Ernst & Young Tax Guide

File your taxes with the help of an authoritative leader in the field If you wish to personally prepare your 2013 federal tax return, but seek the guidance of a trusted name in this field, look no further than the Ernst & Young Tax Guide 2014 . Drawing from the tax experience and knowledge base of Ernst & Young professionals, this reliable resource not only covers how to file your federal income tax return but also provides valuable insights on how to avoid common errors and maximize your federal tax deductions. Designed in a straightforward and accessible style, the Ernst & Young Tax Guide 2014 contains essential information that will help you save time and money as you prepare your 2013 federal tax return. Throughout the book, you'll find hundreds of examples illustrating how tax laws work, as well as sample tax forms and schedules to show you how to fill out your return line by line. Includes 50 of the most commonly overlooked deductions to take into account when preparing your return Provides specific solutions in its special contents index for taxpayers in particular circumstances, including families, homeowners, investors, entrepreneurs, senior citizens, and military personnel Contains an individual tax organizer, 2014 tax calendar, and a summary of expiring provisions Provides checklists of key 2013 tax breaks and deductions you may be eligible to use Comprehensive yet direct, the Ernst & Young Tax Guide 2014 has everything you'll need to personally prepare your 2013 federal tax return.

Table of Contents:
2014 tax calendar ii How to use this guide v Special contents vii Changes in the tax law you should know about x Summary of provisions expiring at the end of 2013 and beyond xviii Important 2013 tax reminders xix How to avoid 25 common errors xxi 50 of the most easily overlooked deductions xxii Individual tax organizer xxiii Income and expense records you should keep in addition to your income tax return xxxi Part I * The income tax return 1 CHAPTER 1 * Filing information 3 Do I Have To File a Return? 5 Which Form Should I Use? 11 Does My Return Have To Be on Paper? 12 When Do I Have To File? 17 Where Do I File? 32 What Happens After I File? 32 What If I Made a Mistake? 37 CHAPTER 2 * Filing status 45 Marital Status 46 Single 48 Married Filing Jointly 48 Married Filing Separately 51 Head of Household 53 CHAPTER 3 * Personal exemptions and dependents 59 Exemptions 61 Phaseout of Exemptions 87 Social Security Numbers for Dependents 88 CHAPTER 4 * Tax withholding and estimated tax 89 Tax Withholding for 2014 93 Estimated Tax for 2014 106 Credit for Withholding and Estimated Tax for 2013 113 Underpayment Penalty for 2013 117 Part II * Income 119 CHAPTER 5 * Wages, salaries, and other earnings 121 Employee Compensation 123 Miscellaneous Compensation 124 Special Rules for Certain Employees 139 Sickness and Injury Benefits 143 CHAPTER 6 * Tip income 147 Keeping a Daily Tip Record 148 Reporting Tips to Your Employer 149 Allocated Tips 153 CHAPTER 7 * Interest income 157 General Information 159 Taxable Interest 165 When To Report Interest Income 186 How To Report Interest Income 187 CHAPTER 8 * Dividends and other corporate distributions 190 General Information 194 Ordinary Dividends 198 Capital Gain Distributions 203 Nondividend Distributions 204 Other Distributions 207 How To Report Dividend Income 209 CHAPTER 9 * Rental income and expenses 213 Rental Income 214 Rental Expenses 217 Repairs and Improvements 218 Property Changed to Rental Use 221 Renting Part of Property 221 Not Rented for Profit 222 Personal Use of Dwelling Unit (Including Vacation Home) 222 Depreciation 229 Limits on Rental Losses 231 How To Report Rental Income and Expenses 234 CHAPTER 10 * Retirement plans, pensions, and annuities 238 General Information 239 Cost (Investment in the Contract) 245 Taxation of Periodic Payment 246 Taxation of Nonperiodic Payments 249 Rollovers 252 Special Additional Taxes 259 Survivors and Beneficiaries 265 CHAPTER 11 * Social security and equivalent railroad retirement benefits 266 Are Any of Your Benefits Taxable? 267 How To Report Your Benefits 270 Examples 272 Deductions Related to Your Benefits 276 Repayments More Than Gross Benefits 276 CHAPTER 12 * Other income 279 Bartering 281 Canceled Debts 281 Host or Hostess 284 Life Insurance Proceeds 284 Partnership Income 286 S Corporation Income 288 Recoveries 290 Rents from Personal Property 293 Repayments 293 Royalties 295 Unemployment Benefits 296 Welfare and Other Public Assistance Benefit 297 Other Sickness and Injury Benefits 299 Other Income 300 Passive Activity Limitations and At-Risk Limitations 314 Part III * Gains and losses 319 CHAPTER 13 * Basis of property 321 Cost Basis 322 Adjusted Basis 324 Basis Other Than Cost 327 CHAPTER 14 * Sale of property 342 Sales and Trades 343 Capital Gains and Losses 359 CHAPTER 15 * Selling your home 382 Main Home 384 Figuring Gain or Loss 385 Excluding the Gain 390 Business Use or Rental of Home 396 Reporting the Sale 400 Recapturing (Paying Back) a Federal Mortgage Subsidy 401 CHAPTER 16 * Reporting gains and losses 403 Reporting Capital Gains and Losses 406 Part IV * Adjustments to income 423 CHAPTER 17 * Individual retirement arrangements (IRAs) 425 Traditional IRAs 428 Roth IRAs 455 Simplified Employee Pensions (SEPs) 462 Savings Incentive Match Plans for Employees (SIMPLE) 463 CHAPTER 18 * Alimony 464 General Rules 465 Instruments Executed After 1984 467 How To Deduct Alimony Paid 472 How To Report Alimony Received 472 Recapture Rule 472 Other Alimony Issues and Rules 474 CHAPTER 19 * Education related adjustments 478 Student Loan Interest Deduction 479 Tuition and Fees Deduction 482 Educator Expenses 487 CHAPTER 20 * Moving expenses 488 Who Can Deduct Moving Expenses 489 Members of the Armed Forces 495 Retirees or Survivors Who Move to the United States 496 Deductible Moving Expenses 497 Nondeductible Expenses 499 How and When To Report 500 When To Deduct Expenses 501 Part V * Standard and itemized deductions 505 CHAPTER 21 * Standard deduction 507 Standard Deduction Amount 508 Standard Deduction for Dependents 510 Who Should Itemize 511 CHAPTER 22 * Medical and dental expenses 514 What Are Medical Expenses? 515 What Expenses Can You Include This Year? 516 How Much of the Expenses Can You Deduct? 516 Whose Medical Expenses Can You Include? 517 What Medical Expenses Are Includible? 520 How Do You Treat Reimbursements? 528 Damages for Personal Injuries 531 How Do You Figure and Report the Deduction on Your Tax Return? 531 Impairment-Related Work Expenses 532 Health Insurance Costs for Self-Employed Persons 533 CHAPTER 23 * Taxes you may deduct 535 Tests to Deduct Any Tax 537 Income Taxes 537 General Sales Taxes 542 Real Estate Taxes 542 Personal Property Taxes 548 Taxes and Fees You Cannot Deduct 548 Where To Deduct 549 CHAPTER 24 * Interest expense 550 Home Mortgage Interest 551 Investment Interest 564 Items You Cannot Deduct 567 Allocation of Interest 570 How To Report 572 CHAPTER 25 * Contributions Organizations That Qualify To Receive 574 Deductible Contributions 576 Contributions You Can Deduct 578 Contributions You Cannot Deduct 585 When To Deduct 595 Limits on Deductions 596 Records To Keep 599 How To Report 604 CHAPTER 26 * Nonbusiness casualty and theft losses 605 Casualty 607 Theft 610 Loss on Deposits 612 Proof of Loss 613 Figuring a Loss 614 Deduction Limits 623 When To Report Gains and Losses 627 How To Report Gains and Losses 629 CHAPTER 27 * Car expenses and other employee business expenses 630 Travel Expenses 632 Entertainment Expenses 644 Gift Expenses 651 Transportation Expenses 652 Record keeping 661 How To Report 665 CHAPTER 28 * Tax benefits for work-related education 679 Qualifying Work-Related Education 681 Education To Meet Minimum Requirements 683 What Expenses Can Be Deducted 687 Reimbursements 691 Deducting Business Expenses 691 Recordkeeping 692 CHAPTER 29 * Miscellaneous deductions 693 Deductions Subject to the 2% Limit 694 Deductions Not Subject to the 2% Limit 710 Nondeductible Expenses 712 CHAPTER 30 * Limit on itemized deductions 718 Part VI * Figuring your taxes and credits 723 CHAPTER 31 * How to figure your tax 725 Figuring Your Tax 727 Alternative Minimum Tax 730 Additional Medicare Tax 736 Net Investment Income Tax (NIIT) 736 Tax Figured by IRS 737 CHAPTER 32 * Tax on investment income of certain children 741 Which Parent's Return To Use 743 Parent's Election To Report Child's Interest and Dividends 743 Tax for Certain Children Who Have Investment Income of More Than $2,000 748 CHAPTER 33 * Child and dependent care credit 755 Tests To Claim the Credit 756 How To Figure the Credit 765 How To Claim the Credit 771 Employment Taxes for Household Employers 772 CHAPTER 34 * Credit for the elderly or the disabled 776 Are You Eligible for the Credit? 777 Figuring the Credit Yourself 781 CHAPTER 35 * Child tax credit 786 Checking your withholding 786 Amount of Credit 787 Claiming the Credit 788 Additional Child Tax Credit 788 CHAPTER 36 * Education credits and other education tax benefits 789 Who Can Claim an Education Credit 790 Qualified Education Expenses 792 CHAPTER 37 * Other credits including the earned income credit 801 Nonrefundable Credits 803 Refundable Credits 811 Earned Income Credit (EIC) 816 Reminders 816 Do You Qualify for the Credit? 817 Part A. Rules for Everyone 818 Part B. Rules If You Have a Qualifying Child 822 Part C. Rules If You Do Not Have a Qualifying Child 829 Part D. Figuring and Claiming the EIC 831 Examples 832 Part VII * Special situations and tax planning 837 CHAPTER 38 * Self-employment income: How to file Schedule C 839 Who Must File Schedule C 840 What Is Included in Net Self-Employment Earnings? 844 How to Determine Items of Income and Expenses 846 How to Complete Schedule C 849 Sales of Business Property Used in Your Business 863 Business Tax Credit 863 Special Situations 864 How to Complete Schedule SE Line by Line, Briefly 864 CHAPTER 39 * Mutual funds Tax 872 Treatment of Distributions 875 Sales, Exchanges, and Redemptions 881 Keeping Track of Your Basis 882 Gains and Losses 888 Holding Period 888 How to Figure Gains and Losses on Form 8949 and Schedule D 890 Capital Losses 890 Investment Expenses 891 CHAPTER 40 * What to do if you employ domestic help 893 Reminder 894 Employment Taxes for Household Employers 894 Reporting and Paying Taxes on Wages Paid to Household Employees 900 CHAPTER 41 * U.S. citizens working abroad: Tax treatment of foreign earned income 905 How to Qualify for the Foreign Earned Income Exclusion 905 The Foreign Earned Income Exclusion 906 The Foreign Housing Exclusion 908 Employer-Provided Meals and Lodging 909 Foreign Tax Credit 909 CHAPTER 42 * Foreign citizens living in the United States 912 Determining Your Status 912 How Resident Aliens Are Taxed 914 Rules for Individuals Giving Up U.S. Citizenship or U.S. Residency 915 How Nonresident Aliens Are Taxed 918 Departing from the United States 920 CHAPTER 43 * Decedents: Dealing with the death of a family member 921 Personal Representative 922 Final Return for the Decedent 923 Tax Effect on Others 932 CHAPTER 44 * Estate and gift tax planning 938 Getting Started 938 Estate Tax Fundamentals 939 How Your Estate Is Taxed 941 The Fundamentals of the Gift Tax 944 The Generation-Skipping Transfer Tax 949 How to Use Trusts 949 How to Raise Cash to Pay Estate Taxes 951 Concerns Regarding Community Property 952 Estate Planning--Steps to Take Now 952 CHAPTER 45 * Everything you need to know about e-filing 953 Information You'll Need to E-File 954 Making Tax Payments 956 Methods of E-Filing 957 CHAPTER 46 * If your return is examined 960 IRS Declaration of Taxpayer Rights 960 Examinations, Appeals, Collections, and Refunds 961 The Examination Process 962 Appeals 969 Collections 973 Potential Third Party Contacts 973 Claims for Refunds 973 Past-Due Taxes 974 CHAPTER 47 * Planning ahead for 2014 and beyond 976 Tax Provisions Expiring at the End of 2013 977 Inflation Adjustments for 2014 979 Affordable Care Act (ACA) Individual Provisions 979 A Summary for 2014 and Beyond 985 CHAPTER 48 * 2013 Tax rate schedules 986 Index 988