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Turbotax 2009

Taxact 2011 ReturnOnline 1040ez FormTaxes Help2011 1040 Form2013 Ez Tax FormWww Irs Gov Com1090 Ez FormFillable 1040ez Form 2012Federal Income Tax Amendment FormHow To File A 1040 EzTax Forms 2012Tax FormE File State Tax ReturnHow To File State TaxesHow To Refile A Tax ReturnAmendedAarp Tax Aide Locations1040ez Amended Form1040ez Tax Forms2011 Federal Tax FormsIncome Tax Preparation Software1040 Ez Tax Form 2012I Need To Amend My 2012 TaxesPrintable 1040ez Form 20112009 Federal Income Tax FormsFile An Extension On My Taxes1040 Ez FormWhere To Get 2011 Tax FormsWww Irs Gov Form1040ezFiling Form 1040ezH And R Block Online TaxesH&r Block For MilitaryTurbotax FreeFree Federal And State EfileFiling 2010 Taxes In 20131040ez 2009 Tax FormTax Preparer Software2012 State Tax FormSearch Freetaxusa Com2010incometax Forms

Turbotax 2009

Turbotax 2009 Publication 584-B - Additional Material Table of Contents This image is too large to be displayed in the current screen. Turbotax 2009 Please click the link to view the image. Turbotax 2009 Office Furniture and Fixtures This image is too large to be displayed in the current screen. Turbotax 2009 Please click the link to view the image. Turbotax 2009 Information Systems This image is too large to be displayed in the current screen. Turbotax 2009 Please click the link to view the image. Turbotax 2009 Motor Vehicles This image is too large to be displayed in the current screen. Turbotax 2009 Please click the link to view the image. Turbotax 2009 Office Supplies This image is too large to be displayed in the current screen. Turbotax 2009 Please click the link to view the image. Turbotax 2009 Building, Components, and Land This image is too large to be displayed in the current screen. Turbotax 2009 Please click the link to view the image. Turbotax 2009 Equipment Tax Publications for Individual TaxpayersSee How To Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. Turbotax 2009 General Guides 1 Your Rights as a Taxpayer 17 Your Federal Income Tax For Individuals 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509 Tax Calendars for 2012 910 IRS Guide to Free Tax Services Specialized Publications 3 Armed Forces’ Tax Guide 54 Tax Guide for U. Turbotax 2009 S. Turbotax 2009 Citizens and Resident Aliens Abroad 225 Farmer’s Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit) 503 Child and Dependent Care Expenses 504 Divorced or Separated Individuals 505 Tax Withholding and Estimated Tax 514 Foreign Tax Credit for Individuals 516 U. Turbotax 2009 S. Turbotax 2009 Government Civilian Employees Stationed Abroad 517 Social Security and Other Information for Members of the Clergy and Religious Workers 519 U. Turbotax 2009 S. Turbotax 2009 Tax Guide for Aliens 521 Moving Expenses 523 Selling Your Home 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 526 Charitable Contributions 527 Residential Rental Property (Including Rental of Vacation Homes) 529 Miscellaneous Deductions 530 Tax Information for Homeowners 531 Reporting Tip Income 535 Business Expenses 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537 Installment Sales 541 Partnerships 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 550 Investment Income and Expenses (Including Capital Gains and Losses) 551 Basis of Assets 554 Tax Guide for Seniors 555 Community Property 556 Examination of Returns, Appeal Rights, and Claims for Refund 559 Survivors, Executors, and Administrators 561 Determining the Value of Donated Property 570 Tax Guide for Individuals With Income From U. Turbotax 2009 S. Turbotax 2009 Possessions 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations 575 Pension and Annuity Income 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 587 Business Use of Your Home (Including Use by Daycare Providers) 590 Individual Retirement Arrangements (IRAs) 594 The IRS Collection Process 596 Earned Income Credit (EIC) 721 Tax Guide to U. Turbotax 2009 S. Turbotax 2009 Civil Service Retirement Benefits 901 U. Turbotax 2009 S. Turbotax 2009 Tax Treaties 907 Tax Highlights for Persons with Disabilities 908 Bankruptcy Tax Guide 915 Social Security and Equivalent Railroad Retirement Benefits 925 Passive Activity and At-Risk Rules 926 Household Employer’s Tax Guide For Wages Paid in 2012 929 Tax Rules for Children and Dependents 936 Home Mortgage Interest Deduction 946 How To Depreciate Property 947 Practice Before the IRS and Power of Attorney 950 Introduction to Estate and Gift Taxes 969 Health Savings Accounts and Other Tax-Favored Health Plans 970 Tax Benefits for Education 971 Innocent Spouse Relief 972 Child Tax Credit 1542 Per Diem Rates (For Travel Within the Continental United States) 1544 Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546 Taxpayer Advocate Service – Your Voice at the IRS Spanish Language Publications 1SP Derechos del Contribuyente 17(SP) El Impuesto Federal sobre los Ingresos Para Personas Fisicas 547(SP) Hechos Fortuitos Desastres y Robos 584(SP) Registro de Pérdidas por Hechos Fortuitos (Imprevistos), Desastres y Robos (Propiedad de Uso Personal) 594SP El Proceso de Cobro del IRS 596SP Crédito por Ingreso del Trabajo 850(EN/SP) English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544 (SP) Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax FormsSee How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail. Turbotax 2009 Form Number and Title 1040 U. Turbotax 2009 S. Turbotax 2009 Individual Income Tax Return Sch A Itemized Deductions Sch B Interest and Ordinary Dividends Sch C Profit or Loss From Business Sch C-EZ Net Profit From Business Sch D Capital Gains and Losses Sch E Supplemental Income and Loss Sch EIC Earned Income Credit Sch F Profit or Loss From Farming Sch H Household Employment Taxes Sch J Income Averaging for Farmers and Fishermen Sch R Credit for the Elderly or the Disabled Sch SE Self-Employment Tax 1040A U. Turbotax 2009 S. Turbotax 2009 Individual Income Tax Return Sch B Interest and Ordinary Dividends 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040-ES Estimated Tax for Individuals 1040X Amended U. Turbotax 2009 S. Turbotax 2009 Individual Income Tax Return 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441 Child and Dependent Care Expenses 2848 Power of Attorney and Declaration of Representative 2848(SP) Poder Legal y Declaración del Representante 3903 Moving Expenses 4562 Depreciation and Amortization 4868 Application for Automatic Extension of Time To File U. Turbotax 2009 S. Turbotax 2009 Individual Income Tax Return 4868(SP) Solicitud de Prórroga Automática para Presentar la Declaración del Impuesto sobre el Ingreso Personal de los Estados Unidos 4952 Investment Interest Expense Deduction 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6251 Alternative Minimum Tax—Individuals 8283 Noncash Charitable Contributions 8582 Passive Activity Loss Limitations 8606 Nondeductible IRAs 8812 Additional Child Tax Credit 8822 Change of Address 8829 Expenses for Business Use of Your Home 8863 Education Credits (American Opportunity and Lifetime Learning Credits) 8949 Sales and Other Dispositions of Capital Assets 9465 Installment Agreement Request 9465(SP) Solicitud para un Plan de Pagos a Plazos         Prev  Up  Next   Home   More Online Publications
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Understanding Your CP161 Notice

You received this notice because of the money you owe from your tax return.


What you need to do

  • Read your notice carefully ― it will explain how much money you owe on your taxes.
  • Check the list of payments we applied to your account to see if we applied all the payments you made.
  • Pay the amount owed by the date on the notice's payment coupon.
  • Make payment arrangements if you can't pay the full amount you owe.

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    Answers to Common Questions

  • Do I have to pay interest on the amount I owe?
    Interest will accrue on the amount you owe unless you pay it by the requested payment date on the notice’s payment coupon.

  • Do I receive a penalty if I cannot pay the full amount?
    Yes. You usually will receive a late payment penalty. Notice 746, Information About Your Notice, Penalty and Interest has more information about penalties and interest.

  • What happens if I cannot pay the full amount I owe?
    You can arrange to make a payment plan with us if you cannot pay the full amount you owe.

  • How can I set up a payment plan?
    Call the toll-free number listed on the top right corner of your notice to discuss payment options or learn more about payment arrangements here.

  • What should I do if I disagree with the notice?
    Contact us at the toll free number listed on the top right corner of your notice. Please have your documentation (such as cancelled checks, amended return, etc.) ready when you call.

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  • Tips for next year

    Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions for which you may qualify. In many cases, you can file free. Learn more about how to file electronically here.

Page Last Reviewed or Updated: 26-Mar-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Turbotax 2009

Turbotax 2009 12. Turbotax 2009   Other Income Table of Contents Introduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. Turbotax 2009 Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. Turbotax 2009 Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. Turbotax 2009 Method 2. Turbotax 2009 RoyaltiesDepletion. Turbotax 2009 Coal and iron ore. Turbotax 2009 Sale of property interest. Turbotax 2009 Part of future production sold. Turbotax 2009 Unemployment BenefitsTypes of unemployment compensation. Turbotax 2009 Governmental program. Turbotax 2009 Repayment of unemployment compensation. Turbotax 2009 Tax withholding. Turbotax 2009 Repayment of benefits. Turbotax 2009 Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. Turbotax 2009 Deduction for costs involved in unlawful discrimination suits. Turbotax 2009 Energy conservation measure. Turbotax 2009 Dwelling unit. Turbotax 2009 Current income required to be distributed. Turbotax 2009 Current income not required to be distributed. Turbotax 2009 How to report. Turbotax 2009 Losses. Turbotax 2009 Grantor trust. Turbotax 2009 Nonemployee compensation. Turbotax 2009 Corporate director. Turbotax 2009 Personal representatives. Turbotax 2009 Manager of trade or business for bankruptcy estate. Turbotax 2009 Notary public. Turbotax 2009 Election precinct official. Turbotax 2009 Difficulty-of-care payments. Turbotax 2009 Maintaining space in home. Turbotax 2009 Reporting taxable payments. Turbotax 2009 Lotteries and raffles. Turbotax 2009 Form W-2G. Turbotax 2009 Reporting winnings and recordkeeping. Turbotax 2009 Inherited pension or IRA. Turbotax 2009 Employee awards or bonuses. Turbotax 2009 Pulitzer, Nobel, and similar prizes. Turbotax 2009 Payment for services. Turbotax 2009 VA payments. Turbotax 2009 Prizes. Turbotax 2009 Strike and lockout benefits. Turbotax 2009 Introduction You must include on your return all items of income you receive in the form of money, property, and services unless the tax law states that you do not include them. Turbotax 2009 Some items, however, are only partly excluded from income. Turbotax 2009 This chapter discusses many kinds of income and explains whether they are taxable or nontaxable. Turbotax 2009 Income that is taxable must be reported on your tax return and is subject to tax. Turbotax 2009 Income that is nontaxable may have to be shown on your tax return but is not taxable. Turbotax 2009 This chapter begins with discussions of the following income items. Turbotax 2009 Bartering. Turbotax 2009 Canceled debts. Turbotax 2009 Sales parties at which you are the host or hostess. Turbotax 2009 Life insurance proceeds. Turbotax 2009 Partnership income. Turbotax 2009 S Corporation income. Turbotax 2009 Recoveries (including state income tax refunds). Turbotax 2009 Rents from personal property. Turbotax 2009 Repayments. Turbotax 2009 Royalties. Turbotax 2009 Unemployment benefits. Turbotax 2009 Welfare and other public assistance benefits. Turbotax 2009 These discussions are followed by brief discussions of other income items. Turbotax 2009 Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 544 Sales and Other Dispositions of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Bartering Bartering is an exchange of property or services. Turbotax 2009 You must include in your income, at the time received, the fair market value of property or services you receive in bartering. Turbotax 2009 If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise. Turbotax 2009 Generally, you report this income on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Turbotax 2009 However, if the barter involves an exchange of something other than services, such as in Example 3 below, you may have to use another form or schedule instead. Turbotax 2009 Example 1. Turbotax 2009 You are a self-employed attorney who performs legal services for a client, a small corporation. Turbotax 2009 The corporation gives you shares of its stock as payment for your services. Turbotax 2009 You must include the fair market value of the shares in your income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) in the year you receive them. Turbotax 2009 Example 2. Turbotax 2009 You are self-employed and a member of a barter club. Turbotax 2009 The club uses “credit units” as a means of exchange. Turbotax 2009 It adds credit units to your account for goods or services you provide to members, which you can use to purchase goods or services offered by other members of the barter club. Turbotax 2009 The club subtracts credit units from your account when you receive goods or services from other members. Turbotax 2009 You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. Turbotax 2009 Example 3. Turbotax 2009 You own a small apartment building. Turbotax 2009 In return for 6 months rent-free use of an apartment, an artist gives you a work of art she created. Turbotax 2009 You must report as rental income on Schedule E (Form 1040), Supplemental Income and Loss, the fair market value of the artwork, and the artist must report as income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) the fair rental value of the apartment. Turbotax 2009 Form 1099-B from barter exchange. Turbotax 2009   If you exchanged property or services through a barter exchange, Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a similar statement from the barter exchange should be sent to you by February 18, 2014. Turbotax 2009 It should show the value of cash, property, services, credits, or scrip you received from exchanges during 2013. Turbotax 2009 The IRS also will receive a copy of Form 1099-B. Turbotax 2009 Canceled Debts In most cases, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. Turbotax 2009 You have no income from the canceled debt if it is intended as a gift to you. Turbotax 2009 A debt includes any indebtedness for which you are liable or which attaches to property you hold. Turbotax 2009 If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. Turbotax 2009 If it is a business debt, report the amount on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer). Turbotax 2009 Form 1099-C. Turbotax 2009   If a Federal Government agency, financial institution, or credit union cancels or forgives a debt you owe of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. Turbotax 2009 The amount of the canceled debt is shown in box 2. Turbotax 2009 Interest included in canceled debt. Turbotax 2009   If any interest is forgiven and included in the amount of canceled debt in box 2, the amount of interest also will be shown in box 3. Turbotax 2009 Whether or not you must include the interest portion of the canceled debt in your income depends on whether the interest would be deductible when you paid it. Turbotax 2009 See Deductible debt under Exceptions, later. Turbotax 2009   If the interest would not be deductible (such as interest on a personal loan), include in your income the amount from Form 1099-C, box 2. Turbotax 2009 If the interest would be deductible (such as on a business loan), include in your income the net amount of the canceled debt (the amount shown in box 2 less the interest amount shown in box 3). Turbotax 2009 Discounted mortgage loan. Turbotax 2009   If your financial institution offers a discount for the early payment of your mortgage loan, the amount of the discount is canceled debt. Turbotax 2009 You must include the canceled amount in your income. Turbotax 2009 Mortgage relief upon sale or other disposition. Turbotax 2009   If you are personally liable for a mortgage (recourse debt), and you are relieved of the mortgage when you dispose of the property, you may realize gain or loss up to the fair market value of the property. Turbotax 2009 To the extent the mortgage discharge exceeds the fair market value of the property, it is income from discharge of indebtedness unless it qualifies for exclusion under Excluded debt , later. Turbotax 2009 Report any income from discharge of indebtedness on nonbusiness debt that does not qualify for exclusion as other income on Form 1040, line 21. Turbotax 2009    You may be able to exclude part of the mortgage relief on your principal residence. Turbotax 2009 See Excluded debt, later. Turbotax 2009   If you are not personally liable for a mortgage (nonrecourse debt), and you are relieved of the mortgage when you dispose of the property (such as through foreclosure), that relief is included in the amount you realize. Turbotax 2009 You may have a taxable gain if the amount you realize exceeds your adjusted basis in the property. Turbotax 2009 Report any gain on nonbusiness property as a capital gain. Turbotax 2009   See Publication 4681 for more information. Turbotax 2009 Stockholder debt. Turbotax 2009   If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution that is generally dividend income to you. Turbotax 2009 For more information, see Publication 542, Corporations. Turbotax 2009   If you are a stockholder in a corporation and you cancel a debt owed to you by the corporation, you generally do not realize income. Turbotax 2009 This is because the canceled debt is considered as a contribution to the capital of the corporation equal to the amount of debt principal that you canceled. Turbotax 2009 Repayment of canceled debt. Turbotax 2009   If you included a canceled amount in your income and later pay the debt, you may be able to file a claim for refund for the year the amount was included in income. Turbotax 2009 You can file a claim on Form 1040X if the statute of limitations for filing a claim is still open. Turbotax 2009 The statute of limitations generally does not end until 3 years after the due date of your original return. Turbotax 2009 Exceptions There are several exceptions to the inclusion of canceled debt in income. Turbotax 2009 These are explained next. Turbotax 2009 Student loans. Turbotax 2009   Certain student loans contain a provision that all or part of the debt incurred to attend the qualified educational institution will be canceled if you work for a certain period of time in certain professions for any of a broad class of employers. Turbotax 2009   You do not have income if your student loan is canceled after you agreed to this provision and then performed the services required. Turbotax 2009 To qualify, the loan must have been made by: The Federal Government, a state or local government, or an instrumentality, agency, or subdivision thereof, A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law, or An educational institution: Under an agreement with an entity described in (1) or (2) that provided the funds to the institution to make the loan, or As part of a program of the institution designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt organization described in section 501(c)(3). Turbotax 2009   A loan to refinance a qualified student loan also will qualify if it was made by an educational institution or a qualified tax-exempt organization under its program designed as described in (3)(b) above. Turbotax 2009 Education loan repayment assistance. Turbotax 2009   Education loan repayments made to you by the National Health Service Corps Loan Repayment Program (NHSC Loan Repayment Program), a state education loan repayment program eligible for funds under the Public Health Service Act, or any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in underserved or health professional shortage areas are not taxable. Turbotax 2009    The provision relating to the “other state loan repayment or loan forgiveness program” was added to this exclusion for amounts received in tax years beginning after December 31, 2008. Turbotax 2009 If you included these amounts in income in 2010, 2011, or 2012, you should file an amended tax return to exclude this income. Turbotax 2009 See Form 1040X and its instructions for details on filing. Turbotax 2009 Deductible debt. Turbotax 2009   You do not have income from the cancellation of a debt if your payment of the debt would be deductible. Turbotax 2009 This exception applies only if you use the cash method of accounting. Turbotax 2009 For more information, see chapter 5 of Publication 334, Tax Guide for Small Business. Turbotax 2009 Price reduced after purchase. Turbotax 2009   In most cases, if the seller reduces the amount of debt you owe for property you purchased, you do not have income from the reduction. Turbotax 2009 The reduction of the debt is treated as a purchase price adjustment and reduces your basis in the property. Turbotax 2009 Excluded debt. Turbotax 2009   Do not include a canceled debt in your gross income in the following situations. Turbotax 2009 The debt is canceled in a bankruptcy case under title 11 of the U. Turbotax 2009 S. Turbotax 2009 Code. Turbotax 2009 See Publication 908, Bankruptcy Tax Guide. Turbotax 2009 The debt is canceled when you are insolvent. Turbotax 2009 However, you cannot exclude any amount of canceled debt that is more than the amount by which you are insolvent. Turbotax 2009 See Publication 908. Turbotax 2009 The debt is qualified farm debt and is canceled by a qualified person. Turbotax 2009 See chapter 3 of Publication 225, Farmer's Tax Guide. Turbotax 2009 The debt is qualified real property business debt. Turbotax 2009 See chapter 5 of Publication 334. Turbotax 2009 The cancellation is intended as a gift. Turbotax 2009 The debt is qualified principal residence indebtedness. Turbotax 2009 See Publication 525 for additional information. Turbotax 2009 Host or Hostess If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. Turbotax 2009 You must report this item as income at its fair market value. Turbotax 2009 Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. Turbotax 2009 These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party. Turbotax 2009 For more information about the 50% limit for meal and entertainment expenses, see chapter 26. Turbotax 2009 Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Turbotax 2009 This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Turbotax 2009 However, interest income received as a result of life insurance proceeds may be taxable. Turbotax 2009 Proceeds not received in installments. Turbotax 2009   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Turbotax 2009 If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Turbotax 2009 Proceeds received in installments. Turbotax 2009   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Turbotax 2009   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Turbotax 2009 Include anything over this excluded part in your income as interest. Turbotax 2009 Surviving spouse. Turbotax 2009   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude up to $1,000 a year of the interest included in the installments. Turbotax 2009 If you remarry, you can continue to take the exclusion. Turbotax 2009 Surrender of policy for cash. Turbotax 2009   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Turbotax 2009 In most cases, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Turbotax 2009    You should receive a Form 1099-R showing the total proceeds and the taxable part. Turbotax 2009 Report these amounts on lines 16a and 16b of Form 1040 or lines 12a and 12b of Form 1040A. Turbotax 2009 More information. Turbotax 2009   For more information, see Life Insurance Proceeds in Publication 525. Turbotax 2009 Endowment Contract Proceeds An endowment contract is a policy under which you are paid a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Turbotax 2009 Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Turbotax 2009 To determine your cost, subtract any amount that you previously received under the contract and excluded from your income from the total premiums (or other consideration) paid for the contract. Turbotax 2009 Include the part of the lump sum payment that is more than your cost in your income. Turbotax 2009 Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. Turbotax 2009 Viatical settlement. Turbotax 2009   This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. Turbotax 2009 A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)(B) of the Internal Revenue Code. Turbotax 2009 Exclusion for terminal illness. Turbotax 2009    Accelerated death benefits are fully excludable if the insured is a terminally ill individual. Turbotax 2009 This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. Turbotax 2009 Exclusion for chronic illness. Turbotax 2009    If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Turbotax 2009 Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. Turbotax 2009 This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. Turbotax 2009 For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits in Publication 525. Turbotax 2009 Exception. Turbotax 2009   The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. Turbotax 2009 Form 8853. Turbotax 2009   To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Turbotax 2009 You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred. Turbotax 2009 Public Safety Officer Killed in the Line of Duty If you are a survivor of a public safety officer who was killed in the line of duty, you may be able to exclude from income certain amounts you receive. Turbotax 2009 For this purpose, the term public safety officer includes law enforcement officers, firefighters, chaplains, and rescue squad and ambulance crew members. Turbotax 2009 For more information, see Publication 559, Survivors, Executors, and Administrators. Turbotax 2009 Partnership Income A partnership generally is not a taxable entity. Turbotax 2009 The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items. Turbotax 2009 Schedule K-1 (Form 1065). Turbotax 2009    Although a partnership generally pays no tax, it must file an information return on Form 1065, U. Turbotax 2009 S. Turbotax 2009 Return of Partnership Income, and send Schedule K-1 (Form 1065) to each partner. Turbotax 2009 In addition, the partnership will send each partner a copy of the Partner's Instructions for Schedule K-1 (Form 1065) to help each partner report his or her share of the partnership's income, deductions, credits, and tax preference items. Turbotax 2009 Keep Schedule K-1 (Form 1065) for your records. Turbotax 2009 Do not attach it to your Form 1040, unless you are specifically required to do so. Turbotax 2009 For more information on partnerships, see Publication 541, Partnerships. Turbotax 2009 Qualified joint venture. Turbotax 2009   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Turbotax 2009 To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Turbotax 2009 For further information on how to make the election and which schedule(s) to file, see the instructions for your individual tax return. Turbotax 2009 S Corporation Income In most cases, an S corporation does not pay tax on its income. Turbotax 2009 Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. Turbotax 2009 Schedule K-1 (Form 1120S). Turbotax 2009   An S corporation must file a return on Form 1120S, U. Turbotax 2009 S. Turbotax 2009 Income Tax Return for an S Corporation, and send Schedule K-1 (Form 1120S) to each shareholder. Turbotax 2009 In addition, the S corporation will send each shareholder a copy of the Shareholder's Instructions for Schedule K-1 (Form 1120S) to help each shareholder report his or her share of the S corporation's income, losses, credits, and deductions. Turbotax 2009 Keep Schedule K-1 (Form 1120S) for your records. Turbotax 2009 Do not attach it to your Form 1040, unless you are specifically required to do so. Turbotax 2009 For more information on S corporations and their shareholders, see the Instructions for Form 1120S. Turbotax 2009 Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. Turbotax 2009 The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). Turbotax 2009 You also may have recoveries of non-itemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit. Turbotax 2009 Tax benefit rule. Turbotax 2009   You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. Turbotax 2009 For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year. Turbotax 2009 For more information, see Publication 525. Turbotax 2009 Federal income tax refund. Turbotax 2009   Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income. Turbotax 2009 State tax refund. Turbotax 2009   If you received a state or local income tax refund (or credit or offset) in 2013, you generally must include it in income if you deducted the tax in an earlier year. Turbotax 2009 The payer should send Form 1099-G, Certain Government Payments, to you by January 31, 2014. Turbotax 2009 The IRS also will receive a copy of the Form 1099-G. Turbotax 2009 If you file Form 1040, use the State and Local Income Tax Refund Worksheet in the 2013 Form 1040 instructions for line 10 to figure the amount (if any) to include in your income. Turbotax 2009 See Publication 525 for when you must use another worksheet. Turbotax 2009   If you could choose to deduct for a tax year either: State and local income taxes, or State and local general sales taxes, then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you did not choose to deduct for that year. Turbotax 2009 For examples, see Publication 525. Turbotax 2009 Mortgage interest refund. Turbotax 2009    If you received a refund or credit in 2013 of mortgage interest paid in an earlier year, the amount should be shown in box 3 of your Form 1098, Mortgage Interest Statement. Turbotax 2009 Do not subtract the refund amount from the interest you paid in 2013. Turbotax 2009 You may have to include it in your income under the rules explained in the following discussions. Turbotax 2009 Interest on recovery. Turbotax 2009   Interest on any of the amounts you recover must be reported as interest income in the year received. Turbotax 2009 For example, report any interest you received on state or local income tax refunds on Form 1040, line 8a. Turbotax 2009 Recovery and expense in same year. Turbotax 2009   If the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income. Turbotax 2009 Recovery for 2 or more years. Turbotax 2009   If you receive a refund or other recovery that is for amounts you paid in 2 or more separate years, you must allocate, on a pro rata basis, the recovered amount between the years in which you paid it. Turbotax 2009 This allocation is necessary to determine the amount of recovery from any earlier years and to determine the amount, if any, of your allowable deduction for this item for the current year. Turbotax 2009 For information on how to compute the allocation, see Recoveries in Publication 525. Turbotax 2009 Itemized Deduction Recoveries If you recover any amount that you deducted in an earlier year on Schedule A (Form 1040), you generally must include the full amount of the recovery in your income in the year you receive it. Turbotax 2009 Where to report. Turbotax 2009   Enter your state or local income tax refund on Form 1040, line 10, and the total of all other recoveries as other income on Form 1040, line 21. Turbotax 2009 You cannot use Form 1040A or Form 1040EZ. Turbotax 2009 Standard deduction limit. Turbotax 2009   You generally are allowed to claim the standard deduction if you do not itemize your deductions. Turbotax 2009 Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you are required to itemize your deductions). Turbotax 2009 If your total deductions on the earlier year return were not more than your income for that year, include in your income this year the lesser of: Your recoveries, or The amount by which your itemized deductions exceeded the standard deduction. Turbotax 2009 Example. Turbotax 2009 For 2012, you filed a joint return. Turbotax 2009 Your taxable income was $60,000 and you were not entitled to any tax credits. Turbotax 2009 Your standard deduction was $11,900, and you had itemized deductions of $14,000. Turbotax 2009 In 2013, you received the following recoveries for amounts deducted on your 2012 return: Medical expenses $200 State and local income tax refund 400 Refund of mortgage interest 325 Total recoveries $925 None of the recoveries were more than the deductions taken for 2012. Turbotax 2009 The difference between the state and local income tax you deducted and your local general sales tax was more than $400. Turbotax 2009 Your total recoveries are less than the amount by which your itemized deductions exceeded the standard deduction ($14,000 − 11,900 = $2,100), so you must include your total recoveries in your income for 2013. Turbotax 2009 Report the state and local income tax refund of $400 on Form 1040, line 10, and the balance of your recoveries, $525, on Form 1040, line 21. Turbotax 2009 Standard deduction for earlier years. Turbotax 2009   To determine if amounts recovered in 2013 must be included in your income, you must know the standard deduction for your filing status for the year the deduction was claimed. Turbotax 2009 Look in the instructions for your tax return from prior years to locate the standard deduction for the filing status for that prior year. Turbotax 2009 Example. Turbotax 2009 You filed a joint return on Form 1040 for 2012 with taxable income of $45,000. Turbotax 2009 Your itemized deductions were $12,350. Turbotax 2009 The standard deduction that you could have claimed was $11,900. Turbotax 2009 In 2013, you recovered $2,100 of your 2012 itemized deductions. Turbotax 2009 None of the recoveries were more than the actual deductions for 2012. Turbotax 2009 Include $450 of the recoveries in your 2013 income. Turbotax 2009 This is the smaller of your recoveries ($2,100) or the amount by which your itemized deductions were more than the standard deduction ($12,350 − $11,900 = $450). Turbotax 2009 Recovery limited to deduction. Turbotax 2009   You do not include in your income any amount of your recovery that is more than the amount you deducted in the earlier year. Turbotax 2009 The amount you include in your income is limited to the smaller of: The amount deducted on Schedule A (Form 1040), or The amount recovered. Turbotax 2009 Example. Turbotax 2009 During 2012 you paid $1,700 for medical expenses. Turbotax 2009 From this amount you subtracted $1,500, which was 7. Turbotax 2009 5% of your adjusted gross income. Turbotax 2009 Your actual medical expense deduction was $200. Turbotax 2009 In 2013, you received a $500 reimbursement from your medical insurance for your 2012 expenses. Turbotax 2009 The only amount of the $500 reimbursement that must be included in your income for 2013 is $200—the amount actually deducted. Turbotax 2009 Other recoveries. Turbotax 2009   See Recoveries in Publication 525 if: You have recoveries of items other than itemized deductions, or You received a recovery for an item for which you claimed a tax credit (other than investment credit or foreign tax credit) in a prior year. Turbotax 2009 Rents from Personal Property If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is in most cases determined by: Whether or not the rental activity is a business, and Whether or not the rental activity is conducted for profit. Turbotax 2009 In most cases, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. Turbotax 2009 See Publication 535, Business Expenses, for details on deducting expenses for both business and not-for-profit activities. Turbotax 2009 Reporting business income and expenses. Turbotax 2009    If you are in the business of renting personal property, report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 The form instructions have information on how to complete them. Turbotax 2009 Reporting nonbusiness income. Turbotax 2009   If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. Turbotax 2009 List the type and amount of the income on the dotted line next to line 21. Turbotax 2009 Reporting nonbusiness expenses. Turbotax 2009   If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. Turbotax 2009 Also enter the amount and “PPR” on the dotted line next to line 36. Turbotax 2009   If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income. Turbotax 2009 See Activity not for profit , under Other Income, later. Turbotax 2009 Repayments If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Turbotax 2009 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. Turbotax 2009 Generally, you can claim a deduction or credit only if the repayment qualifies as an expense or loss incurred in your trade or business or in a for-profit transaction. Turbotax 2009 Type of deduction. Turbotax 2009   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Turbotax 2009 You generally deduct the repayment on the same form or schedule on which you previously reported it as income. Turbotax 2009 For example, if you reported it as self-employment income, deduct it as a business expense on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Turbotax 2009 If you reported it as a capital gain, deduct it as a capital loss as explained in the Instructions for Schedule D (Form 1040). Turbotax 2009 If you reported it as wages, unemployment compensation, or other nonbusiness income, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040). Turbotax 2009 Repaid social security benefits. Turbotax 2009   If you repaid social security benefits or equivalent railroad retirement benefits, see Repayment of benefits in chapter 11. Turbotax 2009 Repayment of $3,000 or less. Turbotax 2009   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Turbotax 2009 If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 23. Turbotax 2009 Repayment over $3,000. Turbotax 2009   If the amount you repaid was more than $3,000, you can deduct the repayment (as explained under Type of deduction , earlier). Turbotax 2009 However, you can choose instead to take a tax credit for the year of repayment if you included the income under a claim of right. Turbotax 2009 This means that at the time you included the income, it appeared that you had an unrestricted right to it. Turbotax 2009 If you qualify for this choice, figure your tax under both methods and compare the results. Turbotax 2009 Use the method (deduction or credit) that results in less tax. Turbotax 2009 When determining whether the amount you repaid was more or less than $3,000, consider the total amount being repaid on the return. Turbotax 2009 Each instance of repayment is not considered separately. Turbotax 2009 Method 1. Turbotax 2009   Figure your tax for 2013 claiming a deduction for the repaid amount. Turbotax 2009 If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 28. Turbotax 2009 Method 2. Turbotax 2009   Figure your tax for 2013 claiming a credit for the repaid amount. Turbotax 2009 Follow these steps. Turbotax 2009 Figure your tax for 2013 without deducting the repaid amount. Turbotax 2009 Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Turbotax 2009 Subtract the tax in (2) from the tax shown on your return for the earlier year. Turbotax 2009 This is the credit. Turbotax 2009 Subtract the answer in (3) from the tax for 2013 figured without the deduction (Step 1). Turbotax 2009   If method 1 results in less tax, deduct the amount repaid. Turbotax 2009 If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 71, by adding the amount of the credit to any other credits on this line, and entering “I. Turbotax 2009 R. Turbotax 2009 C. Turbotax 2009 1341” in the column to the right of line 71. Turbotax 2009   An example of this computation can be found in Publication 525. Turbotax 2009 Repaid wages subject to social security and Medicare taxes. Turbotax 2009   If you had to repay an amount that you included in your wages or compensation in an earlier year on which social security, Medicare, or tier 1 RRTA taxes were paid, ask your employer to refund the excess amount to you. Turbotax 2009 If the employer refuses to refund the taxes, ask for a statement indicating the amount of the overcollection to support your claim. Turbotax 2009 File a claim for refund using Form 843, Claim for Refund and Request for Abatement. Turbotax 2009 Repaid wages subject to Additional Medicare Tax. Turbotax 2009   Employers cannot make an adjustment or file a claim for refund for Additional Medicare Tax withholding when there is a repayment of wages received by an employee in a prior year because the employee determines liability for Additional Medicare Tax on the employee's income tax return for the prior year. Turbotax 2009 If you had to repay an amount that you included in your wages or compensation in an earlier year, and on which Additional Medicare Tax was paid, you may be able to recover the Additional Medicare Tax paid on the amount. Turbotax 2009 To recover Additional Medicare Tax on the repaid wages or compensation, you must file Form 1040X, Amended U. Turbotax 2009 S. Turbotax 2009 Individual Income Tax Return, for the prior year in which the wages or compensation were originally received. Turbotax 2009 See the Instructions for Form 1040X. Turbotax 2009 Royalties Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. Turbotax 2009 In most cases you report royalties in Part I of Schedule E (Form 1040). Turbotax 2009 However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc. Turbotax 2009 , report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 Copyrights and patents. Turbotax 2009   Royalties from copyrights on literary, musical, or artistic works, and similar property, or from patents on inventions, are amounts paid to you for the right to use your work over a specified period of time. Turbotax 2009 Royalties generally are based on the number of units sold, such as the number of books, tickets to a performance, or machines sold. Turbotax 2009 Oil, gas, and minerals. Turbotax 2009   Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property. Turbotax 2009 The royalties are based on units, such as barrels, tons, etc. Turbotax 2009 , and are paid to you by a person or company who leases the property from you. Turbotax 2009 Depletion. Turbotax 2009   If you are the owner of an economic interest in mineral deposits or oil and gas wells, you can recover your investment through the depletion allowance. Turbotax 2009 For information on this subject, see chapter 9 of Publication 535. Turbotax 2009 Coal and iron ore. Turbotax 2009   Under certain circumstances, you can treat amounts you receive from the disposal of coal and iron ore as payments from the sale of a capital asset, rather than as royalty income. Turbotax 2009 For information about gain or loss from the sale of coal and iron ore, see Publication 544. Turbotax 2009 Sale of property interest. Turbotax 2009   If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of property used in a trade or business under section 1231, not royalty income. Turbotax 2009 Under certain circumstances, the sale is subject to capital gain or loss treatment as explained in the Instructions for Schedule D (Form 1040). Turbotax 2009 For more information on selling section 1231 property, see chapter 3 of Publication 544. Turbotax 2009   If you retain a royalty, an overriding royalty, or a net profit interest in a mineral property for the life of the property, you have made a lease or a sublease, and any cash you receive for the assignment of other interests in the property is ordinary income subject to a depletion allowance. Turbotax 2009 Part of future production sold. Turbotax 2009   If you own mineral property but sell part of the future production, in most cases you treat the money you receive from the buyer at the time of the sale as a loan from the buyer. Turbotax 2009 Do not include it in your income or take depletion based on it. Turbotax 2009   When production begins, you include all the proceeds in your income, deduct all the production expenses, and deduct depletion from that amount to arrive at your taxable income from the property. Turbotax 2009 Unemployment Benefits The tax treatment of unemployment benefits you receive depends on the type of program paying the benefits. Turbotax 2009 Unemployment compensation. Turbotax 2009   You must include in income all unemployment compensation you receive. Turbotax 2009 You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you. Turbotax 2009 In most cases, you enter unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Turbotax 2009 Types of unemployment compensation. Turbotax 2009   Unemployment compensation generally includes any amount received under an unemployment compensation law of the United States or of a state. Turbotax 2009 It includes the following benefits. Turbotax 2009 Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. Turbotax 2009 State unemployment insurance benefits. Turbotax 2009 Railroad unemployment compensation benefits. Turbotax 2009 Disability payments from a government program paid as a substitute for unemployment compensation. Turbotax 2009 (Amounts received as workers' compensation for injuries or illness are not unemployment compensation. Turbotax 2009 See chapter 5 for more information. Turbotax 2009 ) Trade readjustment allowances under the Trade Act of 1974. Turbotax 2009 Unemployment assistance under the Disaster Relief and Emergency Assistance Act. Turbotax 2009 Unemployment assistance under the Airline Deregulation Act of 1974 Program. Turbotax 2009 Governmental program. Turbotax 2009   If you contribute to a governmental unemployment compensation program and your contributions are not deductible, amounts you receive under the program are not included as unemployment compensation until you recover your contributions. Turbotax 2009 If you deducted all of your contributions to the program, the entire amount you receive under the program is included in your income. Turbotax 2009 Repayment of unemployment compensation. Turbotax 2009   If you repaid in 2013 unemployment compensation you received in 2013, subtract the amount you repaid from the total amount you received and enter the difference on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Turbotax 2009 On the dotted line next to your entry enter “Repaid” and the amount you repaid. Turbotax 2009 If you repaid unemployment compensation in 2013 that you included in income in an earlier year, you can deduct the amount repaid on Schedule A (Form 1040), line 23, if you itemize deductions. Turbotax 2009 If the amount is more than $3,000, see Repayments , earlier. Turbotax 2009 Tax withholding. Turbotax 2009   You can choose to have federal income tax withheld from your unemployment compensation. Turbotax 2009 To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. Turbotax 2009 Tax will be withheld at 10% of your payment. Turbotax 2009    If you do not choose to have tax withheld from your unemployment compensation, you may be liable for estimated tax. Turbotax 2009 If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Turbotax 2009 For more information on estimated tax, see chapter 4. Turbotax 2009 Supplemental unemployment benefits. Turbotax 2009   Benefits received from an employer-financed fund (to which the employees did not contribute) are not unemployment compensation. Turbotax 2009 They are taxable as wages and are subject to withholding for income tax. Turbotax 2009 They may be subject to social security and Medicare taxes. Turbotax 2009 For more information, see Supplemental Unemployment Benefits in section 5 of Publication 15-A, Employer's Supplemental Tax Guide. Turbotax 2009 Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Turbotax 2009 Repayment of benefits. Turbotax 2009   You may have to repay some of your supplemental unemployment benefits to qualify for trade readjustment allowances under the Trade Act of 1974. Turbotax 2009 If you repay supplemental unemployment benefits in the same year you receive them, reduce the total benefits by the amount you repay. Turbotax 2009 If you repay the benefits in a later year, you must include the full amount of the benefits received in your income for the year you received them. Turbotax 2009   Deduct the repayment in the later year as an adjustment to gross income on Form 1040. Turbotax 2009 (You cannot use Form 1040A or Form 1040EZ. Turbotax 2009 ) Include the repayment on Form 1040, line 36, and enter “Sub-Pay TRA” and the amount on the dotted line next to line 36. Turbotax 2009 If the amount you repay in a later year is more than $3,000, you may be able to take a credit against your tax for the later year instead of deducting the amount repaid. Turbotax 2009 For more information on this, see Repayments , earlier. Turbotax 2009 Private unemployment fund. Turbotax 2009   Unemployment benefit payments from a private (nonunion) fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. Turbotax 2009 Report the taxable amount on Form 1040, line 21. Turbotax 2009 Payments by a union. Turbotax 2009   Benefits paid to you as an unemployed member of a union from regular union dues are included in your income on Form 1040, line 21. Turbotax 2009 However, if you contribute to a special union fund and your payments to the fund are not deductible, the unemployment benefits you receive from the fund are includible in your income only to the extent they are more than your contributions. Turbotax 2009 Guaranteed annual wage. Turbotax 2009   Payments you receive from your employer during periods of unemployment, under a union agreement that guarantees you full pay during the year, are taxable as wages. Turbotax 2009 Include them on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Turbotax 2009 State employees. Turbotax 2009   Payments similar to a state's unemployment compensation may be made by the state to its employees who are not covered by the state's unemployment compensation law. Turbotax 2009 Although the payments are fully taxable, do not report them as unemployment compensation. Turbotax 2009 Report these payments on Form 1040, line 21. Turbotax 2009 Welfare and Other Public Assistance Benefits Do not include in your income governmental benefit payments from a public welfare fund based upon need, such as payments to blind individuals under a state public assistance law. Turbotax 2009 Payments from a state fund for the victims of crime should not be included in the victims' incomes if they are in the nature of welfare payments. Turbotax 2009 Do not deduct medical expenses that are reimbursed by such a fund. Turbotax 2009 You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently. Turbotax 2009 Reemployment Trade Adjustment Assistance (RTAA) payments. Turbotax 2009   RTAA payments received from a state must be included in your income. Turbotax 2009 The state must send you Form 1099-G to advise you of the amount you should include in income. Turbotax 2009 The amount should be reported on Form 1040, line 21. Turbotax 2009 Persons with disabilities. Turbotax 2009   If you have a disability, you must include in income compensation you receive for services you perform unless the compensation is otherwise excluded. Turbotax 2009 However, you do not include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. Turbotax 2009 Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work. Turbotax 2009 Disaster relief grants. Turbotax 2009    Do not include post-disaster grants received under the Robert T. Turbotax 2009 Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, child care, or funeral expenses. Turbotax 2009 Do not deduct casualty losses or medical expenses that are specifically reimbursed by these disaster relief grants. Turbotax 2009 If you have deducted a casualty loss for the loss of your personal residence and you later receive a disaster relief grant for the loss of the same residence, you may have to include part or all of the grant in your taxable income. Turbotax 2009 See Recoveries , earlier. Turbotax 2009 Unemployment assistance payments under the Act are taxable unemployment compensation. Turbotax 2009 See Unemployment compensation under Unemployment Benefits, earlier. Turbotax 2009 Disaster relief payments. Turbotax 2009   You can exclude from income any amount you receive that is a qualified disaster relief payment. Turbotax 2009 A qualified disaster relief payment is an amount paid to you: To reimburse or pay reasonable and necessary personal, family, living, or funeral expenses that result from a qualified disaster; To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of your home or repair or replacement of its contents to the extent it is due to a qualified disaster; By a person engaged in the furnishing or sale of transportation as a common carrier because of the death or personal physical injuries incurred as a result of a qualified disaster; or By a federal, state, or local government, or agency, or instrumentality in connection with a qualified disaster in order to promote the general welfare. Turbotax 2009 You can exclude this amount only to the extent any expense it pays for is not paid for by insurance or otherwise. Turbotax 2009 The exclusion does not apply if you were a participant or conspirator in a terrorist action or a representative of one. Turbotax 2009   A qualified disaster is: A disaster which results from a terrorist or military action; A federally declared disaster; or A disaster which results from an accident involving a common carrier, or from any other event, which is determined to be catastrophic by the Secretary of the Treasury or his or her delegate. Turbotax 2009   For amounts paid under item (4), a disaster is qualified if it is determined by an applicable federal, state, or local authority to warrant assistance from the federal, state, or local government, agency, or instrumentality. Turbotax 2009 Disaster mitigation payments. Turbotax 2009   You also can exclude from income any amount you receive that is a qualified disaster mitigation payment. Turbotax 2009 Qualified disaster mitigation payments are also most commonly paid to you in the period immediately following damage to property as a result of a natural disaster. Turbotax 2009 However, disaster mitigation payments are used to mitigate (reduce the severity of) potential damage from future natural disasters. Turbotax 2009 They are paid to you through state and local governments based on the provisions of the Robert T. Turbotax 2009 Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act. Turbotax 2009   You cannot increase the basis or adjusted basis of your property for improvements made with nontaxable disaster mitigation payments. Turbotax 2009 Home Affordable Modification Program (HAMP). Turbotax 2009   If you benefit from Pay-for-Performance Success Payments under HAMP, the payments are not taxable. Turbotax 2009 Mortgage assistance payments under section 235 of the National Housing Act. Turbotax 2009   Payments made under section 235 of the National Housing Act for mortgage assistance are not included in the homeowner's income. Turbotax 2009 Interest paid for the homeowner under the mortgage assistance program cannot be deducted. Turbotax 2009 Medicare. Turbotax 2009   Medicare benefits received under title XVIII of the Social Security Act are not includible in the gross income of the individuals for whom they are paid. Turbotax 2009 This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)). Turbotax 2009 Old-age, survivors, and disability insurance benefits (OASDI). Turbotax 2009   Generally, OASDI payments under section 202 of title II of the Social Security Act are not includible in the gross income of the individuals to whom they are paid. Turbotax 2009 This applies to old-age insurance benefits, and insurance benefits for wives, husbands, children, widows, widowers, mothers and fathers, and parents, as well as the lump-sum death payment. Turbotax 2009 Nutrition Program for the Elderly. Turbotax 2009    Food benefits you receive under the Nutrition Program for the Elderly are not taxable. Turbotax 2009 If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you are also eligible for food benefits. Turbotax 2009 Payments to reduce cost of winter energy. Turbotax 2009   Payments made by a state to qualified people to reduce their cost of winter energy use are not taxable. Turbotax 2009 Other Income The following brief discussions are arranged in alphabetical order. Turbotax 2009 Other income items briefly discussed below are referenced to publications which provide more topical information. Turbotax 2009 Activity not for profit. Turbotax 2009   You must include on your return income from an activity from which you do not expect to make a profit. Turbotax 2009 An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Turbotax 2009 Enter this income on Form 1040, line 21. Turbotax 2009 Deductions for expenses related to the activity are limited. Turbotax 2009 They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). Turbotax 2009 See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit. Turbotax 2009 Alaska Permanent Fund dividend. Turbotax 2009   If you received a payment from Alaska's mineral income fund (Alaska Permanent Fund dividend), report it as income on line 21 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Turbotax 2009 The state of Alaska sends each recipient a document that shows the amount of the payment with the check. Turbotax 2009 The amount also is reported to IRS. Turbotax 2009 Alimony. Turbotax 2009   Include in your income on Form 1040, line 11, any alimony payments you receive. Turbotax 2009 Amounts you receive for child support are not income to you. Turbotax 2009 Alimony and child support payments are discussed in chapter 18. Turbotax 2009 Bribes. Turbotax 2009   If you receive a bribe, include it in your income. Turbotax 2009 Campaign contributions. Turbotax 2009   These contributions are not income to a candidate unless they are diverted to his or her personal use. Turbotax 2009 To be exempt from tax, the contributions must be spent for campaign purposes or kept in a fund for use in future campaigns. Turbotax 2009 However, interest earned on bank deposits, dividends received on contributed securities, and net gains realized on sales of contributed securities are taxable and must be reported on Form 1120-POL, U. Turbotax 2009 S. Turbotax 2009 Income Tax Return for Certain Political Organizations. Turbotax 2009 Excess campaign funds transferred to an office account must be included in the officeholder's income on Form 1040, line 21, in the year transferred. Turbotax 2009 Car pools. Turbotax 2009   Do not include in your income amounts you receive from the passengers for driving a car in a car pool to and from work. Turbotax 2009 These amounts are considered reimbursement for your expenses. Turbotax 2009 However, this rule does not apply if you have developed car pool arrangements into a profit-making business of transporting workers for hire. Turbotax 2009 Cash rebates. Turbotax 2009   A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate. Turbotax 2009 Example. Turbotax 2009 You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. Turbotax 2009 The $2,000 is not income to you. Turbotax 2009 Your basis in the car is $22,000. Turbotax 2009 This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business. Turbotax 2009 Casualty insurance and other reimbursements. Turbotax 2009   You generally should not report these reimbursements on your return unless you are figuring gain or loss from the casualty or theft. Turbotax 2009 See chapter 25 for more information. Turbotax 2009 Child support payments. Turbotax 2009   You should not report these payments on your return. Turbotax 2009 See chapter 18 for more information. Turbotax 2009 Court awards and damages. Turbotax 2009   To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. Turbotax 2009 The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Turbotax 2009 Include the following as ordinary income. Turbotax 2009 Interest on any award. Turbotax 2009 Compensation for lost wages or lost profits in most cases. Turbotax 2009 Punitive damages, in most cases. Turbotax 2009 It does not matter if they relate to a physical injury or physical sickness. Turbotax 2009 Amounts received in settlement of pension rights (if you did not contribute to the plan). Turbotax 2009 Damages for: Patent or copyright infringement, Breach of contract, or Interference with business operations. Turbotax 2009 Back pay and damages for emotional distress received to satisfy a claim under title VII of the Civil Rights Act of 1964. Turbotax 2009 Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income. Turbotax 2009   Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments). Turbotax 2009 Emotional distress. Turbotax 2009   Emotional distress itself is not a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Turbotax 2009 Do not include them in your income. Turbotax 2009   If the emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Turbotax 2009 Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. Turbotax 2009 Deduction for costs involved in unlawful discrimination suits. Turbotax 2009   You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. Turbotax 2009 For more information, see Publication 525. Turbotax 2009 Credit card insurance. Turbotax 2009   In most cases, if you receive benefits under a credit card disability or unemployment insurance plan, the benefits are taxable to you. Turbotax 2009 These plans make the minimum monthly payment on your credit card account if you cannot make the payment due to injury, illness, disability, or unemployment. Turbotax 2009 Report on Form 1040, line 21, the amount of benefits you received during the year that is more than the amount of the premiums you paid during the year. Turbotax 2009 Down payment assistance. Turbotax 2009   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. Turbotax 2009 If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. Turbotax 2009 If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis. Turbotax 2009 Employment agency fees. Turbotax 2009   If you get a job through an employment agency, and the fee is paid by your employer, the fee is not includible in your income if you are not liable for it. Turbotax 2009 However, if you pay it and your employer reimburses you for it, it is includible in your income. Turbotax 2009 Energy conservation subsidies. Turbotax 2009   You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit. Turbotax 2009 Energy conservation measure. Turbotax 2009   This includes installations or modifications that are primarily designed to reduce consumption of electricity or natural gas, or improve the management of energy demand. Turbotax 2009 Dwelling unit. Turbotax 2009   This includes a house, apartment, condominium, mobile home, boat, or similar property. Turbotax 2009 If a building or structure contains both dwelling and other units, any subsidy must be properly allocated. Turbotax 2009 Estate and trust income. Turbotax 2009    An estate or trust, unlike a partnership, may have to pay federal income tax. Turbotax 2009 If you are a beneficiary of an estate or trust, you may be taxed on your share of its income distributed or required to be distributed to you. Turbotax 2009 However, there is never a double tax. Turbotax 2009 Estates and trusts file their returns on Form 1041, U. Turbotax 2009 S. Turbotax 2009 Income Tax Return for Estates and Trusts, and your share of the income is reported to you on Schedule K-1 (Form 1041). Turbotax 2009 Current income required to be distributed. Turbotax 2009   If you are the beneficiary of an estate or trust that must distribute all of its current income, you must report your share of the distributable net income, whether or not you actually received it. Turbotax 2009 Current income not required to be distributed. Turbotax 2009    If you are the beneficiary of an estate or trust and the fiduciary has the choice of whether to distribute all or part of the current income, you must report: All income that is required to be distributed to you, whether or not it is actually distributed, plus All other amounts actually paid or credited to you, up to the amount of your share of distributable net income. Turbotax 2009 How to report. Turbotax 2009   Treat each item of income the same way that the estate or trust would treat it. Turbotax 2009 For example, if a trust's dividend income is distributed to you, you report the distribution as dividend income on your return. Turbotax 2009 The same rule applies to distributions of tax-exempt interest and capital gains. Turbotax 2009   The fiduciary of the estate or trust must tell you the type of items making up your share of the estate or trust income and any credits you are allowed on your individual income tax return. Turbotax 2009 Losses. Turbotax 2009   Losses of estates and trusts generally are not deductible by the beneficiaries. Turbotax 2009 Grantor trust. Turbotax 2009   Income earned by a grantor trust is taxable to the grantor, not the beneficiary, if the grantor keeps certain control over the trust. Turbotax 2009 (The grantor is the one who transferred property to the trust. Turbotax 2009 ) This rule applies if the property (or income from the property) put into the trust will or may revert (be returned) to the grantor or the grantor's spouse. Turbotax 2009   Generally, a trust is a grantor trust if the grantor has a reversionary interest valued (at the date of transfer) at more than 5% of the value of the transferred property. Turbotax 2009 Expenses paid by another. Turbotax 2009   If your personal expenses are paid for by another person, such as a corporation, the payment may be taxable to you depending upon your relationship with that person and the nature of the payment. Turbotax 2009 But if the payment makes up for a loss caused by that person, and only restores you to the position you were in before the loss, the payment is not includible in your income. Turbotax 2009 Fees for services. Turbotax 2009   Include all fees for your services in your income. Turbotax 2009 Examples of these fees are amounts you receive for services you perform as: A corporate director, An executor, administrator, or personal representative of an estate, A manager of a trade or business you operated before declaring Chapter 11 bankruptcy, A notary public, or An election precinct official. Turbotax 2009 Nonemployee compensation. Turbotax 2009   If you are not an employee and the fees for your services from the same payer total $600 or more for the year, you may receive a Form 1099-MISC. Turbotax 2009 You may need to report your fees as self-employment income. Turbotax 2009 See Self-Employed Persons , in chapter 1, for a discussion of when you are considered self-employed. Turbotax 2009 Corporate director. Turbotax 2009   Corporate director fees are self-employment income. Turbotax 2009 Report these payments on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 Personal representatives. Turbotax 2009   All personal representatives must include in their gross income fees paid to them from an estate. Turbotax 2009 If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. Turbotax 2009 If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 The fee is not includible in income if it is waived. Turbotax 2009 Manager of trade or business for bankruptcy estate. Turbotax 2009   Include in your income all payments received from your bankruptcy estate for managing or operating a trade or business that you operated before you filed for bankruptcy. Turbotax 2009 Report this income on Form 1040, line 21. Turbotax 2009 Notary public. Turbotax 2009    Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 These payments are not subject to self-employment tax. Turbotax 2009 See the separate instructions for Schedule SE (Form 1040) for details. Turbotax 2009 Election precinct official. Turbotax 2009    You should receive a Form W-2 showing payments for services performed as an election official or election worker. Turbotax 2009 Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Turbotax 2009 Foster care providers. Turbotax 2009   Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. Turbotax 2009 However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments. Turbotax 2009   A qualified foster individual is a person who: Is living in a foster family home, and Was placed there by: An agency of a state or one of its political subdivisions, or A qualified foster care placement agency. Turbotax 2009 Difficulty-of-care payments. Turbotax 2009   These are additional payments that are designated by the payer as compensation for providing the additional care that is required for physically, mentally, or emotionally handicapped qualified foster individuals. Turbotax 2009 A state must determine that the additional compensation is needed, and the care for which the payments are made must be provided in your home. Turbotax 2009   You must include in your income difficulty-of-care payments received for more than: 10 qualified foster individuals under age 19, or 5 qualified foster individuals age 19 or older. Turbotax 2009 Maintaining space in home. Turbotax 2009   If you are paid to maintain space in your home for emergency foster care, you must include the payment in your income. Turbotax 2009 Reporting taxable payments. Turbotax 2009    If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed. Turbotax 2009 Report the payments on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 See Publication 587, Business Use of Your Home, to help you determine the amount you can deduct for the use of your home. Turbotax 2009 Found property. Turbotax 2009   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession. Turbotax 2009 Free tour. Turbotax 2009   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. Turbotax 2009 Report the fair market value of the tour on Form 1040, line 21, if you are not in the trade or business of organizing tours. Turbotax 2009 You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request. Turbotax 2009 If you organize tours as a trade or business, report the tour's value on Schedule C or Schedule C-EZ (Form 1040). Turbotax 2009 Gambling winnings. Turbotax 2009   You must include your gambling winnings in income on Form 1040, line 21. Turbotax 2009 If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. Turbotax 2009 Lotteries and raffles. Turbotax 2009   Winnings from lotteries and raffles are gambling winnings. Turbotax 2009 In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes. Turbotax 2009    If you win a state lottery prize payable in installments, see Publication 525 for more information. Turbotax 2009 Form W-2G. Turbotax 2009   You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. Turbotax 2009 Include the amount from box 1 on Form 1040, line 21. Turbotax 2009 Include the amount shown in box 4 on Form 1040, line 62, as federal income tax withheld. Turbotax 2009 Reporting winnings and recordkeeping. Turbotax 2009   For more information on reporting gam