines 2 and 3 4. Taxact 2010 free 1,750       5. Taxact 2010 free Subtract line 4 from line 1. Taxact 2010 free If zero or less, enter -0- 5. Taxact 2010 free    700       6. Taxact 2010 free Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. Taxact 2010 free 2,450         $48,600 if head of household. Taxact 2010 free                   7. Taxact 2010 free Enter the smaller of line 5 or line 6 7. Taxact 2010 free  700       8. Taxact 2010 free Subtract line 7 from line 6. Taxact 2010 free This amount is taxed at 0% 8. Taxact 2010 free 1,750       9. Taxact 2010 free Enter the smaller of line 1 or line 4 9. Taxact 2010 free 1,750       10. Taxact 2010 free Enter the amount from line 8 10. Taxact 2010 free 1,750       11. Taxact 2010 free Subtract line 10 from line 9 11. Taxact 2010 free -0-       12. Taxact 2010 free Multiply line 11 by 15% (. Taxact 2010 free 15) 12. Taxact 2010 free -0-   13. Taxact 2010 free Use the Tax Table to figure the tax on the amount on line 5. Taxact 2010 free Enter the tax here 13. Taxact 2010 free  71   14. Taxact 2010 free Add lines 12 and 13 14. Taxact 2010 free  71   15. Taxact 2010 free Use the Tax Table to figure the tax on the amount on line 1. Taxact 2010 free Enter the tax here 15. Taxact 2010 free 246   16. Taxact 2010 free Tax on all taxable income. Taxact 2010 free Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. Taxact 2010 free  71         How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Taxact 2010 free Free help with your tax return. Taxact 2010 free   You can get free help preparing your return nationwide from IRS-certified volunteers. Taxact 2010 free The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Taxact 2010 free The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Taxact 2010 free Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Taxact 2010 free In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Taxact 2010 free To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Taxact 2010 free gov, download the IRS2Go app, or call 1-800-906-9887. Taxact 2010 free   As part of the TCE program, AARP offers the Tax-Aide counseling program. Taxact 2010 free To find the nearest AARP Tax-Aide site, visit AARP's website at www. Taxact 2010 free aarp. Taxact 2010 free org/money/taxaide or call 1-888-227-7669. Taxact 2010 free For more information on these programs, go to IRS. Taxact 2010 free gov and enter “VITA” in the search box. Taxact 2010 free Internet. Taxact 2010 free    IRS. Taxact 2010 free gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Taxact 2010 free Download the free IRS2Go app from the iTunes app store or from Google Play. Taxact 2010 free Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Taxact 2010 free Check the status of your 2013 refund with the Where's My Refund? application on IRS. Taxact 2010 free gov or download the IRS2Go app and select the Refund Status option. Taxact 2010 free The IRS issues more than 9 out of 10 refunds in less than 21 days. Taxact 2010 free Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Taxact 2010 free You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Taxact 2010 free The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Taxact 2010 free Use the Interactive Tax Assistant (ITA) to research your tax questions. Taxact 2010 free No need to wait on the phone or stand in line. Taxact 2010 free The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Taxact 2010 free When you reach the response screen, you can print the entire interview and the final response for your records. Taxact 2010 free New subject areas are added on a regular basis. Taxact 2010 free  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Taxact 2010 free gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Taxact 2010 free You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Taxact 2010 free The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Taxact 2010 free When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Taxact 2010 free Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Taxact 2010 free You can also ask the IRS to mail a return or an account transcript to you. Taxact 2010 free Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Taxact 2010 free gov or by calling 1-800-908-9946. Taxact 2010 free Tax return and tax account transcripts are generally available for the current year and the past three years. Taxact 2010 free Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Taxact 2010 free Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Taxact 2010 free If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Taxact 2010 free Check the status of your amended return using Where's My Amended Return? Go to IRS. Taxact 2010 free gov and enter Where's My Amended Return? in the search box. Taxact 2010 free You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Taxact 2010 free It can take up to 3 weeks from the date you mailed it to show up in our system. Taxact 2010 free Make a payment using one of several safe and convenient electronic payment options available on IRS. Taxact 2010 free gov. Taxact 2010 free Select the Payment tab on the front page of IRS. Taxact 2010 free gov for more information. Taxact 2010 free Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Taxact 2010 free Figure your income tax withholding with the IRS Withholding Calculator on IRS. Taxact 2010 free gov. Taxact 2010 free Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Taxact 2010 free Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Taxact 2010 free gov. Taxact 2010 free Request an Electronic Filing PIN by going to IRS. Taxact 2010 free gov and entering Electronic Filing PIN in the search box. Taxact 2010 free Download forms, instructions and publications, including accessible versions for people with disabilities. Taxact 2010 free Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Taxact 2010 free gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Taxact 2010 free An employee can answer questions about your tax account or help you set up a payment plan. Taxact 2010 free Before you visit, check the Office Locator on IRS. Taxact 2010 free gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Taxact 2010 free If you have a special need, such as a disability, you can request an appointment. Taxact 2010 free Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Taxact 2010 free Apply for an Employer Identification Number (EIN). Taxact 2010 free Go to IRS. Taxact 2010 free gov and enter Apply for an EIN in the search box. Taxact 2010 free Read the Internal Revenue Code, regulations, or other official guidance. Taxact 2010 free Read Internal Revenue Bulletins. Taxact 2010 free Sign up to receive local and national tax news and more by email. Taxact 2010 free Just click on “subscriptions” above the search box on IRS. Taxact 2010 free gov and choose from a variety of options. Taxact 2010 free    Phone. Taxact 2010 free You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Taxact 2010 free Download the free IRS2Go app from the iTunes app store or from Google Play. Taxact 2010 free Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Taxact 2010 free gov, or download the IRS2Go app. Taxact 2010 free Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Taxact 2010 free The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Taxact 2010 free Most VITA and TCE sites offer free electronic filing. Taxact 2010 free Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Taxact 2010 free Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Taxact 2010 free Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Taxact 2010 free If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Taxact 2010 free The IRS issues more than 9 out of 10 refunds in less than 21 days. Taxact 2010 free Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Taxact 2010 free Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Taxact 2010 free The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Taxact 2010 free Note, the above information is for our automated hotline. Taxact 2010 free Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Taxact 2010 free Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Taxact 2010 free You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Taxact 2010 free It can take up to 3 weeks from the date you mailed it to show up in our system. Taxact 2010 free Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Taxact 2010 free You should receive your order within 10 business days. Taxact 2010 free Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Taxact 2010 free If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Taxact 2010 free Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Taxact 2010 free The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Taxact 2010 free These individuals can also contact the IRS through relay services such as the Federal Relay Service. Taxact 2010 free    Walk-in. Taxact 2010 free You can find a selection of forms, publications and services — in-person. Taxact 2010 free Products. Taxact 2010 free You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Taxact 2010 free Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Taxact 2010 free Services. Taxact 2010 free You can walk in to your local TAC for face-to-face tax help. Taxact 2010 free An employee can answer questions about your tax account or help you set up a payment plan. Taxact 2010 free Before visiting, use the Office Locator tool on IRS. Taxact 2010 free gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Taxact 2010 free    Mail. Taxact 2010 free You can send your order for forms, instructions, and publications to the address below. Taxact 2010 free You should receive a response within 10 business days after your request is received. Taxact 2010 free Internal Revenue Service 1201 N. Taxact 2010 free Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Taxact 2010 free The Taxpayer Advocate Service (TAS) is your voice at the IRS. Taxact 2010 free Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Taxact 2010 free   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Taxact 2010 free We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Taxact 2010 free You face (or your business is facing) an immediate threat of adverse action. Taxact 2010 free You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Taxact 2010 free   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Taxact 2010 free Here's why we can help: TAS is an independent organization within the IRS. Taxact 2010 free Our advocates know how to work with the IRS. Taxact 2010 free Our services are free and tailored to meet your needs. Taxact 2010 free We have offices in every state, the District of Columbia, and Puerto Rico. Taxact 2010 free   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Taxact 2010 free   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Taxact 2010 free If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Taxact 2010 free Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Taxact 2010 free Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Taxact 2010 free Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Taxact 2010 free Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in Kentucky

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Bowling Green 200 West Professional
Park Court
Bowling Green, KY 42104

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

Services Provided

(270) 782-7667
Hopkinsville 121 W. Tenth St.
Hopkinsville, KY 42240

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

Services Provided

(270) 886-6625 
Lexington  1500 Leestown Rd.
Lexington, KY 40511 

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

Services Provided

(859) 244-2400 
Louisville  600 Dr. Martin Luther
King Jr. Place
Louisville, KY 40202 

Monday-Friday - 8:30 a.m.-4:30 p.m. 

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(502) 582-6700 
Owensboro  401 Frederica St.
Owensboro, KY 42301 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m. - 12:30 p.m.)

 

   Services Provided

(270) 852-8490 
Paducah  2765 Wayne Sullivan Dr.
Paducah, KY 42003 

Monday - Friday  8:30 a.m. - 4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.) 

 

Services Provided

(270) 443-1977 
Prestonsburg  311 N. Arnold Ave.
Prestonsburg, KY 41653 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.) 

 

Services Provided

(606) 889-1590 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (502) 582-6030 in Louisville or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
600 Dr. Martin Luther King, Jr. Place
Room 321
Louisville, KY 40202

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Taxact 2010 Free

Taxact 2010 free 11. Taxact 2010 free   Other Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Reimbursement of Travel, Meals, and EntertainmentReimbursements Miscellaneous ExpensesMeaning of generally enforced. Taxact 2010 free Kickbacks. Taxact 2010 free Form 1099-MISC. Taxact 2010 free Exception. Taxact 2010 free Tax preparation fees. Taxact 2010 free Covered executive branch official. Taxact 2010 free Exceptions to denial of deduction. Taxact 2010 free Indirect political contributions. Taxact 2010 free Type of deduction. Taxact 2010 free Repayment—$3,000 or less. Taxact 2010 free Repayment—over $3,000. Taxact 2010 free Method 1. Taxact 2010 free Method 2. Taxact 2010 free Repayment does not apply. Taxact 2010 free Year of deduction (or credit). Taxact 2010 free Telephone. Taxact 2010 free What's New Standard mileage rate. Taxact 2010 free  Beginning in 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business use is 56. Taxact 2010 free 5 cents per mile. Taxact 2010 free For more information, see Car and truck expenses under Miscellaneous Expenses. Taxact 2010 free Introduction This chapter covers business expenses that may not have been explained to you, as a business owner, in previous chapters of this publication. Taxact 2010 free Topics - This chapter discusses: Travel, meals, and entertainment Bribes and kickbacks Charitable contributions Education expenses Lobbying expenses Penalties and fines Repayments (claim of right) Other miscellaneous expenses Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 463 Travel, Entertainment, Gift, and Car Expenses 526 Charitable Contributions 529 Miscellaneous Deductions 544 Sales and Other Dispositions of Assets 970 Tax Benefits for Education 1542 Per Diem Rates See chapter 12 for information about getting publications and forms. Taxact 2010 free Reimbursement of Travel, Meals, and Entertainment The following discussion explains how to handle any reimbursements or allowances you may provide to your employees under a reimbursement or allowance arrangement for travel, meals, and entertainment expenses. Taxact 2010 free If you are self-employed and report your income and expenses on Schedule C or C-EZ (Form 1040), see Publication 463. Taxact 2010 free To be deductible for tax purposes, expenses incurred for travel, meals, and entertainment must be ordinary and necessary expenses incurred while carrying on your trade or business. Taxact 2010 free Generally, you also must show that entertainment expenses (including meals) are directly related to, or associated with, the conduct of your trade or business. Taxact 2010 free For more information on travel, meals, and entertainment, including deductibility, see Publication 463. Taxact 2010 free Reimbursements A “reimbursement or allowance arrangement” provides for payment of advances, reimbursements, and allowances for travel, meals, and entertainment expenses incurred by your employees during the ordinary course of business. Taxact 2010 free If the expenses are substantiated, you can deduct the allowable amount on your tax return. Taxact 2010 free Because of differences between accounting methods and tax law, the amount you can deduct for tax purposes may not be the same as the amount you deduct on your business books and records. Taxact 2010 free For example, you can deduct 100% of the cost of meals on your business books and records. Taxact 2010 free However, only 50% of these costs are allowed by law as a tax deduction. Taxact 2010 free How you deduct a business expense under a reimbursement or allowance arrangement depends on whether you have: An accountable plan, or A nonaccountable plan. Taxact 2010 free If you reimburse these expenses under an accountable plan, deduct them as travel, meals, or entertainment expenses. Taxact 2010 free If you reimburse these expenses under a nonaccountable plan, report the reimbursements as wages on Form W-2, Wage and Tax Statement, and deduct them as wages on the appropriate line of your tax return. Taxact 2010 free If you make a single payment to your employees and it includes both wages and an expense reimbursement, you must specify the amount of the reimbursement and report it accordingly. Taxact 2010 free See Table 11-1 , Reporting Reimbursements. Taxact 2010 free Accountable Plans An accountable plan requires your employees to meet all of the following requirements. Taxact 2010 free Each employee must: Have paid or incurred deductible expenses while performing services as your employee, Adequately account to you for these expenses within a reasonable period of time, and Return any excess reimbursement or allowance within a reasonable period of time. Taxact 2010 free An arrangement under which you advance money to employees is treated as meeting (3) above only if the following requirements are also met. Taxact 2010 free The advance is reasonably calculated not to exceed the amount of anticipated expenses. Taxact 2010 free You make the advance within a reasonable period of time of your employee paying or incurring the expense. Taxact 2010 free If any expenses reimbursed under this arrangement are not substantiated, or an excess reimbursement is not returned within a reasonable period of time by an employee, you cannot treat these expenses as reimbursed under an accountable plan. Taxact 2010 free Instead, treat the reimbursed expenses as paid under a nonaccountable plan, discussed later. Taxact 2010 free Adequate accounting. Taxact 2010 free   Your employees must adequately account to you for their travel, meals, and entertainment expenses. Taxact 2010 free They must give you documentary evidence of their travel, mileage, and other employee business expenses. Taxact 2010 free This evidence should include items such as receipts, along with either a statement of expenses, an account book, a day-planner, or similar record in which the employee entered each expense at or near the time the expense was incurred. Taxact 2010 free Excess reimbursement or allowance. Taxact 2010 free   An excess reimbursement or allowance is any amount you pay to an employee that is more than the business-related expenses for which the employee adequately accounted. Taxact 2010 free The employee must return any excess reimbursement or other expense allowance to you within a reasonable period of time. Taxact 2010 free Reasonable period of time. Taxact 2010 free   A reasonable period of time depends on the facts and circumstances. Taxact 2010 free Generally, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Taxact 2010 free You give an advance within 30 days of the time the employee pays or incurs the expense. Taxact 2010 free Your employees adequately account for their expenses within 60 days after the expenses were paid or incurred. Taxact 2010 free Your employees return any excess reimbursement within 120 days after the expenses were paid or incurred. Taxact 2010 free You give a periodic statement (at least quarterly) to your employees that asks them to either return or adequately account for outstanding advances and they comply within 120 days of the date of the statement. Taxact 2010 free How to deduct. Taxact 2010 free   You can claim a deduction for travel, meals, and entertainment expenses if you reimburse your employees for these expenses under an accountable plan. Taxact 2010 free Generally, the amount you can deduct for meals and entertainment is subject to a 50% limit, discussed later. Taxact 2010 free If you are a sole proprietor, or are filing as a single member limited liability company, deduct the travel reimbursement on line 24a and the deductible part of the meals and entertainment reimbursement on line 24b, Schedule C (Form 1040) or line 2, Schedule C-EZ (Form 1040). Taxact 2010 free   If you are filing an income tax return for a corporation, include the reimbursement on the Other deductions line of Form 1120, U. Taxact 2010 free S. Taxact 2010 free Corporation Income Tax Return. Taxact 2010 free If you are filing any other business income tax return, such as a partnership or S corporation return, deduct the reimbursement on the appropriate line of the return as provided in the instructions for that return. Taxact 2010 free Table 11-1. Taxact 2010 free Reporting Reimbursements IF the type of reimbursement (or other expense allowance) arrangement is under THEN the employer reports on Form W-2 An accountable plan with: Actual expense reimbursement:  Adequate accounting made and excess returned No amount. Taxact 2010 free Actual expense reimbursement:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. Taxact 2010 free Per diem or mileage allowance up to the federal rate:  Adequate accounting made and excess returned No amount. Taxact 2010 free Per diem or mileage allowance up to the federal rate:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. Taxact 2010 free The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Taxact 2010 free Per diem or mileage allowance exceeds the federal rate:  Adequate accounting made up to the federal rate only and excess not returned The excess amount as wages in box 1. Taxact 2010 free The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Taxact 2010 free A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan The entire amount as wages in box 1. Taxact 2010 free No reimbursement plan The entire amount as wages in box 1. Taxact 2010 free Per Diem and Car Allowances You can reimburse your employees under an accountable plan based on travel days, miles, or some other fixed allowance. Taxact 2010 free In these cases, your employee is considered to have accounted to you for the amount of the expense that does not exceed the rates established by the federal government. Taxact 2010 free Your employee must actually substantiate to you the other elements of the expense, such as time, place, and business purpose. Taxact 2010 free Federal rate. Taxact 2010 free   The federal rate can be figured using any one of the following methods. Taxact 2010 free For car expenses: The standard mileage rate. Taxact 2010 free A fixed and variable rate (FAVR). Taxact 2010 free For per diem amounts: The regular federal per diem rate. Taxact 2010 free The standard meal allowance. Taxact 2010 free The high-low rate. Taxact 2010 free Car allowance. Taxact 2010 free   Your employee is considered to have accounted to you for car expenses that do not exceed the standard mileage rate. Taxact 2010 free Beginning in 2013, the standard business mileage rate is 56. Taxact 2010 free 5 cents per mile. Taxact 2010 free   You can choose to reimburse your employees using a fixed and variable rate (FAVR) allowance. Taxact 2010 free This is an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your employees' variable operating costs (such as gas, oil, etc. Taxact 2010 free ) plus a flat amount to cover your employees' fixed costs (such as depreciation, insurance, etc. Taxact 2010 free ). Taxact 2010 free For information on using a FAVR allowance, see Revenue Procedure 2010-51, available at www. Taxact 2010 free irs. Taxact 2010 free gov/irb/2010-51_IRB/ar14. Taxact 2010 free html and Notice 2012-72, available at www. Taxact 2010 free irs. Taxact 2010 free gov/irb/2012-50_IRB/ar10. Taxact 2010 free html. Taxact 2010 free Per diem allowance. Taxact 2010 free   If your employee actually substantiates to you the other elements (discussed earlier) of the expenses reimbursed using the per diem allowance, how you report and deduct the allowance depends on whether the allowance is for lodging and meal expenses or for meal expenses only and whether the allowance is more than the federal rate. Taxact 2010 free Regular federal per diem rate. Taxact 2010 free   The regular federal per diem rate is the highest amount the federal government will pay to its employees while away from home on travel. Taxact 2010 free It has two components: Lodging expense, and Meal and incidental expense (M&IE). Taxact 2010 free The rates are different for different locations. Taxact 2010 free Publication 1542 lists the rates in the continental United States. Taxact 2010 free Standard meal allowance. Taxact 2010 free   The federal rate for meal and incidental expenses (M&IE) is the standard meal allowance. Taxact 2010 free You can pay only an M&IE allowance to employees who travel away from home if: You pay the employee for actual expenses for lodging based on receipts submitted to you, You provide for the lodging, You pay for the actual expense of the lodging directly to the provider, You do not have a reasonable belief that lodging expenses were incurred by the employee, or The allowance is computed on a basis similar to that used in computing the employee's wages (that is, number of hours worked or miles traveled). Taxact 2010 free Internet access. Taxact 2010 free    Per diem rates are available on the Internet. Taxact 2010 free You can access per diem rates at www. Taxact 2010 free gsa. Taxact 2010 free gov/perdiemrates. Taxact 2010 free High-low method. Taxact 2010 free   This is a simplified method of computing the federal per diem rate for travel within the continental United States. Taxact 2010 free It eliminates the need to keep a current list of the per diem rate for each city. Taxact 2010 free   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 ($65 for M&IE) for certain high-cost locations. Taxact 2010 free All other areas have a per diem amount of $163 ($52 for M&IE). Taxact 2010 free The high-cost locations eligible for the higher per diem amount under the high-low method are listed in Publication 1542. Taxact 2010 free   Effective October 1, 2013, the per diem rate for high-cost locations increased to $251 ($65 for M&IE). Taxact 2010 free The rate for all other locations increased to $170 ($52 for M&IE). Taxact 2010 free For October, November, and December 2013, you can either continue to use the rates described in the preceding paragraph or change to the new rates. Taxact 2010 free However, you must use the same rate for all employees reimbursed under the high-low method. Taxact 2010 free   For more information about the high-low method, see Notice 2013-65, available at www. Taxact 2010 free irs. Taxact 2010 free gov/irb/2013-44_IRB/ar13. Taxact 2010 free html. Taxact 2010 free See Publication 1542 (available on the Internet at IRS. Taxact 2010 free gov) for the current per diem rates for all locations. Taxact 2010 free Reporting per diem and car allowances. Taxact 2010 free   The following discussion explains how to report per diem and car allowances. Taxact 2010 free The manner in which you report them depends on how the allowance compares to the federal rate. Taxact 2010 free See Table 11-1. Taxact 2010 free Allowance less than or equal to the federal rate. Taxact 2010 free   If your allowance for the employee is less than or equal to the appropriate federal rate, that allowance is not included as part of the employee's pay in box 1 of the employee's Form W-2. Taxact 2010 free Deduct the allowance as travel expenses (including meals that may be subject to the 50% limit, discussed later). Taxact 2010 free See How to deduct under Accountable Plans, earlier. Taxact 2010 free Allowance more than the federal rate. Taxact 2010 free   If your employee's allowance is more than the appropriate federal rate, you must report the allowance as two separate items. Taxact 2010 free   Include the allowance amount up to the federal rate in box 12 (code L) of the employee's Form W-2. Taxact 2010 free Deduct it as travel expenses (as explained above). Taxact 2010 free This part of the allowance is treated as reimbursed under an accountable plan. Taxact 2010 free   Include the amount that is more than the federal rate in box 1 (and in boxes 3 and 5 if they apply) of the employee's Form W-2. Taxact 2010 free Deduct it as wages subject to income tax withholding, social security, Medicare, and federal unemployment taxes. Taxact 2010 free This part of the allowance is treated as reimbursed under a nonaccountable plan as explained later under Nonaccountable Plans. Taxact 2010 free Meals and Entertainment Under an accountable plan, you can generally deduct only 50% of any otherwise deductible business-related meal and entertainment expenses you reimburse your employees. Taxact 2010 free The deduction limit applies even if you reimburse them for 100% of the expenses. Taxact 2010 free Application of the 50% limit. Taxact 2010 free   The 50% deduction limit applies to reimbursements you make to your employees for expenses they incur for meals while traveling away from home on business and for entertaining business customers at your place of business, a restaurant, or another location. Taxact 2010 free It applies to expenses incurred at a business convention or reception, business meeting, or business luncheon at a club. Taxact 2010 free The deduction limit may also apply to meals you furnish on your premises to your employees. Taxact 2010 free Related expenses. Taxact 2010 free   Taxes and tips relating to a meal or entertainment activity you reimburse to your employee under an accountable plan are included in the amount subject to the 50% limit. Taxact 2010 free Reimbursements you make for expenses, such as cover charges for admission to a nightclub, rent paid for a room to hold a dinner or cocktail party, or the amount you pay for parking at a sports arena, are all subject to the 50% limit. Taxact 2010 free However, the cost of transportation to and from an otherwise allowable business meal or a business-related entertainment activity is not subject to the 50% limit. Taxact 2010 free Amount subject to 50% limit. Taxact 2010 free   If you provide your employees with a per diem allowance only for meal and incidental expenses, the amount treated as an expense for food and beverages is the lesser of the following. Taxact 2010 free The per diem allowance. Taxact 2010 free The federal rate for M&IE. Taxact 2010 free   If you provide your employees with a per diem allowance that covers lodging, meals, and incidental expenses, you must treat an amount equal to the federal M&IE rate for the area of travel as an expense for food and beverages. Taxact 2010 free If the per diem allowance you provide is less than the federal per diem rate for the area of travel, you can treat 40% of the per diem allowance as the amount for food and beverages. Taxact 2010 free Meal expenses when subject to “hours of service” limits. Taxact 2010 free   You can deduct 80% of the cost of reimbursed meals your employees consume while away from their tax home on business during, or incident to, any period subject to the Department of Transportation's “hours of service” limits. Taxact 2010 free   See Publication 463 for a detailed discussion of individuals subject to the Department of Transportation's “hours of service” limits. Taxact 2010 free De minimis (minimal) fringe benefit. Taxact 2010 free   The 50% limit does not apply to an expense for food or beverage that is excluded from the gross income of an employee because it is a de minimis fringe benefit. Taxact 2010 free See Publication 15-B for additional information on de minimis fringe benefits. Taxact 2010 free Company cafeteria or executive dining room. Taxact 2010 free   The cost of food and beverages you provide primarily to your employees on your business premises is deductible. Taxact 2010 free This includes the cost of maintaining the facilities for providing the food and beverages. Taxact 2010 free These expenses are subject to the 50% limit unless they qualify as a de minimis fringe benefit, as just discussed, or unless they are compensation to your employees (explained later). Taxact 2010 free Employee activities. Taxact 2010 free   The expense of providing recreational, social, or similar activities (including the use of a facility) for your employees is deductible and is not subject to the 50% limit. Taxact 2010 free The benefit must be primarily for your employees who are not highly compensated. Taxact 2010 free   For this purpose, a highly compensated employee is an employee who meets either of the following requirements. Taxact 2010 free Owned a 10% or more interest in the business during the year or the preceding year. Taxact 2010 free An employee is treated as owning any interest owned by his or her brother, sister, spouse, ancestors, and lineal descendants. Taxact 2010 free Received more than $115,000 in pay for the preceding year. Taxact 2010 free You can choose to include only employees who were also in the top 20% of employees when ranked by pay for the preceding year. Taxact 2010 free   For example, the expenses for food, beverages, and entertainment for a company-wide picnic are not subject to the 50% limit. Taxact 2010 free Meals or entertainment treated as compensation. Taxact 2010 free   The 50% limit does not apply to either of the following. Taxact 2010 free Expenses for meals or entertainment that you treat as: Compensation to an employee who was the recipient of the meals or entertainment, and Wages subject to withholding of federal income tax. Taxact 2010 free Expenses for meals or entertainment if: A recipient of the meals or entertainment who is not your employee has to include the expenses in gross income as compensation for services or as a prize or award, and You include that amount on a Form 1099 issued to the recipient, if a Form 1099 is required. Taxact 2010 free Sales of meals or entertainment. Taxact 2010 free   You can deduct the cost of meals or entertainment (including the use of facilities) you sell to the public. Taxact 2010 free For example, if you run a nightclub, your expense for the entertainment you furnish to your customers, such as a floor show, is a business expense that is fully deductible. Taxact 2010 free The 50% limit does not apply to this expense. Taxact 2010 free Providing meals or entertainment to general public to promote goodwill. Taxact 2010 free   You can deduct the cost of providing meals, entertainment, or recreational facilities to the general public as a means of advertising or promoting goodwill in the community. Taxact 2010 free The 50% limit does not apply to this expense. Taxact 2010 free Director, stockholder, or employee meetings. Taxact 2010 free   You can deduct entertainment expenses directly related to business meetings of your employees, partners, stockholders, agents, or directors. Taxact 2010 free You can provide some minor social activities, but the main purpose of the meeting must be your company's business. Taxact 2010 free These expenses are subject to the 50% limit. Taxact 2010 free Trade association meetings. Taxact 2010 free   You can deduct expenses directly related to and necessary for attending business meetings or conventions of certain tax-exempt organizations. Taxact 2010 free These organizations include business leagues, chambers of commerce, real estate boards, and trade and professional associations. Taxact 2010 free Nonaccountable Plans A nonaccountable plan is an arrangement that does not meet the requirements for an accountable plan. Taxact 2010 free All amounts paid, or treated as paid, under a nonaccountable plan are reported as wages on Form W-2. Taxact 2010 free The payments are subject to income tax withholding, social security, Medicare, and federal unemployment taxes. Taxact 2010 free You can deduct the reimbursement as compensation or wages only to the extent it meets the deductibility tests for employees' pay in chapter 2. Taxact 2010 free Deduct the allowable amount as compensation or wages on the appropriate line of your income tax return, as provided in its instructions. Taxact 2010 free Miscellaneous Expenses In addition to travel, meal, and entertainment expenses, there are other expenses you can deduct. Taxact 2010 free Advertising expenses. Taxact 2010 free   You generally can deduct reasonable advertising expenses that are directly related to your business activities. Taxact 2010 free Generally, you cannot deduct amounts paid to influence legislation (i. Taxact 2010 free e. Taxact 2010 free , lobbying). Taxact 2010 free See Lobbying expenses , later. Taxact 2010 free   You can usually deduct as a business expense the cost of institutional or goodwill advertising to keep your name before the public if it relates to business you reasonably expect to gain in the future. Taxact 2010 free For example, the cost of advertising that encourages people to contribute to the Red Cross, to buy U. Taxact 2010 free S. Taxact 2010 free Savings Bonds, or to participate in similar causes is usually deductible. Taxact 2010 free Anticipated liabilities. Taxact 2010 free   Anticipated liabilities or reserves for anticipated liabilities are not deductible. Taxact 2010 free For example, assume you sold 1-year TV service contracts this year totaling $50,000. Taxact 2010 free From experience, you know you will have expenses of about $15,000 in the coming year for these contracts. Taxact 2010 free You cannot deduct any of the $15,000 this year by charging expenses to a reserve or liability account. Taxact 2010 free You can deduct your expenses only when you actually pay or accrue them, depending on your accounting method. Taxact 2010 free Bribes and kickbacks. Taxact 2010 free   Engaging in the payment of bribes or kickbacks is a serious criminal matter. Taxact 2010 free Such activity could result in criminal prosecution. Taxact 2010 free Any payments that appear to have been made, either directly or indirectly, to an official or employee of any government or an agency or instrumentality of any government are not deductible for tax purposes and are in violation of the law. Taxact 2010 free   Payments paid directly or indirectly to a person in violation of any federal or state law (but only if that state law is generally enforced, defined below) that provides for a criminal penalty or for the loss of a license or privilege to engage in a trade or business are also not allowed as a deduction for tax purposes. Taxact 2010 free Meaning of “generally enforced. Taxact 2010 free ”   A state law is considered generally enforced unless it is never enforced or enforced only for infamous persons or persons whose violations are extraordinarily flagrant. Taxact 2010 free For example, a state law is generally enforced unless proper reporting of a violation of the law results in enforcement only under unusual circumstances. Taxact 2010 free Kickbacks. Taxact 2010 free   A kickback is a payment for referring a client, patient, or customer. Taxact 2010 free The common kickback situation occurs when money or property is given to someone as payment for influencing a third party to purchase from, use the services of, or otherwise deal with the person who pays the kickback. Taxact 2010 free In many cases, the person whose business is being sought or enjoyed by the person who pays the kickback is not aware of the payment. Taxact 2010 free   For example, the Yard Corporation is in the business of repairing ships. Taxact 2010 free It returns 10% of the repair bills as kickbacks to the captains and chief officers of the vessels it repairs. Taxact 2010 free Although this practice is considered an ordinary and necessary expense of getting business, it is clearly a violation of a state law that is generally enforced. Taxact 2010 free These expenditures are not deductible for tax purposes, whether or not the owners of the shipyard are subsequently prosecuted. Taxact 2010 free Form 1099-MISC. Taxact 2010 free   It does not matter whether any kickbacks paid during the tax year are deductible on your income tax return in regards to information reporting. Taxact 2010 free See Form 1099-MISC for more information. Taxact 2010 free Car and truck expenses. Taxact 2010 free   The costs of operating a car, truck, or other vehicle in your business are deductible. Taxact 2010 free For more information on how to figure your deduction, see Publication 463. Taxact 2010 free Charitable contributions. Taxact 2010 free   Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments are not charitable contributions or gifts and are directly related to your business. Taxact 2010 free If the payments are charitable contributions or gifts, you cannot deduct them as business expenses. Taxact 2010 free However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. Taxact 2010 free See the Instructions for Form 1120 for more information. Taxact 2010 free Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040). Taxact 2010 free Example. Taxact 2010 free You paid $15 to a local church for a half-page ad in a program for a concert it is sponsoring. Taxact 2010 free The purpose of the ad was to encourage readers to buy your products. Taxact 2010 free Your payment is not a charitable contribution. Taxact 2010 free You can deduct it as an advertising expense. Taxact 2010 free Example. Taxact 2010 free You made a $100,000 donation to a committee organized by the local Chamber of Commerce to bring a convention to your city, intended to increase business activity, including yours. Taxact 2010 free Your payment is not a charitable contribution. Taxact 2010 free You can deduct it as a business expense. Taxact 2010 free See Publication 526 for a discussion of donated inventory, including capital gain property. Taxact 2010 free Club dues and membership fees. Taxact 2010 free   Generally, you cannot deduct amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or any other social purpose. Taxact 2010 free This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Taxact 2010 free Exception. Taxact 2010 free   The following organizations are not treated as clubs organized for business, pleasure, recreation, or other social purpose unless one of the main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. Taxact 2010 free Boards of trade. Taxact 2010 free Business leagues. Taxact 2010 free Chambers of commerce. Taxact 2010 free Civic or public service organizations. Taxact 2010 free Professional organizations such as bar associations and medical associations. Taxact 2010 free Real estate boards. Taxact 2010 free Trade associations. Taxact 2010 free Credit card convenience fees. Taxact 2010 free   Credit card companies charge a fee to businesses who accept their cards. Taxact 2010 free This fee when paid or incurred by the business can be deducted as a business expense. Taxact 2010 free Damages recovered. Taxact 2010 free   Special rules apply to compensation you receive for damages sustained as a result of patent infringement, breach of contract or fiduciary duty, or antitrust violations. Taxact 2010 free You must include this compensation in your income. Taxact 2010 free However, you may be able to take a special deduction. Taxact 2010 free The deduction applies only to amounts recovered for actual economic injury, not any additional amount. Taxact 2010 free The deduction is the smaller of the following. Taxact 2010 free The amount you received or accrued for damages in the tax year reduced by the amount you paid or incurred in the year to recover that amount. Taxact 2010 free Your losses from the injury you have not deducted. Taxact 2010 free Demolition expenses or losses. Taxact 2010 free   Amounts paid or incurred to demolish a structure are not deductible. Taxact 2010 free These amounts are added to the basis of the land where the demolished structure was located. Taxact 2010 free Any loss for the remaining undepreciated basis of a demolished structure would not be recognized until the property is disposed of. Taxact 2010 free Education expenses. Taxact 2010 free   Ordinary and necessary expenses paid for the cost of the education and training of your employees are deductible. Taxact 2010 free See Education Expenses in chapter 2. Taxact 2010 free   You can also deduct the cost of your own education (including certain related travel) related to your trade or business. Taxact 2010 free You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. Taxact 2010 free For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law. Taxact 2010 free   Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. Taxact 2010 free This is true even if the education maintains or improves skills presently required in your business. Taxact 2010 free For more information on education expenses, see Publication 970. Taxact 2010 free Franchise, trademark, trade name. Taxact 2010 free   If you buy a franchise, trademark, or trade name, you can deduct the amount you pay or incur as a business expense only if your payments are part of a series of payments that are: Contingent on productivity, use, or disposition of the item, Payable at least annually for the entire term of the transfer agreement, and Substantially equal in amount (or payable under a fixed formula). Taxact 2010 free   When determining the term of the transfer agreement, include all renewal options and any other period for which you and the transferrer reasonably expect the agreement to be renewed. Taxact 2010 free   A franchise includes an agreement that gives one of the parties to the agreement the right to distribute, sell, or provide goods, services, or facilities within a specified area. Taxact 2010 free Impairment-related expenses. Taxact 2010 free   If you are disabled, you can deduct expenses necessary for you to be able to work (impairment-related expenses) as a business expense, rather than as a medical expense. Taxact 2010 free   You are disabled if you have either of the following. Taxact 2010 free A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed. Taxact 2010 free A physical or mental impairment that substantially limits one or more of your major life activities. Taxact 2010 free   The expense qualifies as a business expense if all the following apply. Taxact 2010 free Your work clearly requires the expense for you to satisfactorily perform that work. Taxact 2010 free The goods or services purchased are clearly not needed or used, other than incidentally, in your personal activities. Taxact 2010 free Their treatment is not specifically provided for under other tax law provisions. Taxact 2010 free Example. Taxact 2010 free You are blind. Taxact 2010 free You must use a reader to do your work, both at and away from your place of work. Taxact 2010 free The reader's services are only for your work. Taxact 2010 free You can deduct your expenses for the reader as a business expense. Taxact 2010 free Internet-related expenses. Taxact 2010 free   Generally, you can deduct internet-related expenses including domain registrations fees and webmaster consulting costs. Taxact 2010 free If you are starting a business you may have to amortize these expenses as start-up costs. Taxact 2010 free For more information about amortizing start-up and organizational costs, see chapter 8. Taxact 2010 free Interview expense allowances. Taxact 2010 free   Reimbursements you make to job candidates for transportation or other expenses related to interviews for possible employment are not wages. Taxact 2010 free You can deduct the reimbursements as a business expense. Taxact 2010 free However, expenses for food, beverages, and entertainment are subject to the 50% limit discussed earlier under Meals and Entertainment. Taxact 2010 free Legal and professional fees. Taxact 2010 free   Fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business are deductible as business expenses. Taxact 2010 free However, usually legal fees you pay to acquire business assets are not deductible. Taxact 2010 free These costs are added to the basis of the property. Taxact 2010 free   Fees that include payments for work of a personal nature (such as drafting a will, or damages arising from a personal injury) are not allowed as a business deduction on Schedule C or C-EZ. Taxact 2010 free If the invoice includes both business and personal charges, compute the business portion as follows: multiply the total amount of the bill by a fraction, the numerator of which is the amount attributable to business matters, the denominator of which is the total amount paid. Taxact 2010 free The result is the portion of the invoice attributable to business expenses. Taxact 2010 free The portion attributable to personal matters is the difference between the total amount and the business portion (computed above). Taxact 2010 free   Legal fees relating to personal tax advice may be deductible on Schedule A (Form 1040), if you itemize deductions. Taxact 2010 free However, the deduction is subject to the 2% limitation on miscellaneous itemized deductions. Taxact 2010 free See Publication 529, Miscellaneous Deductions. Taxact 2010 free Tax preparation fees. Taxact 2010 free   The cost of hiring a tax professional, such as a C. Taxact 2010 free P. Taxact 2010 free A. Taxact 2010 free , to prepare that part of your tax return relating to your business as a sole proprietor is deductible on Schedule C or Schedule C-EZ. Taxact 2010 free Any remaining cost may be deductible on Schedule A (Form 1040) if you itemize deductions. Taxact 2010 free   You can also claim a business deduction for amounts paid or incurred in resolving asserted tax deficiencies for your business operated as a sole proprietor. Taxact 2010 free Licenses and regulatory fees. Taxact 2010 free   Licenses and regulatory fees for your trade or business paid annually to state or local governments generally are deductible. Taxact 2010 free Some licenses and fees may have to be amortized. Taxact 2010 free See chapter 8 for more information. Taxact 2010 free Lobbying expenses. Taxact 2010 free   Generally, lobbying expenses are not deductible. Taxact 2010 free Lobbying expenses include amounts paid or incurred for any of the following activities. Taxact 2010 free Influencing legislation. Taxact 2010 free Participating in or intervening in any political campaign for, or against, any candidate for public office. Taxact 2010 free Attempting to influence the general public, or segments of the public, about elections, legislative matters, or referendums. Taxact 2010 free Communicating directly with covered executive branch officials (defined later) in any attempt to influence the official actions or positions of those officials. Taxact 2010 free Researching, preparing, planning, or coordinating any of the preceding activities. Taxact 2010 free   Your expenses for influencing legislation and communicating directly with a covered executive branch official include a portion of your labor costs and general and administrative costs of your business. Taxact 2010 free For information on making this allocation, see section 1. Taxact 2010 free 162-28 of the regulations. Taxact 2010 free   You cannot claim a charitable or business expense deduction for amounts paid to an organization if both of the following apply. Taxact 2010 free The organization conducts lobbying activities on matters of direct financial interest to your business. Taxact 2010 free A principal purpose of your contribution is to avoid the rules discussed earlier that prohibit a business deduction for lobbying expenses. Taxact 2010 free   If a tax-exempt organization, other than a section 501(c)(3) organization, provides you with a notice on the part of dues that is allocable to nondeductible lobbying and political expenses, you cannot deduct that part of the dues. Taxact 2010 free Covered executive branch official. Taxact 2010 free   For purposes of this discussion, a covered executive branch official is any of the following. Taxact 2010 free The President. Taxact 2010 free The Vice President. Taxact 2010 free Any officer or employee of the White House Office of the Executive Office of the President and the two most senior level officers of each of the other agencies in the Executive Office. Taxact 2010 free Any individual who: Is serving in a position in Level I of the Executive Schedule under section 5312 of title 5, United States Code, Has been designated by the President as having Cabinet-level status, or Is an immediate deputy of an individual listed in item (a) or (b). Taxact 2010 free Exceptions to denial of deduction. Taxact 2010 free   The general denial of the deduction does not apply to the following. Taxact 2010 free Expenses of appearing before, or communicating with, any committee or member of any local council or similar governing body concerning its legislation (local legislation) if the legislation is of direct interest to you or to you and an organization of which you are a member. Taxact 2010 free An Indian tribal government is treated as a local council or similar governing body. Taxact 2010 free Any in-house expenses for influencing legislation and communicating directly with a covered executive branch official if those expenses for the tax year do not exceed $2,000 (excluding overhead expenses). Taxact 2010 free Expenses incurred by taxpayers engaged in the trade or business of lobbying (professional lobbyists) on behalf of another person (but does apply to payments by the other person to the lobbyist for lobbying activities). Taxact 2010 free Moving machinery. Taxact 2010 free   Generally, the cost of moving machinery from one city to another is a deductible expense. Taxact 2010 free So is the cost of moving machinery from one plant to another, or from one part of your plant to another. Taxact 2010 free You can deduct the cost of installing the machinery in the new location. Taxact 2010 free However, you must capitalize the costs of installing or moving newly purchased machinery. Taxact 2010 free Outplacement services. Taxact 2010 free   The costs of outplacement services you provide to your employees to help them find new employment, such as career counseling, résumé assistance, skills assessment, etc. Taxact 2010 free are deductible. Taxact 2010 free   The costs of outplacement services may cover more than one deduction category. Taxact 2010 free For example, deduct as a utilities expense the cost of telephone calls made under this service and deduct as rental expense the cost of renting machinery and equipment for this service. Taxact 2010 free   For information on whether the value of outplacement services is includable in your employees' income, see Publication 15-B. Taxact 2010 free Penalties and fines. Taxact 2010 free   Penalties paid for late performance or nonperformance of a contract are generally deductible. Taxact 2010 free For instance, you own and operate a construction company. Taxact 2010 free Under a contract, you are to finish construction of a building by a certain date. Taxact 2010 free Due to construction delays, the building is not completed and ready for occupancy on the date stipulated in the contract. Taxact 2010 free You are now required to pay an additional amount for each day that completion is delayed beyond the completion date stipulated in the contract. Taxact 2010 free These additional costs are deductible business expenses. Taxact 2010 free   On the other hand, penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible. Taxact 2010 free These fines or penalties include the following amounts. Taxact 2010 free Paid because of a conviction for a crime or after a plea of guilty or no contest in a criminal proceeding. Taxact 2010 free Paid as a penalty imposed by federal, state, or local law in a civil action, including certain additions to tax and additional amounts and assessable penalties imposed by the Internal Revenue Code. Taxact 2010 free Paid in settlement of actual or possible liability for a fine or penalty, whether civil or criminal. Taxact 2010 free Forfeited as collateral posted for a proceeding that could result in a fine or penalty. Taxact 2010 free   Examples of nondeductible penalties and fines include the following. Taxact 2010 free Fines for violating city housing codes. Taxact 2010 free Fines paid by truckers for violating state maximum highway weight laws. Taxact 2010 free Fines for violating air quality laws. Taxact 2010 free Civil penalties for violating federal laws regarding mining safety standards and discharges into navigable waters. Taxact 2010 free   A fine or penalty does not include any of the following. Taxact 2010 free Legal fees and related expenses to defend yourself in a prosecution or civil action for a violation of the law imposing the fine or civil penalty. Taxact 2010 free Court costs or stenographic and printing charges. Taxact 2010 free Compensatory damages paid to a government. Taxact 2010 free Political contributions. Taxact 2010 free   Contributions or gifts paid to political parties or candidates are not deductible. Taxact 2010 free In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible. Taxact 2010 free Indirect political contributions. Taxact 2010 free   You cannot deduct indirect political contributions and costs of taking part in political activities as business expenses. Taxact 2010 free Examples of nondeductible expenses include the following. Taxact 2010 free Advertising in a convention program of a political party, or in any other publication if any of the proceeds from the publication are for, or intended for, the use of a political party or candidate. Taxact 2010 free Admission to a dinner or program (including, but not limited to, galas, dances, film presentations, parties, and sporting events) if any of the proceeds from the function are for, or intended for, the use of a political party or candidate. Taxact 2010 free Admission to an inaugural ball, gala, parade, concert, or similar event if identified with a political party or candidate. Taxact 2010 free Repairs. Taxact 2010 free   The cost of repairing or improving property used in your trade or business is either a deductible or capital expense. Taxact 2010 free Routine maintenance that keeps your property in a normal efficient operating condition, but that does not materially increase the value or substantially prolong the useful life of the property, is deductible in the year that it is incurred. Taxact 2010 free Otherwise, the cost must be capitalized and depreciated. Taxact 2010 free See Form 4562 and its instructions for how to compute and claim the depreciation deduction. Taxact 2010 free   The cost of repairs includes the costs of labor, supplies, and certain other items. Taxact 2010 free The value of your own labor is not deductible. Taxact 2010 free Examples of repairs include: Reconditioning floors (but not replacement), Repainting the interior and exterior walls of a building, Cleaning and repairing roofs and gutters, and Fixing plumbing leaks (but not replacement of fixtures). Taxact 2010 free Repayments. Taxact 2010 free   If you had to repay an amount you included in your income in an earlier year, you may be able to deduct the amount repaid for the year in which you repaid it. Taxact 2010 free Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Taxact 2010 free Type of deduction. Taxact 2010 free   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Taxact 2010 free For instance, if you repay an amount you previously reported as a capital gain, deduct the repayment as a capital loss on Form 8949. Taxact 2010 free If you reported it as self-employment income, deduct it as a business deduction on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Taxact 2010 free   If you reported the amount as wages, unemployment compensation, or other nonbusiness ordinary income, enter it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is subject to the 2% limitation. Taxact 2010 free However, if the repayment is over $3,000 and Method 1 (discussed later) applies, deduct it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is not subject to the 2% limitation. Taxact 2010 free Repayment—$3,000 or less. Taxact 2010 free   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Taxact 2010 free Repayment—over $3,000. Taxact 2010 free   If the amount you repaid was more than $3,000, you can deduct the repayment, as described earlier. Taxact 2010 free However, you can instead choose to take a tax credit for the year of repayment if you included the income under a “claim of right. Taxact 2010 free ” This means that at the time you included the income, it appeared that you had an unrestricted right to it. Taxact 2010 free If you qualify for this choice, figure your tax under both methods and use the method that results in less tax. Taxact 2010 free Method 1. Taxact 2010 free   Figure your tax for 2013 claiming a deduction for the repaid amount. Taxact 2010 free Method 2. Taxact 2010 free   Figure your tax for 2013 claiming a credit for the repaid amount. Taxact 2010 free Follow these steps. Taxact 2010 free Figure your tax for 2013 without deducting the repaid amount. Taxact 2010 free Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Taxact 2010 free Subtract the tax in (2) from the tax shown on your return for the earlier year. Taxact 2010 free This is the amount of your credit. Taxact 2010 free Subtract the answer in (3) from the tax for 2013 figured without the deduction (step 1). Taxact 2010 free   If Method 1 results in less tax, deduct the amount repaid as discussed earlier under Type of deduction. Taxact 2010 free   If Method 2 results in less tax, claim the credit on line 71 of Form 1040, and write “I. Taxact 2010 free R. Taxact 2010 free C. Taxact 2010 free 1341” next to line 71. Taxact 2010 free Example. Taxact 2010 free For 2012, you filed a return and reported your income on the cash method. Taxact 2010 free In 2013, you repaid $5,000 included in your 2012 gross income under a claim of right. Taxact 2010 free Your filing status in 2013 and 2012 is single. Taxact 2010 free Your income and tax for both years are as follows:   2012  With Income 2012  Without Income Taxable Income $15,000 $10,000 Tax $ 1,819 $ 1,069   2013  Without Deduction 2013  With Deduction Taxable Income $49,950 $44,950 Tax $8,423 $7,173 Your tax under Method 1 is $7,173. Taxact 2010 free Your tax under Method 2 is $7,673, figured as follows: Tax previously determined for 2012 $ 1,819 Less: Tax as refigured − 1,069 Decrease in 2012 tax $ 750 Regular tax liability for 2013 $8,423 Less: Decrease in 2012 tax − 750 Refigured tax for 2013 $ 7,673 Because you pay less tax under Method 1, you should take a deduction for the repayment in 2013. Taxact 2010 free Repayment does not apply. Taxact 2010 free   This discussion does not apply to the following. Taxact 2010 free Deductions for bad debts. Taxact 2010 free Deductions from sales to customers, such as returns and allowances, and similar items. Taxact 2010 free Deductions for legal and other expenses of contesting the repayment. Taxact 2010 free Year of deduction (or credit). Taxact 2010 free   If you use the cash method of accounting, you can take the deduction (or credit, if applicable) for the tax year in which you actually make the repayment. Taxact 2010 free If you use any other accounting method, you can deduct the repayment or claim a credit for it only for the tax year in which it is a proper deduction under your accounting method. Taxact 2010 free For example, if you use the accrual method, you are entitled to the deduction or credit in the tax year in which the obligation for the repayment accrues. Taxact 2010 free Subscriptions. Taxact 2010 free   Subscriptions to professional, technical, and trade journals that deal with your business field are deductible. Taxact 2010 free Supplies and materials. Taxact 2010 free   Unless you have deducted the cost in any earlier year, you generally can deduct the cost of materials and supplies actually consumed and used during the tax year. Taxact 2010 free   If you keep incidental materials and supplies on hand, you can deduct the cost of the incidental materials and supplies you bought during the tax year if all the following requirements are met. Taxact 2010 free You do not keep a record of when they are used. Taxact 2010 free You do not take an inventory of the amount on hand at the beginning and end of the tax year. Taxact 2010 free This method does not distort your income. Taxact 2010 free   You can also deduct the cost of books, professional instruments, equipment, etc. Taxact 2010 free , if you normally use them within a year. Taxact 2010 free However, if the usefulness of these items extends substantially beyond the year they are placed in service, you generally must recover their costs through depreciation. Taxact 2010 free For more information regarding depreciation see Publication 946, How To Depreciate Property. Taxact 2010 free Utilities. Taxact 2010 free   Business expenses for heat, lights, power, telephone service, and water and sewerage are deductible. Taxact 2010 free However, any part due to personal use is not deductible. Taxact 2010 free Telephone. Taxact 2010 free   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. Taxact 2010 free However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. Taxact 2010 free Prev  Up  Next   Home   More Online Publications