Publication 17 - Introductory Material


All material in this publication may be reprinted freely. A citation to Your Federal Income Tax (2014) would be appropriate.

The explanations and examples in this publication reflect the interpretation by the Internal Revenue Service (IRS) of:

  • Tax laws enacted by Congress,

  • Treasury regulations, and

  • Court decisions.

However, the information given does not cover every situation and is not intended to replace the law or change its meaning.

This publication covers some subjects on which a court may have made a decision more favorable to taxpayers than the interpretation by the IRS. Until these differing interpretations are resolved by higher court decisions or in some other way, this publication will continue to present the interpretations by the IRS.

All taxpayers have important rights when working with the IRS. These rights are described in Your Rights as a Taxpayer in the back of this publication.

What's New

This section summarizes important tax changes that took effect in 2014. Most of these changes are discussed in more detail throughout this publication.

Future developments. For the latest information about the tax law topics covered in this publication, including information about any tax legislation, go to www.irs.gov/pub17.

Health care: individual responsibility. You must either:

  • Indicate on your 2014 federal income tax return that you, your spouse (if filing jointly), and your dependents had health care coverage throughout 2014;

  • Claim an exemption from the health care coverage requirement for some or all of 2014 and attach Form 8965 to your return; or

  • Make a shared responsibility payment if, for any month in 2014, you, your spouse (if filing jointly), or your dependents did not have coverage and do not qualify for a coverage exemption.

See the Instructions for Form 8965 for details.

Premium tax credit. You may be eligible to claim the premium tax credit if you, your spouse, or a dependent enrolled in health insurance through the Health Insurance Marketplace. See chapter 37 for more information.

Advance payments of the premium tax credit. Advance payments of the premium tax credit may have been made to a health insurer to help pay for the insurance coverage of you, your spouse, or your dependent. If advance payments of the premium tax credit were made, you must file a 2014 return and Form 8962. For more information, see chapter 37.

Form 1095-A. If you, your spouse, or a dependent enrolled in health insurance through the Health Insurance Marketplace, you should have received Form(s) 1095-A. If you receive Form(s) 1095-A, save it. It will help you figure your premium tax credit. If you did not receive a Form 1095-A, contact the Marketplace. See chapter 37 for information about the premium tax credit.

Medicaid waiver payments. If you received certain payments under a Medicaid waiver program for caring for someone who lives in your home with you, you may be able to exclude these amounts from your income. See chapters 12 and 36. If you reported these payments on your return for 2013 or an earlier year, see www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income. You may want to file Form 1040X to amend that prior year return.

Expired tax benefits. At the time this publication was prepared for printing, certain tax benefits had expired. These included the following:

  • Tuition and fees deduction.

  • Deduction for educator expenses in figuring adjusted gross income.

  • Deduction for state and local general sales taxes.

  • The exclusion from income of qualified charitable distributions from IRAs.

  • Credit for certain nonbusiness energy property.

  • Deduction for mortgage insurance premiums.

You can find out whether legislation extended these and other tax benefits to allow you to claim them on your 2014 return at www.irs.gov/pub17.

Pell grants and other scholarships or fellowships. Choosing to include otherwise tax-free scholarships or fellowships in your income can increase an education credit and lower your total tax or increase your refund. See the instructions for Form 8863 and Pub. 970, Tax Benefits for Education, for more information.

Personal exemption amount increased for certain taxpayers. Your personal exemption is increased to $3,950. But the amount is reduced if your adjusted gross income is more than:

  • $152,525 if married filing separately,

  • $254,200 if single,

  • $279,650 if head of household, or

  • $305,050 if any other filing status.

See chapter 3.

Standard mileage rates. The 2014 rate for business use of your car is reduced to 56 cents a mile. See chapter 26.The 2014 rate for use of your car to get medical care is reduced to 23½ cents a mile. See chapter 21.The 2014 rate for use of your car to move is reduced to 23½ cents a mile. See Publication 521, Moving Expenses.

Mailing your return. If you live in Missouri and need to make a payment with your paper return, you will need to mail it to a different address this year. See Where To File at the end of this publication.

Form 1099-B. Form 1099-B has been redesigned so that the information on it is reported in boxes that are numbered to match the corresponding line and column on Form 8949. This will make it easier for you to complete Form 8949. See chapter 16.

Direct deposit. To combat fraud and identity theft, the number of refunds that can be directly deposited to a single financial account or prepaid debit card is now limited to three a year. After this limit is exceeded, paper checks will be sent instead. For more information about direct deposit, see chapter 1.

Direct Pay. The best way to pay your taxes is online with IRS Direct Pay. Just click on “Pay Your Tax Bill” on IRS.gov. For more information about how to pay your taxes, see chapter 1.

Reminders

Listed below are important reminders and other items that may help you file your 2014 tax return. Many of these items are explained in more detail later in this publication.

Enter your social security number (SSN). Enter your SSN in the space provided on your tax form. If you filed a joint return for 2013 and are filing a joint return for 2014 with the same spouse, enter your names and SSNs in the same order as on your 2013 return. See chapter 1.

Secure your tax records from identity theft. Identity theft occurs when someone uses your personal information, such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund. For more information about identity theft and how to reduce your risk from it, see chapter 1.

Taxpayer identification numbers. You must provide the taxpayer identification number for each person for whom you claim certain tax benefits. This applies even if the person was born in 2014. Generally, this number is the person's social security number (SSN). See chapter 1.

Foreign source income. If you are a U.S. citizen with income from sources outside the United States (foreign income), you must report all such income on your tax return unless it is exempt by U.S. law. This is true whether you live inside or outside the United States and whether or not you receive a Form W-2 or Form 1099 from the foreign payer. This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). If you live outside the United States, you may be able to exclude part or all of your foreign source earned income. For details, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Foreign financial assets. If you had foreign financial assets in 2014, you may have to file Form 8938 with your return. Check www.IRS.gov/form8938 for details.

Automatic 6-month extension to file tax return. You can get an automatic 6-month extension of time to file your tax return. See chapter 1.

Include your phone number on your return. To promptly resolve any questions we have in processing your tax return, we would like to be able to call you. Please enter your daytime telephone number on your tax form next to your signature and occupation. If you are filing a joint return, you can enter either your or your spouse's daytime phone number.

Payment of taxes.  You can pay your taxes online, by phone, or by check or money order. You can make a direct transfer from your bank account or use a credit or debit card. See chapter 1.

Faster ways to file your return. The IRS offers fast, accurate ways to file your tax return information without filing a paper tax return. You can use IRS e-file (electronic filing). See chapter 1.

Free electronic filing. You may be able to file your 2014 taxes online for free. See chapter 1.

Change of address. If you change your address, notify the IRS. See Change of Address in chapter 1.

Refund on a late filed return. If you were due a refund but you did not file a return, you generally must file your return within 3 years from the date the return was due (including extensions) to get that refund. See chapter 1.

Frivolous tax returns. The IRS has published a list of positions that are identified as frivolous. The penalty for filing a frivolous tax return is $5,000. See chapter 1.

Filing erroneous claim for refund or credit. You may have to pay a penalty if you file an erroneous claim for refund or credit. See chapter 1.

Privacy Act and paperwork reduction information.  The IRS Restructuring and Reform Act of 1998, the Privacy Act of 1974, and the Paperwork Reduction Act of 1980 require that when we ask you for information we must first tell you what our legal right is to ask for the information, why we are asking for it, how it will be used, what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory under the law. A complete statement on this subject can be found in your tax form instructions.

Preparer e-file mandate. Most paid preparers must e-file returns they prepare and file. Your preparer may make you aware of this requirement and the options available to you.

Treasury Inspector General for Tax Administration.  If you want to confidentially report misconduct, waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (call 1-800-877-8339 if you are deaf, hard of hearing, or have a speech disability, and are using TTY/TDD equipment). You can remain anonymous.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

This publication covers the general rules for filing a federal income tax return. It supplements the information contained in your tax form instructions. It explains the tax law to make sure you pay only the tax you owe and no more.

How this publication is arranged.   This publication closely follows Form 1040, U.S. Individual Income Tax Return. It is divided into six parts which cover different sections of Form 1040. Each part is further divided into chapters which generally discuss one line of the form. Do not worry if you file Form 1040A or Form 1040EZ. Anything included on a line of either of these forms is also included on Form 1040.

  The table of contents inside the front cover and the index in the back of the publication are useful tools to help you find the information you need.

What is in this publication.   The publication begins with the rules for filing a tax return. It explains:
  1. Who must file a return,

  2. Which tax form to use,

  3. When the return is due,

  4. How to e-file your return, and

  5. Other general information.

It will help you identify which filing status you qualify for, whether you can claim any dependents, and whether the income you receive is taxable. The publication goes on to explain the standard deduction, the kinds of expenses you may be able to deduct, and the various kinds of credits you may be able to take to reduce your tax.

  Throughout the publication are examples showing how the tax law applies in typical situations. Also throughout the publication are flowcharts and tables that present tax information in an easy-to-understand manner.

  Many of the subjects discussed in this publication are discussed in greater detail in other IRS publications. References to those other publications are provided for your information.

Icons.   Small graphic symbols, or icons, are used to draw your attention to special information. See Table 1 for an explanation of each icon used in this publication.

What is not covered in this publication.   Some material that you may find helpful is not included in this publication but can be found in your tax form instruction booklet. This includes lists of:
  • Where to report certain items shown on information documents, and

  • Recorded tax information topics (TeleTax).

  If you operate your own business or have other self-employment income, such as from babysitting or selling crafts, see the following publications for more information.
  • Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ).

  • Publication 535, Business Expenses.

  • Publication 587, Business Use of Your Home (Including Use by Daycare Providers).

Help from the IRS.   There are many ways you can get help from the IRS. These are explained under How To Get Tax Help in the back of this publication.

Comments and suggestions.    We welcome your comments about this publication and your suggestions for future editions.

  You can send us comments from www.irs.gov/formspubs. Click on “More Information” and then on “Give us feedback.

  Or you can write to:

Internal Revenue Service 
Tax Forms and Publications 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications.    Visit www.irs.gov/formspubs to download forms and publications. Otherwise, you can go to www.irs.gov/orderforms to order forms or call 1-800-829-3676 to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions.    If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to the above address.

IRS mission.   Provide America's taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Table 1. Legend of Icons

Icon Explanation
Caution
Items that may cause you particular problems, or an alert about pending legislation that may be enacted after this publication goes to print.
Access by computer
An Internet site or an email address.
Address you may need
An address you may need.
Records you should keep
Items you should keep in your personal records.
Worksheet you may need to fill in
Items you may need to figure or a worksheet you may need to complete and keep for your records.
Phone number
An important phone number.
Tip
Helpful information you may need.


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