Publication 17
For use in Preparing 2012 Returns
Do I Have To File a Return?
Individuals—In GeneralDependentsCertain Children Under Age 19 or Full-Time StudentsSelf-Employed PersonsAliensWho Should FileWhich Form Should I Use?
Form 1040EZForm 1040AForm 1040Does My Return Have To Be on Paper?
IRSWhen Do I Have To File?
Extensions of Time To FileHow Do I Prepare My Return?
When Do I Report My Income and Expenses?Social Security Number (SSN)Presidential Election Campaign FundComputationsAttachmentsThird Party DesigneeSignaturesPaid PreparerRefundsAmount You OweGift To Reduce Debt Held by the PublicName and AddressWhere Do I File?
What Happens After I File?
What Records Should I Keep?Why Keep Records?Kinds of Records to KeepBasic RecordsHow Long to Keep RecordsRefund InformationInterest on RefundsChange of AddressWhat If I Made a Mistake?
Amended Returns and Claims for RefundPenaltiesIdentity TheftMarital Status
Single
Married Filing Jointly
Filing a Joint ReturnMarried Filing Separately
Special RulesHead of Household
Considered UnmarriedKeeping Up a HomeQualifying PersonQualifying Widow(er) With Dependent Child
Exemptions
Personal ExemptionsExemptions for Dependents
Qualifying ChildQualifying RelativeSocial Security Numbers for Dependents
Tax Withholding for 2013
Salaries and WagesTipsTaxable Fringe BenefitsSick PayPensions and AnnuitiesGambling WinningsUnemployment CompensationFederal PaymentsBackup WithholdingEstimated Tax for 2013
Who Does Not Have To Pay Estimated TaxWho Must Pay Estimated TaxHow To Figure Estimated TaxWhen To Pay Estimated TaxHow To Figure Each PaymentHow To Pay Estimated TaxCredit for Withholding and Estimated Tax for 2012
WithholdingEstimated TaxUnderpayment Penalty for 2012
Employee Compensation
Miscellaneous CompensationFringe BenefitsRetirement Plan ContributionsStock OptionsRestricted PropertySpecial Rules for Certain Employees
ClergyMembers of Religious OrdersForeign EmployerMilitaryVolunteersSickness and Injury Benefits
Disability PensionsLong-Term Care Insurance ContractsWorkers' CompensationOther Sickness and Injury BenefitsKeeping a Daily Tip Record
Reporting Tips to Your Employer
Reporting Tips on Your Tax Return
Allocated Tips
General Information
Taxable Interest
U.S. Savings BondsEducation Savings Bond ProgramU.S. Treasury Bills, Notes, and BondsBonds Sold Between Interest DatesInsuranceState or Local Government ObligationsOriginal Issue Discount (OID)When To Report Interest Income
How To Report Interest Income
General Information
Ordinary Dividends
Qualified DividendsDividends Used to Buy More StockMoney Market FundsCapital Gain Distributions
Nondividend Distributions
Liquidating DistributionsDistributions of Stock and Stock RightsOther Distributions
How To Report Dividend Income
Rental Income
Rental Expenses
Repairs and ImprovementsOther ExpensesProperty Changed to Rental Use
Renting Part of Property
Not Rented for Profit
Personal Use of Dwelling Unit (Including Vacation Home)
Dividing ExpensesDwelling Unit Used as a HomeReporting Income and DeductionsDepreciation
Limits on Rental Losses
At-Risk RulesPassive Activity LimitsHow To Report Rental Income and Expenses
Schedule E (Form 1040)General Information
How To ReportCost (Investment in the Contract)
Taxation of Periodic Payments
Simplified MethodTaxation of Nonperiodic Payments
Lump-Sum DistributionsRollovers
Special Additional Taxes
Tax on Early DistributionsTax on Excess AccumulationSurvivors and Beneficiaries
Are Any of Your Benefits Taxable?
How To Report Your Benefits
How Much Is Taxable?Examples
Deductions Related to Your Benefits
Repayments More Than Gross BenefitsBartering
Canceled Debts
ExceptionsHost or Hostess
Life Insurance Proceeds
Endowment Contract ProceedsAccelerated Death BenefitsPublic Safety Officer Killed in the Line of DutyPartnership Income
S Corporation Income
Recoveries
Itemized Deduction RecoveriesRents from Personal Property
Repayments
Royalties
Unemployment Benefits
Welfare and Other Public Assistance Benefits
Other Income
Cost Basis
Real PropertyAdjusted Basis
Increases to BasisDecreases to BasisBasis Other Than Cost
Property Received for ServicesTaxable ExchangesInvoluntary ConversionsNontaxable ExchangesProperty Transferred From a SpouseProperty Received as a GiftInherited PropertyProperty Changed From Personal to Business or Rental UseStocks and BondsSales and Trades
What Is a Sale or Trade?How To Figure Gain or LossNontaxable TradesTransfers Between SpousesRelated Party TransactionsCapital Gains and Losses
Capital or Ordinary Gain or LossCapital Assets and Noncapital AssetsHolding PeriodNonbusiness Bad DebtsWash SalesRollover of Gain From Publicly Traded SecuritiesMain Home
Figuring Gain or Loss
Selling PriceAmount RealizedAdjusted BasisAmount of Gain or LossDispositions Other Than SalesDetermining BasisExcluding the Gain
Maximum ExclusionOwnership and Use TestsReduced Maximum ExclusionBusiness Use or Rental of Home
Reporting the Sale
Special Situations
Recapturing (Paying Back) a Federal Mortgage Subsidy
Reporting Capital Gains and Losses
Capital LossesCapital Gain Tax RatesTraditional IRAs
Who Can Open a Traditional IRA?When and How Can a Traditional IRA Be Opened?How Much Can Be Contributed?When Can Contributions Be Made?How Much Can You Deduct?Nondeductible ContributionsInherited IRAsCan You Move Retirement Plan Assets?When Can You Withdraw or Use IRA Assets?When Must You Withdraw IRA Assets? (Required Minimum Distributions)Are Distributions Taxable?What Acts Result in Penalties or Additional Taxes?Roth IRAs
What Is a Roth IRA?When Can a Roth IRA Be Opened?Can You Contribute to a Roth IRA?Can You Move Amounts Into a Roth IRA?Are Distributions Taxable?General Rules
Instruments Executed After 1984
How To Deduct Alimony Paid
How To Report Alimony Received
Recapture Rule
Student Loan Interest Deduction
Student Loan Interest DefinedCan You Claim the DeductionHow Much Can You DeductHow Do You Figure the DeductionTuition and Fees Deduction
Can You Claim the DeductionWhat Expenses QualifyWho Is an Eligible StudentWho Can Claim a Dependent's ExpensesHow Much Can You DeductEducator Expenses
Standard Deduction Amount
Standard Deduction for Dependents
Who Should Itemize
What Are Medical Expenses?
What Expenses Can You Include This Year?
How Much of the Expenses Can You Deduct?
Whose Medical Expenses Can You Include?
YourselfSpouseDependentDecedentWhat Medical Expenses Are Includible?
Insurance PremiumsMeals and LodgingTransportationDisabled Dependent Care ExpensesHow Do You Treat Reimbursements?
Insurance ReimbursementDamages for Personal Injuries
How Do You Figure and Report the Deduction on Your Tax Return?
What Tax Form Do You Use?Impairment-Related Work Expenses
Health Insurance Costs for Self-Employed Persons
Tests To Deduct Any Tax
Income Taxes
State and Local Income TaxesForeign Income TaxesGeneral Sales Taxes
Real Estate Taxes
Real Estate-Related Items You Cannot DeductPersonal Property Taxes
Taxes and Fees You Cannot Deduct
Where To Deduct
Home Mortgage Interest
Amount DeductiblePointsMortgage Insurance PremiumsForm 1098, Mortgage Interest StatementInvestment Interest
Investment PropertyAllocation of Interest ExpenseLimit on DeductionItems You Cannot Deduct
Personal InterestAllocation of Interest
How To Report
Organizations That Qualify To Receive Deductible Contributions
Types of Qualified OrganizationsContributions You Can Deduct
Contributions From Which You BenefitExpenses Paid for Student Living With YouOut-of-Pocket Expenses in Giving ServicesContributions You Cannot Deduct
Contributions to IndividualsContributions to Nonqualified OrganizationsContributions From Which You BenefitValue of Time or ServicesPersonal ExpensesAppraisal FeesContributions of Property
Determining Fair Market ValueGiving Property That Has Decreased in ValueGiving Property That Has Increased in ValueWhen To Deduct
Limits on Deductions
CarryoversRecords To Keep
Cash ContributionsNoncash ContributionsOut-of-Pocket ExpensesHow To Report
Casualty
Theft
Loss on Deposits
Proof of Loss
Figuring a Loss
Decrease in Fair Market ValueAdjusted BasisInsurance and Other ReimbursementsSingle Casualty on Multiple PropertiesDeduction Limits
$100 Rule10% RuleWhen To Report Gains and Losses
Disaster Area LossHow To Report Gains and Losses
Travel Expenses
Traveling Away From HomeTax HomeTemporary Assignment or JobWhat Travel Expenses Are Deductible?Travel in the United StatesTravel Outside the United StatesConventionsEntertainment Expenses
50% LimitWhat Entertainment Expenses Are Deductible?What Entertainment Expenses Are Not Deductible?Gift Expenses
Transportation Expenses
Car ExpensesRecordkeeping
How To Prove ExpensesHow Long To Keep Records and ReceiptsHow To Report
ReimbursementsCompleting Forms 2106 and 2106-EZSpecial RulesQualifying Work-Related Education
Education Required by Employer or by LawEducation To Maintain or Improve SkillsEducation To Meet Minimum RequirementsEducation That Qualifies You for a New Trade or BusinessWhat Expenses Can Be Deducted
Transportation ExpensesTravel ExpensesNo Double Benefit AllowedReimbursements
Deducting Business Expenses
Self-Employed PersonsEmployeesPerforming Artists and Fee-Basis OfficialsImpairment-Related Work ExpensesRecordkeeping
Deductions Subject to the 2% Limit
Unreimbursed Employee Expenses (Line 21)Tax Preparation Fees (Line 22)Other Expenses (Line 23)Deductions Not Subject to the 2% Limit
List of DeductionsNondeductible Expenses
List of Nondeductible ExpensesFiguring Your Tax
Alternative Minimum Tax (AMT)
Tax Figured by IRS
Filing the ReturnWhich Parent's Return To Use
Parents Who Do Not File a Joint ReturnParent's Election To Report Child's Interest and Dividends
Effect of Making the ElectionFiguring Child's IncomeFiguring Additional TaxIllustrated ExampleTax for Certain Children Who Have Investment Income of More Than
$1,900
Providing Parental Information (Form 8615, lines A–C)Step 1. Figuring the Child's Net Investment Income (Form 8615, Part
I)Step 2. Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part
II)Step 3. Figuring the Child's Tax (Form 8615, Part III)Illustrated ExampleTests To Claim the Credit
Qualifying Person TestEarned Income TestWork-Related Expense TestJoint Return TestProvider Identification TestHow To Figure the Credit
Figuring Total Work-Related ExpensesEarned Income LimitDollar LimitAmount of CreditHow To Claim the Credit
Employment Taxes for Household Employers
Are You Eligible for the Credit?
Qualified IndividualIncome LimitsCredit Figured for You
Figuring the Credit Yourself
Step 1. Determine Initial AmountStep 2. Total Certain Nontaxable Pensions and BenefitsStep 3. Determine Excess Adjusted Gross IncomeStep 4. Determine the Total of Steps 2 and 3Step 5. Determine Your CreditQualifying Child
Amount of Credit
Limits on the CreditClaiming the Credit
Additional Child Tax Credit
Who Can Claim an Education Credit
Qualified Education Expenses
No Double Benefit AllowedAdjustments to Qualified Education ExpensesDo You Qualify for the Credit?
If Improper Claim Made in Prior YearPart A. Rules for Everyone
Rule 1. Your AGI Must Be Less Than:Rule 2. You Must Have a Valid Social Security Number (SSN)Rule 3. Your Filing Status Cannot Be Married Filing SeparatelyRule 4. You Must Be a U.S. Citizen or Resident Alien All YearRule 5. You Cannot File Form 2555 or Form 2555-EZRule 6. Your Investment Income Must Be $3,200 or LessRule 7. You Must Have Earned IncomePart B. Rules If You Have a Qualifying Child
Rule 8. Your Child Must Meet the Relationship, Age, Residency, and Joint Return
TestsRule 9. Your Qualifying Child Cannot Be Used By More Than One Person To Claim the
EICRule 10. You Cannot Be a Qualifying Child of Another TaxpayerPart C. Rules If You Do Not Have a Qualifying Child
Rule 11. You Must Be at Least Age 25 but Under Age 65Rule 12. You Cannot Be the Dependent of Another PersonRule 13. You Cannot Be a Qualifying Child of Another TaxpayerRule 14. You Must Have Lived in the United States More Than Half of the
YearPart D. Figuring and Claiming the EIC
Rule 15. Your Earned Income Must Be Less Than:IRS Will Figure the EIC for YouHow To Figure the EIC YourselfExamples
Example 1. John and Janet Smith (Form 1040A)Example 2. Kelly Green (Form 1040EZ)Nonrefundable Credits
Adoption CreditAlternative Motor Vehicle CreditAlternative Fuel Vehicle Refueling Property CreditCredit to Holders of Tax Credit BondsForeign Tax CreditMortgage Interest CreditNonrefundable Credit for Prior Year Minimum TaxPlug-in Electric Drive Motor Vehicle CreditPlug-in Electric Vehicle CreditResidential Energy CreditsRetirement Savings Contributions Credit (Saver's Credit)Refundable Credits
Credit for Tax on Undistributed Capital GainHealth Coverage Tax CreditRefundable Credit for Prior Year Minimum TaxCredit for Excess Social Security Tax or Railroad Retirement Tax
WithheldYour Rights as a Taxpayer
How To Get Tax Help
