1.   Filing Information

What's New

Filing status for same-sex married couple.  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. See Publication 501 for more information.

Additional Medicare Tax. Beginning in 2013, a 0.9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income over a threshold amount based on your filing status. For more information, see the Instructions for Form 1040, line 60, and Form 8959.

Net Investment Income Tax. Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). NIIT is a 3.8% tax on the lesser of net investment income or the excess of your modified adjusted gross income over a threshold amount. For more information, see the Instructions for Form 1040, line 60, and Form 8960.

Refundable credit for prior year minimum tax. The refundable portion of the credit for prior year minimum tax is no longer available.

Who must file. Generally, the amount of income you can receive before you must file a return has been increased. See Table 1-1, Table 1-2, and Table 1-3 for the specific amounts.

Reminders

File online. Rather than filing a return on paper, you may be able to file electronically using IRS e-file. Create your own personal identification number (PIN) and file a completely paperless tax return. For more information, see Does My Return Have To Be on Paper , later.

Change of address. If you change your address, you should notify the IRS. You can use Form 8822 to notify the IRS of the change. See Change of Address , later, under What Happens After I File.

Enter your social security number. You must enter your social security number (SSN) in the spaces provided on your tax return. If you file a joint return, enter the SSNs in the same order as the names.

Direct deposit of refund. Instead of getting a paper check, you may be able to have your refund deposited directly into your account at a bank or other financial institution. See Direct Deposit under Refunds, later. If you choose direct deposit of your refund, you may be able to split the refund among two or three accounts.

Pay online or by phone. If you owe additional tax, you may be able to pay online or by phone. See How To Pay , later.

Installment agreement. If you cannot pay the full amount due with your return, you may ask to make monthly installment payments. See Installment Agreement , later, under Amount You Owe. You may be able to apply online for a payment agreement if you owe federal tax, interest, and penalties.

Automatic 6-month extension. You can get an automatic 6-month extension to file your tax return if, no later than the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. See Automatic Extension , later.

Service in combat zone. You are allowed extra time to take care of your tax matters if you are a member of the Armed Forces who served in a combat zone, or if you served in the combat zone in support of the Armed Forces. See Individuals Serving in Combat Zone , later, under When Do I Have To File.

Adoption taxpayer identification number. If a child has been placed in your home for purposes of legal adoption and you will not be able to get a social security number for the child in time to file your return, you may be able to get an adoption taxpayer identification number (ATIN). For more information, see Social Security Number (SSN) , later.

Taxpayer identification number for aliens. If you or your dependent is a nonresident or resident alien who does not have and is not eligible to get a social security number, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. For more information, see Social Security Number (SSN) , later.

Frivolous tax submissions. The IRS has published a list of positions that are identified as frivolous. The penalty for filing a frivolous tax return is $5,000. Also, the $5,000 penalty will apply to other specified frivolous submissions. For more information, see Civil Penalties , later.

Introduction

This chapter discusses the following topics.

  • Whether you have to file a return.

  • Which form to use.

  • How to file electronically.

  • When, how, and where to file your return.

  • What happens if you pay too little or too much tax.

  • What records you should keep and how long you should keep them.

  • How you can change a return you have already filed.

Do I Have To File a Return?

You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you.

  1. Individuals in general. (There are special rules for surviving spouses, executors, administrators, legal representatives, U.S. citizens and residents living outside the United States, residents of Puerto Rico, and individuals with income from U.S. possessions.)

  2. Dependents.

  3. Certain children under age 19 or full-time students.

  4. Self-employed persons.

  5. Aliens.

The filing requirements for each category are explained in this chapter.

The filing requirements apply even if you do not owe tax.

Even if you do not have to file a return, it may be to your advantage to do so. See Who Should File, later.

File only one federal income tax return for the year regardless of how many jobs you had, how many Forms W-2 you received, or how many states you lived in during the year. Do not file more than one original return for the same year, even if you have not gotten your refund or have not heard from the IRS since you filed.

Individuals—In General

If you are a U.S. citizen or resident, whether you must file a return depends on three factors:

  1. Your gross income,

  2. Your filing status, and

  3. Your age.

To find out whether you must file, see Table 1-1, Table 1-2, and Table 1-3. Even if no table shows that you must file, you may need to file to get money back. (See Who Should File , later.)

Gross income.   This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. It also includes income from sources outside the United States or from the sale of your main home (even if you can exclude all or part of it). Include part of your social security benefits if:
  1. You were married, filing a separate return, and you lived with your spouse at any time during 2013; or

  2. Half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly).

If either (1) or (2) applies, see the instructions for Form 1040 or 1040A, or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the social security benefits you must include in gross income.

  Common types of income are discussed in Part Two of this publication.

Community income.   If you are married and your permanent home is in a community property state, half of any income described by state law as community income may be considered yours. This affects your federal taxes, including whether you must file if you do not file a joint return with your spouse. See Publication 555, Community Property, for more information.

Nevada, Washington, and California domestic partners.   A registered domestic partner in Nevada, Washington, or California generally must report half the combined community income of the individual and his or her domestic partner. See Publication 555.

Self-employed individuals.   If you are self-employed, your gross income includes the amount on line 7 of Schedule C (Form 1040), Profit or Loss From Business; line 1 of Schedule C-EZ (Form 1040), Net Profit From Business; and line 9 of Schedule F (Form 1040), Profit or Loss From Farming. See Self-Employed Persons , later, for more information about your filing requirements.

  
If you do not report all of your self-employment income, your social security benefits may be lower when you retire.

Filing status.   Your filing status depends on whether you are single or married and on your family situation. Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers. See chapter 2 for an explanation of each filing status.

Age.   If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. See Table 1-1. You are considered 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2014, you are considered 65 for 2013.

Table 1-1.2013 Filing Requirements for Most Taxpayers

IF your filing status is... AND at the end of 2013 you  
were...*
THEN file a return if  
your gross income  
was at least...**
single under 65 $10,000  
  65 or older $11,500  
married filing jointly*** under 65 (both spouses) $20,000  
  65 or older (one spouse) $21,200  
  65 or older (both spouses) $22,400  
married filing separately any age $3,900  
head of household under 65 $12,850  
  65 or older $14,350  
qualifying widow(er) with dependent child under 65 $16,100  
65 or older $17,300  
* If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013.
** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the Instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9.
*** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900, you must file a return regardless of your age.

Surviving Spouses, Executors, Administrators, and Legal Representatives

You must file a final return for a decedent (a person who died) if both of the following are true.

  • You are the surviving spouse, executor, administrator, or legal representative.

  • The decedent met the filing requirements at the date of death.

For more information on rules for filing a decedent's final return, see Publication 559, Survivors, Executors, and Administrators.

U.S. Citizens and Resident Aliens Living Abroad

To determine whether you must file a return, include in your gross income any income you received abroad, including any income you can exclude under the foreign earned income exclusion. For information on special tax rules that may apply to you, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. It is available online and at most U.S. embassies and consulates. See How To Get Tax Help in the back of this publication.

Residents of Puerto Rico

If you are a U.S. citizen and also a bona fide resident of Puerto Rico, you generally must file a U.S. income tax return for any year in which you meet the income requirements. This is in addition to any legal requirement you may have to file an income tax return with Puerto Rico.

If you are a bona fide resident of Puerto Rico for the entire year, your U.S. gross income does not include income from sources within Puerto Rico. It does, however, include any income you received for your services as an employee of the United States or a U.S. agency. If you receive income from Puerto Rican sources that is not subject to U.S. tax, you must reduce your standard deduction. As a result, the amount of income you must have before you are required to file a U.S. income tax return is lower than the applicable amount in Table 1-1 or Table 1-2. For more information, see Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.

Individuals With Income From U.S. Possessions

If you had income from Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, or the U.S. Virgin Islands, special rules may apply when determining whether you must file a U.S. federal income tax return. In addition, you may have to file a return with the individual island government. See Publication 570 for more information.

Dependents

If you are a dependent (one who meets the dependency tests in chapter 3), see Table 1-2 to find out whether you must file a return. You also must file if your situation is described in Table 1-3.

Responsibility of parent.   Generally, a child is responsible for filing his or her own tax return and for paying any tax on the return. If a dependent child must file an income tax return but cannot file due to age or any other reason, then a parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian must sign the child's name followed by the words “By (your signature), parent for minor child.

Child's earnings.   Amounts a child earns by performing services are included in his or her gross income and not the gross income of the parent. This is true even if under local law the child's parent has the right to the earnings and may actually have received them. But if the child does not pay the tax due on this income, the parent is liable for the tax.

Certain Children Under Age 19 or Full-Time Students

If a child's only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends), the child was under age 19 at the end of 2013 or was a full-time student under age 24 at the end of 2013, and certain other conditions are met, a parent can elect to include the child's income on the parent's return. If this election is made, the child does not have to file a return. See Parent's Election To Report Child's Interest and Dividends in chapter 31.

Self-Employed Persons

You are self-employed if you:

  • Carry on a trade or business as a sole proprietor,

  • Are an independent contractor,

  • Are a member of a partnership, or

  • Are in business for yourself in any other way.

Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.

You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if:

  1. Your net earnings from self-employment (excluding church employee income) were $400 or more, or

  2. You had church employee income of $108.28 or more. (See Table 1-3.)

Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. For more information about this tax, see Publication 334, Tax Guide for Small Business.

Employees of foreign governments or international organizations.   If you are a U.S. citizen who works in the United States for an international organization, a foreign government, or a wholly owned instrumentality of a foreign government, and your employer is not required to withhold social security and Medicare taxes from your wages, you must include your earnings from services performed in the United States when figuring your net earnings from self-employment.

Ministers.   You must include income from services you performed as a minister when figuring your net earnings from self-employment, unless you have an exemption from self-employment tax. This also applies to Christian Science practitioners and members of a religious order who have not taken a vow of poverty. For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

Table 1-2.2013 Filing Requirements for Dependents

See chapter 3 to find out if someone can claim you as a dependent.

If your parents (or someone else) can claim you as a dependent, use this table to see if you must file a return. (See Table 1-3 for other situations when you must file.)
In this table, earned income includes salaries, wages, tips, and professional fees. It also includes taxable scholarship and fellowship grants. (See Scholarships and fellowships in chapter 12.) Unearned income includes investment-type income such as taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, cancellation of debt, and distributions of unearned income from a trust. Gross income is the total of your earned and unearned income.
 
Single dependents—Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
    Your unearned income was more than $1,000.
    Your earned income was more than $6,100.
    Your gross income was more than the larger of:
      $1,000, or
      Your earned income (up to $5,750) plus $350.
Yes. You must file a return if any of the following apply.
    Your unearned income was more than $2,500 ($4,000 if 65 or older and blind).
    Your earned income was more than $7,600 ($9,100 if 65 or older and blind).
    Your gross income was more than the larger of:
      $2,500 ($4,000 if 65 or older and blind), or
      Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind).
Married dependents—Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
    Your unearned income was more than $1,000.
    Your earned income was more than $6,100.
    Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
    Your gross income was more than the larger of:
      $1,000, or
      Your earned income (up to $5,750) plus $350.
Yes. You must file a return if any of the following apply.
    Your unearned income was more than $2,200 ($3,400 if 65 or older and blind).
    Your earned income was more than $7,300 ($8,500 if 65 or older and blind).
    Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
    Your gross income was more than the larger of:
      $2,200 ($3,400 if 65 or older and blind), or
      Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind).

Aliens

Your status as an alien—resident, nonresident, or dual-status—determines whether and how you must file an income tax return.

The rules used to determine your alien status are discussed in Publication 519, U.S. Tax Guide for Aliens.

Resident alien.   If you are a resident alien for the entire year, you must file a tax return following the same rules that apply to U.S. citizens. Use the forms discussed in this publication.

Nonresident alien.   If you are a nonresident alien, the rules and tax forms that apply to you are different from those that apply to U.S. citizens and resident aliens. See Publication 519 to find out if U.S. income tax laws apply to you and which forms you should file.

Dual-status taxpayer.   If you are a resident alien for part of the tax year and a nonresident alien for the rest of the year, you are a dual-status taxpayer. Different rules apply for each part of the year. For information on dual-status taxpayers, see Publication 519.

Table 1-3.Other Situations When You Must File a 2013 Return

You must file a return if any of the four conditions below apply for 2013.
1.   You owe any special taxes, including any of the following.
  a. Alternative minimum tax.
  b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.
  c. Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.
  d. Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes.
  e. Recapture of first-time homebuyer credit.
  f. Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional taxes on health savings accounts.
  g. Recapture taxes.
2.   You (or your spouse, if filing jointly) received HSA, Archer MSA, or Medicare Advantage MSA distributions.
3.   You had net earnings from self-employment of at least $400.
4.   You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.

Who Should File

Even if you do not have to file, you should file a federal income tax return to get money back if any of the following conditions apply.

  1. You had federal income tax withheld or made estimated tax payments.

  2. You qualify for the earned income credit. See chapter 36 for more information.

  3. You qualify for the additional child tax credit. See chapter 34 for more information.

  4. You qualify for the health coverage tax credit. See chapter 37 for more information.

  5. You qualify for the American opportunity credit. See chapter 35 for more information.

  6. You qualify for the credit for federal tax on fuels. See chapter 37 for more information.

Which Form Should I Use?

You must use one of three forms to file your return: Form 1040EZ, Form 1040A, or Form 1040. (But also see Does My Return Have To Be on Paper , later.)

See the discussion under Form 1040 for when you must use that form.

Form 1040EZ

Form 1040EZ is the simplest form to use.

You can use Form 1040EZ if all of the following apply.   
  1. Your filing status is single or married filing jointly. If you were a nonresident alien at any time in 2013, your filing status must be married filing jointly.

  2. You (and your spouse if married filing a joint return) were under age 65 and not blind at the end of 2013. If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013.

  3. You do not claim any dependents.

  4. Your taxable income is less than $100,000.

  5. Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.

  6. You do not claim any adjustments to income, such as a deduction for IRA contributions or student loan interest.

  7. You do not claim any credits other than the earned income credit.

  8. You do not owe any household employment taxes on wages you paid to a household employee.

  9. If you earned tips, they are included in boxes 5 and 7 of your Form W-2.

  10. You are not a debtor in a chapter 11 bankruptcy case filed after October 16, 2005.

  You must meet all of these requirements to use Form 1040EZ. If you do not, you must use Form 1040A or Form 1040.

Figuring tax.   On Form 1040EZ, you can use only the tax table to figure your income tax. You cannot use Form 1040EZ to report any other tax.

Form 1040A

If you do not qualify to use Form 1040EZ, you may be able to use Form 1040A.

You can use Form 1040A if all of the following apply.   
  1. Your income is only from:

    1. Wages, salaries, and tips,

    2. Interest,

    3. Ordinary dividends (including Alaska Permanent Fund dividends),

    4. Capital gain distributions,

    5. IRA distributions,

    6. Pensions and annuities,

    7. Unemployment compensation,

    8. Taxable social security and railroad retirement benefits, and

    9. Taxable scholarship and fellowship grants.

    If you receive a capital gain distribution that includes unrecaptured section 1250 gain, section 1202 gain, or collectibles (28%) gain, you cannot use Form 1040A. You must use Form 1040.

  2. Your taxable income is less than $100,000.

  3. Your adjustments to income are for only the following items.

    1. Educator expenses.

    2. IRA deduction.

    3. Student loan interest deduction.

    4. Tuition and fees.

  4. You do not itemize your deductions.

  5. You claim only the following tax credits.

    1. The credit for child and dependent care expenses. (See chapter 32.)

    2. The credit for the elderly or the disabled. (See chapter 33.)

    3. The education credits. (See chapter 35.)

    4. The retirement savings contribution credit. (See chapter 37.)

    5. The child tax credit. (See chapter 34.)

    6. The earned income credit. (See chapter 36.)

    7. The additional child tax credit. (See chapter 34.)

  6. You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. (See Publication 525, Taxable and Nontaxable Income.)

  You can also use Form 1040A if you received employer-provided dependent care benefits or if you owe tax from the recapture of an education credit or the alternative minimum tax.

  You must meet all these requirements to use Form 1040A. If you do not, you must use Form 1040.

Form 1040

If you cannot use Form 1040EZ or Form 1040A, you must use Form 1040. You can use Form 1040 to report all types of income, deductions, and credits.

You may pay less tax by filing Form 1040 because you can take itemized deductions, some adjustments to income, and credits you cannot take on Form 1040A or Form 1040EZ.

You must use Form 1040 if any of the following apply.   
  1. Your taxable income is $100,000 or more.

  2. You itemize your deductions on Schedule A.

  3. You had income that cannot be reported on Form 1040EZ or Form 1040A, including tax-exempt interest from private activity bonds issued after August 7, 1986.

  4. You claim any adjustments to gross income other than the adjustments listed earlier under Form 1040A.

  5. Your Form W-2, box 12, shows uncollected employee tax (social security and Medicare tax) on tips (see chapter 6) or group-term life insurance (see chapter 5).

  6. You received $20 or more in tips in any 1 month and did not report all of them to your employer. (See chapter 6.)

  7. You were a bona fide resident of Puerto Rico and exclude income from sources in Puerto Rico.

  8. You claim any credits other than the credits listed earlier under Form 1040A.

  9. You owe the excise tax on insider stock compensation from an expatriated corporation.

  10. Your Form W-2 shows an amount in box 12 with a code Z.

  11. You had a qualified health savings account funding distribution from your IRA.

  12. You are an employee and your employer did not withhold social security and Medicare tax.

  13. You have to file other forms with your return to report certain exclusions, taxes, or transactions, such as Form 8959 or Form 8960.

  14. You are a debtor in a bankruptcy case filed after October 16, 2005.

  15. You must repay the first-time homebuyer credit.

  16. You have adjusted gross income of more than $150,000 and must reduce the dollar amount of your exemptions.

Does My Return Have To Be on Paper?

You may be able to file a paperless return using IRS e-file (electronic filing). If your 2013 adjusted gross income (AGI) is less than a certain amount, you are eligible for Free File. See your tax return instructions for details. If you do not qualify for Free File, then you should check out IRS.gov for low-cost e-file options or Free File Fillable Forms.

IRS e-file

Table 1-4 lists the benefits of IRS e-file. IRS e-file uses automation to replace most of the manual steps needed to process paper returns. As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. However, as with a paper return, you are responsible for making sure your return contains accurate information and is filed on time.

Using e-file does not affect your chances of an IRS examination of your return.

Free File Fillable Forms.   If you do not need the help of a tax preparer, then Free File Fillable Forms may be for you. These forms:
  • Do not have an income requirement so everyone is eligible,

  • Are easy to use,

  • Perform basic math calculations,

  • Are available only at IRS.gov, and

  • Apply only to a federal tax return.

Electronic return signatures.   To file your return electronically, you must sign the return electronically using a personal identification number (PIN). If you are filing online, you must use a Self-Select PIN. If you are filing electronically using a tax practitioner, you can use a Self-Select PIN or a Practitioner PIN.

Self-Select PIN.   The Self-Select PIN method allows you to create your own PIN. If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures.

  A PIN is any combination of five digits you choose except five zeros. If you use a PIN, there is nothing to sign and nothing to mail—not even your Forms W-2.

  To verify your identity, you will be prompted to enter your adjusted gross income (AGI) from your originally filed 2012 federal income tax return, if applicable. Do not use your AGI from an amended return (Form 1040X) or a math error correction made by the IRS. AGI is the amount shown on your 2012 Form 1040, line 38; Form 1040A, line 22; or Form 1040EZ, line 4. If you do not have your 2012 income tax return, you can quickly request a transcript by using our automated self-service tool. Visit us at IRS.gov and click on Order a Return or Account Transcript or call 1-800-908-9946 to get a free transcript of your return. (If you filed electronically last year, you may use your prior year PIN to verify your identity instead of your prior year AGI. The prior year PIN is the five digit PIN you used to electronically sign your 2012 return.) You will also be prompted to enter your date of birth.

Table 1-4.Benefits of IRS e-file

Free File allows qualified taxpayers to prepare and e-file their own tax returns for free.
Free File is available in English and Spanish.
Free File is available online 24 hours a day, 7 days a week.
Get your refund faster by e-filing using Direct Deposit.
Sign electronically with a secure self-selected PIN and file a completely paperless return.
Receive an acknowledgement that your return was received and accepted.
If you owe, you can e-file and pay electronically either online or by phone, using your bank account or a credit or debit card. You can also file a return early and pay the amount you owe by the due date of your return.
Save time by preparing and e-filing federal and state returns together.
IRS computers quickly and automatically check for errors or other missing information.
Help the environment, use less paper, and save taxpayer money—it costs less to process an e-filed return than a paper return.

You cannot use the Self-Select PIN method if you are a first-time filer under age 16 at the end of 2013.

If you cannot locate your prior year AGI or prior year PIN, use the Electronic Filing PIN Request. This can be found at IRS.gov. Click on Request an Electronic Filing PIN. Or you can call 1-866-704-7388.

Practitioner PIN.   The Practitioner PIN method allows you to authorize your tax practitioner to enter or generate your PIN. The practitioner can provide you with details.

Form 8453.   You must send in a paper Form 8453 if you have to attach certain forms or other documents that cannot be electronically filed. For details, see Form 8453.

For more details, visit www.irs.gov/efile and click on “ Individuals.

Identity Protection PIN.   If the IRS gave you an identity protection personal identification number (PIN) because you were a victim of identity theft, enter it in the spaces provided on your tax form. If the IRS has not given you this type of number, leave these spaces blank. For more information, see the Instructions for Form 1040A or Form 1040.

Power of attorney.   If an agent is signing your return for you, a power of attorney (POA) must be filed. Attach the POA to Form 8453 and file it using that form's instructions. See Signatures , later, for more information on POAs.

State returns.   In most states, you can file an electronic state return simultaneously with your federal return. For more information, check with your local IRS office, state tax agency, tax professional, or the IRS website at  
www.irs.gov/efile.

Refunds.   You can have a refund check mailed to you, or you can have your refund deposited directly to your checking or savings account or split among two or three accounts. With e-file, your refund will be issued faster than if you filed on paper.

  As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain other federal nontax debts, such as student loans. See Offset against debts under Refunds, later.

Refund inquiries.   Information about your return will generally be available within 24 hours after the IRS receives your e-filed return. See Refund Information , later.

Amount you owe.   To avoid late-payment penalties and interest, pay your taxes in full by April 15, 2014. See How To Pay , later, for information on how to pay the amount you owe.

Using Your Personal Computer

You can file your tax return in a fast, easy, and convenient way using your personal computer. A computer with Internet access and tax preparation software are all you need. Best of all, you can e-file from the comfort of your home 24 hours a day, 7 days a week.

IRS approved tax preparation software is available for online use on the Internet, for download from the Internet, and in retail stores.

For information, visit www.irs.gov/efile.

Through Employers and Financial Institutions

Some businesses offer free e-file to their employees, members, or customers. Others offer it for a fee. Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit.

Free Help With Your Return

Free help in preparing your return is available nationwide from IRS-trained volunteers. The Volunteer Income Tax Assistance (VITA) program is designed to help low to moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Many VITA sites offer free electronic filing and all volunteers will let you know about the credits and deductions you may be entitled to claim. To find a site near you, call 1-800-906-9887. Or to find the nearest AARP TaxAide site, visit AARP's website at www.aarp.org/taxaide or call 1-888-227-7669. For more information on these programs, go to IRS.gov and enter keyword “VITA” in the search box.

Using a Tax Professional

Many tax professionals electronically file tax returns for their clients. You may personally enter your PIN or complete Form 8879, IRS e-file Signature Authorization, to authorize the tax professional to enter your PIN on your return.

Note.

Tax professionals may charge a fee for IRS e-file. Fees can vary depending on the professional and the specific services rendered.

When Do I Have To File?

April 15, 2014, is the due date for filing your 2013 income tax return if you use the calendar year. For a quick view of due dates for filing a return with or without an extension of time to file (discussed later), see Table 1-5.

Table 1-5. When To File Your 2013 Return

For U.S. citizens and residents who file returns on a calendar year.

  For Most Taxpayers For Certain Taxpayers 
Outside the U.S.
No extension requested April 15, 2014 June 16, 2014
Automatic extension October 15, 2014 October 15, 2014

If you use a fiscal year (a year ending on the last day of any month except December, or a 52-53-week year), your income tax return is due by the 15th day of the 4th month after the close of your fiscal year.

When the due date for doing any act for tax purposes—filing a return, paying taxes, etc.—falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

Filing paper returns on time.   Your paper return is filed on time if it is mailed in an envelope that is properly addressed, has enough postage, and is postmarked by the due date. If you send your return by registered mail, the date of the registration is the postmark date. The registration is evidence that the return was delivered. If you send a return by certified mail and have your receipt postmarked by a postal employee, the date on the receipt is the postmark date. The postmarked certified mail receipt is evidence that the return was delivered.

Private delivery services.   If you use a private delivery service designated by the IRS to send your return, the postmark date generally is the date the private delivery service records in its database or marks on the mailing label. The private delivery service can tell you how to get written proof of this date.

  For the IRS mailing address to use if you are using a private delivery service, go to IRS.gov and enter “private delivery service” in the search box.

  The following are designated private delivery services.
  • DHL Express (DHL): Same Day Service.

  • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.

  • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

Filing electronic returns on time.   If you use IRS e-file, your return is considered filed on time if the authorized electronic return transmitter postmarks the transmission by the due date. An authorized electronic return transmitter is a participant in the IRS e-file program that transmits electronic tax return information directly to the IRS.

  The electronic postmark is a record of when the authorized electronic return transmitter received the transmission of your electronically filed return on its host system. The date and time in your time zone controls whether your electronically filed return is timely.

Filing late.   If you do not file your return by the due date, you may have to pay a failure-to-file penalty and interest. For more information, see Penalties , later. Also see Interest under Amount You Owe.

  If you were due a refund but you did not file a return, you generally must file within 3 years from the date the return was due (including extensions) to get that refund.

Nonresident alien.    If you are a nonresident alien and earn wages subject to U.S. income tax withholding, your 2013 U.S. income tax return (Form 1040NR or Form 1040NR-EZ) is due by:
  • April 15, 2014, if you use a calendar year, or

  • The 15th day of the 4th month after the end of your fiscal year if you use a fiscal year.

  If you do not earn wages subject to U.S. income tax withholding, your return is due by:
  • June 16, 2014, if you use a calendar year, or

  • The 15th day of the 6th month after the end of your fiscal year, if you use a fiscal year.

See Publication 519 for more filing information.

Filing for a decedent.   If you must file a final income tax return for a taxpayer who died during the year (a decedent), the return is due by the 15th day of the 4th month after the end of the decedent's normal tax year. See Publication 559.

Extensions of Time To File

You may be able to get an extension of time to file your return. There are three types of situations where you may qualify for an extension:

  • Automatic extensions,

  • You are outside the United States, or

  • You are serving in a combat zone.

Automatic Extension

If you cannot file your 2013 return by the due date, you may be able to get an automatic 6-month extension of time to file.

Example.

If your return is due on April 15, 2014, you will have until October 15, 2014, to file.

If you do not pay the tax due by the regular due date (generally, April 15), you will owe interest. You may also be charged penalties, discussed later.

How to get the automatic extension.   You can get the automatic extension by:
  1. Using IRS e-file (electronic filing), or

  2. Filing a paper form.

E-file options.   There are two ways you can use e-file to get an extension of time to file. Complete Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, to use as a worksheet. If you think you may owe tax when you file your return, use Part II of the form to estimate your balance due. If you e-file Form 4868 to the IRS, do not also send a paper Form 4868.

E-file using your personal computer or a tax professional.    You can use a tax software package with your personal computer or a tax professional to file Form 4868 electronically. You will need to provide certain information from your tax return for 2012. If you wish to make a payment by direct transfer from your bank account, see Pay online , under How To Pay, later in this chapter.

E-file and pay by credit or debit card or by direct transfer from your bank account.   You can get an extension by paying part or all of your estimate of tax due by using a credit or debit card or by direct transfer from your bank account. You can do this by phone or over the Internet. You do not file Form 4868. See Pay online , under How To Pay, later in this chapter.

Filing a paper Form 4868.   You can get an extension of time to file by filing a paper Form 4868. Mail it to the address shown in the form instructions.

  If you want to make a payment with the form, make your check or money order payable to “United States Treasury.” Write your SSN, daytime phone number, and “2013 Form 4868” on your check or money order.

When to file.   You must request the automatic extension by the due date for your return. You can file your return any time before the 6-month extension period ends.

When you file your return.   Enter any payment you made related to the extension of time to file on Form 1040, line 68. If you file Form 1040EZ or Form 1040A, include that payment in your total payments on Form 1040EZ, line 9, or Form 1040A, line 41. Also enter “Form 4868” and the amount paid in the space to the left of line 9 or line 41.

Individuals Outside the United States

You are allowed an automatic 2-month extension, without filing Form 4868, (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if:

  1. You are a U.S. citizen or resident, and

  2. On the due date of your return:

    1. You are living outside the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or

    2. You are in military or naval service on duty outside the United States and  
      Puerto Rico.

However, if you pay the tax due after the regular due date (generally, April 15), interest will be charged from that date until the date the tax is paid.

If you served in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. See Individuals Serving in Combat Zone , later, for special rules that apply to you.

Married taxpayers.   If you file a joint return, only one spouse has to qualify for this automatic extension. If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies.

How to get the extension.   To use this automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. (See the situations listed under (2), earlier.)

Extensions beyond 2 months.   If you cannot file your return within the automatic 2-month extension period, you may be able to get an additional 4-month extension, for a total of 6 months. File Form 4868 and check the box on line 8.

No further extension.   An extension of more than 6 months will generally not be granted. However, if you are outside the United States and meet certain tests, you may be granted a longer extension. For more information, see When To File and Pay in Publication 54.

Individuals Serving in Combat Zone

The deadline for filing your tax return, paying any tax you may owe, and filing a claim for refund is automatically extended if you serve in a combat zone. This applies to members of the Armed Forces, as well as merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilians under the direction of the Armed Forces in support of the Armed Forces.

Combat zone.   For purposes of the automatic extension, the term “combat zone” includes the following areas.
  1. The Arabian peninsula area, effective January 17, 1991.

  2. The Kosovo area, effective March 24, 1999.

  3. Afghanistan area, effective September 19, 2001.

  See Publication 3, Armed Forces' Tax Guide, for more detailed information on the locations comprising each combat zone. The publication also has information about other tax benefits available to military personnel serving in a combat zone.

Extension period.   The deadline for filing your return, paying any tax due, and filing a claim for refund is extended for at least 180 days after the later of:
  1. The last day you are in a combat zone or the last day the area qualifies as a combat zone, or

  2. The last day of any continuous qualified hospitalization for injury from service in the combat zone.

  In addition to the 180 days, your deadline is also extended by the number of days you had left to take action with the IRS when you entered the combat zone. For example, you have 3½ months (January 1 – April 15) to file your tax return. Any days left in this period when you entered the combat zone (or the entire 3½ months if you entered it before the beginning of the year) are added to the 180 days. See Extension of Deadlines in Publication 3 for more information.

  The rules on the extension for filing your return also apply when you are deployed outside the United States (away from your permanent duty station) while participating in a designated contingency operation.

How Do I Prepare My Return?

This section explains how to get ready to fill in your tax return and when to report your income and expenses. It also explains how to complete certain sections of the form. You may find Table 1-6 helpful when you prepare your paper return.

Table 1-6. Six Steps for Preparing Your Paper Return

1 Get your records together for income and expenses.
2 Get the forms, schedules, and publications you need.
3 Fill in your return.
4 Check your return to make sure it is correct.
5 Sign and date your return.
6 Attach all required forms and schedules.

Electronic returns.   For information you may find useful in preparing a paperless return, see Does My Return Have To Be on Paper , earlier.

Substitute tax forms.   You cannot use your own version of a tax form unless it meets the requirements explained in Publication 1167, General Rules and Specifications for Substitute Forms and Schedules.

Form W-2.   If you were an employee, you should receive Form W-2 from your employer. You will need the information from this form to prepare your return. See Form W-2 under Credit for Withholding and Estimated Tax in chapter 4.

  Your employer is required to provide or send Form W-2 to you no later than January 31, 2014. If it is mailed, you should allow adequate time to receive it before contacting your employer. If you still do not get the form by February 15, the IRS can help you by requesting the form from your employer. When you request IRS help, be prepared to provide the following information.
  • Your name, address (including ZIP code), and phone number.

  • Your SSN.

  • Your dates of employment.

  • Your employer's name, address (including ZIP code), and phone number.

Form 1099.   If you received certain types of income, you may receive a Form 1099. For example, if you received taxable interest of $10 or more, the payer is required to provide or send Form 1099 to you no later than January 31, 2014 (or by February 18, 2014, if furnished by a broker). If it is mailed, you should allow adequate time to receive it before contacting the payer. If you still do not get the form by February 18 (or by March 5, 2014, if furnished by a broker), call the IRS for help.

When Do I Report My Income and Expenses?

You must figure your taxable income on the basis of a tax year. A “tax year” is an annual accounting period used for keeping records and reporting income and expenses. You must account for your income and expenses in a way that clearly shows your taxable income. The way you do this is called an accounting method. This section explains which accounting periods and methods you can use.

Accounting Periods

Most individual tax returns cover a calendar year—the 12 months from January 1 through December 31. If you do not use a calendar year, your accounting period is a fiscal year. A regular fiscal year is a 12-month period that ends on the last day of any month except December. A 52-53-week fiscal year varies from 52 to 53 weeks and always ends on the same day of the week.

You choose your accounting period (tax year) when you file your first income tax return. It cannot be longer than 12 months.

More information.   For more information on accounting periods, including how to change your accounting period, see Publication 538, Accounting Periods and Methods.

Accounting Methods

Your accounting method is the way you account for your income and expenses. Most taxpayers use either the cash method or an accrual method. You choose a method when you file your first income tax return. If you want to change your accounting method after that, you generally must get IRS approval.

Cash method.   If you use this method, report all items of income in the year in which you actually or constructively receive them. Generally, you deduct all expenses in the year you actually pay them. This is the method most individual taxpayers use.

Constructive receipt.   Generally, you constructively receive income when it is credited to your account or set apart in any way that makes it available to you. You do not need to have physical possession of it. For example, interest credited to your bank account on December 31, 2013, is taxable income to you in 2013 if you could have withdrawn it in 2013 (even if the amount is not entered in your records or withdrawn until 2014).

Garnisheed wages.   If your employer uses your wages to pay your debts, or if your wages are attached or garnisheed, the full amount is constructively received by you. You must include these wages in income for the year you would have received them.

Debts paid for you.   If another person cancels or pays your debts (but not as a gift or loan), you have constructively received the amount and generally must include it in your gross income for the year. See Canceled Debts in chapter 12 for more information.

Payment to third party.   If a third party is paid income from property you own, you have constructively received the income. It is the same as if you had actually received the income and paid it to the third party.

Payment to an agent.   Income an agent receives for you is income you constructively received in the year the agent receives it. If you indicate in a contract that your income is to be paid to another person, you must include the amount in your gross income when the other person receives it.

Check received or available.   A valid check that was made available to you before the end of the tax year is constructively received by you in that year. A check that was “made available to you” includes a check you have already received, but not cashed or deposited. It also includes, for example, your last paycheck of the year that your employer made available for you to pick up at the office before the end of the year. It is constructively received by you in that year whether or not you pick it up before the end of the year or wait to receive it by mail after the end of the year.

No constructive receipt.   There may be facts to show that you did not constructively receive income.

Example.

Alice Johnson, a teacher, agreed to her school board's condition that, in her absence, she would receive only the difference between her regular salary and the salary of a substitute teacher hired by the school board. Therefore, Alice did not constructively receive the amount by which her salary was reduced to pay the substitute teacher.

Accrual method.   If you use an accrual method, you generally report income when you earn it, rather than when you receive it. You generally deduct your expenses when you incur them, rather than when you pay them.

Income paid in advance.   An advance payment of income is generally included in gross income in the year you receive it. Your method of accounting does not matter as long as the income is available to you. An advance payment may include rent or interest you receive in advance and pay for services you will perform later.

  A limited deferral until the next tax year may be allowed for certain advance payments. See Publication 538 for specific information.

Additional information.   For more information on accounting methods, including how to change your accounting method, see Publication 538.

Social Security Number (SSN)

You must enter your SSN on your return. If you are married, enter the SSNs for both you and your spouse, whether you file jointly or separately.

If you are filing a joint return, include the SSNs in the same order as the names. Use this same order in submitting other forms and documents to the IRS.

Check that both the name and SSN on your Form 1040, W-2, and 1099 agree with your social security card. If they do not, certain deductions and credits on your Form 1040 may be reduced or disallowed and you may not receive credit for your social security earnings. If your Form W-2 shows an incorrect SSN or name, notify your employer or the form-issuing agent as soon as possible to make sure your earnings are credited to your social security record. If the name or SSN on your social security card is incorrect, call the SSA at 1-800-772-1213.

Name change.   If you changed your name because of marriage, divorce, etc., be sure to report the change to your local Social Security Administration (SSA) office before filing your return. This prevents delays in processing your return and issuing refunds. It also safeguards your future social security benefits.

Dependent's SSN.   You must provide the SSN of each dependent you claim, regardless of the dependent's age. This requirement applies to all dependents (not just your children) claimed on your tax return.

Exception.    If your child was born and died in 2013 and did not have an SSN, enter “DIED” in column (2) of line 6c (Form 1040 or 1040A) and include a copy of the child's birth certificate, death certificate, or hospital records. The document must show that the child was born alive.

No SSN.   File Form SS-5, Application for a Social Security Card, with your local SSA office to get an SSN for yourself or your dependent. It usually takes about 2 weeks to get an SSN. If you or your dependent is not eligible for an SSN, see Individual taxpayer identification number (ITIN) , later.

  If you are a U.S. citizen or resident alien, you must show proof of age, identity, and citizenship or alien status with your Form SS-5. If you are 12 or older and have never been assigned an SSN, you must appear in person with this proof at an SSA office.

  Form SS-5 is available at any SSA office, on the Internet at www.socialsecurity.gov, or by calling 1-800-772-1213. If you have any questions about which documents you can use as proof of age, identity, or citizenship, contact your SSA office.

  If your dependent does not have an SSN by the time your return is due, you may want to ask for an extension of time to file, as explained earlier under When Do I Have To File .

  If you do not provide a required SSN or if you provide an incorrect SSN, your tax may be increased and any refund may be reduced.

Adoption taxpayer identification number (ATIN).   If you are in the process of adopting a child who is a U.S. citizen or resident and cannot get an SSN for the child until the adoption is final, you can apply for an ATIN to use instead of an SSN.

   File Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS to get an ATIN if all of the following are true.
  • You have a child living with you who was placed in your home for legal adoption.

  • You cannot get the child's existing SSN even though you have made a reasonable attempt to get it from the birth parents, the placement agency, and other persons.

  • You cannot get an SSN for the child from the SSA because, for example, the adoption is not final.

  • You are eligible to claim the child as a dependent on your tax return.

After the adoption is final, you must apply for an SSN for the child. You cannot continue using the ATIN.

  See Form W-7A for more information.

Nonresident alien spouse.   If your spouse is a nonresident alien, your spouse must have either an SSN or an ITIN if:
  • You file a joint return,

  • You file a separate return and claim an exemption for your spouse, or

  • Your spouse is filing a separate return.

If your spouse is not eligible for an SSN, see the following discussion on ITINs.

Individual taxpayer identification number (ITIN).   The IRS will issue you an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN. This also applies to an alien spouse or dependent. To apply for an ITIN, file Form W-7 with the IRS. It usually takes about 6 to 10 weeks to get an ITIN. Enter the ITIN on your tax return wherever an SSN is requested.

  
If you are applying for an ITIN for yourself, your spouse, or a dependent in order to file your tax return, attach your completed tax return to your Form W-7. See the Form W-7 instructions for how and where to file.

You cannot e-file a return using an ITIN in the calendar year the ITIN is issued; however, you can e-file returns in the following years.

ITIN for tax use only.   An ITIN is for tax use only. It does not entitle you or your dependent to social security benefits or change the employment or immigration status of either of you under U.S. law.

Penalty for not providing social security number.   If you do not include your SSN or the SSN of your spouse or dependent as required, you may have to pay a penalty. See the discussion on Penalties , later, for more information.

SSN on correspondence.   If you write to the IRS about your tax account, be sure to include your SSN (and the name and SSN of your spouse, if you filed a joint return) in your correspondence. Because your SSN is used to identify your account, this helps the IRS respond to your correspondence promptly.

Presidential Election Campaign Fund

This fund helps pay for Presidential election campaigns. If you want $3 to go to this fund, check the box. If you are filing a joint return, your spouse can also have $3 go to the fund. If you check a box, your tax or refund will not change.

Computations

The following information may be useful in making the return easier to complete.

Rounding off dollars.   You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

  If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Example.

You receive two Forms W-2: one showing wages of $5,000.55 and one showing wages of $18,500.73. On Form 1040, line 7, you would enter $23,501 ($5,000.55 + $18,500.73 = $23,501.28), not $23,502 ($5,001 + $18,501).

Equal amounts.   If you are asked to enter the smaller or larger of two equal amounts, enter that amount.

Example.

Line 1 is $500. Line 3 is $500. Line 5 asks you to enter the smaller of line 1 or 3. Enter $500 on line 5.

Negative amounts.   If you file a paper return and you need to enter a negative amount, put the amount in parentheses rather than using a minus sign. To combine positive and negative amounts, add all the positive amounts together and then subtract the negative amounts.

Attachments

Depending on the form you file and the items reported on your return, you may have to complete additional schedules and forms and attach them to your paper return.

You may be able to file a paperless return using IRS e-file. There's nothing to attach or mail, not even your Forms W-2. See Does My Return Have To Be on Paper, earlier.

Form W-2.   Form W-2 is a statement from your employer of wages and other compensation paid to you and taxes withheld from your pay. You should have a Form W-2 from each employer. If you file a paper return, be sure to attach a copy of Form W-2 in the place indicated on the front page of your return. Attach it to the front page of your paper return, not to any attachments. For more information, see Form W-2 in chapter 4.

  If you received a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., showing federal income tax withheld, and you file a paper return, attach a copy of that form in the place indicated on the front page of your return.

Form 1040EZ.   There are no additional schedules to file with Form 1040EZ.

Form 1040A.   If you file a paper return, attach any forms and schedules behind Form 1040A in order of the “Attachment Sequence Number” shown in the upper right corner of the form or schedule. Then arrange all other statements or attachments in the same order as the forms and schedules they relate to and attach them last. Do not attach items unless required to do so.

Form 1040.   If you file a paper return, attach any forms and schedules behind Form 1040 in order of the “Attachment Sequence Number” shown in the upper right corner of the form or schedule. Then arrange all other statements or attachments in the same order as the forms and schedules they relate to and attach them last. Do not attach items unless required to do so.

Third Party Designee

You can authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. If you check the “Yes” box in the Third party designee area of your 2013 tax return and provide the information required, you are authorizing:

  1. The IRS to call the designee to answer any questions that arise during the processing of your return, and

  2. The designee to:

    1. Give information that is missing from your return to the IRS,

    2. Call the IRS for information about the processing of your return or the status of your refund or payments,

    3. Receive copies of notices or transcripts related to your return, upon request, and

    4. Respond to certain IRS notices about math errors, offsets (see Refunds , later), and return preparation.

The authorization will automatically end no later than the due date (without any extensions) for filing your 2014 tax return. This is April 15, 2015, for most people.

See your form instructions for more information.

Signatures

You must sign and date your return. If you file a joint return, both you and your spouse must sign the return, even if only one of you had income.

If you file a joint return, both spouses are generally liable for the tax, and the entire tax liability may be assessed against either spouse. See chapter 2.

If you e-file your return, you can use an electronic signature to sign your return. See Does My Return Have To Be on Paper, earlier.

If you are due a refund, it cannot be issued unless you have signed your return.

Enter your occupation. If you file a joint return, enter both your occupation and your spouse's occupation. Entering your daytime phone number may help speed the processing of your return.

When someone can sign for you.   You can appoint an agent to sign your return if you are:
  1. Unable to sign the return because of disease or injury,

  2. Absent from the United States for a continuous period of at least 60 days before the due date for filing your return, or

  3. Given permission to do so by the IRS office in your area.

Power of attorney.   A return signed by an agent in any of these cases must have a power of attorney (POA) attached that authorizes the agent to sign for you. You can use a POA that states that the agent is granted authority to sign the return, or you can use Form 2848, Power of Attorney and Declaration of Representative. Part I of Form 2848 must state that the agent is granted authority to sign the return.

Court-appointed, conservator, or other fiduciary.   If you are a court-appointed conservator, guardian, or other fiduciary for a mentally or physically incompetent individual who has to file a tax return, sign your name for the individual. File Form 56.

Unable to sign.   If the taxpayer is mentally competent but physically unable to sign the return or POA, a valid “signature” is defined under state law. It can be anything that clearly indicates the taxpayer's intent to sign. For example, the taxpayer's “X” with the signatures of two witnesses might be considered a valid signature under a state's law.

Spouse unable to sign.   If your spouse is unable to sign for any reason, see Signing a joint return in chapter 2.

Child's return.   If a child has to file a tax return but cannot sign the return, the child's parent, guardian, or another legally responsible person must sign the child's name, followed by the words “By (your signature), parent for minor child.

Paid Preparer

Generally, anyone you pay to prepare, assist in preparing, or review your tax return must sign it and fill in the other blanks, including their Preparer Tax Identification Number (PTIN), in the paid preparer's area of your return.

Many preparers are required to e-file the tax returns they prepare. They sign these e-filed returns using their tax preparation software. However, you can choose to have your return completed on paper if you prefer. In that case, the paid preparer can sign the paper return manually or use a rubber stamp or mechanical device. The preparer is personally responsible for affixing his or her signature to the return.

If the preparer is self-employed (that is, not employed by any person or business to prepare the return), he or she should check the self-employed box in the Paid Preparer Use Only space on the return.

The preparer must give you a copy of your return in addition to the copy filed with the IRS.

If you prepare your own return, leave this area blank. If another person prepares your return and does not charge you, that person should not sign your return.

If you have questions about whether a preparer must sign your return, contact any IRS office.

Refunds

When you complete your return, you will determine if you paid more income tax than you owed. If so, you can get a refund of the amount you overpaid or, if you file Form 1040 or Form 1040A, you can choose to apply all or part of the overpayment to your next year's (2014) estimated tax. You cannot have your overpayment applied to your 2014 estimated tax if you file Form 1040EZ.

If you choose to have a 2013 overpayment applied to your 2014 estimated tax, you cannot change your mind and have any of it refunded to you after the due date (without extensions) of your 2013 return.

Follow the form instructions to complete the entries to claim your refund and/or to apply your overpayment to your 2014 estimated tax.

If your refund for 2013 is large, you may want to decrease the amount of income tax withheld from your pay in 2014. See chapter 4 for more information.

Instead of getting a paper check, you may be able to have your refund deposited directly into your checking or savings account, including an individual retirement arrangement. Follow the form instructions to request direct deposit.

If the direct deposit cannot be done, the IRS will send a check instead.

TreasuryDirect®.   You can request a deposit of your refund to a TreasuryDirect® online account to buy U.S. Treasury marketable securities and savings bonds. For more information, go to www.treasurydirect.gov.

Split refunds.   If you choose direct deposit, you may be able to split the refund and have it deposited among two or three accounts or buy up to $5,000 in paper series I savings bonds. Complete Form 8888, Allocation of Refund (Including Savings Bond Purchases), and attach it to your return.

Overpayment less than one dollar.   If your overpayment is less than one dollar, you will not get a refund unless you ask for it in writing.

Cashing your refund check.   Cash your tax refund check soon after you receive it. Checks expire the last business day of the 12th month of issue.

  If your check has expired, you can apply to the IRS to have it reissued.

Refund more or less than expected.   If you receive a check for a refund you are not entitled to, or for an overpayment that should have been credited to estimated tax, do not cash the check. Call the IRS.

  If you receive a check for more than the refund you claimed, do not cash the check until you receive a notice explaining the difference.

  If your refund check is for less than you claimed, it should be accompanied by a notice explaining the difference. Cashing the check does not stop you from claiming an additional amount of refund.

  If you did not receive a notice and you have any questions about the amount of your refund, you should wait 2 weeks. If you still have not received a notice, call the IRS.

Offset against debts.   If you are due a refund but have not paid certain amounts you owe, all or part of your refund may be used to pay all or part of the past-due amount. This includes past-due federal income tax, other federal debts (such as student loans), state income tax, child and spousal support payments, and state unemployment compensation debt. You will be notified if the refund you claimed has been offset against your debts.

Joint return and injured spouse.   When a joint return is filed and only one spouse owes a past-due amount, the other spouse can be considered an injured spouse. An injured spouse should file Form 8379, Injured Spouse Allocation, if both of the following apply and the spouse wants a refund of his or her share of the overpayment shown on the joint return.

  
  1. You are not legally obligated to pay the past-due amount.

  2. You made and reported tax payments (such as federal income tax withheld from your wages or estimated tax payments), or claimed a refundable tax credit (see the credits listed under Who Should File , earlier).

Note.

If the injured spouse's residence was in a community property state at any time during the tax year, special rules may apply. See the Instructions for Form 8379.

  If you have not filed your joint return and you know that your joint refund will be offset, file Form 8379 with your return. You should receive your refund within 14 weeks from the date the paper return is filed or within 11 weeks from the date the return is filed electronically.

  If you filed your joint return and your joint refund was offset, file Form 8379 by itself. When filed after offset, it can take up to 8 weeks to receive your refund. Do not attach the previously filed tax return, but do include copies of all Forms W-2 and W-2G for both spouses and any Forms 1099 that show income tax withheld. The processing of Form 8379 may be delayed if these forms are not attached, or if the form is incomplete when filed.

  A separate Form 8379 must be filed for each tax year to be considered.

  
An injured spouse claim is different from an innocent spouse relief request. An injured spouse uses Form 8379 to request the division of the tax overpayment attributed to each spouse. An innocent spouse uses Form 8857, Request for Innocent Spouse Relief, to request relief from joint liability for tax, interest, and penalties on a joint return for items of the other spouse (or former spouse) that were incorrectly reported on the joint return. For information on innocent spouses, see Relief from joint responsibility under Filing a Joint Return in chapter 2.

Amount You Owe

When you complete your return, you will determine if you have paid the full amount of tax that you owe. If you owe additional tax, you should pay it with your return.

You do not have to pay if the amount you owe is under $1.

If the IRS figures your tax for you, you will receive a bill for any tax that is due. You should pay this bill within 30 days (or by the due date of your return, if later). See Tax Figured by IRS in chapter 30.

If you do not pay your tax when due, you may have to pay a failure-to-pay penalty. See Penalties, later. For more information about your balance due, see Publication 594, The IRS Collection Process.

If the amount you owe for 2013 is large, you may want to increase the amount of income tax withheld from your pay or make estimated tax payments for 2014. See chapter 4 for more information.

How To Pay

You can pay online, by phone, or by check or money order. Do not include any estimated tax payment for 2014 in this payment. Instead, make the estimated tax payment separately.

Bad check or payment.   The penalty for writing a bad check to the IRS is $25 or 2% of the check, whichever is more. This penalty also applies to other forms of payment if the IRS does not receive the funds.

Pay online.   Paying online is convenient and secure and helps make sure we get your payments on time.

  You can pay using either of the following electronic payment methods.
  • Direct transfer from your bank account.

  • Credit or debit card.

  To pay your taxes online or for more information, go to www.irs.gov/e-pay.

Pay by phone.   Paying by phone is another safe and secure method of paying electronically. Use one of the following methods.
  • Direct transfer from your bank account.

  • Credit or debit card.

  To pay by direct transfer from your bank account, call 1-800-555-4477 (English) or 1-800-244-4829 (Espanol). People who are deaf, hard of hearing, or have a speech disability and have access to TTY/TDD equipment can call 1-800-733-4829.

  To pay using a credit or debit card, you can call one of the following service providers. There is a convenience fee charged by these providers that varies by provider, card type, and payment amount.

WorldPay 
1-888-9-PAY-TAXTM (1-888-972-9829) 
www.payUSAtax.com

Official Payments Corporation 
1-888-UPAY-TAXTM (1-888-872-9829) 
www.officialpayments.com

Link2Gov Corporation 
1-888-PAY-1040TM (1-888-729-1040) 
www.PAY1040.com

  For the latest details on how to pay by phone, go to www.irs.gov/e-pay.

Pay by check or money order.   Make your check or money order payable to “United States Treasury” for the full amount due. Do not send cash. Do not attach the payment to your return. Show your correct name, address, SSN, daytime phone number, and the tax year and form number on the front of your check or money order. If you are filing a joint return, enter the SSN shown first on your tax return.

Estimated tax payments.   Do not include any 2014 estimated tax payment in the payment for your 2013 income tax return. See chapter 4 for information on how to pay estimated tax.

Interest

Interest is charged on tax you do not pay by the due date of your return. Interest is charged even if you get an extension of time for filing.

If the IRS figures your tax for you, to avoid interest for late payment, you must pay the bill within 30 days of the date of the bill or by the due date of your return, whichever is later. For information, see Tax Figured by IRS in chapter 30.

Interest on penalties.   Interest is charged on the failure-to-file penalty, the accuracy-related penalty, and the fraud penalty from the due date of the return (including extensions) to the date of payment. Interest on other penalties starts on the date of notice and demand, but is not charged on penalties paid within 21 calendar days from the date of the notice (or within 10 business days if the notice is for $100,000 or more).

Interest due to IRS error or delay.   All or part of any interest you were charged can be forgiven if the interest is due to an unreasonable error or delay by an officer or employee of the IRS in performing a ministerial or managerial act.

  A ministerial act is a procedural or mechanical act that occurs during the processing of your case. A managerial act includes personnel transfers and extended personnel training. A decision concerning the proper application of federal tax law is not a ministerial or managerial act.

  The interest can be forgiven only if you are not responsible in any important way for the error or delay and the IRS has notified you in writing of the deficiency or payment. For more information, see Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund.

Interest and certain penalties may also be suspended for a limited period if you filed your return by the due date (including extensions) and the IRS does not provide you with a notice specifically stating your liability and the basis for it before the close of the 36-month period beginning on the later of:

  • The date the return is filed, or

  • The due date of the return without regard to extensions.

For more information, see Publication 556.

Installment Agreement

If you cannot pay the full amount due with your return, you can ask to make monthly installment payments for the full or a partial amount. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by the date your return is due, even if your request to pay in installments is granted. If your request is granted, you must also pay a fee. To limit the interest and penalty charges, pay as much of the tax as possible with your return. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan or credit card payment.

To ask for an installment agreement, you can apply online or use Form 9465.

In addition to paying by check or money order, you can use a credit or debit card or direct payment from your bank account to make installment agreement payments. See How To Pay , earlier.

To apply online, go to IRS.gov and click on “Tools” and then Online Payment Agreement.

Gift To Reduce Debt Held by the Public

You can make a contribution (gift) to reduce debt held by the public. If you wish to do so, make a separate check payable to “Bureau of the Public Debt.

Send your check to:

Bureau of the Public Debt 
ATTN: Department G 
P.O. Box 2188 
Parkersburg, WV 26106-2188

Or, enclose your separate check in the envelope with your income tax return. Do not add this gift to any tax you owe.

Go to www.publicdebt.treas.gov for information on how to make this type of gift online.

You may be able to deduct this gift as a charitable contribution on next year's tax return if you itemize your deductions on Schedule A (Form 1040).

Name and Address

After you have completed your return, fill in your name and address in the appropriate area of the Form 1040, Form 1040A, or Form 1040EZ.

You must include your SSN in the correct place on your tax return.

P.O. box.   If your post office does not deliver mail to your street address and you have a P.O. box, enter your P.O. box number on the line for your present home address instead of your street address.

Foreign address.   If your address is outside the United States or its possessions or territories, enter the city name on the appropriate line of your return. Do not enter any other information on that line, but also complete the line listing:
  1. Foreign country name,

  2. Foreign province/state/county, and

  3. Foreign postal code.

Follow the country's practice for entering the postal code and the name of the province, county, or state.

Where Do I File?

After you complete your return, you must send it to the IRS. You can mail it or you may be able to file it electronically. See Does My Return Have To Be on Paper , earlier.

Mailing your paper return.   Mail your paper return to the address shown in your instructions.

What Happens After I File?

After you send your return to the IRS, you may have some questions. This section discusses concerns you may have about recordkeeping, your refund, and what to do if you move.

What Records Should I Keep?

This part discusses why you should keep records, what kinds of records you should keep, and how long you should keep them.

You must keep records so that you can prepare a complete and accurate income tax return. The law does not require any special form of records. However, you should keep all receipts, canceled checks or other proof of payment, and any other records to support any deductions or credits you claim.

If you file a claim for refund, you must be able to prove by your records that you have overpaid your tax.

This part does not discuss the records you should keep when operating a business. For information on business records, see Publication 583, Starting a Business and Keeping Records.

Why Keep Records?

Good records help you:

  • Identify sources of income. Your records can identify the sources of your income to help you separate business from nonbusiness income and taxable from nontaxable income.

  • Keep track of expenses.You can use your records to identify expenses for which you can claim a deduction. This helps you determine if you can itemize deductions on your tax return.

  • Keep track of the basis of property. You need to keep records that show the basis of your property. This includes the original cost or other basis of the property and any improvements you made.

  • Prepare tax returns. You need records to prepare your tax return.

  • Support items reported on tax returns. The IRS may question an item on your return. Your records will help you explain any item and arrive at the correct tax. If you cannot produce the correct documents, you may have to pay additional tax and be subject to penalties.

Kinds of Records to Keep

The IRS does not require you to keep your records in a particular way. Keep them in a manner that allows you and the IRS to determine your correct tax.

You can use your checkbook to keep a record of your income and expenses. You also need to keep documents, such as receipts and sales slips, that can help prove a deduction.

In this section you will find guidance about basic records that everyone should keep. The section also provides guidance about specific records you should keep for certain items.

Electronic records.   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law.

  For details on electronic storage system requirements, see Rev. Proc. 97-22, which is on page 9 of Internal Revenue Bulletin 1997-13 at www.irs.gov/pub/irs-irbs/irb97-13.pdf.

Copies of tax returns.   You should keep copies of your tax returns as part of your tax records. They can help you prepare future tax returns, and you will need them if you file an amended return or are audited. Copies of your returns and other records can be helpful to your survivor or the executor or administrator of your estate.

  If necessary, you can request a copy of a return and all attachments (including Form W-2) from the IRS by using Form 4506, Request for Copy of Tax Return. There is a charge for a copy of a return. For information on the cost and where to file, see the Form 4506 instructions.

  If you just need information from your return, you can order a transcript in one of the following ways.
  • Visit IRS.gov and click on Order a Return or Account Transcript.

  • Call 1-800-908-9946.

  • Use Form 4506-T, Request for Transcript of Tax Return, or Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.

There is no fee for a transcript. For more information, see Form 4506-T.

Basic Records

Basic records are documents that everybody should keep. These are the records that prove your income and expenses. If you own a home or investments, your basic records should contain documents related to those items.

Income.   Your basic records prove the amounts you report as income on your tax return. Your income may include wages, dividends, interest, and partnership or S corporation distributions. Your records also can prove that certain amounts are not taxable, such as tax-exempt interest.

Note.

If you receive a Form W-2, keep Copy C until you begin receiving social security benefits. This will help protect your benefits in case there is a question about your work record or earnings in a particular year.

Expenses.   Your basic records prove the expenses for which you claim a deduction (or credit) on your tax return. Your deductions may include alimony, charitable contributions, mortgage interest, and real estate taxes. You also may have child care expenses for which you can claim a credit.

Home.   Your basic records should enable you to determine the basis or adjusted basis of your home. You need this information to determine if you have a gain or loss when you sell your home or to figure depreciation if you use part of your home for business purposes or for rent. Your records should show the purchase price, settlement or closing costs, and the cost of any improvements. They also may show any casualty losses deducted and insurance reimbursements for casualty losses. Your records also should include a copy of Form 2119, Sale of Your Home, if you sold your previous home before May 7, 1997, and postponed tax on the gain from that sale.

  For detailed information on basis, including which settlement or closing costs are included in the basis of your home, see chapter 13.

  When you sell your home, your records should show the sales price and any selling expenses, such as commissions. For information on selling your home, see chapter 15.

Investments.   Your basic records should enable you to determine your basis in an investment and whether you have a gain or loss when you sell it. Investments include stocks, bonds, and mutual funds. Your records should show the purchase price, sales price, and commissions. They may also show any reinvested dividends, stock splits and dividends, load charges, and original issue discount (OID).

  For information on stocks, bonds, and mutual funds, see chapters chapters 8, 13, 14, and 16.

Proof of Payment

One of your basic records is proof of payment. You should keep these records to support certain amounts shown on your tax return. Proof of payment alone is not proof that the item claimed on your return is allowable. You also should keep other documents that will help prove that the item is allowable.

Generally, you prove payment with a cash receipt, financial account statement, credit card statement, canceled check, or substitute check. If you make payments in cash, you should get a dated and signed receipt showing the amount and the reason for the payment.

If you make payments using your bank account, you may be able to prove payment with an account statement.

Account statements.   You may be able to prove payment with a legible financial account statement prepared by your bank or other financial institution.

Pay statements.   You may have deductible expenses withheld from your paycheck, such as union dues or medical insurance premiums. You should keep your year-end or final pay statements as proof of payment of these expenses.

How Long to Keep Records

You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support items shown on your return until the period of limitations for that return runs out.

The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax. Table 1-7 contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period beginning after the return was filed. Returns filed before the due date are treated as being filed on the due date.

Table 1-7. Period of Limitations

  IF you... THEN the 
period is...
1 Owe additional tax and (2), (3), and (4) do not apply to you 3 years
2 Do not report income that you should and it is more than 25% of the gross income shown on your return 6 years
3 File a fraudulent return No limit
4 Do not file a return No limit
5 File a claim for credit or refund after you filed your return The later of 3 years or 2 years after tax was paid.
6 File a claim for a loss from worthless securities 7 years

Property.   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure your basis for computing gain or loss when you sell or otherwise dispose of the property.

  Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up. You must keep the records on the old property, as well as the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

Refund Information

You can go online to check the status of your 2013 refund 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail a paper return. If you filed Form 8379 with your return, allow 14 weeks (11 weeks if you filed electronically) before checking your refund status. Be sure to have a copy of your 2013 tax return handy because you will need to know the filing status, the first SSN shown on the return, and the exact whole-dollar amount of the refund. To check on your refund, do one of the following.

  • Go to IRS.gov, and click on “Where's My Refund.

  • Download the free IRS2GO app by visiting the iTunes app store or Google Play.

  • Call 1-800-829-4477 24 hours a day, 7 days a week for automated refund information.

Interest on Refunds

If you are due a refund, you may get interest on it. The interest rates are adjusted quarterly.

If the refund is made within 45 days after the due date of your return, no interest will be paid. If you file your return after the due date (including extensions), no interest will be paid if the refund is made within 45 days after the date you filed. If the refund is not made within this 45-day period, interest will be paid from the due date of the return or from the date you filed, whichever is later.

Accepting a refund check does not change your right to claim an additional refund and interest. File your claim within the period of time that applies. See Amended Returns and Claims for Refund , later. If you do not accept a refund check, no more interest will be paid on the overpayment included in the check.

Interest on erroneous refund.   All or part of any interest you were charged on an erroneous refund generally will be forgiven. Any interest charged for the period before demand for repayment was made will be forgiven unless:
  1. You, or a person related to you, caused the erroneous refund in any way, or

  2. The refund is more than $50,000.

  For example, if you claimed a refund of $100 on your return, but the IRS made an error and sent you $1,000, you would not be charged interest for the time you held the $900 difference. You must, however, repay the $900 when the IRS asks.

Change of Address

If you have moved, file your return using your new address.

If you move after you filed your return, you should give the IRS clear and concise notification of your change of address. The notification may be written, electronic, or oral. Send written notification to the Internal Revenue Service Center serving your old address. You can use Form 8822, Change of Address. If you are expecting a refund, also notify the post office serving your old address. This will help in forwarding your check to your new address (unless you chose direct deposit of your refund). For more information, see Revenue Procedure 2010-16, 2010-19 I.R.B. 664, available at www.irs.gov/irb/2010-19_IRB/ar07.html.

Be sure to include your SSN (and the name and SSN of your spouse, if you filed a joint return) in any correspondence with the IRS.

What If I Made a Mistake?

Errors may delay your refund or result in notices being sent to you. If you discover an error, you can file an amended return or claim for refund.

Amended Returns and Claims for Refund

You should correct your return if, after you have filed it, you find that:

  1. You did not report some income,

  2. You claimed deductions or credits you should not have claimed,

  3. You did not claim deductions or credits you could have claimed, or

  4. You should have claimed a different filing status. (Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. However, an executor may be able to make this change for a deceased spouse.)

If you need a copy of your return, see Copies of tax returns under Kinds of Records to Keep, earlier in this chapter.

Form 1040X.   Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a return you have already filed. An amended tax return cannot be filed electronically.

Completing Form 1040X.   On Form 1040X, enter your income, deductions, and credits as you originally reported them on your return, the changes you are making, and the corrected amounts. Then figure the tax on the corrected amount of taxable income and the amount you owe or your refund.

  If you owe tax, pay the full amount with Form 1040X. The tax owed will not be subtracted from any amount you had credited to your estimated tax.

  If you cannot pay the full amount due with your return, you can ask to make monthly installment payments. See Installment Agreement , earlier.

  If you overpaid tax, you can have all or part of the overpayment refunded to you, or you can apply all or part of it to your estimated tax. If you choose to get a refund, it will be sent separately from any refund shown on your original return.

Filing Form 1040X.   When completing Form 1040X, do not forget to show the year of your original return and explain all changes you made. Be sure to attach any forms or schedules needed to explain your changes. Mail your Form 1040X to the Internal Revenue Service Center serving the area where you now live (as shown in the instructions to the form). However, if you are filing Form 1040X in response to a notice you received from the IRS, mail it to the address shown on the notice.

  File a separate form for each tax year involved.

Time for filing a claim for refund.   Generally, you must file your claim for a credit or refund within 3 years after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date (even if the due date was a Saturday, Sunday, or legal holiday). These time periods are suspended while you are financially disabled, discussed later.

  If the last day for claiming a credit or refund is a Saturday, Sunday, or legal holiday, you can file the claim on the next business day.

  If you do not file a claim within this period, you may not be entitled to a credit or a refund.

Protective claim for refund.   Generally, a protective claim is a formal claim or amended return for credit or refund normally based on current litigation or expected changes in tax law or other legislation. You file a protective claim when your right to a refund is contingent on future events and may not be determinable until after the statute of limitations expires. A valid protective claim does not have to list a particular dollar amount or demand an immediate refund. However, a valid protective claim must:
  • Be in writing and signed,

  • Include your name, address, SSN or ITIN, and other contact information,

  • Identify and describe the contingencies affecting the claim,

  • Clearly alert the IRS to the essential nature of the claim, and

  • Identify the specific year(s) for which a refund is sought.

Mail your protective claim for refund to the address listed in the instructions for Form 1040X, under Where To File.

  Generally, the IRS will delay action on the protective claim until the contingency is resolved.

Limit on amount of refund.   If you file your claim within 3 years after the date you filed your return, the credit or refund cannot be more than the part of the tax paid within the 3-year period (plus any extension of time for filing your return) immediately before you filed the claim. This time period is suspended while you are financially disabled, discussed later.

Tax paid.   Payments, including estimated tax payments, made before the due date (without regard to extensions) of the original return are considered paid on the due date. For example, income tax withheld during the year is considered paid on the due date of the return, April 15 for most taxpayers.

Example 1.

You made estimated tax payments of $500 and got an automatic extension of time to October 15, 2010, to file your 2009 income tax return. When you filed your return on that date, you paid an additional $200 tax. On October 15, 2013, you filed an amended return and claimed a refund of $700. Because you filed your claim within 3 years after you filed your original return, you can get a refund of up to $700, the tax paid within the 3 years plus the 6-month extension period immediately before you filed the claim.

Example 2.

The situation is the same as in Example 1, except you filed your return on October 30, 2010, 2 weeks after the extension period ended. You paid an additional $200 on that date. On October 31, 2013, you filed an amended return and claimed a refund of $700. Although you filed your claim within 3 years from the date you filed your original return, the refund was limited to $200, the tax paid within the 3 years plus the 6-month extension period immediately before you filed the claim. The estimated tax of $500 paid before that period cannot be refunded or credited.

  If you file a claim more than 3 years after you file your return, the credit or refund cannot be more than the tax you paid within the 2 years immediately before you file the claim.

Example.

You filed your 2009 tax return on April 15, 2010. You paid taxes of $500. On November 5, 2011, after an examination of your 2009 return, you had to pay an additional tax of $200. On May 12, 2013, you file a claim for a refund of $300. However, because you filed your claim more than 3 years after you filed your return, your refund will be limited to the $200 you paid during the 2 years immediately before you filed your claim.

Financially disabled.   The time periods for claiming a refund are suspended for the period in which you are financially disabled. For a joint income tax return, only one spouse has to be financially disabled for the time period to be suspended. You are financially disabled if you are unable to manage your financial affairs because of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. However, you are not treated as financially disabled during any period your spouse or any other person is authorized to act on your behalf in financial matters.

  To claim that you are financially disabled, you must send in the following written statements with your claim for refund.
  1. A statement from your qualified physician that includes:

    1. The name and a description of your physical or mental impairment,

    2. The physician's medical opinion that the impairment prevented you from managing your financial affairs,

    3. The physician's medical opinion that the impairment was or can be expected to result in death, or that its duration has lasted, or can be expected to last, at least 12 months,

    4. The specific time period (to the best of the physician's knowledge), and

    5. The following certification signed by the physician: “I hereby certify that, to the best of my knowledge and belief, the above representations are true, correct, and complete.

  2. A statement made by the person signing the claim for credit or refund that no person, including your spouse, was authorized to act on your behalf in financial matters during the period of disability (or the exact dates that a person was authorized to act for you).

Exceptions for special types of refunds.   If you file a claim for one of the items in the following list, the dates and limits discussed earlier may not apply. These items, and where to get more information, are as follows.
  • Bad debt. (See Nonbusiness Bad Debts in chapter 14.)

  • Worthless security. (See Worthless securities in chapter 14.)

  • Foreign tax paid or accrued. (See Publication 514, Foreign Tax Credit for Individuals.)

  • Net operating loss carryback. (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts.)

  • Carryback of certain business tax credits. (See Form 3800, General Business Credit.)

  • Claim based on an agreement with the IRS extending the period for assessment of tax.

Processing claims for refund.   Claims are usually processed 8-12 weeks after they are filed. Your claim may be accepted as filed, disallowed, or subject to examination. If a claim is examined, the procedures are the same as in the examination of a tax return.

  If your claim is disallowed, you will receive an explanation of why it was disallowed.

Taking your claim to court.   You can sue for a refund in court, but you must first file a timely claim with the IRS. If the IRS disallows your claim or does not act on your claim within 6 months after you file it, you can then take your claim to court. For information on the burden of proof in a court proceeding, see Publication 556.

The IRS provides a direct method to move your claim to court if:

  • You are filing a claim for a credit or refund based solely on contested income tax or on estate tax or gift tax issues considered in your previously examined returns, and

  • You want to take your case to court instead of appealing it within the IRS.

When you file your claim with the IRS, you get the direct method by requesting in writing that your claim be immediately rejected. A notice of claim disallowance will be sent to you.

You have 2 years from the date of mailing of the notice of claim disallowance to file a refund suit in the United States District Court having jurisdiction or in the United States Court of Federal Claims.

Interest on refund.   If you receive a refund because of your amended return, interest will be paid on it from the due date of your original return or the date you filed your original return, whichever is later, to the date you filed the amended return. However, if the refund is not made within 45 days after you file the amended return, interest will be paid up to the date the refund is paid.

Reduced refund.   Your refund may be reduced by an additional tax liability that has been assessed against you.

  Also, your refund may be reduced by amounts you owe for past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain other federal nontax debts, such as student loans. If your spouse owes these debts, see Offset against debts , under Refunds, earlier, for the correct refund procedures to follow.

Effect on state tax liability.   If your return is changed for any reason, it may affect your state income tax liability. This includes changes made as a result of an examination of your return by the IRS. Contact your state tax agency for more information.

Penalties

The law provides penalties for failure to file returns or pay taxes as required.

Civil Penalties

If you do not file your return and pay your tax by the due date, you may have to pay a penalty. You may also have to pay a penalty if you substantially understate your tax, understate a reportable transaction, file an erroneous claim for refund or credit, file a frivolous tax submission, or fail to supply your SSN or individual taxpayer identification number. If you provide fraudulent information on your return, you may have to pay a civil fraud penalty.

Filing late.   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. The penalty is based on the tax not paid by the due date (without regard to extensions).

Fraud.   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%.

Return over 60 days late.   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.

Exception.   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect.

Paying tax late.   You will have to pay a failure-to-pay penalty of ½ of 1% (.50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. This penalty does not apply during the automatic 6-month extension of time to file period if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return.

  The monthly rate of the failure-to-pay penalty is half the usual rate (.25% instead of .50%) if an installment agreement is in effect for that month. You must have filed your return by the due date (including extensions) to qualify for this reduced penalty.

  If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued.

  This penalty cannot be more than 25% of your unpaid tax. You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time.

Combined penalties.   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.

Accuracy-related penalty.   You may have to pay an accuracy-related penalty if you underpay your tax because:
  1. You show negligence or disregard of the rules or regulations,

  2. You substantially understate your income tax,

  3. You claim tax benefits for a transaction that lacks economic substance, or

  4. You fail to disclose a foreign financial asset.

The penalty is equal to 20% of the underpayment. The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged.

Negligence or disregard.   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. Negligence also includes failure to keep adequate books and records. You will not have to pay a negligence penalty if you have a reasonable basis for a position you took.

  The term “disregard” includes any careless, reckless, or intentional disregard.

Adequate disclosure.   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. See Disclosure statement , later.

  This exception will not apply to an item that is attributable to a tax shelter. In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly.

Substantial understatement of income tax.   You understate your tax if the tax shown on your return is less than the correct tax. The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. However, the amount of the understatement may be reduced to the extent the understatement is due to:
  1. Substantial authority, or

  2. Adequate disclosure and a reasonable basis.

If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment.

Substantial authority.   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. Some of the items that may be considered are court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours.

Disclosure statement.   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. You must also have a reasonable basis for treating the item the way you did.

  In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51 (or later update) are considered adequately disclosed on your return without filing Form 8275.

  Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations.

Transaction lacking economic substance.   For more information on economic substance, see section 7701(o).

Foreign financial asset.   For more information on undisclosed foreign financial assets, see section 6662(j).

Reasonable cause.   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. You must also show that you acted in good faith. This does not apply to a transaction that lacks economic substance.

Filing erroneous claim for refund or credit.   You may have to pay a penalty if you file an erroneous claim for refund or credit. The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged.

Frivolous tax submission.   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 I.R.B. 609, available at www.irs.gov/irb/2010-17_IRB/ar13.html.

  You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. This includes altering or striking out the preprinted language above the space provided for your signature.

  This penalty is added to any other penalty provided by law.

Fraud.   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax.

Joint return.   The fraud penalty on a joint return does not apply to a spouse unless some part of the underpayment is due to the fraud of that spouse.

Failure to supply SSN.   If you do not include your SSN or the SSN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. You will also be subject to a penalty of $50 if you do not give your SSN to another person when it is required on a return, statement, or other document.

  For example, if you have a bank account that earns interest, you must give your SSN to the bank. The number must be shown on the Form 1099-INT or other statement the bank sends you. If you do not give the bank your SSN, you will be subject to the $50 penalty. (You also may be subject to “backup” withholding of income tax. See chapter 4.)

  You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect.

Criminal Penalties

You may be subject to criminal prosecution (brought to trial) for actions such as:

  1. Tax evasion,

  2. Willful failure to file a return, supply information, or pay any tax due,

  3. Fraud and false statements,

  4. Preparing and filing a fraudulent return, or

  5. Identity theft.

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.

To reduce your risk:

  • Protect your SSN,

  • Ensure your employer is protecting your SSN, and

  • Be careful when choosing a tax preparer.

If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.

If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, etc., contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 or submit Form 14039.

For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance.

Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the National Taxpayer Advocate helpline at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Deaf or hard-of-hearing individuals can also contact the IRS through relay services such as the Federal Relay Service available at www.gsa.gov/fedrelay.

Protect yourself from suspicious emails or phishing schemes.    Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common form is the act of sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

  The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request detailed personal information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

  If you receive an unsolicited email claiming to be from the IRS, forward the message to: phishing@irs.gov. You may also report misuse of the IRS name, logo, forms or other IRS property to the Treasury Inspector General for Tax Administration toll-free at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at: spam@uce.gov or contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338).

Visit IRS.gov and enter “identity theft” in the search box to learn more about identity theft and how to reduce your risk.


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