2004 Instructions For Form 1040 (ALL) P 72 I1040

User Manual: P-72

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Tuition and Fees Deduction
Expanded
You may be able to deduct up to
$4,000 for qualified tuition and fees.
Health Savings Accounts
(HSAs)
You may be able to take a deduction if
contributions were made to your HSA for
2004.
Sales Tax Deduction
You can elect to deduct state and local
general sales taxes instead of state and
local income taxes as an itemized
deduction on Schedule A.
For details on these and other changes, see page 11.
4
I.R.S. SPECIFICATIONS TO BE REMOVED BEFORE PRINTING
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT
Layer 1
Color=Solid Black
Department of the Treasury
Internal Revenue Service
www.irs.gov
Search
http://www.irs.gov/
Search
http://www.irs.gov/
IRS.gov
IRS.gov Home
For details on these and other changes, see page 11.
With Consider Your Taxes Done
You surf the web, email your friends,
book travel, and bank online. Why
not file your tax return the same way.
For details, see page 3 or go to www.irs.gov.
Explore “Free File” and other
electronic e-file options.
TLS, have you
transmitted all R
text files for this
cycle update?
Date
Action
Revised proofs
requested
Date Signature
O.K. to print
Additional Child Tax Credit
Expanded
You may be able to take a larger
additional child tax credit.
INSTRUCTIONS TO PRINTERS
PACKAGE 1040-OTC, FOLIO 1 OF 132
MARGINS; TOP 13mm (1⁄2"), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216mm (81⁄2") x 279mm (11")
PERFORATE: ON FOLD
Note. This booklet does not contain any tax forms.
1040
Including Instructions for Schedules A, B,
C, D, E, F, J, and SE
2004
Instructions
Cat. No. 11325E
Page 2 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Dear Taxpayer,
A Message From
the Commissioner As our nation moves forward in this still young century, the Internal Revenue
Service will focus on three areas of tax administration:
•Improving taxpayer service;
•Enhancing enforcement of the tax law; and
•Modernizing the IRS through its people, processes, and technology.
Our working equation at the IRS is simple: service plus enforcement equals
compliance. Not service or enforcement, but service and enforcement. We must
do both in a balanced and consistent manner, with full respect for, and attention
to, taxpayer rights.
By service, we mean helping people understand their federal tax obligations
and facilitating their participation in the tax system. Enforcing the law is
equally essential to our system of individual self-assessment. Americans need to
be confident that when they pay their taxes, their neighbors and competitors are
doing the same.
As you prepare your taxes, I encourage you to file electronically. Last year,
more than 61 million Americans did. And we expect even more to file
electronically this year. E-file benefits both the taxpayer and the government.
E-file promotes greater reliability and faster processing. If you’re getting a
refund, you’ll get it sooner.
To learn more, go online. Check out
www.irs.gov
and click on “1040
Central” for the tax forms, information, and updates you need. For example,
you can find out whether you are eligible for the earned income credit. Also,
like more than 23 million people last year, you can check the status of your
refund online. Just click on “Where’s My Refund?”
I hope this tax booklet is useful to you. For further information, you may
contact us at
www.irs.gov
or call our toll-free numbers 1-800-829-1040 for
individuals and 1-800-829-4933 for businesses.
Sincerely,
Mark W. Everson
The IRS Mission
Provide America’s taxpayers top quality service by helping them understand and meet their tax
responsibilities and by applying the tax law with integrity and fairness to all.
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At least 60 percent of taxpayers are eligible to use free commercial online tax preparation software to e-file.●
What is IRS e-file?
What are the benefits?
It’s the fastest, easiest, and most convenient way to file your income tax return electronically. So easy, over 61 million
taxpayers preferred e-file over filing a paper income tax return last year. Visit the IRS website at www.irs.gov/efile for
all the details and latest information.
Free File Options!
Visit www.irs.gov to see if you qualify and to access these free services offered by the tax software industry (not
the IRS).
●
Get your refund in half the time as paper filers do, even faster and safer with direct deposit. See page 54. ●
Fast! Easy! Convenient!
Sign electronically and file a completely paperless return. See page 56.●
Receive an electronic proof of receipt within 48 hours that the IRS received your return.●
If you owe, you can e-file and authorize an electronic funds withdrawal or pay by credit card. If you e-file before
April 15, 2005, you can schedule an electronic funds withdrawal from your checking or savings account as late as
April 15, 2005. See page 55.
●
Prepare and file your federal and state returns together and save time.●
IRS computers quickly and automatically check for errors or other missing information.●
Accurate! Secure!
The chance of being audited does not differ whether you e-file or file a paper income tax return.●
Your bank account information is safeguarded along with other tax return information. The IRS does not have
access to credit card numbers.
●
consider it done
How to e-file?
Many tax professionals electronically file tax returns
for their clients. As a taxpayer, you have two options:
Use an Authorized IRS e-file
Provider
●You can prepare your return, take it to an
Authorized IRS e-file Provider, and have the provider
transmit it electronically to the IRS, or
●You can have a tax professional prepare your return
and transmit it for you electronically.
Tax professionals can charge a fee for IRS e-file.
Fees can vary depending on the professional and the
specific services rendered.
You can file your income tax return in a fast, easy,
convenient way using your personal computer. A
computer with a modem or 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. Visit www.irs.gov for details.
Use a Personal Computer
IRS approved tax preparation software is available
for online use on the Internet, for download from the
Internet, and in retail stores. Visit www.irs.gov/efile for
details.
If you do not qualify for the Free File options, visit
our Partners Page for partners that offer other free or
low-cost filing options at www.irs.gov/efile.
Visit the IRS website at www.irs.gov/efile for details.
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16
Other gains or (losses). Attach Form 4797
Your social security number
Other income. List type and amount (see page 24)
Unemployment compensation
Total number of exemptions claimed
Tax Return Page Reference
Questions about what to put on a line? Help is on the page number in the circle.
22
19
FOR REFERENCE ONLY—DO NOT FILE
20
Department of the Treasury—Internal Revenue Service
1040
U.S. Individual Income Tax Return
OMB No. 1545-0074
For the year Jan. 1–Dec. 31, 2004, or other tax year beginning , 2004, ending , 20
Last nameYour first name and initial
(See
instructions
on page 16.)
L
A
B
E
L
H
E
R
E
Last name Spouse’s social security numberIf a joint return, spouse’s first name and initial
Use the IRS
label.
Otherwise,
please print
or type.
Home address (number and street). If you have a P.O. box, see page 16. Apt. no.
City, town or post office, state, and ZIP code. If you have a foreign address, see page 16.
Presidential
Election Campaign
1Single
Filing Status
Married filing jointly (even if only one had income)2
Check only
one box.
3
Qualifying widow(er) with dependent child (see page 17)
6a Yourself. If someone can claim you as a dependent, do not check box 6a
Exemptions
Spouseb
(4) if qualifying
child for child tax
credit (see page 18)
Dependents:c
(2) Dependent’s
social security number
(3) Dependent’s
relationship to
you
(1) First name Last name
If more than four
dependents, see
page 18.
d
7
Wages, salaries, tips, etc. Attach Form(s) W-2
7
8a
8a Taxable interest. Attach Schedule B if required
Income
8b
b Tax-exempt interest. Do not include on line 8a
Attach Form(s)
W-2 here. Also
attach Forms
W-2G and
1099-R if tax
was withheld.
9a
9a Ordinary dividends. Attach Schedule B if required
10
10 Taxable refunds, credits, or offsets of state and local income taxes (see page 20)
11
11 Alimony received
12
12 Business income or (loss). Attach Schedule C or C-EZ
Enclose, but do
not attach, any
payment. Also,
please use
Form 1040-V.
13
13 Capital gain or (loss). Attach Schedule D if required. If not required, check here
䊳
14
14
15a 15b
IRA distributions b
Taxable amount (see page 22)
15a
16b16a
Pensions and annuities b
Taxable amount (see page 22)
16a
17
17
Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E
18
18 Farm income or (loss). Attach Schedule F
19
19
20b20a b
Taxable amount (see page 24)
20a
Social security benefits
21
21
22 Add the amounts in the far right column for lines 7 through 21. This is your total income
䊳
22
25
IRA deduction (see page 26)
23
27
26
One-half of self-employment tax. Attach Schedule SE
29
Self-employed health insurance deduction (see page 30)
27
30
29
Self-employed SEP, SIMPLE, and qualified plans
31
30
Penalty on early withdrawal of savings
32
31
Alimony paid bRecipient’s SSN
䊳
35
Add lines 23 through 34a
32
Subtract line 35 from line 22. This is your adjusted gross income
䊳
33
Adjusted
Gross
Income
36
If you did not
get a W-2,
see page 19.
Form
Married filing separately. Enter spouse’s SSN above
and full name here.
䊳
Cat. No. 11320B
䊳
其
Label
Form 1040 (2004)
IRS Use Only—Do not write or staple in this space.
Head of household (with qualifying person). (See page 17.) If
the qualifying person is a child but not your dependent, enter
this child’s name here.
䊳
Moving expenses. Attach Form 3903
25
26
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see page 75.
Boxes checked
on 6a and 6b
No. of children
on 6c who:
Dependents on 6c
not entered above
Add numbers on
lines above
䊳
●lived with you
●did not live with
you due to divorce
or separation
(see page 18)
34a 34a
Student loan interest deduction (see page 28)
33
35
䊱䊱
Important!
NoYes
Note. Checking “Yes” will not change your tax or reduce your refund.
Do you, or your spouse if filing a joint return, want $3 to go to this fund?
䊳
You must enter
your SSN(s) above.
YesNo
SpouseYou
(See page 16.)
(99)
Tuition and fees deduction (see page 29)
36
4
5
23
Educator expenses (see page 26)
9b
bQualified dividends (see page 20)
20
04
24
Certain business expenses of reservists, performing artists, and
fee-basis government officials. Attach Form 2106 or 2106-EZ
24
28
Health savings account deduction. Attach Form 8889
28
16
16
18
18
57
16
55
16
17
18 18
18
19
19
20
20
21
21
21
22
22
22
24
24
B-1
20
22
24
24
26
26
28
29
29
29
30
30
30
30
30
31
31
26
NEW
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Itemized deductions (from Schedule A) or your standard deduction (see left margin)
If your spouse itemizes on a separate return or you were a dual-status alien, see page 31 and check here
䊳
Amount you owe. Subtract line 70 from line 62. For details on how to pay, see page 55
䊳
If line 70 is more than line 62, subtract line 62 from line 70. This is the amount you overpaid
36
Tax Return Page Reference
Questions about what to put on a line? Help is on the page number in the circle.
56
56
31
31
33
35
36
36
36
37
40
54
40
54
55
54
39
39
40
39
39
31
54
36
A-1
33
39
39
56
54
54
56
55
55
39
41
Married filing
jointly or
Qualifying
widow(er),
$9,700
Head of
household,
$7,150
Add lines 63, 64, 65a, and 66 through 69. These are your total payments
䊳
Page
2
Form 1040 (2004)
Amount from line 36 (adjusted gross income)37 37
Check
if:
38a
Tax and
Credits
38a
Single or
Married filing
separately,
$4,850
b38b
39 39
40
Subtract line 39 from line 37
40
41
If line 37 is $107,025 or less, multiply $3,100 by the total number of exemptions claimed on
line 6d. If line 37 is over $107,025, see the worksheet on page 33
41
42
Taxable income. Subtract line 41 from line 40. If line 41 is more than line 40, enter -0-42
43 43
48
52
Education credits. Attach Form 8863
47
Other credits. Check applicable box(es):
46
55
56
Add lines 46 through 54. These are your total credits
Subtract line 55 from line 45. If line 55 is more than line 45, enter -0-
䊳
55
Self-employment tax. Attach Schedule SE
56
Other
Taxes
57
71
Social security and Medicare tax on tip income not reported to employer. Attach Form 4137
59
Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required
58
60
Add lines 56 through 61. This is your total tax
䊳
61 61
Federal income tax withheld from Forms W-2 and 109963 63
64
2004 estimated tax payments and amount applied from 2003 return
64
Payments
65a
68
Amount paid with request for extension to file (see page 54)
67
66
Excess social security and tier 1 RRTA tax withheld (see page 54)
68
70
Other payments from:
69
72a
72a
73 73
74 74
Amount of line 71 you want refunded to you
䊳
Refund
75
Amount of line 71 you want applied to your 2005 estimated tax
䊳
Estimated tax penalty (see page 55)
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and
belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
75
You were born before January 2, 1940, Blind.
Spouse was born before January 2, 1940, Blind.
aForm 3800
b
Form 8801
cSpecify
a
Form 2439
b
Form 4136
59
Household employment taxes. Attach Schedule H
60
69
Amount
You Owe
Sign
Here
DateYour signature
Keep a copy
for your
records.
DateSpouse’s signature. If a joint return, both must sign.
Preparer’s SSN or PTINDate
Preparer’s
signature Check if
self-employed
Paid
Preparer’s
Use Only
Firm’s name (or
yours if self-employed),
address, and ZIP code
EIN
Phone no.
䊳
䊳
䊳
Your occupation
Tax (see page 33). Check if any tax is from:
b
Direct deposit?
See page 54
and fill in 72b,
72c, and 72d.
Routing number
Account number
c
Checking Savings
aForm(s) 8814 Form 4972
b
d
䊳
䊳
70
53
Retirement savings contributions credit. Attach Form 8880
57
58
Advance earned income credit payments from Form(s) W-2
71
䊳
Child tax credit (see page 37)
Credits from:
51
Additional child tax credit. Attach Form 8812
66
67
Standard
Deduction
for—
Joint return?
See page 17.
Daytime phone number
()
Earned income credit (EIC)
Credit for the elderly or the disabled. Attach Schedule R
44
45
Alternative minimum tax (see page 35). Attach Form 6251
Add lines 43 and 44
䊳
Credit for child and dependent care expenses. Attach Form 2441
49
If you have a
qualifying
child, attach
Schedule EIC.
44
45
65a
Spouse’s occupation
()
Form
1040
(2004)
●People who
checked any
box on line
38a or 38b or
who can be
claimed as a
dependent,
see page 31.
●All others:
Designee’s
name
䊳
Do you want to allow another person to discuss this return with the IRS (see page 56)?
Third Party
Designee
Phone
no.
䊳
()
Yes. Complete the following. No
Personal identification
number (PIN)
䊳
54
Foreign tax credit. Attach Form 1116 if required
54
aForm 8396 b
Form 8859
50
Adoption credit. Attach Form 8839
62 62
Type:
c
Form 8885
Total boxes
checked
䊳
兵其
50
48
52
47
46
53
51
49
65b
Nontaxable combat pay election
䊳
b
54
NEW 43
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Page 7 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Quick and Easy Access to Tax Help and Forms
If you live outside the United States, see Pub. 54 to find out how to get help and forms.
TIP
Internet Phone
You can access the IRS website 24 hours a day, You can order forms and publications and
7 days a week, at
www.irs.gov
to: receive automated information by phone.
Forms and publications. Call 1-800-TAX-FORM
•Access commercial tax preparation and
e-file
(1-800-829-3676) during the hours shown on page 10 to order cur-
services available for free to eligible taxpayers; rent year forms, instructions, and publications, and prior year forms
and instructions. You should receive your order within 10 days.
•Check the status of your 2004 refund;
TeleTax topics. Call 1-800-829-4477 24 hours a day, 7 days a
•Download forms, instructions, and publications; week, to listen to pre-recorded messages covering about 150 tax
topics. See pages 8 and 9 for a list of the topics.
•Order IRS products online;
Refund information. You can check the status of your 2004 refund
•Research your tax questions online; 24 hours a day, 7 days a week. See page 8 for details.
•Search publications online by topic or keyword; CD-ROM
•Figure your withholding allowances using our W-4
calculator; and Order Pub. 1796, Federal Tax Products on
CD-ROM, and get:
•Sign up to receive local and national tax news by email.
•Current year forms, instructions, and publications;
Fax •Prior year forms, instructions, and publications;
You can get over 100 of the most requested •Frequently requested tax forms that can be filled in
forms and instructions 24 hours a day, 7 days a electronically, printed out for submission, and saved for
week, by fax. Just call 703-368-9694 from the recordkeeping; and
telephone connected to the fax machine. When •The Internal Revenue Bulletin.
you call, you will hear instructions on how to use
the service. For help with transmission problems, call Buy the CD-ROM on the Internet at
www.irs.gov/cdorders
from
703-487-4608. the National Technical Information Service (NTIS) for $22 (no
handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free
to buy the CD-ROM for $22 (plus a $5 handling fee).
Long-distance charges may apply.
Other ways to get help. See page 58 for information.
Mail
You can order forms, instructions, and publica-
tions by completing the order blank on page 73.
You should receive your order within 10 days
after we receive your request.
Walk-In
You can pick up some of the most requested
forms, instructions, and publications at many
IRS offices, post offices, and libraries. Some gro-
cery stores, copy centers, city and county govern-
ment offices, credit unions, and office supply
stores have a collection of reproducible tax forms available to pho-
tocopy or print from a CD-ROM.
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You can check on the status of your 2004 refund if it has been at least 6 weeks from the date
you filed your return (3 weeks if you filed electronically). But if you filed Form 8379 with
Refund your return, allow 14 weeks (11 weeks if you filed electronically).
Information
Be sure to have a copy of your 2004 tax •Call 1-800-829-1954 during the hours Do not send in a copy of your return un-
return available because you will need to shown on page 10. less asked to do so.
know the filing status and the exact To get a refund, you generally must file
Refunds are sent out weekly on
whole-dollar amount of your refund. Then, your return within 3 years from the date the
Fridays. If you check the status
do one of the following. return was due (including extensions).
of your refund and are not given
•Go to
www.irs.gov
and click on
TIP
the date it will be issued, please
Where’s My Refund
.
wait until the next week before checking
•Call 1-800-829-4477 24 hours a day,
back.
7 days a week, for automated refund infor-
mation.
What Is
TeleTax?
Recorded Tax Topics by Internet
TeleTax topics are also available through
Information the IRS website at
www.irs.gov
.
Recorded tax information is available 24
hours a day, 7 days a week. Select the num-
ber of the topic you want to hear. Then, call
1-800-829-4477. Have paper and pencil
handy to take notes.
Topic Topic
TeleTax Topics No. Subject No. Subject
All topics are available in Spanish. 156 Copy of your tax return—How to 303 Checklist of common errors when
get one preparing your tax return
Topic 157 Change of address — How to notify 304 Extensions of time to file your tax
No. Subject IRS return
158 Ensuring proper credit of payments 305 Recordkeeping
159 Prior year(s) Form W-2 — How to 306 Penalty for underpayment of
IRS Help Available get a copy of estimated tax
101 IRS services — Volunteer tax 307 Backup withholding
Collection
assistance, toll-free telephone, 308 Amended returns
walk-in assistance, and outreach 309 Roth IRA contributions
201 The collection process
programs 310 Coverdell education savings
202 What to do if you can’t pay your tax
102 Tax assistance for individuals with accounts
203 Failure to pay child support and
disabilities and the hearing impaired 311 Power of attorney information
federal nontax and state income tax
103 Intro. to federal taxes for small 312 Disclosure authorizations
obligations
businesses/self-employed 313 Qualified tuition programs (QTPs)
204 Offers in compromise
104 Taxpayer Advocate program — Help 205 Innocent spouse relief (and Filing Requirements, Filing
for problem situations separation of liability and equitable Status, and Exemptions
105 Public libraries — Tax information relief)
and reproducible tax forms 351 Who must file?
Alternative Filing Methods 352 Which form — 1040, 1040A, or
IRS Procedures 1040EZ?
251 Electronic signatures 353 What is your filing status?
252 Electronic filing
151 Your appeal rights 354 Dependents
253 Substitute tax forms
152 Refunds — How long they should 355 Estimated tax
254 How to choose a paid tax preparer
take 356 Decedents
255 TeleFile
153 What to do if you haven’t filed your 357 Tax information for parents of
256 Filing business returns electronically
tax return kidnapped children
154 2004 Form W-2 and Form General Information
1099-R—What to do if not received Types of Income
155 Forms and publications — How to 301 When, where, and how to file
order 302 Highlights of tax changes 401 Wages and salaries
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Topic Topic
TeleTax Topics No. Subject No. Subject
(Continued) 509 Business use of home 755 Employer identification number
510 Business use of car (EIN)—How to apply
Topic 511 Business travel expenses 756 Employment taxes for household
No. Subject 512 Business entertainment expenses employees
402 Tips 513 Educational expenses 757 Form 941 — Deposit requirements
403 Interest received 514 Employee business expenses 758 Form 941—Employer’s Quarterly
404 Dividends 515 Casualty, disaster, and theft losses Federal Tax Return
405 Refunds of state and local taxes 759 Form 940 and 940-EZ — Deposit
406 Alimony received Tax Computation requirements
407 Business income 760 Form 940 and Form 940-EZ —
551 Standard deduction
408 Sole proprietorship Employer’s Annual Federal
552 Tax and credits figured by the IRS
409 Capital gains and losses Unemployment Tax Returns
553 Tax on a child’s investment income
410 Pensions and annuities 761 Tips — Withholding and reporting
554 Self-employment tax
411 Pensions — The general rule and the 762 Independent contractor vs. employee
555 Ten-year tax option for lump-sum
simplified method distributions
412 Lump-sum distributions Magnetic Media Filers—1099
556 Alternative minimum tax
413 Rollovers from retirement plans Series and Related Information
557 Tax on early distributions from
414 Rental income and expenses Returns
traditional and Roth IRAs
415 Renting residential and vacation 558 Tax on early distributions from
property 801 Who must file magnetically
retirement plans
416 Farming and fishing income 802 Applications, forms, and information
417 Earnings for clergy 803 Waivers and extensions
Tax Credits
418 Unemployment compensation 804 Test files and combined federal and
419 Gambling income and expenses state filing
601 Earned income credit (EIC)
420 Bartering income 805 Electronic filing of information
602 Child and dependent care credit
421 Scholarship and fellowship grants returns
603 Credit for the elderly or the disabled
422 Nontaxable income 604 Advance earned income credit
423 Social security and equivalent 605 Education credits Tax Information for Aliens and
railroad retirement benefits 606 Child tax credits U.S. Citizens Living Abroad
424 401(k) plans 607 Adoption credit
425 Passive activities — Losses and 851 Resident and nonresident aliens
608 Excess social security and RRTA
credits 852 Dual-status alien
tax withheld
426 Other income 853 Foreign earned income exclusion —
610 Retirement savings contributions
427 Stock options General
credit
428 Roth IRA distributions 854 Foreign earned income exclusion —
429 Traders in securities (information for IRS Notices Who qualifies?
Form 1040 filers) 855 Foreign earned income exclusion —
430 Exchange of policyholder interest 651 Notices — What to do What qualifies?
for stock 652 Notice of underreported income — 856 Foreign tax credit
CP 2000 857 Individual taxpayer identification
Adjustments to Income 653 IRS notices and bills, penalties, and number (ITIN)—Form W-7
interest charges
451 Individual retirement arrangements 858 Alien tax clearance
(IRAs) Basis of Assets, Depreciation,
452 Alimony paid Tax Information for Puerto
and Sale of Assets
453 Bad debt deduction Rico Residents (in Spanish
454 Tax shelters 701 Sale of your home only)
455 Moving expenses 703 Basis of assets
456 Student loan interest deduction 901 Who must file a U.S. income tax
704 Depreciation
457 Tuition and fees deduction return in Puerto Rico
705 Installment sales
458 Educator expense deduction 902 Deductions and credits for Puerto
Employer Tax Information Rico filers
Itemized Deductions
903 Federal employment taxes in Puerto
751 Social security and Medicare
501 Should I itemize? Rico
withholding rates
502 Medical and dental expenses 904 Tax assistance for Puerto Rico
752 Form W-2 — Where, when, and how
503 Deductible taxes residents
to file
504 Home mortgage points
753 Form W-4 — Employee’s
505 Interest expense
Withholding Allowance Certificate
506 Contributions Topic numbers are effective
754 Form W-5 — Advance earned
507 Casualty and theft losses January 1, 2005.
508 Miscellaneous expenses income credit
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
If you cannot find the answer to your question using one of the methods listed on page 7,
please call us for assistance at 1-800-829-1040. You will not be charged for the call unless
Calling the IRS your phone company charges you for toll-free calls. Our normal hours of operation are
Monday through Friday from 7:00 a.m. to 10:00 p.m. local time. Beginning January 29,
2005, through April 9, 2005, assistance will also be available on Saturday from 10:00 a.m. to
3:00 p.m. local time. Assistance provided to callers from Alaska and Hawaii will be based on
the hours of operation in the Pacific time zone.
If you want to check the status of your 2004 refund, see
Refund Information
on
page 8.
TIP
If you are asking for an installment •Order tax forms and publications.
agreement to pay your tax, you will be
Before You Call
•Find out what you owe.
asked for the highest amount you can pay •Determine if we have adjusted your
IRS representatives care about the quality each month and the date on which you can
of the service provided to you, our cus- account or received payments you made.
pay it.
tomer. You can help us provide accurate, •Request a transcript of your tax return
complete answers to your questions by hav- Evaluation of services provided. The IRS or account.
ing the following information available. uses several methods to evaluate our tele- •Find out where to send your tax return
•The tax form, schedule, or notice to phone service. One method is to record or payment.
which your question relates. telephone calls for quality purposes only. A •Request more time to pay or set up a
•The facts about your particular situa- random sample of recorded calls is selected monthly installment agreement.
tion. The answer to the same question often for review through the quality assurance •Find out if you qualify for innocent
varies from one taxpayer to another be- process. Other methods include listening to spouse relief.
cause of differences in their age, income, live calls in progress and random selection
whether they can be claimed as a depen- of customers for participation in a customer
dent, etc. satisfaction survey.
•The name of any IRS publication or
other source of information that you used to
Before You Hang Up
look for the answer. If you do not fully understand the answer
To maintain your account security, you
Making the Call
you receive, or you feel our representative
may be asked for the following informa- may not fully understand your question,
Call 1-800-829-1040 (for TTY/TDD help,
tion, which you should also have available. our representative needs to know this. He
call 1-800-829-4059). Our menus allow
•Your social security number. callers with pulse or rotary dial telephones or she will be happy to take additional time
•The amount of refund and filing status to speak their responses when requested to to be sure your question is answered fully.
shown on your tax return. do so. First, you will be provided a series of
options that will request touch-tone re-
•The “Caller ID Number” shown at the By law, you are responsible for paying
sponses. If a touch-tone response is not re-
top of any notice you received. your share of federal income tax. If we
ceived, you will then hear a series of
•Your personal identification number should make an error in answering your
options and be asked to speak your selec-
(PIN) if you have one. question, you are still responsible for the
tions. After your touch-tone or spoken re-
•Your date of birth. payment of the correct tax. Should this oc-
sponse is received, the system will direct
•The numbers in your street address. cur, however, you will not be charged any
your call to the appropriate assistance. You
can do the following within the system.
•Your ZIP code. penalty.
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See
How To Avoid Common Mistakes
on page 57.
If you were serving in, or in support of, the U.S. Armed Forces in a designated combat
Before You Fill zone, qualified hazardous duty area, or contingency operation (for example, you were in the
Afghanistan, Bosnia, Kosovo, or Persian Gulf area), see Pub. 3.
In Form 1040
For details on these and other
your tax. The Tax Computation Worksheet your qualified higher education expenses.
changes for 2004 and 2005, see
is on page 72. The Tax Rate Schedules are See Pub. 970.
Pub. 553.
shown on page 76 so you can see the tax
TIP
Elective salary deferrals. The maximum
rate that applies to all levels of taxable in- amount you can defer under all plans is
come, but they should not be used to figure generally limited to $13,000 ($16,000 for
your tax. section 403(b) plans if you qualify for the
IRA deduction allowed to more people
What’s New for 2004 15-year rule). The catch-up contribution
covered by retirement plans. You may be limit increased to $3,000 ($1,500 for
Health savings account (HSA) deduction. able to take an IRA deduction if you were SIMPLE plans). See the instructions for
You may be able to take a deduction if covered by a retirement plan and your mod- line 7 on page 19.
contributions (other than employer contri- ified AGI is less than $55,000 ($75,000 if
butions) were made to your HSA for 2004. married filing jointly or qualifying Excise tax on insider stock compensation
See Form 8889 for details. widow(er)). See the instructions for line 25 from an expatriated corporation. You
that begin on page 26.
Tuition and fees deduction expanded. may owe a 15% excise tax on the value of
You may be able to deduct up to $4,000 if nonstatutory stock options and certain
Certain business expenses of reservists,
your adjusted gross income (AGI) is not other stock-based compensation held by
performing artists, and fee-basis
more than $65,000 ($130,000 if married you or a member of your family from an
government officials. These expenses are
filing jointly), or deduct up to $2,000 if expatriated corporation or its expanded af-
now reported on line 24. See the instruc-
your AGI is higher than that limit but not filiated group in which you were an officer,
tions for line 24 on page 26.
more than $80,000 ($160,000 if married director, or more-than-10% owner. See the
Earned income credit (EIC). You may be
filing jointly). See the instructions for line instructions for line 62 on page 40.
able to take the EIC if:
27 on page 29.
Mailing your return. You may be mailing
•A child lived with you and you earned
Sales tax deduction. You can elect to de- your return to a different address this year
less than $34,458 ($35,458 if married filing
duct state and local general sales taxes in- because the IRS has changed the filing lo-
jointly), or
stead of state and local income taxes as an cation for several areas. If you received an
•A child did not live with you and you
itemized deduction on Schedule A. Gener- envelope with your tax package, please use
earned less than $11,490 ($12,490 if mar-
ally, you can use either your actual ex- it. Otherwise, see
Where Do You File?
on
ried filing jointly).
penses or the Optional State Sales Tax the back cover.
Tables to figure your state and local general If you were a member of the U.S.
sales tax deduction. See the Instructions for Armed Forces who served in a combat
Schedule A for details. zone, you may be able to include your non- What’s New for 2005
taxable combat pay in earned income when
Income averaging for farmers and fisher-
figuring the EIC.
men. Fishermen can elect to use income IRA deduction expanded. You, and your
averaging on Schedule J to reduce their tax. spouse if filing jointly, may be able to de-
See the instructions for lines 65a and
Also, the benefit of income averaging is duct up to $4,000 ($4,500 if age 50 or older
65b that begin on page 41.
extended to farmers and fishermen who at the end of 2005). If you were covered by
Additional child tax credit expanded. The
owe the alternative minimum tax. See the a retirement plan, you may be able to take
credit limit based on earned income is in-
Instructions for Schedule J for details. an IRA deduction if your 2005 modified
creased to 15% of your earned income that AGI is less than $60,000 ($80,000 if mar-
Unlawful discrimination claims. You may exceeds $10,750. If you were a member of ried filing jointly or qualifying widow(er)).
be able to take a deduction on line 35 for the U.S. Armed Forces who served in a
attorney fees and court costs paid after Oc- combat zone, your nontaxable combat pay EIC phaseout amount increased for joint
tober 22, 2004, for actions settled or de- counts as earned income when figuring this filers. The maximum amount of earned
cided after that date involving a claim of credit limit. See Form 8812 for details. income that joint filers can have and still
unlawful discrimination, a claim against take the EIC will be $2,000 more than that
Standard mileage rates. The 2004 rate for
the United States Government, or a claim for other filers.
business use of your vehicle is 371⁄2 cents a
made under section 1862(b)(3)(A) of the
mile. The 2004 rate for use of your vehicle
Social Security Act, but only up to the Elective salary deferrals. The maximum
to get medical care or to move is 14 cents a
amount included in gross income in 2004 amount you can defer under all plans is
mile.
from such claim. See Pub. 525 for details. generally limited to $14,000 ($17,000 for
Tax Computation Worksheet. If your tax- Qualified tuition program (QTP) section 403(b) plans if you qualify for the
able income is $100,000 or more, you will distributions. You may be able to exclude 15-year rule). The catch-up contribution
now use the Tax Computation Worksheet from income distributions from a private limit is increased to $4,000 ($2,000 for
instead of the Tax Rate Schedules to figure QTP if the distributions are not more than SIMPLE plans).
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These rules apply to all U.S. citizens, regardless of where they live, and resident aliens.
Filing
Requirements
Nonresident aliens and dual-status aliens.
An automatic 4-month exten-
These rules also apply to nonresident aliens
sion to file does not extend the
Do You Have To File?
and dual-status aliens who were married to
time to pay your tax. See Form
Use Chart A, B, or C to see if you must file
CAUTION
!
U.S. citizens or residents at the end of 2004
4868.
a return. U.S. citizens who lived in or had and who have elected to be taxed as resi-
income from a U.S. possession should see dent aliens. Other nonresident aliens and If you are a U.S. citizen or resident, you
Pub. 570. Residents of Puerto Rico can use dual-status aliens have different filing re- may qualify for an automatic extension of
TeleTax topic 901 (see page 8) to see if quirements. They may have to file Form time to file without filing Form 4868 or
they must file. 1040NR or Form 1040NR-EZ. Specific filing for an extension by phone. You qual-
rules apply to determine if you are a resi-
Even if you do not otherwise
ify if, on the due date of your return, you
dent or nonresident alien. See Pub. 519 for
have to file a return, you should
meet one of the following conditions.
details, including the rules for students and
file one to get a refund of any
scholars who are aliens.
TIP
•You live outside the United States and
federal income tax withheld.
Puerto Rico and your main place of busi-
You should also file if you are eligible for
the earned income credit, the additional
ness or post of duty is outside the United
child tax credit, or the health coverage tax
States and Puerto Rico.
When Should You
credit.
•You are in military or naval service on
duty outside the United States and Puerto
File?
Have you tried IRS
e-file?
Rico.
It’s the fastest way to get Not later than April 15, 2005. If you file
your refund and it’s free if you are eligible. after this date, you may have to pay interest
Visit
www.irs.gov
for details. This extension gives you an extra 2
and penalties. See page 59.
months to file and pay the tax, but interest
Exception for children under age 14. If will be charged from the original due date
you are planning to file a tax return for your of the return on any unpaid tax. You must
What If You Cannot File
child who was under age 14 at the end of attach a statement to your return showing
on Time?
2004 and certain other conditions apply, that you meet the requirements.
you can elect to include your child’s in- You can get an automatic 4-month exten-
come on your return. But you must use sion if, no later than April 15, 2005, you
Form 8814 to do so. If you make this elec- either file for an extension by phone or you
tion, your child does not have to file a re- file Form 4868. For details, including how
Where Do You File?
turn. For details, use TeleTax topic 553 to file by phone, see Form 4868.
(see page 8) or see Form 8814. See the back cover of this booklet for filing
instructions and addresses. For details on
A child born on January 1, 1991, is con- using a private delivery service to mail
sidered to be age 14 at the end of 2004. Do
not use Form 8814 for such a child. your return or payment, see page 15.
Chart A—For Most People
AND at the end of 2004 THEN file a return if your gross
IF your filing status is . . . you were* . . . income** was at least . . .
under 65 $7,950
Single 65 or older 9,150
under 65 (both spouses) $15,900
Married filing jointly*** 65 or older (one spouse) 16,850
65 or older (both spouses) 17,800
Married filing separately (see page 17) any age $3,100
under 65 $10,250
Head of household (see page 17) 65 or older 11,450
Qualifying widow(er) with dependent under 65 $12,800
child (see page 17) 65 or older 13,750
* If you were born on January 1, 1940, you are considered to be age 65 at the end of 2004.
** 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 (even if you may exclude part or all of it). Do
not include social security benefits unless you are married filing a separate return and you lived with your spouse at
any time in 2004.
*** If you did not live with your spouse at the end of 2004 (or on the date your spouse died) and your gross income was
at least $3,100, you must file a return regardless of your age.
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Chart B—For Children and Other Dependents (See the instructions for line 6c on page 18 to find
out if someone can claim you as a dependent.)
If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return.
In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. Earned income includes
wages, tips, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.
If your gross income was $3,100 or more, you usually cannot be claimed as a dependent unless you were (a) under age 19 at the
end of 2004 or (b) under age 24 at the end of 2004 and a student. For details, see Pub. 501.
CAUTION
!
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 over $800.
•Your earned income was over $4,850.
•Your gross income was more than the larger of—
•$800, or
•Your earned income (up to $4,600) plus $250.
Yes. You must file a return if any of the following apply.
•Your unearned income was over $2,000 ($3,200 if 65 or older and blind).
•Your earned income was over $6,050 ($7,250 if 65 or older and blind).
•Your gross income was more than—
The larger of: Plus This amount:
•$800, or $1,200 ($2,400 if 65 or
}
older and blind)
•Your earned income (up to $4,600) plus $250
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 over $800.
•Your earned income was over $4,850.
•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—
•$800, or
•Your earned income (up to $4,600) plus $250.
Yes. You must file a return if any of the following apply.
•Your unearned income was over $1,750 ($2,700 if 65 or older and blind).
•Your earned income was over $5,800 ($6,750 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: Plus This amount:
•$800, or $950 ($1,900 if 65 or
}
older and blind)
•Your earned income (up to $4,600) plus $250
Chart C—Other Situations When You Must File
You must file a return if any of the four conditions below apply for 2004.
1. You owe any special taxes, such as:
•Social security and Medicare tax on tips you did not report to your employer,
•Uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance,
•Alternative minimum tax,
•Recapture taxes (see the instructions for line 43, on page 33, and line 62, on page 40), or
•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.
2. You received any advance earned income credit (EIC) payments from your employer. These payments are shown in
Form W-2, box 9.
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.
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Where To Report Certain Items From 2004 Forms W-2, 1098, and 1099
IRS
e-file
takes the guesswork out of preparing your return. You may also be eligible to use free online commercial tax
preparation software to file your federal income tax return. Visit
www.irs.gov/efile
for details.
If any federal income tax withheld is shown on these forms, include the tax withheld on Form 1040, line 63. If you itemize your deductions
and any state or local income tax withheld is shown on these forms, include the tax withheld on Schedule A, line 5, if you do not elect to
deduct state and local general sales taxes.
Form Item and Box in Which it Should Appear Where To Report if Filing Form 1040
W-2 Wages, tips, other compensation (box 1) Form 1040, line 7
Allocated tips (box 8) See Tip income on page 19
Advance EIC payment (box 9) Form 1040, line 60
Dependent care benefits (box 10) Form 2441, line 12
Adoption benefits (box 12, code T) Form 8839, line 22
Employer contributions to an Archer Form 8853, line 3
MSA (box 12, code R)
Employer contributions to a health savings Form 8889, line 9
account (box 12, code W)
W-2G Gambling winnings (box 1) Form 1040, line 21 (Schedule C or C-EZ for professional
gamblers)
1098 Mortgage interest (box 1) Schedule A, line 10*
Points (box 2)
}
Refund of overpaid interest (box 3) Form 1040, line 21, but first see the instructions on Form 1098*
1098-E Student loan interest (box 1) See the instructions for Form 1040, line 26, on page 28*
1098-T Qualified tuition and related expenses See the instructions for Form 1040, line 27, on page 29, or line 49,
(box 1) on page 36, but first see the instructions on Form 1098-T*
1099-A Acquisition or abandonment of secured property See Pub. 544
1099-B Stocks, bonds, etc. (box 2) See the instructions on Form 1099-B
Bartering (box 3) See Pub. 525
Aggregate profit or (loss) (box 11) Form 6781, line 1
1099-C Canceled debt (box 2) Form 1040, line 21, but first see the instructions on Form 1099-C*
1099-DIV Total ordinary dividends (box 1a) Form 1040, line 9a
Qualified dividends (box 1b) See the instructions for Form 1040, line 9b, on page 20
Total capital gain distributions (box 2a) Form 1040, line 13, or, if required, Schedule D, line 13
Unrecaptured section 1250 gain (box 2b) See the instructions for Schedule D, line 19, that begin on page
D-7
Section 1202 gain (box 2c) See
Exclusion of Gain on Qualified Small Business (QSB) Stock
in the instructions for Schedule D on page D-4
Collectibles (28%) gain (box 2d) See the instructions for Schedule D, line 18, on page D-7
Nontaxable (nondividend) distributions (box 3) See the instructions for Form 1040, line 9a, on page 20
Investment expenses (box 5) Schedule A, line 22
Foreign tax paid (box 6) Form 1040, line 46, or Schedule A, line 8
1099-G Unemployment compensation (box 1) Form 1040, line 19. But if you repaid any unemployment
compensation in 2004, see the instructions for line 19 on
page 24.
State or local income tax refunds, credits, or See the instructions for Form 1040, line 10, that begin on
offsets (box 2) page 20*
Taxable grants (box 6) Form 1040, line 21*
Agriculture payments (box 7) See the Instructions for Schedule F or Pub. 225*
1099-H HCTC advance payments (box 1) Form 8885, lines 2 and 6
*
If the item relates to an activity for which you are required to file Schedule C, C-EZ, E, or F or Form 4835, report the taxable or deductible amount
allocable to the activity on that schedule or form instead.
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Form Item and Box in Which it Should Appear Where To Report if Filing Form 1040
1099-INT Interest income (box 1) See the instructions for Form 1040, line 8a, on page 19
Early withdrawal penalty (box 2) Form 1040, line 33
Interest on U.S. savings bonds and Treasury See the instructions for Form 1040, line 8a, on page 19
obligations (box 3)
Investment expenses (box 5) Schedule A, line 22
Foreign tax paid (box 6) Form 1040, line 46, or Schedule A, line 8
1099-LTC Long-term care and accelerated death benefits See Pub. 502 and the Instructions for Form 8853
1099-MISC Rents (box 1) See the Instructions for Schedule E*
Royalties (box 2) Schedule E, line 4 (timber, coal, iron ore royalties, see
Pub. 544)*
Other income (box 3) Form 1040, line 21*
Nonemployee compensation (box 7) Schedule C, C-EZ, or F. But if you were not self-employed, see
the instructions on Form 1099-MISC.
Other (boxes 5, 6, 8, 9, 10, 13, and 14) See the instructions on Form 1099-MISC
1099-OID Original issue discount (box 1)
}
See the instructions on Form 1099-OID
Other periodic interest (box 2)
Early withdrawal penalty (box 3) Form 1040, line 33
Original issue discount on U.S. Treasury See the instructions on Form 1099-OID
obligations (box 6)
Investment expenses (box 7) Schedule A, line 22
1099-PATR Patronage dividends and other distributions Schedule C, C-EZ, or F or Form 4835, but first see the
from a cooperative (boxes 1, 2, 3, and 5) instructions on Form 1099-PATR
Credits (boxes 6, 7, and 8) Form 3468, 5884, 8844, 8845, 8861, or 8884
Patron’s AMT adjustment (box 9) Form 6251, line 26
1099-Q Qualified education program payments See the instructions for Form 1040, line 21, on page 24
1099-R Distributions from IRAs** See the instructions for Form 1040, lines 15a and 15b, on page 22
Distributions from pensions, annuities, etc. See the instructions for Form 1040, lines 16a and 16b, that begin
on page 22
Capital gain (box 3) See the instructions on Form 1099-R
1099-S Gross proceeds from real estate transactions Form 4797, Form 6252, or Schedule D. But if the property was
(box 2) your home, see the Instructions for Schedule D to find out if
you must report the sale or exchange.
Buyer’s part of real estate tax (box 5) See the instructions for Schedule A, line 6, on page A-3*
1099-SA Distributions from health savings accounts Form 8889, line 12a
(HSAs)
Distributions from MSAs*** Form 8853
*
If the item relates to an activity for which you are required to file Schedule C, C-EZ, E, or F or Form 4835, report the taxable or deductible amount
allocable to the activity on that schedule or form instead.
**
This includes distributions from Roth, SEP, and SIMPLE IRAs.
***
This includes distributions from Archer and Medicare Advantage MSAs.
•Federal Express (FedEx): FedEx Pri- The private delivery service can tell you
Private Delivery Services ority Overnight, FedEx Standard Over- how to get written proof of the mailing
You can use certain private delivery serv- night, FedEx 2Day, FedEx International date.
ices designated by the IRS to meet the Priority, and FedEx International First.
Private delivery services cannot
‘‘timely mailing as timely filing/paying’’ •United Parcel Service (UPS): UPS
deliver items to P.O. boxes.
rule for tax returns and payments. These Next Day Air, UPS Next Day Air Saver,
You must use the U.S. Postal
private delivery services include only the UPS 2nd Day Air, UPS 2nd Day Air A.M.,
CAUTION
!
Service to mail any item to an
following. UPS Worldwide Express Plus, and UPS
IRS P.O. box address.
•DHL Express (DHL): DHL Same Day Worldwide Express.
Service, DHL Next Day 10:30 am, DHL
Next Day 12:00 pm, DHL Next Day 3:00
pm, and DHL 2nd Day Service.
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Form 1040—Line 1
IRS
e-file
takes the guesswork out of preparing your return. You may also
be eligible to use free online commercial tax preparation software to file
Line your federal income tax return. Visit
www.irs.gov/efile
for details.
Instructions for
Form 1040
Foreign Address
Name and Address Presidential Election
Enter the information in the following or-
der: City, province or state, and country.
Campaign Fund
Follow the country’s practice for entering
Use the Peel-Off Label This fund helps pay for Presidential elec-
the postal code. Do not abbreviate the
Using your peel-off name and address label tion campaigns. The fund reduces candi-
country name.
on the back of this booklet will speed the dates’ dependence on large contributions
processing of your return. It also prevents from individuals and groups and places
common errors that can delay refunds or candidates on an equal financial footing in
Death of a Taxpayer
result in unnecessary notices. Put the label the general election. If you want $3 to go to
See page 58.
on your return after you have finished it. this fund, check the “Yes” box. If you are
Cross out any incorrect information and filing a joint return, your spouse may also
print the correct information. Add any have $3 go to the fund. If you check “Yes,”
missing items, such as your apartment your tax or refund will not change.
number.
Social Security
Number (SSN)
Address Change
Filing Status
An incorrect or missing SSN may increase
If the address on your peel-off label is not your tax or reduce your refund. To apply
your current address, cross out your old Check only the filing status that applies to
for an SSN, fill in Form SS-5 and return it
address and print your new address. If you you. The ones that will usually give you the
to the Social Security Administration
plan to move after filing your return, use lowest tax are listed last.
(SSA). You can get Form SS-5 online at
Form 8822 to notify the IRS of your new •Married filing separately.
www.socialsecurity.gov
, from your local
address. •Single.
SSA office, or by calling the SSA at
1-800-772-1213. It usually takes about 2 •Head of household.
Name Change weeks to get an SSN. •Married filing jointly or qualifying
If you changed your name because of mar- widow(er) with dependent child.
Check that your SSN on your Forms
riage, divorce, etc., be sure to report the
More than one filing status can
W-2 and 1099 agrees with your social se-
change to your local Social Security Ad-
apply to you. Choose the one
curity card. If not, see page 58 for more
ministration office before filing your re-
that will give you the lowest
details.
turn. This prevents delays in processing
TIP
tax.
your return and issuing refunds. It also
safeguards your future social security bene- IRS Individual Taxpayer
fits. See page 58 for more details. If you Identification Numbers
received a peel-off label, cross out your Line 1
(ITINs) for Aliens
former name and print your new name.
If you are a nonresident or resident alien Single
and you do not have and are not eligible to
What if You Do Not Have a You can check the box on line 1 if any of
get an SSN, you must apply for an ITIN. the following was true on December 31,
Label? For details on how to do so, see Form W-7 2004.
Print or type the information in the spaces and its instructions. It usually takes about •You were never married.
provided. If you are married filing a sepa- 4-6 weeks to get an ITIN.
rate return, enter your husband’s or wife’s •You were legally separated, according
name on line 3 instead of below your name. to your state law, under a decree of divorce
If you already have an ITIN, enter it
or separate maintenance.
wherever your SSN is requested on your
tax return.
If you filed a joint return for
•You were widowed before
2003 and you are filing a joint
January 1, 2004, and did not remarry in
Note. An ITIN is for tax use only. It does
return for 2004 with the same
2004. But if you have a dependent child,
TIP
not entitle you to social security benefits or
spouse, be sure to enter your
you may be able to use the qualifying
change your employment or immigration
names and SSNs in the same order as on
widow(er) filing status. See the instructions
status under U.S. law.
your 2003 return.
for line 5 on page 17.
Nonresident Alien Spouse
P.O. Box If your spouse is a nonresident alien and
Enter your box number only if your post you file a joint or separate return, your
office does not deliver mail to your home. spouse must have either an SSN or an ITIN.
Need more information or forms? See page 7.
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Form 1040—Lines 2 Through 5
December 31, 2004, you were unmarried or ter child for more than half of 2004 (if half
Line 2 or less, see the
Exception
below).
legally separated (according to your state
law) under a decree of divorce or separate •You claim this child as your depen-
Married Filing Jointly maintenance and either 1 or 2 below ap- dent or the child’s other parent claims him
You can check the box on line 2 if any of plies to you. or her under the rules for
Children Who Did
the following apply.
Not Live With You Due to Divorce or Sep-
1. You paid over half the cost of keeping
aration
on page 18. If this child is not your
•You were married as of up a home that was the main home for all of dependent, be sure to enter the child’s name
December 31, 2004, even if you did not live 2004 of your parent whom you can claim as on line 4. If you do not enter the name, it
with your spouse at the end of 2004. a dependent. Your parent did not have to will take us longer to process your return.
•Your spouse died in 2004 and you did live with you in your home.
not remarry in 2004. 2. You paid over half the cost of keeping Keeping up a home. To find out what is
•You were married as of December 31, up a home in which you lived and in which included in the cost of keeping up a home,
2004, and your spouse died in 2005 before one of the following also lived for more see Pub. 501.
filing a 2004 return. than half of the year (if half or less, see the
Exception
on this page).
A husband and wife can file a joint re- If you used payments you received
turn even if only one had income or if they under Temporary Assistance for Needy
a. Your unmarried child, adopted child,
did not live together all year. However, Families (TANF) or other public assistance
grandchild, great-grandchild, etc., or
both persons must sign the return. If you programs to pay part of the cost of keeping
stepchild. It does not matter what age the
file a joint return for 2004, you cannot, after up your home, you cannot count them as
child was. This child does not have to be
the due date for filing that return, amend it money you paid. However, you must in-
your dependent. If the child is not your
to file as married filing separately. clude them in the total cost of keeping up
dependent, enter the child’s name in the your home to figure if you paid over half of
space provided on line 4. If you do not
Joint and several tax liability. If you file a the cost.
enter the name, it will take us longer to
joint return, both you and your spouse are process your return.
generally responsible for the tax and any Dependent. To find out if someone is your
interest or penalties due on the return. This b. Your married child, adopted child, dependent, see the instructions for line 6c
means that if one spouse does not pay the grandchild, great-grandchild, etc., or on page 18.
tax due, the other may have to. However, stepchild. This child must be your depen-
see
Innocent Spouse Relief
on page 57. dent. But if your married child’s other par- Exception. You can count temporary ab-
ent claims him or her as a dependent under
Nonresident aliens and dual-status aliens. sences for special circumstances, such as
the rules for
Children Who Did Not Live
You may be able to file a joint return. See for school, vacation, medical care, or mili-
With You Due to Divorce or Separation
on
Pub. 519 for details. tary service, as time lived in the home. If
page 18, this child does not have to be your the person for whom you kept up a home
dependent. In this case, enter the child’s was born or died in 2004, you may still file
name on line 4. If you do not enter the as head of household as long as the home
Line 3 name, it will take us longer to process your was that person’s main home for the part of
return. the year he or she was alive.
Married Filing Separately c. Your foster child, who must be your
If you are married and file a separate return, dependent.
you will usually pay more tax than if you d. Any other relative you can claim as a
use another filing status that you qualify Line 5
dependent. For the definition of a relative,
for. Also, if you file a separate return, you see Pub. 501. Qualifying Widow(er) With
cannot take the student loan interest deduc-
tion, the tuition and fees deduction, the ed- Dependent Child
You cannot file as head of
ucation credits, or the earned income credit. You can check the box on line 5 and use
household if your child, parent,
You also cannot take the standard deduc- joint return tax rates for 2004 if all of the
or relative described above is
tion if your spouse itemizes deductions.
CAUTION
!
following apply.
your dependent under the rules
Generally, you report only your own
on
Multiple Support Agreement
in Pub.
•Your spouse died in 2002 or 2003 and
income, exemptions, deductions, and cred-
501.
you did not remarry in 2004.
its. Different rules apply to people in com- •You have a child, adopted child,
munity property states. See page 19. Married persons who live apart. Even if stepchild, or foster child whom you claim
you were not divorced or legally separated
You may be able to file as head
as a dependent.
in 2004, you may be able to file as head of
of household if you had a child
•This child lived in your home for all of
household. You can check the box on
living with you and you lived
2004. Temporary absences for special cir-
TIP
line 4 if all of the following apply.
apart from your spouse during
cumstances, such as for school, vacation,
the last 6 months of 2004. See
Married •You must have lived apart from your medical care, or military service, count as
persons who live apart
on this page.
spouse for the last 6 months of 2004. Tem- time lived in the home.
porary absences for special circumstances, •You paid over half the cost of keeping
such as for business, medical care, school, up your home.
or military service, count as time lived in
Line 4 •You could have filed a joint return
the home. with your spouse the year he or she died,
•You file a separate return from your
Head of Household even if you did not actually do so.
spouse.
This filing status is for unmarried individu- •You paid over half the cost of keeping
als who provide a home for certain other If your spouse died in 2004, you cannot
up your home for 2004.
persons. (Some married persons who live file as qualifying widow(er) with depen-
•Your home was the main home of
apart may also qualify. See this page.) You dent child. Instead, see the instructions for
your child, adopted child, stepchild, or fos-
can check the box on line 4 only if as of line 2 on this page.
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Form 1040—Lines 6b and 6c
Support test. You must have provided thorized placement agency whom you
over half of the person’s total support in cared for as you would your own child),
Exemptions
2004. But there are two exceptions to this and
You usually can deduct $3,100 on line 41 test: One for children of divorced or sepa- 4. Is a U.S. citizen or resident alien.
for each exemption you can take. rated parents and one for persons supported
by two or more taxpayers.
The above requirements are not
the same as the requirements to
For more details about the tests,
Line 6b
be a qualifying child for the
including any exceptions that
CAUTION
!
earned income credit.
apply, see Pub. 501.
Spouse
TIP
An adopted child is always treated as
Check the box on line 6b if either of the your own child. An adopted child includes
Line 6c, Column (2)
following apply. a child placed with you by an authorized
You must enter each dependent’s social se- placement agency for legal adoption even if
1. Your filing status is married filing curity number (SSN). Be sure the name and the adoption is not final. An authorized
jointly. SSN entered agree with the dependent’s placement agency includes any person or
2. You were married as of December 31, social security card. Otherwise, at the time court authorized by state law to place chil-
2004, your filing status is married filing we process your return, we may disallow dren for legal adoption.
separately or head of household, and both the exemption claimed for the dependent
of the following apply. Children Who Did Not Live With
and reduce or disallow any other tax bene- You Due to Divorce or Separation
fits (such as the child tax credit) based on
a. Your spouse had no income and is not that dependent. If the name or SSN on the
filing a return. If you are claiming a child who did not live
dependent’s social security card is not cor- with you under the rules explained in
b. Your spouse cannot be claimed as a rect, call the Social Security Administra- Pub. 501 for children of divorced or sepa-
dependent on another person’s return. tion at 1-800-772-1213. rated parents, attach Form 8332 or similar
statement to your return. But see the
Excep-
If your filing status is head of household
For details on how your depen- tion
below.
and you check the box on line 6b, enter the
dent can get an SSN, see page
name of your spouse on the dotted line next
16. If your dependent will not
If your divorce decree or separation
to line 6b. Also, enter your spouse’s social
TIP
have a number by April 15,
agreement went into effect after 1984, you
security number in the space provided at
2005, see
What If You Cannot File on can attach certain pages from the decree or
the top of your return. Time?
on page 12.
agreement instead of Form 8332. To be
able to do this, the decree or agreement
If your dependent child was born and must state all three of the following.
died in 2004 and you do not have an SSN
Line 6c for the child, you can attach a copy of the 1. You can claim the child as your de-
child’s birth certificate instead and enter pendent without regard to any condition
Dependents “Died” in column (2). (such as payment of support).
You can take an exemption for each of your 2. The other parent will not claim the
Adoption taxpayer identification numbers
dependents. The following is a brief child as a dependent.
(ATINs). If you have a dependent who was
description of the five tests that must be placed with you by an authorized place- 3. The years for which the claim is re-
met for a person to qualify as your depen- ment agency and you do not know his or leased.
dent. If you have more than four depen- her SSN, you must get an ATIN for the
dents, attach a statement to your return with Attach all of the following pages from
dependent from the IRS. An authorized
the required information. the decree or agreement.
placement agency includes any person au- •Cover page (include the other parent’s
Relationship test. The person must be ei- thorized by state law to place children for SSN on that page).
ther your relative or have lived in your legal adoption. See Form W-7A for details.
home all year as a member of your house- •The pages that include all of the infor-
Line 6c, Column (4)
hold. If the person is not your relative, the mation identified in (1) through (3) above.
Check the box in this column if your depen-
relationship must not violate local law. •Signature page with the other parent’s
dent is a qualifying child for the child tax signature and date of agreement.
Joint return test. If the person is married, credit (defined below). If you have a quali-
he or she cannot file a joint return. But the fying child, you may be able to take the
You must attach the required
person can file a joint return if the return is child tax credit on line 51 and the additional
information even if you filed it
filed only as a claim for refund and no tax child tax credit on line 67.
with your return in an earlier
liability would exist for either spouse if
CAUTION
!
year.
they had filed separate returns. Qualifying child for child tax credit. A
qualifying child for purposes of the child Exception. You do not have to attach Form
Citizen or resident test. The person must tax credit is a child who: 8332 or similar statement if your divorce
be a U.S. citizen or resident alien, or a decree or written separation agreement
resident of Canada or Mexico. There is an 1. Is claimed as your dependent on line went into effect before 1985 and it states
exception for certain adopted children. To 6c, that you can claim the child as your depen-
find out who is a resident alien, use 2. Was under age 17 at the end of 2004, dent.
TeleTax topic 851 (see page 8) or see 3. Is your (a) son, daughter, adopted
Pub. 519. Other Dependent Children
child, stepchild, or a descendant of any of
Income test. The person’s gross income them (for example, your grandchild); (b) Include the total number of children who
must be less than $3,100. But your child’s brother, sister, stepbrother, stepsister, or a did not live with you for reasons other than
gross income can be $3,100 or more if he or descendant of any of them (for example, divorce or separation on the line labeled
she was either (a) under age 19 at the end of your niece or nephew), whom you cared for ‘‘Dependents on 6c not entered above.’’
2004, or (b) under age 24 at the end of 2004 as you would your own child; or (c) foster Include dependent children who lived in
and a student. child (any child placed with you by an au- Canada or Mexico during 2004.
Need more information or forms? See page 7.
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Form 1040—Lines 7 and 8a
less than $1,400 in 2004. Also, enter •Disability pensions shown on Form
‘‘HSH’’ and the amount not reported on 1099-R if you have not reached the mini-
Income
Form W-2 on the dotted line next to line 7. mum retirement age set by your employer.
Foreign-Source Income •Tip income you did not report to your Disability pensions received after you
employer. Also include allocated tips reach that age and other payments shown
You must report unearned income, such as shown on your Form(s) W-2 unless you can on Form 1099-R (other than payments from
interest, dividends, and pensions, from prove that you received less. Allocated tips an IRA*) are reported on lines 16a and 16b.
sources outside the United States unless ex- should be shown in Form(s) W-2, box 8. Payments from an IRA are reported on
empt by law or a tax treaty. You must also They are not included as income in box 1. lines 15a and 15b.
report earned income, such as wages and See Pub. 531 for more details.
tips, from sources outside the United •Corrective distributions from a retire-
States. ment plan shown on Form 1099-R of ex-
You may owe social security
cess salary deferrals, and excess
If you worked abroad, you may be able
and Medicare tax on unreported
contributions (plus earnings). But do not
to exclude part or all of your earned in-
or allocated tips. See the in-
include distributions from an IRA* on line
CAUTION
!
come. For details, see Pub. 54 and Form
structions for line 58 on
7. Instead, report distributions from an IRA
2555 or 2555-EZ.
page 39.
on lines 15a and 15b.
Foreign retirement plans. If you were a *
This includes a Roth, SEP, or SIMPLE IRA.
•Dependent care benefits, which
beneficiary of a foreign retirement plan, should be shown in Form(s) W-2, box 10.
you may have to report the undistributed But first complete Form 2441 to see if you Were You a Statutory Employee?
income earned in your plan. However, if may exclude part or all of the benefits. If you were, the “Statutory employee” box
you were the beneficiary of a Canadian reg- •Employer-provided adoption benefits, in Form W-2, box 13, should be checked.
istered retirement plan, see Form 8891 to which should be shown in Form(s) W-2, Statutory employees include full-time life
find out if you can elect to defer tax on the box 12, with code T. But see the Instruc- insurance salespeople, certain agent or
undistributed income. tions for Form 8839 to find out if you can commission drivers and traveling salespe-
exclude part or all of the benefits. You may
Report distributions from foreign pen- ople, and certain homeworkers. If you have
also be able to exclude amounts if you
sion plans on lines 16a and 16b. related business expenses to deduct, report
adopted a child with special needs and the the amount shown in Form W-2, box 1, on
adoption became final in 2004.
Community Property States Schedule C or C-EZ along with your ex-
•Scholarship and fellowship grants not penses.
Community property states are Arizona, reported on Form W-2. Also, enter “SCH”
California, Idaho, Louisiana, Nevada, New and the amount on the dotted line next to Missing or Incorrect Form W-2?
Mexico, Texas, Washington, and Wiscon- line 7. However, if you were a degree can-
sin. If you and your spouse lived in a com- Your employer is required to provide or
didate, include on line 7 only the amounts
munity property state, you must usually send Form W-2 to you no later than
you used for expenses other than tuition
follow state law to determine what is com- January 31, 2005. If you do not receive it
and course-related expenses. For example,
munity income and what is separate in- by early February, use TeleTax topic 154
amounts used for room, board, and travel
come. For details, see Pub. 555. (see page 8) to find out what to do. Even if
must be reported on line 7. you do not get a Form W-2, you must still
•Excess salary deferrals. The amount
Rounding Off to Whole report your earnings on line 7. If you lose
deferred should be shown in Form W-2, your Form W-2 or it is incorrect, ask your
Dollars box 12, and the “Retirement plan” box in employer for a new one.
You may round off cents to whole dollars box 13 should be checked. If the total
on your return and schedules. If you do amount you (or your spouse if filing
round to whole dollars, you must round all jointly) deferred for 2004 under all plans
amounts. To round, drop amounts under 50 was more than $13,000 (excluding Line 8a
cents and increase amounts from 50 to 99 catch-up contributions as explained be- Taxable Interest
cents to the next dollar. For example, $1.39 low), include the excess on line 7. This
becomes $1 and $2.50 becomes $3. limit is increased to $16,000 for section Each payer should send you a Form
403(b) plans if you qualify for the 15-year 1099-INT or Form 1099-OID. Enter your
If you have to add two or more amounts rule in Pub. 571. total taxable interest income on line 8a. But
to figure the amount to enter on a line, you must fill in and attach Schedule B if the
include cents when adding the amounts and A higher limit may apply to participants total is over $1,500 or any of the other
round off only the total. in section 457(b) deferred compensation conditions listed at the beginning of the
plans for the 3 years before retirement age. Schedule B instructions (see page B-1) ap-
Contact your plan administrator for more ply to you.
information.
Line 7
Interest credited in 2004 on deposits that
If you were age 50 or older at the end of
Wages, Salaries, Tips, etc. you could not withdraw because of the
2004, your employer may have allowed an bankruptcy or insolvency of the financial
Enter the total of your wages, salaries, tips, additional deferral (catch-up contributions) institution may not have to be included in
etc. If a joint return, also include your of up to $3,000 ($1,500 for SIMPLE plans). your 2004 income. For details, see
spouse’s income. For most people, the This additional deferral amount is not sub- Pub. 550.
amount to enter on this line should be ject to the overall limit on elective defer-
shown in Form(s) W-2, box 1. But the fol- rals.
lowing types of income must also be in-
If you get a 2004 Form
cluded in the total on line 7.
1099-INT for U.S. savings
You cannot deduct the amount
bond interest that includes
•Wages received as a household em-
deferred. It is not included as
TIP
amounts you reported before
ployee for which you did not receive a
income in Form W-2, box 1.
CAUTION
!
2004, see Pub. 550.
Form W-2 because your employer paid you
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Form 1040—Lines 8b Through 10
purchaser of a stock is not entitled to re- Your Form 1099-DIV from ABC Mutual
Line 8b ceive the next dividend payment. When Fund shows total ordinary dividends of
counting the number of days you held the $1,000 and qualified dividends of $200.
Tax-Exempt Interest stock, include the day you disposed of the However, you sold the 10,000 shares on
stock but not the day you acquired it. See August 4, 2004. You have no qualified div-
If you received any tax-exempt interest,
the examples below. Also, when counting idends from ABC Mutual Fund because
such as from municipal bonds, report it on
the number of days you held the stock, you you held the ABC Mutual Fund stock for
line 8b. Include any exempt-interest divi-
cannot count certain days during which less than 61 days.
dends from a mutual fund or other regu-
your risk of loss was diminished. See
lated investment company. Do not include
Be sure you use the Qualified
Pub. 550 for more details.
interest earned on your IRA or Coverdell
Dividends and Capital Gain
education savings account. •Dividends attributable to periods to-
Tax Worksheet or the
taling more than 366 days that you received
TIP
Schedule D Tax Worksheet,
on any share of preferred stock held for less
whichever applies, to figure your tax. Your
than 91 days during the 181-day period that
Line 9a
tax may be less if you use the worksheet
began 90 days before the ex-dividend date.
that applies. See the instructions for line 43
When counting the number of days you
Ordinary Dividends
that begin on page 33 for details.
held the stock, you cannot count certain
Each payer should send you a Form days during which your risk of loss was
1099-DIV. Enter your total ordinary divi- diminished. See Pub. 550 for more details.
dends on line 9a. This amount should be Preferred dividends attributable to periods Line 10
shown in Form(s) 1099-DIV, box 1a. But totaling less than 367 days are subject to the
you must fill in and attach Schedule B if the Taxable Refunds, Credits, or
61-day holding period rule above.
total is over $1,500 or you received, as a •Dividends on any share of stock to the Offsets of State and Local
nominee, ordinary dividends that actually extent that you are under an obligation (in- Income Taxes
belong to someone else. cluding a short sale) to make related pay-
None of your refund is taxable
ments with respect to positions in
Nondividend Distributions
if, in the year you paid the tax,
substantially similar or related property.
Some distributions are a return of your cost
you did not itemize deductions.
•Payments in lieu of dividends, but
(or other basis). They will not be taxed until
TIP
only if you know or have reason to know
you recover your cost (or other basis). You that the payments are not qualified divi- If you received a refund, credit, or offset
must reduce your cost (or other basis) by dends. of state or local income taxes in 2004, you
these distributions. After you get back all of may receive a Form 1099-G. If you chose
your cost (or other basis), you must report
Example 1.
You bought 5,000 shares of to apply part or all of the refund to your
these distributions as capital gains on XYZ Corp. common stock on July 1, 2004. 2004 estimated state or local income tax,
Schedule D. For details, see Pub. 550. XYZ Corp. paid a cash dividend of 10 cents the amount applied is treated as received in
per share. The ex-dividend date was July 9, 2004. If the refund was for a tax you paid in
Dividends on insurance policies
2004. Your Form 1099-DIV from XYZ 2003 and you itemized deductions for
are a partial return of the premi-
Corp. shows $500 in box 1a (ordinary divi- 2003, use the worksheet on page 21 to see
ums you paid. Do not report
dends) and in box 1b (qualified dividends).
TIP
if any of your refund is taxable.
them as dividends. Include
However, you sold the 5,000 shares on Au-
them in income only if they exceed the total
gust 4, 2004. You held your shares of XYZ Exception. See
Recoveries
in Pub. 525 in-
of all net premiums you paid for the con-
Corp. for only 34 days of the 121-day pe- stead of using the worksheet on page 21 if
tract.
riod (from July 2, 2004, through August 4, any of the following apply.
2004). The 121-day period began on May •You received a refund in 2004 that is
10, 2004 (60 days before the ex-dividend for a tax year other than 2003.
date), and ended on September 7, 2004.
Line 9b •You received a refund other than an
You have no qualified dividends from XYZ income tax refund, such as a real property
Corp. because you held the XYZ stock for
Qualified Dividends tax refund, in 2004 of an amount deducted
less than 61 days.
Enter your total qualified dividends on or credit claimed in an earlier year.
Example 2.
Assume the same facts as in
line 9b. Qualified dividends are eligible for •Your 2003 taxable income was less
Example 1 except that you bought the stock
a lower tax rate than other ordinary income. than zero.
on July 8, 2004 (the day before the ex-divi-
Generally, these dividends are shown in •You made your last payment of 2003
dend date), and you sold the stock on Sep-
Form(s) 1099-DIV, box 1b. See Pub. 550 estimated state or local income tax in 2004.
tember 9, 2004. You held the stock for 63
for the definition of qualified dividends if days (from July 9, 2004, through Septem- •You owed alternative minimum tax in
you received dividends not reported on ber 9, 2004). The $500 of qualified divi- 2003.
Form 1099-DIV. dends shown in Form 1099-DIV, box 1b, •You could not deduct the full amount
Exception. Some dividends may be re- are all qualified dividends because you held of credits you were entitled to in 2003 be-
ported as qualified dividends in box 1b of the stock for 61 days of the 121-day period cause the total credits exceeded the amount
Form 1099-DIV but are not qualified divi- (from July 9, 2004, through September 7, shown on your 2003 Form 1040, line 43.
dends. These include: 2004). •You could be claimed as a dependent
•Dividends you received as a nominee.
Example 3.
You bought 10,000 shares by someone else in 2003.
See the Instructions for Schedule B. of ABC Mutual Fund common stock on Also, see
Tax benefit rule
in Pub. 525
•Dividends you received on any share July 1, 2004. ABC Mutual Fund paid a cash instead of using the worksheet on page 21 if
of stock that you held for less than 61 days dividend of 10 cents a share. The ex-divi- all of the following apply.
during the 121-day period that began 60 dend date was July 9, 2004. The ABC Mu-
days before the ex-dividend date. The tual Fund advises you that the portion of •You had to use the Itemized Deduc-
ex-dividend date is the first date following the dividend eligible to be treated as quali- tions Worksheet in the 2003 Schedule A
the declaration of a dividend on which the fied dividends equals 2 cents per share. instructions because your 2003 adjusted
Need more information or forms? See page 7.
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State and Local Income Tax Refund Worksheet—Line 10
Keep for Your Records
Form 1040—Lines 10 Through 13
gross income was over $139,500 ($69,750 box 2c (section 1202 gain), or box 2d (col-
Line 12
if married filing separately). lectibles (28%) gain).
•You could not deduct all of the If both of the above apply, enter your
Business Income or (Loss)
amount on the 2003 Itemized Deductions total capital gain distributions (from box 2a
If you operated a business or practiced your
Worksheet, line 1. of Form(s) 1099-DIV) on line 13 and check
profession as a sole proprietor, report your the box on that line. If you received capital
•The amount on line 8 of that 2003 income and expenses on Schedule C or gain distributions as a nominee (that is,
worksheet would be more than the amount C-EZ. they were paid to you but actually belong to
on line 4 of that worksheet if the amount on someone else), report on line 13 only the
line 4 were reduced by 80% of the refund amount that belongs to you. Attach a state-
you received in 2004. ment showing the full amount you received
Line 13 and the amount you received as a nominee.
See the Instructions for Schedule B for fil-
Capital Gain or (Loss)
Line 11 ing requirements for Forms 1099-DIV and
If you had a capital gain or loss, including 1096.
any capital gain distributions or a capital
Alimony Received loss carryover from 2003, you must com-
If you do not have to file Sched-
Enter amounts received as alimony or sepa- plete and attach Schedule D.
ule D, be sure you use the Qual-
rate maintenance. You must let the person
ified Dividends and Capital
Exception. You do not have to file Sched-
who made the payments know your social
TIP
Gain Tax Worksheet on
ule D if both of the following apply.
security number. If you do not, you may
page 34 to figure your tax. Your tax may be
have to pay a $50 penalty. For more details, •The only amounts you have to report
less if you use this worksheet.
use TeleTax topic 406 (see page 8) or see on Schedule D are capital gain distributions
Pub. 504. from Form(s) 1099-DIV, box 2a, or substi-
tute statements.
•None of the Form(s) 1099-DIV or
substitute statements have an amount in
box 2b (unrecaptured section 1250 gain),
1. Enter the income tax refund from Form(s) 1099-G (or similar statement). But do not enter more than
the amount on your 2003 Schedule A (Form 1040), line 5 ................................. 1.
2. Enter your total allowable itemized deductions from your 2003 Schedule A (Form
1040), line 28 .................................................... 2.
Note. If the filing status on your 2003 Form 1040 was married filing separately and
your spouse itemized deductions in 2003, skip lines 3, 4, and 5, and enter the
amount from line 2 on line 6.
3. Enter the amount shown below for the filing status claimed on
your 2003 Form 1040.
•Single or married filing separately— $4,750
}
•Married filing jointly or qualifying widow(er)— $9,500 . . 3.
•Head of household— $7,000
4. Did you fill in line 36a on your 2003 Form 1040?
No. Enter -0-.
Yes. Multiply the number in the box on line 36a of your
2003 Form 1040 by: $950 if your 2003 filing status
}
was married filing jointly or separately or qualifying 4.
widow(er); $1,150 if your 2003 filing status was
single or head of household.
5. Add lines 3 and 4 ................................................. 5.
6. Is the amount on line 5 less than the amount on line 2?
No. None of your refund is taxable.
STOP
Yes. Subtract line 5 from line 2 ................................................. 6.
7. Taxable part of your refund. Enter the smaller of line 1 or line 6 here and on Form 1040, line 10 7.
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Form 1040—Lines 14 Through 16b
b. Distribution code Q is shown in on Form 1099-R. For details on military
Line 14 Form 1099-R, box 7. disability pensions, see Pub. 525. If you
received a Form RRB-1099-R, see
3. You converted part or all of a tradi-
Other Gains or (Losses) Pub. 575 to find out how to report your
tional, SEP, or SIMPLE IRA to a Roth IRA benefits.
If you sold or exchanged assets used in a in 2004.
trade or business, see the Instructions for 4. You had a 2003 or 2004 IRA contri- Partially Taxable Pensions and
Form 4797. bution returned to you, with the related Annuities
earnings or less any loss, by the due date
Enter the total pension or annuity payments
(including extensions) of your tax return
you received in 2004 on line 16a. If your
for that year.
Lines 15a and 15b Form 1099-R does not show the taxable
5. You made excess contributions to amount, you must use the General Rule
IRA Distributions your IRA for an earlier year and had them explained in Pub. 939 to figure the taxable
returned to you in 2004.
You should receive a Form 1099-R show- part to enter on line 16b. But if your annu-
ing the amount of any distribution from 6. You recharacterized part or all of a ity starting date (defined below) was after
your individual retirement arrangement contribution to a Roth IRA as a traditional July 1, 1986, see
Simplified Method
below
(IRA). Unless otherwise noted in the line IRA contribution, or vice versa. to find out if you must use that method to
15a and 15b instructions, an IRA includes a figure the taxable part.
traditional IRA, Roth IRA, simplified em- Note. If you (or your spouse if filing
ployee pension (SEP) IRA, and a savings jointly) received more than one distribu- You can ask the IRS to figure the tax-
incentive match plan for employees tion, figure the taxable amount of each dis- able part for you for a $95 fee. For details,
(SIMPLE) IRA. Except as provided below, tribution and enter the total of the taxable see Pub. 939.
leave line 15a blank and enter the total dis- amounts on line 15b. Enter the total amount
tribution on line 15b. of those distributions on line 15a. If your Form 1099-R shows a taxable
amount, you may report that amount on
Exception 1. Enter the total distribution on
You may have to pay an addi-
line 16b. But you may be able to report a
line 15a if you rolled over part or all of the
tional tax if (a) you received an
lower taxable amount by using the General
distribution from one:
early distribution from your
Rule or the Simplified Method.
CAUTION
!
IRA and the total was not rolled
•IRA to another IRA of the same type
over, or (b) you were born before July 1,
(for example, from one traditional IRA to Annuity Starting Date
1933, and received less than the minimum
another traditional IRA), or Your annuity starting date is the later of the
required distribution from your traditional,
•SEP or SIMPLE IRA to a traditional first day of the first period for which you
SEP, and SIMPLE IRAs. See the instruc-
IRA. received a payment or the date the plan’s
tions for line 59 on page 39 for details.
Also, put “Rollover” next to line 15b. If obligations became fixed.
the total distribution was rolled over in a Simplified Method
qualified rollover, enter -0- on line 15b. If Lines 16a and 16b
the total distribution was not rolled over in You must use the Simplified Method if ei-
a qualified rollover, enter the part not rolled ther of the following applies.
Pensions and Annuities
over on line 15b unless
Exception 2
applies 1. Your annuity starting date (defined
You should receive a Form 1099-R show-
to the part not rolled over. Generally, a above) was after July 1, 1986, and you used
ing the amount of your pension and annuity
qualified rollover must be made within 60 this method last year to figure the taxable
payments. See pages 23 and 24 for details
days after the day you received the distribu- part.
on rollovers and lump-sum distributions.
tion. For more details on rollovers, see
Do not include the following payments on
Pub. 590. 2. Your annuity starting date was after
lines 16a and 16b. Instead, report them on November 18, 1996, and both of the fol-
If you rolled over the distribution (a) in line 7. lowing apply.
2005, or (b) from an IRA into a qualified •Disability pensions received before
plan (other than an IRA), attach a statement a. The payments are from a qualified
you reach the minimum retirement age set
explaining what you did. employee plan, a qualified employee annu-
by your employer. ity, or a tax-sheltered annuity.
Exception 2. If any of the following apply, •Corrective distributions of excess sal- b. On your annuity starting date, either
enter the total distribution on line 15a and ary deferrals or excess contributions to re- you were under age 75 or the number of
see Form 8606 and its instructions to figure tirement plans. years of guaranteed payments was fewer
the amount to enter on line 15b. than 5. See Pub. 575 for the definition of
Attach Form(s) 1099-R to
1. You received a distribution from an guaranteed payments.
Form 1040 if any federal
IRA (other than a Roth IRA) and you made
income tax was withheld.
nondeductible contributions to any of your
TIP
If you must use the Simplified Method,
traditional or SEP IRAs for 2004 or an ear- complete the worksheet on page 23 to fig-
Fully Taxable Pensions and
lier year. If you made nondeductible contri- ure the taxable part of your pension or an-
Annuities
butions to these IRAs for 2004, also see nuity. For more details on the Simplified
Pub. 590. If your pension or annuity is fully taxable, Method, see Pub. 575 or Pub. 721 for U.S.
2. You received a distribution from a enter it on line 16b; do not make an entry Civil Service retirement benefits.
Roth IRA. But if either (a) or (b) below on line 16a. Your payments are fully tax-
applies, enter -0- on line 15b; you do not able if (a) you did not contribute to the cost
If you received U.S. Civil Serv-
have to see Form 8606 or its instructions. (see page 23) of your pension or annuity, or
ice retirement benefits and you
(b) you got your entire cost back tax free
a. Distribution code T is shown in Form
chose the alternative annuity
before 2004.
CAUTION
!
1099-R, box 7, and you made a contribu-
option, see Pub. 721 to figure
tion (including a conversion) to a Roth IRA Fully taxable pensions and annuities
the taxable part of your annuity. Do not use
for 1998 or 1999. also include military retirement pay shown
the worksheet on page 23.
Need more information or forms? See page 7.
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Simplified Method Worksheet—Lines 16a and 16b
Keep for Your Records
Form 1040—Lines 16a and 16b
employee who died, see Pub. 575. If there
Age (or Combined Ages) at Rollovers
is more than one beneficiary, see Pub. 575
Annuity Starting Date Generally, a qualified rollover is a tax-free
or Pub. 721 to figure each beneficiary’s distribution of cash or other assets from one
If you are the retiree, use your age on the taxable amount. retirement plan that is contributed to an-
annuity starting date. If you are the survivor Cost other plan within 60 days of receiving the
of a retiree, use the retiree’s age on his or
distribution. Use lines 16a and 16b to report
her annuity starting date. But if your annu- Your cost is generally your net investment a qualified rollover, including a direct roll-
ity starting date was after 1997 and the in the plan as of the annuity starting date. It over, from one qualified employer’s plan to
payments are for your life and that of your does not include pre-tax contributions. another or to an IRA or SEP.
beneficiary, use your combined ages on the Your net investment should be shown in
annuity starting date. Form 1099-R, box 9b, for the first year you Enter on line 16a the total distribution
received payments from the plan.
If you are the beneficiary of an before income tax or other deductions were
Before you begin: ⻫If you are the beneficiary of a deceased employee or former employee who died before
August 21, 1996, include any death benefit exclusion that you are entitled to (up to $5,000)
in the amount entered on line 2 below.
Note. If you had more than one partially taxable pension or annuity, figure the taxable part of each separately. Enter the
total of the taxable parts on Form 1040, line 16b. Enter the total pension or annuity payments received in 2004 on
Form 1040, line 16a.
1. Enter the total pension or annuity payments received in 2004. Also, enter this amount on Form 1040,
line 16a ...................................................................... 1.
2. Enter your cost in the plan at the annuity starting date ..................... 2.
3. Enter the appropriate number from Table 1 below. But if your annuity starting
date was after 1997 and the payments are for your life and that of your
beneficiary, enter the appropriate number from Table 2 below ............... 3.
4. Divide line 2 by the number on line 3 ................................. 4.
5. Multiply line 4 by the number of months for which this year’s payments were
made. If your annuity starting date was before 1987, skip lines 6 and 7 and enter
this amount on line 8. Otherwise, go to line 6 ........................... 5.
6. Enter the amount, if any, recovered tax free in years after 1986 .............. 6.
7. Subtract line 6 from line 2 ......................................... 7.
8. Enter the smaller of line 5 or line 7 ................................................. 8.
9. Taxable amount. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, enter this
amount on Form 1040, line 16b. If your Form 1099-R shows a larger amount, use the amount on this
line instead of the amount from Form 1099-R .......................................... 9.
Table 1 for Line 3 Above
AND your annuity starting date was—
IF the age at annuity starting before November 19, 1996, after November 18, 1996,
date (see above) was . . . enter on line 3 . . . enter on line 3 . . .
55 or under 300 360
56–60 260 310
61–65 240 260
66–70 170 210
71 or older 120 160
Table 2 for Line 3 Above
IF the combined ages at annuity
starting date (see above) were . . . THEN enter on line 3 . . .
110 or under 410
111–120 360
121–130 310
131–140 260
141 or older 210
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Need more information or forms? See page 7.
Page 24 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 16a Through 21
withheld. This amount should be shown in benefits paid to you. Box 4 will show the •Taxable distributions from a Cover-
Form 1099-R, box 1. From the total on line amount of any benefits you repaid in 2004. dell education savings account (ESA) or a
16a, subtract any contributions (usually If you received railroad retirement benefits qualified tuition program (QTP). Distribu-
shown in box 5) that were taxable to you treated as social security, you should re- tions from these accounts may be taxable if
when made. From that result, subtract the ceive a Form RRB-1099. (a) they are more than the qualified higher
amount of the qualified rollover. Enter the education expenses of the designated bene-
Use the worksheet on page 25 to see if
remaining amount, even if zero, on ficiary in 2004, and (b) they were not in-
any of your benefits are taxable.
line 16b. Also, enter ‘‘Rollover’’ next to cluded in a qualified rollover. See
Exception. Do not use the worksheet on
line 16b. Pub. 970.
page 25 if any of the following apply.
Special rules apply to partial rollovers
You may have to pay an addi-
•You made contributions to a tradi-
of property. For more details on rollovers,
tional tax if you received a tax-
tional IRA for 2004 and you or your spouse
including distributions under qualified do-
able distribution from a
were covered by a retirement plan at work
mestic relations orders, see Pub. 575.
CAUTION
!
Coverdell ESA or a QTP. See
or through self-employment. Instead, use
Lump-Sum Distributions
the Instructions for Form 5329.
the worksheets in Pub. 590 to see if any of
your social security benefits are taxable and
If you received a lump-sum distribution •Taxable distributions from a health
to figure your IRA deduction.
from a profit-sharing or retirement plan, savings account (HSA) or an Archer MSA.
your Form 1099-R should have the ‘‘Total •You repaid any benefits in 2004 and Distributions from these accounts may be
distribution’’ box in box 2b checked. You your total repayments (box 4) were more taxable if (a) they are more than the un-
may owe an additional tax if you received than your total benefits for 2004 (box 3). reimbursed qualified medical expenses of
an early distribution from a qualified retire- None of your benefits are taxable for 2004. the account beneficiary or account holder
ment plan and the total amount was not Also, you may be able to take an itemized in 2004, and (b) they were not included in a
rolled over in a qualified rollover. For de- deduction or a credit for part of the excess qualified rollover. See Pub. 969.
tails, see the instructions for line 59 on repayments if they were for benefits you
You may have to pay an addi-
page 39. included in gross income in an earlier year.
tional tax if you received a tax-
For more details, see Pub. 915.
Enter the total distribution on line 16a
able distribution from an HSA
and the taxable part on line 16b. •You file Form 2555, 2555-EZ, 4563,
CAUTION
!
or an Archer MSA. See the In-
or 8815, or you exclude employer-provided
structions for Form 8889 for HSAs or the
You may be able to pay less tax
adoption benefits or income from sources
Instructions for Form 8853 for Archer
on the distribution if you were
within Puerto Rico. Instead, use the work-
MSAs.
born before January 2, 1936, or
sheet in Pub. 915.
TIP
you are the beneficiary of a de-
•Prizes and awards.
ceased employee who was born before Jan-
•Gambling winnings, including lotter-
uary 2, 1936. For details, see Form 4972.
ies, raffles, a lump-sum payment from the
Line 21 sale of a right to receive future lottery pay-
ments, etc. For details on gambling losses,
Other Income see the instructions for Schedule A, line 27,
Line 19
Do not report on this line any
on page A-6.
income from self-employment
Unemployment
Attach Form(s) W-2G to
or fees received as a notary
Compensation
Form 1040 if any federal in-
CAUTION
!
public. Instead, you must use come tax was withheld.
You should receive a Form 1099-G show-
Schedule C, C-EZ, or F, even if you do not
TIP
ing the total unemployment compensation
have any business expenses. Also, do not
paid to you in 2004. •Jury duty fees. Also, see the instruc-
report on line 21 any nonemployee com-
tions for line 35 on page 31.
pensation shown on Form 1099-MISC. In-
If you received an overpayment of un-
stead, see the chart on page 15 to find out
employment compensation in 2004 and •Alaska Permanent Fund dividends.
where to report that income.
you repaid any of it in 2004, subtract the •Reimbursements or other amounts re-
amount you repaid from the total amount Use line 21 to report any income not ceived for items deducted in an earlier year,
you received. Enter the result on line 19. reported elsewhere on your return or other such as medical expenses, real estate taxes,
Also, enter “Repaid” and the amount you schedules. See the examples below. List the or home mortgage interest. See
Recoveries
repaid on the dotted line next to line 19. If, type and amount of income. If necessary, in Pub. 525 for details on how to figure the
in 2004, you repaid unemployment com- show the required information on an at- amount to report.
pensation that you included in gross in- tached statement. For more details, see •Income from the rental of personal
come in an earlier year, you may deduct the
Miscellaneous Income
in Pub. 525. property if you engaged in the rental for
amount repaid on Schedule A, line 22. But profit but were not in the business of rent-
Do not report any nontaxable
if you repaid more than $3,000, see
Repay-
ing such property. Also, see the instructions
amounts on line 21, such as
ments
in Pub. 525 for details on how to for line 35 on page 31.
child support; money or prop-
report the repayment.
TIP
•Income from an activity not engaged
erty that was inherited, willed
in for profit. See Pub. 535.
to you, or received as a gift; or life insur-
ance proceeds received because of a
•Loss on certain corrective distribu-
Lines 20a and 20b
person’s death.
tions of excess deferrals. See
Retirement
Plan Contributions
in Pub. 525.
Examples of income to report on line 21
Social Security Benefits are:
You should receive a Form SSA-1099
showing in box 3 the total social security
Need more information or forms? See page 7.
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Social Security Benefits Worksheet—Lines 20a and 20b
Keep for Your Records
Form 1040—Lines 20a and 20b
Before you begin: ⻫Complete Form 1040, lines 21, 23 through 25, and 28 through 34a, if they apply to you.
⻫Figure any write-in adjustments to be entered on the dotted line next to line 35 (see the
instructions for line 35 on page 31).
⻫If you are married filing separately and you lived apart from your spouse for all of 2004,
enter “D” to the right of the word “benefits” on line 20a.
⻫Be sure you have read the Exception on page 24 to see if you can use this worksheet
instead of a publication to find out if any of your benefits are taxable.
1. Enter the total amount from box 5 of all your Forms SSA-1099 and
Forms RRB-1099 .......................................... 1.
2. Enter one-half of line 1 ...................................................... 2.
3. Enter the total of the amounts from Form 1040, lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17
through 19, and 21 ......................................................... 3.
4. Enter the amount, if any, from Form 1040, line 8b .................................. 4.
5. Add lines 2, 3, and 4 ........................................................ 5.
6. Enter the total of the amounts from Form 1040, lines 23 through 25, and 28 through 34a, plus
any write-in adjustments you entered on the dotted line next to line 35 ................... 6.
7. Is the amount on line 6 less than the amount on line 5?
No. None of your social security benefits are taxable.
STOP
Yes. Subtract line 6 from line 5 ............................................. 7.
8. If you are:
•Married filing jointly, enter $32,000
•Single, head of household, qualifying widow(er), or married filing
separately and you lived apart from your spouse for all of 2004,
enter $25,000
}
.............. 8.
•Married filing separately and you lived with your spouse at any time
in 2004, skip lines 8 through 15; multiply line 7 by 85% (.85) and
enter the result on line 16. Then go to line 17
9. Is the amount on line 8 less than the amount on line 7?
No. None of your social security benefits are taxable. You do not have to enter any
STOP
amounts on line 20a or 20b of Form 1040. But if you are married filing
separately and you lived apart from your spouse for all of 2004, enter -0- on
line 20b. Be sure you entered “D” to the right of the word “benefits” on line 20a.
Yes. Subtract line 8 from line 7 ............................................. 9.
10. Enter: $12,000 if married filing jointly; $9,000 if single, head of household, qualifying
widow(er), or married filing separately and you lived apart from your spouse for all of 2004 . . 10.
11. Subtract line 10 from line 9. If zero or less, enter -0- ................................ 11.
12. Enter the smaller of line 9 or line 10 ............................................ 12.
13. Enter one-half of line 12 ..................................................... 13.
14. Enter the smaller of line 2 or line 13 ............................................ 14.
15. Multiply line 11 by 85% (.85). If line 11 is zero, enter -0- ............................ 15.
16. Add lines 14 and 15 ........................................................ 16.
17. Multiply line 1 by 85% (.85) .................................................. 17.
18. Taxable social security benefits. Enter the smaller of line 16 or line 17 ................. 18.
•Enter the amount from line 1 above on Form 1040, line 20a.
•Enter the amount from line 18 above on Form 1040, line 20b.
If any of your benefits are taxable for 2004 and they include a lump-sum benefit payment that was for an earlier
year, you may be able to reduce the taxable amount. See Pub. 915 for details.
TIP
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Form 1040—Lines 23 Through 25
•Performing-arts-related expenses as a shown in Form W-2, box 11. If it is not,
qualified performing artist. contact your employer for the amount of
Adjusted Gross
the distribution.
•Business expenses of fee-basis state
or local government officials. •You must file a joint return to deduct
Income
contributions to your spouse’s IRA. Enter
For more details, see Form 2106 or the total IRA deduction for you and your
2106-EZ. spouse on line 25.
Line 23 •Do not include qualified rollover con-
Educator Expenses tributions in figuring your deduction. In-
Line 25 stead, see the instructions for lines 15a and
If you were an eligible educator in 2004, 15b on page 22.
you can deduct up to $250 of qualified ex- IRA Deduction
penses you paid in 2004. If you and your •Do not include trustees’ fees that were
If you made any nondeductible
spouse are filing jointly and both of you billed separately and paid by you for your
contributions to a traditional in-
were eligible educators, the maximum de- IRA. These fees can be deducted only as an
dividual retirement arrange-
duction is $500. However, neither spouse itemized deduction on Schedule A.
TIP
ment (IRA) for 2004, you must
can deduct more than $250 of his or her •If the total of your IRA deduction on
report them on Form 8606.
qualified expenses. An eligible educator is line 25 plus any nondeductible contribution
a kindergarten through grade 12 teacher, If you made contributions to a tradi- to your traditional IRAs shown on Form
instructor, counselor, principal, or aide in a tional IRA for 2004, you may be able to 8606 is less than your total traditional IRA
school for at least 900 hours during a take an IRA deduction. But you, or your contributions for 2004, see Pub. 590 for
school year. spouse if filing a joint return, must have special rules.
had earned income to do so. For IRA pur-
Qualified expenses include ordinary and
By April 1 of the year after the
poses, earned income includes alimony and
necessary expenses paid in connection with
year in which you turn age 70
1
⁄
2
,
separate maintenance payments reported
books, supplies, equipment (including
you must start taking minimum
on line 11. A statement should be sent to
computer equipment, software, and serv-
TIP
required distributions from
you by May 31, 2005, that shows all contri-
ices), and other materials used in the class-
your traditional IRA. If you do not, you
butions to your traditional IRA for 2004.
room. An ordinary expense is one that is
may have to pay a 50% additional tax on
common and accepted in your educational Use the worksheet on page 27 to figure
the amount that should have been distrib-
field. A necessary expense is one that is the amount, if any, of your IRA deduction.
uted. For details, including how to figure
helpful and appropriate for your profession But read the following list before you fill in
the minimum required distribution, see
as an educator. An expense does not have the worksheet.
Pub. 590.
to be required to be considered necessary. •If you were age 701⁄2 or older at the Were You Covered by a
Qualified expenses do not include ex- end of 2004, you cannot deduct any contri- Retirement Plan?
penses for home schooling or for butions made to your traditional IRA for
nonathletic supplies for courses in health or 2004 or treat them as nondeductible contri- If you were covered by a retirement plan
physical education. You must reduce your butions. (qualified pension, profit-sharing (includ-
qualified expenses by the following ing 401(k)), annuity, SEP, SIMPLE, etc.) at
•You cannot deduct contributions to a
amounts. work or through self-employment, your
Roth IRA. But you may be able to take the IRA deduction may be reduced or elimi-
• Excludable U.S. series EE and I sav- retirement savings contributions credit. See nated. But you can still make contributions
ings bond interest from Form 8815. the instructions for line 50 on page 36. to an IRA even if you cannot deduct them.
•Nontaxable qualified tuition program
If you made contributions to
In any case, the income earned on your IRA
earnings.
both a traditional IRA and a
contributions is not taxed until it is paid to
•Nontaxable earnings from Coverdell
Roth IRA for 2004, do not use
you.
education savings accounts.
CAUTION
!
the worksheet on page 27. In-
The “Retirement plan” box in Form
•Any reimbursements you received for
stead, see Pub. 590 to figure the amount, if
W-2, box 13, should be checked if you
these expenses that were not reported to
any, of your IRA deduction.
were covered by a plan at work even if you
you in Form W-2, box 1. were not vested in the plan. You are also
•You cannot deduct elective deferrals
For more details, use TeleTax topic 458 covered by a plan if you were self-em-
to a 401(k) plan, section 457 plan, SIMPLE
(see page 8). ployed and had a SEP, SIMPLE, or quali-
plan, or the federal Thrift Savings Plan.
fied retirement plan.
These amounts are not included as income
in Form W-2, box 1. But you may be able If you were covered by a retirement plan
to take the retirement savings contributions and you file Form 2555, 2555-EZ, or 8815,
Line 24 credit. See the instructions for line 50 on or you exclude employer-provided adop-
page 36.
Certain Business Expenses tion benefits, see Pub. 590 to figure the
•If you made contributions to your IRA amount, if any, of your IRA deduction.
of Reservists, Performing in 2004 that you deducted for 2003, do not Married persons filing separately. If you
Artists, and Fee-Basis include them in the worksheet. were not covered by a retirement plan but
Government Officials •If you received a distribution from a your spouse was, you are considered cov-
Include the following deductions on nonqualified deferred compensation plan ered by a plan unless you lived apart from
line 24. or nongovernmental section 457 plan that is your spouse for all of 2004.
included in Form W-2, box 1, do not in-
•Certain business expenses of National clude that distribution on line 8 of the
Guard and reserve members who traveled worksheet. The distribution should be
more than 100 miles from home to perform
services as a National Guard or reserve
member.
Need more information or forms? See page 7.
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IRA Deduction Worksheet—Line 25
Keep for Your Records
Form 1040—Line 25
Before you begin: ⻫Complete Form 1040, lines 28 through 34a, if they apply to you.
⻫Figure any write-in adjustments to be entered on the dotted line next to line 35 (see the instructions for
line 35 on page 31).
⻫Be sure you have read the list on page 26.
Your IRA Spouse’s IRA
1a. Were you covered by a retirement plan (see page 26)? .................... 1a. Yes No
b. If married filing jointly, was your spouse covered by a retirement plan? ......................... 1b. Yes No
Next. If you checked “No” on line 1a (and “No” on line 1b if married filing
jointly), skip lines 2 through 6, enter $3,000 ($3,500 if age 50 or older at the end
of 2004) on line 7a (and 7b if applicable), and go to line 8. Otherwise, go to
line 2.
2. Enter the amount shown below that applies to you.
•Single, head of household, or married filing separately and you lived apart
from your spouse for all of 2004, enter $55,000
•Qualifying widow(er), enter $75,000
}
2a. 2b.
•Married filing jointly, enter $75,000 in both columns. But if you checked
“No” on either line 1a or 1b, enter $160,000 for the person who was not
covered by a plan
•Married filing separately and you lived with your spouse at any time in 2004,
enter $10,000
3. Enter the amount from Form 1040, line 22 .......... 3.
4. Enter the total of the amounts from Form 1040, lines 23,
24, 28 through 34a, plus any write-in adjustments you
entered on the dotted line next to line 35 ........... 4.
5. Subtract line 4 from line 3. Enter the result in both columns ................ 5a. 5b.
6. Is the amount on line 5 less than the amount on line 2?
None of your IRA contributions are deductible. For details on
No.
nondeductible IRA contributions, see Form 8606.
STOP
Subtract line 5 from line 2 in each column. If the result is $10,000 or
Yes.
more, enter $3,000 ($3,500 if age 50 or older at the end of 2004) on
line 7 for that column and go to line 8. Otherwise, go to line 7 .... 6a. 6b.
7. Multiply lines 6a and 6b by 30% (.30) (or by 35% (.35) in the column for the IRA
of a person who is age 50 or older at the end of 2004). If the result is not a
multiple of $10, increase it to the next multiple of $10 (for example, increase
$490.30 to $500). If the result is $200 or more, enter the result. But if it is less
than $200, enter $200 ........................................... 7a. 7b.
8. Enter your wages, and your spouse’s if filing jointly, and
other earned income from Form 1040, minus any
deductions on Form 1040, lines 30 and 32. Do not reduce
wages by any loss from self-employment ........... 8.
If married filing jointly and line 8 is less than $6,000 ($6,500 if one
spouse is age 50 or older at the end of 2004; $7,000 if both spouses are
age 50 or older at the end of 2004), stop here and see Pub. 590 to
CAUTION
!
figure your IRA deduction.
9. Enter traditional IRA contributions made, or that will be made by April 15, 2005,
for 2004 to your IRA on line 9a and to your spouse’s IRA on line 9b ......... 9a. 9b.
10. On line 10a, enter the smallest of line 7a, 8, or 9a. On line 10b, enter the smallest
of line 7b, 8, or 9b. This is the most you can deduct. Add the amounts on lines 10a
and 10b and enter the total on Form 1040, line 25. Or, if you want, you can deduct
a smaller amount and treat the rest as a nondeductible contribution (see Form
8606) ......................................................10a. 10b.
You may be able to take the retirement savings contributions credit. See the instructions for line 50 on page 36.
TIP
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Need more information or forms? See page 7.
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Student Loan Interest Deduction Worksheet—Line 26
Keep for Your Records
Form 1040—Line 26
tion expenses for yourself, your spouse, or •Excludable U.S. series EE and I sav-
anyone who was your dependent when the ings bond interest from Form 8815.
Line 26 loan was taken out. The person for whom •Nontaxable qualified tuition program
Student Loan Interest the expenses were paid must have been an earnings.
eligible student (see this page). However, a
Deduction •Nontaxable earnings from Coverdell
loan is not a qualified student loan if (a) any education savings accounts.
You can take this deduction only if all of of the proceeds were used for other pur-
the following apply. •Any scholarship, educational assis-
poses, or (b) the loan was from either a tance allowance, or other payment (but not
•You paid interest in 2004 on a quali- related person or a person who borrowed gifts, inheritances, etc.) excluded from in-
fied student loan (see below). the proceeds under a qualified employer come.
plan or a contract purchased under such a
•Your filing status is any status except
plan. To find out who is a related person,
married filing separately. For more details on these expenses, see
see Pub. 970. Pub. 970.
•Your modified adjusted gross income
(AGI) is less than: $65,000 if single, head Qualified higher education expenses An eligible student is a person who:
of household, or qualifying widow(er); generally include tuition, fees, room and •Was enrolled in a degree, certificate,
$130,000 if married filing jointly. Use lines board, and related expenses such as books or other program (including a program of
2 through 4 of the worksheet below to fig- and supplies. The expenses must be for ed- study abroad that was approved for credit
ure your modified AGI. ucation in a degree, certificate, or similar by the institution at which the student was
program at an eligible educational institu-
•You are not claimed as a dependent on enrolled) leading to a recognized educa-
tion. An eligible educational institution in-
someone’s (such as your parent’s) 2004 tax tional credential at an eligible educational
cludes most colleges, universities, and
return. institution, and
certain vocational schools. You must re- •Carried at least half the normal
Use the worksheet below to figure your duce the expenses by the following bene- full-time workload for the course of study
student loan interest deduction. fits. he or she was pursuing.
•Employer-provided educational assis-
Exception. Use Pub. 970 instead of the tance benefits that are not included in
worksheet below to figure your student Form(s) W-2, box 1.
loan interest deduction if you file Form
2555, 2555-EZ, or 4563, or you exclude
income from sources within Puerto Rico.
A qualified student loan is any loan you
took out to pay the qualified higher educa-
Before you begin: ⻫Complete Form 1040, lines 28 through 34a, if they apply to you.
⻫Figure any write-in adjustments to be entered on the dotted line next to line 35 (see the
instructions for line 35 on page 31).
⻫See the instructions for line 26 above.
⻫Be sure you have read the Exception above to see if you can use this worksheet instead of
Pub. 970 to figure your deduction.
1. Enter the total interest you paid in 2004 on qualified student loans (see above). Do not enter more
than $2,500 ...................................................................1.
2. Enter the amount from Form 1040, line 22 .............................. 2.
3. Enter the total of the amounts from Form 1040, lines 23 through 25, 28 through
34a, plus any write-in adjustments you entered on the dotted line next to line 35 . . 3.
4. Subtract line 3 from line 2 .......................................... 4.
5. Enter the amount shown below for your filing status.
•Single, head of household, or qualifying widow(er)—$50,000
}
......... 5.
•Married filing jointly—$100,000
6. Is the amount on line 4 more than the amount on line 5?
No. Skip lines 6 and 7, enter -0- on line 8, and go to line 9.
Yes. Subtract line 5 from line 4 .................................. 6.
7. Divide line 6 by $15,000 ($30,000 if married filing jointly). Enter the result as a decimal (rounded to
at least three places). If the result is 1.000 or more, enter 1.000 ............................7. .
8. Multiply line 1 by line 7 .........................................................8.
9. Student loan interest deduction. Subtract line 8 from line 1. Enter the result here and on
Form 1040, line 26. Do not include this amount in figuring any other deduction on your return (such
as on Schedule A, C, E, etc.) ......................................................9.
Need more information or forms? See page 7.
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Tuition and Fees Deduction Worksheet—Line 27
Keep for Your Records
Form 1040—Lines 27 Through 29
for the student’s enrollment or attendance For more details, use TeleTax topic 457
Line 27 at an eligible educational institution during (see page 8) or see Pub. 970.
2004. Tuition and fees paid in 2004 for an
You may be able to take a credit
Tuition and Fees Deduction academic period that begins in the first 3
for your educational expenses
months of 2005 can also be used in figuring
You can take this deduction only if all of
instead of a deduction. See the
your deduction. Amounts paid include
the following apply.
TIP
instructions for line 49 on page
those paid by credit card or with borrowed
•You paid qualified tuition and fees
36 for details.
funds. An eligible educational institution
(see this page) in 2004 for yourself, your includes most colleges, universities, and
spouse, or your dependent(s). certain vocational schools.
•Your filing status is any status except Line 28
Qualified tuition and fees do not include
married filing separately. amounts paid for the following amounts.
•Your modified adjusted gross income Health Savings Account
•Room and board, insurance, medical
(AGI) is not more than: $80,000 if single, Deduction
expenses (including student health fees),
head of household, or qualifying transportation, or other similar personal, If contributions (other than employer con-
widow(er); $160,000 if married filing living, or family expenses. tributions) were made to your health sav-
jointly. Use lines 1 through 3 of the work-
ings account for 2004, you may be able to
sheet below to figure your modified AGI. •Course-related books, supplies, equip-
take this deduction. See Form 8889.
ment, and nonacademic activities, except
•You cannot be claimed as a dependent for fees required to be paid to the institution
on someone’s (such as your parent’s) 2004 as a condition of enrollment or attendance.
tax return.
•Any course involving sports, games,
•You are not claiming an education Line 29
or hobbies, unless such course is part of the
credit for the same student. See the instruc- student’s degree program. Moving Expenses
tions for line 49 on page 36.
Qualified tuition and fees must be re-
•You were a U.S. citizen or resident If you moved in connection with your job
duced by the following benefits.
alien for all of 2004 or you were a nonresi- or business or started a new job, you may
dent alien for any part of 2004 and you are be able to take this deduction. But your new
•Excludable U.S. series EE and I sav-
filing a joint return. workplace must be at least 50 miles farther
ings bond interest from Form 8815.
from your old home than your old home
Use the worksheet below to figure your •Nontaxable qualified tuition program was from your old workplace. If you had no
tuition and fees deduction. earnings. former workplace, your new workplace
•Nontaxable earnings from Coverdell
Exception. Use Pub. 970 instead of the must be at least 50 miles from your old
education savings accounts.
worksheet below to figure your tuition and home. Use TeleTax topic 455 (see page 8)
fees deduction if you file Form 2555, •Any scholarship, educational assis- or see Form 3903.
2555-EZ, or 4563, or you exclude income tance allowance, or other payment (but not
from sources within Puerto Rico. gifts, inheritances, etc.) excluded from in-
come.
Qualified tuition and fees are amounts
paid in 2004 for tuition and fees required
Before you begin: ⻫Complete Form 1040, lines 28 through 34a, if they apply to you.
⻫Figure any write-in adjustments to be entered on the dotted line next to line 35 (see the
instructions for line 35 on page 31).
⻫See the instructions for line 27 above.
⻫Be sure you have read the Exception above to see if you can use this worksheet instead of
Pub. 970 to figure your deduction.
1. Enter the amount from Form 1040, line 22 ........................................ 1.
2. Enter the total of the amounts from Form 1040, lines 23 through 26, 28 through 34a, plus any
write-in adjustments you entered on the dotted line next to line 35 ...................... 2.
3. Subtract line 2 from line 1. If the result is more than $80,000 ($160,000 if married filing
jointly),
STOP
You cannot take the deduction for tuition and fees ........................ 3.
4. Tuition and fees deduction. Is the amount on line 3 more than $65,000 ($130,000 if married
filing jointly)?
Yes. Enter the total qualified tuition and fees (defined above) you paid in 2004. Do not
enter more than $2,000. Also, enter this amount on Form 1040, line 27. 4.
No. Enter the total qualified tuition and fees (defined above) you paid in 2004. Do not
}
enter more than $4,000. Also, enter this amount on Form 1040, line 27.
Note. Do not include this amount in figuring any other deduction on your return (such as on Schedule A, C, E, etc.).
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Need more information or forms? See page 7.
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Self-Employed Health Insurance Deduction Worksheet—Line 31
Keep for Your Records
Form 1040—Lines 30 Through 34b
be used to figure the deduction. For exam- •You are using amounts paid for quali-
Line 30 ple, if you were eligible to participate in a fied long-term care insurance to figure the
subsidized health plan maintained by your deduction.
One-Half of spouse’s employer from September 30
Self-Employment Tax through December 31, you cannot use
amounts paid for health insurance coverage
If you were self-employed and owe Line 32
for September through December to figure
self-employment tax, fill in Schedule SE to your deduction.
figure the amount of your deduction. Self-Employed SEP, SIMPLE,
For more details, see Pub. 535. and Qualified Plans
If you were self-employed or a partner, you
Note. If, during 2004, you were an eligible
Line 31 may be able to take this deduction. See
trade adjustment assistance (TAA) recipi-
Pub. 560 or, if you were a minister, Pub.
ent, alternative TAA recipient, or Pension
Self-Employed Health 517.
Benefit Guaranty Corporation pension re-
Insurance Deduction cipient, you must complete Form 8885
before completing the worksheet below.
You may be able to deduct the amount you When figuring the amount to enter on line 1
paid for health insurance for yourself, your Line 33
of the worksheet below, do not include any
spouse, and your dependents if any of the health coverage tax credit advance pay-
following apply. Penalty on Early Withdrawal
ments shown in Form 1099-H, box 1. Also,
•You were self-employed and had a net of Savings
subtract the amount shown on Form 8885,
profit for the year. line 4, (reduced by any advance payments The Form 1099-INT or Form 1099-OID
•You used one of the optional methods shown on line 6 of that form) from the total you received will show the amount of any
to figure your net earnings from self-em- insurance premiums you paid. penalty you were charged.
ployment on Schedule SE.
•You received wages in 2004 from an If you qualify to take the deduction, use
S corporation in which you were a the worksheet below to figure the amount Lines 34a and 34b
more-than-2% shareholder. Health insur- you can deduct.
ance benefits paid for you may be shown in Alimony Paid
Exception. Use Pub. 535 instead of the
Form W-2, box 14. worksheet below to find out how to figure If you made payments to or for your spouse
The insurance plan must be established your deduction if any of the following ap- or former spouse under a divorce or separa-
under your business. But if you were also ply. tion instrument, you may be able to take
eligible to participate in any subsidized this deduction. Use TeleTax topic 452 (see
•You had more than one source of in-
health plan maintained by your or your page 8) or see Pub. 504.
come subject to self-employment tax.
spouse’s employer for any month or part of •You file Form 2555 or 2555-EZ.
a month in 2004, amounts paid for health
insurance coverage for that month cannot
Before you begin: ⻫Complete Form 1040, line 32, if it applies to you.
⻫If, during 2004, you were an eligible trade adjustment assistance (TAA) recipient, alternative
TAA recipient, or Pension Benefit Guaranty Corporation pension recipient, see the Note
above.
⻫Be sure you have read the Exception above to see if you can use this worksheet instead of
Pub. 535 to figure your deduction.
1. Enter the total amount paid in 2004 for health insurance coverage established under your business
for 2004 for you, your spouse, and your dependents. But do not include amounts for any month you
were eligible to participate in an employer-sponsored health plan ......................... 1.
2. Enter your net profit* and any other earned income** from the business under which the insurance
plan is established, minus any deductions on Form 1040, lines 30 and 32 ................... 2.
3. Self-employed health insurance deduction. Enter the smaller of line 1 or line 2 here and on
Form 1040, line 31. Do not include this amount in figuring any medical expense deduction on
Schedule A ................................................................. 3.
*
If you used either optional method to figure your net earnings from self-employment, do not enter your net profit. Instead, enter the
amount from Schedule SE, line 4b.
**
Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. It does not include capital
gain income. If you were a more-than-2% shareholder in the S corporation under which the insurance plan is established, earned income
is your wages from that corporation.
Need more information or forms? See page 7.
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Form 1040—Lines 35 Through 39
3. Is designed to be propelled by a above, you can get a statement certified by
clean-burning fuel, such as natural gas, liq- your eye doctor or registered optometrist to
Line 35 uefied natural gas, liquefied petroleum gas, this effect instead.
Include in the total on line 35 any of the hydrogen, or electricity. You must keep the statement for your
following write-in adjustments. To find out records.
if you can take the deduction, see the form A qualified clean-fuel vehicle includes
or publication indicated. On the dotted line certain gasoline-electric hybrid vehicles
next to line 35, enter the amount of your such as the Honda Insight, Honda Civic
deduction and identify it as indicated. Hybrid, and Toyota Prius. It does not in- Line 38b
•Archer MSA deduction (see Form clude electric vehicles. If your spouse itemizes deductions on a
8853). Identify as “MSA.” separate return or if you were a dual-status
You may be able to take a credit
•Jury duty pay if you gave the pay to alien, check the box on line 38b. But if you
if you placed a new electric ve-
your employer because your employer paid were a dual-status alien and you file a joint
hicle in service in 2004. See
your salary while you served on the jury.
TIP
return with your spouse who was a U.S.
Form 8834 for details.
Identify as “Jury Pay.” citizen or resident at the end of 2004 and
You may also be able to take this deduc-
•Deductible expenses related to in- you and your spouse agree to be taxed on
tion for certain new property installed on a
come reported on line 21 from the rental of your combined worldwide income, do not
motor vehicle to enable it to be propelled
personal property engaged in for profit. check the box.
by a clean-burning fuel.
Identify as “PPR.” For more details, see Pub. 535.
•Reforestation amortization and ex-
penses (see Pub. 535). Identify as “RFST.” Line 39
•Repayment of supplemental unem-
ployment benefits under the Trade Act of Line 36 Itemized Deductions or
1974 (see Pub. 525). Identify as “Sub-Pay Standard Deduction
If line 36 is less than zero, you may have a
TRA.” net operating loss that you can carry to In most cases, your federal income tax will
•Contributions to section another tax year. See the Instructions for be less if you take the larger of your item-
501(c)(18)(D) pension plans (see Pub. Form 1045 for details. ized deductions or standard deduction.
525). Identify as “501(c)(18)(D).”
If you checked the box on line
•Contributions by certain chaplains to
38b, your standard deduction is
section 403(b) plans (see Pub. 517). Iden-
zero.
tify as “403(b).”
Tax and Credits
CAUTION
!
•Attorney fees and court costs paid af-
ter October 22, 2004, for actions settled or Itemized Deductions
decided after that date involving certain un- Line 38a To figure your itemized deductions, fill in
lawful discrimination claims, but only to Schedule A.
If you were born before January 2, 1940, or
the extent of gross income from such ac- were blind at the end of 2004, check the Standard Deduction
tions (see Pub. 525). Identify as “UDC.” appropriate box(es) on line 38a. If you were
•Deduction for clean-fuel vehicles. If Most people can find their standard deduc-
married and checked the box on Form
you placed a qualified clean-fuel vehicle in tion by looking at the amounts listed under
1040, line 6b, and your spouse was born
service in 2004, you can deduct $2,000 on “All others” to the left of Form 1040, line
before January 2, 1940, or was blind at the
line 35 if you did not use the vehicle in your 39. But if you, or your spouse if filing
end of 2004, also check the appropriate
business (other than as an employee). Iden- jointly, can be claimed as a dependent on
box(es) for your spouse. Be sure to enter
tify this deduction on line 35 as someone’s 2004 return or you checked any
the total number of boxes checked.
“Clean-Fuel.” box on line 38a, use the worksheet or the
chart on page 32, whichever applies, to fig-
Blindness
If you used a qualified clean-fuel vehi- ure your standard deduction. Also, if you
cle or other clean-fuel vehicle property in If you were partially blind as of December checked the box on line 38b, your standard
your business (other than as an employee), 31, 2004, you must get a statement certified deduction is zero, even if you were born
claim the business portion of the deduction by your eye doctor or registered optome- before January 2, 1940, or were blind.
on the applicable line of Schedule C, E, trist that:
or F. Electing To Itemize for State Tax
•You cannot see better than 20/200 in or Other Purposes
your better eye with glasses or contact
There are higher deduction
lenses, or
amounts for heavy trucks, vans,
If you itemize even though your itemized
and buses.
deductions are less than your standard de-
•Your field of vision is 20 degrees or
TIP
duction, enter “IE” on the dotted line next
less. to line 39.
A qualified clean-fuel vehicle: If your eye condition is not likely to
improve beyond the conditions listed
1. Must be acquired new and for your
own use.
2. Must satisfy any federal and state
emissions standards.
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Need more information or forms? See page 7.
Page 32 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Standard Deduction Worksheet for Dependents—Line 39
Keep for Your Records
Form 1040—Line 39
Use this worksheet only if someone can claim you, or your spouse if filing jointly, as a dependent.
1. Add $250 to your earned income*. Enter the total ................................... 1.
2. Minimum standard deduction ................................................... 2. 800.00
3. Enter the larger of line 1 or line 2 ............................................... 3.
4. Enter the amount shown below for your filing status.
•Single or married filing separately—$4,850
•Married filing jointly or qualifying widow(er)—$9,700 . ..................... 4.
•Head of household—$7,150
}
5. Standard deduction.
a. Enter the smaller of line 3 or line 4. If born after January 1, 1940, and not blind, stop here and
enter this amount on Form 1040, line 39. Otherwise, go to line 5b ........................ 5a.
b. If born before January 2, 1940, or blind, multiply the number on Form 1040, line 38a, by
$950 ($1,200 if single or head of household) ....................................... 5b.
c. Add lines 5a and 5b. Enter the total here and on Form 1040, line 39 ...................... 5c.
* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed.
It also includes any amount received as a scholarship that you must include in your income. Generally, your earned income is the total
of the amount(s) you reported on Form 1040, lines 7, 12, and 18, minus the amount, if any, on line 30.
Standard Deduction Chart for People Who Were Born Before January 2, 1940, or Were
Blind—Line 39
Do not use this chart if someone can claim you, or your spouse if filing jointly, as a dependent. Instead, use the worksheet above.
Enter the number from the box on Do not use the number of exemptions from
䊳
Form 1040, line 38a ................ line 6d.
CAUTION
!
IF your filing AND the number in THEN your standard
status is . . . the box above is . . . deduction is . . .
1 $6,050
Single 2 7,250
1 $10,650
Married filing jointly 2 11,600
or 3 12,550
Qualifying widow(er) 4 13,500
1 $5,800
2 6,750
Married filing separately 3 7,700
4 8,650
1 $8,350
Head of household 2 9,550
Need more information or forms? See page 7.
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Deduction for Exemptions Worksheet—Line 41
Keep for Your Records
Form 1040—Lines 41 and 43
Tax Table or Tax Computation Work- Schedule D Tax Worksheet. If you have to
sheet. If your taxable income is less than file Schedule D and Schedule D, line 18 or
Line 43 $100,000, you must use the Tax Table that 19, is more than zero, use the Schedule D
Tax begins on page 60 to figure your tax. Be Tax Worksheet on page D-9 of the Instruc-
sure you use the correct column. If your tions for Schedule D to figure your tax.
Do you want the IRS to figure your tax for taxable income is $100,000 or more, use
you? Qualified Dividends and Capital Gain Tax
the Tax Computation Worksheet on Worksheet. If you do not have to use the
䡺 Yes. See Pub. 967 for details, in- page 72. Schedule D Tax Worksheet (see above),
cluding who is eligible and what to do. If However, do not use the Tax Table or use the worksheet on page 34 to figure your
you have paid too much, we will send you a Tax Computation Worksheet to figure your tax if any of the following apply.
refund. If you did not pay enough, we will tax if any of the following apply. •You reported qualified dividends on
send you a bill.
Form 1040, line 9b.
Form 8615. Form 8615 must generally be
䡺 No. Use one of the following meth- used to figure the tax for any child who was •You do not have to file Schedule D
ods to figure your tax. Also include in the under age 14 at the end of 2004, and who and you reported capital gain distributions
total on line 43 any of the following taxes. had more than $1,600 of investment in- on Form 1040, line 13.
1. Tax from Forms 8814 and 4972. Be come, such as taxable interest, ordinary •You are filing Schedule D and Sched-
sure to check the appropriate box(es). dividends, or capital gains (including capi- ule D, lines 15 and 16, are both more than
tal gain distributions). But if neither of the
2. Tax from recapture of an education zero.
child’s parents was alive at the end of 2004,
credit. You may owe this tax if (a) you Schedule J. If you had income from farm-
do not use Form 8615 to figure the child’s
claimed an education credit in an earlier ing or fishing, your tax may be less if you
tax. Also, a child born on January 1, 1991,
year, and (b) you, your spouse if filing choose to figure it using income averaging
is considered to be age 14 at the end of
jointly, or your dependent received in 2004 on Schedule J.
2004. Do not use Form 8615 for such a
either tax-free educational assistance or a child.
refund of qualified expenses. See Form
8863 for more details. If you owe this tax,
enter the amount and “ECR” on the dotted
line next to line 43.
1. Is the amount on Form 1040, line 37, more than the amount shown on line 4 below for your filing status?
Multiply $3,100 by the total number of exemptions claimed on Form 1040, line 6d, and enter the
No.
STOP
result on line 41.
Yes.
Continue
䊲
2. Multiply $3,100 by the total number of exemptions claimed on Form 1040, line 6d .................. 2.
3. Enter the amount from Form 1040, line 37 ................................. 3.
4. Enter the amount shown below for your filing status.
•Single—$142,700
•Married filing jointly or qualifying widow(er)—$214,050
}
..... 4.
•Married filing separately—$107,025
•Head of household—$178,350
5. Subtract line 4 from line 3. If the result is more than $122,500 ($61,250 if married
filing separately),
STOP
You cannot take a deduction for exemptions ............... 5.
6. Divide line 5 by $2,500 ($1,250 if married filing separately). If the result is not a whole
number, increase it to the next higher whole number (for example, increase 0.0004 to 1) 6.
7. Multiply line 6 by 2% (.02) and enter the result as a decimal .................................. 7. .
8. Multiply line 2 by line 7 ........................................................... 8.
9. Deduction for exemptions. Subtract line 8 from line 2. Enter the result here and on Form 1040, line 41 . . . 9.
-33-
Need more information or forms? See page 7.
Page 34 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Qualified Dividends and Capital Gain Tax Worksheet—Line 43
Keep for Your Records
Form 1040—Line 43
Before you begin: ⻫See the instructions for line 43 on page 33 to see if you can use this worksheet to figure
your tax.
⻫If you do not have to file Schedule D and you received capital gain distributions, be sure
you checked the box on line 13 of Form 1040.
1. Enter the amount from Form 1040, line 42 ........................... 1.
2. Enter the amount from Form 1040, line 9b .......... 2.
3. Are you filing Schedule D?
Yes. Enter the smaller of line 15 or 16 of
Schedule D, but do not enter less than -0-
}
3.
No. Enter the amount from Form 1040, line 13
4. Add lines 2 and 3 ............................. 4.
5. If you are claiming investment interest expense on Form
4952, enter the amount from line 4g of that form.
Otherwise, enter -0- ........................... 5.
6. Subtract line 5 from line 4. If zero or less, enter -0- ..................... 6.
7. Subtract line 6 from line 1. If zero or less, enter -0- ..................... 7.
8. Enter the smaller of:
•The amount on line 1, or
•$29,050 if single or married filing separately,
}
........... 8.
$58,100 if married filing jointly or qualifying widow(er),
$38,900 if head of household.
9. Is the amount on line 7 equal to or more than the amount on line 8?
Yes. Skip lines 9 through 11; go to line 12 and check the ‘‘No’’ box.
No. Enter the amount from line 7 ............................... 9.
10. Subtract line 9 from line 8 ....................................... 10.
11. Multiply line 10 by 5% (.05) .....................................................11.
12. Are the amounts on lines 6 and 10 the same?
Yes. Skip lines 12 through 15; go to line 16.
No. Enter the smaller of line 1 or line 6 .......................... 12.
13. Enter the amount from line 10 (if line 10 is blank, enter -0-) .............. 13.
14. Subtract line 13 from line 12 ...................................... 14.
15. Multiply line 14 by 15% (.15) ....................................................15.
16. Figure the tax on the amount on line 7. Use the Tax Table or Tax Computation Worksheet,
whichever applies .............................................................16.
17. Add lines 11, 15, and 16 ........................................................17.
18. Figure the tax on the amount on line 1. Use the Tax Table or Tax Computation Worksheet,
whichever applies .............................................................18.
19. Tax on all taxable income. Enter the smaller of line 17 or line 18. Also include this amount on
Form 1040, line 43 ............................................................19.
Need more information or forms? See page 7.
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Worksheet To See if You Should Fill in Form 6251—Line 44
Keep for Your Records
Form 1040—Line 44
•Tax-exempt interest from private ac- •Interest paid on a home mortgage not
tivity bonds. used to buy, build, or substantially improve
Line 44 your home.
•Intangible drilling, circulation, re-
Alternative Minimum Tax search, experimental, or mining costs. •Investment interest expense reported
on Form 4952.
Use the worksheet below to see if you •Amortization of pollution-control fa-
should fill in Form 6251. cilities or depletion. •Net operating loss deduction.
•Income or (loss) from tax-shelter farm •Alternative minimum tax adjustments
Exception. Fill in Form 6251 instead of activities or passive activities. from an estate, trust, electing large partner-
using the worksheet below if you claimed ship, or cooperative.
•Income from long-term contracts not
or received any of the following items. figured using the percentage-of-completion •Section 1202 exclusion.
•Accelerated depreciation. method. •A general business credit.
•Stock by exercising an incentive stock
option and you did not dispose of the stock
in the same year.
(Continued on page 36)
Before you begin: ⻫Be sure you have read the Exception above to see if you must fill in Form 6251 instead of
using this worksheet.
⻫If you are claiming the foreign tax credit (see the instructions for Form 1040, line 46, on
page 36), enter that credit on line 46.
1. Are you filing Schedule A?
No. Skip lines 1 through 3; enter the amount from Form 1040, line 37, on line 4, and go
to line 5.
Yes. Enter the amount from Form 1040, line 40 ................................ 1.
2. Enter the smaller of the amount on Schedule A, line 4, or 2.5% (.025) of the amount on
Form 1040, line 37 ........................................................ 2.
3. Enter the total of the amounts from Schedule A, lines 9 and 26 ....................... 3.
4. Add lines 1 through 3 above ................................................. 4.
5. Enter the amount shown below for your filing status.
•Single or head of household—$40,250
•Married filing jointly or qualifying widow(er)—$58,000
}
...................... 5.
•Married filing separately—$29,000
6. Is the amount on line 4 more than the amount on line 5?
No. You do not need to fill in Form 6251.
STOP
Yes. Subtract line 5 from line 4 ............................................ 6.
7. Enter the amount shown below for your filing status.
•Single or head of household—$112,500
•Married filing jointly or qualifying widow(er)—$150,000
}
...................... 7.
•Married filing separately—$75,000
8. Is the amount on line 4 more than the amount on line 7?
No. Skip lines 8 and 9; enter the amount from line 6 on line 10, and go to line 11.
Yes. Subtract line 7 from line 4 ............................................ 8.
9. Multiply line 8 by 25% (.25) and enter the result but do not enter more than line 5 above .... 9.
10. Add lines 6 and 9 ......................................................... 10.
11. Is the amount on line 10 more than $175,000 ($87,500 if married filing separately)?
Yes. Fill in Form 6251 to see if you owe the alternative minimum tax.
STOP
No. Multiply line 10 by 26% (.26) .......................................... 11.
12. Enter the amount from Form 1040, line 43, minus the total of any tax from Form 4972 and
any amount on Form 1040, line 46. If you used Schedule J to figure your tax, the amounts for
lines 43 and 46 of Form 1040 must be refigured without using Schedule J ............... 12.
Next. Is the amount on line 11 more than the amount on line 12?
Yes.Fill in Form 6251 to see if you owe the alternative minimum tax.
No. You do not need to fill in Form 6251.
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Need more information or forms? See page 7.
Page 36 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 44 Through 50
Form 6251 should be filled in
•The amount on Form 1040, line 37, is
Line 47
for a child who was under age
$52,000 or more ($105,000 or more if mar-
14 at the end of 2004 if the
ried filing jointly).
Credit for Child and
CAUTION
!
child’s adjusted gross income
•You are taking a deduction for tuition
Dependent Care Expenses
from Form 1040, line 37, exceeds the
and fees on Form 1040, line 27, for the
child’s earned income by more than
same student.
You may be able to take this credit if you
$5,750.
paid someone to care for your child under •You (or your spouse) were a nonresi-
age 13 or your dependent or spouse who dent alien for any part of 2004 unless your
could not care for himself or herself. For filing status is married filing jointly.
details, use TeleTax topic 602 (see page 8)
Line 46 or see Form 2441.
Foreign Tax Credit Line 50
If you paid income tax to a foreign country,
you may be able to take this credit. Gener- Retirement Savings
Line 48
ally, you must complete and attach Form Contributions Credit
Credit for the Elderly or the
1116 to do so. You may be able to take this credit if you,
Disabled
Exception. You do not have to complete or your spouse if filing jointly, made (a)
Form 1116 to take this credit if all five of You may be able to take this credit if by the contributions to a traditional or Roth IRA;
the following apply. end of 2004 (a) you were age 65 or older, or (b) elective deferrals to a 401(k), 403(b),
(b) you retired on permanent and total disa- governmental 457, SEP, or SIMPLE plan;
1. All of your gross foreign source in- bility and you had taxable disability in- (c) voluntary employee contributions to a
come was from interest and dividends and come. But you usually cannot take the qualified retirement plan (including the
all of that income and the foreign tax paid credit if the amount on Form 1040, line 37, federal Thrift Savings Plan); or (d) contri-
on it were reported to you on Form is $17,500 or more ($20,000 or more if butions to a 501(c)(18)(D) plan.
1099-INT, Form 1099-DIV, or Schedule married filing jointly and only one spouse
K-1 (or substitute statement). However, you cannot take the credit if
is eligible for the credit; $25,000 or more if either of the following applies.
2. If you had dividend income from married filing jointly and both spouses are
shares of stock, you held those shares for at 1. The amount on Form 1040, line 37, is
eligible; $12,500 or more if married filing
least 16 days. more than $25,000 ($37,500 if head of
separately). See Schedule R and its instruc-
3. You are not filing Form 4563 or ex- household; $50,000 if married filing
tions for details.
cluding income from sources within Puerto jointly).
Credit figured by the IRS. If you can take
Rico. 2. The person(s) who made the qualified
this credit and you want us to figure it for
4. The total of your foreign taxes was contribution or elective deferral (a) was
you, see the Instructions for Schedule R.
not more than $300 (not more than $600 if born after January 1, 1987, (b) is claimed as
married filing jointly). a dependent on someone else’s 2004 tax
return, or (c) was a student (defined below).
5. All of your foreign taxes were: Line 49
a. Legally owed and not eligible for a You were a student if during any 5
refund, and Education Credits months of 2004 you:
b. Paid to countries that are recognized If you (or your dependent) paid qualified •Were enrolled as a full-time student at
by the United States and do not support expenses in 2004 for yourself, your spouse, a school, or
terrorism. or your dependent to enroll in or attend an •Took a full-time, on-farm training
eligible educational institution, you may be course given by a school or a state, county,
For more details on these requirements, able to take an education credit. See Form or local government agency.
see the Instructions for Form 1116. 8863 for details. However, you cannot take A school includes a technical, trade, or
Do you meet all five requirements an education credit if any of the following mechanical school. It does not include an
above? apply. on-the-job training course, correspondence
•You are claimed as a dependent on
䡺 Yes. Enter on line 46 the smaller of school, or night school.
someone’s (such as your parent’s) 2004 tax
(a) your total foreign taxes, or (b) the For more details, use TeleTax topic 610
return.
amount on Form 1040, line 43. (see page 8) or see Form 8880.
•Your filing status is married filing
䡺 No. See Form 1116 to find out if separately.
you can take the credit and, if you can, if
you have to file Form 1116.
Need more information or forms? See page 7.
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Page 37 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Line 51
Line 51—Child Tax Credit
Who Must UseQuestions Pub. 972
Pub.
972
What Is the Child Tax Credit?
1. Are you excluding income from Puerto Rico or are you
This credit is for people who have a qualifying child (defined
filing any of the following forms?
below). It is in addition to the credit for child and dependent care
expenses on Form 1040, line 47, and the earned income credit on •Form 2555 or 2555-EZ (relating to foreign earned
Form 1040, line 65a. income).
•Form 4563 (exclusion of income for residents of
Three Steps To Take the Child Tax Credit! American Samoa).
No. Continue Yes.
䊲
STOP
Step 1. Make sure you have a qualifying child for the child You must use Pub. 972 to
tax credit (defined below). figure your credit.
Step 2. Make sure you checked the box on Form 1040,
line 6c, column (4), for each qualifying child. 2. Is the amount on Form 1040, line 37, more than the amount
Step 3. Answer the questions on this page to see if you shown below for your filing status?
may use the worksheet on page 38 to figure your •Married filing jointly – $110,000
credit or if you must use Pub. 972, Child Tax •Single, head of household, or qualifying widow(er) –
Credit. If you need Pub. 972, see page 7.
$75,000
•Married filing separately – $55,000
Qualifying Child for Child Tax Credit No. Continue Yes.
䊲
STOP
A qualifying child for purposes of the child tax credit is a child who: You must use Pub. 972 to
figure your credit.
1. Is claimed as your dependent on line 6c,
2. Was under age 17 at the end of 2004,
3. Are you claiming any of the following credits?
3. Is your (a) son, daughter, adopted child, stepchild, or a de-
scendant of any of them (for example, your grandchild); (b) •Adoption credit, Form 8839 (see the instructions for Form
brother, sister, stepbrother, stepsister, or a descendant of any 1040, line 52, on page 39).
of them (for example, your niece or nephew), whom you •Mortgage interest credit, Form 8396 (see the instructions
cared for as you would your own child; or (c) foster child (any for Form 1040, line 53, on page 39).
child placed with you by an authorized placement agency •District of Columbia first-time homebuyer credit, Form
whom you cared for as you would your own child), and 8859.
4. Is a U.S. citizen or resident alien. No. Use the Yes. You must use
worksheet on page 38 Pub. 972 to figure your
The above requirements are not the same as the require-
to figure your child child tax credit. You will
ments to be a qualifying child for the earned income
tax credit. also need the form(s) listed
credit.
above for any credit(s) you
CAUTION
!
are claiming.
An adopted child is always treated as your own child. An
adopted child includes a child placed with you by an authorized
placement agency for legal adoption even if the adoption is not
final. An authorized placement agency includes any person or court
authorized by state law to place children for legal adoption.
-37-
Need more information or forms? See page 7.
Page 38 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Line 51
Child Tax Credit Worksheet—Line 51
1040
Yes.
STOP
●To be a qualifying child for the child tax credit, the child must be under age 17 at the end
of 2004 and meet the other requirements listed on page 37.
●Do not use this worksheet if you answered “Yes” to question 1, 2, or 3 on page 37. Instead, use Pub. 972.
1.
4.
5.
1
Number of qualifying children: $1,000.
Enter the result.
⫻
Are the amounts on lines 2 and 3 the same?
You cannot take this credit because there is no tax
to reduce. However, you may be able to take the
additional child tax credit. See the below.TIP
No. Subtract line 3 from line 2.
Is the amount on line 1 more than the amount on line 4?
Yes. Enter the amount from line 4.
Also, you may be able to take the
additional child tax credit. See the
below.TIP
No. Enter the amount from line 1.
This is your child tax
credit.
Enter this amount on
Form 1040, line 51.
You may be able to take the additional child tax credit
on Form 1040, line 67, if you answered “Yes” on line 4 or
line 5 above.
●First, complete your Form 1040 through line 66.
●Then, use Form 8812 to figure any additional child tax
credit.
4
其
5
䊴
2. 2
Enter the amount from Form 1040, line 45.
3. Add the amounts from Form 1040:
3
Keep for Your Records
TIP
CAUTION
Line 46
Line 47 +
Line 48 +
Line 49 +
Line 50 + Enter the total.
Need more information or forms? See page 7.
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Page 39 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 52 Through 61
ured the credit. Check box c and enter Exception. If only item 1 applies to you
Line 52 “FNS” on the line to the right of box c. and distribution code 1 is correctly shown
in Form 1099-R, box 7, you do not have to
•Qualified zone academy bond credit.
Adoption Credit file Form 5329. Instead, multiply the tax-
This credit applies only to S corporation
You may be able to take this credit if either able amount of the distribution by 10%
shareholders. See Form 8860.
of the following applies. (.10) and enter the result on line 59. The
•You paid expenses to adopt a child. taxable amount of the distribution is the
part of the distribution you reported on
•You adopted a child with special Form 1040, line 15b or line 16b, or on
needs and the adoption became final in
Other Taxes
Form 4972. Also, put “No” under the head-
2004.
ing
“Other Taxes”
to the left of line 59 to
See the Instructions for Form 8839 for indicate that you do not have to file Form
Line 58
details. 5329. But if distribution code 1 is incor-
rectly shown in Form 1099-R, box 7, or
Social Security and
you qualify for an exception for qualified
Medicare Tax on Tip Income
Line 53 medical expenses, qualified higher educa-
Not Reported to Employer tion expenses, or qualified first-time
Include the following credits on line 53 and If you received tips of $20 or more in any homebuyer distributions, you must file
check the appropriate box(es). To find out month and you did not report the full Form 5329.
if you can take the credit, see the form amount to your employer, you must pay the
indicated. social security and Medicare or railroad re-
•Mortgage interest credit. If a state or tirement (RRTA) tax on the unreported
local government gave you a mortgage Line 60
tips. You must also pay this tax if your
credit certificate, see Form 8396. Form(s) W-2 shows allocated tips that you Advance Earned Income
•District of Columbia first-time are including in your income on Form
homebuyer credit. See Form 8859. Credit Payments
1040, line 7.
Enter the total amount of advance earned
To figure the social security and Medi- income credit (EIC) payments you re-
care tax, use Form 4137. If you owe RRTA ceived. These payments are shown in
Line 54 tax, contact your employer. Your employer Form(s) W-2, box 9.
will figure and collect the RRTA tax.
Other Credits
Include the following credits on line 54 and
You may be charged a penalty
check the appropriate box(es). If box c is Line 61
equal to 50% of the social se-
checked, also enter the form number, if ap-
curity and Medicare tax due on
plicable. To find out if you can take the Household Employment
CAUTION
!
tips you received but did not re-
credit, see the form or publication indi- Taxes
port to your employer.
cated.
•Credit for prior year minimum tax. If If any of the following apply, see
you paid alternative minimum tax in a prior Schedule H and its instructions to find out
year, see Form 8801. Line 59 if you owe these taxes.
•Qualified electric vehicle credit. If 1. You paid any one household em-
Additional Tax on IRAs,
you placed a new electric vehicle in service ployee (defined below) cash wages of
Other Qualified Retirement
in 2004, see Form 8834. $1,400 or more in 2004. Cash wages in-
Plans, etc.
•General business credit. This credit clude wages paid by check, money order,
consists of a number of credits that usually etc.
If any of the following apply, see
apply only to individuals who are partners, Form 5329 and its instructions to find out if 2. You withheld federal income tax dur-
shareholders in an S corporation, self-em- you owe this tax and if you must file ing 2004 at the request of any household
ployed, or who have rental property. See Form 5329. employee.
Form 3800 or Pub. 334. 3. You paid total cash wages of $1,000
1. You received an early distribution
•Empowerment zone and renewal from (a) an IRA or other qualified retire- or more in any calendar quarter of 2003 or
community employment credit. See ment plan, (b) an annuity, or (c) a modified 2004 to household employees.
Form 8844. endowment contract entered into after June
•New York Liberty Zone business em- 20, 1988, and the total distribution was not
ployee credit. See Form 8884. rolled over in a qualified rollover contribu-
For item (1), do not count
•Nonconventional source fuel credit. If tion.
amounts paid to an employee
you sold fuel produced from a nonconven-
who was under age 18 at any
2. Excess contributions were made to
TIP
tional source, or you were an owner of roy-
time in 2004 and was a student.
your IRAs, Coverdell education savings ac-
alty interests and you received income from counts (ESAs), Archer MSAs, or health
the sale of fuel produced from a noncon- savings accounts. Household employee. Any person who
ventional source, you may be able to take 3. You received taxable distributions does household work is a household em-
this credit. See Internal Revenue Code sec- from Coverdell ESAs or qualified tuition ployee if you can control what will be done
tion 29 and, if an owner of royalty interests, programs. and how it will be done. Household work
Rev. Proc. 2004-27, 2004-17 I.R.B. 831. includes work done in or around your home
4. You were born before July 1, 1933,
You can find Rev. Proc. 2004-27 on page by babysitters, nannies, health aides,
and did not take the minimum required dis-
831 of Internal Revenue Bulletin 2004-17
maids, yard workers, and similar domestic
tribution from your IRA or other qualified
at
www.irs.gov/pub/irs-irbs/irb04-17.pdf.
retirement plan. workers.
Attach a schedule showing how you fig-
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Form 1040—Lines 62 Through 64
8. Golden parachute payments. If you
Line 62 Line 64
received an excess parachute payment
(EPP), you must pay a 20% tax on it. This
Total Tax 2004 Estimated Tax
tax should be shown in Form W-2, box 12, Payments
Include in the total on line 62 any of the with code K. If you received a Form
following taxes. To find out if you owe the 1099-MISC, the tax is 20% of the EPP Enter any estimated federal income tax
tax, see the form or publication indicated. shown in box 13. Identify as “EPP.” payments you made using Form 1040-ES
On the dotted line next to line 62, enter the 9. Tax on accumulation distribution of for 2004. Include any overpayment from
amount of the tax and identify it as indi- trusts (see Form 4970). Identify as “ADT.” your 2003 return that you applied to your
cated. 2004 estimated tax.
10. Excise tax on insider stock compen-
1. Additional tax on health savings ac- sation from an expatriated corporation. If you and your spouse paid joint esti-
count distributions (see Form 8889). Iden- You may owe a 15% excise tax on the mated tax but are now filing separate in-
tify as “HSA.” value of nonstatutory stock options and cer- come tax returns, you can divide the
2. Additional tax on Archer MSA distri- tain other stock-based compensation held amount paid in any way you choose as long
butions (see Form 8853). Identify as by you or a member of your family from an as you both agree. If you cannot agree, you
“MSA.” expatriated corporation or its expanded af- must divide the payments in proportion to
3. Additional tax on Medicare Advan- filiated group in which you were an officer, each spouse’s individual tax as shown on
tage MSA distributions (see Form 8853). director, or more-than-10% owner. See In- your separate returns for 2004. For an ex-
Identify as “Med MSA.” ternal Revenue Code section 4985. Identify ample of how to do this, see Pub. 505. Be
as “ISC.”
4. Recapture of the following credits. sure to show both social security numbers
(SSNs) in the space provided on the sepa-
a. Investment credit (see Form 4255). rate returns. If you or your spouse paid
Identify as “ICR.” separate estimated tax but you are now fil-
b. Low-income housing credit (see ing a joint return, add the amounts you each
Form 8611). Identify as “LIHCR.”
Payments
paid. Follow these instructions even if your
c. Qualified electric vehicle credit (see spouse died in 2004 or in 2005 before filing
Pub. 535). Identify as “QEVCR.” a 2004 return.
Line 63
d. Indian employment credit (see Form
8845). Identify as “IECR.” Divorced Taxpayers
Federal Income Tax
e. New markets credit (see Form 8874). If you got divorced in 2004 and you made
Withheld
Identify as “NMCR.” joint estimated tax payments with your for-
Add the amounts shown as federal income
f. Credit for employer-provided child mer spouse, put your former spouse’s SSN
tax withheld on your Forms W-2, W-2G,
care facilities (see Form 8882). Identify as in the space provided on the front of
and 1099-R. Enter the total on line 63. The
“ECCFR.” Form 1040. If you were divorced and re-
amount withheld should be shown in Form married in 2004, put your present spouse’s
5. Recapture of federal mortgage sub- W-2 or W-2G, box 2, and in Form 1099-R, SSN in the space provided on the front of
sidy. If you sold your home in 2004 and it box 4. Attach Forms W-2G and 1099-R to Form 1040. Also, under the heading
Pay-
was financed (in whole or in part) from the the front of your return if federal income
ments
to the left of line 64, put your former
proceeds of any tax-exempt qualified mort- tax was withheld. spouse’s SSN, followed by “DIV.”
gage bond or you claimed the mortgage
interest credit, see Form 8828. Identify as If you received a 2004 Form 1099 Name Change
“FMSR.” showing federal income tax withheld on
6. Section 72(m)(5) excess benefits tax If you changed your name because of mar-
dividends, interest income, unemployment
(see Pub. 560). Identify as ‘‘Sec. riage, divorce, etc., and you made esti-
compensation, social security benefits, or
72(m)(5).’’ mated tax payments using your former
other income you received, include the name, attach a statement to the front of
7. Uncollected social security and amount withheld in the total on line 63. Form 1040. On the statement, explain all
Medicare or RRTA tax on tips or This should be shown in Form 1099, box 4, the payments you and your spouse made in
group-term life insurance. This tax should or Form SSA-1099, box 6. 2004 and the name(s) and SSN(s) under
be shown in Form W-2, box 12, with codes
which you made them.
A and B or M and N. Identify as “UT.”
Need more information or forms? See page 7.
-40-
Page 41 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 65a and 65b
Lines 65a and 65b—
Investment IncomeStep 2
Earned Income Credit (EIC)
1. Add the amounts from
Form 1040:
What Is the EIC?
Line 8a
The EIC is a credit for certain people who work. The credit may
give you a refund even if you do not owe any tax. Line 8b +
To Take the EIC: Line 9a +
Line 13* +
•Follow the steps below.
•Complete the worksheet that applies to you or let the IRS
figure the credit for you.
Investment Income =
•If you have a qualifying child, complete and attach
Schedule EIC.
*Do not include if line 13 is a loss.
If you take the EIC even though you are not eligible and
it is determined that your error is due to reckless or
2. Is your investment income more than $2,650?
intentional disregard of the EIC rules, you will not be
Yes. Continue No. Skip question 3; go to
䊲
CAUTION
!
allowed to take the credit for 2 years even if you are
question 4.
otherwise eligible to do so. If you fraudulently take the EIC, you
will not be allowed to take the credit for 10 years. See
Form 8862,
Who must file,
on page 44. You may also have to pay penalties.
3. Are you filing Form 4797 (relating to sales of business
property)?
Yes. See
Form 4797
No.
STOP
All FilersStep 1
filers
on page 44. You cannot take the credit.
1. If, in 2004:
•2 children lived with you, is the amount on Form 1040, 4. Do any of the following apply for 2004?
line 37, less than $34,458 ($35,458 if married filing •You are filing Schedule E.
jointly)? •You are reporting income or a loss from the rental of
•1 child lived with you, is the amount on Form 1040, line personal property not used in a trade or business.
37, less than $30,338 ($31,338 if married filing jointly)? •You are reporting income on Form 1040, line 21, from
•No children lived with you, is the amount on Form 1040, Form 8814 (relating to election to report child’s interest
line 37, less than $11,490 ($12,490 if married filing and dividends).
jointly)? Yes. You must use No. Continue
䊲
Yes. Continue No.
䊲
STOP
Worksheet 1 in Pub.
596 to see if you can
You cannot take the credit.
take the credit. To get
Pub. 596, see page 7.
2. Do you, and your spouse if filing a joint return, have a
social security number that allows you to work or is valid
5. Did a child live with you in 2004?
for EIC purposes (see page 44)?
Yes. Go to Step 3 No. Go to Step 4 on
Yes. Continue No.
䊲
STOP
on page 42. page 42.
You cannot take the credit.
Put “No” on the dotted line
next to line 65a.
3. Is your filing status married filing separately?
Yes. No. Continue
STOP
䊲
You cannot take the
credit.
4. Are you filing Form 2555 or 2555-EZ (relating to foreign
earned income)?
Yes. No. Continue
STOP
䊲
You cannot take the
credit.
5. Were you a nonresident alien for any part of 2004?
Yes. See
Nonresident
No. Go to Step 2.
aliens
on page 44.
-41-
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Page 42 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 65a and 65b
Continued from page 41
2. Do you have at least one child who meets the conditions to
be your qualifying child?
Qualifying ChildStep 3
Yes. Continue No. Skip the next two
䊲
questions; go to Step 4,
question 2.
A qualifying child is a child who is your...
3. Does the child meet the conditions to be a qualifying child
of any other person (other than your spouse if filing a joint
Son, daughter, adopted child, stepchild, or a descendant of return) for 2004?
any of them (for example, your grandchild)
or Yes. See
Qualifying
No. This child is your
Brother, sister, stepbrother, stepsister, or a descendant of any
child of more than one
qualifying child. The child
person
on page 44. must have a valid social
of them (for example, your niece or nephew), whom you
security number as defined
cared for as you would your own child on page 44 unless the child
or was born and died in 2004.
Foster child (any child placed with you by an authorized Skip Step 4; go to Step 5
placement agency whom you cared for as you would your on page 43.
own child)
Filers Without a Qualifying ChildStep 4
1. Look at the qualifying child conditions in Step 3. Could
AND
you, or your spouse if filing a joint return, be a qualifying
was at the end of 2004... child of another person in 2004?
Yes. No. Continue
STOP
䊲
Under age 19
You cannot take the
or credit. Put “No” on
Under age 24 and a student (see page 44) the dotted line next to
line 65a.
or
Any age and permanently and totally disabled (see page 44) 2. Can you, or your spouse if filing a joint return, be claimed
as a dependent on someone else’s 2004 tax return?
Yes. No. Continue
STOP
䊲
You cannot take the
AND
credit.
who...
3. Were you, or your spouse if filing a joint return, at least age
Lived with you in the United States for more than half
25 but under age 65 at the end of 2004?
of 2004.
If the child did not live with you for the Yes. Continue No.
䊲
STOP
required time, see
Exception to “time lived with you”
You cannot take the credit.
condition
on page 44.
4. Was your home, and your spouse’s if filing a joint return, in
the United States for more than half of 2004? Members of
the military stationed outside the United States, see page 44
CAUTION
!
If the child was married, see page 44.
before you answer.
Yes. Go to Step 5 No.
STOP
1. Look at the qualifying child conditions above. Could you, or on page 43. You cannot take the credit.
your spouse if filing a joint return, be a qualifying child of Put “No” on the dotted line
another person in 2004? next to line 65a.
Yes. No. Go to question 2.
STOP
You cannot take the
credit. Put “No” on
the dotted line next to
line 65a.
Need more information or forms? See page 7.
-42-
Page 43 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 65a and 65b
Continued from page 42
3. Were you self-employed, or are you filing Schedule SE be-
cause you were a member of the clergy or you had church
Earned IncomeStep 5 employee income, or are you filing Schedule C or C-EZ as a
statutory employee?
1. Are you filing Schedule SE because you were a member of
the clergy or you had church employee income of $108.28 Yes. Skip question 4 No. Continue
䊲
or more? and Step 6; go to
Worksheet B on
Yes. See
Clergy
or No. Continue
䊲
page 46.
Church employees,
whichever applies, on
this page. 4. If you have:
•2 or more qualifying children, is your earned income less
than $34,458 ($35,458 if married filing jointly)?
2. Figure earned income:
•1 qualifying child, is your earned income less than
$30,338 ($31,338 if married filing jointly)?
Form 1040, line 7
•No qualifying children, is your earned income less than
Subtract, if included on line 7, any: $11,490 ($12,490 if married filing jointly)?
•Taxable scholarship or fellowship grant Yes. Go to Step 6. No.
STOP
not reported on a Form W-2.
You cannot take the credit.
•Amount paid to an inmate in a penal
institution for work (put “PRI” and the
amount subtracted on the dotted line next How To Figure the CreditStep 6
to Form 1040, line 7).
•Amount received as a pension or annuity 1. Do you want the IRS to figure the credit for you?
from a nonqualified deferred – Yes. See
Credit fig-
No. Go to Worksheet A
compensation plan or a nongovernmental
ured by the IRS
on on page 45.
section 457 plan (put “DFC” and the page 44.
amount subtracted on the dotted line next
}
to Form 1040, line 7). This amount may
be shown in Form W-2, box 11. If you Definitions and Special Rules
received such an amount but box 11 is (listed in alphabetical order)
blank, contact your employer for the Adopted child. An adopted child is always treated as your own
amount received as a pension or annuity. child. An adopted child includes a child placed with you by an
authorized placement agency for legal adoption even if the adoption
Add all of your nontaxable combat pay if is not final. An authorized placement agency includes any person or
you elect to include it in earned court authorized by state law to place children for legal adoption.
income.* Also enter this amount on
Form 1040, line 65b. See
Combat pay,
Church employees. Determine how much of the amount on
Nontaxable
on this page. + Form 1040, line 7, was also reported on Schedule SE, line 5a.
Subtract that amount from the amount on Form 1040, line 7, and
enter the result in the first space of Step 5, line 2. Be sure to answer
“Yes” to question 3 in Step 5.
Clergy. The following instructions apply to ministers, members of
CAUTION
!
Electing to include nontaxable
religious orders who have not taken a vow of poverty, and Christian
combat pay may increase or decrease
Science practitioners. If you are filing Schedule SE and the amount
your EIC. Figure the credit with and
on line 2 of that schedule includes an amount that was also reported
without your nontaxable combat pay
on Form 1040, line 7:
before making the election.
1. Put “Clergy” on the dotted line next to Form 1040, line 65a.
2. Determine how much of the amount on Form 1040, line 7,
Earned Income = was also reported on Schedule SE, line 2.
3. Subtract that amount from the amount on Form 1040,
* The election cannot be made on the return of a taxpayer line 7. Enter the result in the first space of Step 5, line 2.
whose tax year ended before October 5, 2004, due to his
4. Be sure to answer “Yes” to question 3 in Step 5.
or her death.
Combat pay, Nontaxable. If you were a member of the U.S.
Armed Forces who served in a combat zone, certain pay is excluded
from your income. See
Combat Zone Exclusion
in Pub. 3. You can
elect to include this pay in your earned income when figuring the
EIC. The amount of your nontaxable combat pay should be shown
in Form(s) W-2, box 14, with code Q.
-43-
Need more information or forms? See page 7.
Page 44 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 65a and 65b
Credit figured by the IRS. To have the IRS figure the credit for mental condition and a doctor has determined that this condition (a)
you: has lasted or can be expected to last continuously for at least a year,
or (b) can lead to death.
1. Put “EIC” on the dotted line next to Form 1040, line 65a.
2. Be sure you enter the nontaxable combat pay you elect to Qualifying child of more than one person. If the child meets
include in earned income on Form 1040, line 65b. See
Com-
the conditions to be a qualifying child of more than one person, only
bat pay, Nontaxable
on page 43. one person can take the EIC based on that child. The other person(s)
cannot take the EIC for people without a qualifying child, but may
3. If you have a qualifying child, complete and attach Schedule
be able to take the EIC based on a different qualifying child. If you
EIC. If your EIC for a year after 1996 was reduced or disal-
and the other person(s) cannot agree who will take the EIC based on
lowed, see
Form 8862, Who must file
below.
the same child, the IRS will apply the following rules.
•If only one of the persons is the child’s parent, the child will be
Exception to “time lived with you” condition. A child is con- treated as the qualifying child of the parent.
sidered to have lived with you for all of 2004 if the child was born
or died in 2004 and your home was this child’s home for the entire •If both persons are the child’s parents, the child will be treated
time he or she was alive in 2004. Temporary absences for special as the qualifying child of the parent with whom the child lived
circumstances, such as for school, vacation, medical care, military for the longer period of time during 2004. If the child lived
service, or detention in a juvenile facility, count as time lived at with each parent for the same amount of time, the child will be
home. If your child is presumed to have been kidnapped by some- treated as the qualifying child of the parent who had the higher
one who is not a family member, see Pub. 596 to find out if that adjusted gross income (AGI) for 2004.
child is a qualifying child for the EIC. To get Pub. 596, see page 7. •If none of the persons is the child’s parent, the child will be
If you were in the military stationed outside the United States, see treated as the qualifying child of the person who had the
Members of the military
below. highest AGI for 2004.
The child must have a valid social security number as defined
Form 4797 filers. If the amount on Form 1040, line 13, includes below unless the child was born and died in 2004. If you do not
an amount from Form 4797, you must use Worksheet 1 in Pub. 596 have a qualifying child, stop; you cannot take the EIC. Put “No” on
to see if you can take the EIC. To get Pub. 596, see page 7. the dotted line next to line 65a. If you have a qualifying child, skip
Otherwise, stop; you cannot take the EIC. Step 4; go to Step 5 on page 43.
Form 8862, Who must file. You must file Form 8862 if your EIC Example. You and your 5-year-old daughter moved in with
for a year after 1996 was reduced or disallowed for any reason other your mother in April 2004. You are not a qualifying child of your
than a math or clerical error. But do not file Form 8862 if either of mother. Your daughter meets the conditions to be a qualifying child
the following applies. for both you and your mother. If you and your mother cannot agree
on who will treat your daughter as a qualifying child, the rules
1. After your EIC was reduced or disallowed in an earlier year
above apply. Under these rules, you are entitled to treat your daugh-
(a) you filed Form 8862 (or other documents) and your EIC
ter as a qualifying child because you are the child’s parent. Your
was then allowed, and (b) your EIC has not been reduced or
mother would not be entitled to take the EIC unless she has a
disallowed again for any reason other than a math or clerical
different qualifying child.
error.
2. You are taking the EIC without a qualifying child and the only Social security number (SSN). For purposes of taking the EIC, a
reason your EIC was reduced or disallowed in the earlier year valid SSN is a number issued by the Social Security Administration
was because it was determined that a child listed on Schedule unless “Not Valid for Employment” is printed on the social security
EIC was not your qualifying child. card and the number was issued solely to apply for or receive a
Also, do not file Form 8862 or take the credit for the: federally funded benefit.
•2 years after the most recent tax year for which there was a To find out how to get an SSN, see page 16. If you will not have
final determination that your EIC was reduced or disallowed an SSN by April 15, 2005, see
What If You Cannot File on Time?
due to reckless or intentional disregard of the EIC rules, or on page 12.
•10 years after the most recent tax year for which there was a Student. A child who during any 5 months of 2004:
final determination that your EIC was reduced or disallowed •Was enrolled as a full-time student at a school, or
due to fraud. •Took a full-time, on-farm training course given by a school or
a state, county, or local government agency.
Married child. A child who was married at the end of 2004 is a
qualifying child only if (a) you can claim him or her as your A school includes a technical, trade, or mechanical school. It
dependent on Form 1040, line 6c, or (b) this child’s other parent does not include an on-the-job training course, correspondence
claims him or her as a dependent under the rules for children of school, or night school.
divorced or separated parents in Pub. 501.
Welfare benefits, Effect of credit on. Any refund you receive as
Members of the military. If you were on extended active duty a result of taking the EIC will not be used to determine if you are
outside the United States, your home is considered to be in the eligible for the following programs or how much you can receive
United States during that duty period. Extended active duty is from them. But if the refund you receive because of the EIC is not
military duty ordered for an indefinite period or for a period of more spent within a certain period of time, it may count as an asset (or
than 90 days. Once you begin serving extended active duty, you are resource) and affect your eligibility.
considered to be on extended active duty even if you serve fewer
than 90 days. •Temporary Assistance for Needy Families (TANF).
•Medicaid and supplemental security income (SSI).
Nonresident aliens. If your filing status is married filing jointly, •Food stamps and low-income housing.
go to Step 2 on page 41. Otherwise, stop; you cannot take the EIC.
Permanently and totally disabled child. A child who cannot
engage in any substantial gainful activity because of a physical or
Need more information or forms? See page 7.
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Page 45 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Form 1040—Lines 65a and 65b
Worksheet —Earned Income Credit (EIC)—Lines 65a and 65bA
1040
Yes. Skip line 5; enter the amount from line 2 on line 6.
STOP
Keep for Your Records
Before you begin: Be sure you are using the correct worksheet. Do not use this worksheet if you
were self-employed, or you are filing Schedule SE because you were a member of
the clergy or you had church employee income, or you are filing Schedule C or
C-EZ as a statutory employee. Instead, use Worksheet B that begins on page 46.
1.
2.
3.
4.
5.
1
Enter your earned income from Step 5 on page 43.
Look up the amount on line 1 above in the EIC Table on pages 48–53
to find the credit. Be sure you use the correct column for your filing
status and the number of children you have. Enter the credit here.
Enter the amount from Form 1040, line 37.
Are the amounts on lines 3 and 1 the same?
No. Go to line 5.
If you have:
Yes. Leave line 5 blank; enter the amount from line 2 on line 6.
No. Look up the amount on line 3 in the EIC Table on
pages 48–53 to find the credit. Be sure you use the correct
column for your filing status and the number of children
you have. Enter the credit here.
Enter this amount on
Form 1040, line 65a.
3
6
Part 3
Part 1
Part 2
All Filers Using
Worksheet A
Filers Who
Answered
“No” on
Line 4
Your Earned
Income Credit
2
If line 2 is zero, You cannot take the credit.
Put “No” on the dotted line next to line 65a.
●No qualifying children, is the amount on line 3 less than $6,400
($7,400 if married filing jointly)?
●1 or more qualifying children, is the amount on line 3 less than
$14,050 ($15,050 if married filing jointly)?
Look at the amounts on lines 5 and 2.
Then, enter the smaller amount on line 6.
5
6. This is your earned income credit.
Reminder—
If you have a qualifying child, complete and attach Schedule EIC.
If your EIC for a year after 1996 was reduced or disallowed, see
page 44 to find out if you must file Form 8862 to take the credit for
2004.
⻫䊴
䊴
EIC
1040
⻫
CAUTION
-45-
Need more information or forms? See page 7.
Page 46 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Form 1040—Lines 65a and 65b
Worksheet —Earned Income Credit (EIC)—Lines 65a and 65bB
STOP
Keep for Your Records
Use this worksheet if you were self-employed, or you are filing Schedule SE because you were a member of
the clergy or you had church employee income, or you are filing Schedule C or C-EZ as a statutory employee.
Complete the parts below (Parts 1 through 3) that apply to you. Then, continue to Part 4.
1a.
2.
3.
1a
Enter the amount from Schedule SE, Section A, line 3, or
Section B, line 3, whichever applies.
Subtract line 1d from 1c.
Do not include on these lines any statutory employee income or any amount exempt from
self-employment tax as the result of the filing and approval of Form 4029 or Form 4361.
Yes. If you want the IRS to figure your credit, see page 44. If you want to
figure the credit yourself, enter the amount from line 4b on line 6 (page 47).
Part 3
Part 1
Part 2
Self-Employed,
Members of the
Clergy, and
People With
Church Employee
Income Filing
Schedule SE
Self-Employed
NOT Required
To File
Schedule SE
Statutory Employees
Filing Schedule
C or C-EZ
●2 or more qualifying children, is line 4b less than $34,458 ($35,458 if married filing jointly)?
●1 qualifying child, is line 4b less than $30,338 ($31,338 if married filing jointly)?
⻫
If you are married filing a joint return, include your spouse’s amounts, if any, with yours to figure the amounts to
enter in Parts 1 through 3.
⻫
1e
b.
c.
d.
e.
1b
Enter any amount from Schedule SE, Section B, line 4b, and line 5a.
1c
Combine lines 1a and 1b.
1d
Enter the amount from Schedule SE, Section A, line 6, or
Section B, line 13, whichever applies.
+
=
–
=
For example, your
net earnings from
self-employment
were less than $400.
a. 2a
Enter any net farm profit or (loss) from Schedule F, line 36, and from
farm partnerships, Schedule K-1 (Form 1065), box 14, code A*.
b.
2b
Enter any net profit or (loss) from Schedule C, line 31; Schedule C-EZ,
line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming);
and Schedule K-1 (Form 1065-B), box 9*. +
Combine lines 2a and 2b. 2cc. =
Enter the amount from Schedule C, line 1, or Schedule C-EZ, line 1, that
you are filing as a statutory employee. 3
Part 4
All Filers Using
Worksheet B
Note. If line 4b
includes income on
which you should
have paid self-
employment tax but
did not, we may
reduce your credit by
the amount of
self-employment tax
not paid.
4a. Enter your earned income from Step 5 on page 43.
4b
b. Combine lines 1e, 2c, 3, and 4a. This is your total earned income.
5. If you have:
●No qualifying children, is line 4b less than $11,490 ($12,490 if married filing jointly)?
No. You cannot take the credit. Put “No” on the dotted line next to line 65a.
*Reduce any Schedule K-1 amounts by any partnership section 179 expense deduction claimed,
unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties. If you
have any Schedule K-1 amounts, complete the appropriate line(s) of Schedule SE, Section A. Put your
name and social security number on Schedule SE and attach it to your return.
If line 4b is zero or less, You cannot take the credit. Put “No” on the dotted line next to line 65a.
4a
STOP
Need more information or forms? See page 7.
-46-
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Form 1040—Lines 65a and 65b
Worksheet —Continued from page 46B
1040
Yes. Skip line 10; enter the amount from line 7 on line 11.
STOP
Keep for Your Records
6.
7.
8.
9.
10.
6
Enter your total earned income from Part 4, line 4b,
on page 46.
Look up the amount on line 6 above in the EIC Table on pages 48–53
to find the credit. Be sure you use the correct column for your filing
status and the number of children you have. Enter the credit here.
Enter the amount from Form 1040, line 37.
Are the amounts on lines 8 and 6 the same?
No. Go to line 10.
If you have:
Yes. Leave line 10 blank; enter the amount from line 7 on line 11.
No. Look up the amount on line 8 in the EIC Table on
pages 48–53 to find the credit. Be sure you use the correct
column for your filing status and the number of children
you have. Enter the credit here.
Enter this amount on
Form 1040, line 65a.
8
11
Part 5
Part 7
All Filers Using
Worksheet B
Your Earned
Income Credit
7
If line 7 is zero, You cannot take the credit.
Put “No” on the dotted line next to line 65a.
●No qualifying children, is the amount on line 8 less than $6,400
($7,400 if married filing jointly)?
●1 or more qualifying children, is the amount on line 8 less than $14,050
($15,050 if married filing jointly)?
Look at the amounts on lines 10 and 7.
Then, enter the smaller amount on line 11.
10
11. This is your earned income credit.
Reminder—
If you have a qualifying child, complete and attach Schedule EIC.
If your EIC for a year after 1996 was reduced or disallowed, see
page 44 to find out if you must file Form 8862 to take the credit for
2004.
⻫䊴
䊴
EIC
1040
Part 6
Filers Who
Answered
“No” on
Line 9
CAUTION
-47-
Need more information or forms? See page 7.
Page 48 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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(Continued on page 49)
2004 Earned Income Credit (EIC) Table
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
This is not a tax table.Caution.
1. To find your credit, read
down the “At least – But less
than” columns and find the
line that includes the amount
you were told to look up from
your EIC Worksheet.
Your credit is—
No
children
If the amount you are
looking up from the
worksheet is—
2. Then, go to the column
that includes your filing status
and the number of qualifying
children you have. Enter the
credit from that column on
your EIC Worksheet.
Example. If your filing
status is single, you have one
qualifying child, and the amount
you are looking up from your
EIC Worksheet is $2,455, you
would enter $842.
At least But less than Your credit is— Your credit is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children Two
children
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
2,400 2,450 186 825 970
2,450 2,500 189 842 990
$1 $50 $2 $9 $10
50 100 62630
100 150 10 43 50
150 200 13 60 70
200 250 17 77 90
250 300 21 94 110
300 350 25 111 130
350 400 29 128 150
400 450 33 145 170
450 500 36 162 190
500 550 40 179 210
550 600 44 196 230
600 650 48 213 250
650 700 52 230 270
700 750 55 247 290
750 800 59 264 310
800 850 63 281 330
850 900 67 298 350
900 950 71 315 370
950 1,000 75 332 390
1,000 1,050 78 349 410
1,050 1,100 82 366 430
1,100 1,150 86 383 450
1,150 1,200 90 400 470
1,200 1,250 94 417 490
1,250 1,300 98 434 510
1,300 1,350 101 451 530
1,350 1,400 105 468 550
1,400 1,450 109 485 570
1,450 1,500 113 502 590
1,500 1,550 117 519 610
1,550 1,600 120 536 630
1,600 1,650 124 553 650
1,650 1,700 128 570 670
1,700 1,750 132 587 690
1,750 1,800 136 604 710
1,800 1,850 140 621 730
1,850 1,900 143 638 750
1,900 1,950 147 655 770
1,950 2,000 151 672 790
2,000 2,050 155 689 810
2,050 2,100 159 706 830
2,100 2,150 163 723 850
2,150 2,200 166 740 870
2,200 2,250 170 757 890
2,250 2,300 174 774 910
2,300 2,350 178 791 930
2,350 2,400 182 808 950
2,400 2,450 186 825 970
2,450 2,500 189 842 990
2,500 2,550 193 859 1,010
2,550 2,600 197 876 1,030
2,600 2,650 201 893 1,050
2,650 2,700 205 910 1,070
2,700 2,750 208 927 1,090
2,750 2,800 212 944 1,110
2,800 2,850 216 961 1,130
2,850 2,900 220 978 1,150
2,900 2,950 224 995 1,170
2,950 3,000 228 1,012 1,190
3,000 3,050 231 1,029 1,210
3,050 3,100 235 1,046 1,230
3,100 3,150 239 1,063 1,250
3,150 3,200 243 1,080 1,270
3,200 3,250 247 1,097 1,290
3,250 3,300 251 1,114 1,310
3,300 3,350 254 1,131 1,330
3,350 3,400 258 1,148 1,350
3,400 3,450 262 1,165 1,370
3,450 3,500 266 1,182 1,390
3,500 3,550 270 1,199 1,410
3,550 3,600 273 1,216 1,430
3,600 3,650 277 1,233 1,450
3,650 3,700 281 1,250 1,470
3,700 3,750 285 1,267 1,490
3,750 3,800 289 1,284 1,510
3,800 3,850 293 1,301 1,530
3,850 3,900 296 1,318 1,550
3,900 3,950 300 1,335 1,570
3,950 4,000 304 1,352 1,590
4,000 4,050 308 1,369 1,610
4,050 4,100 312 1,386 1,630
4,100 4,150 316 1,403 1,650
4,150 4,200 319 1,420 1,670
4,200 4,250 323 1,437 1,690
4,250 4,300 327 1,454 1,710
4,300 4,350 331 1,471 1,730
4,350 4,400 335 1,488 1,750
4,400 4,450 339 1,505 1,770
4,450 4,500 342 1,522 1,790
4,500 4,550 346 1,539 1,810
4,550 4,600 350 1,556 1,830
4,600 4,650 354 1,573 1,850
4,650 4,700 358 1,590 1,870
4,700 4,750 361 1,607 1,890
4,750 4,800 365 1,624 1,910
4,800 4,850 369 1,641 1,930
4,850 4,900 373 1,658 1,950
4,900 4,950 377 1,675 1,970
4,950 5,000 381 1,692 1,990
5,000 5,050 384 1,709 2,010
5,050 5,100 388 1,726 2,030
5,100 5,150 390 1,743 2,050
5,150 5,200 390 1,760 2,070
5,200 5,250 390 1,777 2,090
5,250 5,300 390 1,794 2,110
5,300 5,350 390 1,811 2,130
5,350 5,400 390 1,828 2,150
5,400 5,450 390 1,845 2,170
5,450 5,500 390 1,862 2,190
$2 $9 $10
626 30
10 43 50
13 60 70
17 77 90
21 94 110
25 111 130
29 128 150
33 145 170
36 162 190
40 179 210
44 196 230
48 213 250
52 230 270
55 247 290
59 264 310
63 281 330
67 298 350
71 315 370
75 332 390
78 349 410
82 366 430
86 383 450
90 400 470
94 417 490
98 434 510
101 451 530
105 468 550
109 485 570
113 502 590
117 519 610
120 536 630
124 553 650
128 570 670
132 587 690
136 604 710
140 621 730
143 638 750
147 655 770
151 672 790
155 689 810
159 706 830
163 723 850
166 740 870
170 757 890
174 774 910
178 791 930
182 808 950
186 825 970
189 842 990
193 859 1,010
197 876 1,030
201 893 1,050
205 910 1,070
208 927 1,090
212 944 1,110
216 961 1,130
220 978 1,150
224 995 1,170
228 1,012 1,190
231 1,029 1,210
235 1,046 1,230
239 1,063 1,250
243 1,080 1,270
247 1,097 1,290
251 1,114 1,310
254 1,131 1,330
258 1,148 1,350
262 1,165 1,370
266 1,182 1,390
270 1,199 1,410
273 1,216 1,430
277 1,233 1,450
281 1,250 1,470
285 1,267 1,490
289 1,284 1,510
293 1,301 1,530
296 1,318 1,550
300 1,335 1,570
304 1,352 1,590
308 1,369 1,610
312 1,386 1,630
316 1,403 1,650
319 1,420 1,670
323 1,437 1,690
327 1,454 1,710
331 1,471 1,730
335 1,488 1,750
339 1,505 1,770
342 1,522 1,790
346 1,539 1,810
350 1,556 1,830
354 1,573 1,850
358 1,590 1,870
361 1,607 1,890
365 1,624 1,910
369 1,641 1,930
373 1,658 1,950
377 1,675 1,970
381 1,692 1,990
384 1,709 2,010
388 1,726 2,030
390 1,743 2,050
390 1,760 2,070
390 1,777 2,090
390 1,794 2,110
390 1,811 2,130
390 1,828 2,150
390 1,845 2,170
390 1,862 2,190
Need more information or forms? See page 7.
-48-
Page 49 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Earned Income Credit (EIC) Table—Continued (Caution. This is not a tax table.)
(Continued on page 50)
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
Your credit is—
No
children
If the amount you are
looking up from the
worksheet is—
At least But less than Your credit is— Your credit is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children Two
children
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children
*If the amount you are looking up from the worksheet is at least $11,450 ($12,450 if married filing jointly) but less than $11,490 ($12,490 if married filing jointly), your
credit is $2. Otherwise, you cannot take the credit.
5,500 5,550 390 1,879 2,210
5,550 5,600 390 1,896 2,230
5,600 5,650 390 1,913 2,250
5,650 5,700 390 1,930 2,270
5,700 5,750 390 1,947 2,290
5,750 5,800 390 1,964 2,310
5,800 5,850 390 1,981 2,330
5,850 5,900 390 1,998 2,350
5,900 5,950 390 2,015 2,370
5,950 6,000 390 2,032 2,390
6,000 6,050 390 2,049 2,410
6,050 6,100 390 2,066 2,430
6,100 6,150 390 2,083 2,450
6,150 6,200 390 2,100 2,470
6,200 6,250 390 2,117 2,490
6,250 6,300 390 2,134 2,510
6,300 6,350 390 2,151 2,530
6,350 6,400 390 2,168 2,550
6,400 6,450 387 2,185 2,570
6,450 6,500 384 2,202 2,590
6,500 6,550 380 2,219 2,610
6,550 6,600 376 2,236 2,630
6,600 6,650 372 2,253 2,650
6,650 6,700 368 2,270 2,670
6,700 6,750 365 2,287 2,690
6,750 6,800 361 2,304 2,710
6,800 6,850 357 2,321 2,730
6,850 6,900 353 2,338 2,750
6,900 6,950 349 2,355 2,770
6,950 7,000 345 2,372 2,790
7,000 7,050 342 2,389 2,810
7,050 7,100 338 2,406 2,830
7,100 7,150 334 2,423 2,850
7,150 7,200 330 2,440 2,870
7,200 7,250 326 2,457 2,890
7,250 7,300 322 2,474 2,910
7,300 7,350 319 2,491 2,930
7,350 7,400 315 2,508 2,950
7,400 7,450 311 2,525 2,970
7,450 7,500 307 2,542 2,990
7,500 7,550 303 2,559 3,010
7,550 7,600 299 2,576 3,030
7,600 7,650 296 2,593 3,050
7,650 7,700 292 2,604 3,070
7,700 7,750 288 2,604 3,090
7,750 7,800 284 2,604 3,110
7,800 7,850 280 2,604 3,130
7,850 7,900 277 2,604 3,150
7,900 7,950 273 2,604 3,170
7,950 8,000 269 2,604 3,190
8,000 8,050 265 2,604 3,210
8,050 8,100 261 2,604 3,230
8,100 8,150 257 2,604 3,250
8,150 8,200 254 2,604 3,270
8,200 8,250 250 2,604 3,290
8,250 8,300 246 2,604 3,310
8,300 8,350 242 2,604 3,330
8,350 8,400 238 2,604 3,350
8,400 8,450 234 2,604 3,370
8,450 8,500 231 2,604 3,390
8,500 8,550 227 2,604 3,410
8,550 8,600 223 2,604 3,430
8,600 8,650 219 2,604 3,450
8,650 8,700 215 2,604 3,470
8,700 8,750 212 2,604 3,490
8,750 8,800 208 2,604 3,510
8,800 8,850 204 2,604 3,530
8,850 8,900 200 2,604 3,550
8,900 8,950 196 2,604 3,570
8,950 9,000 192 2,604 3,590
9,000 9,050 189 2,604 3,610
9,050 9,100 185 2,604 3,630
9,100 9,150 181 2,604 3,650
9,150 9,200 177 2,604 3,670
9,200 9,250 173 2,604 3,690
9,250 9,300 169 2,604 3,710
9,300 9,350 166 2,604 3,730
9,350 9,400 162 2,604 3,750
9,400 9,450 158 2,604 3,770
9,450 9,500 154 2,604 3,790
9,500 9,550 150 2,604 3,810
9,550 9,600 146 2,604 3,830
9,600 9,650 143 2,604 3,850
9,650 9,700 139 2,604 3,870
9,700 9,750 135 2,604 3,890
9,750 9,800 131 2,604 3,910
9,800 9,850 127 2,604 3,930
9,850 9,900 124 2,604 3,950
9,900 9,950 120 2,604 3,970
9,950 10,000 116 2,604 3,990
10,000 10,050 112 2,604 4,010
10,050 10,100 108 2,604 4,030
10,100 10,150 104 2,604 4,050
10,150 10,200 101 2,604 4,070
10,200 10,250 97 2,604 4,090
10,250 10,300 93 2,604 4,110
10,300 10,350 89 2,604 4,130
10,350 10,400 85 2,604 4,150
10,400 10,450 81 2,604 4,170
10,450 10,500 78 2,604 4,190
10,500 10,550 74 2,604 4,210
10,550 10,600 70 2,604 4,230
10,600 10,650 66 2,604 4,250
10,650 10,700 62 2,604 4,270
10,700 10,750 59 2,604 4,290
10,750 10,800 55 2,604 4,300
10,800 10,850 51 2,604 4,300
10,850 10,900 47 2,604 4,300
10,900 10,950 43 2,604 4,300
10,950 11,000 39 2,604 4,300
11,000 11,050 36 2,604 4,300
11,050 11,100 32 2,604 4,300
11,100 11,150 28 2,604 4,300
11,150 11,200 24 2,604 4,300
11,200 11,250 20 2,604 4,300
11,250 11,300 16 2,604 4,300
11,300 11,350 13 2,604 4,300
11,350 11,400 9 2,604 4,300
11,400 11,450 5 2,604 4,300
11,450 11,500 *2,604 4,300
390 1,879 2,210
390 1,896 2,230
390 1,913 2,250
390 1,930 2,270
390 1,947 2,290
390 1,964 2,310
390 1,981 2,330
390 1,998 2,350
390 2,015 2,370
390 2,032 2,390
390 2,049 2,410
390 2,066 2,430
390 2,083 2,450
390 2,100 2,470
390 2,117 2,490
390 2,134 2,510
390 2,151 2,530
390 2,168 2,550
390 2,185 2,570
390 2,202 2,590
390 2,219 2,610
390 2,236 2,630
390 2,253 2,650
390 2,270 2,670
390 2,287 2,690
390 2,304 2,710
390 2,321 2,730
390 2,338 2,750
390 2,355 2,770
390 2,372 2,790
390 2,389 2,810
390 2,406 2,830
390 2,423 2,850
390 2,440 2,870
390 2,457 2,890
390 2,474 2,910
390 2,491 2,930
390 2,508 2,950
387 2,525 2,970
384 2,542 2,990
380 2,559 3,010
376 2,576 3,030
372 2,593 3,050
368 2,604 3,070
365 2,604 3,090
361 2,604 3,110
357 2,604 3,130
353 2,604 3,150
349 2,604 3,170
345 2,604 3,190
342 2,604 3,210
338 2,604 3,230
334 2,604 3,250
330 2,604 3,270
326 2,604 3,290
322 2,604 3,310
319 2,604 3,330
315 2,604 3,350
311 2,604 3,370
307 2,604 3,390
303 2,604 3,410
299 2,604 3,430
296 2,604 3,450
292 2,604 3,470
288 2,604 3,490
284 2,604 3,510
280 2,604 3,530
277 2,604 3,550
273 2,604 3,570
269 2,604 3,590
265 2,604 3,610
261 2,604 3,630
257 2,604 3,650
254 2,604 3,670
250 2,604 3,690
246 2,604 3,710
242 2,604 3,730
238 2,604 3,750
234 2,604 3,770
231 2,604 3,790
227 2,604 3,810
223 2,604 3,830
219 2,604 3,850
215 2,604 3,870
212 2,604 3,890
208 2,604 3,910
204 2,604 3,930
200 2,604 3,950
196 2,604 3,970
192 2,604 3,990
189 2,604 4,010
185 2,604 4,030
181 2,604 4,050
177 2,604 4,070
173 2,604 4,090
169 2,604 4,110
166 2,604 4,130
162 2,604 4,150
158 2,604 4,170
154 2,604 4,190
150 2,604 4,210
146 2,604 4,230
143 2,604 4,250
139 2,604 4,270
135 2,604 4,290
131 2,604 4,300
127 2,604 4,300
124 2,604 4,300
120 2,604 4,300
116 2,604 4,300
112 2,604 4,300
108 2,604 4,300
104 2,604 4,300
101 2,604 4,300
97 2,604 4,300
93 2,604 4,300
89 2,604 4,300
85 2,604 4,300
81 2,604 4,300
78 2,604 4,300
-49-
Need more information or forms? See page 7.
Page 50 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Earned Income Credit (EIC) Table—Continued (Caution. This is not a tax table.)
(Continued on page 51)
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
Your credit is—
No
children
If the amount you are
looking up from the
worksheet is—
At least But less than Your credit is— Your credit is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children Two
children
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children
11,500 11,550 0 2,604 4,300
11,550 11,600 0 2,604 4,300
11,600 11,650 0 2,604 4,300
11,650 11,700 0 2,604 4,300
11,700 11,750 0 2,604 4,300
11,750 11,800 0 2,604 4,300
11,800 11,850 0 2,604 4,300
11,850 11,900 0 2,604 4,300
11,900 11,950 0 2,604 4,300
11,950 12,000 0 2,604 4,300
12,000 12,050 0 2,604 4,300
12,050 12,100 0 2,604 4,300
12,100 12,150 0 2,604 4,300
12,150 12,200 0 2,604 4,300
12,200 12,250 0 2,604 4,300
12,250 12,300 0 2,604 4,300
12,300 12,350 0 2,604 4,300
12,350 12,400 0 2,604 4,300
12,400 12,450 0 2,604 4,300
12,450 12,500 0 2,604 4,300
12,500 14,050 0 2,604 4,300
14,050 14,100 0 2,599 4,293
14,100 14,150 0 2,591 4,282
14,150 14,200 0 2,583 4,272
14,200 14,250 0 2,575 4,261
14,250 14,300 0 2,567 4,251
14,300 14,350 0 2,559 4,240
14,350 14,400 0 2,551 4,229
14,400 14,450 0 2,543 4,219
14,450 14,500 0 2,535 4,208
14,500 14,550 0 2,527 4,198
14,550 14,600 0 2,519 4,187
14,600 14,650 0 2,511 4,177
14,650 14,700 0 2,503 4,166
14,700 14,750 0 2,495 4,156
14,750 14,800 0 2,487 4,145
14,800 14,850 0 2,479 4,135
14,850 14,900 0 2,471 4,124
14,900 14,950 0 2,463 4,114
14,950 15,000 0 2,455 4,103
15,000 15,050 0 2,447 4,093
15,050 15,100 0 2,439 4,082
15,100 15,150 0 2,431 4,071
15,150 15,200 0 2,423 4,061
15,200 15,250 0 2,415 4,050
15,250 15,300 0 2,407 4,040
15,300 15,350 0 2,399 4,029
15,350 15,400 0 2,391 4,019
15,400 15,450 0 2,383 4,008
15,450 15,500 0 2,375 3,998
15,500 15,550 0 2,367 3,987
15,550 15,600 0 2,359 3,977
15,600 15,650 0 2,351 3,966
15,650 15,700 0 2,343 3,956
15,700 15,750 0 2,335 3,945
15,750 15,800 0 2,327 3,935
15,800 15,850 0 2,319 3,924
15,850 15,900 0 2,311 3,914
15,900 15,950 0 2,303 3,903
15,950 16,000 0 2,295 3,892
16,000 16,050 0 2,287 3,882
16,050 16,100 0 2,279 3,871
16,100 16,150 0 2,271 3,861
16,150 16,200 0 2,263 3,850
16,200 16,250 0 2,255 3,840
16,250 16,300 0 2,247 3,829
16,300 16,350 0 2,239 3,819
16,350 16,400 0 2,231 3,808
16,400 16,450 0 2,223 3,798
16,450 16,500 0 2,215 3,787
16,500 16,550 0 2,207 3,777
16,550 16,600 0 2,199 3,766
16,600 16,650 0 2,191 3,756
16,650 16,700 0 2,183 3,745
16,700 16,750 0 2,175 3,735
16,750 16,800 0 2,167 3,724
16,800 16,850 0 2,159 3,713
16,850 16,900 0 2,151 3,703
16,900 16,950 0 2,143 3,692
16,950 17,000 0 2,135 3,682
17,000 17,050 0 2,127 3,671
17,050 17,100 0 2,119 3,661
17,100 17,150 0 2,111 3,650
17,150 17,200 0 2,103 3,640
17,200 17,250 0 2,095 3,629
17,250 17,300 0 2,087 3,619
17,300 17,350 0 2,079 3,608
17,350 17,400 0 2,071 3,598
17,400 17,450 0 2,063 3,587
17,450 17,500 0 2,055 3,577
74 2,604 4,300
70 2,604 4,300
66 2,604 4,300
62 2,604 4,300
59 2,604 4,300
55 2,604 4,300
51 2,604 4,300
47 2,604 4,300
43 2,604 4,300
39 2,604 4,300
36 2,604 4,300
32 2,604 4,300
28 2,604 4,300
24 2,604 4,300
20 2,604 4,300
16 2,604 4,300
13 2,604 4,300
9 2,604 4,300
5 2,604 4,300
*2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,604 4,300
0 2,599 4,293
0 2,591 4,282
0 2,583 4,272
0 2,575 4,261
0 2,567 4,251
0 2,559 4,240
0 2,551 4,229
0 2,543 4,219
0 2,535 4,208
0 2,527 4,198
0 2,519 4,187
0 2,511 4,177
0 2,503 4,166
0 2,495 4,156
0 2,487 4,145
0 2,479 4,135
0 2,471 4,124
0 2,463 4,114
0 2,455 4,103
0 2,447 4,093
0 2,439 4,082
0 2,431 4,071
0 2,423 4,061
0 2,415 4,050
0 2,407 4,040
0 2,399 4,029
0 2,391 4,019
0 2,383 4,008
0 2,375 3,998
0 2,367 3,987
0 2,359 3,977
0 2,351 3,966
0 2,343 3,956
0 2,335 3,945
0 2,327 3,935
0 2,319 3,924
0 2,311 3,914
0 2,303 3,903
0 2,295 3,892
0 2,287 3,882
0 2,279 3,871
0 2,271 3,861
0 2,263 3,850
0 2,255 3,840
0 2,247 3,829
0 2,239 3,819
0 2,231 3,808
0 2,223 3,798
0 2,215 3,787
*If the amount you are looking up from the worksheet is at least $11,450 ($12,450 if married filing jointly) but less than $11,490 ( $12,490 if married filing jointly), your
credit is $2. Otherwise, you cannot take the credit.
17,500 17,550 0 2,047 3,566
17,550 17,600 0 2,040 3,556
17,600 17,650 0 2,032 3,545
17,650 17,700 0 2,024 3,534
17,700 17,750 0 2,016 3,524
17,750 17,800 0 2,008 3,513
17,800 17,850 0 2,000 3,503
17,850 17,900 0 1,992 3,492
17,900 17,950 0 1,984 3,482
17,950 18,000 0 1,976 3,471
18,000 18,050 0 1,968 3,461
18,050 18,100 0 1,960 3,450
18,100 18,150 0 1,952 3,440
18,150 18,200 0 1,944 3,429
18,200 18,250 0 1,936 3,419
18,250 18,300 0 1,928 3,408
18,300 18,350 0 1,920 3,398
18,350 18,400 0 1,912 3,387
18,400 18,450 0 1,904 3,377
18,450 18,500 0 1,896 3,366
18,500 18,550 0 1,888 3,355
18,550 18,600 0 1,880 3,345
18,600 18,650 0 1,872 3,334
18,650 18,700 0 1,864 3,324
18,700 18,750 0 1,856 3,313
18,750 18,800 0 1,848 3,303
18,800 18,850 0 1,840 3,292
18,850 18,900 0 1,832 3,282
18,900 18,950 0 1,824 3,271
18,950 19,000 0 1,816 3,261
0 2,207 3,777
0 2,199 3,766
0 2,191 3,756
0 2,183 3,745
0 2,175 3,735
0 2,167 3,724
0 2,159 3,713
0 2,151 3,703
0 2,143 3,692
0 2,135 3,682
0 2,127 3,671
0 2,119 3,661
0 2,111 3,650
0 2,103 3,640
0 2,095 3,629
0 2,087 3,619
0 2,079 3,608
0 2,071 3,598
0 2,063 3,587
0 2,055 3,577
0 2,047 3,566
0 2,040 3,556
0 2,032 3,545
0 2,024 3,534
0 2,016 3,524
0 2,008 3,513
0 2,000 3,503
0 1,992 3,492
0 1,984 3,482
0 1,976 3,471
Need more information or forms? See page 7.
-50-
Page 51 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Earned Income Credit (EIC) Table—Continued (Caution. This is not a tax table.)
(Continued on page 52)
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
Your credit is—
No
children
If the amount you are
looking up from the
worksheet is—
At least But less than Your credit is— Your credit is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children Two
children
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children
19,000 19,050 0 1,808 3,250
19,050 19,100 0 1,800 3,240
19,100 19,150 0 1,792 3,229
19,150 19,200 0 1,784 3,219
19,200 19,250 0 1,776 3,208
19,250 19,300 0 1,768 3,198
19,300 19,350 0 1,760 3,187
19,350 19,400 0 1,752 3,176
19,400 19,450 0 1,744 3,166
19,450 19,500 0 1,736 3,155
19,500 19,550 0 1,728 3,145
19,550 19,600 0 1,720 3,134
19,600 19,650 0 1,712 3,124
19,650 19,700 0 1,704 3,113
19,700 19,750 0 1,696 3,103
19,750 19,800 0 1,688 3,092
19,800 19,850 0 1,680 3,082
19,850 19,900 0 1,672 3,071
19,900 19,950 0 1,664 3,061
19,950 20,000 0 1,656 3,050
20,000 20,050 0 1,648 3,040
20,050 20,100 0 1,640 3,029
20,100 20,150 0 1,632 3,018
20,150 20,200 0 1,624 3,008
20,200 20,250 0 1,616 2,997
20,250 20,300 0 1,608 2,987
20,300 20,350 0 1,600 2,976
20,350 20,400 0 1,592 2,966
20,400 20,450 0 1,584 2,955
20,450 20,500 0 1,576 2,945
20,500 20,550 0 1,568 2,934
20,550 20,600 0 1,560 2,924
20,600 20,650 0 1,552 2,913
20,650 20,700 0 1,544 2,903
20,700 20,750 0 1,536 2,892
20,750 20,800 0 1,528 2,882
20,800 20,850 0 1,520 2,871
20,850 20,900 0 1,512 2,861
20,900 20,950 0 1,504 2,850
20,950 21,000 0 1,496 2,839
21,000 21,050 0 1,488 2,829
21,050 21,100 0 1,480 2,818
21,100 21,150 0 1,472 2,808
21,150 21,200 0 1,464 2,797
21,200 21,250 0 1,456 2,787
21,250 21,300 0 1,448 2,776
21,300 21,350 0 1,440 2,766
21,350 21,400 0 1,432 2,755
21,400 21,450 0 1,424 2,745
21,450 21,500 0 1,416 2,734
21,500 21,550 0 1,408 2,724
21,550 21,600 0 1,400 2,713
21,600 21,650 0 1,392 2,703
21,650 21,700 0 1,384 2,692
21,700 21,750 0 1,376 2,682
21,750 21,800 0 1,368 2,671
21,800 21,850 0 1,360 2,660
21,850 21,900 0 1,352 2,650
21,900 21,950 0 1,344 2,639
21,950 22,000 0 1,336 2,629
22,000 22,050 0 1,328 2,618
22,050 22,100 0 1,320 2,608
22,100 22,150 0 1,312 2,597
22,150 22,200 0 1,304 2,587
22,200 22,250 0 1,296 2,576
22,250 22,300 0 1,288 2,566
22,300 22,350 0 1,280 2,555
22,350 22,400 0 1,272 2,545
22,400 22,450 0 1,264 2,534
22,450 22,500 0 1,256 2,524
22,500 22,550 0 1,248 2,513
22,550 22,600 0 1,241 2,503
22,600 22,650 0 1,233 2,492
22,650 22,700 0 1,225 2,481
22,700 22,750 0 1,217 2,471
22,750 22,800 0 1,209 2,460
22,800 22,850 0 1,201 2,450
22,850 22,900 0 1,193 2,439
22,900 22,950 0 1,185 2,429
22,950 23,000 0 1,177 2,418
23,000 23,050 0 1,169 2,408
23,050 23,100 0 1,161 2,397
23,100 23,150 0 1,153 2,387
23,150 23,200 0 1,145 2,376
23,200 23,250 0 1,137 2,366
23,250 23,300 0 1,129 2,355
23,300 23,350 0 1,121 2,345
23,350 23,400 0 1,113 2,334
23,400 23,450 0 1,105 2,324
23,450 23,500 0 1,097 2,313
0 1,968 3,461
0 1,960 3,450
0 1,952 3,440
0 1,944 3,429
0 1,936 3,419
0 1,928 3,408
0 1,920 3,398
0 1,912 3,387
0 1,904 3,377
0 1,896 3,366
0 1,888 3,355
0 1,880 3,345
0 1,872 3,334
0 1,864 3,324
0 1,856 3,313
0 1,848 3,303
0 1,840 3,292
0 1,832 3,282
0 1,824 3,271
0 1,816 3,261
0 1,808 3,250
0 1,800 3,240
0 1,792 3,229
0 1,784 3,219
0 1,776 3,208
0 1,768 3,198
0 1,760 3,187
0 1,752 3,176
0 1,744 3,166
0 1,736 3,155
0 1,728 3,145
0 1,720 3,134
0 1,712 3,124
0 1,704 3,113
0 1,696 3,103
0 1,688 3,092
0 1,680 3,082
0 1,672 3,071
0 1,664 3,061
0 1,656 3,050
0 1,648 3,040
0 1,640 3,029
0 1,632 3,018
0 1,624 3,008
0 1,616 2,997
0 1,608 2,987
0 1,600 2,976
0 1,592 2,966
0 1,584 2,955
0 1,576 2,945
0 1,568 2,934
0 1,560 2,924
0 1,552 2,913
0 1,544 2,903
0 1,536 2,892
0 1,528 2,882
0 1,520 2,871
0 1,512 2,861
0 1,504 2,850
0 1,496 2,839
0 1,488 2,829
0 1,480 2,818
0 1,472 2,808
0 1,464 2,797
0 1,456 2,787
0 1,448 2,776
0 1,440 2,766
0 1,432 2,755
0 1,424 2,745
0 1,416 2,734
0 1,408 2,724
0 1,400 2,713
0 1,392 2,703
0 1,384 2,692
0 1,376 2,682
0 1,368 2,671
0 1,360 2,660
0 1,352 2,650
0 1,344 2,639
0 1,336 2,629
0 1,328 2,618
0 1,320 2,608
0 1,312 2,597
0 1,304 2,587
0 1,296 2,576
0 1,288 2,566
0 1,280 2,555
0 1,272 2,545
0 1,264 2,534
0 1,256 2,524
23,500 23,550 0 1,089 2,302
23,550 23,600 0 1,081 2,292
23,600 23,650 0 1,073 2,281
23,650 23,700 0 1,065 2,271
23,700 23,750 0 1,057 2,260
23,750 23,800 0 1,049 2,250
23,800 23,850 0 1,041 2,239
23,850 23,900 0 1,033 2,229
23,900 23,950 0 1,025 2,218
23,950 24,000 0 1,017 2,208
24,000 24,050 0 1,009 2,197
24,050 24,100 0 1,001 2,187
24,100 24,150 0 993 2,176
24,150 24,200 0 985 2,166
24,200 24,250 0 977 2,155
24,250 24,300 0 969 2,145
24,300 24,350 0 961 2,134
24,350 24,400 0 953 2,123
24,400 24,450 0 945 2,113
24,450 24,500 0 937 2,102
24,500 24,550 0 929 2,092
24,550 24,600 0 921 2,081
24,600 24,650 0 913 2,071
24,650 24,700 0 905 2,060
24,700 24,750 0 897 2,050
24,750 24,800 0 889 2,039
24,800 24,850 0 881 2,029
24,850 24,900 0 873 2,018
24,900 24,950 0 865 2,008
24,950 25,000 0 857 1,997
0 1,248 2,513
0 1,241 2,503
0 1,233 2,492
0 1,225 2,481
0 1,217 2,471
0 1,209 2,460
0 1,201 2,450
0 1,193 2,439
0 1,185 2,429
0 1,177 2,418
0 1,169 2,408
0 1,161 2,397
0 1,153 2,387
0 1,145 2,376
0 1,137 2,366
0 1,129 2,355
0 1,121 2,345
0 1,113 2,334
0 1,105 2,324
0 1,097 2,313
0 1,089 2,302
0 1,081 2,292
0 1,073 2,281
0 1,065 2,271
0 1,057 2,260
0 1,049 2,250
0 1,041 2,239
0 1,033 2,229
0 1,025 2,218
0 1,017 2,208
-51-
Need more information or forms? See page 7.
Page 52 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Earned Income Credit (EIC) Table—Continued (Caution. This is not a tax table.)
(Continued on page 53)
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
Your credit is—
No
children
If the amount you are
looking up from the
worksheet is—
At least But less than Your credit is— Your credit is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children Two
children
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children
25,000 25,050 0 849 1,987
25,050 25,100 0 841 1,976
25,100 25,150 0 833 1,965
25,150 25,200 0 825 1,955
25,200 25,250 0 817 1,944
25,250 25,300 0 809 1,934
25,300 25,350 0 801 1,923
25,350 25,400 0 793 1,913
25,400 25,450 0 785 1,902
25,450 25,500 0 777 1,892
25,500 25,550 0 769 1,881
25,550 25,600 0 761 1,871
25,600 25,650 0 753 1,860
25,650 25,700 0 745 1,850
25,700 25,750 0 737 1,839
25,750 25,800 0 729 1,829
25,800 25,850 0 721 1,818
25,850 25,900 0 713 1,808
25,900 25,950 0 705 1,797
25,950 26,000 0 697 1,786
26,000 26,050 0 689 1,776
26,050 26,100 0 681 1,765
26,100 26,150 0 673 1,755
26,150 26,200 0 665 1,744
26,200 26,250 0 657 1,734
26,250 26,300 0 649 1,723
26,300 26,350 0 641 1,713
26,350 26,400 0 633 1,702
26,400 26,450 0 625 1,692
26,450 26,500 0 617 1,681
26,500 26,550 0 609 1,671
26,550 26,600 0 601 1,660
26,600 26,650 0 593 1,650
26,650 26,700 0 585 1,639
26,700 26,750 0 577 1,629
26,750 26,800 0 569 1,618
26,800 26,850 0 561 1,607
26,850 26,900 0 553 1,597
26,900 26,950 0 545 1,586
26,950 27,000 0 537 1,576
27,000 27,050 0 529 1,565
27,050 27,100 0 521 1,555
27,100 27,150 0 513 1,544
27,150 27,200 0 505 1,534
27,200 27,250 0 497 1,523
27,250 27,300 0 489 1,513
27,300 27,350 0 481 1,502
27,350 27,400 0 473 1,492
27,400 27,450 0 465 1,481
27,450 27,500 0 457 1,471
27,500 27,550 0 449 1,460
27,550 27,600 0 442 1,450
27,600 27,650 0 434 1,439
27,650 27,700 0 426 1,428
27,700 27,750 0 418 1,418
27,750 27,800 0 410 1,407
27,800 27,850 0 402 1,397
27,850 27,900 0 394 1,386
27,900 27,950 0 386 1,376
27,950 28,000 0 378 1,365
28,000 28,050 0 370 1,355
28,050 28,100 0 362 1,344
28,100 28,150 0 354 1,334
28,150 28,200 0 346 1,323
28,200 28,250 0 338 1,313
28,250 28,300 0 330 1,302
28,300 28,350 0 322 1,292
28,350 28,400 0 314 1,281
28,400 28,450 0 306 1,271
28,450 28,500 0 298 1,260
28,500 28,550 0 290 1,249
28,550 28,600 0 282 1,239
28,600 28,650 0 274 1,228
28,650 28,700 0 266 1,218
28,700 28,750 0 258 1,207
28,750 28,800 0 250 1,197
28,800 28,850 0 242 1,186
28,850 28,900 0 234 1,176
28,900 28,950 0 226 1,165
28,950 29,000 0 218 1,155
29,000 29,050 0 210 1,144
29,050 29,100 0 202 1,134
29,100 29,150 0 194 1,123
29,150 29,200 0 186 1,113
29,200 29,250 0 178 1,102
29,250 29,300 0 170 1,092
29,300 29,350 0 162 1,081
29,350 29,400 0 154 1,070
29,400 29,450 0 146 1,060
29,450 29,500 0 138 1,049
0 1,009 2,197
0 1,001 2,187
0 993 2,176
0 985 2,166
0 977 2,155
0 969 2,145
0 961 2,134
0 953 2,123
0 945 2,113
0 937 2,102
0 929 2,092
0 921 2,081
0 913 2,071
0 905 2,060
0 897 2,050
0 889 2,039
0 881 2,029
0 873 2,018
0 865 2,008
0 857 1,997
0 849 1,987
0 841 1,976
0 833 1,965
0 825 1,955
0 817 1,944
0 809 1,934
0 801 1,923
0 793 1,913
0 785 1,902
0 777 1,892
0 769 1,881
0 761 1,871
0 753 1,860
0 745 1,850
0 737 1,839
0 729 1,829
0 721 1,818
0 713 1,808
0 705 1,797
0 697 1,786
0 689 1,776
0 681 1,765
0 673 1,755
0 665 1,744
0 657 1,734
0 649 1,723
0 641 1,713
0 633 1,702
0 625 1,692
0 617 1,681
0 609 1,671
0 601 1,660
0 593 1,650
0 585 1,639
0 577 1,629
0 569 1,618
0 561 1,607
0 553 1,597
0 545 1,586
0 537 1,576
0 529 1,565
0 521 1,555
0 513 1,544
0 505 1,534
0 497 1,523
0 489 1,513
0 481 1,502
0 473 1,492
0 465 1,481
0 457 1,471
0 449 1,460
0 442 1,450
0 434 1,439
0 426 1,428
0 418 1,418
0 410 1,407
0 402 1,397
0 394 1,386
0 386 1,376
0 378 1,365
0 370 1,355
0 362 1,344
0 354 1,334
0 346 1,323
0 338 1,313
0 330 1,302
0 322 1,292
0 314 1,281
0 306 1,271
0 298 1,260
29,500 29,550 0 130 1,039
29,550 29,600 0 122 1,028
29,600 29,650 0 114 1,018
29,650 29,700 0 106 1,007
29,700 29,750 0 98 997
29,750 29,800 0 90 986
29,800 29,850 0 82 976
29,850 29,900 0 74 965
29,900 29,950 0 66 955
29,950 30,000 0 58 944
30,000 30,050 0 50 934
30,050 30,100 0 42 923
30,100 30,150 0 34 912
30,150 30,200 0 26 902
30,200 30,250 0 18 891
30,250 30,300 0 10 881
30,300 30,350 0** 870
30,350 30,400 0 0 860
30,400 30,450 0 0 849
30,450 30,500 0 0 839
30,500 30,550 0 0 828
30,550 30,600 0 0 818
30,600 30,650 0 0 807
30,650 30,700 0 0 797
30,700 30,750 0 0 786
30,750 30,800 0 0 776
30,800 30,850 0 0 765
30,850 30,900 0 0 755
30,900 30,950 0 0 744
30,950 31,000 0 0 733
0 290 1,249
0 282 1,239
0 274 1,228
0 266 1,218
0 258 1,207
0 250 1,197
0 242 1,186
0 234 1,176
0 226 1,165
0 218 1,155
0 210 1,144
0 202 1,134
0 194 1,123
0 186 1,113
0 178 1,102
0 170 1,092
0 162 1,081
0 154 1,070
0 146 1,060
0 138 1,049
0 130 1,039
0 122 1,028
0 114 1,018
0 106 1,007
0 98 997
0 90 986
0 82 976
0 74 965
0 66 955
0 58 944
**If the amount you are looking up from the worksheet is at least $30,300 ($31,300 if married filing jointly) but less than $30,338 ($31,338 if married filing jointly), your
credit is $3. Otherwise, you cannot take the credit.
Need more information or forms? See page 7.
-52-
Page 53 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Earned Income Credit (EIC) Table—Continued (Caution. This is not a tax table.)
**If the amount you are looking up from the worksheet is at least $30,300 ($31,300 if married filing jointly) but less than $30,338 ($31,338 if married filing jointly), your
credit is $3. Otherwise, you cannot take the credit.
At least But less than
Two
children
Your credit is—
One
child
And your filing status is—
Your credit is—
No
children
If the amount you are
looking up from the
worksheet is—
At least But less than Your credit is— Your credit is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children Two
children
One
child
And your filing status is—
No
children
If the amount you are
looking up from the
worksheet is—
Single, head of household,
or qualifying widow(er) and
you have—
Married filing jointly and
you have—
Two
children
One
child
No
children
***If the amount you are looking up from the worksheet is at least $34,450 but less than $34,458, your credit is $1. Otherwise, you cannot take the credit.
31,000 31,050 0 0 723
31,050 31,100 0 0 712
31,100 31,150 0 0 702
31,150 31,200 0 0 691
31,200 31,250 0 0 681
31,250 31,300 0 0 670
31,300 31,350 0 0 660
31,350 31,400 0 0 649
31,400 31,450 0 0 639
31,450 31,500 0 0 628
31,500 31,550 0 0 618
31,550 31,600 0 0 607
31,600 31,650 0 0 597
31,650 31,700 0 0 586
31,700 31,750 0 0 576
31,750 31,800 0 0 565
31,800 31,850 0 0 554
31,850 31,900 0 0 544
31,900 31,950 0 0 533
31,950 32,000 0 0 523
32,000 32,050 0 0 512
32,050 32,100 0 0 502
32,100 32,150 0 0 491
32,150 32,200 0 0 481
32,200 32,250 0 0 470
32,250 32,300 0 0 460
32,300 32,350 0 0 449
32,350 32,400 0 0 439
32,400 32,450 0 0 428
32,450 32,500 0 0 418
32,500 32,550 0 0 407
32,550 32,600 0 0 397
32,600 32,650 0 0 386
32,650 32,700 0 0 375
32,700 32,750 0 0 365
32,750 32,800 0 0 354
32,800 32,850 0 0 344
32,850 32,900 0 0 333
32,900 32,950 0 0 323
32,950 33,000 0 0 312
33,000 33,050 0 0 302
33,050 33,100 0 0 291
33,100 33,150 0 0 281
33,150 33,200 0 0 270
33,200 33,250 0 0 260
33,250 33,300 0 0 249
33,300 33,350 0 0 239
33,350 33,400 0 0 228
33,400 33,450 0 0 218
33,450 33,500 0 0 207
33,500 33,550 0 0 196
33,550 33,600 0 0 186
33,600 33,650 0 0 175
33,650 33,700 0 0 165
33,700 33,750 0 0 154
33,750 33,800 0 0 144
33,800 33,850 0 0 133
33,850 33,900 0 0 123
33,900 33,950 0 0 112
33,950 34,000 0 0 102
34,000 34,050 0091
34,050 34,100 0081
34,100 34,150 0070
34,150 34,200 0060
34,200 34,250 0049
0039
0028
0017
00 7
00
***
0 50 934
0 42 923
0 34 912
0 26 902
0 18 891
0 10 881
0** 870
0 0 860
0 0 849
0 0 839
0 0 828
0 0 818
0 0 807
0 0 797
0 0 786
0 0 776
0 0 765
0 0 755
0 0 744
0 0 733
0 0 723
0 0 712
0 0 702
0 0 691
0 0 681
0 0 670
0 0 660
0 0 649
0 0 639
0 0 628
0 0 618
0 0 607
0 0 597
0 0 586
0 0 576
0 0 565
0 0 554
0 0 544
0 0 533
0 0 523
0 0 512
0 0 502
0 0 491
0 0 481
0 0 470
0 0 460
0 0 449
0 0 439
0 0 428
0 0 418
0 0 407
0 0 397
0 0 386
0 0 375
0 0 365
0 0 354
0 0 344
0 0 333
0 0 323
0 0 312
0 0 302
0 0 291
0 0 281
0 0 270
0 0 260
34,250 34,300 0 0 249
34,300 34,350 0 0 239
34,350 34,400 0 0 228
34,400 34,450 0 0 218
34,450 34,500 0 0 207
34,500 34,550 0 0 196
34,550 34,600 0 0 186
34,600 34,650 0 0 175
34,650 34,700 0 0 165
34,700 34,750 0 0 154
34,750 34,800 0 0 144
34,800 34,850 0 0 133
34,850 34,900 0 0 123
34,900 34,950 0 0 112
34,950 35,000 0 0 102
35,000 35,050 0091
35,050 35,100 0081
35,100 35,150 0070
35,150 35,200 0060
35,200 35,250 0049
35,250 35,300 0039
35,300 35,350 0028
35,350 35,400 0017
35,400 35,450 00 7
35,450 35,458 00 1
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
00 0
35,458 or more 00 000 0
-53-
Need more information or forms? See page 7.
Page 54 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Form 1040—Lines 66 Through 72d
Line 66 Line 69 Lines 72b Through 72d
Excess Social Security and Other Payments
Tier 1 RRTA Tax Withheld Check the box(es) on line 69 to report any
Simple. Safe. Secure.
DIRECT
DEPOSIT
credit from Form 2439, 4136, or 8885.
If you, or your spouse if filing a joint re- Fast Refunds! Choose direct deposit–a
turn, had more than one employer for 2004 fast, simple, safe, secure way to have
and total wages of more than $87,900, too your refund deposited automatically
much social security or tier 1 railroad re- into your checking or savings account.
tirement (RRTA) tax may have been with-
Refund
held. You can take a credit on this line for
the amount withheld in excess of Complete lines 72b through 72d if you
$5,449.80. But if any one employer with- Line 71 want us to directly deposit the amount
held more than $5,449.80, you must ask shown on line 72a into your checking or
that employer to refund the excess to you. Amount Overpaid savings account at a bank or other financial
You cannot claim it on your return. Figure If line 71 is under $1, we will send a refund institution (such as a mutual fund, broker-
this amount separately for you and your only on written request. age firm, or credit union) in the United
spouse. States instead of sending you a check.
If you want to check the status of your
You cannot claim a refund for excess refund, please wait at least 6 weeks (3 Note. If you do not want your refund di-
tier 2 RRTA tax on Form 1040. Instead, use weeks if you filed electronically) from the rectly deposited into your account, draw a
Form 843. date you filed your return to do so. But if line through the boxes on lines 72b and
For more details, see Pub. 505. you filed Form 8379 with your return, al- 72d.
low 14 weeks (11 weeks if you filed elec- Why Use Direct Deposit?
tronically). See page 8 for details. •You get your refund fast—in half the
Line 67
If the amount you overpaid is
time as paper filers if you
e-file
.
large, you may want to decrease
•Payment is more secure—there is no
Additional Child Tax Credit
the amount of income tax with-
check to get lost.
TIP
held from your pay by filing a
What Is the Additional Child Tax •More convenient. No trip to the bank
new Form W-4. See
Income Tax Withhold- to deposit your check.
Credit? ing and Estimated Tax Payments for 2005 •Saves tax dollars. A refund by direct
on page 57.
This credit is for certain people who have at deposit costs less than a check.
least one qualifying child as defined in the Refund Offset
instructions for line 51 on page 37. The
You can check with your finan-
If you owe past-due federal tax, state in-
additional child tax credit may give you a
cial institution to make sure
come tax, child support, spousal support, or
refund even if you do not owe any tax.
your direct deposit will be ac-
certain federal nontax debts, such as stu-
TIP
cepted and to get the correct
Two Steps To Take the Additional dent loans, all or part of the overpayment
routing and account numbers. The IRS is
Child Tax Credit! on line 71 may be used (offset) to pay the
not responsible for a lost refund if you enter
past-due amount. Offsets for federal taxes
Step 1. Be sure you figured the amount, if
the wrong account information.
are made by the IRS. All other offsets are
any, of your child tax credit. See the in- If you file a joint return and fill in lines
made by the Treasury Department’s Finan-
structions for line 51 that begin on page 37. 72b through 72d, you are appointing your
cial Management Service (FMS). For fed-
Step 2. Read the TIP at the end of your spouse as an agent to receive the refund.
eral tax offsets, you will receive a notice
Child Tax Credit Worksheet. Use Form This appointment cannot be changed later.
from the IRS. For all other offsets, you will
8812 to see if you can take the additional receive a notice from FMS. To find out if Line 72b
child tax credit, but only if you meet the you may have an offset or if you have any
condition given in that TIP. The routing number must be nine digits.
questions about it, contact the agency to The first two digits must be 01 through 12
which you owe the debt. or 21 through 32. Otherwise, the direct de-
Injured Spouse Claim posit will be rejected and a check sent in-
Line 68 stead. On the sample check on page 55, the
If you file a joint return and your spouse
routing number is 250250025.
has not paid past-due federal tax, state in-
Amount Paid With Request come tax, child support, spousal support, or Your check may state that it is payable
for Extension To File a federal nontax debt, such as a student through a financial institution different
If you filed Form 4868 to get an automatic loan, part or all of the overpayment on line from the one at which you have your check-
extension of time to file Form 1040, enter 71 may be used (offset) to pay the past-due ing account. If so, do not use the routing
any amount you paid with that form or by amount. But your part of the overpayment number on that check. Instead, contact your
electronic funds withdrawal or credit card. may be refunded to you if certain condi- financial institution for the correct routing
If you paid by credit card, do not include on tions apply and you complete Form 8379. number to enter on line 72b.
line 68 the convenience fee you were For details, use TeleTax topic 203 (see Line 72d
charged. Also, include any amounts paid page 8) or see Form 8379.
with Form 2688 or 2350. The account number can be up to 17 char-
acters (both numbers and letters). Include
hyphens but omit spaces and special sym-
bols. Enter the number from left to right
and leave any unused boxes blank. On the
sample check on page 55, the account
Need more information or forms? See page 7.
-54-
Page 55 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Form 1040—Lines 72b Through 75
number is 20202086. Do not include the service provider based on the amount you
Line 74
check number. are paying. Fees may vary between the
providers. You will be told what the fee is
Some financial institutions will
Amount You Owe during the transaction and you will have the
not allow a joint refund to be
option to either continue or cancel the
Pay your taxes in full by April
deposited into an individual ac-
transaction. You can also find out what the
15, 2005, to save interest and
CAUTION
!
count. If the direct deposit is
fee will be by calling the provider’s
penalties. You do not have to
rejected, a check will be sent instead. The
TIP
toll-free automated customer service num-
pay if line 74 is under $1.
IRS is not responsible if a financial institu-
ber or visiting the provider’s website
Include any estimated tax penalty from
tion rejects a direct deposit.
shown below. If you pay by credit card
line 75 in the amount you enter on line 74. before filing your return, please enter on
You can pay by check, money order, or page 1 of Form 1040 in the upper left cor-
credit card. Do not include any estimated ner the confirmation number you were
Line 73 tax payment for 2005 in your check, money given at the end of the transaction and the
order, or amount you charge. Instead, make amount you charged (not including the con-
Applied to Your 2005 the estimated tax payment separately. venience fee).
Estimated Tax To pay by check or money order. Make
Enter on line 73 the amount, if any, of the Official Payments Corporation
your check or money order payable to the
overpayment on line 71 you want applied 1-800-2PAY-TAXSM (1-800-272-9829)
“United States Treasury” for the full
to your 2005 estimated tax. We will apply 1-877-754-4413 (Customer Service)
amount due. Do not send cash. Do not at-
this amount to your account unless you at-
www.officialpayments.com
tach the payment to your return. Write
tach a statement requesting us to apply it to “2004 Form 1040” and your name, address,
your spouse’s account. Include your Link2Gov Corporation
daytime phone number, and social security
spouse’s social security number in the at- 1-888-PAY-1040SM (1-888-729-1040)
number (SSN) on your payment. If you are
tached statement. 1-888-658-5465 (Customer Service)
filing a joint return, enter the SSN shown
www.PAY1040.com
first on your tax return.
This election to apply part or all
of the amount overpaid to your
To help process your payment, enter the
You may need to (a) increase
2005 estimated tax cannot be
amount on the right side of the check like
the amount of income tax with-
CAUTION
!
changed later.
this: $ XXX.XX. Do not use dashes or lines
held from your pay by filing a
TIP
(for example, do not enter “$ XXX–” or
new Form W-4, or (b) make es-
“$ XXX xx
100”).
timated tax payments for 2005. See
Income
Tax Withholding and Estimated Tax Pay-
Then, please complete Form 1040-V
Amount You Owe
ments for 2005
on page 57.
following the instructions on that form and
IRS
e-file
offers an addi- enclose it in the envelope with your tax What If You Cannot Pay?
tional payment option: return and payment. Although you do not If you cannot pay the full amount shown on
Electronic funds withdrawal. This option have to use Form 1040-V, doing so allows line 74 when you file, you can ask to make
allows you to file your return early and us to process your payment more accu- monthly installment payments for the full
schedule your payment for withdrawal rately and efficiently. or a partial amount. You may have up to 60
from your checking or savings account on a To pay by credit card. You may use your months to pay. However, you will be
future date up to and including April 15, American Express Card, Discovercharged interest and may be charged a late
2005. IRS
e-file
also provides proof of re- Card, MasterCard card, or Visa card. payment penalty on the tax not paid by
ceipt of your return and payment by email To pay by credit card, call toll free or visit April 15, 2005, even if your request to pay
or through your software package. Visit the website of either service provider listed in installments is granted. You must also
www.irs.gov/efile
for details. on this page and follow the instructions. A pay a fee. To limit the interest and penalty
convenience fee will be charged by the charges, pay as much of the tax as possible
when you file. 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, use
Form 9465. You should receive a response
to your request for installments within 30
days. But if you file your return after
March 31, it may take us longer to reply.
Line 75
Estimated Tax Penalty
You may owe this penalty if:
•Line 74 is at least $1,000 and it is
more than 10% of the tax shown on your
return, or
•You did not pay enough estimated tax
by any of the due dates. This is true even if
Do not include
the check number.
1234
SAMPLE
JEFFREY MAPLE
SUZANNE MAPLE
123 Pear Lane
Anyplace, VA 20000
15-0000/0000
PAY TO THE
ORDER OF $
DOLLARS
ANYPLACE BANK
Anyplace, VA 20000
For
|:250250025|:202020"’86".1234
The routing and account numbers may be in different places on your check.
(line 72b) (line 72d)
Routing
number
Account
number
䊲
䊲
Sample Check—Lines 72b Through 72d
CAUTION
-55-
Need more information or forms? See page 7.
Page 56 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Form 1040—Line 75
you are due a refund.
which you may be able to lower your pen-
return as a surviving spouse, see
Death of a
alty by filing Form 2210. Taxpayer
on page 58.
For most people, the “tax shown on your
return” is the amount on line 62 minus the Child’s Return
total of any amounts shown on lines 65a
If your child cannot sign the return, either
and 67 and Forms 8828, 4137, 4136, 5329
Third Party Designee
parent can sign the child’s name in the
(Parts III through VIII only), and 8885. If you want to allow a friend, family mem- space provided. Then, add “By (your signa-
When figuring the amount on line 62, in- ber, or any other person you choose to dis- ture), parent for minor child.”
clude the amount on line 61 only if line 63 cuss your 2004 tax return with the IRS,
is more than zero or you would owe the check the “Yes” box in the “Third Party
penalty even if you did not include those Daytime Phone Number
Designee” area of your return. Also, enter
taxes. But if you entered an amount on Providing your daytime phone number may
the designee’s name, phone number, and
Schedule H, line 7, include the total of that help speed the processing of your return.
any five digits the designee chooses as his
amount plus the amount on Form 1040, We may have questions about items on
or her personal identification number
line 61. your return, such as the earned income
(PIN). But if you want to allow the paid credit, credit for child and dependent care
Exception. You will not owe the penalty if preparer who signed your return to discuss expenses, etc. By answering our questions
your 2003 tax return was for a tax year of it with the IRS, just enter “Preparer” in the over the phone, we may be able to continue
12 full months and either of the following space for the designee’s name. You do not processing your return without mailing you
applies. have to provide the other information re- a letter. If you are filing a joint return, you
quested.
1. You had no tax liability for 2003 and may enter either your or your spouse’s day-
you were a U.S. citizen or resident for all of time phone number.
If you check the “Yes” box, you, and
2003, or your spouse if filing a joint return, are au-
2. The total of lines 63, 64, and 66 on Paid Preparer Must Sign
thorizing the IRS to call the designee to
your 2004 return is at least as much as the answer any questions that may arise during Your Return
tax liability shown on your 2003 return. the processing of your return. You are also Generally, anyone you pay to prepare your
Your estimated tax payments for 2004 must authorizing the designee to: return must sign it in the space provided.
have been made on time and for the re- •Give the IRS any information that is The preparer must give you a copy of the
quired amount. missing from your return, return for your records. Someone who
prepares your return but does not charge
•Call the IRS for information about the
If your 2003 adjusted gross in-
you should not sign your return.
processing of your return or the status of
come was over $150,000 (over
your refund or payment(s),
$75,000 if your 2004 filing sta-
CAUTION
!
•Receive copies of notices or tran-
tus is married filing separately),
scripts related to your return, upon request,
item 2 above applies only if the total of
and
lines 63, 64, and 66 on your 2004 return is
Electronic Return
•Respond to certain IRS notices about
at least 110% of the tax liability shown on
Signatures!
math errors, offsets, and return preparation.
your 2003 return. This rule does not apply
to farmers and fishermen.
Create your own personal identification
You are not authorizing the designee to number (PIN) and file a paperless return
Figuring the Penalty receive any refund check, bind you to any- electronically or use a tax professional. If
thing (including any additional tax liabil-
If the
Exception
above does not apply and you are married filing jointly, you and your
ity), or otherwise represent you before the
you choose to figure the penalty yourself, spouse will each need to create a PIN and
IRS. If you want to expand the designee’s
see Form 2210 (or 2210-F for farmers and enter these PINs as your electronic signa-
authorization, see Pub. 947.
fishermen) to find out if you owe the pen- tures.
alty. If you do, you can use the form to The authorization will automatically A PIN is any combination of five digits
figure the amount. end no later than the due date (without re- you choose except five zeros. If you use a
Enter the penalty on line 75. Add the gard to extensions) for filing your 2005 tax PIN, there is nothing to sign and nothing to
penalty to any tax due and enter the total on return. This is April 17, 2006, for most mail —not even your Forms W-2.
line 74. If you are due a refund, subtract the people. If you wish to revoke the authoriza- To verify your identity, you will be
penalty from the overpayment you show on tion before it ends, see Pub. 947. prompted to enter your adjusted gross in-
line 71. Do not file Form 2210 with your come (AGI) from your originally filed
return unless Form 2210 indicates that you 2003 federal income tax return, if applica-
must do so. Instead, keep it for your rec- ble. Do not use your AGI from an amended
ords.
Sign Your Return
return (Form 1040X), a math error notice,
Because Form 2210 is compli-
Form 1040 is not considered a valid return or an IRS examination report. AGI is the
cated, if you want to, you can
unless you sign it. If you are filing a joint amount shown on your 2003 Form 1040,
leave line 75 blank and the IRS
return, your spouse must also sign. If your line 35; Form 1040A, line 22; Form
TIP
will figure the penalty and send
spouse cannot sign the return, see Pub. 501. 1040EZ, line 4; or on the TeleFile Tax Re-
you a bill. We will not charge you interest
Be sure to date your return and enter your cord, line I. If you do not have your 2003
on the penalty if you pay by the date speci-
occupation(s). If you have someone pre- income tax return, call the IRS at
fied on the bill. If your income varied dur-
pare your return, you are still responsible 1-800-829-1040 to get a free transcript of
ing the year, the annualized income
for the correctness of the return. If your your return. You will also be prompted to
installment method may reduce the amount
return is signed by a representative for you, enter your date of birth (DOB). Make sure
of your penalty. But you must file Form
you must have a power of attorney attached your DOB is accurate and matches the in-
2210 because the IRS cannot figure your
that specifically authorizes the representa- formation on record with the Social Secur-
penalty under this method. See the Instruc-
tive to sign your return. To do this, you can ity Administration by checking your annual
tions for Form 2210 for other situations in
use Form 2848. If you are filing a joint social security statement.
Need more information or forms? See page 7.
-56-
Page 57 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
You cannot sign your return
are not eligible or choose not to sign your quence No.” shown in the upper right cor-
electronically if you are a
ner of the schedule or form. If you have
return electronically, you must complete,
first-time filer under age 16 at
supporting statements, arrange them in the
sign, and file Form 8453 or Form 8453-OL,
CAUTION
!
the end of 2004 or if you are
same order as the schedules or forms they
whichever applies
filing certain forms, such as Form 3115,
support and attach them last. Do not attach
If you use a paid preparer, ask to sign
3468 (if attachments are required), 5713,
correspondence or other items unless re-
your return electronically!
8283 (if Section B is completed), 8332,
quired to do so. Attach a copy of Forms
8858, or 8885.
W-2 and 2439 to the front of Form 1040.
Also attach Forms W-2G and 1099-R to the
For more details, visit front of Form 1040 if tax was withheld.
www.irs.gov/efile
and click on “
e-file for
Individual Taxpayers.
”
Assemble Your Return
Assemble any schedules and forms behind
Forms 8453 and 8453-OL. Your return is
Form 1040 in order of the “Attachment Se-
not complete without your signature. If you
General Information
or 38b or you (or your spouse if filing
How To Avoid Common Innocent Spouse Relief
jointly) can be claimed as a dependent on
someone else’s 2004 return, see page 31 to You may qualify for relief from liability for
Mistakes be sure you entered the correct amount on tax on a joint return if (a) there is an under-
Mistakes may delay your refund or result in line 39. statement of tax because your spouse omit-
notices being sent to you. •If you received capital gain distribu- ted income or claimed false deductions or
•Make sure you entered the correct tions but were not required to file Schedule credits, (b) you are divorced, separated, or
name and social security number (SSN) for D, make sure you checked the box on line no longer living with your spouse, or (c)
each dependent you claim on line 6c. 13. given all the facts and circumstances, it
Check that each dependent’s name and •If you are taking the EIC, be sure you would not be fair to hold you liable for the
SSN agrees with his or her social security used the correct column of the EIC Table tax. See Form 8857 or Pub. 971 for more
card. Also, make sure you check the box in for your filing status and the number of
line 6c, column (4), for each dependent details.
children you have.
under age 17 who is also a qualifying child
for the child tax credit. •Remember to sign and date Form
1040 and enter your occupation(s).
•Check your math, especially for the Income Tax
child tax credit, earned income credit •Attach your Form(s) W-2 and other
(EIC), taxable social security benefits, total Withholding and
required forms and schedules. Put all forms
income, itemized deductions or standard and schedules in the proper order. See
As-
Estimated Tax
deduction, deduction for exemptions, tax-
semble Your Return
above.
able income, total tax, federal income tax Payments for 2005
•If you owe tax and are paying by
withheld, and refund or amount you owe. check or money order, be sure to include all If the amount you owe or the amount you
•Be sure you use the correct method to the required information on your payment. overpaid is large, you may want to file a
figure your tax. See the instructions for line See the instructions for line 74 on page 55 new Form W-4 with your employer to
43 that begin on page 33. for details. change the amount of income tax withheld
•Be sure to enter your SSN in the space from your 2005 pay. For details on how to
provided on page 1 of Form 1040. If you
complete Form W-4, see Pub. 919.
are married filing a joint or separate return,
also enter your spouse’s SSN. Be sure to What Are Your Rights
enter your SSN in the space next to your In general, you do not have to make
as a Taxpayer?
name. Check that your name and SSN estimated tax payments if you expect that
agree with your social security card. You have the right to be treated fairly, pro- your 2005 Form 1040 will show a tax re-
fessionally, promptly, and courteously by
•Make sure your name and address are fund or a tax balance due of less than
IRS employees. Our goal at the IRS is to
correct on the peel-off label. If not, enter $1,000. If your total estimated tax (includ-
protect your rights so that you will have the
the correct information. If you did not get a ing any household employment taxes or al-
highest confidence in the integrity, effi-
peel-off label, enter your (and your ternative minimum tax) for 2005 is $1,000
spouse’s) name in the same order as shown ciency, and fairness of our tax system. To
or more, see Form 1040-ES. It has a work-
on your last return. Check that your name ensure that you always receive such treat-
agrees with your social security card. sheet you can use to see if you have to
ment, you should know about the many
make estimated tax payments. For more de-
rights you have at each step of the tax pro-
•If you are taking the standard deduc-
tails, see Pub. 505.
tion and you checked any box on line 38a cess. For details, see Pub. 1.
-57-
Page 58 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
tally unable to manage your financial af-
Do Both the Name and Parent of a Kidnapped
fairs. See Pub. 556 for details. Child
SSN on Your Tax
The parent of a child who is presumed by
Forms Agree With Your Need a Copy of Your law enforcement authorities to have been
Social Security Card? kidnapped by someone who is not a family
Tax Return? member may be able to take the child into
If not, certain deductions and credits may If you need a copy of your tax return, use account in determining his or her eligibility
be reduced or disallowed, your refund may Form 4506. There is a $39 fee for each for the head of household or qualifying
be delayed, and you may not receive credit return requested. If you want a free tran- widow(er) filing status, deduction for de-
for your social security earnings. If your pendents, child tax credit, and the earned
script of your tax return or account, use
Form W-2, Form 1099, or other tax docu- income credit (EIC). For details, use
Form 4506-T or call us. See page 10 for the
ment shows an incorrect SSN or name, no- TeleTax topic 357 (see page 8) or see Pub.
number.
tify your employer or the form-issuing 501 (Pub. 596 for the EIC).
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 Death of a Taxpayer
security card is incorrect, call the Social Other Ways To Get
If a taxpayer died before filing a return for
Security Administration at 2004, the taxpayer’s spouse or personal Help
1-800-772-1213. representative may have to file and sign a Send Your Written Tax
return for that taxpayer. A personal repre-
sentative can be an executor, administrator, Questions to the IRS
How Do You Make a or anyone who is in charge of the deceased You should get an answer in about 30 days.
taxpayer’s property. If the deceased tax- If you do not have the mailing address, call
Gift To Reduce Debt payer did not have to file a return but had us. See page 10 for the number. Do not
Held By the Public? tax withheld, a return must be filed to get a send questions with your return.
refund. The person who files the return
If you wish to do so, make a check payable Research Your Tax
must enter “Deceased,” the deceased
to “Bureau of the Public Debt.” You can taxpayer’s name, and the date of death
send it to: Bureau of the Public Debt, De- Questions Online
across the top of the return. If this informa-
partment G, P.O. Box 2188, Parkersburg, You can find answers to many of your tax
tion is not provided, it may delay the
WV 26106-2188. Or you can enclose the questions online in several ways by acces-
processing of the return.
check with your income tax return when sing the IRS website at
www.irs.gov/help
you file. Do not add your gift to any tax you and then clicking on “Help With Tax Ques-
may owe. See page 55 for details on how to If your spouse died in 2004 and you did tions.” Here are some of the methods you
pay any tax you owe. not remarry in 2004, or if your spouse died may want to try.
in 2005 before filing a return for 2004, you •Frequently asked questions. This sec-
You may be able to deduct this
can file a joint return. A joint return should tion contains an extensive list of questions
gift on your 2005 tax return.
show your spouse’s 2004 income before and answers. You may select your question
death and your income for all of 2004. by category or keyword.
TIP
Enter “Filing as surviving spouse” in the •Tax trails. This is an interactive sec-
area where you sign the return. If someone tion which asks questions you can answer
else is the personal representative, he or she by selecting “Yes” or “No.”
must also sign.
How Long Should •Tax topics. This section provides a
broad picture of tax topics beginning with
Records Be Kept? The surviving spouse or personal repre- 17 main categories. Each topic link leads to
sentative should promptly notify all payers
Keep a copy of your tax return, worksheets further categories and then to a discussion
of income, including financial institutions,
you used, and records of all items appear- of the topic.
ing on it (such as Forms W-2 and 1099) of the taxpayer’s death. This will ensure the Free Help With Your Return
until the statute of limitations runs out for proper reporting of income earned by the
that return. Usually, this is 3 years from the taxpayer’s estate or heirs. A deceased Free help in preparing your return is avail-
date the return was due or filed, or 2 years taxpayer’s social security number should able nationwide from IRS-sponsored vol-
from the date the tax was paid, whichever is not be used for tax years after the year of unteers. The Volunteer Income Tax
later. You should keep some records death, except for estate tax return purposes. Assistance (VITA) program is designed to
longer. For example, keep property records help low-income taxpayers and the Tax
(including those on your home) as long as Counseling for the Elderly (TCE) program
Claiming a Refund for a
they are needed to figure the basis of the is designed to assist taxpayers age 60 or
original or replacement property. For more Deceased Taxpayer older with their tax returns. Many VITA
details, see Pub. 552. sites offer free electronic filing and all vol-
If you are filing a joint return as a surviving unteers will let you know about the credits
spouse, you only need to file the tax return and deductions you may be entitled to
to claim the refund. If you are a court-ap- claim. If you are a member of the military,
pointed representative, file the return and
Amended Return you can also get assistance on military tax
attach a copy of the certificate that shows
File Form 1040X to change a return you benefits, such as combat zone tax benefits,
your appointment. All other filers request-
already filed. Generally, Form 1040X must at an office within your installation. For
ing the deceased taxpayer’s refund must
be filed within 3 years after the date the more information on these programs, go to
file the return and attach Form 1310.
original return was filed, or within 2 years
www.irs.gov
and enter keyword “VITA” in
after the date the tax was paid, whichever is the upper right corner. Or, call us. See page
For more details, use TeleTax topic 356
later. But you may have more time to file 10 for the number. To find the nearest
(see page 8) or see Pub. 559.
Form 1040X if you are physically or men- AARP Tax-Aide site, visit AARP’s web-
-58-
Page 59 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
site at
www.aarp.org/taxaide
or call 1-800-829-4059. Braille materials are each month or part of a month your return
1-888-227-7669. available at libraries that have special serv- is late, unless you have a reasonable expla-
ices for people with disabilities. nation. If you do, attach it to your return.
When you go for help, take your photo The penalty can be as much as 25% (more
ID and social security numbers (or individ- in some cases) of the tax due. If your return
ual taxpayer identification numbers) for is more than 60 days late, the minimum
your spouse, your dependents, and your- Interest and Penalties penalty will be $100 or the amount of any
self. Also take a copy of your 2003 tax tax you owe, whichever is smaller.
You do not have to figure the amount of
return (if available), all your Forms W-2 any interest or penalties you may owe. Be-
and 1099 for 2004, and any other informa- Late payment of tax. If you pay your taxes
cause figuring these amounts can be com-
tion about your 2004 income and expenses. late, the penalty is usually 1⁄2 of 1% of the
plicated, we will do it for you if you want. unpaid amount for each month or part of a
We will send you a bill for any amount due.
Everyday Tax Solutions month the tax is not paid. The penalty can
If you include interest or penalties be as much as 25% of the unpaid amount. It
You can get face-to-face help solving tax
(other than the estimated tax penalty) with applies to any unpaid tax on the return. This
problems every business day in IRS Tax-
your payment, identify and enter the penalty is in addition to interest charges on
payer Assistance Centers. An employee
amount in the bottom margin of Form late payments.
can explain IRS letters, request adjustments
1040, page 2. Do not include interest or
to your account, or help you set up a pay- Frivolous return. In addition to any other
penalties (other than the estimated tax pen-
ment plan. Call your local Taxpayer Assis- penalties, the law imposes a penalty of
alty) in the amount you owe on line 74.
tance Center for an appointment. To find $500 for filing a frivolous return. A frivo-
the number, go to
www.irs.gov/localcon-
lous return is one that does not contain in-
Interest
tacts
or look in the phone book under formation needed to figure the correct tax
“United States Government, Internal Reve- We will charge you interest on taxes not or shows a substantially incorrect tax be-
nue Service.” paid by their due date, even if an extension cause you take a frivolous position or de-
of time to file is granted. We will also sire to delay or interfere with the tax laws.
Online Services charge you interest on penalties imposed This includes altering or striking out the
for failure to file, negligence, fraud, sub-
If you subscribe to an online service, ask preprinted language above the space where
stantial valuation misstatements, and sub-
about online filing or tax information. you sign.
stantial understatements of tax. Interest is Other. Other penalties can be imposed for
Large-Print Forms and charged on the penalty from the due date of negligence, substantial understatement of
the return (including extensions).
Instructions tax, and fraud. Criminal penalties may be
Pub. 1614 has large-print copies of Form imposed for willful failure to file, tax eva-
Penalties
1040, Schedules A, B, D, E, and R, and sion, or making a false statement. See
Late filing. If you do not file your return
Form 1040-V, and their instructions. You Pub. 17 for details on some of these penal-
by the due date (including extensions), the
can use the large-print forms and schedules ties.
penalty is usually 5% of the amount due for
as worksheets to figure your tax, but you
cannot file them. You can get Pub. 1614 by
phone or mail. See pages 7 and 73.
Help for People With
Disabilities
Telephone help is available using TTY/
TDD equipment by calling
-59-
Page 60 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004
Tax Table
See the instructions for line 43 that begin
on page 33 to see if you must use the Tax
Table below to figure your tax.
Example. Mr. and Mrs. Brown are filing a joint return. Their
taxable income on Form 1040, line 42, is $25,300. First,
they find the $25,300–25,350 taxable income line. Next, they
find the column for married filing jointly and read down the
column. The amount shown where the taxable income line
and filing status column meet is $3,084. This is the tax
amount they should enter on Form 1040, line 43.
If line 42
(taxable
income) is— And you are—
At
least But
less
than
Single Married
filing
jointly
*
Married
filing
sepa-
rately
Head
of a
house-
hold
Your tax is—
If line 42
(taxable
income) is— And you are—
At
least But
less
than
Single Married
filing
jointly
*
Married
filing
sepa-
rately
Head
of a
house-
hold
Your tax is—
If line 42
(taxable
income) is— And you are—
At
least But
less
than
Single Married
filing
jointly
*
Married
filing
sepa-
rately
Head
of a
house-
hold
Your tax is—
* This column must also be used by a qualifying widow(er).
(Continued on page 61)
At
least But
less
than
Single Married
filing
jointly
*
Married
filing
sepa-
rately
Head
of a
house-
hold
Your tax is—
25,200
25,250
25,300
25,350
3,426
3,434
3,441
3,449
Sample Table
25,250
25,300
25,350
25,400
3,069
3,076
3,084
3,091
3,426
3,434
3,441
3,449
3,274
3,281
3,289
3,296
1,000
2,000
3,000
4,000
0500 0 0
515 11 1 1
15 25 22 2 2
25 50 44 4 4
50 75 66 6 6
75 100 99 9 9
100 125 11 11 11 11
125 150 14 14 14 14
150 175 16 16 16 16
175 200 19 19 19 19
200 225 21 21 21 21
225 250 24 24 24 24
250 275 26 26 26 26
275 300 29 29 29 29
300 325 31 31 31 31
325 350 34 34 34 34
350 375 36 36 36 36
375 400 39 39 39 39
400 425 41 41 41 41
425 450 44 44 44 44
450 475 46 46 46 46
475 500 49 49 49 49
500 525 51 51 51 51
525 550 54 54 54 54
550 575 56 56 56 56
575 600 59 59 59 59
600 625 61 61 61 61
625 650 64 64 64 64
650 675 66 66 66 66
675 700 69 69 69 69
700 725 71 71 71 71
725 750 74 74 74 74
750 775 76 76 76 76
775 800 79 79 79 79
800 825 81 81 81 81
825 850 84 84 84 84
850 875 86 86 86 86
875 900 89 89 89 89
900 925 91 91 91 91
925 950 94 94 94 94
950 975 96 96 96 96
975 1,000 99 99 99 99
1,000 1,025 101 101 101 101
1,025 1,050 104 104 104 104
1,050 1,075 106 106 106 106
1,075 1,100 109 109 109 109
1,100 1,125 111 111 111 111
1,125 1,150 114 114 114 114
1,150 1,175 116 116 116 116
1,175 1,200 119 119 119 119
1,200 1,225 121 121 121 121
1,225 1,250 124 124 124 124
1,250 1,275 126 126 126 126
1,275 1,300 129 129 129 129
1,300 1,325 131 131 131 131
1,325 1,350 134 134 134 134
1,350 1,375 136 136 136 136
1,375 1,400 139 139 139 139
1,400 1,425 141 141 141 141
1,425 1,450 144 144 144 144
1,450 1,475 146 146 146 146
1,475 1,500 149 149 149 149
1,500 1,525 151 151 151 151
1,525 1,550 154 154 154 154
1,550 1,575 156 156 156 156
1,575 1,600 159 159 159 159
1,600 1,625 161 161 161 161
1,625 1,650 164 164 164 164
1,650 1,675 166 166 166 166
1,675 1,700 169 169 169 169
1,700 1,725 171 171 171 171
1,725 1,750 174 174 174 174
1,750 1,775 176 176 176 176
1,775 1,800 179 179 179 179
1,800 1,825 181 181 181 181
1,825 1,850 184 184 184 184
1,850 1,875 186 186 186 186
1,875 1,900 189 189 189 189
1,900 1,925 191 191 191 191
1,925 1,950 194 194 194 194
1,950 1,975 196 196 196 196
1,975 2,000 199 199 199 199
2,000 2,025 201 201 201 201
2,025 2,050 204 204 204 204
2,050 2,075 206 206 206 206
2,075 2,100 209 209 209 209
2,100 2,125 211 211 211 211
2,125 2,150 214 214 214 214
2,150 2,175 216 216 216 216
2,175 2,200 219 219 219 219
2,200 2,225 221 221 221 221
2,225 2,250 224 224 224 224
2,250 2,275 226 226 226 226
2,275 2,300 229 229 229 229
2,300 2,325 231 231 231 231
2,325 2,350 234 234 234 234
2,350 2,375 236 236 236 236
2,375 2,400 239 239 239 239
2,400 2,425 241 241 241 241
2,425 2,450 244 244 244 244
2,450 2,475 246 246 246 246
2,475 2,500 249 249 249 249
2,500 2,525 251 251 251 251
2,525 2,550 254 254 254 254
2,550 2,575 256 256 256 256
2,575 2,600 259 259 259 259
2,600 2,625 261 261 261 261
2,625 2,650 264 264 264 264
2,650 2,675 266 266 266 266
2,675 2,700 269 269 269 269
2,700 2,725 271 271 271 271
2,725 2,750 274 274 274 274
2,750 2,775 276 276 276 276
2,775 2,800 279 279 279 279
2,800 2,825 281 281 281 281
2,825 2,850 284 284 284 284
2,850 2,875 286 286 286 286
2,875 2,900 289 289 289 289
2,900 2,925 291 291 291 291
2,925 2,950 294 294 294 294
2,950 2,975 296 296 296 296
2,975 3,000 299 299 299 299
3,000 3,050 303 303 303 303
3,050 3,100 308 308 308 308
3,100 3,150 313 313 313 313
3,150 3,200 318 318 318 318
3,200 3,250 323 323 323 323
3,250 3,300 328 328 328 328
3,300 3,350 333 333 333 333
3,350 3,400 338 338 338 338
3,400 3,450 343 343 343 343
3,450 3,500 348 348 348 348
3,500 3,550 353 353 353 353
3,550 3,600 358 358 358 358
3,600 3,650 363 363 363 363
3,650 3,700 368 368 368 368
3,700 3,750 373 373 373 373
3,750 3,800 378 378 378 378
3,800 3,850 383 383 383 383
3,850 3,900 388 388 388 388
3,900 3,950 393 393 393 393
3,950 4,000 398 398 398 398
4,000 4,050 403 403 403 403
4,050 4,100 408 408 408 408
4,100 4,150 413 413 413 413
4,150 4,200 418 418 418 418
4,200 4,250 423 423 423 423
4,250 4,300 428 428 428 428
4,300 4,350 433 433 433 433
4,350 4,400 438 438 438 438
4,400 4,450 443 443 443 443
4,450 4,500 448 448 448 448
4,500 4,550 453 453 453 453
4,550 4,600 458 458 458 458
4,600 4,650 463 463 463 463
4,650 4,700 468 468 468 468
4,700 4,750 473 473 473 473
4,750 4,800 478 478 478 478
4,800 4,850 483 483 483 483
4,850 4,900 488 488 488 488
4,900 4,950 493 493 493 493
4,950 5,000 498 498 498 498
CAUTION
-60-
Page 61 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 62)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
5,000 5,050 503 503 503 503
5,050 5,100 508 508 508 508
5,100 5,150 513 513 513 513
5,150 5,200 518 518 518 518
5,200 5,250 523 523 523 523
5,250 5,300 528 528 528 528
5,300 5,350 533 533 533 533
5,350 5,400 538 538 538 538
5,400 5,450 543 543 543 543
5,450 5,500 548 548 548 548
5,500 5,550 553 553 553 553
5,550 5,600 558 558 558 558
5,600 5,650 563 563 563 563
5,650 5,700 568 568 568 568
5,700 5,750 573 573 573 573
5,750 5,800 578 578 578 578
5,800 5,850 583 583 583 583
5,850 5,900 588 588 588 588
5,900 5,950 593 593 593 593
5,950 6,000 598 598 598 598
6,000 6,050 603 603 603 603
6,050 6,100 608 608 608 608
6,100 6,150 613 613 613 613
6,150 6,200 618 618 618 618
6,200 6,250 623 623 623 623
6,250 6,300 628 628 628 628
6,300 6,350 633 633 633 633
6,350 6,400 638 638 638 638
6,400 6,450 643 643 643 643
6,450 6,500 648 648 648 648
6,500 6,550 653 653 653 653
6,550 6,600 658 658 658 658
6,600 6,650 663 663 663 663
6,650 6,700 668 668 668 668
6,700 6,750 673 673 673 673
6,750 6,800 678 678 678 678
6,800 6,850 683 683 683 683
6,850 6,900 688 688 688 688
6,900 6,950 693 693 693 693
6,950 7,000 698 698 698 698
7,000 7,050 703 703 703 703
7,050 7,100 708 708 708 708
7,100 7,150 713 713 713 713
7,150 7,200 719 718 719 718
7,200 7,250 726 723 726 723
7,250 7,300 734 728 734 728
7,300 7,350 741 733 741 733
7,350 7,400 749 738 749 738
7,400 7,450 756 743 756 743
7,450 7,500 764 748 764 748
7,500 7,550 771 753 771 753
7,550 7,600 779 758 779 758
7,600 7,650 786 763 786 763
7,650 7,700 794 768 794 768
7,700 7,750 801 773 801 773
7,750 7,800 809 778 809 778
7,800 7,850 816 783 816 783
7,850 7,900 824 788 824 788
7,900 7,950 831 793 831 793
7,950 8,000 839 798 839 798
8,000 8,050 846 803 846 803
8,050 8,100 854 808 854 808
8,100 8,150 861 813 861 813
8,150 8,200 869 818 869 818
8,200 8,250 876 823 876 823
8,250 8,300 884 828 884 828
8,300 8,350 891 833 891 833
8,350 8,400 899 838 899 838
8,400 8,450 906 843 906 843
8,450 8,500 914 848 914 848
8,500 8,550 921 853 921 853
8,550 8,600 929 858 929 858
8,600 8,650 936 863 936 863
8,650 8,700 944 868 944 868
8,700 8,750 951 873 951 873
8,750 8,800 959 878 959 878
8,800 8,850 966 883 966 883
8,850 8,900 974 888 974 888
8,900 8,950 981 893 981 893
8,950 9,000 989 898 989 898
9,000 9,050 996 903 996 903
9,050 9,100 1,004 908 1,004 908
9,100 9,150 1,011 913 1,011 913
9,150 9,200 1,019 918 1,019 918
9,200 9,250 1,026 923 1,026 923
9,250 9,300 1,034 928 1,034 928
9,300 9,350 1,041 933 1,041 933
9,350 9,400 1,049 938 1,049 938
9,400 9,450 1,056 943 1,056 943
9,450 9,500 1,064 948 1,064 948
9,500 9,550 1,071 953 1,071 953
9,550 9,600 1,079 958 1,079 958
9,600 9,650 1,086 963 1,086 963
9,650 9,700 1,094 968 1,094 968
9,700 9,750 1,101 973 1,101 973
9,750 9,800 1,109 978 1,109 978
9,800 9,850 1,116 983 1,116 983
9,850 9,900 1,124 988 1,124 988
9,900 9,950 1,131 993 1,131 993
9,950 10,000 1,139 998 1,139 998
10,000 10,050 1,146 1,003 1,146 1,003
10,050 10,100 1,154 1,008 1,154 1,008
10,100 10,150 1,161 1,013 1,161 1,013
10,150 10,200 1,169 1,018 1,169 1,018
10,200 10,250 1,176 1,023 1,176 1,024
10,250 10,300 1,184 1,028 1,184 1,031
10,300 10,350 1,191 1,033 1,191 1,039
10,350 10,400 1,199 1,038 1,199 1,046
10,400 10,450 1,206 1,043 1,206 1,054
10,450 10,500 1,214 1,048 1,214 1,061
10,500 10,550 1,221 1,053 1,221 1,069
10,550 10,600 1,229 1,058 1,229 1,076
10,600 10,650 1,236 1,063 1,236 1,084
10,650 10,700 1,244 1,068 1,244 1,091
10,700 10,750 1,251 1,073 1,251 1,099
10,750 10,800 1,259 1,078 1,259 1,106
10,800 10,850 1,266 1,083 1,266 1,114
10,850 10,900 1,274 1,088 1,274 1,121
10,900 10,950 1,281 1,093 1,281 1,129
10,950 11,000 1,289 1,098 1,289 1,136
11,000 11,050 1,296 1,103 1,296 1,144
11,050 11,100 1,304 1,108 1,304 1,151
11,100 11,150 1,311 1,113 1,311 1,159
11,150 11,200 1,319 1,118 1,319 1,166
11,200 11,250 1,326 1,123 1,326 1,174
11,250 11,300 1,334 1,128 1,334 1,181
11,300 11,350 1,341 1,133 1,341 1,189
11,350 11,400 1,349 1,138 1,349 1,196
11,400 11,450 1,356 1,143 1,356 1,204
11,450 11,500 1,364 1,148 1,364 1,211
11,500 11,550 1,371 1,153 1,371 1,219
11,550 11,600 1,379 1,158 1,379 1,226
11,600 11,650 1,386 1,163 1,386 1,234
11,650 11,700 1,394 1,168 1,394 1,241
11,700 11,750 1,401 1,173 1,401 1,249
11,750 11,800 1,409 1,178 1,409 1,256
11,800 11,850 1,416 1,183 1,416 1,264
11,850 11,900 1,424 1,188 1,424 1,271
11,900 11,950 1,431 1,193 1,431 1,279
11,950 12,000 1,439 1,198 1,439 1,286
12,000 12,050 1,446 1,203 1,446 1,294
12,050 12,100 1,454 1,208 1,454 1,301
12,100 12,150 1,461 1,213 1,461 1,309
12,150 12,200 1,469 1,218 1,469 1,316
12,200 12,250 1,476 1,223 1,476 1,324
12,250 12,300 1,484 1,228 1,484 1,331
12,300 12,350 1,491 1,233 1,491 1,339
12,350 12,400 1,499 1,238 1,499 1,346
12,400 12,450 1,506 1,243 1,506 1,354
12,450 12,500 1,514 1,248 1,514 1,361
12,500 12,550 1,521 1,253 1,521 1,369
12,550 12,600 1,529 1,258 1,529 1,376
12,600 12,650 1,536 1,263 1,536 1,384
12,650 12,700 1,544 1,268 1,544 1,391
12,700 12,750 1,551 1,273 1,551 1,399
12,750 12,800 1,559 1,278 1,559 1,406
12,800 12,850 1,566 1,283 1,566 1,414
12,850 12,900 1,574 1,288 1,574 1,421
12,900 12,950 1,581 1,293 1,581 1,429
12,950 13,000 1,589 1,298 1,589 1,436
13,000 13,050 1,596 1,303 1,596 1,444
13,050 13,100 1,604 1,308 1,604 1,451
13,100 13,150 1,611 1,313 1,611 1,459
13,150 13,200 1,619 1,318 1,619 1,466
13,200 13,250 1,626 1,323 1,626 1,474
13,250 13,300 1,634 1,328 1,634 1,481
13,300 13,350 1,641 1,333 1,641 1,489
13,350 13,400 1,649 1,338 1,649 1,496
13,400 13,450 1,656 1,343 1,656 1,504
13,450 13,500 1,664 1,348 1,664 1,511
13,500 13,550 1,671 1,353 1,671 1,519
13,550 13,600 1,679 1,358 1,679 1,526
13,600 13,650 1,686 1,363 1,686 1,534
13,650 13,700 1,694 1,368 1,694 1,541
13,700 13,750 1,701 1,373 1,701 1,549
13,750 13,800 1,709 1,378 1,709 1,556
13,800 13,850 1,716 1,383 1,716 1,564
13,850 13,900 1,724 1,388 1,724 1,571
13,900 13,950 1,731 1,393 1,731 1,579
13,950 14,000 1,739 1,398 1,739 1,586
-61-
Page 62 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 63)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
14,000 14,050 1,746 1,403 1,746 1,594
14,050 14,100 1,754 1,408 1,754 1,601
14,100 14,150 1,761 1,413 1,761 1,609
14,150 14,200 1,769 1,418 1,769 1,616
14,200 14,250 1,776 1,423 1,776 1,624
14,250 14,300 1,784 1,428 1,784 1,631
14,300 14,350 1,791 1,434 1,791 1,639
14,350 14,400 1,799 1,441 1,799 1,646
14,400 14,450 1,806 1,449 1,806 1,654
14,450 14,500 1,814 1,456 1,814 1,661
14,500 14,550 1,821 1,464 1,821 1,669
14,550 14,600 1,829 1,471 1,829 1,676
14,600 14,650 1,836 1,479 1,836 1,684
14,650 14,700 1,844 1,486 1,844 1,691
14,700 14,750 1,851 1,494 1,851 1,699
14,750 14,800 1,859 1,501 1,859 1,706
14,800 14,850 1,866 1,509 1,866 1,714
14,850 14,900 1,874 1,516 1,874 1,721
14,900 14,950 1,881 1,524 1,881 1,729
14,950 15,000 1,889 1,531 1,889 1,736
15,000 15,050 1,896 1,539 1,896 1,744
15,050 15,100 1,904 1,546 1,904 1,751
15,100 15,150 1,911 1,554 1,911 1,759
15,150 15,200 1,919 1,561 1,919 1,766
15,200 15,250 1,926 1,569 1,926 1,774
15,250 15,300 1,934 1,576 1,934 1,781
15,300 15,350 1,941 1,584 1,941 1,789
15,350 15,400 1,949 1,591 1,949 1,796
15,400 15,450 1,956 1,599 1,956 1,804
15,450 15,500 1,964 1,606 1,964 1,811
15,500 15,550 1,971 1,614 1,971 1,819
15,550 15,600 1,979 1,621 1,979 1,826
15,600 15,650 1,986 1,629 1,986 1,834
15,650 15,700 1,994 1,636 1,994 1,841
15,700 15,750 2,001 1,644 2,001 1,849
15,750 15,800 2,009 1,651 2,009 1,856
15,800 15,850 2,016 1,659 2,016 1,864
15,850 15,900 2,024 1,666 2,024 1,871
15,900 15,950 2,031 1,674 2,031 1,879
15,950 16,000 2,039 1,681 2,039 1,886
16,000 16,050 2,046 1,689 2,046 1,894
16,050 16,100 2,054 1,696 2,054 1,901
16,100 16,150 2,061 1,704 2,061 1,909
16,150 16,200 2,069 1,711 2,069 1,916
16,200 16,250 2,076 1,719 2,076 1,924
16,250 16,300 2,084 1,726 2,084 1,931
16,300 16,350 2,091 1,734 2,091 1,939
16,350 16,400 2,099 1,741 2,099 1,946
16,400 16,450 2,106 1,749 2,106 1,954
16,450 16,500 2,114 1,756 2,114 1,961
16,500 16,550 2,121 1,764 2,121 1,969
16,550 16,600 2,129 1,771 2,129 1,976
16,600 16,650 2,136 1,779 2,136 1,984
16,650 16,700 2,144 1,786 2,144 1,991
16,700 16,750 2,151 1,794 2,151 1,999
16,750 16,800 2,159 1,801 2,159 2,006
16,800 16,850 2,166 1,809 2,166 2,014
16,850 16,900 2,174 1,816 2,174 2,021
16,900 16,950 2,181 1,824 2,181 2,029
16,950 17,000 2,189 1,831 2,189 2,036
17,000 17,050 2,196 1,839 2,196 2,044
17,050 17,100 2,204 1,846 2,204 2,051
17,100 17,150 2,211 1,854 2,211 2,059
17,150 17,200 2,219 1,861 2,219 2,066
17,200 17,250 2,226 1,869 2,226 2,074
17,250 17,300 2,234 1,876 2,234 2,081
17,300 17,350 2,241 1,884 2,241 2,089
17,350 17,400 2,249 1,891 2,249 2,096
17,400 17,450 2,256 1,899 2,256 2,104
17,450 17,500 2,264 1,906 2,264 2,111
17,500 17,550 2,271 1,914 2,271 2,119
17,550 17,600 2,279 1,921 2,279 2,126
17,600 17,650 2,286 1,929 2,286 2,134
17,650 17,700 2,294 1,936 2,294 2,141
17,700 17,750 2,301 1,944 2,301 2,149
17,750 17,800 2,309 1,951 2,309 2,156
17,800 17,850 2,316 1,959 2,316 2,164
17,850 17,900 2,324 1,966 2,324 2,171
17,900 17,950 2,331 1,974 2,331 2,179
17,950 18,000 2,339 1,981 2,339 2,186
18,000 18,050 2,346 1,989 2,346 2,194
18,050 18,100 2,354 1,996 2,354 2,201
18,100 18,150 2,361 2,004 2,361 2,209
18,150 18,200 2,369 2,011 2,369 2,216
18,200 18,250 2,376 2,019 2,376 2,224
18,250 18,300 2,384 2,026 2,384 2,231
18,300 18,350 2,391 2,034 2,391 2,239
18,350 18,400 2,399 2,041 2,399 2,246
18,400 18,450 2,406 2,049 2,406 2,254
18,450 18,500 2,414 2,056 2,414 2,261
18,500 18,550 2,421 2,064 2,421 2,269
18,550 18,600 2,429 2,071 2,429 2,276
18,600 18,650 2,436 2,079 2,436 2,284
18,650 18,700 2,444 2,086 2,444 2,291
18,700 18,750 2,451 2,094 2,451 2,299
18,750 18,800 2,459 2,101 2,459 2,306
18,800 18,850 2,466 2,109 2,466 2,314
18,850 18,900 2,474 2,116 2,474 2,321
18,900 18,950 2,481 2,124 2,481 2,329
18,950 19,000 2,489 2,131 2,489 2,336
19,000 19,050 2,496 2,139 2,496 2,344
19,050 19,100 2,504 2,146 2,504 2,351
19,100 19,150 2,511 2,154 2,511 2,359
19,150 19,200 2,519 2,161 2,519 2,366
19,200 19,250 2,526 2,169 2,526 2,374
19,250 19,300 2,534 2,176 2,534 2,381
19,300 19,350 2,541 2,184 2,541 2,389
19,350 19,400 2,549 2,191 2,549 2,396
19,400 19,450 2,556 2,199 2,556 2,404
19,450 19,500 2,564 2,206 2,564 2,411
19,500 19,550 2,571 2,214 2,571 2,419
19,550 19,600 2,579 2,221 2,579 2,426
19,600 19,650 2,586 2,229 2,586 2,434
19,650 19,700 2,594 2,236 2,594 2,441
19,700 19,750 2,601 2,244 2,601 2,449
19,750 19,800 2,609 2,251 2,609 2,456
19,800 19,850 2,616 2,259 2,616 2,464
19,850 19,900 2,624 2,266 2,624 2,471
19,900 19,950 2,631 2,274 2,631 2,479
19,950 20,000 2,639 2,281 2,639 2,486
20,000 20,050 2,646 2,289 2,646 2,494
20,050 20,100 2,654 2,296 2,654 2,501
20,100 20,150 2,661 2,304 2,661 2,509
20,150 20,200 2,669 2,311 2,669 2,516
20,200 20,250 2,676 2,319 2,676 2,524
20,250 20,300 2,684 2,326 2,684 2,531
20,300 20,350 2,691 2,334 2,691 2,539
20,350 20,400 2,699 2,341 2,699 2,546
20,400 20,450 2,706 2,349 2,706 2,554
20,450 20,500 2,714 2,356 2,714 2,561
20,500 20,550 2,721 2,364 2,721 2,569
20,550 20,600 2,729 2,371 2,729 2,576
20,600 20,650 2,736 2,379 2,736 2,584
20,650 20,700 2,744 2,386 2,744 2,591
20,700 20,750 2,751 2,394 2,751 2,599
20,750 20,800 2,759 2,401 2,759 2,606
20,800 20,850 2,766 2,409 2,766 2,614
20,850 20,900 2,774 2,416 2,774 2,621
20,900 20,950 2,781 2,424 2,781 2,629
20,950 21,000 2,789 2,431 2,789 2,636
21,000 21,050 2,796 2,439 2,796 2,644
21,050 21,100 2,804 2,446 2,804 2,651
21,100 21,150 2,811 2,454 2,811 2,659
21,150 21,200 2,819 2,461 2,819 2,666
21,200 21,250 2,826 2,469 2,826 2,674
21,250 21,300 2,834 2,476 2,834 2,681
21,300 21,350 2,841 2,484 2,841 2,689
21,350 21,400 2,849 2,491 2,849 2,696
21,400 21,450 2,856 2,499 2,856 2,704
21,450 21,500 2,864 2,506 2,864 2,711
21,500 21,550 2,871 2,514 2,871 2,719
21,550 21,600 2,879 2,521 2,879 2,726
21,600 21,650 2,886 2,529 2,886 2,734
21,650 21,700 2,894 2,536 2,894 2,741
21,700 21,750 2,901 2,544 2,901 2,749
21,750 21,800 2,909 2,551 2,909 2,756
21,800 21,850 2,916 2,559 2,916 2,764
21,850 21,900 2,924 2,566 2,924 2,771
21,900 21,950 2,931 2,574 2,931 2,779
21,950 22,000 2,939 2,581 2,939 2,786
22,000 22,050 2,946 2,589 2,946 2,794
22,050 22,100 2,954 2,596 2,954 2,801
22,100 22,150 2,961 2,604 2,961 2,809
22,150 22,200 2,969 2,611 2,969 2,816
22,200 22,250 2,976 2,619 2,976 2,824
22,250 22,300 2,984 2,626 2,984 2,831
22,300 22,350 2,991 2,634 2,991 2,839
22,350 22,400 2,999 2,641 2,999 2,846
22,400 22,450 3,006 2,649 3,006 2,854
22,450 22,500 3,014 2,656 3,014 2,861
22,500 22,550 3,021 2,664 3,021 2,869
22,550 22,600 3,029 2,671 3,029 2,876
22,600 22,650 3,036 2,679 3,036 2,884
22,650 22,700 3,044 2,686 3,044 2,891
22,700 22,750 3,051 2,694 3,051 2,899
22,750 22,800 3,059 2,701 3,059 2,906
22,800 22,850 3,066 2,709 3,066 2,914
22,850 22,900 3,074 2,716 3,074 2,921
22,900 22,950 3,081 2,724 3,081 2,929
22,950 23,000 3,089 2,731 3,089 2,936
-62-
Page 63 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 64)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
23,000
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
23,000 23,050 3,096 2,739 3,096 2,944
23,050 23,100 3,104 2,746 3,104 2,951
23,100 23,150 3,111 2,754 3,111 2,959
23,150 23,200 3,119 2,761 3,119 2,966
23,200 23,250 3,126 2,769 3,126 2,974
23,250 23,300 3,134 2,776 3,134 2,981
23,300 23,350 3,141 2,784 3,141 2,989
23,350 23,400 3,149 2,791 3,149 2,996
23,400 23,450 3,156 2,799 3,156 3,004
23,450 23,500 3,164 2,806 3,164 3,011
23,500 23,550 3,171 2,814 3,171 3,019
23,550 23,600 3,179 2,821 3,179 3,026
23,600 23,650 3,186 2,829 3,186 3,034
23,650 23,700 3,194 2,836 3,194 3,041
23,700 23,750 3,201 2,844 3,201 3,049
23,750 23,800 3,209 2,851 3,209 3,056
23,800 23,850 3,216 2,859 3,216 3,064
23,850 23,900 3,224 2,866 3,224 3,071
23,900 23,950 3,231 2,874 3,231 3,079
23,950 24,000 3,239 2,881 3,239 3,086
24,000 24,050 3,246 2,889 3,246 3,094
24,050 24,100 3,254 2,896 3,254 3,101
24,100 24,150 3,261 2,904 3,261 3,109
24,150 24,200 3,269 2,911 3,269 3,116
24,200 24,250 3,276 2,919 3,276 3,124
24,250 24,300 3,284 2,926 3,284 3,131
24,300 24,350 3,291 2,934 3,291 3,139
24,350 24,400 3,299 2,941 3,299 3,146
24,400 24,450 3,306 2,949 3,306 3,154
24,450 24,500 3,314 2,956 3,314 3,161
24,500 24,550 3,321 2,964 3,321 3,169
24,550 24,600 3,329 2,971 3,329 3,176
24,600 24,650 3,336 2,979 3,336 3,184
24,650 24,700 3,344 2,986 3,344 3,191
24,700 24,750 3,351 2,994 3,351 3,199
24,750 24,800 3,359 3,001 3,359 3,206
24,800 24,850 3,366 3,009 3,366 3,214
24,850 24,900 3,374 3,016 3,374 3,221
24,900 24,950 3,381 3,024 3,381 3,229
24,950 25,000 3,389 3,031 3,389 3,236
25,000 25,050 3,396 3,039 3,396 3,244
25,050 25,100 3,404 3,046 3,404 3,251
25,100 25,150 3,411 3,054 3,411 3,259
25,150 25,200 3,419 3,061 3,419 3,266
25,200 25,250 3,426 3,069 3,426 3,274
25,250 25,300 3,434 3,076 3,434 3,281
25,300 25,350 3,441 3,084 3,441 3,289
25,350 25,400 3,449 3,091 3,449 3,296
25,400 25,450 3,456 3,099 3,456 3,304
25,450 25,500 3,464 3,106 3,464 3,311
25,500 25,550 3,471 3,114 3,471 3,319
25,550 25,600 3,479 3,121 3,479 3,326
25,600 25,650 3,486 3,129 3,486 3,334
25,650 25,700 3,494 3,136 3,494 3,341
25,700 25,750 3,501 3,144 3,501 3,349
25,750 25,800 3,509 3,151 3,509 3,356
25,800 25,850 3,516 3,159 3,516 3,364
25,850 25,900 3,524 3,166 3,524 3,371
25,900 25,950 3,531 3,174 3,531 3,379
25,950 26,000 3,539 3,181 3,539 3,386
26,000 26,050 3,546 3,189 3,546 3,394
26,050 26,100 3,554 3,196 3,554 3,401
26,100 26,150 3,561 3,204 3,561 3,409
26,150 26,200 3,569 3,211 3,569 3,416
26,200 26,250 3,576 3,219 3,576 3,424
26,250 26,300 3,584 3,226 3,584 3,431
26,300 26,350 3,591 3,234 3,591 3,439
26,350 26,400 3,599 3,241 3,599 3,446
26,400 26,450 3,606 3,249 3,606 3,454
26,450 26,500 3,614 3,256 3,614 3,461
26,500 26,550 3,621 3,264 3,621 3,469
26,550 26,600 3,629 3,271 3,629 3,476
26,600 26,650 3,636 3,279 3,636 3,484
26,650 26,700 3,644 3,286 3,644 3,491
26,700 26,750 3,651 3,294 3,651 3,499
26,750 26,800 3,659 3,301 3,659 3,506
26,800 26,850 3,666 3,309 3,666 3,514
26,850 26,900 3,674 3,316 3,674 3,521
26,900 26,950 3,681 3,324 3,681 3,529
26,950 27,000 3,689 3,331 3,689 3,536
27,000 27,050 3,696 3,339 3,696 3,544
27,050 27,100 3,704 3,346 3,704 3,551
27,100 27,150 3,711 3,354 3,711 3,559
27,150 27,200 3,719 3,361 3,719 3,566
27,200 27,250 3,726 3,369 3,726 3,574
27,250 27,300 3,734 3,376 3,734 3,581
27,300 27,350 3,741 3,384 3,741 3,589
27,350 27,400 3,749 3,391 3,749 3,596
27,400 27,450 3,756 3,399 3,756 3,604
27,450 27,500 3,764 3,406 3,764 3,611
27,500 27,550 3,771 3,414 3,771 3,619
27,550 27,600 3,779 3,421 3,779 3,626
27,600 27,650 3,786 3,429 3,786 3,634
27,650 27,700 3,794 3,436 3,794 3,641
27,700 27,750 3,801 3,444 3,801 3,649
27,750 27,800 3,809 3,451 3,809 3,656
27,800 27,850 3,816 3,459 3,816 3,664
27,850 27,900 3,824 3,466 3,824 3,671
27,900 27,950 3,831 3,474 3,831 3,679
27,950 28,000 3,839 3,481 3,839 3,686
28,000 28,050 3,846 3,489 3,846 3,694
28,050 28,100 3,854 3,496 3,854 3,701
28,100 28,150 3,861 3,504 3,861 3,709
28,150 28,200 3,869 3,511 3,869 3,716
28,200 28,250 3,876 3,519 3,876 3,724
28,250 28,300 3,884 3,526 3,884 3,731
28,300 28,350 3,891 3,534 3,891 3,739
28,350 28,400 3,899 3,541 3,899 3,746
28,400 28,450 3,906 3,549 3,906 3,754
28,450 28,500 3,914 3,556 3,914 3,761
28,500 28,550 3,921 3,564 3,921 3,769
28,550 28,600 3,929 3,571 3,929 3,776
28,600 28,650 3,936 3,579 3,936 3,784
28,650 28,700 3,944 3,586 3,944 3,791
28,700 28,750 3,951 3,594 3,951 3,799
28,750 28,800 3,959 3,601 3,959 3,806
28,800 28,850 3,966 3,609 3,966 3,814
28,850 28,900 3,974 3,616 3,974 3,821
28,900 28,950 3,981 3,624 3,981 3,829
28,950 29,000 3,989 3,631 3,989 3,836
29,000 29,050 3,996 3,639 3,996 3,844
29,050 29,100 4,006 3,646 4,006 3,851
29,100 29,150 4,019 3,654 4,019 3,859
29,150 29,200 4,031 3,661 4,031 3,866
29,200 29,250 4,044 3,669 4,044 3,874
29,250 29,300 4,056 3,676 4,056 3,881
29,300 29,350 4,069 3,684 4,069 3,889
29,350 29,400 4,081 3,691 4,081 3,896
29,400 29,450 4,094 3,699 4,094 3,904
29,450 29,500 4,106 3,706 4,106 3,911
29,500 29,550 4,119 3,714 4,119 3,919
29,550 29,600 4,131 3,721 4,131 3,926
29,600 29,650 4,144 3,729 4,144 3,934
29,650 29,700 4,156 3,736 4,156 3,941
29,700 29,750 4,169 3,744 4,169 3,949
29,750 29,800 4,181 3,751 4,181 3,956
29,800 29,850 4,194 3,759 4,194 3,964
29,850 29,900 4,206 3,766 4,206 3,971
29,900 29,950 4,219 3,774 4,219 3,979
29,950 30,000 4,231 3,781 4,231 3,986
30,000 30,050 4,244 3,789 4,244 3,994
30,050 30,100 4,256 3,796 4,256 4,001
30,100 30,150 4,269 3,804 4,269 4,009
30,150 30,200 4,281 3,811 4,281 4,016
30,200 30,250 4,294 3,819 4,294 4,024
30,250 30,300 4,306 3,826 4,306 4,031
30,300 30,350 4,319 3,834 4,319 4,039
30,350 30,400 4,331 3,841 4,331 4,046
30,400 30,450 4,344 3,849 4,344 4,054
30,450 30,500 4,356 3,856 4,356 4,061
30,500 30,550 4,369 3,864 4,369 4,069
30,550 30,600 4,381 3,871 4,381 4,076
30,600 30,650 4,394 3,879 4,394 4,084
30,650 30,700 4,406 3,886 4,406 4,091
30,700 30,750 4,419 3,894 4,419 4,099
30,750 30,800 4,431 3,901 4,431 4,106
30,800 30,850 4,444 3,909 4,444 4,114
30,850 30,900 4,456 3,916 4,456 4,121
30,900 30,950 4,469 3,924 4,469 4,129
30,950 31,000 4,481 3,931 4,481 4,136
31,000 31,050 4,494 3,939 4,494 4,144
31,050 31,100 4,506 3,946 4,506 4,151
31,100 31,150 4,519 3,954 4,519 4,159
31,150 31,200 4,531 3,961 4,531 4,166
31,200 31,250 4,544 3,969 4,544 4,174
31,250 31,300 4,556 3,976 4,556 4,181
31,300 31,350 4,569 3,984 4,569 4,189
31,350 31,400 4,581 3,991 4,581 4,196
31,400 31,450 4,594 3,999 4,594 4,204
31,450 31,500 4,606 4,006 4,606 4,211
31,500 31,550 4,619 4,014 4,619 4,219
31,550 31,600 4,631 4,021 4,631 4,226
31,600 31,650 4,644 4,029 4,644 4,234
31,650 31,700 4,656 4,036 4,656 4,241
31,700 31,750 4,669 4,044 4,669 4,249
31,750 31,800 4,681 4,051 4,681 4,256
31,800 31,850 4,694 4,059 4,694 4,264
31,850 31,900 4,706 4,066 4,706 4,271
31,900 31,950 4,719 4,074 4,719 4,279
31,950 32,000 4,731 4,081 4,731 4,286
-63-
Page 64 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 65)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
32,000
33,000
34,000
35,000
36,000
37,000
38,000
39,000
40,000
32,000 32,050 4,744 4,089 4,744 4,294
32,050 32,100 4,756 4,096 4,756 4,301
32,100 32,150 4,769 4,104 4,769 4,309
32,150 32,200 4,781 4,111 4,781 4,316
32,200 32,250 4,794 4,119 4,794 4,324
32,250 32,300 4,806 4,126 4,806 4,331
32,300 32,350 4,819 4,134 4,819 4,339
32,350 32,400 4,831 4,141 4,831 4,346
32,400 32,450 4,844 4,149 4,844 4,354
32,450 32,500 4,856 4,156 4,856 4,361
32,500 32,550 4,869 4,164 4,869 4,369
32,550 32,600 4,881 4,171 4,881 4,376
32,600 32,650 4,894 4,179 4,894 4,384
32,650 32,700 4,906 4,186 4,906 4,391
32,700 32,750 4,919 4,194 4,919 4,399
32,750 32,800 4,931 4,201 4,931 4,406
32,800 32,850 4,944 4,209 4,944 4,414
32,850 32,900 4,956 4,216 4,956 4,421
32,900 32,950 4,969 4,224 4,969 4,429
32,950 33,000 4,981 4,231 4,981 4,436
33,000 33,050 4,994 4,239 4,994 4,444
33,050 33,100 5,006 4,246 5,006 4,451
33,100 33,150 5,019 4,254 5,019 4,459
33,150 33,200 5,031 4,261 5,031 4,466
33,200 33,250 5,044 4,269 5,044 4,474
33,250 33,300 5,056 4,276 5,056 4,481
33,300 33,350 5,069 4,284 5,069 4,489
33,350 33,400 5,081 4,291 5,081 4,496
33,400 33,450 5,094 4,299 5,094 4,504
33,450 33,500 5,106 4,306 5,106 4,511
33,500 33,550 5,119 4,314 5,119 4,519
33,550 33,600 5,131 4,321 5,131 4,526
33,600 33,650 5,144 4,329 5,144 4,534
33,650 33,700 5,156 4,336 5,156 4,541
33,700 33,750 5,169 4,344 5,169 4,549
33,750 33,800 5,181 4,351 5,181 4,556
33,800 33,850 5,194 4,359 5,194 4,564
33,850 33,900 5,206 4,366 5,206 4,571
33,900 33,950 5,219 4,374 5,219 4,579
33,950 34,000 5,231 4,381 5,231 4,586
34,000 34,050 5,244 4,389 5,244 4,594
34,050 34,100 5,256 4,396 5,256 4,601
34,100 34,150 5,269 4,404 5,269 4,609
34,150 34,200 5,281 4,411 5,281 4,616
34,200 34,250 5,294 4,419 5,294 4,624
34,250 34,300 5,306 4,426 5,306 4,631
34,300 34,350 5,319 4,434 5,319 4,639
34,350 34,400 5,331 4,441 5,331 4,646
34,400 34,450 5,344 4,449 5,344 4,654
34,450 34,500 5,356 4,456 5,356 4,661
34,500 34,550 5,369 4,464 5,369 4,669
34,550 34,600 5,381 4,471 5,381 4,676
34,600 34,650 5,394 4,479 5,394 4,684
34,650 34,700 5,406 4,486 5,406 4,691
34,700 34,750 5,419 4,494 5,419 4,699
34,750 34,800 5,431 4,501 5,431 4,706
34,800 34,850 5,444 4,509 5,444 4,714
34,850 34,900 5,456 4,516 5,456 4,721
34,900 34,950 5,469 4,524 5,469 4,729
34,950 35,000 5,481 4,531 5,481 4,736
35,000 35,050 5,494 4,539 5,494 4,744
35,050 35,100 5,506 4,546 5,506 4,751
35,100 35,150 5,519 4,554 5,519 4,759
35,150 35,200 5,531 4,561 5,531 4,766
35,200 35,250 5,544 4,569 5,544 4,774
35,250 35,300 5,556 4,576 5,556 4,781
35,300 35,350 5,569 4,584 5,569 4,789
35,350 35,400 5,581 4,591 5,581 4,796
35,400 35,450 5,594 4,599 5,594 4,804
35,450 35,500 5,606 4,606 5,606 4,811
35,500 35,550 5,619 4,614 5,619 4,819
35,550 35,600 5,631 4,621 5,631 4,826
35,600 35,650 5,644 4,629 5,644 4,834
35,650 35,700 5,656 4,636 5,656 4,841
35,700 35,750 5,669 4,644 5,669 4,849
35,750 35,800 5,681 4,651 5,681 4,856
35,800 35,850 5,694 4,659 5,694 4,864
35,850 35,900 5,706 4,666 5,706 4,871
35,900 35,950 5,719 4,674 5,719 4,879
35,950 36,000 5,731 4,681 5,731 4,886
36,000 36,050 5,744 4,689 5,744 4,894
36,050 36,100 5,756 4,696 5,756 4,901
36,100 36,150 5,769 4,704 5,769 4,909
36,150 36,200 5,781 4,711 5,781 4,916
36,200 36,250 5,794 4,719 5,794 4,924
36,250 36,300 5,806 4,726 5,806 4,931
36,300 36,350 5,819 4,734 5,819 4,939
36,350 36,400 5,831 4,741 5,831 4,946
36,400 36,450 5,844 4,749 5,844 4,954
36,450 36,500 5,856 4,756 5,856 4,961
36,500 36,550 5,869 4,764 5,869 4,969
36,550 36,600 5,881 4,771 5,881 4,976
36,600 36,650 5,894 4,779 5,894 4,984
36,650 36,700 5,906 4,786 5,906 4,991
36,700 36,750 5,919 4,794 5,919 4,999
36,750 36,800 5,931 4,801 5,931 5,006
36,800 36,850 5,944 4,809 5,944 5,014
36,850 36,900 5,956 4,816 5,956 5,021
36,900 36,950 5,969 4,824 5,969 5,029
36,950 37,000 5,981 4,831 5,981 5,036
37,000 37,050 5,994 4,839 5,994 5,044
37,050 37,100 6,006 4,846 6,006 5,051
37,100 37,150 6,019 4,854 6,019 5,059
37,150 37,200 6,031 4,861 6,031 5,066
37,200 37,250 6,044 4,869 6,044 5,074
37,250 37,300 6,056 4,876 6,056 5,081
37,300 37,350 6,069 4,884 6,069 5,089
37,350 37,400 6,081 4,891 6,081 5,096
37,400 37,450 6,094 4,899 6,094 5,104
37,450 37,500 6,106 4,906 6,106 5,111
37,500 37,550 6,119 4,914 6,119 5,119
37,550 37,600 6,131 4,921 6,131 5,126
37,600 37,650 6,144 4,929 6,144 5,134
37,650 37,700 6,156 4,936 6,156 5,141
37,700 37,750 6,169 4,944 6,169 5,149
37,750 37,800 6,181 4,951 6,181 5,156
37,800 37,850 6,194 4,959 6,194 5,164
37,850 37,900 6,206 4,966 6,206 5,171
37,900 37,950 6,219 4,974 6,219 5,179
37,950 38,000 6,231 4,981 6,231 5,186
38,000 38,050 6,244 4,989 6,244 5,194
38,050 38,100 6,256 4,996 6,256 5,201
38,100 38,150 6,269 5,004 6,269 5,209
38,150 38,200 6,281 5,011 6,281 5,216
38,200 38,250 6,294 5,019 6,294 5,224
38,250 38,300 6,306 5,026 6,306 5,231
38,300 38,350 6,319 5,034 6,319 5,239
38,350 38,400 6,331 5,041 6,331 5,246
38,400 38,450 6,344 5,049 6,344 5,254
38,450 38,500 6,356 5,056 6,356 5,261
38,500 38,550 6,369 5,064 6,369 5,269
38,550 38,600 6,381 5,071 6,381 5,276
38,600 38,650 6,394 5,079 6,394 5,284
38,650 38,700 6,406 5,086 6,406 5,291
38,700 38,750 6,419 5,094 6,419 5,299
38,750 38,800 6,431 5,101 6,431 5,306
38,800 38,850 6,444 5,109 6,444 5,314
38,850 38,900 6,456 5,116 6,456 5,321
38,900 38,950 6,469 5,124 6,469 5,331
38,950 39,000 6,481 5,131 6,481 5,344
39,000 39,050 6,494 5,139 6,494 5,356
39,050 39,100 6,506 5,146 6,506 5,369
39,100 39,150 6,519 5,154 6,519 5,381
39,150 39,200 6,531 5,161 6,531 5,394
39,200 39,250 6,544 5,169 6,544 5,406
39,250 39,300 6,556 5,176 6,556 5,419
39,300 39,350 6,569 5,184 6,569 5,431
39,350 39,400 6,581 5,191 6,581 5,444
39,400 39,450 6,594 5,199 6,594 5,456
39,450 39,500 6,606 5,206 6,606 5,469
39,500 39,550 6,619 5,214 6,619 5,481
39,550 39,600 6,631 5,221 6,631 5,494
39,600 39,650 6,644 5,229 6,644 5,506
39,650 39,700 6,656 5,236 6,656 5,519
39,700 39,750 6,669 5,244 6,669 5,531
39,750 39,800 6,681 5,251 6,681 5,544
39,800 39,850 6,694 5,259 6,694 5,556
39,850 39,900 6,706 5,266 6,706 5,569
39,900 39,950 6,719 5,274 6,719 5,581
39,950 40,000 6,731 5,281 6,731 5,594
40,000 40,050 6,744 5,289 6,744 5,606
40,050 40,100 6,756 5,296 6,756 5,619
40,100 40,150 6,769 5,304 6,769 5,631
40,150 40,200 6,781 5,311 6,781 5,644
40,200 40,250 6,794 5,319 6,794 5,656
40,250 40,300 6,806 5,326 6,806 5,669
40,300 40,350 6,819 5,334 6,819 5,681
40,350 40,400 6,831 5,341 6,831 5,694
40,400 40,450 6,844 5,349 6,844 5,706
40,450 40,500 6,856 5,356 6,856 5,719
40,500 40,550 6,869 5,364 6,869 5,731
40,550 40,600 6,881 5,371 6,881 5,744
40,600 40,650 6,894 5,379 6,894 5,756
40,650 40,700 6,906 5,386 6,906 5,769
40,700 40,750 6,919 5,394 6,919 5,781
40,750 40,800 6,931 5,401 6,931 5,794
40,800 40,850 6,944 5,409 6,944 5,806
40,850 40,900 6,956 5,416 6,956 5,819
40,900 40,950 6,969 5,424 6,969 5,831
40,950 41,000 6,981 5,431 6,981 5,844
-64-
Page 65 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 66)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
41,000
42,000
43,000
44,000
45,000
46,000
47,000
48,000
49,000
41,000 41,050 6,994 5,439 6,994 5,856
41,050 41,100 7,006 5,446 7,006 5,869
41,100 41,150 7,019 5,454 7,019 5,881
41,150 41,200 7,031 5,461 7,031 5,894
41,200 41,250 7,044 5,469 7,044 5,906
41,250 41,300 7,056 5,476 7,056 5,919
41,300 41,350 7,069 5,484 7,069 5,931
41,350 41,400 7,081 5,491 7,081 5,944
41,400 41,450 7,094 5,499 7,094 5,956
41,450 41,500 7,106 5,506 7,106 5,969
41,500 41,550 7,119 5,514 7,119 5,981
41,550 41,600 7,131 5,521 7,131 5,994
41,600 41,650 7,144 5,529 7,144 6,006
41,650 41,700 7,156 5,536 7,156 6,019
41,700 41,750 7,169 5,544 7,169 6,031
41,750 41,800 7,181 5,551 7,181 6,044
41,800 41,850 7,194 5,559 7,194 6,056
41,850 41,900 7,206 5,566 7,206 6,069
41,900 41,950 7,219 5,574 7,219 6,081
41,950 42,000 7,231 5,581 7,231 6,094
42,000 42,050 7,244 5,589 7,244 6,106
42,050 42,100 7,256 5,596 7,256 6,119
42,100 42,150 7,269 5,604 7,269 6,131
42,150 42,200 7,281 5,611 7,281 6,144
42,200 42,250 7,294 5,619 7,294 6,156
42,250 42,300 7,306 5,626 7,306 6,169
42,300 42,350 7,319 5,634 7,319 6,181
42,350 42,400 7,331 5,641 7,331 6,194
42,400 42,450 7,344 5,649 7,344 6,206
42,450 42,500 7,356 5,656 7,356 6,219
42,500 42,550 7,369 5,664 7,369 6,231
42,550 42,600 7,381 5,671 7,381 6,244
42,600 42,650 7,394 5,679 7,394 6,256
42,650 42,700 7,406 5,686 7,406 6,269
42,700 42,750 7,419 5,694 7,419 6,281
42,750 42,800 7,431 5,701 7,431 6,294
42,800 42,850 7,444 5,709 7,444 6,306
42,850 42,900 7,456 5,716 7,456 6,319
42,900 42,950 7,469 5,724 7,469 6,331
42,950 43,000 7,481 5,731 7,481 6,344
43,000 43,050 7,494 5,739 7,494 6,356
43,050 43,100 7,506 5,746 7,506 6,369
43,100 43,150 7,519 5,754 7,519 6,381
43,150 43,200 7,531 5,761 7,531 6,394
43,200 43,250 7,544 5,769 7,544 6,406
43,250 43,300 7,556 5,776 7,556 6,419
43,300 43,350 7,569 5,784 7,569 6,431
43,350 43,400 7,581 5,791 7,581 6,444
43,400 43,450 7,594 5,799 7,594 6,456
43,450 43,500 7,606 5,806 7,606 6,469
43,500 43,550 7,619 5,814 7,619 6,481
43,550 43,600 7,631 5,821 7,631 6,494
43,600 43,650 7,644 5,829 7,644 6,506
43,650 43,700 7,656 5,836 7,656 6,519
43,700 43,750 7,669 5,844 7,669 6,531
43,750 43,800 7,681 5,851 7,681 6,544
43,800 43,850 7,694 5,859 7,694 6,556
43,850 43,900 7,706 5,866 7,706 6,569
43,900 43,950 7,719 5,874 7,719 6,581
43,950 44,000 7,731 5,881 7,731 6,594
44,000 44,050 7,744 5,889 7,744 6,606
44,050 44,100 7,756 5,896 7,756 6,619
44,100 44,150 7,769 5,904 7,769 6,631
44,150 44,200 7,781 5,911 7,781 6,644
44,200 44,250 7,794 5,919 7,794 6,656
44,250 44,300 7,806 5,926 7,806 6,669
44,300 44,350 7,819 5,934 7,819 6,681
44,350 44,400 7,831 5,941 7,831 6,694
44,400 44,450 7,844 5,949 7,844 6,706
44,450 44,500 7,856 5,956 7,856 6,719
44,500 44,550 7,869 5,964 7,869 6,731
44,550 44,600 7,881 5,971 7,881 6,744
44,600 44,650 7,894 5,979 7,894 6,756
44,650 44,700 7,906 5,986 7,906 6,769
44,700 44,750 7,919 5,994 7,919 6,781
44,750 44,800 7,931 6,001 7,931 6,794
44,800 44,850 7,944 6,009 7,944 6,806
44,850 44,900 7,956 6,016 7,956 6,819
44,900 44,950 7,969 6,024 7,969 6,831
44,950 45,000 7,981 6,031 7,981 6,844
45,000 45,050 7,994 6,039 7,994 6,856
45,050 45,100 8,006 6,046 8,006 6,869
45,100 45,150 8,019 6,054 8,019 6,881
45,150 45,200 8,031 6,061 8,031 6,894
45,200 45,250 8,044 6,069 8,044 6,906
45,250 45,300 8,056 6,076 8,056 6,919
45,300 45,350 8,069 6,084 8,069 6,931
45,350 45,400 8,081 6,091 8,081 6,944
45,400 45,450 8,094 6,099 8,094 6,956
45,450 45,500 8,106 6,106 8,106 6,969
45,500 45,550 8,119 6,114 8,119 6,981
45,550 45,600 8,131 6,121 8,131 6,994
45,600 45,650 8,144 6,129 8,144 7,006
45,650 45,700 8,156 6,136 8,156 7,019
45,700 45,750 8,169 6,144 8,169 7,031
45,750 45,800 8,181 6,151 8,181 7,044
45,800 45,850 8,194 6,159 8,194 7,056
45,850 45,900 8,206 6,166 8,206 7,069
45,900 45,950 8,219 6,174 8,219 7,081
45,950 46,000 8,231 6,181 8,231 7,094
46,000 46,050 8,244 6,189 8,244 7,106
46,050 46,100 8,256 6,196 8,256 7,119
46,100 46,150 8,269 6,204 8,269 7,131
46,150 46,200 8,281 6,211 8,281 7,144
46,200 46,250 8,294 6,219 8,294 7,156
46,250 46,300 8,306 6,226 8,306 7,169
46,300 46,350 8,319 6,234 8,319 7,181
46,350 46,400 8,331 6,241 8,331 7,194
46,400 46,450 8,344 6,249 8,344 7,206
46,450 46,500 8,356 6,256 8,356 7,219
46,500 46,550 8,369 6,264 8,369 7,231
46,550 46,600 8,381 6,271 8,381 7,244
46,600 46,650 8,394 6,279 8,394 7,256
46,650 46,700 8,406 6,286 8,406 7,269
46,700 46,750 8,419 6,294 8,419 7,281
46,750 46,800 8,431 6,301 8,431 7,294
46,800 46,850 8,444 6,309 8,444 7,306
46,850 46,900 8,456 6,316 8,456 7,319
46,900 46,950 8,469 6,324 8,469 7,331
46,950 47,000 8,481 6,331 8,481 7,344
47,000 47,050 8,494 6,339 8,494 7,356
47,050 47,100 8,506 6,346 8,506 7,369
47,100 47,150 8,519 6,354 8,519 7,381
47,150 47,200 8,531 6,361 8,531 7,394
47,200 47,250 8,544 6,369 8,544 7,406
47,250 47,300 8,556 6,376 8,556 7,419
47,300 47,350 8,569 6,384 8,569 7,431
47,350 47,400 8,581 6,391 8,581 7,444
47,400 47,450 8,594 6,399 8,594 7,456
47,450 47,500 8,606 6,406 8,606 7,469
47,500 47,550 8,619 6,414 8,619 7,481
47,550 47,600 8,631 6,421 8,631 7,494
47,600 47,650 8,644 6,429 8,644 7,506
47,650 47,700 8,656 6,436 8,656 7,519
47,700 47,750 8,669 6,444 8,669 7,531
47,750 47,800 8,681 6,451 8,681 7,544
47,800 47,850 8,694 6,459 8,694 7,556
47,850 47,900 8,706 6,466 8,706 7,569
47,900 47,950 8,719 6,474 8,719 7,581
47,950 48,000 8,731 6,481 8,731 7,594
48,000 48,050 8,744 6,489 8,744 7,606
48,050 48,100 8,756 6,496 8,756 7,619
48,100 48,150 8,769 6,504 8,769 7,631
48,150 48,200 8,781 6,511 8,781 7,644
48,200 48,250 8,794 6,519 8,794 7,656
48,250 48,300 8,806 6,526 8,806 7,669
48,300 48,350 8,819 6,534 8,819 7,681
48,350 48,400 8,831 6,541 8,831 7,694
48,400 48,450 8,844 6,549 8,844 7,706
48,450 48,500 8,856 6,556 8,856 7,719
48,500 48,550 8,869 6,564 8,869 7,731
48,550 48,600 8,881 6,571 8,881 7,744
48,600 48,650 8,894 6,579 8,894 7,756
48,650 48,700 8,906 6,586 8,906 7,769
48,700 48,750 8,919 6,594 8,919 7,781
48,750 48,800 8,931 6,601 8,931 7,794
48,800 48,850 8,944 6,609 8,944 7,806
48,850 48,900 8,956 6,616 8,956 7,819
48,900 48,950 8,969 6,624 8,969 7,831
48,950 49,000 8,981 6,631 8,981 7,844
49,000 49,050 8,994 6,639 8,994 7,856
49,050 49,100 9,006 6,646 9,006 7,869
49,100 49,150 9,019 6,654 9,019 7,881
49,150 49,200 9,031 6,661 9,031 7,894
49,200 49,250 9,044 6,669 9,044 7,906
49,250 49,300 9,056 6,676 9,056 7,919
49,300 49,350 9,069 6,684 9,069 7,931
49,350 49,400 9,081 6,691 9,081 7,944
49,400 49,450 9,094 6,699 9,094 7,956
49,450 49,500 9,106 6,706 9,106 7,969
49,500 49,550 9,119 6,714 9,119 7,981
49,550 49,600 9,131 6,721 9,131 7,994
49,600 49,650 9,144 6,729 9,144 8,006
49,650 49,700 9,156 6,736 9,156 8,019
49,700 49,750 9,169 6,744 9,169 8,031
49,750 49,800 9,181 6,751 9,181 8,044
49,800 49,850 9,194 6,759 9,194 8,056
49,850 49,900 9,206 6,766 9,206 8,069
49,900 49,950 9,219 6,774 9,219 8,081
49,950 50,000 9,231 6,781 9,231 8,094
-65-
Page 66 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 67)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
50,000
51,000
52,000
53,000
54,000
55,000
56,000
57,000
58,000
50,000 50,050 9,244 6,789 9,244 8,106
50,050 50,100 9,256 6,796 9,256 8,119
50,100 50,150 9,269 6,804 9,269 8,131
50,150 50,200 9,281 6,811 9,281 8,144
50,200 50,250 9,294 6,819 9,294 8,156
50,250 50,300 9,306 6,826 9,306 8,169
50,300 50,350 9,319 6,834 9,319 8,181
50,350 50,400 9,331 6,841 9,331 8,194
50,400 50,450 9,344 6,849 9,344 8,206
50,450 50,500 9,356 6,856 9,356 8,219
50,500 50,550 9,369 6,864 9,369 8,231
50,550 50,600 9,381 6,871 9,381 8,244
50,600 50,650 9,394 6,879 9,394 8,256
50,650 50,700 9,406 6,886 9,406 8,269
50,700 50,750 9,419 6,894 9,419 8,281
50,750 50,800 9,431 6,901 9,431 8,294
50,800 50,850 9,444 6,909 9,444 8,306
50,850 50,900 9,456 6,916 9,456 8,319
50,900 50,950 9,469 6,924 9,469 8,331
50,950 51,000 9,481 6,931 9,481 8,344
51,000 51,050 9,494 6,939 9,494 8,356
51,050 51,100 9,506 6,946 9,506 8,369
51,100 51,150 9,519 6,954 9,519 8,381
51,150 51,200 9,531 6,961 9,531 8,394
51,200 51,250 9,544 6,969 9,544 8,406
51,250 51,300 9,556 6,976 9,556 8,419
51,300 51,350 9,569 6,984 9,569 8,431
51,350 51,400 9,581 6,991 9,581 8,444
51,400 51,450 9,594 6,999 9,594 8,456
51,450 51,500 9,606 7,006 9,606 8,469
51,500 51,550 9,619 7,014 9,619 8,481
51,550 51,600 9,631 7,021 9,631 8,494
51,600 51,650 9,644 7,029 9,644 8,506
51,650 51,700 9,656 7,036 9,656 8,519
51,700 51,750 9,669 7,044 9,669 8,531
51,750 51,800 9,681 7,051 9,681 8,544
51,800 51,850 9,694 7,059 9,694 8,556
51,850 51,900 9,706 7,066 9,706 8,569
51,900 51,950 9,719 7,074 9,719 8,581
51,950 52,000 9,731 7,081 9,731 8,594
52,000 52,050 9,744 7,089 9,744 8,606
52,050 52,100 9,756 7,096 9,756 8,619
52,100 52,150 9,769 7,104 9,769 8,631
52,150 52,200 9,781 7,111 9,781 8,644
52,200 52,250 9,794 7,119 9,794 8,656
52,250 52,300 9,806 7,126 9,806 8,669
52,300 52,350 9,819 7,134 9,819 8,681
52,350 52,400 9,831 7,141 9,831 8,694
52,400 52,450 9,844 7,149 9,844 8,706
52,450 52,500 9,856 7,156 9,856 8,719
52,500 52,550 9,869 7,164 9,869 8,731
52,550 52,600 9,881 7,171 9,881 8,744
52,600 52,650 9,894 7,179 9,894 8,756
52,650 52,700 9,906 7,186 9,906 8,769
52,700 52,750 9,919 7,194 9,919 8,781
52,750 52,800 9,931 7,201 9,931 8,794
52,800 52,850 9,944 7,209 9,944 8,806
52,850 52,900 9,956 7,216 9,956 8,819
52,900 52,950 9,969 7,224 9,969 8,831
52,950 53,000 9,981 7,231 9,981 8,844
53,000 53,050 9,994 7,239 9,994 8,856
53,050 53,100 10,006 7,246 10,006 8,869
53,100 53,150 10,019 7,254 10,019 8,881
53,150 53,200 10,031 7,261 10,031 8,894
53,200 53,250 10,044 7,269 10,044 8,906
53,250 53,300 10,056 7,276 10,056 8,919
53,300 53,350 10,069 7,284 10,069 8,931
53,350 53,400 10,081 7,291 10,081 8,944
53,400 53,450 10,094 7,299 10,094 8,956
53,450 53,500 10,106 7,306 10,106 8,969
53,500 53,550 10,119 7,314 10,119 8,981
53,550 53,600 10,131 7,321 10,131 8,994
53,600 53,650 10,144 7,329 10,144 9,006
53,650 53,700 10,156 7,336 10,156 9,019
53,700 53,750 10,169 7,344 10,169 9,031
53,750 53,800 10,181 7,351 10,181 9,044
53,800 53,850 10,194 7,359 10,194 9,056
53,850 53,900 10,206 7,366 10,206 9,069
53,900 53,950 10,219 7,374 10,219 9,081
53,950 54,000 10,231 7,381 10,231 9,094
54,000 54,050 10,244 7,389 10,244 9,106
54,050 54,100 10,256 7,396 10,256 9,119
54,100 54,150 10,269 7,404 10,269 9,131
54,150 54,200 10,281 7,411 10,281 9,144
54,200 54,250 10,294 7,419 10,294 9,156
54,250 54,300 10,306 7,426 10,306 9,169
54,300 54,350 10,319 7,434 10,319 9,181
54,350 54,400 10,331 7,441 10,331 9,194
54,400 54,450 10,344 7,449 10,344 9,206
54,450 54,500 10,356 7,456 10,356 9,219
54,500 54,550 10,369 7,464 10,369 9,231
54,550 54,600 10,381 7,471 10,381 9,244
54,600 54,650 10,394 7,479 10,394 9,256
54,650 54,700 10,406 7,486 10,406 9,269
54,700 54,750 10,419 7,494 10,419 9,281
54,750 54,800 10,431 7,501 10,431 9,294
54,800 54,850 10,444 7,509 10,444 9,306
54,850 54,900 10,456 7,516 10,456 9,319
54,900 54,950 10,469 7,524 10,469 9,331
54,950 55,000 10,481 7,531 10,481 9,344
55,000 55,050 10,494 7,539 10,494 9,356
55,050 55,100 10,506 7,546 10,506 9,369
55,100 55,150 10,519 7,554 10,519 9,381
55,150 55,200 10,531 7,561 10,531 9,394
55,200 55,250 10,544 7,569 10,544 9,406
55,250 55,300 10,556 7,576 10,556 9,419
55,300 55,350 10,569 7,584 10,569 9,431
55,350 55,400 10,581 7,591 10,581 9,444
55,400 55,450 10,594 7,599 10,594 9,456
55,450 55,500 10,606 7,606 10,606 9,469
55,500 55,550 10,619 7,614 10,619 9,481
55,550 55,600 10,631 7,621 10,631 9,494
55,600 55,650 10,644 7,629 10,644 9,506
55,650 55,700 10,656 7,636 10,656 9,519
55,700 55,750 10,669 7,644 10,669 9,531
55,750 55,800 10,681 7,651 10,681 9,544
55,800 55,850 10,694 7,659 10,694 9,556
55,850 55,900 10,706 7,666 10,706 9,569
55,900 55,950 10,719 7,674 10,719 9,581
55,950 56,000 10,731 7,681 10,731 9,594
56,000 56,050 10,744 7,689 10,744 9,606
56,050 56,100 10,756 7,696 10,756 9,619
56,100 56,150 10,769 7,704 10,769 9,631
56,150 56,200 10,781 7,711 10,781 9,644
56,200 56,250 10,794 7,719 10,794 9,656
56,250 56,300 10,806 7,726 10,806 9,669
56,300 56,350 10,819 7,734 10,819 9,681
56,350 56,400 10,831 7,741 10,831 9,694
56,400 56,450 10,844 7,749 10,844 9,706
56,450 56,500 10,856 7,756 10,856 9,719
56,500 56,550 10,869 7,764 10,869 9,731
56,550 56,600 10,881 7,771 10,881 9,744
56,600 56,650 10,894 7,779 10,894 9,756
56,650 56,700 10,906 7,786 10,906 9,769
56,700 56,750 10,919 7,794 10,919 9,781
56,750 56,800 10,931 7,801 10,931 9,794
56,800 56,850 10,944 7,809 10,944 9,806
56,850 56,900 10,956 7,816 10,956 9,819
56,900 56,950 10,969 7,824 10,969 9,831
56,950 57,000 10,981 7,831 10,981 9,844
57,000 57,050 10,994 7,839 10,994 9,856
57,050 57,100 11,006 7,846 11,006 9,869
57,100 57,150 11,019 7,854 11,019 9,881
57,150 57,200 11,031 7,861 11,031 9,894
57,200 57,250 11,044 7,869 11,044 9,906
57,250 57,300 11,056 7,876 11,056 9,919
57,300 57,350 11,069 7,884 11,069 9,931
57,350 57,400 11,081 7,891 11,081 9,944
57,400 57,450 11,094 7,899 11,094 9,956
57,450 57,500 11,106 7,906 11,106 9,969
57,500 57,550 11,119 7,914 11,119 9,981
57,550 57,600 11,131 7,921 11,131 9,994
57,600 57,650 11,144 7,929 11,144 10,006
57,650 57,700 11,156 7,936 11,156 10,019
57,700 57,750 11,169 7,944 11,169 10,031
57,750 57,800 11,181 7,951 11,181 10,044
57,800 57,850 11,194 7,959 11,194 10,056
57,850 57,900 11,206 7,966 11,206 10,069
57,900 57,950 11,219 7,974 11,219 10,081
57,950 58,000 11,231 7,981 11,231 10,094
58,000 58,050 11,244 7,989 11,244 10,106
58,050 58,100 11,256 7,996 11,256 10,119
58,100 58,150 11,269 8,006 11,269 10,131
58,150 58,200 11,281 8,019 11,281 10,144
58,200 58,250 11,294 8,031 11,294 10,156
58,250 58,300 11,306 8,044 11,306 10,169
58,300 58,350 11,319 8,056 11,319 10,181
58,350 58,400 11,331 8,069 11,331 10,194
58,400 58,450 11,344 8,081 11,344 10,206
58,450 58,500 11,356 8,094 11,356 10,219
58,500 58,550 11,369 8,106 11,369 10,231
58,550 58,600 11,381 8,119 11,381 10,244
58,600 58,650 11,394 8,131 11,394 10,256
58,650 58,700 11,406 8,144 11,408 10,269
58,700 58,750 11,419 8,156 11,422 10,281
58,750 58,800 11,431 8,169 11,436 10,294
58,800 58,850 11,444 8,181 11,450 10,306
58,850 58,900 11,456 8,194 11,464 10,319
58,900 58,950 11,469 8,206 11,478 10,331
58,950 59,000 11,481 8,219 11,492 10,344
-66-
Page 67 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 68)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
59,000
60,000
61,000
62,000
63,000
64,000
65,000
66,000
67,000
59,000 59,050 11,494 8,231 11,506 10,356
59,050 59,100 11,506 8,244 11,520 10,369
59,100 59,150 11,519 8,256 11,534 10,381
59,150 59,200 11,531 8,269 11,548 10,394
59,200 59,250 11,544 8,281 11,562 10,406
59,250 59,300 11,556 8,294 11,576 10,419
59,300 59,350 11,569 8,306 11,590 10,431
59,350 59,400 11,581 8,319 11,604 10,444
59,400 59,450 11,594 8,331 11,618 10,456
59,450 59,500 11,606 8,344 11,632 10,469
59,500 59,550 11,619 8,356 11,646 10,481
59,550 59,600 11,631 8,369 11,660 10,494
59,600 59,650 11,644 8,381 11,674 10,506
59,650 59,700 11,656 8,394 11,688 10,519
59,700 59,750 11,669 8,406 11,702 10,531
59,750 59,800 11,681 8,419 11,716 10,544
59,800 59,850 11,694 8,431 11,730 10,556
59,850 59,900 11,706 8,444 11,744 10,569
59,900 59,950 11,719 8,456 11,758 10,581
59,950 60,000 11,731 8,469 11,772 10,594
60,000 60,050 11,744 8,481 11,786 10,606
60,050 60,100 11,756 8,494 11,800 10,619
60,100 60,150 11,769 8,506 11,814 10,631
60,150 60,200 11,781 8,519 11,828 10,644
60,200 60,250 11,794 8,531 11,842 10,656
60,250 60,300 11,806 8,544 11,856 10,669
60,300 60,350 11,819 8,556 11,870 10,681
60,350 60,400 11,831 8,569 11,884 10,694
60,400 60,450 11,844 8,581 11,898 10,706
60,450 60,500 11,856 8,594 11,912 10,719
60,500 60,550 11,869 8,606 11,926 10,731
60,550 60,600 11,881 8,619 11,940 10,744
60,600 60,650 11,894 8,631 11,954 10,756
60,650 60,700 11,906 8,644 11,968 10,769
60,700 60,750 11,919 8,656 11,982 10,781
60,750 60,800 11,931 8,669 11,996 10,794
60,800 60,850 11,944 8,681 12,010 10,806
60,850 60,900 11,956 8,694 12,024 10,819
60,900 60,950 11,969 8,706 12,038 10,831
60,950 61,000 11,981 8,719 12,052 10,844
61,000 61,050 11,994 8,731 12,066 10,856
61,050 61,100 12,006 8,744 12,080 10,869
61,100 61,150 12,019 8,756 12,094 10,881
61,150 61,200 12,031 8,769 12,108 10,894
61,200 61,250 12,044 8,781 12,122 10,906
61,250 61,300 12,056 8,794 12,136 10,919
61,300 61,350 12,069 8,806 12,150 10,931
61,350 61,400 12,081 8,819 12,164 10,944
61,400 61,450 12,094 8,831 12,178 10,956
61,450 61,500 12,106 8,844 12,192 10,969
61,500 61,550 12,119 8,856 12,206 10,981
61,550 61,600 12,131 8,869 12,220 10,994
61,600 61,650 12,144 8,881 12,234 11,006
61,650 61,700 12,156 8,894 12,248 11,019
61,700 61,750 12,169 8,906 12,262 11,031
61,750 61,800 12,181 8,919 12,276 11,044
61,800 61,850 12,194 8,931 12,290 11,056
61,850 61,900 12,206 8,944 12,304 11,069
61,900 61,950 12,219 8,956 12,318 11,081
61,950 62,000 12,231 8,969 12,332 11,094
62,000 62,050 12,244 8,981 12,346 11,106
62,050 62,100 12,256 8,994 12,360 11,119
62,100 62,150 12,269 9,006 12,374 11,131
62,150 62,200 12,281 9,019 12,388 11,144
62,200 62,250 12,294 9,031 12,402 11,156
62,250 62,300 12,306 9,044 12,416 11,169
62,300 62,350 12,319 9,056 12,430 11,181
62,350 62,400 12,331 9,069 12,444 11,194
62,400 62,450 12,344 9,081 12,458 11,206
62,450 62,500 12,356 9,094 12,472 11,219
62,500 62,550 12,369 9,106 12,486 11,231
62,550 62,600 12,381 9,119 12,500 11,244
62,600 62,650 12,394 9,131 12,514 11,256
62,650 62,700 12,406 9,144 12,528 11,269
62,700 62,750 12,419 9,156 12,542 11,281
62,750 62,800 12,431 9,169 12,556 11,294
62,800 62,850 12,444 9,181 12,570 11,306
62,850 62,900 12,456 9,194 12,584 11,319
62,900 62,950 12,469 9,206 12,598 11,331
62,950 63,000 12,481 9,219 12,612 11,344
63,000 63,050 12,494 9,231 12,626 11,356
63,050 63,100 12,506 9,244 12,640 11,369
63,100 63,150 12,519 9,256 12,654 11,381
63,150 63,200 12,531 9,269 12,668 11,394
63,200 63,250 12,544 9,281 12,682 11,406
63,250 63,300 12,556 9,294 12,696 11,419
63,300 63,350 12,569 9,306 12,710 11,431
63,350 63,400 12,581 9,319 12,724 11,444
63,400 63,450 12,594 9,331 12,738 11,456
63,450 63,500 12,606 9,344 12,752 11,469
63,500 63,550 12,619 9,356 12,766 11,481
63,550 63,600 12,631 9,369 12,780 11,494
63,600 63,650 12,644 9,381 12,794 11,506
63,650 63,700 12,656 9,394 12,808 11,519
63,700 63,750 12,669 9,406 12,822 11,531
63,750 63,800 12,681 9,419 12,836 11,544
63,800 63,850 12,694 9,431 12,850 11,556
63,850 63,900 12,706 9,444 12,864 11,569
63,900 63,950 12,719 9,456 12,878 11,581
63,950 64,000 12,731 9,469 12,892 11,594
64,000 64,050 12,744 9,481 12,906 11,606
64,050 64,100 12,756 9,494 12,920 11,619
64,100 64,150 12,769 9,506 12,934 11,631
64,150 64,200 12,781 9,519 12,948 11,644
64,200 64,250 12,794 9,531 12,962 11,656
64,250 64,300 12,806 9,544 12,976 11,669
64,300 64,350 12,819 9,556 12,990 11,681
64,350 64,400 12,831 9,569 13,004 11,694
64,400 64,450 12,844 9,581 13,018 11,706
64,450 64,500 12,856 9,594 13,032 11,719
64,500 64,550 12,869 9,606 13,046 11,731
64,550 64,600 12,881 9,619 13,060 11,744
64,600 64,650 12,894 9,631 13,074 11,756
64,650 64,700 12,906 9,644 13,088 11,769
64,700 64,750 12,919 9,656 13,102 11,781
64,750 64,800 12,931 9,669 13,116 11,794
64,800 64,850 12,944 9,681 13,130 11,806
64,850 64,900 12,956 9,694 13,144 11,819
64,900 64,950 12,969 9,706 13,158 11,831
64,950 65,000 12,981 9,719 13,172 11,844
65,000 65,050 12,994 9,731 13,186 11,856
65,050 65,100 13,006 9,744 13,200 11,869
65,100 65,150 13,019 9,756 13,214 11,881
65,150 65,200 13,031 9,769 13,228 11,894
65,200 65,250 13,044 9,781 13,242 11,906
65,250 65,300 13,056 9,794 13,256 11,919
65,300 65,350 13,069 9,806 13,270 11,931
65,350 65,400 13,081 9,819 13,284 11,944
65,400 65,450 13,094 9,831 13,298 11,956
65,450 65,500 13,106 9,844 13,312 11,969
65,500 65,550 13,119 9,856 13,326 11,981
65,550 65,600 13,131 9,869 13,340 11,994
65,600 65,650 13,144 9,881 13,354 12,006
65,650 65,700 13,156 9,894 13,368 12,019
65,700 65,750 13,169 9,906 13,382 12,031
65,750 65,800 13,181 9,919 13,396 12,044
65,800 65,850 13,194 9,931 13,410 12,056
65,850 65,900 13,206 9,944 13,424 12,069
65,900 65,950 13,219 9,956 13,438 12,081
65,950 66,000 13,231 9,969 13,452 12,094
66,000 66,050 13,244 9,981 13,466 12,106
66,050 66,100 13,256 9,994 13,480 12,119
66,100 66,150 13,269 10,006 13,494 12,131
66,150 66,200 13,281 10,019 13,508 12,144
66,200 66,250 13,294 10,031 13,522 12,156
66,250 66,300 13,306 10,044 13,536 12,169
66,300 66,350 13,319 10,056 13,550 12,181
66,350 66,400 13,331 10,069 13,564 12,194
66,400 66,450 13,344 10,081 13,578 12,206
66,450 66,500 13,356 10,094 13,592 12,219
66,500 66,550 13,369 10,106 13,606 12,231
66,550 66,600 13,381 10,119 13,620 12,244
66,600 66,650 13,394 10,131 13,634 12,256
66,650 66,700 13,406 10,144 13,648 12,269
66,700 66,750 13,419 10,156 13,662 12,281
66,750 66,800 13,431 10,169 13,676 12,294
66,800 66,850 13,444 10,181 13,690 12,306
66,850 66,900 13,456 10,194 13,704 12,319
66,900 66,950 13,469 10,206 13,718 12,331
66,950 67,000 13,481 10,219 13,732 12,344
67,000 67,050 13,494 10,231 13,746 12,356
67,050 67,100 13,506 10,244 13,760 12,369
67,100 67,150 13,519 10,256 13,774 12,381
67,150 67,200 13,531 10,269 13,788 12,394
67,200 67,250 13,544 10,281 13,802 12,406
67,250 67,300 13,556 10,294 13,816 12,419
67,300 67,350 13,569 10,306 13,830 12,431
67,350 67,400 13,581 10,319 13,844 12,444
67,400 67,450 13,594 10,331 13,858 12,456
67,450 67,500 13,606 10,344 13,872 12,469
67,500 67,550 13,619 10,356 13,886 12,481
67,550 67,600 13,631 10,369 13,900 12,494
67,600 67,650 13,644 10,381 13,914 12,506
67,650 67,700 13,656 10,394 13,928 12,519
67,700 67,750 13,669 10,406 13,942 12,531
67,750 67,800 13,681 10,419 13,956 12,544
67,800 67,850 13,694 10,431 13,970 12,556
67,850 67,900 13,706 10,444 13,984 12,569
67,900 67,950 13,719 10,456 13,998 12,581
67,950 68,000 13,731 10,469 14,012 12,594
-67-
Page 68 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 69)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
68,000
69,000
70,000
71,000
72,000
73,000
74,000
75,000
76,000
68,000 68,050 13,744 10,481 14,026 12,606
68,050 68,100 13,756 10,494 14,040 12,619
68,100 68,150 13,769 10,506 14,054 12,631
68,150 68,200 13,781 10,519 14,068 12,644
68,200 68,250 13,794 10,531 14,082 12,656
68,250 68,300 13,806 10,544 14,096 12,669
68,300 68,350 13,819 10,556 14,110 12,681
68,350 68,400 13,831 10,569 14,124 12,694
68,400 68,450 13,844 10,581 14,138 12,706
68,450 68,500 13,856 10,594 14,152 12,719
68,500 68,550 13,869 10,606 14,166 12,731
68,550 68,600 13,881 10,619 14,180 12,744
68,600 68,650 13,894 10,631 14,194 12,756
68,650 68,700 13,906 10,644 14,208 12,769
68,700 68,750 13,919 10,656 14,222 12,781
68,750 68,800 13,931 10,669 14,236 12,794
68,800 68,850 13,944 10,681 14,250 12,806
68,850 68,900 13,956 10,694 14,264 12,819
68,900 68,950 13,969 10,706 14,278 12,831
68,950 69,000 13,981 10,719 14,292 12,844
69,000 69,050 13,994 10,731 14,306 12,856
69,050 69,100 14,006 10,744 14,320 12,869
69,100 69,150 14,019 10,756 14,334 12,881
69,150 69,200 14,031 10,769 14,348 12,894
69,200 69,250 14,044 10,781 14,362 12,906
69,250 69,300 14,056 10,794 14,376 12,919
69,300 69,350 14,069 10,806 14,390 12,931
69,350 69,400 14,081 10,819 14,404 12,944
69,400 69,450 14,094 10,831 14,418 12,956
69,450 69,500 14,106 10,844 14,432 12,969
69,500 69,550 14,119 10,856 14,446 12,981
69,550 69,600 14,131 10,869 14,460 12,994
69,600 69,650 14,144 10,881 14,474 13,006
69,650 69,700 14,156 10,894 14,488 13,019
69,700 69,750 14,169 10,906 14,502 13,031
69,750 69,800 14,181 10,919 14,516 13,044
69,800 69,850 14,194 10,931 14,530 13,056
69,850 69,900 14,206 10,944 14,544 13,069
69,900 69,950 14,219 10,956 14,558 13,081
69,950 70,000 14,231 10,969 14,572 13,094
70,000 70,050 14,244 10,981 14,586 13,106
70,050 70,100 14,256 10,994 14,600 13,119
70,100 70,150 14,269 11,006 14,614 13,131
70,150 70,200 14,281 11,019 14,628 13,144
70,200 70,250 14,294 11,031 14,642 13,156
70,250 70,300 14,306 11,044 14,656 13,169
70,300 70,350 14,319 11,056 14,670 13,181
70,350 70,400 14,332 11,069 14,684 13,194
70,400 70,450 14,346 11,081 14,698 13,206
70,450 70,500 14,360 11,094 14,712 13,219
70,500 70,550 14,374 11,106 14,726 13,231
70,550 70,600 14,388 11,119 14,740 13,244
70,600 70,650 14,402 11,131 14,754 13,256
70,650 70,700 14,416 11,144 14,768 13,269
70,700 70,750 14,430 11,156 14,782 13,281
70,750 70,800 14,444 11,169 14,796 13,294
70,800 70,850 14,458 11,181 14,810 13,306
70,850 70,900 14,472 11,194 14,824 13,319
70,900 70,950 14,486 11,206 14,838 13,331
70,950 71,000 14,500 11,219 14,852 13,344
71,000 71,050 14,514 11,231 14,866 13,356
71,050 71,100 14,528 11,244 14,880 13,369
71,100 71,150 14,542 11,256 14,894 13,381
71,150 71,200 14,556 11,269 14,908 13,394
71,200 71,250 14,570 11,281 14,922 13,406
71,250 71,300 14,584 11,294 14,936 13,419
71,300 71,350 14,598 11,306 14,950 13,431
71,350 71,400 14,612 11,319 14,964 13,444
71,400 71,450 14,626 11,331 14,978 13,456
71,450 71,500 14,640 11,344 14,992 13,469
71,500 71,550 14,654 11,356 15,006 13,481
71,550 71,600 14,668 11,369 15,020 13,494
71,600 71,650 14,682 11,381 15,034 13,506
71,650 71,700 14,696 11,394 15,048 13,519
71,700 71,750 14,710 11,406 15,062 13,531
71,750 71,800 14,724 11,419 15,076 13,544
71,800 71,850 14,738 11,431 15,090 13,556
71,850 71,900 14,752 11,444 15,104 13,569
71,900 71,950 14,766 11,456 15,118 13,581
71,950 72,000 14,780 11,469 15,132 13,594
72,000 72,050 14,794 11,481 15,146 13,606
72,050 72,100 14,808 11,494 15,160 13,619
72,100 72,150 14,822 11,506 15,174 13,631
72,150 72,200 14,836 11,519 15,188 13,644
72,200 72,250 14,850 11,531 15,202 13,656
72,250 72,300 14,864 11,544 15,216 13,669
72,300 72,350 14,878 11,556 15,230 13,681
72,350 72,400 14,892 11,569 15,244 13,694
72,400 72,450 14,906 11,581 15,258 13,706
72,450 72,500 14,920 11,594 15,272 13,719
72,500 72,550 14,934 11,606 15,286 13,731
72,550 72,600 14,948 11,619 15,300 13,744
72,600 72,650 14,962 11,631 15,314 13,756
72,650 72,700 14,976 11,644 15,328 13,769
72,700 72,750 14,990 11,656 15,342 13,781
72,750 72,800 15,004 11,669 15,356 13,794
72,800 72,850 15,018 11,681 15,370 13,806
72,850 72,900 15,032 11,694 15,384 13,819
72,900 72,950 15,046 11,706 15,398 13,831
72,950 73,000 15,060 11,719 15,412 13,844
73,000 73,050 15,074 11,731 15,426 13,856
73,050 73,100 15,088 11,744 15,440 13,869
73,100 73,150 15,102 11,756 15,454 13,881
73,150 73,200 15,116 11,769 15,468 13,894
73,200 73,250 15,130 11,781 15,482 13,906
73,250 73,300 15,144 11,794 15,496 13,919
73,300 73,350 15,158 11,806 15,510 13,931
73,350 73,400 15,172 11,819 15,524 13,944
73,400 73,450 15,186 11,831 15,538 13,956
73,450 73,500 15,200 11,844 15,552 13,969
73,500 73,550 15,214 11,856 15,566 13,981
73,550 73,600 15,228 11,869 15,580 13,994
73,600 73,650 15,242 11,881 15,594 14,006
73,650 73,700 15,256 11,894 15,608 14,019
73,700 73,750 15,270 11,906 15,622 14,031
73,750 73,800 15,284 11,919 15,636 14,044
73,800 73,850 15,298 11,931 15,650 14,056
73,850 73,900 15,312 11,944 15,664 14,069
73,900 73,950 15,326 11,956 15,678 14,081
73,950 74,000 15,340 11,969 15,692 14,094
74,000 74,050 15,354 11,981 15,706 14,106
74,050 74,100 15,368 11,994 15,720 14,119
74,100 74,150 15,382 12,006 15,734 14,131
74,150 74,200 15,396 12,019 15,748 14,144
74,200 74,250 15,410 12,031 15,762 14,156
74,250 74,300 15,424 12,044 15,776 14,169
74,300 74,350 15,438 12,056 15,790 14,181
74,350 74,400 15,452 12,069 15,804 14,194
74,400 74,450 15,466 12,081 15,818 14,206
74,450 74,500 15,480 12,094 15,832 14,219
74,500 74,550 15,494 12,106 15,846 14,231
74,550 74,600 15,508 12,119 15,860 14,244
74,600 74,650 15,522 12,131 15,874 14,256
74,650 74,700 15,536 12,144 15,888 14,269
74,700 74,750 15,550 12,156 15,902 14,281
74,750 74,800 15,564 12,169 15,916 14,294
74,800 74,850 15,578 12,181 15,930 14,306
74,850 74,900 15,592 12,194 15,944 14,319
74,900 74,950 15,606 12,206 15,958 14,331
74,950 75,000 15,620 12,219 15,972 14,344
75,000 75,050 15,634 12,231 15,986 14,356
75,050 75,100 15,648 12,244 16,000 14,369
75,100 75,150 15,662 12,256 16,014 14,381
75,150 75,200 15,676 12,269 16,028 14,394
75,200 75,250 15,690 12,281 16,042 14,406
75,250 75,300 15,704 12,294 16,056 14,419
75,300 75,350 15,718 12,306 16,070 14,431
75,350 75,400 15,732 12,319 16,084 14,444
75,400 75,450 15,746 12,331 16,098 14,456
75,450 75,500 15,760 12,344 16,112 14,469
75,500 75,550 15,774 12,356 16,126 14,481
75,550 75,600 15,788 12,369 16,140 14,494
75,600 75,650 15,802 12,381 16,154 14,506
75,650 75,700 15,816 12,394 16,168 14,519
75,700 75,750 15,830 12,406 16,182 14,531
75,750 75,800 15,844 12,419 16,196 14,544
75,800 75,850 15,858 12,431 16,210 14,556
75,850 75,900 15,872 12,444 16,224 14,569
75,900 75,950 15,886 12,456 16,238 14,581
75,950 76,000 15,900 12,469 16,252 14,594
76,000 76,050 15,914 12,481 16,266 14,606
76,050 76,100 15,928 12,494 16,280 14,619
76,100 76,150 15,942 12,506 16,294 14,631
76,150 76,200 15,956 12,519 16,308 14,644
76,200 76,250 15,970 12,531 16,322 14,656
76,250 76,300 15,984 12,544 16,336 14,669
76,300 76,350 15,998 12,556 16,350 14,681
76,350 76,400 16,012 12,569 16,364 14,694
76,400 76,450 16,026 12,581 16,378 14,706
76,450 76,500 16,040 12,594 16,392 14,719
76,500 76,550 16,054 12,606 16,406 14,731
76,550 76,600 16,068 12,619 16,420 14,744
76,600 76,650 16,082 12,631 16,434 14,756
76,650 76,700 16,096 12,644 16,448 14,769
76,700 76,750 16,110 12,656 16,462 14,781
76,750 76,800 16,124 12,669 16,476 14,794
76,800 76,850 16,138 12,681 16,490 14,806
76,850 76,900 16,152 12,694 16,504 14,819
76,900 76,950 16,166 12,706 16,518 14,831
76,950 77,000 16,180 12,719 16,532 14,844
-68-
Page 69 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 70)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
77,000
78,000
79,000
80,000
81,000
82,000
83,000
84,000
85,000
77,000 77,050 16,194 12,731 16,546 14,856
77,050 77,100 16,208 12,744 16,560 14,869
77,100 77,150 16,222 12,756 16,574 14,881
77,150 77,200 16,236 12,769 16,588 14,894
77,200 77,250 16,250 12,781 16,602 14,906
77,250 77,300 16,264 12,794 16,616 14,919
77,300 77,350 16,278 12,806 16,630 14,931
77,350 77,400 16,292 12,819 16,644 14,944
77,400 77,450 16,306 12,831 16,658 14,956
77,450 77,500 16,320 12,844 16,672 14,969
77,500 77,550 16,334 12,856 16,686 14,981
77,550 77,600 16,348 12,869 16,700 14,994
77,600 77,650 16,362 12,881 16,714 15,006
77,650 77,700 16,376 12,894 16,728 15,019
77,700 77,750 16,390 12,906 16,742 15,031
77,750 77,800 16,404 12,919 16,756 15,044
77,800 77,850 16,418 12,931 16,770 15,056
77,850 77,900 16,432 12,944 16,784 15,069
77,900 77,950 16,446 12,956 16,798 15,081
77,950 78,000 16,460 12,969 16,812 15,094
78,000 78,050 16,474 12,981 16,826 15,106
78,050 78,100 16,488 12,994 16,840 15,119
78,100 78,150 16,502 13,006 16,854 15,131
78,150 78,200 16,516 13,019 16,868 15,144
78,200 78,250 16,530 13,031 16,882 15,156
78,250 78,300 16,544 13,044 16,896 15,169
78,300 78,350 16,558 13,056 16,910 15,181
78,350 78,400 16,572 13,069 16,924 15,194
78,400 78,450 16,586 13,081 16,938 15,206
78,450 78,500 16,600 13,094 16,952 15,219
78,500 78,550 16,614 13,106 16,966 15,231
78,550 78,600 16,628 13,119 16,980 15,244
78,600 78,650 16,642 13,131 16,994 15,256
78,650 78,700 16,656 13,144 17,008 15,269
78,700 78,750 16,670 13,156 17,022 15,281
78,750 78,800 16,684 13,169 17,036 15,294
78,800 78,850 16,698 13,181 17,050 15,306
78,850 78,900 16,712 13,194 17,064 15,319
78,900 78,950 16,726 13,206 17,078 15,331
78,950 79,000 16,740 13,219 17,092 15,344
79,000 79,050 16,754 13,231 17,106 15,356
79,050 79,100 16,768 13,244 17,120 15,369
79,100 79,150 16,782 13,256 17,134 15,381
79,150 79,200 16,796 13,269 17,148 15,394
79,200 79,250 16,810 13,281 17,162 15,406
79,250 79,300 16,824 13,294 17,176 15,419
79,300 79,350 16,838 13,306 17,190 15,431
79,350 79,400 16,852 13,319 17,204 15,444
79,400 79,450 16,866 13,331 17,218 15,456
79,450 79,500 16,880 13,344 17,232 15,469
79,500 79,550 16,894 13,356 17,246 15,481
79,550 79,600 16,908 13,369 17,260 15,494
79,600 79,650 16,922 13,381 17,274 15,506
79,650 79,700 16,936 13,394 17,288 15,519
79,700 79,750 16,950 13,406 17,302 15,531
79,750 79,800 16,964 13,419 17,316 15,544
79,800 79,850 16,978 13,431 17,330 15,556
79,850 79,900 16,992 13,444 17,344 15,569
79,900 79,950 17,006 13,456 17,358 15,581
79,950 80,000 17,020 13,469 17,372 15,594
80,000 80,050 17,034 13,481 17,386 15,606
80,050 80,100 17,048 13,494 17,400 15,619
80,100 80,150 17,062 13,506 17,414 15,631
80,150 80,200 17,076 13,519 17,428 15,644
80,200 80,250 17,090 13,531 17,442 15,656
80,250 80,300 17,104 13,544 17,456 15,669
80,300 80,350 17,118 13,556 17,470 15,681
80,350 80,400 17,132 13,569 17,484 15,694
80,400 80,450 17,146 13,581 17,498 15,706
80,450 80,500 17,160 13,594 17,512 15,719
80,500 80,550 17,174 13,606 17,526 15,731
80,550 80,600 17,188 13,619 17,540 15,744
80,600 80,650 17,202 13,631 17,554 15,756
80,650 80,700 17,216 13,644 17,568 15,769
80,700 80,750 17,230 13,656 17,582 15,781
80,750 80,800 17,244 13,669 17,596 15,794
80,800 80,850 17,258 13,681 17,610 15,806
80,850 80,900 17,272 13,694 17,624 15,819
80,900 80,950 17,286 13,706 17,638 15,831
80,950 81,000 17,300 13,719 17,652 15,844
81,000 81,050 17,314 13,731 17,666 15,856
81,050 81,100 17,328 13,744 17,680 15,869
81,100 81,150 17,342 13,756 17,694 15,881
81,150 81,200 17,356 13,769 17,708 15,894
81,200 81,250 17,370 13,781 17,722 15,906
81,250 81,300 17,384 13,794 17,736 15,919
81,300 81,350 17,398 13,806 17,750 15,931
81,350 81,400 17,412 13,819 17,764 15,944
81,400 81,450 17,426 13,831 17,778 15,956
81,450 81,500 17,440 13,844 17,792 15,969
81,500 81,550 17,454 13,856 17,806 15,981
81,550 81,600 17,468 13,869 17,820 15,994
81,600 81,650 17,482 13,881 17,834 16,006
81,650 81,700 17,496 13,894 17,848 16,019
81,700 81,750 17,510 13,906 17,862 16,031
81,750 81,800 17,524 13,919 17,876 16,044
81,800 81,850 17,538 13,931 17,890 16,056
81,850 81,900 17,552 13,944 17,904 16,069
81,900 81,950 17,566 13,956 17,918 16,081
81,950 82,000 17,580 13,969 17,932 16,094
82,000 82,050 17,594 13,981 17,946 16,106
82,050 82,100 17,608 13,994 17,960 16,119
82,100 82,150 17,622 14,006 17,974 16,131
82,150 82,200 17,636 14,019 17,988 16,144
82,200 82,250 17,650 14,031 18,002 16,156
82,250 82,300 17,664 14,044 18,016 16,169
82,300 82,350 17,678 14,056 18,030 16,181
82,350 82,400 17,692 14,069 18,044 16,194
82,400 82,450 17,706 14,081 18,058 16,206
82,450 82,500 17,720 14,094 18,072 16,219
82,500 82,550 17,734 14,106 18,086 16,231
82,550 82,600 17,748 14,119 18,100 16,244
82,600 82,650 17,762 14,131 18,114 16,256
82,650 82,700 17,776 14,144 18,128 16,269
82,700 82,750 17,790 14,156 18,142 16,281
82,750 82,800 17,804 14,169 18,156 16,294
82,800 82,850 17,818 14,181 18,170 16,306
82,850 82,900 17,832 14,194 18,184 16,319
82,900 82,950 17,846 14,206 18,198 16,331
82,950 83,000 17,860 14,219 18,212 16,344
83,000 83,050 17,874 14,231 18,226 16,356
83,050 83,100 17,888 14,244 18,240 16,369
83,100 83,150 17,902 14,256 18,254 16,381
83,150 83,200 17,916 14,269 18,268 16,394
83,200 83,250 17,930 14,281 18,282 16,406
83,250 83,300 17,944 14,294 18,296 16,419
83,300 83,350 17,958 14,306 18,310 16,431
83,350 83,400 17,972 14,319 18,324 16,444
83,400 83,450 17,986 14,331 18,338 16,456
83,450 83,500 18,000 14,344 18,352 16,469
83,500 83,550 18,014 14,356 18,366 16,481
83,550 83,600 18,028 14,369 18,380 16,494
83,600 83,650 18,042 14,381 18,394 16,506
83,650 83,700 18,056 14,394 18,408 16,519
83,700 83,750 18,070 14,406 18,422 16,531
83,750 83,800 18,084 14,419 18,436 16,544
83,800 83,850 18,098 14,431 18,450 16,556
83,850 83,900 18,112 14,444 18,464 16,569
83,900 83,950 18,126 14,456 18,478 16,581
83,950 84,000 18,140 14,469 18,492 16,594
84,000 84,050 18,154 14,481 18,506 16,606
84,050 84,100 18,168 14,494 18,520 16,619
84,100 84,150 18,182 14,506 18,534 16,631
84,150 84,200 18,196 14,519 18,548 16,644
84,200 84,250 18,210 14,531 18,562 16,656
84,250 84,300 18,224 14,544 18,576 16,669
84,300 84,350 18,238 14,556 18,590 16,681
84,350 84,400 18,252 14,569 18,604 16,694
84,400 84,450 18,266 14,581 18,618 16,706
84,450 84,500 18,280 14,594 18,632 16,719
84,500 84,550 18,294 14,606 18,646 16,731
84,550 84,600 18,308 14,619 18,660 16,744
84,600 84,650 18,322 14,631 18,674 16,756
84,650 84,700 18,336 14,644 18,688 16,769
84,700 84,750 18,350 14,656 18,702 16,781
84,750 84,800 18,364 14,669 18,716 16,794
84,800 84,850 18,378 14,681 18,730 16,806
84,850 84,900 18,392 14,694 18,744 16,819
84,900 84,950 18,406 14,706 18,758 16,831
84,950 85,000 18,420 14,719 18,772 16,844
85,000 85,050 18,434 14,731 18,786 16,856
85,050 85,100 18,448 14,744 18,800 16,869
85,100 85,150 18,462 14,756 18,814 16,881
85,150 85,200 18,476 14,769 18,828 16,894
85,200 85,250 18,490 14,781 18,842 16,906
85,250 85,300 18,504 14,794 18,856 16,919
85,300 85,350 18,518 14,806 18,870 16,931
85,350 85,400 18,532 14,819 18,884 16,944
85,400 85,450 18,546 14,831 18,898 16,956
85,450 85,500 18,560 14,844 18,912 16,969
85,500 85,550 18,574 14,856 18,926 16,981
85,550 85,600 18,588 14,869 18,940 16,994
85,600 85,650 18,602 14,881 18,954 17,006
85,650 85,700 18,616 14,894 18,968 17,019
85,700 85,750 18,630 14,906 18,982 17,031
85,750 85,800 18,644 14,919 18,996 17,044
85,800 85,850 18,658 14,931 19,010 17,056
85,850 85,900 18,672 14,944 19,024 17,069
85,900 85,950 18,686 14,956 19,038 17,081
85,950 86,000 18,700 14,969 19,052 17,094
-69-
Page 70 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—Your tax is—
(Continued on page 71)
* This column must also be used by a qualifying widow(er).
If line 42
(taxable
income) is—
If line 42
(taxable
income) is—
86,000
87,000
88,000
89,000
90,000
91,000
92,000
93,000
94,000
86,000 86,050 18,714 14,981 19,066 17,106
86,050 86,100 18,728 14,994 19,080 17,119
86,100 86,150 18,742 15,006 19,094 17,131
86,150 86,200 18,756 15,019 19,108 17,144
86,200 86,250 18,770 15,031 19,122 17,156
86,250 86,300 18,784 15,044 19,136 17,169
86,300 86,350 18,798 15,056 19,150 17,181
86,350 86,400 18,812 15,069 19,164 17,194
86,400 86,450 18,826 15,081 19,178 17,206
86,450 86,500 18,840 15,094 19,192 17,219
86,500 86,550 18,854 15,106 19,206 17,231
86,550 86,600 18,868 15,119 19,220 17,244
86,600 86,650 18,882 15,131 19,234 17,256
86,650 86,700 18,896 15,144 19,248 17,269
86,700 86,750 18,910 15,156 19,262 17,281
86,750 86,800 18,924 15,169 19,276 17,294
86,800 86,850 18,938 15,181 19,290 17,306
86,850 86,900 18,952 15,194 19,304 17,319
86,900 86,950 18,966 15,206 19,318 17,331
86,950 87,000 18,980 15,219 19,332 17,344
87,000 87,050 18,994 15,231 19,346 17,356
87,050 87,100 19,008 15,244 19,360 17,369
87,100 87,150 19,022 15,256 19,374 17,381
87,150 87,200 19,036 15,269 19,388 17,394
87,200 87,250 19,050 15,281 19,402 17,406
87,250 87,300 19,064 15,294 19,416 17,419
87,300 87,350 19,078 15,306 19,430 17,431
87,350 87,400 19,092 15,319 19,444 17,444
87,400 87,450 19,106 15,331 19,458 17,456
87,450 87,500 19,120 15,344 19,472 17,469
87,500 87,550 19,134 15,356 19,486 17,481
87,550 87,600 19,148 15,369 19,500 17,494
87,600 87,650 19,162 15,381 19,514 17,506
87,650 87,700 19,176 15,394 19,528 17,519
87,700 87,750 19,190 15,406 19,542 17,531
87,750 87,800 19,204 15,419 19,556 17,544
87,800 87,850 19,218 15,431 19,570 17,556
87,850 87,900 19,232 15,444 19,584 17,569
87,900 87,950 19,246 15,456 19,598 17,581
87,950 88,000 19,260 15,469 19,612 17,594
88,000 88,050 19,274 15,481 19,626 17,606
88,050 88,100 19,288 15,494 19,640 17,619
88,100 88,150 19,302 15,506 19,654 17,631
88,150 88,200 19,316 15,519 19,668 17,644
88,200 88,250 19,330 15,531 19,682 17,656
88,250 88,300 19,344 15,544 19,696 17,669
88,300 88,350 19,358 15,556 19,710 17,681
88,350 88,400 19,372 15,569 19,724 17,694
88,400 88,450 19,386 15,581 19,738 17,706
88,450 88,500 19,400 15,594 19,752 17,719
88,500 88,550 19,414 15,606 19,766 17,731
88,550 88,600 19,428 15,619 19,780 17,744
88,600 88,650 19,442 15,631 19,794 17,756
88,650 88,700 19,456 15,644 19,808 17,769
88,700 88,750 19,470 15,656 19,822 17,781
88,750 88,800 19,484 15,669 19,836 17,794
88,800 88,850 19,498 15,681 19,850 17,806
88,850 88,900 19,512 15,694 19,864 17,819
88,900 88,950 19,526 15,706 19,878 17,831
88,950 89,000 19,540 15,719 19,892 17,844
89,000 89,050 19,554 15,731 19,906 17,856
89,050 89,100 19,568 15,744 19,920 17,869
89,100 89,150 19,582 15,756 19,934 17,881
89,150 89,200 19,596 15,769 19,948 17,894
89,200 89,250 19,610 15,781 19,962 17,906
89,250 89,300 19,624 15,794 19,976 17,919
89,300 89,350 19,638 15,806 19,990 17,931
89,350 89,400 19,652 15,819 20,006 17,944
89,400 89,450 19,666 15,831 20,023 17,956
89,450 89,500 19,680 15,844 20,039 17,969
89,500 89,550 19,694 15,856 20,056 17,981
89,550 89,600 19,708 15,869 20,072 17,994
89,600 89,650 19,722 15,881 20,089 18,006
89,650 89,700 19,736 15,894 20,105 18,019
89,700 89,750 19,750 15,906 20,122 18,031
89,750 89,800 19,764 15,919 20,138 18,044
89,800 89,850 19,778 15,931 20,155 18,056
89,850 89,900 19,792 15,944 20,171 18,069
89,900 89,950 19,806 15,956 20,188 18,081
89,950 90,000 19,820 15,969 20,204 18,094
90,000 90,050 19,834 15,981 20,221 18,106
90,050 90,100 19,848 15,994 20,237 18,119
90,100 90,150 19,862 16,006 20,254 18,131
90,150 90,200 19,876 16,019 20,270 18,144
90,200 90,250 19,890 16,031 20,287 18,156
90,250 90,300 19,904 16,044 20,303 18,169
90,300 90,350 19,918 16,056 20,320 18,181
90,350 90,400 19,932 16,069 20,336 18,194
90,400 90,450 19,946 16,081 20,353 18,206
90,450 90,500 19,960 16,094 20,369 18,219
90,500 90,550 19,974 16,106 20,386 18,231
90,550 90,600 19,988 16,119 20,402 18,244
90,600 90,650 20,002 16,131 20,419 18,256
90,650 90,700 20,016 16,144 20,435 18,269
90,700 90,750 20,030 16,156 20,452 18,281
90,750 90,800 20,044 16,169 20,468 18,294
90,800 90,850 20,058 16,181 20,485 18,306
90,850 90,900 20,072 16,194 20,501 18,319
90,900 90,950 20,086 16,206 20,518 18,331
90,950 91,000 20,100 16,219 20,534 18,344
91,000 91,050 20,114 16,231 20,551 18,356
91,050 91,100 20,128 16,244 20,567 18,369
91,100 91,150 20,142 16,256 20,584 18,381
91,150 91,200 20,156 16,269 20,600 18,394
91,200 91,250 20,170 16,281 20,617 18,406
91,250 91,300 20,184 16,294 20,633 18,419
91,300 91,350 20,198 16,306 20,650 18,431
91,350 91,400 20,212 16,319 20,666 18,444
91,400 91,450 20,226 16,331 20,683 18,456
91,450 91,500 20,240 16,344 20,699 18,469
91,500 91,550 20,254 16,356 20,716 18,481
91,550 91,600 20,268 16,369 20,732 18,494
91,600 91,650 20,282 16,381 20,749 18,506
91,650 91,700 20,296 16,394 20,765 18,519
91,700 91,750 20,310 16,406 20,782 18,531
91,750 91,800 20,324 16,419 20,798 18,544
91,800 91,850 20,338 16,431 20,815 18,556
91,850 91,900 20,352 16,444 20,831 18,569
91,900 91,950 20,366 16,456 20,848 18,581
91,950 92,000 20,380 16,469 20,864 18,594
92,000 92,050 20,394 16,481 20,881 18,606
92,050 92,100 20,408 16,494 20,897 18,619
92,100 92,150 20,422 16,506 20,914 18,631
92,150 92,200 20,436 16,519 20,930 18,644
92,200 92,250 20,450 16,531 20,947 18,656
92,250 92,300 20,464 16,544 20,963 18,669
92,300 92,350 20,478 16,556 20,980 18,681
92,350 92,400 20,492 16,569 20,996 18,694
92,400 92,450 20,506 16,581 21,013 18,706
92,450 92,500 20,520 16,594 21,029 18,719
92,500 92,550 20,534 16,606 21,046 18,731
92,550 92,600 20,548 16,619 21,062 18,744
92,600 92,650 20,562 16,631 21,079 18,756
92,650 92,700 20,576 16,644 21,095 18,769
92,700 92,750 20,590 16,656 21,112 18,781
92,750 92,800 20,604 16,669 21,128 18,794
92,800 92,850 20,618 16,681 21,145 18,806
92,850 92,900 20,632 16,694 21,161 18,819
92,900 92,950 20,646 16,706 21,178 18,831
92,950 93,000 20,660 16,719 21,194 18,844
93,000 93,050 20,674 16,731 21,211 18,856
93,050 93,100 20,688 16,744 21,227 18,869
93,100 93,150 20,702 16,756 21,244 18,881
93,150 93,200 20,716 16,769 21,260 18,894
93,200 93,250 20,730 16,781 21,277 18,906
93,250 93,300 20,744 16,794 21,293 18,919
93,300 93,350 20,758 16,806 21,310 18,931
93,350 93,400 20,772 16,819 21,326 18,944
93,400 93,450 20,786 16,831 21,343 18,956
93,450 93,500 20,800 16,844 21,359 18,969
93,500 93,550 20,814 16,856 21,376 18,981
93,550 93,600 20,828 16,869 21,392 18,994
93,600 93,650 20,842 16,881 21,409 19,006
93,650 93,700 20,856 16,894 21,425 19,019
93,700 93,750 20,870 16,906 21,442 19,031
93,750 93,800 20,884 16,919 21,458 19,044
93,800 93,850 20,898 16,931 21,475 19,056
93,850 93,900 20,912 16,944 21,491 19,069
93,900 93,950 20,926 16,956 21,508 19,081
93,950 94,000 20,940 16,969 21,524 19,094
94,000 94,050 20,954 16,981 21,541 19,106
94,050 94,100 20,968 16,994 21,557 19,119
94,100 94,150 20,982 17,006 21,574 19,131
94,150 94,200 20,996 17,019 21,590 19,144
94,200 94,250 21,010 17,031 21,607 19,156
94,250 94,300 21,024 17,044 21,623 19,169
94,300 94,350 21,038 17,056 21,640 19,181
94,350 94,400 21,052 17,069 21,656 19,194
94,400 94,450 21,066 17,081 21,673 19,206
94,450 94,500 21,080 17,094 21,689 19,219
94,500 94,550 21,094 17,106 21,706 19,231
94,550 94,600 21,108 17,119 21,722 19,244
94,600 94,650 21,122 17,131 21,739 19,256
94,650 94,700 21,136 17,144 21,755 19,269
94,700 94,750 21,150 17,156 21,772 19,281
94,750 94,800 21,164 17,169 21,788 19,294
94,800 94,850 21,178 17,181 21,805 19,306
94,850 94,900 21,192 17,194 21,821 19,319
94,900 94,950 21,206 17,206 21,838 19,331
94,950 95,000 21,220 17,219 21,854 19,344
-70-
Page 71 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Table—Continued
If line 42
(taxable
income) is—
And you are—And you are—
Married
filing
jointly
*
SingleMarried
filing
jointly
*
Single Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Head
of a
house-
hold
Married
filing
sepa-
rately
But
less
than
At
least
Your tax is—Your tax is—
If line 42
(taxable
income) is—
* This column must also be used by a qualifying widow(er).
95,000
96,000
97,000
98,000
99,000
$100,000
or over —
use the Tax
Computation
Worksheet
on page 72
95,000 95,050 21,234 17,231 21,871 19,356
95,050 95,100 21,248 17,244 21,887 19,369
95,100 95,150 21,262 17,256 21,904 19,381
95,150 95,200 21,276 17,269 21,920 19,394
95,200 95,250 21,290 17,281 21,937 19,406
95,250 95,300 21,304 17,294 21,953 19,419
95,300 95,350 21,318 17,306 21,970 19,431
95,350 95,400 21,332 17,319 21,986 19,444
95,400 95,450 21,346 17,331 22,003 19,456
95,450 95,500 21,360 17,344 22,019 19,469
95,500 95,550 21,374 17,356 22,036 19,481
95,550 95,600 21,388 17,369 22,052 19,494
95,600 95,650 21,402 17,381 22,069 19,506
95,650 95,700 21,416 17,394 22,085 19,519
95,700 95,750 21,430 17,406 22,102 19,531
95,750 95,800 21,444 17,419 22,118 19,544
95,800 95,850 21,458 17,431 22,135 19,556
95,850 95,900 21,472 17,444 22,151 19,569
95,900 95,950 21,486 17,456 22,168 19,581
95,950 96,000 21,500 17,469 22,184 19,594
96,000 96,050 21,514 17,481 22,201 19,606
96,050 96,100 21,528 17,494 22,217 19,619
96,100 96,150 21,542 17,506 22,234 19,631
96,150 96,200 21,556 17,519 22,250 19,644
96,200 96,250 21,570 17,531 22,267 19,656
96,250 96,300 21,584 17,544 22,283 19,669
96,300 96,350 21,598 17,556 22,300 19,681
96,350 96,400 21,612 17,569 22,316 19,694
96,400 96,450 21,626 17,581 22,333 19,706
96,450 96,500 21,640 17,594 22,349 19,719
96,500 96,550 21,654 17,606 22,366 19,731
96,550 96,600 21,668 17,619 22,382 19,744
96,600 96,650 21,682 17,631 22,399 19,756
96,650 96,700 21,696 17,644 22,415 19,769
96,700 96,750 21,710 17,656 22,432 19,781
96,750 96,800 21,724 17,669 22,448 19,794
96,800 96,850 21,738 17,681 22,465 19,806
96,850 96,900 21,752 17,694 22,481 19,819
96,900 96,950 21,766 17,706 22,498 19,831
96,950 97,000 21,780 17,719 22,514 19,844
97,000 97,050 21,794 17,731 22,531 19,856
97,050 97,100 21,808 17,744 22,547 19,869
97,100 97,150 21,822 17,756 22,564 19,881
97,150 97,200 21,836 17,769 22,580 19,894
97,200 97,250 21,850 17,781 22,597 19,906
97,250 97,300 21,864 17,794 22,613 19,919
97,300 97,350 21,878 17,806 22,630 19,931
97,350 97,400 21,892 17,819 22,646 19,944
97,400 97,450 21,906 17,831 22,663 19,956
97,450 97,500 21,920 17,844 22,679 19,969
97,500 97,550 21,934 17,856 22,696 19,981
97,550 97,600 21,948 17,869 22,712 19,994
97,600 97,650 21,962 17,881 22,729 20,006
97,650 97,700 21,976 17,894 22,745 20,019
97,700 97,750 21,990 17,906 22,762 20,031
97,750 97,800 22,004 17,919 22,778 20,044
97,800 97,850 22,018 17,931 22,795 20,056
97,850 97,900 22,032 17,944 22,811 20,069
97,900 97,950 22,046 17,956 22,828 20,081
97,950 98,000 22,060 17,969 22,844 20,094
98,000 98,050 22,074 17,981 22,861 20,106
98,050 98,100 22,088 17,994 22,877 20,119
98,100 98,150 22,102 18,006 22,894 20,131
98,150 98,200 22,116 18,019 22,910 20,144
98,200 98,250 22,130 18,031 22,927 20,156
98,250 98,300 22,144 18,044 22,943 20,169
98,300 98,350 22,158 18,056 22,960 20,181
98,350 98,400 22,172 18,069 22,976 20,194
98,400 98,450 22,186 18,081 22,993 20,206
98,450 98,500 22,200 18,094 23,009 20,219
98,500 98,550 22,214 18,106 23,026 20,231
98,550 98,600 22,228 18,119 23,042 20,244
98,600 98,650 22,242 18,131 23,059 20,256
98,650 98,700 22,256 18,144 23,075 20,269
98,700 98,750 22,270 18,156 23,092 20,281
98,750 98,800 22,284 18,169 23,108 20,294
98,800 98,850 22,298 18,181 23,125 20,306
98,850 98,900 22,312 18,194 23,141 20,319
98,900 98,950 22,326 18,206 23,158 20,331
98,950 99,000 22,340 18,219 23,174 20,344
99,000 99,050 22,354 18,231 23,191 20,356
99,050 99,100 22,368 18,244 23,207 20,369
99,100 99,150 22,382 18,256 23,224 20,381
99,150 99,200 22,396 18,269 23,240 20,394
99,200 99,250 22,410 18,281 23,257 20,406
99,250 99,300 22,424 18,294 23,273 20,419
99,300 99,350 22,438 18,306 23,290 20,431
99,350 99,400 22,452 18,319 23,306 20,444
99,400 99,450 22,466 18,331 23,323 20,456
99,450 99,500 22,480 18,344 23,339 20,469
99,500 99,550 22,494 18,356 23,356 20,481
99,550 99,600 22,508 18,369 23,372 20,494
99,600 99,650 22,522 18,381 23,389 20,506
99,650 99,700 22,536 18,394 23,405 20,519
99,700 99,750 22,550 18,406 23,422 20,531
99,750 99,800 22,564 18,419 23,438 20,544
99,800 99,850 22,578 18,431 23,455 20,556
99,850 99,900 22,592 18,444 23,471 20,569
99,900 99,950 22,606 18,456 23,488 20,581
99,950 100,000 22,620 18,469 23,504 20,594
-71-
Page 72 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2004 Tax Computation Worksheet—Line 43
See the instructions for line 43 that begin on page 33 to see if you must use the worksheet below to figure your tax.
CAUTION
!
Section A—Use if your filing status is Single. Complete the row below that applies to you.
Tax.
(a) (b) (c) (d) Subtract (d) from (c).
Taxable income. Enter the amount from Multiplication Multiply Subtraction Enter the result here and
If line 42 is— line 42 amount (a) by (b) amount on Form 1040, line 43
At least $100,000 but not over
$146,750 $ × 28% (.28) $ $ 5,373.00 $
Over $146,750 but not over
$319,100 $ × 33% (.33) $ $ 12,710.50 $
Over $319,100 $ × 35% (.35) $ $ 19,092.50 $
Section B—Use if your filing status is Married filing jointly or qualifying widow(er). Complete the row below that applies to
you.
Tax.
(a) (b) (c) (d) Subtract (d) from (c).
Taxable income. Enter the amount from Multiplication Multiply Subtraction Enter the result here and
If line 42 is— line 42 amount (a) by (b) amount on Form 1040, line 43
At least $100,000 but not over
$117,250 $ × 25% (.25) $ $ 6,525.00 $
Over $117,250 but not over
$178,650 $ × 28% (.28) $ $ 10,042.50 $
Over $178,650 but not over
$319,100 $ × 33% (.33) $ $ 18,975.00 $
Over $319,100 $ × 35% (.35) $ $ 25,357.00 $
Section C—Use if your filing status is Married filing separately. Complete the row below that applies to you.
Tax.
(a) (b) (c) (d) Subtract (d) from (c).
Taxable income. Enter the amount from Multiplication Multiply Subtraction Enter the result here and
If line 42 is— line 42 amount (a) by (b) amount on Form 1040, line 43
At least $100,000 but not over
$159,550 $ × 33% (.33) $ $ 9,487.50 $
Over $159,550 $ × 35% (.35) $ $ 12,678.50 $
Section D—Use if your filing status is Head of household. Complete the row below that applies to you.
Tax.
(a) (b) (c) (d) Subtract (d) from (c).
Taxable income. Enter the amount from Multiplication Multiply Subtraction Enter the result here and
If line 42 is— line 42 amount (a) by (b) amount on Form 1040, line 43
At least $100,000 but not over
$100,500 $ × 25% (.25) $ $ 4,400.00 $
Over $100,500 but not over
$162,700 $ × 28% (.28) $ $ 7,415.00 $
Over $162,700 but not over
$319,100 $ × 33% (.33) $ $ 15,550.00 $
Over $319,100 $ × 35% (.35) $ $ 21,932.00 $
-72-
4
I.R.S. SPECIFICATIONS TO BE REMOVED BEFORE PRINTING
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT
INSTRUCTIONS TO PRINTERS
PACKAGE 1040-OTC, FOLIO 73 OF 132
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for Forms and
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Color=Solid Black
Schedule R
(1040)
8582
2441
1040
1040EZ
Schedule SE
(1040) Pub. 590
8829
Schedules A&B
(1040)
1040-ES
(2005)
Pub. 1
1040A
Pub. 523
Pub. 910
Schedule C
(1040)
1040X
4562
Pub. 17
Pub. 525
Schedule D
(1040)
Schedule 1
(1040A)
2106
Pub. 334
Pub. 527
4868
Schedule E
(1040)
Schedule 2
(1040A)
6251
Pub. 463
Pub. 529
Schedule 3
(1040A)
Schedule F
(1040)
Pub. 505
Schedule EIC
(1040A or 1040)
Pub. 596
8822
Schedule
C-EZ (1040)
8283
8606
Pub. 501
Pub. 502 Pub. 550
Pub. 575
Pub. 554
2106-EZ
Schedule H
(1040)
Pub. 926
1040-V
Schedule J
(1040)
8812
8863
Pub. 970
Schedule D-1
(1040)
9465
Pub. 533
Pub. 972
4506
TIP
Pub. 535
Page 74 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Major Categories of Federal Income and Outlays for Fiscal Year 2003
Income and Outlays. These pie charts show the relative sizes of the major categories of federal income and outlays for fiscal year 2003.
Income Outlays
Personal income
taxes
37%
Excise, customs, estate,
gift, and miscellaneous
taxes
7%
Corporate
income taxes
6%
Social security, Medicare,
and unemployment and other
retirement taxes
33%
Law enforcement and
general government
3%
Social security,
Medicare, and other
retirement 1
37%
National defense,
veterans, and foreign
affairs 2
22%
Net interest on
the debt
7%
Physical, human,
and community
development 3
10%
Social
programs 4
21%
Borrowing to
cover deficit
17%
On or before the first Monday in February outlays were $2.2 trillion, leaving a deficit 3. Physical, human, and community
of each year, the President is required by of $0.4 trillion. development: These outlays were for agri-
law to submit to the Congress a budget culture; natural resources; environment;
Footnotes for Certain Federal
proposal for the fiscal year that begins the transportation; aid for elementary and sec-
Outlays
following October. The budget plan sets ondary education and direct assistance to
forth the President’s proposed receipts, college students; job training; deposit in-
1. Social security, Medicare, and
spending, and the surplus or deficit for the surance, commerce and housing credit, and
other retirement: These programs provide
Federal Government. The plan includes community development; and space, en-
income support for the retired and disabled
recommendations for new legislation as ergy, and general science programs.
and medical care for the elderly.
well as recommendations to change, elimi- 4. Social programs: About 14% of total
2. National defense, veterans, and for-
nate, and add programs. After receiving the outlays were for Medicaid, food stamps,
eign affairs: About 18% of outlays were to
President’s proposal, the Congress reviews temporary assistance for needy families,
equip, modernize, and pay our armed
it and makes changes. It first passes a supplemental security income, and related
forces and to fund other national defense
budget resolution setting its own targets for programs; and the remaining outlays were
activities; about 3% were for veterans ben-
receipts, outlays, and the surplus or deficit. for health research and public health pro-
efits and services; and about 1% were for
Next, individual spending and revenue bills grams, unemployment compensation, as-
international activities, including military
that are consistent with the goals of the sisted housing, and social services.
and economic assistance to foreign coun-
budget resolution are enacted. tries and the maintenance of U.S. embas-
In fiscal year 2003 (which began on Oc- sies abroad.
tober 1, 2002, and ended on September 30,
2003), federal income was $1.8 trillion and
Note. The percentages on this page exclude undistributed offsetting receipts, which were $54 billion in fiscal year 2003. In the budget, these receipts are offset against
spending in figuring the outlay totals shown above. These receipts are for the U.S. Government’s share of its employee retirement programs, rents and royalties on the
Outer Continental Shelf, and proceeds from the sale of assets.
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Page 75 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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Disclosure, Privacy Act, and Paperwork Reduction Act Notice
The IRS Restructuring and Reform Act of 1998, Revenue law. bility for and the repayment of loans. We may
the Privacy Act of 1974, and the Paperwork also disclose this information to other countries
We ask for tax return information to carry
Reduction Act of 1980 require that when we ask under a tax treaty, to federal and state agencies
out the tax laws of the United States. We need it
you for information we must first tell you our to enforce federal nontax criminal laws, or to
to figure and collect the right amount of tax.
legal right to ask for the information, why we are federal law enforcement and intelligence agen-
If you do not file a return, do not provide the
asking for it, and how it will be used. We must cies to combat terrorism.
information we ask for, or provide fraudulent
also tell you what could happen if we do not information, you may be charged penalties and Please keep this notice with your records. It
receive it and whether your response is volun- be subject to criminal prosecution. We may also may help you if we ask you for other informa-
tary, required to obtain a benefit, or mandatory have to disallow the exemptions, exclusions, tion. If you have questions about the rules for
under the law. credits, deductions, or adjustments shown on the filing and giving information, please call or visit
This notice applies to all papers you file with tax return. This could make the tax higher or any Internal Revenue Service office.
us, including this tax return. It also applies to delay any refund. Interest may also be charged.
any questions we need to ask you so we can The Time It Takes To Prepare
Generally, tax returns and return information
complete, correct, or process your return; figure are confidential, as stated in Code section 6103. Your Return
your tax; and collect tax, interest, or penalties. However, Code section 6103 allows or requires We try to create forms and instructions that can
Our legal right to ask for information is Inter- the Internal Revenue Service to disclose or give be easily understood. Often this is difficult to do
nal Revenue Code sections 6001, 6011, and the information shown on your tax return to because our tax laws are very complex. For
6012(a), and their regulations. They say that you others as described in the Code. For example, we
must file a return or statement with us for any tax some people with income mostly from wages,
may disclose your tax information to the Depart-
you are liable for. Your response is mandatory filling in the forms is easy. For others who have
ment of Justice to enforce the tax laws, both civil
under these sections. Code section 6109 requires businesses, pensions, stocks, rental income, or
and criminal, and to cities, states, the District of
that you provide your social security number or other investments, it is more difficult.
Columbia, U.S. commonwealths or possessions,
individual taxpayer identification number on and certain foreign governments to carry out We Welcome Comments on
what you file. This is so we know who you are, their tax laws. We may disclose your tax infor-
and can process your return and other papers. mation to the Department of Treasury and con- Forms
You must fill in all parts of the tax form that tractors for tax administration purposes; and to If you have comments concerning the accuracy
apply to you. But you do not have to check the other persons as necessary to obtain information of the time estimates shown below or sugges-
boxes for the Presidential Election Campaign which we cannot get in any other way in order to tions for making these forms simpler, we would
Fund or for the third-party designee. You also do determine the amount of or to collect the tax you be happy to hear from you. You can email us at
not have to provide your daytime phone number. owe. We may disclose your tax information to
*taxforms@irs.gov.
Please put “Forms Com-
You are not required to provide the informa- the Comptroller General of the United States to ment” on the subject line. Or you can write to
tion requested on a form that is subject to the permit the Comptroller General to review the Internal Revenue Service, Tax Products Coordi-
Paperwork Reduction Act unless the form dis- Internal Revenue Service. We may disclose your nating Committee, SE:W:CAR:MP:T:T:SP,
plays a valid OMB control number. Books or tax information to Committees of Congress; fed- 1111 Constitution Ave. NW, Washington, DC
records relating to a form or its instructions must eral, state, and local child support agencies; and
20224. Do not send your return to this address.
be retained as long as their contents may become to other federal agencies for the purposes of
material in the administration of any Internal determining entitlement for benefits or the eligi- Instead, see the back cover.
Estimated Preparation Time
The time needed to complete and file Form 1040, its schedules, and accompanying worksheets will vary depending on individual circumstances.
The estimated average times are:
Copying,
Learning assembling,
about and sending
the law or Preparing the form
Form Recordkeeping the form the form to the IRS Totals
Form 1040 2 hr., 46 min. 3 hr., 58 min. 6 hr., 17 min. 34 min. 13 hr., 35 min.
Sch. A 3 hr., 4 min. 39 min. 1 hr., 34 min. 20 min. 5 hr., 37 min.
Sch. B 33 min. 8 min. 25 min. 20 min. 1 hr., 26 min.
Sch. C 6 hr., 4 min. 1 hr., 51 min. 2 hr., 19 min. 41 min. 10 hr., 55 min.
Sch. C-EZ 45 min. 3 min. 35 min. 20 min. 1 hr., 43 min.
Sch. D 55 min. 2 hr., 30 min. 2 hr., 18 min. 27 min. 6 hr., 10 min.
Sch. D-1 13 min. 1 min. 11 min. 34 min. 59 min.
Sch. E 3 hr. 1 hr., 13 min. 1 hr., 27 min. 34 min. 6 hr., 14 min.
Sch. EIC - - - - - 1 min. 13 min. 20 min. 34 min.
Sch. F:
Cash Method 3 hr., 29 min. 36 min. 1 hr., 27 min. 20 min. 5 hr., 52 min.
Accrual Method 3 hr., 36 min. 26 min. 1 hr., 25 min. 20 min. 5 hr., 47 min.
Sch. H 1 hr., 38 min. 30 min. 53 min. 34 min. 3 hr., 35 min.
Sch. J 19 min. 13 min. 2 hr., 16 min. 20 min. 3 hr., 8 min.
Sch. R 19 min. 16 min. 35 min. 34 min. 1 hr., 44 min.
Sch. SE:
Short 13 min. 14 min. 13 min. 13 min. 53 min.
Long 26 min. 20 min. 35 min. 20 min. 1 hr., 41 min.
-75-
Page 76 of 79 of Instructions 1040 10:50 - 3-NOV-2004
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2004
Tax Rate
Schedules
The Tax Rate Schedules are shown so you can see the tax rate that applies
to all levels of taxable income. Do not use them to figure your tax. Instead,
see the instructions for line 43 that begin on page 33.
Schedule Z—If your filing status is Head of household
Schedule X—If your filing status is Single
The tax is:If your taxable
income is: of the
amount
over—
But not
over—
Over—
10,20038,90010,200
7,15015%29,0507,150
29,050
38,900100,50038,900
29,0504,000.00 +70,350
70,350 14,325.00 +
100,500100,500
70,350
Schedule Y-2—If your filing status is Married filing separately
Schedule Y-1—If your filing status is Married filing jointly or Qualifying widow(er)
14,30058,10014,300
7,15029,0507,150
29,050 29,050
58,100117,25058,100
58,625
58,62558,625
117,250 117,250
146,750
178,650
162,700
89,325
The tax is:If your taxable
income is: of the
amount
over—
But not
over—
Over—
The tax is:If your taxable
income is: of the
amount
over—
But not
over—
Over—
The tax is:If your taxable
income is: of the
amount
over—
But not
over—
Over—
146,750
319,100
319,100 35,717.00 +
92,592.50 +
146,750
319,100
178,650
319,100
319,100 178,650
319,100
89,325
159,550
159,550 89,325
159,550
162,700
319,100
319,100 162,700
319,100
25%
28%
33%
35%
$010%$7,150$0
$010%$14,300$0
$0$7,150$0
$0$10,200$0
$715.00 +
15%
8,000.00 +
22,787.50 +
39,979.50 +
86,328.00 +
25%
28%
33%
35%
$1,430.00 +
10%
15%
4,000.00 +
11,393.75 +
19,989.75 +
43,164.00 +
25%
28%
33%
35%
$715.00 +
10%
15%
5,325.00 +
20,725.00 +
38,141.00 +
89,753.00 +
25%
28%
33%
35%
$1,020.00 +
CAUTION
-76-
Userid: ________ Leading adjust: -5/0% ❏Draft ❏Ok to Print
PAGER/SGML Fileid: I1040SAB.XML (29-Oct-2004) (Init. & date)
Filename: D:\USERS\mmgood00\documents\Epicfiles\I1040SAB.XML
Page 1 of 8 of 2004 Instructions for Schedules A & B (Form 1040)10:47 - 29-OCT-2004
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Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedules A & B
(Form 1040)
Use Schedule A (Form 1040) to figure your itemized deductions. In most cases, your federal
income tax will be less if you take the larger of your itemized deductions or your standard
Instructions for deduction.
If you itemize, you can deduct a part of your medical and dental expenses and un-
Schedule A, reimbursed employee business expenses, and amounts you paid for certain taxes, interest,
contributions, and miscellaneous expenses. You can also deduct certain casualty and theft
losses.
Itemized
Do not include on Schedule A items deducted elsewhere, such as on Form 1040
or Schedule C, C-EZ, E, or F.
Deductions
self-employed health insurance deduction •A weight-loss program as treatment
you claimed on Form 1040, line 31. for a specific disease (including obesity)
What’s New
diagnosed by a doctor.
You can elect to deduct state and local gen- •Medical treatment at a center for drug
Note. If, during 2004, you were an eligible
eral sales taxes instead of state and local trade adjustment assistance (TAA) recipi- or alcohol addiction.
income taxes as an itemized deduction on ent, alternative TAA recipient, or Pension
Schedule A. Generally, you can use either •Medical aids such as eyeglasses, con-
Benefit Guaranty Corporation pension re-
your actual expenses or the Optional State tact lenses, hearing aids, braces, crutches,
cipient, you must reduce your insurance
Sales Tax Tables to figure your state and wheelchairs, and guide dogs, including the
premiums by any amounts used to figure
local general sales tax deduction. See the cost of maintaining them.
the health coverage tax credit. See the in-
instructions for line 5 that begin on page •Surgery to improve defective vision,
structions for line 1 on page A-2.
A-2 for details. such as laser eye surgery or radial ker-
atotomy.
•Lodging expenses (but not meals)
You cannot deduct insurance
while away from home to receive medical
premiums paid with pretax dol-
Medical and Dental
care in a hospital or a medical care facility
lars because the premiums are
related to a hospital, provided there was no
not included in box 1 of your
Expenses
Form(s) W-2.
significant element of personal pleasure,
You can deduct only the part of your medi- recreation, or vacation in the travel. Do not
cal and dental expenses that exceeds 7.5% •Prescription medicines or insulin. deduct more than $50 a night for each eligi-
of the amount on Form 1040, line 37. ble person.
•Acupuncturists, chiropractors, den-
Pub. 502 discusses the types of ex- tists, eye doctors, medical doctors, occupa- •Ambulance service and other travel
penses that you can and cannot deduct. It tional therapists, osteopathic doctors, costs to get medical care. If you used your
also explains when you can deduct capital physical therapists, podiatrists, psychia- own car, you can claim what you spent for
expenses and special care expenses for dis- trists, psychoanalysts (medical care only), gas and oil to go to and from the place you
abled persons. and psychologists. received the care; or you can claim 14 cents
•Medical examinations, X-ray and lab- a mile. Add parking and tolls to the amount
If you received a distribution
oratory services, insulin treatment, and
from a health savings account
you claim under either method.
whirlpool baths your doctor ordered.
or a medical savings account in
2004, see Pub. 969 to figure
•Nursing help (including your share of Note. Certain medical expenses paid out of
your deduction.
the employment taxes paid). If you paid a deceased taxpayer’s estate can be claimed
someone to do both nursing and house- on the deceased taxpayer’s final return. See
Examples of Medical and work, you can deduct only the cost of the
Pub. 502 for details.
nursing help.
Dental Payments You Can •Hospital care (including meals and
Deduct lodging), clinic costs, and lab fees.
To the extent you were not reimbursed, you •Qualified long-term care services (see Limit on long-term care premiums you can
can deduct what you paid for: Pub. 502). deduct. The amount you can deduct for
•Insurance premiums for medical and •The supplemental part of Medicare in- qualified long-term care contracts (as de-
dental care, including premiums for quali- surance (Medicare B). fined in Pub. 502) depends on the age, at
fied long-term care contracts as defined in the end of 2004, of the person for whom the
•A program to stop smoking and for
Pub. 502. But see
Limit on long-term care
premiums were paid. See the chart on page
prescription medicines to alleviate nicotine
premiums you can deduct
on this page. Re-
withdrawal.
duce the insurance premiums by any A-2 for details.
A-1
Cat. No. 24328L
Page 2 of 8 of 2004 Instructions for Schedules A & B (Form 1040) 10:47 - 29-OCT-2004
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line 31, reduce the premiums by the amount
•Customs duties.
IF the person THEN the most
on line 31.
was, at the end you may deduct •Federal estate and gift taxes. But see
of 2004, age . . . is . . . Note. If, during 2004, you were an eligible the instructions for line 27 on page A-6.
trade adjustment assistance (TAA) recipi- •Certain state and local taxes, includ-
40 or under $ 260 ent, alternative TAA recipient, or Pension ing: tax on gasoline, car inspection fees,
Benefit Guaranty Corporation pension re- assessments for sidewalks or other im-
41–50 $ 490 cipient, you must complete Form 8885 provements to your property, tax you paid
before completing Schedule A, line 1.
51–60 $ 980 for someone else, and license fees (mar-
When figuring the amount of insurance riage, driver’s, dog, etc.).
premiums you can deduct on Schedule A,
61–70 $ 2,600 do not include any health coverage tax
credit advance payments shown in box 1 of
71 or older $ 3,250 Form 1099-H. Also, subtract the amount Line 5
shown on Form 8885, line 4 (reduced by
any advance payments shown on line 6 of State and Local Income or
Examples of Medical and that form), from the total insurance premi-
ums you paid. General Sales Taxes
Dental Payments You
Whose medical and dental expenses can
Cannot Deduct
You can elect to deduct state
you include? You can include medical and
and local general sales taxes in-
•The basic cost of Medicare insurance dental bills you paid for:
stead of state and local income
(Medicare A). •Yourself and your spouse.
taxes. You cannot deduct
•All dependents you claim on your re-
both.
If you were age 65 or older but
turn.
not entitled to social security
State and local income taxes. If you deduct
•Your child whom you do not claim as
benefits, you can deduct premi-
state and local income taxes, check box a
a dependent because of the rules explained
TIP
ums you voluntarily paid for
on line 5. Include on this line the state and
in Pub. 501 for children of divorced or sep-
Medicare A coverage.
local income taxes listed below.
arated parents. •State and local income taxes withheld
•Any person you could have claimed as
•The cost of diet food. from your salary during 2004. Your
a dependent on your return if that person
•Cosmetic surgery unless it was neces- had not received $3,100 or more of gross Form(s) W-2 will show these amounts.
sary to improve a deformity related to a income or had not filed a joint return. Forms W-2G, 1099-G, 1099-R, and
congenital abnormality, an injury from an 1099-MISC may also show state and local
Example.
You provided over half of
accident or trauma, or a disfiguring disease. your mother’s support but cannot claim her income taxes withheld.
as a dependent because she received wages
•Life insurance or income protection •State and local income taxes paid in
of $3,100 in 2004. You can include on line
policies. 2004 for a prior year, such as taxes paid
1 any medical and dental expenses you paid with your 2003 state or local income tax
•The Medicare tax on your wages and in 2004 for your mother. return. Do not include penalties or interest.
tips or the Medicare tax paid as part of the Reimbursements. If your insurance com-
self-employment tax or household employ- •State and local estimated tax pay-
pany paid the provider directly for part of
ment taxes. ments made during 2004, including any
your expenses, and you paid only the part of a prior year refund that you chose to
•Nursing care for a healthy baby. But amount that remained, include on line 1 have credited to your 2004 state or local
you may be able to take a credit for the only the amount you paid. If you received a income taxes.
amount you paid. See the instructions for reimbursement in 2004 for medical or den-
tal expenses you paid in 2004, reduce your
Form 1040, line 47. •Mandatory contributions you made to
2004 expenses by this amount. If you re- the California, New Jersey, or New York
•Illegal operations or drugs. ceived a reimbursement in 2004 for prior Nonoccupational Disability Benefit Fund,
•Imported drugs not approved by the year medical or dental expenses, do not Rhode Island Temporary Disability Benefit
U.S. Food and Drug Administration reduce your 2004 expenses by this amount. Fund, or Washington State Supplemental
(FDA). This includes foreign-made ver- But if you deducted the expenses in the Workmen’s Compensation Fund.
earlier year and the deduction reduced your
sions of U.S.-approved drugs manufactured tax, you must include the reimbursement in
without FDA approval. Do not reduce your deduction by any:
income on Form 1040, line 21. See Pub.
•Nonprescription medicines (including •State or local income tax refund or
502 for details on how to figure the amount
nicotine gum and certain nicotine patches). credit you expect to receive for 2004, or
to include.
•Travel your doctor told you to take for •Refund of, or credit for, prior year
Cafeteria plans. Do not include on line 1
rest or a change. state and local income taxes you actually
insurance premiums paid by an received in 2004. Instead, see the instruc-
•Funeral, burial, or cremation costs. employer-sponsored health insurance plan tions for Form 1040, line 10.
(cafeteria plan) unless the premiums are
included in box 1 of your Form(s) W-2. State and local general sales taxes. If you
Also, do not include any other medical and elect to deduct state and local general sales
Line 1 dental expenses paid by the plan unless the taxes, you must check box b on line 5. To
amount paid is included in box 1 of your
Medical and Dental figure your deduction, you can use either of
Form(s) W-2. the following methods.
Expenses
Enter the total of your medical and dental 1. The actual state and local general
expenses (see page A-1), after you reduce sales taxes (including compensating use
these expenses by any payments received taxes) you paid plus any selective sales
Taxes You Paid
from insurance or other sources. See
Reim-
taxes if the tax rate was the same as the
bursements
on this page. general sales tax rate. For selective sales
Taxes You Cannot Deduct taxes on food, clothing, medical supplies,
Do not forget to include insur-
•Federal income and excise taxes. and motor vehicles, the tax is deductible
ance premiums you paid for
•Social security, Medicare, federal un- even if the tax rate was less than the general
medical and dental care. But if
TIP
employment (FUTA), and railroad retire- sales tax rate. For selective sales taxes on
you claimed the self-employed
health insurance deduction on Form 1040,
ment (RRTA) taxes. motor vehicles for which the tax rate was
A-2
Page 3 of 8 of 2004 Instructions for Schedules A & B (Form 1040) 10:47 - 29-OCT-2004
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more than the general sales tax rate, the tax Refunds and rebates. If you received a re- property. It must provide basic living ac-
is deductible only up to the amount of tax fund or rebate in 2004 of real estate taxes commodations including sleeping space,
that would have been imposed at the gen- you paid in 2004, reduce your deduction by toilet, and cooking facilities.
eral sales tax rate. Do not include sales the amount of the refund or rebate. If you Limit on home mortgage interest. If you
taxes paid on items used in your trade or received a refund or rebate in 2004 of real
took out any mortgages after October 13,
business. estate taxes you paid in an earlier year, do
1987, your deduction may be limited. Any
not reduce your deduction by this amount.
2. The Optional State Sales Tax Tables, additional amounts borrowed after October
Instead, you must include the refund or re-
which are available in Pub. 600. If you use 13, 1987, on a line-of-credit mortgage you
bate in income on Form 1040, line 21, if
the Optional State Sales Tax Tables, you had on that date are treated as a mortgage
you deducted the real estate taxes in the
can add to the table amount any state and taken out after October 13, 1987. If you
earlier year and the deduction reduced your
local general sales taxes you paid on motor refinanced a mortgage you had on October
tax. See
Recoveries
in Pub. 525 for details
vehicles, boats, and any other items speci- 13, 1987, treat the new mortgage as taken
on how to figure the amount to include in
fied in Pub. 600. The deductible amount of out on or before October 13, 1987. But if
income.
tax on motor vehicles cannot exceed the tax you refinanced for more than the balance of
that would have been imposed at the gen- the old mortgage, treat the excess as a mort-
eral sales tax rate. For boats, the tax is gage taken out after October 13, 1987.
deductible only if it was imposed at the Line 7
general sales tax rate. See Pub. 600 for See Pub. 936 to figure your deduction if
details. Do not include sales taxes paid on Personal Property Taxes either (1) or (2) below applies. If you had
items used in your trade or business. Enter personal property tax you paid, but more than one home at the same time, the
only if it is based on value alone and it is dollar amounts in (1) and (2) apply to the
charged on a yearly basis. total mortgages on both homes.
Example.
You paid a yearly fee for the 1. You took out any mortgages after Oc-
Line 6 registration of your car. Part of the fee was tober 13, 1987, and used the proceeds for
Real Estate Taxes based on the car’s value and part was based purposes other than to buy, build, or im-
on its weight. You can deduct only the part prove your home, and all of these mort-
Include taxes (state, local, or foreign) you of the fee that was based on the car’s value. gages totaled over $100,000 at any time
paid on real estate you own that was not during 2004. The limit is $50,000 if mar-
used for business, but only if the taxes are ried filing separately. An example of this
based on the assessed value of the property. type of mortgage is a home equity loan
Also, the assessment must be made uni- Line 8 used to pay off credit card bills, buy a car,
formly on property throughout the commu- or pay tuition.
nity, and the proceeds must be used for Other Taxes
general community or governmental pur- 2. You took out any mortgages after Oc-
If you had any deductible tax not listed on
poses. Pub. 530 explains the deductions tober 13, 1987, and used the proceeds to
line 5, 6, or 7, list the type and amount of
homeowners may take. buy, build, or improve your home, and
tax. Enter only one total on line 8. Include these mortgages plus any mortgages you
on this line income tax you paid to a foreign
Do not include the following amounts took out on or before October 13, 1987,
country or U.S. possession.
on line 6. totaled over $1 million at any time during
2004. The limit is $500,000 if married fil-
You may want to take a credit
•Itemized charges for services to spe- ing separately.
for the foreign tax instead of a
cific property or persons (for example, a
deduction. See the instructions
$20 monthly charge per house for trash col-
TIP
for Form 1040, line 46, for
lection, a $5 charge for every 1,000 gallons
If the total amount of all mort-
details.
of water consumed, or a flat charge for
gages is more than the fair mar-
mowing a lawn that had grown higher than
ket value of the home,
permitted under a local ordinance).
additional limits apply. See
•Charges for improvements that tend to
Pub. 936.
Interest You Paid
increase the value of your property (for ex-
ample, an assessment to build a new side- Whether your interest expense is treated as Line 10
walk). The cost of a property improvement investment interest, personal interest, or Enter on line 10 mortgage interest and
is added to the basis of the property. How- business interest depends on how and when points reported to you on Form 1098. If this
ever, a charge is deductible if it is used only you used the loan proceeds. See Pub. 535 form shows any refund of overpaid interest,
to maintain an existing public facility in for details. do not reduce your deduction by the refund.
service (for example, a charge to repair an In general, if you paid interest in 2004 Instead, see the instructions for Form 1040,
existing sidewalk, and any interest included that applies to any period after 2004, you line 21.
in that charge). can deduct only amounts that apply for
2004. If you paid more interest to the recipient
If your mortgage payments include your than is shown on Form 1098, see Pub. 936
real estate taxes, you may deduct only the to find out if you can deduct the additional
amount the mortgage company actually interest. If you can, attach a statement ex-
paid to the taxing authority in 2004. Lines 10 and 11 plaining the difference and enter “See at-
tached” to the right of line 10.
If you sold your home in 2004, any real Home Mortgage Interest
estate tax charged to the buyer should be A home mortgage is any loan that is se-
shown on your settlement statement and in
If you are claiming the mort-
cured by your main home or second home.
box 5 of any Form 1099-S you received.
gage interest credit (see the in-
It includes first and second mortgages,
This amount is considered a refund of real
structions for Form 1040, line
home equity loans, and refinanced mort-
estate taxes. See
Refunds and rebates
on
53), subtract the amount shown
gages.
this page. Any real estate taxes you paid at
on Form 8396, line 3, from the total deduct-
closing should be shown on your settlement A home may be a house, condominium,
ible interest you paid on your home mort-
statement. cooperative, mobile home, boat, or similar
gage. Enter the result on line 10.
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1. Your investment interest expense is you paid to do volunteer work for the kinds
Line 11 not more than your investment income of organizations described earlier. If you
If you did not receive a Form 1098 from the from interest and ordinary dividends minus drove to and from the volunteer work, you
recipient, report your deductible mortgage any qualified dividends. can take 14 cents a mile or the actual cost of
interest on line 11. gas and oil. Add parking and tolls to the
2. You have no other deductible invest- amount you claim under either method. But
If you bought your home from the recip- ment expenses. do not deduct any amounts that were repaid
ient, be sure to show that recipient’s name, 3. You have no disallowed investment to you.
identifying no., and address on the dotted interest expense from 2003.
lines next to line 11. If the recipient is an Gifts from which you benefit. If you made
individual, the identifying no. is his or her
Alaska Permanent Fund divi-
a gift and received a benefit in return, such
social security number (SSN). Otherwise, it
dends, including those reported
as food, entertainment, or merchandise,
is the employer identification number. You
on Form 8814, are not invest-
you can generally only deduct the amount
must also let the recipient know your SSN.
ment income.
that is more than the value of the benefit.
If you do not show the required information But this rule does not apply to certain mem-
about the recipient or let the recipient know For more details, see Pub. 550. bership benefits provided in return for an
your SSN, you may have to pay a $50 pen- annual payment of $75 or less. For details,
alty. see Pub. 526.
If you and at least one other person
Example.
You paid $70 to a charitable
Gifts to Charity
(other than your spouse if filing jointly) organization to attend a fund-raising dinner
were liable for and paid interest on the You can deduct contributions or gifts you and the value of the dinner was $40. You
mortgage, and the other person received the gave to organizations that are religious, can deduct only $30.
Form 1098, attach a statement to your re- charitable, educational, scientific, or liter-
turn showing the name and address of that ary in purpose. You can also deduct what Gifts of $250 or more. You can deduct a
person. To the right of line 11, enter “See you gave to organizations that work to pre- gift of $250 or more only if you have a
attached.” vent cruelty to children or animals. Exam- statement from the charitable organization
ples of these organizations are: showing the information in (1) and (2) be-
low.
•Churches, mosques, synagogues, tem-
ples, etc.
Line 12 In figuring whether a gift is $250 or
•Boy Scouts, Boys and Girls Clubs of more, do not combine separate donations.
Points Not Reported on America, CARE, Girl Scouts, Goodwill In- For example, if you gave your church $25
Form 1098 dustries, Red Cross, Salvation Army, each week for a total of $1,300, treat each
United Way, etc.
Points are shown on your settlement state- $25 payment as a separate gift. If you made
•Fraternal orders, if the gifts will be
ment. Points you paid only to borrow donations through payroll deductions, treat
used for the purposes listed above.
money are generally deductible over the each deduction from each paycheck as a
life of the loan. See Pub. 936 to figure the separate gift. See Pub. 526 if you made a
•Veterans’ and certain cultural groups.
amount you can deduct. Points paid for separate gift of $250 or more through pay-
•Nonprofit schools, hospitals, and or-
other purposes, such as for a lender’s serv- roll deduction.
ganizations whose purpose is to find a cure
ices, are not deductible. for, or help people who have, arthritis, 1. The amount of any money contrib-
asthma, birth defects, cancer, cerebral
Refinancing. Generally, you must deduct uted and a description (but not value) of
palsy, cystic fibrosis, diabetes, heart dis-
points you paid to refinance a mortgage any property donated.
ease, hemophilia, mental illness or retarda-
over the life of the loan. This is true even if 2. Whether the organization did or did
tion, multiple sclerosis, muscular
the new mortgage is secured by your main not give you any goods or services in return
dystrophy, tuberculosis, etc.
home. for your contribution. If you did receive
•Federal, state, and local governments any goods or services, a description and
If you used part of the proceeds to im- if the gifts are solely for public purposes. estimate of the value must be included. If
prove your main home, you may be able to you received only intangible religious ben-
deduct the part of the points related to the To verify an organization’s charitable efits (such as admission to a religious cere-
improvement in the year paid. See Pub. 936 status, you can: mony), the organization must state this, but
for details. •Check with the organization to which it does not have to describe or value the
you made the donation. The organization
If you paid off a mortgage
benefit.
should be able to provide you with verifica-
early, deduct any remaining
tion of its charitable status.
points in the year you paid off You must get the statement by
TIP
•See Pub. 78 for a list of most qualified
the mortgage. the date you file your return or
organizations. You can access Pub. 78 on
the due date (including exten-
the IRS website at
www.irs.gov
under
TIP
sions) for filing your return,
Charities and Non-Profits. whichever is earlier. Do not attach the
Line 13 •Call our Tax Exempt/Government En-
statement to your return. Instead, keep it for
tities Customer Account Services at
Investment Interest
your records.
1-877-829-5500. Assistance is available
Investment interest is interest paid on Monday through Friday from 8:00 a.m. to Limit on the amount you can deduct. See
money you borrowed that is allocable to 6:30 p.m. EST. Pub. 526 to figure the amount of your de-
property held for investment. It does not duction if any of the following apply.
include any interest allocable to passive ac- Contributions You Can •Your cash contributions or contribu-
tivities or to securities that generate tax- Deduct tions of ordinary income property are more
exempt income. than 30% of the amount on Form 1040, line
Contributions can be in cash (keep can-
Complete and attach Form 4952 to fig- 37.
celed checks, receipts, or other reliable
ure your deduction. written records showing the name of the •Your gifts of capital gain property are
Exception. You do not have to file Form organization and the date and amount more than 20% of the amount on Form
4952 if all three of the following apply. given), property, or out-of-pocket expenses 1040, line 37.
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•You gave gifts of property that in- time you gave them. Fair market value is You may be able to deduct part or all of
creased in value or gave gifts of the use of what a willing buyer would pay a willing each loss caused by theft, vandalism, fire,
property. seller when neither has to buy or sell and storm, or similar causes, and car, boat, and
both are aware of the conditions of the sale. other accidents. You may also be able to
Contributions You Cannot For more details on determining the value deduct money you had in a financial insti-
of donated property, see Pub. 561. tution but lost because of the insolvency or
Deduct bankruptcy of the institution.
•Travel expenses (including meals and If the amount of your deduction is more
lodging) while away from home, unless You may deduct nonbusiness casualty
than $500, you must complete and attach
there was no significant element of per- or theft losses only to the extent that—
Form 8283. For this purpose, the “amount
sonal pleasure, recreation, or vacation in of your deduction” means your deduction •The amount of each separate casualty
the travel. before applying any income limits that or theft loss is more than $100, and
could result in a carryover of contributions.
•Political contributions. •The total amount of all losses during
If your total deduction is over $5,000, you
•Dues, fees, or bills paid to country the year is more than 10% of the amount on
may also have to get appraisals of the val-
clubs, lodges, fraternal orders, or similar Form 1040, line 37.
ues of the donated property. See Form 8283
groups. and its instructions for details. Special rules apply if you had both gains
•Cost of raffle, bingo, or lottery tickets. and losses from nonbusiness casualties or
But you may be able to deduct these ex- Recordkeeping. If you gave property, you thefts. See Form 4684 and its instructions
penses on line 27. See page A-6 for details. should keep a receipt or written statement for details.
•Cost of tuition. But you may be able to from the organization you gave the prop-
deduct this expense on line 20 (see page Use Schedule A, line 22, to deduct the
erty to, or a reliable written record, that
A-6), or Form 1040, line 27, or take a credit costs of proving that you had a property
shows the organization’s name and ad-
for this expense (see Form 8863). loss. Examples of these costs are appraisal
dress, the date and location of the gift, and a fees and photographs used to establish the
•Value of your time or services. description of the property. For each gift of amount of your loss.
property, you should also keep reliable
•Value of blood given to a blood bank. written records that include:
•The transfer of a future interest in tan- For information on federal disaster area
•How you figured the property’s value
gible personal property (generally, until the losses, see Pub. 547.
at the time you gave it. If the value was
entire interest has been transferred). determined by an appraisal, keep a signed
•Gifts to individuals and groups that copy of the appraisal.
are run for personal profit.
Job Expenses and
•The cost or other basis of the property
•Gifts to foreign organizations. But if you must reduce it by any ordinary in-
you may be able to deduct gifts to certain
Most Other
come or capital gain that would have re-
U.S. organizations that transfer funds to sulted if the property had been sold at its
Miscellaneous
foreign charities and certain Canadian, Is- fair market value.
raeli, and Mexican charities. See Pub. 526
Deductions
•How you figured your deduction if
for details. you chose to reduce your deduction for You can deduct only the part of these ex-
•Gifts to organizations engaged in cer- gifts of capital gain property. penses that exceeds 2% of the amount on
tain political activities that are of direct fi- Form 1040, line 37.
•Any conditions attached to the gift.
nancial interest to your trade or business.
See Internal Revenue Code section Pub. 529 discusses the types of ex-
penses that can and cannot be deducted.
If your total deduction for gifts
170(f)(9).
of property is over $500, you
•Gifts to groups whose purpose is to Examples of Expenses You
gave less than your entire inter-
lobby for changes in the laws.
est in the property, or you made
Cannot Deduct
•Gifts to civic leagues, social and
a “qualified conservation contribution,”
sports clubs, labor unions, and chambers of •Political contributions.
your records should contain additional in-
commerce. •Personal legal expenses.
formation. See Pub. 526 for details.
•Value of benefits received in connec- •Lost or misplaced cash or property.
tion with a contribution to a charitable or- •Expenses for meals during regular or
ganization. See Pub. 526 for exceptions. extra work hours.
Line 17 •The cost of entertaining friends.
•Commuting expenses. See Pub. 529
Carryover From Prior Year for the definition of commuting.
Line 15 Enter any carryover of contributions that •Travel expenses for employment
you could not deduct in an earlier year be- away from home if that period of employ-
Gifts by Cash or Check ment exceeds 1 year. See Pub. 529 for an
cause they exceeded your adjusted gross
Enter the total contributions you made in exception for certain federal employees.
income limit. See Pub. 526 for details.
cash or by check (including out-of-pocket •Travel as a form of education.
expenses). •Expenses of attending a seminar, con-
vention, or similar meeting unless it is re-
lated to your employment.
Casualty and Theft
•Club dues. See Pub. 529 for excep-
Line 16 tions.
Losses
•Expenses of adopting a child. But you
Other Than by Cash or may be able to take a credit for adoption
Check expenses. See Form 8839 for details.
Line 19
Enter your contributions of property. If you •Fines and penalties.
gave used items, such as clothing or furni- Complete and attach Form 4684 to figure •Expenses of producing tax-exempt in-
ture, deduct their fair market value at the the amount of your loss to enter on line 19. come.
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•Certain business use of part of your •Deduction for repayment of amounts
Line 20 home. For details, including limits that ap- under a claim of right if $3,000 or less.
ply, use TeleTax topic 509 (see page 8 of
Unreimbursed Employee the Form 1040 instructions) or see Pub.
Expenses 587.
Enter the total ordinary and necessary job •Certain educational expenses. For de-
Other Miscellaneous
expenses you paid for which you were not tails, use TeleTax topic 513 (see page 8 of
reimbursed. (Amounts your employer in- the Form 1040 instructions) or see Pub.
Deductions
cluded in box 1 of your Form W-2 are not 970. Reduce your educational expenses by
considered reimbursements.) any tuition and fees deduction you claimed
on Form 1040, line 27.
An ordinary expense is one that is com- Line 27
mon and accepted in your field of trade, Only the expenses listed next can be de-
business, or profession. A necessary ex-
You may be able to take a credit
ducted on this line. List the type and
pense is one that is helpful and appropriate
for your educational expenses
amount of each expense on the dotted lines
for your business. An expense does not
instead of a deduction. See
next to line 27. If you need more space,
TIP
have to be required to be considered neces-
Form 8863 for details.
attach a statement showing the type and
sary. amount of each expense. Enter one total on
But you must fill in and attach Form line 27.
2106 if either (1) or (2) next applies. Line 21 •Gambling losses, but only to the ex-
1. You claim any travel, transportation, tent of gambling winnings reported on
Tax Preparation Fees
meal, or entertainment expenses for your Form 1040, line 21.
job. Enter the fees you paid for preparation of •Casualty and theft losses of
your tax return, including fees paid for fil-
2. Your employer paid you for any of income-producing property from Form
your job expenses reportable on line 20. ing your return electronically. If you paid 4684, lines 32 and 38b, or Form 4797, line
your tax by credit card, do not include the 18a.
convenience fee you were charged.
If you used your own vehicle
•Federal estate tax on income in re-
and (2) above does not apply,
you may be able to file Form
spect of a decedent.
TIP
2106-EZ instead.
•Amortizable bond premium on bonds
Line 22 acquired before October 23, 1986.
If you do not have to file Form 2106 or
2106-EZ, list the type and amount of each Other Expenses •Deduction for repayment of amounts
expense on the dotted lines next to line 20. under a claim of right if over $3,000. See
Enter the total amount you paid to produce
If you need more space, attach a statement Pub. 525 for details.
or collect taxable income and manage or
showing the type and amount of each ex- protect property held for earning income. •Certain unrecovered investment in a
pense. Enter one total on line 20. But do not include any personal expenses. pension.
Do not include on line 20 any
List the type and amount of each expense •Impairment-related work expenses of
educator expenses you de-
on the dotted lines next to line 22. If you a disabled person.
ducted on Form 1040, line 23.
need more space, attach a statement show-
ing the type and amount of each expense. For more details, see Pub. 529.
Enter one total on line 22.
Examples of other expenses to include
on line 20 are: Examples of expenses to include on line
•Safety equipment, small tools, and 22 are:
supplies needed for your job. •Certain legal and accounting fees.
Total Itemized
•Uniforms required by your employer
that are not suitable for ordinary wear. •Clerical help and office rent.
Deductions
•Protective clothing required in your •Custodial (for example, trust account)
work, such as hard hats, safety shoes, and fees.
glasses. •Your share of the investment ex-
•Physical examinations required by penses of a regulated investment company. Line 28
your employer. •Certain losses on nonfederally insured Use the worksheet on page B-1 to figure the
•Dues to professional organizations deposits in an insolvent or bankrupt finan- amount to enter on line 28 if the amount on
and chambers of commerce. cial institution. For details, including limits Form 1040, line 37, is over $142,700
that apply, see Pub. 529.
•Subscriptions to professional journals. ($71,350 if married filing separately).
•Casualty and theft losses of property
•Fees to employment agencies and used in performing services as an employee
other costs to look for a new job in your from Form 4684, lines 32 and 38b, or Form
present occupation, even if you do not get a 4797, line 18a.
new job.
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Use Schedule B (Form 1040) if any of the following apply.
•You had over $1,500 of taxable interest.
Instructions for •Any of the
Special Rules
listed in the instructions for line 1 apply to you.
•You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued
Schedule B, after 1989.
•You had over $1,500 of ordinary dividends.
Interest and •You received ordinary dividends as a nominee.
•You had a foreign account or you received a distribution from, or were a grantor of, or
Ordinary transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and
trusts.
Dividends
You may list more than one
so. See the instructions for lines 7a and 7b residence, list first any interest the buyer
payer on each entry space for
on page B-2. paid you on a mortgage or other form of
lines 1 and 5, but be sure to
seller financing. Be sure to show the
TIP
clearly show the amount paid
buyer’s name, address, and SSN. You must
next to the payer’s name. Add the separate
also let the buyer know your SSN. If you do
amounts paid by the payers listed on an
not show the buyer’s name, address, and
Part I. Interest
entry space and enter the total in the
SSN, or let the buyer know your SSN, you
“Amount” column. If you still need more
may have to pay a $50 penalty.
space, attach separate statements that are
Line 1 Nominees
the same size as the printed schedule. Use
Interest
the same format as lines 1 and 5, but show
If you received a Form 1099-INT that in-
your totals on Schedule B. Be sure to put
cludes interest you received as a nominee
Report on line 1 all of your taxable interest.
your name and social security number
(that is, in your name, but the interest actu-
Interest should be shown on your Forms
(SSN) on the statements and attach them at
1099-INT, Forms 1099-OID, or substitute ally belongs to someone else), report the
the end of your return.
statements. Include interest from series EE total on line 1. Do this even if you later
and I U.S. savings bonds. List each payer’s distributed some or all of this income to
name and show the amount. others. Under your last entry on line 1, put a
subtotal of all interest listed on line 1. Be-
What’s New
Special Rules low this subtotal, enter “Nominee Distribu-
You may have to pay a penalty of up to tion” and show the total interest you
Seller-Financed Mortgages
$10,000 (more in some cases) if you are received as a nominee. Subtract this
required to file Form TD F 90-22.1 (for amount from the subtotal and enter the re-
If you sold your home or other property and
sult on line 2.
foreign accounts and trusts), but do not do the buyer used the property as a personal
Itemized Deductions Worksheet—Line 28
Keep for Your Records
1. Enter the total of the amounts from Schedule A, lines 4, 9, 14, 18, 19, 26, and 27 ............. 1.
2. Enter the total of the amounts from Schedule A, lines 4, 13, and 19, plus any gambling and casualty
or theft losses included on line 27. ................................................ 2.
Be sure your total gambling and casualty or theft losses are clearly identified on the
dotted lines next to line 27.
3. Is the amount on line 2 less than the amount on line 1?
No. Your deduction is not limited. Enter the amount from line 1 above on Schedule A,
STOP
line 28.
Yes. Subtract line 2 from line 1 ............................................... 3.
4. Multiply line 3 by 80% (.80) ....................................... 4.
5. Enter the amount from Form 1040, line 37 ............................ 5.
6. Enter: $142,700 ($71,350 if married filing separately) .................... 6.
7. Is the amount on line 6 less than the amount on line 5?
No. Your deduction is not limited. Enter the amount from line 1
STOP
above on Schedule A, line 28.
Yes. Subtract line 6 from line 5 ................................. 7.
8. Multiply line 7 by 3% (.03) ........................................ 8.
9. Enter the smaller of line 4 or line 8 ............................................... 9.
10. Total itemized deductions. Subtract line 9 from line 1. Enter the result here and on Schedule A,
line 28 ..................................................................... 10.
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Exceptions. Check the “No” box if any of
If you received interest as a to file Form 5471 if, in 2004, you owned
the following applies to you.
nominee, you must give the ac- 10% or more of the total (a) value of a
tual owner a Form 1099-INT foreign corporation’s stock, or (b) com-
•The combined value of the accounts
TIP
unless the owner is your bined voting power of all classes of a for-
was $10,000 or less during the whole year.
spouse. You must also file a Form 1096 and eign corporation’s stock with voting rights.
•The accounts were with a U.S. mili-
a Form 1099-INT with the IRS. For more For details, see Form 5471 and its instruc-
tary banking facility operated by a U.S.
details, see the General Instructions for tions.
financial institution.
Forms 1099, 1098, 5498, and W-2G and
•You were an officer or employee of a
the Instructions for Forms 1099-INT and
commercial bank that is supervised by the
1099-OID.
Comptroller of the Currency, the Board of
Line 5 Governors of the Federal Reserve System,
Accrued Interest or the Federal Deposit Insurance Corpora-
Ordinary Dividends
When you buy bonds between interest pay- tion; the account was in your employer’s
ment dates and pay accrued interest to the Report on line 5 all of your ordinary divi- name; and you did not have a personal fi-
seller, this interest is taxable to the seller. If dends. This amount should be shown in box nancial interest in the account.
you received a Form 1099 for interest as a 1a of your Forms 1099-DIV or substitute •You were an officer or employee of a
purchaser of a bond with accrued interest, statements. List each payer’s name and domestic corporation with securities listed
follow the rules earlier under
Nominees
to show the amount. on national securities exchanges or with
see how to report the accrued interest on assets of more than $1 million and 500 or
Nominees
Schedule B. But identify the amount to be more shareholders of record; the account
If you received a Form 1099-DIV that in-
subtracted as “Accrued Interest.” was in your employer’s name; you did not
cludes ordinary dividends you received as a have a personal financial interest in the ac-
Tax-Exempt Interest nominee (that is, in your name, but the ordi- count; and the corporation’s chief financial
If you received a Form 1099-INT for nary dividends actually belong to someone officer has given you written notice that the
tax-exempt interest, follow the rules earlier else), report the total on line 5. Do this even corporation has filed a current report that
under
Nominees
to see how to report the if you later distributed some or all of this includes the account.
interest on Schedule B. But identify the income to others. Under your last entry on See Form TD F 90-22.1 to find out if
amount to be subtracted as “Tax-Exempt line 5, put a subtotal of all ordinary divi- you are considered to have an interest in or
Interest.” dends listed on line 5. Below this subtotal, signature or other authority over a financial
enter “Nominee Distribution” and show the
Original Issue Discount (OID) account in a foreign country (such as a bank
total ordinary dividends you received as a account, securities account, or other finan-
If you are reporting OID in an amount less nominee. Subtract this amount from the cial account). You can get Form TD F
than the amount shown on Form subtotal and enter the result on line 6. 90-22.1 by visiting the IRS website at
1099-OID, follow the rules earlier under
www.irs.gov/pub/irs-pdf/f9022-1.pdf.
If you received dividends as a
Nominees
to see how to report the OID on If you checked the “Yes” box on line 7a,
nominee, you must give the ac-
Schedule B. But identify the amount to be file Form TD F 90-22.1 by June 30, 2005,
tual owner a Form 1099-DIV
subtracted as “OID Adjustment.”
TIP
with the Department of the Treasury at the
unless the owner is your
Amortizable Bond Premium address shown on that form. Do not attach
spouse. You must also file a Form 1096 and
it to Form 1040.
If you are reducing your interest income on
a Form 1099-DIV with the IRS. For more
a bond by the amount of amortizable bond
details, see the General Instructions for If you are required to file Form
premium, follow the rules earlier under
Forms 1099, 1098, 5498, and W-2G and 90-22.1 but do not do so, you
Nominees
to see how to report the interest
the Instructions for Form 1099-DIV. may have to pay a penalty of up
on Schedule B. But identify the amount to
to $10,000 (more in some
be subtracted as “ABP Adjustment.”
cases).
Part III. Foreign
Line 7b
If you checked the “Yes” box on line 7a,
Accounts and Trusts
Line 3 enter the name of the foreign country or
countries in the space provided on line 7b.
Excludable Interest on Attach a separate statement if you need
Lines 7a and 7b
Series EE and I U.S. Savings more space.
Bonds Issued After 1989 Foreign Accounts
If, during 2004, you cashed series EE or I
U.S. savings bonds issued after 1989 and Line 8
Line 7a
you paid qualified higher education ex- Check the “Yes” box on line 7a if either (1) Foreign Trusts
penses for yourself, your spouse, or your or (2) next applies.
dependents, you may be able to exclude If you received a distribution from a for-
part or all of the interest on those bonds. 1. You own more than 50% of the stock eign trust, you must provide additional in-
See Form 8815 for details. in any corporation that owns one or more formation. For this purpose, a loan of cash
foreign bank accounts. or marketable securities generally is con-
sidered to be a distribution. See Form 3520
2. At any time during the year you had for details.
an interest in or signature or other authority
over a financial account in a foreign coun- If you were the grantor of, or transferor
Part II. Ordinary
try (such as a bank account, securities ac- to, a foreign trust that existed during 2004,
count, or other financial account). you may have to file Form 3520.
Dividends
You may have to file Form For line 7a, (2) does not apply
5471 if, in 2004, you were an to foreign securities held in a
officer or director of a foreign U.S. securities account.
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corporation. You may also have
B-2
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PAGER/SGML Fileid: I1040SC.XML (28-Oct-2004) (Init. & date)
Filename: D:\USERS\qjfcb\documents\Epicfiles\2004\TEST04i1040sc.xml
Page 1 of 9 of 2004 Instructions for Schedule C 16:57 - 28-OCT-2004
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Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedule C
Use Schedule C (Form 1040) to report income or loss from a business you operated or a
profession you practiced as a sole proprietor. Also, use Schedule C to report wages and
Profit or Loss expenses you had as a statutory employee. An activity qualifies as a business if your primary
purpose for engaging in the activity is for income or profit and you are involved in the
From Business activity with continuity and regularity. For example, a sporadic activity or a hobby does not
qualify as a business. To report income from a nonbusiness activity, see the instructions for
Form 1040, line 21.
Small businesses and statutory employees with expenses of $5,000 or less may be able to
file Schedule C-EZ instead of Schedule C. See Schedule C-EZ for details.
You may be subject to state and local taxes and other requirements such as business
licenses and fees. Check with your state and local governments for more information.
Section references are to the Internal Revenue Code.
•Schedule J to figure your tax by aver- your reporting position will be treated as a
conversion of the entity.
aging your fishing income over the previ-
What’s New
ous 3 years. Doing so may reduce your tax. Single-member limited liability company
•The maximum amount of business ex- •Schedule SE to pay self-employment (LLC). Generally, a single-member do-
penses you can have and qualify to file tax on income from any trade or business. mestic LLC is not treated as a separate en-
Schedule C-EZ is increased from $2,500 to •Form 4562 to claim depreciation on tity for federal income tax purposes. If you
$5,000 for 2004. For other requirements assets placed in service in 2004, to claim are the sole member of a domestic LLC,
you must meet, see Schedule C-EZ. amortization that began in 2004, to make an file Schedule C or C-EZ (or Schedule E or
•You can use up to four vehicles simul- election under section 179 to expense cer- F, if applicable). However, you can elect to
taneously in your business and use the stan- tain property, or to report information on treat a domestic LLC as a corporation. See
dard mileage rate. For details, see the listed property. Form 8832 for details on the election and
instructions for line 9 beginning on the tax treatment of a foreign LLC.
•Form 4684 to report a casualty or theft
page C-3. gain or loss involving property used in your Heavy highway vehicle use tax. If you use
•For certain business start-up costs trade or business or income-producing certain highway trucks, truck-trailers,
paid or incurred after October 22, 2004, property. tractor-trailers, or buses in your trade or
you can elect to deduct up to $5,000. This •Form 4797 to report sales, exchanges, business, you may have to pay a federal
limit is reduced by the amount by which and involuntary conversions (not from a highway motor vehicle use tax. See the In-
your start-up costs exceed $50,000. Also, casualty or theft) of trade or business prop- structions for Form 2290 to find out if you
the amortization period for certain business erty. owe this tax.
start-up costs paid or incurred after October •Form 8271 if you are claiming or re-
22, 2004, has been increased to 15 years. Information returns. You may have to file
porting on Schedule C or C-EZ any in-
For details, see Pub. 535. information returns for wages paid to em-
come, deduction, loss, credit, or other tax
•You can elect to deduct costs of cer- ployees, certain payments of fees and other
benefit from an interest purchased or other-
tain qualified film and television produc- nonemployee compensation, interest, rents,
wise acquired in a tax shelter required to be
tions that begin after October 22, 2004. For royalties, real estate transactions, annuities,
registered with the IRS.
details, see Pub. 535. and pensions. You may also have to file an
•Form 8594 to report certain purchases information return if you sold $5,000 or
•You can elect to deduct certain forest- or sales of groups of assets that constitute a more of consumer products to a person on a
ation and reforestation costs paid or in- trade or business. buy-sell, deposit-commission, or other sim-
curred after October 22, 2004, instead of ilar basis for resale. For details, see the
•Form 8824 to report like-kind ex-
amortizing them over 84 months. This elec- 2004 General Instructions for Forms 1099,
changes.
tion does not apply to estates and trusts. 1098, 5498, and W-2G.
Also, the dollar limitation for amortization •Form 8829 to claim expenses for busi-
on certain forestation and reforestation ness use of your home. If you received cash of more than
costs paid or incurred after October 22, $10,000 in one or more related transactions
Husband-wife business. If you and your
2004, has been eliminated. For details, see in your trade or business, you may have to
spouse jointly own and operate a business
Pub. 535. file Form 8300. For details, see Pub. 1544.
and share in the profits and losses, you are
partners in a partnership, whether or not Reportable Transaction
you have a formal partnership agreement.
Do not use Schedule C or C-EZ. Instead, Disclosure Statement
General Instructions
file Form 1065. See Pub. 541 for more de- Use Form 8886 to disclose information for
tails. each reportable transaction in which you
Other Schedules and Forms participated. Form 8886 must be filed for
Exception.
If you and your spouse
You May Have To File each tax year that your federal income tax
wholly own an unincorporated business as
•Schedule A to deduct interest, taxes, liability is affected by your participation in
community property under the community
and casualty losses not related to your busi- the transaction. You may have to pay a
property laws of a state, foreign country, or
ness. penalty if you are required to file Form
U.S. possession, you can treat the business
•Schedule E to report rental real estate 8886 but do not do so. The following are
either as a sole proprietorship or a partner-
and royalty income or (loss) that is not sub- reportable transactions.
ship. The only states with community prop-
ject to self-employment tax. erty laws are Arizona, California, Idaho, •Any transaction that is the same as or
Louisiana, Nevada, New Mexico, Texas,
•Schedule F to report profit or (loss) substantially similar to tax avoidance trans-
Washington, and Wisconsin. A change in
from farming. actions identified by the IRS.
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Cat. No. 24329W
Page 2 of 9 of 2004 Instructions for Schedule C 16:57 - 28-OCT-2004
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•Any transaction offered under condi- Line F Line G
tions of confidentiality for which you paid
an advisor a minimum fee. Generally, you can use the cash method, If your business activity was not a rental
•Any transaction for which you have activity and you met any of the material
accrual method, or any other method per-
contractual protection against disallowance participation tests below or the exception
mitted by the Internal Revenue Code. In all
of the tax benefits. for oil and gas applies (explained on page
cases, the method used must clearly reflect C-3), check the “Yes” box. Otherwise,
income. Unless you are a qualifying tax-
•Any transaction resulting in a loss of check the “No” box. If you check the “No”
payer or a qualifying small business tax-
at least $2 million in any single tax year or box, this business is a passive activity. If
payer, you must use the accrual method for
$4 million in any combination of tax years. you have a loss from this business, see
(At least $50,000 for a single tax year if the sales and purchases of inventory items. See
Limit on losses
on page C-3. If you have a
loss arose from a foreign currency transac- the Part III instructions on page C-6 for the profit from this business activity but have
tion defined in section 988(c)(1), whether definition of a qualifying taxpayer and a current year losses from other passive ac-
or not the loss flows through from an S qualifying small business taxpayer. Special tivities or you have prior year unallowed
corporation or partnership.) rules apply to long-term contracts. See sec- passive activity losses, see the Instructions
tion 460 for details.
•Any transaction resulting in a for Form 8582.
book-tax difference of more than $10 mil- If you use the cash method, show all
lion on a gross basis. Material participation. Participation, for
items of taxable income actually or con- purposes of the seven material participation
•Any transaction resulting in a tax structively received during the year (in tests listed below, generally includes any
credit of more than $250,000, if you held cash, property, or services). Income is con- work you did in connection with an activity
the asset generating the credit for 45 days structively received when it is credited to if you owned an interest in the activity at
or less. the time you did the work. The capacity in
your account or set aside for you to use.
See the Instructions for Form 8886 for which you did the work does not matter.
Also, show amounts actually paid during
more details and exceptions. However, work is not treated as partici-
the year for deductible expenses. However, pation if it is work that an owner would not
if the payment of an expenditure creates an
Additional Information customarily do in the same type of activity
asset having a useful life that extends sub- and one of your main reasons for doing the
See Pub. 334 for more information for stantially beyond the close of the year, it work was to avoid the disallowance of
small businesses. may not be deductible or may be deductible losses or credits from the activity under the
only in part for the year of the payment. See passive activity rules.
Pub. 535.
Work you did as an investor in an activ-
Specific Instructions
If you use the accrual method, report ity is not treated as participation unless you
income when you earn it and deduct ex- were directly involved in the day-to-day
Filers of Form 1041. Do not complete the penses when you incur them even if you do management or operations of the activity.
block labeled “Social security number not pay them during the tax year. Work done as an investor includes:
(SSN).” Instead, enter your employer iden- Accrual-basis taxpayers are put on a cash •Studying and reviewing financial
tification number (EIN) on line D. basis for deducting business expenses statements or reports on the activity,
owed to a related cash-basis taxpayer. •Preparing or compiling summaries or
Other rules determine the timing of deduc- analyses of the finances or operations of the
tions based on economic performance. See
Line A activity for your own use, and
Pub. 538.
Describe the business or professional activ- •Monitoring the finances or operations
ity that provided your principal source of of the activity in a nonmanagerial capacity.
To change your accounting method, you
income reported on line 1. If you owned generally must file Form 3115. You may Participation by your spouse during the
more than one business, you must complete tax year in an activity you own can be
also have to make an adjustment to prevent
a separate Schedule C for each business. counted as your participation in the activ-
amounts of income or expense from being
Give the general field or activity and the ity. This applies even if your spouse did not
duplicated or omitted. This is called a sec-
type of product or service. If your general own an interest in the activity and whether
tion 481(a) adjustment.
field or activity is wholesale or retail trade, or not you and your spouse file a joint re-
or services connected with production serv-
Example.
You change to the cash turn.
ices (mining, construction, or manufactur- method of accounting and choose to ac- For purposes of the passive activity
ing), also give the type of customer or count for inventoriable items in the same rules, you materially participated in the op-
client. For example, “wholesale sale of manner as materials and supplies that are eration of this trade or business activity
hardware to retailers” or “appraisal of real not incidental. You accrued sales in 2003 during 2004 if you met any of the following
estate for lending institutions.” for which you received payment in 2004. seven tests.
You must report those sales in both years as 1. You participated in the activity for
a result of changing your accounting more than 500 hours during the tax year.
Line D method and must make a section 481(a) 2. Your participation in the activity for
adjustment to prevent duplication of in-
You need an employer identification num- the tax year was substantially all of the
come.
ber (EIN) only if you had a qualified retire- participation in the activity of all individu-
ment plan or were required to file an als (including individuals who did not own
A net negative section 481(a) adjust-
employment, excise, estate, trust, or alco- any interest in the activity) for the tax year.
ment is taken into account entirely in the
hol, tobacco, and firearms tax return. If you year of the change. A net positive section 3. You participated in the activity for
need an EIN, see the Instructions for Form 481(a) adjustment is generally taken into more than 100 hours during the tax year,
SS-4. If you do not have an EIN, leave line account over a period of 4 years. Include and you participated at least as much as any
D blank. Do not enter your SSN. any net positive section 481(a) adjustments other person for the tax year. This includes
individuals who did not own any interest in
on line 6. If the net section 481(a) adjust- the activity.
ment is negative, report it in Part V.
Line E 4. The activity is a significant partici-
For details on figuring section 481(a)
Enter your business address. Show a street pation activity for the tax year, and you
adjustments, see the Instructions for Form
address instead of a box number. Include participated in all significant participation
3115, Rev. Proc. 2004-23, 2004-16 I.R.B.
the suite or room number, if any. If you activities for more than 500 hours during
785, available at
www.irs.gov/irb/
conducted the business from your home lo- the year. An activity is a “significant par-
2004-16_IRB/ar11.html
, and Rev. Proc.
cated at the address shown on Form 1040, ticipation activity” if it involves the con-
2004-57, 2004-38 I.R.B. 498, available at
page 1, you do not have to complete this duct of a trade or business, you participated
www.irs.gov/irb/2004-38_IRB/ar11.html
.
line. in the activity for more than 100 hours dur-
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ing the tax year, and you did not materially extraterritorial income that is qualifying vehicles used in your business and
participate under any of the material par- foreign trade income. Use Form 8873 to clean-fuel vehicle refueling property. For
ticipation tests (other than this test 4). figure the extraterritorial income exclusion. details, see Pub. 535.
Report it on Schedule C as explained in the
5. You materially participated in the ac- If the business use percentage of any
Instructions for Form 8873.
tivity for any 5 of the prior 10 tax years. listed property (defined in the instructions
6. The activity is a personal service ac- for line 13 on page C-4) decreased to 50%
tivity in which you materially participated or less in 2004, report on this line any re-
for any 3 prior tax years. A personal service Line 1 capture of excess depreciation, including
activity is an activity that involves perform- any section 179 expense deduction. Use
Enter gross receipts from your trade or
ing personal services in the fields of health, Form 4797 to figure the recapture. Also, if
business. Include amounts you received in
law, engineering, architecture, accounting, the business use percentage drops to 50%
your trade or business that were properly
actuarial science, performing arts, consult- or less on leased listed property (other than
shown on Forms 1099-MISC. If the total
ing, or any other trade or business in which a vehicle), include on this line any inclu-
amounts that were reported in box 7 of
capital is not a material income-producing sion amount. See Pub. 946 to figure the
Forms 1099-MISC are more than the total
factor. amount.
you are reporting on line 1, attach a state-
7. Based on all the facts and circum- ment explaining the difference.
stances, you participated in the activity on a Statutory employees. If you received a
regular, continuous, and substantial basis Form W-2 and the “Statutory employee”
during the tax year. But you do not meet
Part II. Expenses
box in box 13 of that form was checked,
this test if you participated in the activity report your income and expenses related to Capitalizing costs of property. If you pro-
for 100 hours or less during the tax year. that income on Schedule C or C-EZ. Enter duced real or tangible personal property or
Your participation in managing the activity your statutory employee income from box acquired property for resale, certain ex-
does not count in determining if you meet 1 of Form W-2 on line 1 of Schedule C or penses attributable to the property gener-
this test if any person (except you) (a) re- C-EZ and check the box on that line. Social ally must be included in inventory costs or
ceived compensation for performing man- security and Medicare tax should have been capitalized. In addition to direct costs, pro-
agement services in connection with the withheld from your earnings; therefore, ducers of inventory property generally
activity or (b) spent more hours during the you do not owe self-employment tax on must also include part of certain indirect
tax year than you spent performing man- these earnings. Statutory employees in- costs in their inventory. Purchasers of per-
agement services in connection with the clude full-time life insurance agents, cer- sonal property acquired for resale must in-
activity (regardless of whether the person tain agent or commission drivers and clude part of certain indirect costs in
was compensated for the services). traveling salespersons, and certain home- inventory only if the average annual gross
workers. receipts for the 3 prior tax years exceed $10
Rental of personal property. A rental ac- million. Also, you must capitalize part of
tivity (such as long-term equipment leas- If you had both self-employment in- the indirect costs that benefit real or tangi-
ing) is a passive activity even if you come and statutory employee income, you ble personal property constructed for use in
materially participated in the activity. must file two Schedules C. You cannot use a trade or business, or noninventory prop-
However, if you met any of the five excep- Schedule C-EZ or combine these amounts erty produced for sale to customers. Re-
tions listed under
Rental Activities
in the on a single Schedule C. duce the amounts on lines 8 through 26 and
Instructions for Form 8582, the rental of the Installment sales. Generally, the install- Part V by amounts capitalized. For details,
property is not treated as a rental activity ment method cannot be used to report in- see Pub. 538.
and the material participation rules above come from the sale of (a) personal property
apply. Exception for certain producers. Produc-
regularly sold under the installment ers who account for inventoriable items in
Exception for oil and gas. If you are filing method, or (b) real property held for resale the same manner as materials and supplies
Schedule C to report income and deduc- to customers. But the installment method that are not incidental can currently deduct
tions from an oil or gas well in which you can be used to report income from sales of expenditures for direct labor and all indi-
own a working interest directly or through certain residential lots and timeshares if rect costs that would otherwise be included
an entity that does not limit your liability, you elect to pay interest on the tax due on in inventory costs. See
Cost of Goods Sold
check the “Yes” box. The activity of own- that income after the year of sale. See sec- on page C-6 for more details.
ing the working interest is not a passive tion 453(l)(2)(B) for details. If you make
activity regardless of your participation. this election, include the interest on Form Exception for creative property. If you are
1040, line 62. Also, enter “453(l)(3)” and
Limit on losses. If you checked the “No” an artist, author, or photographer, you may
the amount of the interest on the dotted line
box and you have a loss from this business, be exempt from the capitalization rules.
to the left of line 62.
you may have to use Form 8582 to figure However, your personal efforts must have
If you use the installment method, at-
your allowable loss, if any, to enter on created (or reasonably be expected to cre-
tach a schedule to your return. Show sepa-
Schedule C, line 31. Generally, you can ate) the property. This exception does not
rately for 2004 and the 3 preceding years:
deduct losses from passive activities only apply to any expense related to printing,
gross sales, cost of goods sold, gross profit,
to the extent of income from passive activi- photographic plates, motion picture films,
percentage of gross profit to gross sales,
ties. For details, see Pub. 925. video tapes, or similar items. These ex-
amounts collected, and gross profit on penses are subject to the capitalization
amounts collected. rules. For details, see Pub. 538.
Line H
If you started or acquired this business in Line 6 Line 9
2004, check the box on line H. Also check Report on line 6 amounts from finance re-
the box if you are reopening or restarting You can deduct the actual expenses of run-
serve income, scrap sales, bad debts you
this business after temporarily closing it, ning your car or truck or take the standard
recovered, interest (such as on notes and
and you did not file a 2003 Schedule C or mileage rate. You must use actual expenses
accounts receivable), state gasoline or fuel
C-EZ for this business. if you used your vehicle for hire (such as a
tax refunds you got in 2004, credit for fed- taxicab) or you used more than four vehi-
eral tax paid on gasoline or other fuels cles simultaneously in your business (such
claimed on your 2003 Form 1040, prizes as in fleet operations). You cannot use ac-
and awards related to your trade or busi- tual expenses for a leased vehicle if you
Part I. Income
ness, and other kinds of miscellaneous previously used the standard mileage rate
Except as otherwise provided in the Inter- business income. Include amounts you re- for that vehicle.
nal Revenue Code, gross income includes ceived in your trade or business as shown
income from whatever source derived. on Form 1099-PATR. Also, include any You can take the standard mileage rate
Gross income, however, does not include recapture of the deduction for clean-fuel for 2004 only if you:
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tion of income. You can also elect under and dependents, even if you do not itemize
•Owned the vehicle and use the stan- section 179 to expense part of the cost of your deductions. See the instructions for
dard mileage rate for the first year you certain property you bought in 2004 for use Form 1040, line 31, for details.
placed the vehicle in service, or in your business. See the Instructions for
•Leased the vehicle and are using the Form 4562 to figure the amount to enter on
standard mileage rate for the entire lease line 13.
period (except the period, if any, before Line 15
1998). When to attach Form 4562. You must Deduct premiums paid for business insur-
complete and attach Form 4562 only if:
If you deduct actual expenses: ance on line 15. Deduct on line 14 amounts
•You are claiming depreciation on paid for employee accident and health in-
•Include on line 9 the business portion property placed in service during 2004; surance. Do not deduct amounts credited to
of expenses for gasoline, oil, repairs, insur- a reserve for self-insurance or premiums
•You are claiming depreciation on
ance, tires, license plates, etc., and paid for a policy that pays for your lost
listed property (defined below), regardless
•Show depreciation on line 13 and rent earnings due to sickness or disability. For
of the date it was placed in service; or
or lease payments on line 20a. details, see Pub. 535.
•You are claiming a section 179 ex-
If you take the standard mileage rate, pense deduction.
multiply the number of business miles by
37.5 cents. Add to this amount your park- If you acquired depreciable property for Lines 16a and 16b
ing fees and tolls, and enter the total on line the first time in 2004, see Pub. 946.
9. Do not deduct depreciation, rent or lease Interest allocation rules. The tax treatment
Listed property generally includes, but
payments, or your actual operating ex- of interest expense differs depending on its
is not limited to:
penses. type. For example, home mortgage interest
•Passenger automobiles weighing and investment interest are treated differ-
For details, see Pub. 463. 6,000 pounds or less; ently. “Interest allocation” rules require
•Any other property used for transpor- you to allocate (classify) your interest ex-
Information on your vehicle. If you claim tation if the nature of the property lends pense so it is deducted (or capitalized) on
any car and truck expenses, you must pro- itself to personal use, such as motorcycles, the correct line of your return and receives
vide certain information on the use of your pickup trucks, etc.; the right tax treatment. These rules could
vehicle by completing one of the following. affect how much interest you are allowed to
•Any property used for entertainment
•Schedule C, Part IV, or Schedule deduct on Schedule C or C-EZ.
or recreational purposes (such as photo-
C-EZ, Part III, if: (a) you are claiming the graphic, phonographic, communication,
standard mileage rate, you lease your vehi- Generally, you allocate interest expense
and video recording equipment);
cle, or your vehicle is fully depreciated, and by tracing how the proceeds of the loan
(b) you are not required to file Form 4562 •Cellular telephones or other similar were used. See Pub. 535 for details.
for any other reason. If you used more than telecommunications equipment; and
one vehicle during the year, attach your If you paid interest on a debt secured by
•Computers or peripheral equipment.
own schedule with the information re- your main home and any of the proceeds
quested in Schedule C, Part IV, or Schedule Exceptions. Listed property does not in- from that debt were used in connection
C-EZ, Part III, for each additional vehicle. clude photographic, phonographic, com- with your trade or business, see Pub. 535 to
munication, or video equipment used
•Form 4562, Part V, if you are claim- figure the amount that is deductible on
exclusively in your trade or business or at
ing depreciation on your vehicle or you are Schedule C or C-EZ.
your regular business establishment. It also
required to file Form 4562 for any other How to report. If you have a mortgage on
does not include any computer or periph-
reason (see the instructions for line 13). real property used in your business (other
eral equipment used exclusively at a regu- than your main home), enter on line 16a the
lar business establishment and owned or interest you paid for 2004 to banks or other
leased by the person operating the estab-
Line 11 financial institutions for which you re-
lishment. For purposes of these exceptions, ceived a Form 1098 (or similar statement).
a portion of your home is treated as a regu-
Enter the total cost of contract labor for the If you did not receive a Form 1098, enter
lar business establishment only if that por-
tax year. Do not include contract labor de- the interest on line 16b.
tion meets the requirements under section
ducted elsewhere on your return such as 280A(c)(1) for deducting expenses for the
contract labor that you included in Part III. If you paid more mortgage interest than
business use of your home.
Also, do not include salaries and wages is shown on Form 1098, see Pub. 535 to
paid to your employees, instead see line 26. See the instructions for line 6 on page find out if you can deduct the additional
C-3 if the business use percentage of any interest. If you can, include the amount on
listed property decreased to 50% or less in line 16a. Attach a statement to your return
2004. explaining the difference and enter “See
Line 12 attached” in the margin next to line 16a.
Enter your deduction for depletion on this
line. If you have timber depletion, attach If you and at least one other person
Form T. See Pub. 535 for details. Line 14 (other than your spouse if you file a joint
return) were liable for and paid interest on
Deduct contributions to employee benefit the mortgage and the other person received
programs that are not an incidental part of a the Form 1098, include your share of the
pension or profit-sharing plan included on
Line 13 interest on line 16b. Attach a statement to
line 19. Examples are accident and health
Depreciation and section 179 expense your return showing the name and address
plans, group-term life insurance, and de-
deduction. Depreciation is the annual de- of the person who received the Form 1098.
pendent care assistance programs. If you
duction allowed to recover the cost or other In the margin next to line 16b, enter “See
made contributions on your behalf as a
basis of business or investment property attached.”
self-employed person to a dependent care
having a useful life substantially beyond assistance program, complete Form 2441, If you paid interest in 2004 that applies
the tax year. You can also depreciate im- Parts I and III, to figure your deductible to future years, deduct only the part that
provements made to leased business prop- contributions to that program. applies to 2004.
erty. However, stock in trade, inventories,
and land are not depreciable. Depreciation Do not include on line 14 any contribu-
starts when you first use the property in tions you made on your behalf as a self-em-
your business or for the production of in- ployed person to an accident and health Line 17
come. It ends when you take the property plan or for group-term life insurance. You
out of service, deduct all your depreciable may be able to deduct on Form 1040, line Include on this line fees for tax advice re-
cost or other basis, or no longer use the 31, the amount you paid for health insur- lated to your business and for preparation
property in your business or for the produc- ance on behalf of yourself, your spouse, of the tax forms related to your business.
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also include the amount collected in gross countries. They do not include expenses for
Line 19 receipts or sales on line 1. laundry, cleaning and pressing of clothing,
lodging taxes, or the costs of telegrams or
•Real estate and personal property
Enter your deduction for contributions to a telephone calls. You cannot use this
taxes on business assets.
pension, profit-sharing, or annuity plan, or method on any day that you use the stan-
plans for the benefit of your employees. If •Licenses and regulatory fees for your dard meal allowance (as explained in the
the plan included you as a self-employed trade or business paid each year to state or instructions for lines 24b and 24c).
person, enter contributions made as an em- local governments. But some licenses, such
ployer on your behalf on Form 1040, line as liquor licenses, may have to be amor- You cannot deduct expenses for attend-
32, not on Schedule C. tized. See Pub. 535 for details. ing a foreign convention unless it is directly
related to your trade or business and it is as
•Social security and Medicare taxes
Generally, you must file the applicable reasonable for the meeting to be held
paid to match required withholding from
form listed below if you maintain a pen- outside the North American area as within
your employees’ wages. Also, federal un-
sion, profit-sharing, or other funded-de- it. These rules apply to both employers and
employment tax paid. Reduce your deduc-
ferred compensation plan. The filing employees. Other rules apply to luxury
tion by the amount shown on Form 8846,
requirement is not affected by whether or water travel.
line 4.
not the plan qualified under the Internal
Revenue Code, or whether or not you claim •Federal highway use tax. For details, see Pub. 463.
a deduction for the current tax year. There Do not deduct the following on this line.
is a penalty for failure to timely file these •Federal income taxes, including your
forms. self-employment tax. However, you can Lines 24b and 24c
Form 5500. File this form for a plan that is deduct one-half of your self-employment On line 24b, enter your total business meal
not a one-participant plan (see below). tax on Form 1040, line 30. and entertainment expenses. Include meal
•Estate and gift taxes. expenses while traveling away from home
Form 5500-EZ. File this form for a for business. Instead of the actual cost of
•Taxes assessed to pay for improve-
one-participant plan. A one-participant your meals while traveling away from
ments, such as paving and sewers.
plan is a plan that only covers you (or you home, you can use the standard meal allow-
and your spouse). •Taxes on your home or personal use ance for your daily meals and incidental
property.
For details, see Pub. 560. expenses. Under this method, you deduct a
•State and local sales taxes on property specified amount, depending on where you
purchased for use in your business. Instead, travel, instead of keeping records of your
treat these taxes as part of the cost of the actual meal expenses. However, you must
Lines 20a and 20b property. still keep records to prove the time, place,
•State and local sales taxes imposed on
If you rented or leased vehicles, machinery, and business purpose of your travel.
the buyer that you were required to collect
or equipment, enter on line 20a the business The standard meal allowance is the fed-
and pay over to state or local governments.
portion of your rental cost. But if you eral M&IE rate. You can find these rates on
These taxes are not included in gross re-
leased a vehicle for a term of 30 days or the Internet at
www.policyworks.gov/
ceipts or sales nor are they a deductible
more, you may have to reduce your deduc-
perdiem
. For locations outside the conti-
expense. However, if the state or local gov-
tion by an amount called the inclusion nental United States, the applicable rates
ernment allowed you to retain any part of
amount. See Pub. 463 to figure your inclu- are published monthly. You can find these
the sales tax you collected, you must in-
sion amount. rates on the Internet at
www.state.gov
.
clude that amount as income on line 6.
Enter on line 20b amounts paid to rent •Other taxes and license fees not re- See Pub. 463 for details on how to fig-
or lease other property, such as office space lated to your business. ure your deduction using the standard meal
in a building. allowance, including special rules for par-
tial days of travel.
Business meal expenses are deductible
Line 24a
Line 21 only if they are (a) directly related to or
Enter your expenses for lodging and trans- associated with the active conduct of your
Deduct the cost of repairs and maintenance. portation connected with overnight travel trade or business, (b) not lavish or extrava-
Include labor, supplies, and other items that for business while away from your tax gant, and (c) incurred while you or your
do not add to the value or increase the life home. Generally, your tax home is your employee is present at the meal.
of the property. Do not deduct the value of main place of business regardless of where
your own labor. Do not deduct amounts You cannot deduct any expense paid or
you maintain your family home. You can-
spent to restore or replace property; they incurred for a facility (such as a yacht or
not deduct expenses paid or incurred in
must be capitalized. hunting lodge) used for any activity usually
connection with employment away from considered entertainment, amusement, or
home if that period of employment exceeds recreation.
1 year. Also, you cannot deduct travel ex-
penses for your spouse, your dependent, or
Line 22 Also, you cannot deduct membership
any other individual unless that person is dues for any club organized for business,
Generally, you can deduct the cost of sup- your employee, the travel is for a bona fide pleasure, recreation, or other social pur-
plies only to the extent you actually con- business purpose, and the expenses would pose. This includes country clubs, golf and
sumed and used them in your business otherwise be deductible by that person. athletic clubs, airline and hotel clubs, and
during the tax year (unless you deducted clubs operated to provide meals under con-
Do not include expenses for meals and
them in a prior tax year). However, if you ditions favorable to business discussion.
entertainment on this line. Instead, see the
had incidental supplies on hand for which But it does not include civic or public serv-
instructions for lines 24b and 24c on this
you kept no inventories or records of use, ice organizations, professional organiza-
page.
you can deduct the cost of supplies you tions (such as bar and medical
actually purchased during the tax year, pro- Instead of keeping records of your ac- associations), business leagues, trade as-
vided that method clearly reflects income. tual incidental expenses, you can use an sociations, chambers of commerce, boards
optional method for deducting incidental of trade, and real estate boards, unless a
expenses only if you did not pay or incur principal purpose of the organization is to
meal expenses on a day you were traveling
Line 23 entertain, or provide entertainment facili-
away from your tax home. The amount of ties for, members or their guests.
You can deduct the following taxes and the deduction is $3 a day. Incidental ex-
licenses on this line. penses include fees and tips given to por- There are exceptions to these rules as
•State and local sales taxes imposed on ters, baggage carriers, bellhops, hotel well as other rules that apply to sky-box
you as the seller of goods or services. If you maids, stewards or stewardesses and others rentals and tickets to entertainment events.
collected this tax from the buyer, you must on ships, and hotel servants in foreign See Pub. 463.
C-5
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Generally, you can deduct only 50% of •Form 8884, New York Liberty Zone arrangement (excluding casualty insurance
your business meal and entertainment ex- Business Employee Credit, line 2. and insurance against tort liability).
penses, including meals incurred while •Amounts borrowed for use in the busi-
If you provided taxable fringe
away from home on business. For individu- ness from a person who has an interest in
benefits to your employees,
als subject to the Department of Transpor- the business, other than as a creditor, or
such as personal use of a car, do
tation (DOT) hours of service limits, that who is related under section 465(b)(3) to a
not deduct as wages the amount
percentage is increased to 70% for business person (other than you) having such an in-
applicable to depreciation and other ex-
meals consumed during, or incident to, any terest.
penses claimed elsewhere.
period of duty for which those limits are in If all amounts are at risk in this business,
effect. Individuals subject to the DOT check box 32a and enter your loss on line
hours of service limits include the follow- 31. But if you answered “No” to Question
ing persons: Line 30 G, you may need to complete Form 8582 to
•Certain air transportation workers figure your deductible loss. See the Instruc-
Business use of your home. You may be
(such as pilots, crew, dispatchers, mechan- tions for Form 8582 for details.
able to deduct certain expenses for business
ics, and control tower operators) who are use of your home, subject to limitations. If you checked box 32b, see Form 6198
under Federal Aviation Administration reg- You must attach Form 8829 if you claim to determine the amount of your deductible
ulations. this deduction. For details, see the Instruc- loss. But if you answered “No” to Question
•Interstate truck operators who are tions for Form 8829 and Pub. 587. G, your loss may be further limited. See the
under DOT regulations. Instructions for Form 8582. If your at-risk
•Certain merchant mariners who are amount is zero or less, enter -0- on line 31.
under Coast Guard regulations. Be sure to attach Form 6198 to your return.
Line 31 If you checked box 32b and you do not
However, you can fully deduct meals, attach Form 6198, the processing of your
If you have a loss, the amount of loss you
incidentals, and entertainment furnished or tax return may be delayed.
can deduct this year may be limited. Go to
reimbursed to an employee if you properly line 32 before entering your loss on line 31.
treat the expense as wages subject to with- Any loss from this business not allowed
If you answered “No” to Schedule C, Ques-
holding. You can also fully deduct meals, for 2004 because of the at-risk rules is
tion G, also see the Instructions for Form
incidentals, and entertainment provided to treated as a deduction allocable to the busi-
8582. Enter the net profit or deductible loss
a nonemployee to the extent the expenses ness in 2005. For details, see the Instruc-
here. Combine this amount with any profit
are includible in the gross income of that tions for Form 6198 and Pub. 925.
or loss from other businesses, and enter the
person and reported on Form 1099-MISC. total on Form 1040, line 12, and Schedule
See Pub. 535 for details and other excep- SE, line 2. Estates and trusts should enter
tions. the total on Form 1041, line 3.
Part III. Cost of Goods
If you provide daycare in your home, If you have a net profit on line 31, this
see Pub. 587 for information on deducting amount is earned income and may qualify
Sold
the cost of meals and snacks you provide to you for the earned income credit. See the
your daycare recipients. Generally, if you engaged in a trade or
instructions for Form 1040, lines 65a and business in which the production, purchase,
65b, for details.
Figure how much of the amount on line or sale of merchandise was an income-pro-
24b is not deductible and enter that amount ducing factor, you must take inventories
Statutory employees. Include your net
on line 24c. into account at the beginning and end of
profit or deductible loss from line 31 with your tax year.
other Schedule C amounts on Form 1040,
line 12. However, do not report this amount However, if you are a qualifying tax-
on Schedule SE, line 2. If you are required
Line 25 payer or a qualifying small business tax-
to file Schedule SE because of other payer, you can account for inventoriable
Deduct only utility expenses for your trade self-employment income, see the Instruc- items in the same manner as materials and
or business. tions for Schedule SE. supplies that are not incidental. To change
your accounting method, see the instruc-
Local telephone service. If you used your tions for line F on page C-2.
home phone for business, do not deduct the
base rate (including taxes) of the first A qualifying taxpayer is a taxpayer (a)
Line 32
phone line into your residence. But you can whose average annual gross receipts for the
At-risk rules. Generally, if you have (a) a
deduct expenses for any additional costs 3 prior tax years are $1 million or less, and
business loss and (b) amounts in the busi-
you incurred for business that are more (b) whose business is not a tax shelter (as
ness for which you are not at risk, you will
than the cost of the base rate for the first defined in section 448(d)(3)).
have to complete Form 6198 to figure your
phone line. For example, if you had a sec- A qualifying small business taxpayer is
allowable loss. The at-risk rules generally
ond line, you can deduct the business per- a taxpayer (a) whose average annual gross
limit the amount of loss (including loss on
centage of the charges for that line, receipts for the 3 prior tax years are more
the disposition of assets) you can claim to
including the base rate charges. than $1 million but not more than $10 mil-
the amount you could actually lose in the lion, (b) whose business is not a tax shelter
business. (as defined in section 448(d)(3)), and (c)
Check box 32b if you have amounts for whose principal business activity is not an
Line 26 which you are not at risk in this business, ineligible activity as explained in Rev.
Enter the total salaries and wages for the such as the following. Proc. 2002-28. You can find Rev. Proc.
tax year. Do not include salaries and wages 2002-28 on page 815 of Internal Revenue
•Nonrecourse loans used to finance the
deducted elsewhere on your return or Bulletin 2002-18 at
www.irs.gov/pub/
business, to acquire property used in the
amounts paid to yourself. Reduce your de-
irs-irbs/irb02-18.pdf
.
business, or to acquire the business that are
duction by the amounts claimed on: not secured by your own property (other Under this accounting method, inven-
•Form 5884, Work Opportunity Credit, than property used in the business). How- tory costs for raw materials purchased for
line 2; ever, there is an exception for certain non- use in producing finished goods and mer-
•Form 8844, Empowerment Zone and recourse financing borrowed by you in chandise purchased for resale are deducti-
Renewal Community Employment Credit, connection with holding real property. ble in the year the finished goods or
line 2; •Cash, property, or borrowed amounts merchandise are sold (but not before the
•Form 8845, Indian Employment used in the business (or contributed to the year you paid for the raw materials or mer-
Credit, line 4; business, or used to acquire the business) chandise, if you are also using the cash
•Form 8861, Welfare-to-Work Credit, that are protected against loss by a guaran- method). Enter amounts paid for all raw
line 2; and tee, stop-loss agreement, or other similar materials and merchandise during 2004 on
C-6
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line 36. The amount you can deduct for $50,000. You can elect to amortize any re-
maining business start-up costs over 15
2004 is figured on line 42.
Part V. Other
years. For details, see Pub. 535. For amorti-
zation that begins in 2004, you must com-
Additional information. For additional
Expenses
plete and attach Form 4562.
guidance on this method of accounting for Include all ordinary and necessary business
inventoriable items, see Rev. Proc. 2001-10 Capital construction fund. Do not claim
expenses not deducted elsewhere on
if you are a qualifying taxpayer or Rev. on Schedule C or C-EZ the deduction for
Schedule C. List the type and amount of
Proc. 2002-28 if you are a qualifying small amounts contributed to a capital construc-
each expense separately in the space pro-
business taxpayer. You can find Rev. Proc. tion fund set up under the Merchant Marine
vided. Enter the total on lines 48 and 27. Do
2001-10 on page 272 of Internal Revenue Act of 1936. Instead, reduce the amount
not include the cost of business equipment
Bulletin 2001-2 at
www.irs.gov/pub/
you would otherwise enter on Form 1040,
or furniture, replacements or permanent
irs-irbs/irb01-02.pdf
, and Rev. Proc. line 42, by the amount of the deduction.
improvements to property, or personal, liv-
2002-28 on page 815 of Internal Revenue Next to line 42, enter “CCF” and the
ing, and family expenses. Do not include
Bulletin 2002-18 at
www.irs.gov/pub/
amount of the deduction. For details, see
charitable contributions. Also, you cannot
irs-irbs/irb02-18.pdf
.Pub. 595.
deduct fines or penalties paid to a govern-
ment for violating any law. For details on Clean-fuel vehicles and clean-fuel vehicle
Certain direct and indirect ex-
business expenses, see Pub. 535. refueling property. You may be able to de-
penses may have to be capital-
duct part of the cost of qualified clean-fuel
Amortization. Include amortization in this
ized or included in inventory.
vehicle property used in your business and
part. For amortization that begins in 2004,
See the instructions for Part II
qualified clean-fuel vehicle refueling prop-
you must complete and attach Form 4562.
beginning on page C-3.
erty. See Pub. 535 for details.
You can amortize: Disabled access credit and the deduction
for removing barriers to individuals with
•The cost of pollution-control facili- disabilities and the elderly. You may be
ties.
Line 33 able to claim a tax credit of up to $5,000 for
•Amounts paid for research and experi-
Your inventories can be valued at cost; cost eligible expenditures paid or incurred in
mentation.
or market value, whichever is lower; or any 2004 to provide access to your business for
other method approved by the IRS. How- •Qualified revitalization expenditures. individuals with disabilities. See Form
ever, you are required to use cost if you are •Amounts paid to acquire, protect, ex- 8826 for details. You can also deduct up to
using the cash method of accounting. pand, register, or defend trademarks or $15,000 of costs paid or incurred in 2004 to
trade names. remove architectural or transportation bar-
•Goodwill and certain other in- riers to individuals with disabilities and the
tangibles. elderly. However, you cannot take both the
Line 35 credit and the deduction on the same ex-
In general, you cannot amortize real
If you are changing your method of ac- penditures.
property construction period interest and
counting beginning with 2004, refigure last Film and television production expenses.
taxes. Special rules apply for allocating in-
year’s closing inventory using your new You can elect to deduct costs of certain
terest to real or personal property produced
method of accounting and enter the result qualified film and television productions
in your trade or business.
on line 35. If there is a difference between that begin after October 22, 2004. For de-
last year’s closing inventory and the At-risk loss deduction. Any loss from this tails, see Pub. 535.
refigured amount, attach an explanation activity that was not allowed as a deduction
and take it into account when figuring your Forestation and reforestation costs. You
last year because of the at-risk rules is
section 481(a) adjustment. See the example can elect to amortize certain forestation and
treated as a deduction allocable to this ac-
on page C-2 for details. reforestation costs over 84 months. You
tivity in 2004. can also elect to expense up to $10,000
($5,000 if married filing separately) of cer-
Business start-up costs. You can elect to tain forestation and reforestation costs paid
amortize certain business start-up costs
Line 41 or incurred after October 22, 2004, for each
paid or incurred before October 23, 2004,
If you account for inventoriable items in qualified timber property. The amortization
over 60 months or more, beginning with the
the same manner as materials and supplies election does not apply to trusts and the
month your business began. For certain
that are not incidental, enter on line 41 the expense election does not apply to estates
business start-up costs paid or incurred af- and trusts. For details, see Pub. 535. For
portion of your raw materials and merchan- ter October 22, 2004, you can elect to de- amortization that begins in 2004, you must
dise purchased for resale that are included duct up to $5,000 for the year your business complete and attach Form 4562.
on line 40 and were not sold during the began. This limit is reduced by the amount
year. by which your start-up costs exceed
Principal Business or Professional Activity Codes
These codes for the Principal Business or Professional Select the category that best describes your primary of real estate agents and brokers) and enter it on
Activity classify sole proprietorships by the type of business activity (for example, Real Estate). Then Schedule C or C-EZ, line B.
activity they are engaged in to facilitate the select the activity that best identifies the principal Note. If your principal source of income is from
administration of the Internal Revenue Code. These source of your sales or receipts (for example, real farming activities, you should file Schedule F.
six-digit codes are based on the North American estate agent). Now find the six-digit code assigned to
Industry Classification System (NAICS). this activity (for example, 531210, the code for offices
722300 Special food services 561410 Document preparation 561500 Travel arrangement &
Accommodation, Food (including food service services reservation services
Services, & Drinking Places contractors & caterers) 561300 Employment services 561490 Other business support
Accommodation services (including
561710 Exterminating & pest control
721310 Rooming & boarding houses Administrative & Support repossession services, court
services reporting, & stenotype
721210 RV (recreational vehicle) and Waste Management & 561210 Facilities support services)
parks & recreational camps Remediation Services (management) services 561790 Other services to buildings &
721100 Travel accommodation 561600 Investigation & security
Administrative & Support dwellings
(including hotels, motels, & services
Services
bed & breakfast inns) 561900 Other support services
561720 Janitorial services
561430 Business service centers (including packaging &
Food Services & Drinking 561730 Landscaping services
(including private mail labeling services, &
Places centers & copy shops) 561110 Office administrative services convention & trade show
722410 Drinking places (alcoholic 561740 Carpet & upholstery cleaning organizers)
561420 Telephone call centers
beverages) services (including telephone
722110 Full-service restaurants answering services &
561440 Collection agencies
722210 Limited-service eating places telemarketing bureaus)
561450 Credit bureaus
C-7
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Principal Business or Professional Activity Codes (continued)
238910 Site preparation contractors 325600 Soap, cleaning compound, &
Waste Management & Hospitals toilet preparation mfg.
238120 Structural steel & precast
Remediation Services 622000 Hospitals
concrete construction 325900 Other chemical product &
562000 Waste management & Nursing & Residential Care
contractors preparation mfg.
remediation services Facilities
238340 Tile & terrazzo contractors Food Manufacturing
623000 Nursing & residential care
238290 Other building equipment
Agriculture, Forestry, 311110 Animal food mfg.
facilities
contractors
Hunting, & Fishing 311800 Bakeries & tortilla mfg.
Social Assistance
238390 Other building finishing
112900 Animal production (including 311500 Dairy product mfg.
624410 Child day care services
contractors
breeding of cats and dogs) 311400 Fruit & vegetable preserving
624200 Community food & housing,
238190 Other foundation, structure, &
114110 Fishing & speciality food mfg.
& emergency & other relief
building exterior contractors
113000 Forestry & logging (including 311200 Grain & oilseed milling
services
238990 All other specialty trade
forest nurseries & timber 311610 Animal slaughtering &
624100 Individual & family services
contractors
tracts) processing
624310 Vocational rehabilitation
114210 Hunting & trapping 311710 Seafood product preparation
Educational Services services
Support Activities for & packaging
611000 Educational services
Agriculture & Forestry 311300 Sugar & confectionery
Information
(including schools, colleges, product mfg.
115210 Support activities for animal & universities) 511000 Publishing industries (except
production (including farriers) 311900 Other food mfg. (including
Internet) coffee, tea, flavorings, &
115110 Support activities for crop Finance & Insurance Broadcasting (except Internet) seasonings)
production (including cotton Credit Intermediation & & Telecommunications
ginning, soil preparation, Leather & Allied Product
Related Activities 515000 Broadcasting (except Internet)
planting, & cultivating) Manufacturing
522100 Depository credit 517000 Telecommunications
115310 Support activities for forestry 316210 Footwear mfg. (including
intermediation (including Internet Publishing & leather, rubber, & plastics)
commercial banking, savings
Arts, Entertainment, & Broadcasting 316110 Leather & hide tanning &
institutions, & credit unions)
Recreation finishing
516110 Internet publishing &
522200 Nondepository credit broadcasting
Amusement, Gambling, & 316990 Other leather & allied product
intermediation (including mfg.
Recreation Industries sales financing & consumer Internet Service Providers,
lending) Web Search Portals, & Data Nonmetallic Mineral Product
713100 Amusement parks & arcades
522300 Activities related to credit Processing Services Manufacturing
713200 Gambling industries intermediation (including loan 518210 Data processing, hosting, & 327300 Cement & concrete product
713900 Other amusement & brokers) related services mfg.
recreation services (including Insurance Agents, Brokers, &
golf courses, skiing facilities, 518111 Internet service providers 327100 Clay product & refractory
marinas, fitness centers, Related Activities mfg.
518112 Web search portals
bowling centers, skating 327210 Glass & glass product mfg.
524210 Insurance agencies & 519100 Other information services
rinks, miniature golf courses) brokerages (including news syndicates 327400 Lime & gypsum product mfg.
Museums, Historical Sites, & and libraries)
524290 Other insurance related 327900 Other nonmetallic mineral
Similar Institutions activities product mfg.
Motion Picture & Sound
712100 Museums, historical sites, & Securities, Commodity Recording
similar institutions Mining
Contracts, & Other Financial 512100 Motion picture & video
Performing Arts, Spectator Investments & Related 212110 Coal mining
industries (except video
Sports, & Related Industries Activities rental) 212200 Metal ore mining
711410 Agents & managers for 512200 Sound recording industries
523140 Commodity contracts brokers 212300 Nonmetallic mineral mining
artists, athletes, entertainers, & quarrying
523130 Commodity contracts dealers
& other public figures Manufacturing 211110 Oil & gas extraction
523110 Investment bankers &
711510 Independent artists, writers, & securities dealers 315000 Apparel mfg. 213110 Support activities for mining
performers 523210 Securities & commodity 312000 Beverage & tobacco product
711100 Performing arts companies exchanges mfg. Other Services
711300 Promoters of performing arts, 523120 Securities brokers 334000 Computer & electronic Personal & Laundry Services
sports, & similar events product mfg.
523900 Other financial investment 812111 Barber shops
711210 Spectator sports (including activities (including 335000 Electrical equipment, 812112 Beauty salons
professional sports clubs & investment advice) appliance, & component mfg.
racetrack operations) 812220 Cemeteries & crematories
332000 Fabricated metal product mfg. 812310 Coin-operated laundries &
Health Care & Social 337000 Furniture & related product
Construction of Buildings drycleaners
Assistance mfg. 812320 Drycleaning & laundry
236200 Nonresidential building 333000 Machinery mfg.
Ambulatory Health Care services (except
construction Services 339110 Medical equipment & coin-operated) (including
236100 Residential building supplies mfg.
621610 Home health care services laundry & drycleaning
construction 322000 Paper mfg. dropoff & pickup sites)
621510 Medical & diagnostic
Heavy and Civil Engineering 324100 Petroleum & coal products
laboratories 812210 Funeral homes & funeral
Construction mfg. services
621310 Offices of chiropractors
237310 Highway, street, & bridge 326000 Plastics & rubber products 812330 Linen & uniform supply
621210 Offices of dentists
construction mfg. 812113 Nail salons
621330 Offices of mental health
237210 Land subdivision 331000 Primary metal mfg.
practitioners (except 812930 Parking lots & garages
237100 Utility system construction 323100 Printing & related support
physicians) 812910 Pet care (except veterinary)
237990 Other heavy & civil activities
621320 Offices of optometrists services
engineering construction 313000 Textile mills
621340 Offices of physical, 812920 Photofinishing
Specialty Trade Contractors 314000 Textile product mills
occupational & speech 812190 Other personal care services
238310 Drywall & insulation therapists, & audiologists 336000 Transportation equipment (including diet & weight
contractors mfg.
621111 Offices of physicians (except reducing centers)
238210 Electrical contractors mental health specialists) 321000 Wood product mfg. 812990 All other personal services
238350 Finish carpentry contractors 621112 Offices of physicians, mental 339900 Other miscellaneous mfg. Repair & Maintenance
health specialists
238330 Flooring contractors Chemical Manufacturing 811120 Automotive body, paint,
621391 Offices of podiatrists
238130 Framing carpentry contractors interior, & glass repair
325100 Basic chemical mfg.
621399 Offices of all other
238150 Glass & glazing contractors 811110 Automotive mechanical &
325500 Paint, coating, & adhesive
miscellaneous health
238140 Masonry contractors electrical repair &
mfg.
practitioners maintenance
238320 Painting & wall covering 325300 Pesticide, fertilizer, & other
621400 Outpatient care centers
contractors 811190 Other automotive repair &
agricultural chemical mfg.
621900 Other ambulatory health care maintenance (including oil
238220 Plumbing, heating & air- 325410 Pharmaceutical & medicine
services (including ambulance change & lubrication shops &
conditioning contractors mfg.
services, blood, & organ car washes)
238110 Poured concrete foundation & 325200 Resin, synthetic rubber, &
banks)
structure contractors artificial & synthetic fibers &
filaments mfg.
238160 Roofing contractors
238170 Siding contractors
C-8
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Principal Business or Professional Activity Codes (continued)
811310 Commercial & industrial 446190 Other health & personal care 488000 Support activities for
Rental & Leasing Services
machinery & equipment stores transportation (including
532100 Automotive equipment rental
(except automotive & motor vehicle towing)
Motor Vehicle & Parts Dealers
& leasing
electronic) repair & Couriers & Messengers
532400 Commercial & industrial 441300 Automotive parts, accessories,
maintenance machinery & equipment & tire stores 492000 Couriers & messengers
811210 Electronic & precision rental & leasing 441222 Boat dealers Warehousing & Storage
equipment repair & 532210 Consumer electronics & 441221 Motorcycle dealers Facilities
maintenance appliances rental 441110 New car dealers 493100 Warehousing & storage
811430 Footwear & leather goods 532220 Formal wear & costume (except leases of
repair 441210 Recreational vehicle dealers
rental miniwarehouses &
(including motor home &
811410 Home & garden equipment & 532310 General rental centers self-storage units)
travel trailer dealers)
appliance repair & 532230 Video tape & disc rental
maintenance 441120 Used car dealers Utilities
532290 Other consumer goods rental
811420 Reupholstery & furniture 441229 All other motor vehicle 221000 Utilities
repair dealers
Religious, Grantmaking,
811490 Other personal & household Sporting Goods, Hobby,
Civic, Professional, & Similar Wholesale Trade
goods repair & maintenance Book, & Music Stores
Organizations Merchant Wholesalers,
451211 Book stores
Professional, Scientific, & 813000 Religious, grantmaking, civic, Durable Goods
451120 Hobby, toy, & game stores
Technical Services professional, & similar 423600 Electrical & electronic goods
451140 Musical instrument &
organizations
541100 Legal services 423200 Furniture & home furnishing
supplies stores
541211 Offices of certified public 423700 Hardware, & plumbing &
451212 News dealers & newsstands
Retail Trade
accountants heating equipment & supplies
451220 Prerecorded tape, compact
Building Material & Garden
541214 Payroll services 423940 Jewelry, watch, precious
disc, & record stores
Equipment & Supplies Dealers
541213 Tax preparation services stone, & precious metals
451130 Sewing, needlework, & piece
444130 Hardware stores
541219 Other accounting services 423300 Lumber & other construction
goods stores
444110 Home centers materials
Architectural, Engineering, & 451110 Sporting goods stores
444200 Lawn & garden equipment & 423800 Machinery, equipment, &
Related Services Miscellaneous Store Retailers
supplies stores supplies
541310 Architectural services 453920 Art dealers
444120 Paint & wallpaper stores 423500 Metal & mineral (except
541350 Building inspection services 453110 Florists petroleum)
444190 Other building materials
541340 Drafting services 453220 Gift, novelty, & souvenir
dealers 423100 Motor vehicle & motor
541330 Engineering services stores vehicle parts & supplies
Clothing & Accessories
541360 Geophysical surveying & 453930 Manufactured (mobile) home 423400 Professional & commercial
Stores
mapping services dealers equipment & supplies
448130 Children’s & infants’ clothing
541320 Landscape architecture 453210 Office supplies & stationery 423930 Recyclable materials
stores
services stores 423910 Sporting & recreational goods
448150 Clothing accessories stores
541370 Surveying & mapping (except 453910 Pet & pet supplies stores & supplies
448140 Family clothing stores
geophysical) services 453310 Used merchandise stores 423920 Toy & hobby goods &
448310 Jewelry stores
541380 Testing laboratories 453990 All other miscellaneous store supplies
448320 Luggage & leather goods retailers (including tobacco,
Computer Systems Design & 423990 Other miscellaneous durable
stores candle, & trophy shops)
Related Services goods
448110 Men’s clothing stores Nonstore Retailers
541510 Computer systems design & Merchant Wholesalers,
448210 Shoe stores
related services 454112 Electronic auctions Nondurable Goods
448120 Women’s clothing stores
Specialized Design Services 454111 Electronic shopping 424300 Apparel, piece goods, &
448190 Other clothing stores 454310 Fuel dealers
541400 Specialized design services notions
Electronic & Appliance Stores
(including interior, industrial, 454113 Mail-order houses 424800 Beer, wine, & distilled
graphic, & fashion design) 443130 Camera & photographic alcoholic beverage
454210 Vending machine operators
supplies stores
Other Professional, Scientific, 424920 Books, periodicals, &
454390 Other direct selling
443120 Computer & software stores newspapers
& Technical Services establishments (including
door-to-door retailing, frozen
443111 Household appliance stores 424600 Chemical & allied products
541800 Advertising & related services food plan providers, party
443112 Radio, television, & other 424210 Drugs & druggists’ sundries
541600 Management, scientific, & plan merchandisers, &
electronics stores
technical consulting services 424500 Farm product raw materials
coffee-break service
541910 Market research & public Food & Beverage Stores 424910 Farm supplies
providers)
opinion polling 424930 Flower, nursery stock, &
445310 Beer, wine, & liquor stores
541920 Photographic services florists’ supplies
445220 Fish & seafood markets Transportation &
541700 Scientific research & 424400 Grocery & related products
445230 Fruit & vegetable markets Warehousing
development services 424950 Paint, varnish, & supplies
445100 Grocery stores (including 481000 Air transportation
541930 Translation & interpretation 424100 Paper & paper products
supermarkets & convenience 485510 Charter bus industry
services stores without gas) 424700 Petroleum & petroleum
484110 General freight trucking, local
541940 Veterinary services products
445210 Meat markets 484120 General freight trucking, long
541990 All other professional, 424940 Tobacco & tobacco products
445290 Other specialty food stores distance
scientific, & technical 424990 Other miscellaneous
Furniture & Home Furnishing 485210 Interurban & rural bus
services nondurable goods
Stores transportation
486000 Pipeline transportation
442110 Furniture stores
Real Estate & Rental & Wholesale Electronic
482110 Rail transportation
442200 Home furnishings stores
Leasing Markets and Agents &
487000 Scenic & sightseeing
Gasoline Stations
Real Estate Brokers
transportation
447100 Gasoline stations (including
531100 Lessors of real estate 425110 Business to business
485410 School & employee bus
convenience stores with gas)
(including miniwarehouses & electronic markets
transportation
self-storage units) General Merchandise Stores 425120 Wholesale trade agents &
484200 Specialized freight trucking
531210 Offices of real estate agents brokers
452000 General merchandise stores (including household moving
& brokers Health & Personal Care Stores vans)
531320 Offices of real estate 999999 Unclassified establishments
485300 Taxi & limousine service
446120 Cosmetics, beauty supplies, &
appraisers (unable to classify)
perfume stores 485110 Urban transit systems
531310 Real estate property managers 446130 Optical goods stores 483000 Water transportation
531390 Other activities related to real 446110 Pharmacies & drug stores 485990 Other transit & ground
estate passenger transportation
C-9
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Page 1 of 9 of 2004 Instructions for Schedule D 9:58 - 28-OCT-2004
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Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedule D
Use Schedule D (Form 1040) to report the following.
•The sale or exchange of a capital asset (defined on this page) not reported on another
Capital Gains form or schedule.
•Gains from involuntary conversions (other than from casualty or theft) of capital assets
and Losses not held for business or profit.
•Capital gain distributions not reported directly on Form 1040, line 13.
•Nonbusiness bad debts.
Additional information. See Pub. 544 and Pub. 550 for more details. For a comprehensive
filled-in example of Schedule D, see Pub. 550.
Section references are to the Internal Revenue Code unless otherwise noted.
4. Ordinary loss on the sale, exchange, (a) or (b), in a way (such as by gift) that
or worthlessness of small business invest- entitled you to the basis of the previous
General Instructions
ment company (section 1242) stock. owner.
What’s New 5. Ordinary loss on the sale, exchange, •U.S. Government publications, in-
or worthlessness of small business (section cluding the Congressional Record, that you
Tax computation using maximum capital 1244) stock. received from the government, other than
gains rates. You will now use the Quali- by purchase at the normal sales price, or
6. Ordinary gain or loss on securities
fied Dividends and Capital Gain Tax that you got from someone who had re-
held in connection with your trading busi-
Worksheet on page 34 of the Instructions ceived it in a similar way, if your basis is
ness, if you previously made a
for Form 1040 to figure your tax if you determined by reference to the previous
mark-to-market election. See
Traders in
have net capital gain or qualified dividends. owner’s basis.
Securities
on page D-3.
However, if you have any 25% rate gain
•Certain commodities derivative finan-
(unrecaptured section 1250 gain) or 28% Use Form 4684 to report involuntary cial instruments held by a dealer. See sec-
rate gain, you will still use the Schedule D conversions of property due to casualty or tion 1221(a)(6).
Tax Worksheet on page D-9 to figure your theft. •Certain hedging transactions entered
tax. Part IV of Schedule D has been elimi-
into in the normal course of your trade or
nated. Use Form 6781 to report gains and business. See section 1221(a)(7).
losses from section 1256 contracts and
straddles.
Capital Loss Carryover Worksheet. Use •Supplies regularly used in your trade
the Capital Loss Carryover Worksheet on or business.
Use Form 8824 to report like-kind ex-
page D-6 to figure your capital loss carry- changes. A like-kind exchange occurs Short Term or Long Term
over from 2003 to 2004. You will need a when you exchange business or investment
copy of your 2003 Form 1040 and Sched- property for property of a like kind. Separate your capital gains and losses ac-
ule D. cording to how long you held or owned the
Capital Asset property. The holding period for short-term
Gain on home acquired in a like-kind ex- capital gains and losses is 1 year or less.
Most property you own and use for per-
change. If you sold or exchanged your The holding period for long-term capital
sonal purposes, pleasure, or investment is a
main home that you acquired in a like-kind gains and losses is more than 1 year. To
capital asset. For example, your house, fur-
exchange, you may not be able to exclude figure the holding period, begin counting
niture, car, stocks, and bonds are capital as-
any of the gain. See
Sale of Your Home
on on the day after you received the property
sets. A capital asset is any property held by
page D-2 for details. and include the day you disposed of it.
you except the following.
If you disposed of property that you ac-
•Stock in trade or other property in-
Other Forms You May Have quired by inheritance, report the disposition
cluded in inventory or held mainly for sale as a long-term gain or loss, regardless of
to customers.
To File how long you held the property.
•Accounts or notes receivable for serv-
Use Form 4797 to report the following. ices performed in the ordinary course of A nonbusiness bad debt must be treated
1. The sale or exchange of: your trade or business or as an employee, or as a short-term capital loss. See Pub. 550
from the sale of stock in trade or other for what qualifies as a nonbusiness bad
a. Property used in a trade or business; property held mainly for sale to customers. debt and how to enter it on Schedule D.
b. Depreciable and amortizable prop- •Depreciable property used in your
erty; Capital Gain Distributions
trade or business, even if it is fully depreci-
c. Oil, gas, geothermal, or other mineral ated. These distributions are paid by a mutual
property; and fund (or other regulated investment com-
•Real estate used in your trade or busi-
d. Section 126 property. pany) or real estate investment trust from
ness. its net realized long-term capital gains. Dis-
2. The involuntary conversion (other •Copyrights, literary, musical, or artis- tributions of net realized short-term capital
than from casualty or theft) of property tic compositions, letters or memoranda, or gains are not treated as capital gains. In-
used in a trade or business and capital as- similar property: (a) created by your per- stead, they are included on Form 1099-DIV
sets held for business or profit. sonal efforts; (b) prepared or produced for as ordinary dividends.
3. The disposition of noncapital assets you (in the case of letters, memoranda, or
other than inventory or property held pri- similar property); or (c) that you received Enter on line 13 the total capital gain
marily for sale to customers in the ordinary from someone who created them or for distributions paid to you during the year,
course of your trade or business. whom they were created, as mentioned in regardless of how long you held your in-
D-1
Cat. No. 24331I
Page 2 of 9 of 2004 Instructions for Schedule D 9:58 - 28-OCT-2004
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vestment. This amount is shown in box 2a (b) any part of your interest in an activity to
Partnership Interests
of Form 1099-DIV. which the at-risk rules apply, and you have
A sale or other disposition of an interest in amounts in the activity for which you are
If there is an amount in box 2b, include a partnership may result in ordinary in- not at risk, see the Instructions for Form
that amount on line 11 of the Unrecaptured come, collectibles gain (28% rate gain), or 6198.
Section 1250 Gain Worksheet on page D-8 unrecaptured section 1250 gain. For details
if you complete line 19 of Schedule D. on 28% rate gain, see the instructions for If the loss is allowable under the at-risk
line 18 on page D-7. For details on unre- rules, it then may be subject to the passive
If there is an amount in box 2c, see
Ex-
captured section 1250 gain, see the instruc- activity rules. See Form 8582 and its in-
clusion of Gain on Qualified Small Busi-
tions for line 19 beginning on page D-7. structions for details on reporting capital
ness (QSB) Stock
on page D-4. gains and losses from a passive activity.
If there is an amount in box 2d, include Capital Assets Held for
that amount on line 4 of the 28% Rate Gain Personal Use Items for Special Treatment
Worksheet on page D-7 if you complete Generally, gain from the sale or exchange
line 18 of Schedule D. •Transactions by a securities dealer.
of a capital asset held for personal use is a See section 1236.
If you received capital gain distributions capital gain. Report it on Schedule D, Part I
as a nominee (that is, they were paid to you • Bonds and other debt instruments.
or Part II. However, if you converted
but actually belong to someone else), report See Pub. 550.
depreciable property to personal use, all or
on line 13 only the amount that belongs to •Certain real estate subdivided for sale
part of the gain on the sale or exchange of
you. Attach a statement showing the full that may be considered a capital asset. See
that property may have to be recaptured as
amount you received and the amount you section 1237.
ordinary income. Use Part III of Form 4797
received as a nominee. See the Instructions to figure the amount of ordinary income re- •Gain on the sale of depreciable prop-
for Schedule B for filing requirements for capture. The recapture amount is included erty to a more than 50% owned entity or to
Forms 1099-DIV and 1096. on line 31 (and line 13) of Form 4797. Do a trust of which you are a beneficiary. See
not enter any gain for this property on line Pub. 544.
Sale of Your Home 32 of Form 4797. If you are not completing •Gain on the disposition of stock in an
If you sold or exchanged your main home, Part III for any other properties, enter interest charge domestic international sales
do not report it on your tax return unless “N/A” on line 32. If the total gain is more corporation. See section 995(c).
your gain exceeds your exclusion amount. than the recapture amount, enter “From •Gain on the sale or exchange of stock
Your exclusion amount is zero if you ac- Form 4797” in column (a) of line 1 or line 8 in certain foreign corporations. See section
quired your home in a like-kind exchange of Schedule D, skip columns (b) through 1248.
and you sold or exchanged the home after (e), and in column (f) enter the excess of
October 22, 2004, and during the 5-year pe- •Transfer of property to a partnership
the total gain over the recapture amount.
riod beginning on the date you acquired it. that would be treated as an investment
Loss from the sale or exchange of a cap-
Generally, if you meet the two tests below, company if it were incorporated. See Pub.
ital asset held for personal use is not de-
you can exclude up to $250,000 of gain. If 541.
ductible. But if you had a loss from the sale
both you and your spouse meet these tests •Sales of stock received under a quali-
or exchange of real estate held for personal
and you file a joint return, you can exclude fied public utility dividend reinvestment
use for which you received a Form 1099-S,
up to $500,000 of gain (but only one spouse plan. See Pub. 550.
you must report the transaction on Sched-
needs to meet the ownership requirement in ule D even though the loss is not deducti- •Transfer of appreciated property to a
Test 1
). ble. For example, you have a loss on the political organization. See section 84.
Test 1.
You owned and used the home sale of a vacation home that is not your •In general, no gain or loss is recog-
as your main home for 2 years or more dur- main home and you received a Form nized on the transfer of property from an
ing the 5-year period ending on the date 1099-S for the transaction. Report the individual to a spouse or a former spouse if
you sold or exchanged your home. transaction on line 1 or 8, depending on the transfer is incident to a divorce. See
how long you owned the home. Complete
Test 2.
You have not sold or exchanged Pub. 504.
columns (a) through (e). Because the loss is
another main home during the 2-year pe- •Amounts received on the retirement
not deductible, enter -0- in column (f).
riod ending on the date of the sale or ex- of a debt instrument generally are treated as
change of your home. received in exchange for the debt instru-
Nondeductible Losses
Even if you do not meet one or both of ment. See Pub. 550.
Do not deduct a loss from the direct or indi-
the above two tests, you still can claim an •Any loss on the disposition of con-
rect sale or exchange of property between
exclusion if you sold or exchanged the verted wetland or highly erodible cropland
any of the following.
home because of a change in place of em- that is first used for farming after March 1,
ployment, health, or certain unforeseen cir- •Members of a family. 1986, is reported as a long-term capital loss
cumstances. In this case, the maximum •A corporation and an individual own- on Schedule D, but any gain is reported as
amount of gain you can exclude is reduced. ing more than 50% of the corporation’s ordinary income on Form 4797.
stock (unless the loss is from a distribution
You can choose to have the 5-year test •If qualified dividends that you re-
in complete liquidation of a corporation).
period for ownership and use in
Test 1
ported on Form 1040, line 9b, include ex-
above suspended during any period you or •A grantor and a fiduciary of a trust. traordinary dividends, any loss on the sale
your spouse serve on qualified official ex- or exchange of the stock is a long-term cap-
•A fiduciary and a beneficiary of the
tended duty as a member of the uniformed ital loss to the extent of the extraordinary
same trust.
services or Foreign Service of the United dividends. An extraordinary dividend is a
•A fiduciary and a beneficiary of an-
States. This means you may be able to meet dividend that equals or exceeds 10% (5% in
other trust created by the same grantor.
Test 1
even if, because of your service, you the case of preferred stock) of your basis in
•An executor of an estate and a benefi-
did not actually use the home as your main the stock.
ciary of that estate, unless the sale or ex-
home for at least the required 2 years dur- •Amounts received by shareholders in
change was to satisfy a pecuniary bequest
ing the 5-year period ending on the date of corporate liquidations. See Pub. 550.
(that is, a bequest of a sum of money).
sale. •Cash received in lieu of fractional
•An individual and a tax-exempt or-
See Pub. 523 for details, including how shares of stock as a result of a stock split or
ganization controlled by the individual or
to report any taxable gain if: stock dividend. See Pub. 550.
the individual’s family.
•You (or your spouse if married) used •Mutual fund load charges, which may
See Pub. 544 for more details on sales
any part of the home for business or rental not be taken into account in determining
and exchanges between related parties.
purposes after May 6, 1997, or gain or loss on certain dispositions of stock
in mutual funds if reinvestment rights were
•Your gain exceeds your exclusion If you disposed of (a) an asset used in an
exercised. See Pub. 564.
amount. activity to which the at-risk rules apply or
D-2
Page 3 of 9 of 2004 Instructions for Schedule D 9:58 - 28-OCT-2004
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•The sale or exchange of S corporation securities for your own account. To be en- ing extensions) of the tax return for the year
stock or an interest in a trust held for more gaged in business as a trader in securities: prior to the year for which the election be-
than 1 year, which may result in col- comes effective. To be effective for 2004,
•You must seek to profit from daily
lectibles gain (28% rate gain). See page the election must have been made by
market movements in the prices of securi-
D-7. April 15, 2004.
ties and not from dividends, interest, or
capital appreciation.
•Gain or loss on the disposition of se- Starting with the year the election be-
curities futures contracts. See Pub. 550. •Your activity must be substantial. comes effective, a trader reports all gains
•Gain on the constructive sale of cer- and losses from securities held in connec-
•You must carry on the activity with
tain appreciated financial positions. See tion with the trading business, including se-
continuity and regularity.
Pub. 550. curities held at the end of the year, in Part II
The following facts and circumstances of Form 4797. If you previously made the
•Certain constructive ownership trans- should be considered in determining if your election, see the Instructions for Form
actions. Gain in excess of the gain you activity is a business. 4797. For details on making the
would have recognized if you had held a •Typical holding periods for securities mark-to-market election for 2005, see Pub.
financial asset directly during the term of a bought and sold. 550 or Rev. Proc. 99-17, 1999-1 C.B. 503.
derivative contract must be treated as ordi- You can find Rev. Proc. 99-17 on page 52
nary income. See section 1260. If any por- •The frequency and dollar amount of of Internal Revenue Bulletin 1999-7 at
tion of the constructive ownership your trades during the year.
www.irs.gov/pub/irs-irbs/irb99-07.pdf.
transaction was open in any prior year, you •The extent to which you pursue the
may have to pay interest. See section activity to produce income for a livelihood. If you hold securities for investment,
1260(b) for details, including how to figure •The amount of time you devote to the they must be identified as such in your rec-
the interest. Include the interest as an addi- activity. ords on the day they are acquired (for ex-
tional tax on Form 1040, line 62. Write ample, by holding the securities in a
“Section 1260(b) interest” and the amount You are considered an investor, and not separate brokerage account). Securities
of the interest to the left of line 62. This a trader, if your activity does not meet the held for investment are not marked-to-mar-
interest is not deductible. above definition of a business. It does not ket.
matter whether you call yourself a trader or
•The sale of publicly traded securities, a “day trader.”
if you elect to postpone gain by purchasing Short Sales
common stock or a partnership interest in a Like an investor, a trader must report A short sale is a contract to sell property
specialized small business investment com- each sale of securities (taking into account you borrowed for delivery to a buyer. At a
pany during the 60-day period that began commissions and any other costs of acquir- later date, you either buy substantially
on the date of the sale. See Pub. 550. ing or disposing of the securities) on identical property and deliver it to the
•The sale of qualified securities, held Schedule D or D-1 or on an attached state- lender or deliver property that you held but
for at least 3 years, to an employee stock ment containing all the same information did not want to transfer at the time of the
ownership plan or eligible worker-owned for each sale in a similar format. However, sale. Usually, your holding period is the
cooperative, if you elect to postpone gain if a trader previously made the amount of time you actually held the prop-
by purchasing qualified replacement prop- mark-to-market election (see below), each erty eventually delivered to the lender to
erty. See Pub. 550. transaction is reported in Part II of Form close the short sale. However, your gain
4797 instead of Schedules D and D-1. Re-
•Gain or loss from the disposition of when closing a short sale is short term if
gardless of whether a trader reports his or
stock or other securities in an investment you (a) held substantially identical property
her gains and losses on Schedules D and
club. See Pub. 550. for 1 year or less on the date of the short
D-1 or Form 4797, the gain or loss from the sale or (b) acquired property substantially
disposition of securities is not taken into
Wash Sales identical to the property sold short after the
account when figuring net earnings from
A wash sale occurs when you sell or other- short sale but on or before the date you
self-employment on Schedule SE. See the
wise dispose of stock or securities (includ- close the short sale. If you held substan-
Instructions for Schedule SE for an excep-
ing a contract or option to acquire or sell tially identical property for more than 1
tion that applies to section 1256 contracts.
stock or securities) at a loss and, within 30 year on the date of a short sale, any loss
days before or after the sale or disposition, realized on the short sale is a long-term
The limitation on investment interest
you directly or indirectly: capital loss, even if the property used to
expense that applies to investors does not close the short sale was held 1 year or less.
apply to interest paid or incurred in a trad-
•Buy substantially identical stock or ing business. A trader reports interest ex-
securities, pense and other expenses (excluding Gain or Loss From Options
•Acquire substantially identical stock commissions and other costs of acquiring
or securities in a fully taxable trade, or Report on Schedule D gain or loss from the
or disposing of securities) from a trading closing or expiration of an option that is not
•Enter into a contract or option to ac- business on Schedule C (instead of Sched- a section 1256 contract but is a capital asset
quire substantially identical stock or securi- ule A). in your hands. If an option you purchased
ties. expired, enter the expiration date in column
A trader also may hold securities for in-
You cannot deduct losses from wash (c) and enter “EXPIRED” in column (d). If
vestment. The rules for investors generally
sales unless the loss was incurred in the or- an option that was granted (written) ex-
will apply to those securities. Allocate in-
dinary course of your business as a dealer pired, enter the expiration date in column
terest and other expenses between your
in stock or securities. The basis of the sub- (b) and enter “EXPIRED” in column (e).
trading business and your investment se-
stantially identical property (or contract or Fill in the other columns as appropriate.
curities.
option to acquire such property) is its cost See Pub. 550 for details.
increased by the disallowed loss. For more Mark-To-Market Election for
details on wash sales, see Pub. 550. Traders Undistributed Capital Gains
Report a wash sale transaction on line 1 A trader may make an election under sec- Include on line 11 the amount from box 1a
or 8. Enter the full amount of the (loss) in tion 475(f) to report all gains and losses of Form 2439. This represents your share of
column (f). Directly below the line on from securities held in connection with a the undistributed long-term capital gains of
which you reported the loss, enter “Wash trading business as ordinary income (or the regulated investment company (includ-
Sale” in column (a), and enter as a positive loss), including securities held at the end of ing a mutual fund) or real estate investment
amount in column (f) the amount of the loss the year. Securities held at the end of the trust.
not allowed. year are “marked to market” by treating
them as if they were sold (and reacquired) If there is an amount in box 1b, include
Traders in Securities for fair market value on the last business that amount on line 11 of the Unrecaptured
You are a trader in securities if you are en- day of the year. Generally, the election Section 1250 Gain Worksheet on page D-8
gaged in the business of buying and selling must be made by the due date (not includ- if you complete line 19 of Schedule D.
D-3
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If there is an amount in box 1c, see
Ex-
the stock received. If you held the equity •A business whose principal asset is
clusion of Gain on Qualified Small Busi-
interest for more than 1 year, report the the reputation or skill of one or more em-
ness (QSB) Stock
on this page. gain as a long-term capital gain on line 8. If ployees.
you held the equity interest for 1 year or •A banking, insurance, financing, leas-
If there is an amount in box 1d, include less, report the gain as a short-term capital ing, investing, or similar business.
that amount on line 4 of the 28% Rate Gain gain on line 1. Your holding period for the
Worksheet on page D-7 if you complete •A farming business (including the
new stock begins on the day after you re-
line 18 of Schedule D. raising or harvesting of trees).
ceived the stock.
Enter on Form 1040, line 69, the tax •A business involving the production
paid as shown in box 2 of Form 2439. Also of products for which percentage depletion
Exclusion of Gain on
on line 69, check the box for Form 2439. can be claimed.
Qualified Small Business
Add to the basis of your stock the excess of •A business of operating a hotel, motel,
(QSB) Stock
the amount included in income over the restaurant, or similar business.
amount of the credit for the tax paid. See Section 1202 allows for an exclusion of up For more details about limits and addi-
Pub. 550 for details. to 50% of the eligible gain on the sale or tional requirements that may apply, see
exchange of QSB stock. The section 1202 section 1202.
Installment Sales exclusion applies only to QSB stock held Pass-Through Entities
If you sold property (other than publicly for more than 5 years.
traded stocks or securities) at a gain and If you held an interest in a pass-through en-
To be QSB stock, the stock must meet
you will receive a payment in a tax year tity (a partnership, S corporation, or mutual
all of the following tests.
after the year of sale, you generally must fund or other regulated investment com-
report the sale on the installment method 1. It must be stock in a C corporation pany) that sold QSB stock, to qualify for
unless you elect not to. Use Form 6252 to (that is, not S corporation stock). the exclusion you must have held the inter-
report the sale on the installment method. 2. It must have been originally issued est on the date the pass-through entity ac-
Also use Form 6252 to report any payment after August 10, 1993. quired the QSB stock and at all times
received in 2004 from a sale made in an thereafter until the stock was sold.
3. As of the date the stock was issued,
earlier year that you reported on the install- the corporation was a domestic C corpora- How To Report
ment method. tion with total gross assets of $50 million or Report on line 8 the entire gain realized on
To elect out of the installment method, less (a) at all times after August 9, 1993, the sale of QSB stock. Complete all col-
report the full amount of the gain on Sched- and before the stock was issued and (b) im- umns as indicated. Directly below the line
ule D on a timely filed return (including ex- mediately after the stock was issued. Gross on which you reported the gain, enter in
tensions) for the year of the sale. If your assets include those of any predecessor of column (a) “Section 1202 exclusion” and
original return was filed on time, you may the corporation. All corporations that are enter as a loss in column (f) the amount of
make the election on an amended return members of the same parent-subsidiary the allowable exclusion. If you are com-
filed no later than 6 months after the due controlled group are treated as one corpora- pleting line 18 of Schedule D, enter as a
date of your return (excluding extensions). tion. positive number the amount of your allow-
Write “Filed pursuant to section 4. You must have acquired the stock at able exclusion on line 2 of the 28% Rate
301.9100-2” at the top of the amended re- its original issue (either directly or through Gain Worksheet on page D-7.
turn. an underwriter), either in exchange for Gain from Form 1099-DIV. If you re-
money or other property or as pay for serv-
Demutualization of Life ceived a Form 1099-DIV with a gain in box
ices (other than as an underwriter) to the
Insurance Companies 2c, part or all of that gain (which is also
corporation. In certain cases, you may meet included in box 2a) may be eligible for the
the test if you acquired the stock from an-
Demutualization of a life insurance com- section 1202 exclusion. In column (a) of
other person who met the test (such as by
pany occurs when a mutual life insurance line 8, enter the name of the corporation
gift or inheritance) or through a conversion
company changes to a stock company. If whose stock was sold. In column (f), enter
or exchange of QSB stock you held.
you were a policyholder or annuitant of the the amount of your allowable exclusion as
mutual company, you may have received 5. During substantially all the time you a loss. If you are completing line 18 of
either stock in the stock company or cash in held the stock: Schedule D, enter as a positive number the
exchange for your equity interest in the mu- a. The corporation was a C corporation, amount of your allowable exclusion on line
tual company. The basis of your equity in- 2 of the 28% Rate Gain Worksheet on page
b. At least 80% of the value of the
terest in the mutual company is considered D-7.
corporation’s assets were used in the active
to be zero. conduct of one or more qualified busi- Gain from Form 2439. If you received a
If the demutualization transaction quali- nesses (defined below), and Form 2439 with a gain in box 1c, part or all
fies as a tax-free reorganization, no gain is c. The corporation was not a foreign of that gain (which is also included in box
recognized on the exchange of your equity corporation, DISC, former DISC, regulated 1a) may be eligible for the section 1202 ex-
interest in the mutual company for stock. investment company, real estate invest- clusion. In column (a) of line 8, enter the
The company can advise you if the transac- ment trust, REMIC, FASIT, cooperative, or name of the corporation whose stock was
tion is a tax-free reorganization. Because a corporation that has made (or that has a sold. In column (f), enter the amount of
the basis of your equity interest in the mu- subsidiary that has made) a section 936 your allowable exclusion as a loss. If you
tual company is considered to be zero, your election. are completing line 18 of Schedule D, enter
basis in the stock received is zero. Your as a positive number the amount of your
holding period for the new stock includes allowable exclusion on line 2 of the 28%
the period you held an equity interest in the SSBIC.
A specialized small
Rate Gain Worksheet on page D-7.
mutual company. If you received cash in
business investment company
exchange for your equity interest, you must
(SSBIC) is treated as having
Gain from an installment sale of QSB
TIP
recognize a capital gain in an amount equal
met test 5b above.
stock. If all payments are not received in
to the cash received. If you held the equity the year of sale, a sale of QSB stock that is
Qualified Business
interest for more than 1 year, report the not traded on an established securities mar-
gain as a long-term capital gain on line 8. If A qualified business is any business that is ket generally is treated as an installment
you held the equity interest for 1 year or not one of the following. sale and is reported on Form 6252. Figure
less, report the gain as a short-term capital •A business involving services per- the allowable section 1202 exclusion for
gain on line 1. formed in the fields of health, law, engi- the year by multiplying the total amount of
If the demutualization transaction does neering, architecture, accounting, actuarial the exclusion by a fraction, the numerator
not qualify as a tax-free reorganization, you science, performing arts, consulting, athlet- of which is the amount of eligible gain to be
must recognize a capital gain in an amount ics, financial services, or brokerage serv- recognized for the tax year and the denomi-
equal to the cash and fair market value of ices. nator of which is the total amount of eligi-
D-4
Page 5 of 9 of 2004 Instructions for Schedule D 9:58 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
ble gain. In column (a) of line 8, enter the •The replacement property must qual- include on Schedule D. The exclusion ap-
name of the corporation whose stock was ify as an empowerment zone asset with re- plies to an interest in, or property of, certain
sold. In column (f), enter the amount of spect to the same empowerment zone as the businesses operating in the District of Co-
your allowable exclusion as a loss. If you asset sold. lumbia.
are completing line 18 of Schedule D, enter •You must reduce the basis of the re- DC Zone asset. A DC Zone asset is any of
as a positive number the amount of your placement property by the amount of post- the following.
allowable exclusion on line 2 of the 28% poned gain. •DC Zone business stock.
Rate Gain Worksheet on page D-7. •This election does not apply to any •DC Zone partnership interest.
gain (a) treated as ordinary income or (b)
Alternative minimum tax. You must enter •DC Zone business property.
attributable to real property, or an intangi-
7% of your allowable exclusion for the year ble asset, which is not an integral part of an Qualified capital gain. Qualified capital
on line 12 of Form 6251. enterprise zone business. gain is any gain recognized on the sale or
exchange of a DC Zone asset that is a capi-
•The District of Columbia enterprise
Rollover of Gain From QSB tal asset or property used in a trade or busi-
zone is not treated as an empowerment
Stock ness. It does not include any of the
zone for this purpose.
If you sold QSB stock (defined on page following gains.
•The election is irrevocable without
D-4) that you held for more than 6 months, •Gain treated as ordinary income under
IRS consent.
you may elect to postpone gain if you section 1245.
See Pub. 954 for the definition of em-
purchase other QSB stock during the •Section 1250 gain figured as if section
powerment zone and enterprise zone busi-
60-day period that began on the date of the 1250 applied to all depreciation rather than
ness. You can find out if your business is
sale. A pass-through entity also may make the additional depreciation.
located within an empowerment zone by
the election to postpone gain. The benefit
•Gain attributable to real property, or
using the RC/EZ/EC Address Locator at
of the postponed gain applies to your share an intangible asset, that is not an integral
www.hud.gov/crlocator.
of the entity’s postponed gain if you held an part of a DC Zone business.
interest in the entity for the entire period the Qualified empowerment zone assets
entity held the QSB stock. If a pass-through •Gain from a related-party transaction.
are:
entity sold QSB stock held for more than 6 See
Sales and Exchanges Between Related
1. Tangible property, if:
months and you held an interest in the en-
Persons
in chapter 2 of Pub. 544.
tity for the entire period the entity held the a. You acquired the property after De- See Pub. 954 and section 1400B for
stock, you also may elect to postpone gain cember 21, 2000, more details on DC Zone assets and special
if you, rather than the pass-through entity, rules.
b. The original use of the property in the
purchase the replacement QSB stock empowerment zone began with you, and How to report. Report the entire gain real-
within the 60-day period. c. Substantially all of the use of the ized from the sale or exchange as you oth-
You must recognize gain to the extent property, during substantially all of the erwise would without regard to the
the sale proceeds exceed the cost of the re- time that you held it, was in your enterprise exclusion. On Schedule D, line 8, enter
placement stock. Reduce the basis of the zone business; and “DC Zone Asset” in column (a) and enter
replacement stock by any postponed gain. as a loss in column (f) the amount of the
2. Stock in a domestic corporation or a allowable exclusion. If you are reporting
capital or profits interest in a domestic part-
You must make the election no later the sale directly on Schedule D, line 8, use
nership, if:
than the due date (including extensions) for the line directly below the line on which
filing your tax return for the tax year in a. You acquired the stock or partnership you are reporting the sale.
which the QSB stock was sold. If your orig- interest after December 21, 2000, solely in
inal return was filed on time, you may exchange for cash, from the corporation at
make the election on an amended return its original issue (directly or through an un-
filed no later than 6 months after the due derwriter) or from the partnership;
Specific Instructions
date of your return (excluding extensions). b. The business was an enterprise zone
Write “Filed pursuant to section Lines 1 and 8
business (or a new business being organ-
301.9100-2” at the top of the amended re- ized as an enterprise zone business) as of Enter all sales and exchanges of capital as-
turn. the time you acquired the stock or partner- sets, including stocks, bonds, etc., and real
ship interest; and
To make the election, report the entire estate (if not reported on Form 4684, 4797,
gain realized on the sale on line 1 or 8. Di- 6252, 6781, or 8824). But do not report the
c. The business qualified as an enter-
rectly below the line on which you reported sale or exchange of your main home unless
prise zone business during substantially all
the gain, enter in column (a) “Section 1045 required (see page D-2). Include these
of the time during which you held the stock
rollover,” and enter the amount of the post- transactions even if you did not receive a
or partnership interest.
poned gain as a (loss) in column (f). Form 1099-B or 1099-S (or substitute state-
ment) for the transaction. You can use
How to report. Report the entire gain real- stock ticker symbols or abbreviations to de-
Rollover of Gain From ized from the sale as you otherwise would scribe the property as long as they are based
without regard to the election. On Schedule
Empowerment Zone Assets on the descriptions of the property as
D, line 8, enter “Section 1397B Rollover”
If you sold a qualified empowerment zone shown on Form 1099-B or 1099-S (or sub-
in column (a) and enter as a loss in column
asset that you held for more than 1 year, stitute statement).
(f) the amount of gain included on Sched-
you may be able to elect to postpone part or ule D that you are electing to postpone. If Use Schedule D-1 to list additional
all of the gain that you would otherwise in- you are reporting the sale directly on transactions for lines 1 and 8. Use as many
clude on Schedule D. If you make the elec- Schedule D, line 8, use the line directly be- Schedules D-1 as you need. Enter on
tion, the gain on the sale generally is low the line on which you are reporting the Schedule D, lines 2 and 9, the combined
recognized only to the extent, if any, that sale. totals from all your Schedules D-1.
the amount realized on the sale exceeds the See section 1397B for more details.
cost of qualified empowerment zone assets
Add the following amounts re-
(replacement property) you purchased dur-
ported to you for 2004 on
Exclusion of Gain From DC
ing the 60-day period beginning on the date
Forms 1099-B and 1099-S (or
Zone Assets
of the sale. The following rules apply.
substitute statements) that you
•No portion of the cost of the replace- If you sold or exchanged a District of Co-
are not reporting on another form or sched-
ment property may be taken into account to lumbia Enterprise Zone (DC Zone) asset
ule included with your return: (a) proceeds
the extent the cost is taken into account to that you held for more than 5 years, you
from transactions involving stocks, bonds,
exclude gain on a different empowerment may be able to exclude the amount of quali-
and other securities and (b) gross proceeds
zone asset. fied capital gain that you would otherwise
from real estate transactions (other than the
D-5
Page 6 of 9 of 2004 Instructions for Schedule D 9:58 - 28-OCT-2004
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Capital Loss Carryover Worksheet—Lines 6 and 14
Keep for Your Records
sale of your main home if you are not re-
you sold stocks or bonds and you received a the asset is its closing market price or fair
quired to report it). If this total is more than
Form 1099-B (or substitute statement) market value, whichever applies, on the
the total of lines 3 and 10, attach an expla-
from your broker that shows gross sales date of the deemed sale and reacquisition,
nation of the difference (for example, you
price, enter that amount in column (d). But whether the deemed sale resulted in a gain
were the nominee for the actual owner of
if Form 1099-B (or substitute statement) in- or an unallowed loss.
the property).
dicates that gross proceeds minus commis- You may elect to use an average basis
sions and option premiums were reported
Column (b)—Date Acquired for all shares of a mutual fund if you ac-
to the IRS, enter that net amount in column quired the shares at various times and
Enter in this column the date the asset was (d). If you enter the net amount in column prices and you left the shares on deposit in
acquired. Use the trade date for stocks and (d), do not include the commissions and op- an account handled by a custodian or agent
bonds traded on an exchange or tion premiums from the sale in column (e). who acquired or redeemed those shares. If
over-the-counter market. For stock or other You should not have received a Form you are reporting an average basis, include
property sold short, enter the date the stock 1099-B (or substitute statement) for a trans- “AVGB” in column (a) of Schedule D. For
or property was delivered to the broker or action merely representing the return of details on making the election and how to
lender to close the short sale. your original investment in a nontransfer- figure average basis, see Pub. 564.
The date acquired for an asset you held able obligation, such as a savings bond or a
on January 1, 2001, for which you made an certificate of deposit. But if you did, report The basis of property acquired by gift is
election to recognize any gain in a deemed the amount shown on Form 1099-B (or generally the basis of the property in the
sale is the date of the deemed sale and reac- substitute statement) in both columns (d) hands of the donor. The basis of property
quisition. and (e). acquired from a decedent is generally the
fair market value at the date of death. See
If you disposed of property that you ac-
Be sure to add all sales price en-
Pub. 551 for details.
quired by inheritance, report the gain or
tries on lines 1 and 8, column
(loss) on line 8 and enter “INHERITED” in
(d), to amounts on lines 2 and 9,
Increase the cost or other basis of an
column (b) instead of the date you acquired
column (d). Enter the totals on
original issue discount (OID) debt instru-
the property.
lines 3 and 10.
ment by the amount of OID that has been
If you sold a block of stock (or similar included in gross income for that instru-
Column (e)—Cost or Other Basis
property) that was acquired through several ment. See Pub. 550 for details.
In general, the cost or other basis is the cost
different purchases, you may report the sale of the property plus purchase commissions
on one line and enter “VARIOUS” in col- If a charitable contribution deduction is
and improvements, minus depreciation,
umn (b). However, you still must report the allowed because of a bargain sale of prop-
amortization, and depletion. If you inher-
short-term gain or (loss) on the sale in Part I erty to a charitable organization, the ad-
ited the property, got it as a gift, or received
and the long-term gain or (loss) in Part II. justed basis for purposes of determining
it in a tax-free exchange, involuntary con- gain from the sale is the amount that has the
Column (c)—Date Sold version, or “wash sale” of stock, you may same ratio to the adjusted basis as the
Enter in this column the date the asset was not be able to use the actual cost as the ba- amount realized has to the fair market
sold. Use the trade date for stocks and sis. If you do not use the actual cost, attach value. See Pub. 544 for details.
bonds traded on an exchange or an explanation of your basis.
over-the-counter market. For stock or other Increase your cost or other basis by any
If you sold stock, adjust your basis by
property sold short, enter the date you sold expense of sale, such as broker’s fees, com-
subtracting all the nondividend distribu-
the stock or property you borrowed to open missions, state and local transfer taxes, and
tions you received before the sale. Also ad-
the short sale transaction. option premiums, before making an entry
just your basis for any stock splits. See Pub. in column (e), unless you reported the net
Column (d)—Sales Price 550 for details. sales price in column (d).
Enter in this column either the gross sales If you elected to recognize gain on an
price or the net sales price from the sale. If asset held on January 1, 2001, your basis in For more details, see Pub. 551.
Use this worksheet to figure your capital loss carryovers from 2003 to 2004 if your 2003 Schedule D, line 18, is a loss and (a) that loss is a
smaller loss than the loss on your 2003 Schedule D, line 17a, or (b) your 2003 Form 1040, line 38, is a loss. Otherwise, you do not have
any carryovers.
1. Enter the amount from your 2003 Form 1040, line 38. If a loss, enclose the amount in parentheses .......... 1.
2. Enter the loss from your 2003 Schedule D, line 18, as a positive amount ............................ 2.
3. Combine lines 1 and 2. If zero or less, enter -0- ............................................. 3.
4. Enter the smaller of line 2 or line 3 ..................................................... 4.
If line 7b of your 2003 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9.
5. Enter the loss from your 2003 Schedule D, line 7b, as a positive amount ............................ 5.
6. Enter any gain from your 2003 Schedule D, line 16 .......................... 6.
7. Add lines 4 and 6 ................................................................. 7.
8. Short-term capital loss carryover for 2004. Subtract line 7 from line 5. If zero or less, enter -0-. If more than
zero, also enter this amount on Schedule D, line 6 ........................................... 8.
If line 16 of your 2003 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13.
9. Enter the loss from your 2003 Schedule D, line 16, as a positive amount ............................ 9.
10. Enter any gain from your 2003 Schedule D, line 7b .......................... 10.
11. Subtract line 5 from line 4. If zero or less, enter -0- .......................... 11.
12. Add lines 10 and 11 ................................................................ 12.
13. Long-term capital loss carryover for 2004. Subtract line 12 from line 9. If zero or less, enter -0-. If more than
zero, also enter this amount on Schedule D, line 14 .......................................... 13.
D-6
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28% Rate Gain Worksheet—Line 18
Keep for Your Records
year for which you are reporting gain on the is treated as unrecaptured section 1250 gain
Column (f)—Gain or (Loss) installment method. until the total unrecaptured section 1250
You must make a separate entry in this col- gain figured in step 2 has been used in full.
•You received a Schedule K-1 from an
umn for each transaction reported on lines Figure the amount of gain treated as unre-
estate or trust, partnership, or S corporation
1 and 8 and any other line(s) that applies to captured section 1250 gain for installment
that shows “unrecaptured section 1250
you. For lines 1 and 8, subtract the amount payments received in 2004 as the smaller of
gain.”
in column (e) from the amount in column (a) the amount from line 26 or line 37 of
(d). Enter negative amounts in parentheses. •You received a Form 1099-DIV or your 2004 Form 6252, whichever applies,
Form 2439 from a real estate investment or (b) the amount of unrecaptured section
Line 18 trust or regulated investment company (in- 1250 gain remaining to be reported. This
cluding a mutual fund) that reports “unre-
If you checked “Yes” on line 17, complete amount is generally the total unrecaptured
captured section 1250 gain.”
the worksheet below if either of the follow- section 1250 gain for the sale reduced by all
ing apply for 2004. •You reported a long-term capital gain gain reported in prior years (excluding sec-
from the sale or exchange of an interest in a
•You reported in Part II a section 1202 tion 1250 ordinary income recapture).
partnership that owned section 1250 prop-
exclusion from the eligible gain on quali- However, if you chose not to treat all of the
erty.
fied small business stock (see page D-4), or gain from payments received after May 6,
1997, and before August 24, 1999, as unre-
•You reported in Part II a collectibles Instructions for the Unrecaptured captured section 1250 gain, use only the
gain or (loss). A collectibles gain or (loss) Section 1250 Gain Worksheet amount you chose to treat as unrecaptured
is any long-term gain or deductible Lines 1 through 3. If you had more than section 1250 gain for those payments to re-
long-term loss from the sale or exchange of one property described on line 1, complete duce the total unrecaptured section 1250
a collectible that is a capital asset. lines 1 through 3 for each property on a gain remaining to be reported for the sale.
Collectibles include works of art, rugs, separate worksheet. Enter the total of the Include this amount on line 4.
antiques, metals (such as gold, silver, and line 3 amounts for all properties on line 3 Line 10. Include on line 10 your share of
platinum bullion), gems, stamps, coins, al- and go to line 4. the partnership’s unrecaptured section
coholic beverages, and certain other tangi- Line 4. To figure the amount to enter on 1250 gain that would result if the partner-
ble property. line 4, follow the steps below for each in- ship had transferred all of its section 1250
Include on the worksheet any gain (but stallment sale of trade or business property property in a fully taxable transaction im-
not loss) from the sale or exchange of an held more than 1 year. mediately before you sold or exchanged
interest in a partnership, S corporation, or
Step 1.
Figure the smaller of (a) the de- your interest in that partnership. If you rec-
trust held for more than 1 year and attribu- preciation allowed or allowable or (b) the ognized less than all of the realized gain,
table to unrealized appreciation of col- total gain for the sale. This is the smaller of the partnership will be treated as having
lectibles. For details, see Regulations line 22 or line 24 of your 2004 Form 4797 transferred only a proportionate amount of
section 1.1(h)-1. Also, attach the statement (or the comparable lines of Form 4797 for each section 1250 property. For details, see
required under Regulations the year of sale) for the property. Regulations section 1.1(h)-1. Also attach
section 1.1(h)-1(e). the statement required under Regulations
Step 2.
Reduce the amount figured in section 1.1(h)-1(e).
step 1 by any section 1250 ordinary income
Line 19 recapture for the sale. This is the amount Line 12. An example of an amount to in-
If you checked “Yes” on line 17, complete from line 26g of your 2004 Form 4797 (or clude on line 12 is unrecaptured section
the worksheet on page D-8 if any of the fol- the comparable line of Form 4797 for the 1250 gain from the sale of a vacation home
lowing apply for 2004. year of sale) for the property. The result is you previously used as a rental property but
•You sold or otherwise disposed of your total unrecaptured section 1250 gain converted to personal use prior to the sale.
section 1250 property (generally, real prop- that must be allocated to the installment To figure the amount to enter on line 12,
erty that you depreciated) held more than 1 payments received from the sale.
year.
Step 3.
Generally, the amount of sec-
•You received installment payments tion 1231 gain on each installment payment
for section 1250 property held more than 1
1. Enter the total of all collectibles gain or (loss) from items you reported on line 8, column (f), of Schedules D
and D-1 ........................................................................ 1.
2. Enter as a positive number the amount of any section 1202 exclusion you reported on line 8, column (f), of
Schedules D and D-1 ............................................................... 2.
3. Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15, is more
than zero); Form 6252; Form 6781, Part II; and Form 8824 .................................... 3.
4. Enter the total of any collectibles gain reported to you on:
•Form 1099-DIV, box 2d;
}
................ 4.
•Form 2439, box 1d; and
•Schedule K-1 from a partnership, S corporation, estate, or trust.
5. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1 (Form 1041), 5. ()
line 13c ........................................................................
6. If Schedule D, line 7, is a (loss), enter that (loss) here. Otherwise, enter -0- ......................... 6. ()
7. Combine lines 1 through 6. If zero or less, enter -0-. If more than zero, also enter this amount on
Schedule D, line 18 ................................................................ 7.
D-7
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Unrecaptured Section 1250 Gain Worksheet—Line 19
Keep for Your Records
follow the applicable instructions below. (a) the amount from line 26 or line 37 of Line 21
your 2004 Form 6252, whichever applies,
Installment sales.
To figure the amount Limit on capital losses. For 2004, you may
or (b) the amount of unrecaptured section
to include on line 12, follow the steps be- deduct capital losses up to the amount of
1250 gain remaining to be reported. This
low for each installment sale of property your capital gains plus $3,000 ($1,500 if
amount is generally the total unrecaptured
held more than 1 year for which you did not married filing separately). Enter on line 21
section 1250 gain for the sale reduced by all
make an entry in Part I of your Form 4797 the smaller of (a) the loss on line 16 or (b)
gain reported in prior years (excluding sec-
for the year of sale. ($3,000), or if married filing separately,
tion 1250 ordinary income recapture). ($1,500). When figuring which amount is
However, if you chose not to treat all of the
•Step 1. Figure the smaller of (a) the smaller, treat both amounts as positive
gain from payments received after May 6,
depreciation allowed or allowable or (b) the numbers.
1997, and before August 24, 1999, as unre-
total gain for the sale. This is the smaller of captured section 1250 gain, use only the
line 22 or line 24 of your 2004 Form 4797 Capital loss carryover. You have a capital
amount you chose to treat as unrecaptured
(or the comparable lines of Form 4797 for loss carryover from 2004 to 2005 if you
section 1250 gain for those payments to re-
the year of sale) for the property. have a loss on line 16 and either:
duce the total unrecaptured section 1250
•Step 2. Reduce the amount figured in gain remaining to be reported for the sale. •That loss is more than the loss on line
step 1 by any section 1250 ordinary income Include this amount on line 12. 21, or
recapture for the sale. This is the amount
•Form 1040, line 40, is less than zero.
from line 26g of your 2004 Form 4797 (or
Other sales or dispositions of section
the comparable line of Form 4797 for the
1250 property.
For each sale of property To figure any capital loss carryover to
year of sale) for the property. The result is held more than 1 year (for which you did 2005, you will use the Capital Loss Carry-
your total unrecaptured section 1250 gain not make an entry in Part I of Form 4797), over Worksheet in the 2005 Instructions for
that must be allocated to the installment figure the smaller of (a) the depreciation al- Schedule D. If you want to figure your car-
payments received from the sale. lowed or allowable or (b) the total gain for ryover now, see Pub. 550.
•Step 3. Generally, the amount of capi- the sale. This is the smaller of line 22 or
tal gain on each installment payment is line 24 of Form 4797 for the property.
You will need a copy of your
treated as unrecaptured section 1250 gain Next, reduce that amount by any section
2004 Form 1040 and Schedule
until the total unrecaptured section 1250 1250 ordinary income recapture for the
D to figure your capital loss
gain figured in step 2 has been used in full. sale. This is the amount from line 26g of
TIP
carryover to 2005.
Figure the amount of gain treated as unre- Form 4797 for the property. The result is
captured section 1250 gain for installment the total unrecaptured section 1250 gain for
payments received in 2004 as the smaller of the sale. Include this amount on line 12.
If you are not reporting a gain on Form 4797, line 7, skip lines 1 through 9 and go to line 10.
1. If you have a section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797
(but not on Form 6252), enter the smaller of line 22 or line 24 of Form 4797 for that property. If you did not
have any such property, go to line 4. If you had more than one such property, see instructions ............. 1.
2. Enter the amount from Form 4797, line 26g, for the property for which you made an entry on line 1 ........ 2.
3. Subtract line 2 from line 1 ........................................................... 3.
4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 from installment
sales of trade or business property held more than 1 year (see instructions) .......................... 4.
5. Enter the total of any amounts reported to you on a Schedule K-1 from a partnership or an S corporation as
“unrecaptured section 1250 gain” ...................................................... 5.
6. Add lines 3 through 5 .............................................................. 6.
7. Enter the smaller of line 6 or the gain from Form 4797, line 7 .................. 7.
8. Enter the amount, if any, from Form 4797, line 8 ............................ 8.
9. Subtract line 8 from line 7. If zero or less, enter -0- .......................................... 9.
10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to
unrecaptured section 1250 gain (see instructions) ............................................ 10.
11. Enter the total of any amounts reported to you on a Schedule K-1, Form 1099-DIV, or Form 2439 as
“unrecaptured section 1250 gain” from an estate, trust, real estate investment trust, or mutual fund (or other
regulated investment company) ........................................................ 11.
12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other
dispositions of section 1250 property held more than 1 year for which you did not make an entry in Part I of
Form 4797 for the year of sale (see instructions) ............................................ 12.
13. Add lines 9 through 12 ............................................................. 13.
14. If you had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1
through 4 of the 28% Rate Gain Worksheet on page D-7. Otherwise, enter -0- ...... 14.
15. Enter the (loss), if any, from Schedule D, line 7. If Schedule D, line 7, is zero or a gain,
enter -0- ........................................................ 15. ()
16. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1
(Form 1041), line 13c .............................................. 16. ()
17. Combine lines 14 through 16. If the result is a (loss), enter it as a positive amount. If the result is zero or a gain,
enter -0- ........................................................................ 17.
18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. If more than zero,
enter the result here and on Schedule D, line 19 ............................................ 18.
D-8
Page 9 of 9 of 2004 Instructions for Schedule D 9:58 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Schedule D Tax Worksheet
Keep for Your Records
Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero. Otherwise, complete the Qualified Dividends and Capital Gain
Tax Worksheet on page 34 of the Instructions for Form 1040 to figure your tax.
Exception: Do not use the Qualified Dividends and Capital Gain Tax Worksheet or this worksheet to figure your tax if:
•Line 15 or line 16 of Schedule D is zero or less and you have no qualified dividends on Form 1040, line 9b, or
•Form 1040, line 42, is zero or less.
Instead, see the instructions for Form 1040, line 43.
1. Enter your taxable income from Form 1040, line 42 ................................................. 1.
2. Enter your qualified dividends from Form 1040, line 9b ..... 2.
3. Enter the amount from Form 4952, line 4g 3.
4. Enter the amount from Form 4952, line 4e* 4.
5. Subtract line 4 from line 3. If zero or less, enter -0- ........ 5.
6. Subtract line 5 from line 2. If zero or less, enter -0- ...................... 6.
7. Enter the smaller of line 15 or line 16 of Schedule D ....... 7.
8. Enter the smaller of line 3 or line 4 .................. 8.
9. Subtract line 8 from line 7. If zero or less, enter -0- ...................... 9.
10. Add lines 6 and 9 .......................................................... 10.
11. Add lines 18 and 19 of Schedule D ................................ 11.
12. Enter the smaller of line 9 or line 11 ............................................. 12.
13. Subtract line 12 from line 10 ............................................................... 13.
14. Subtract line 13 from line 1. If zero or less, enter -0- ................................................ 14.
15. Enter the smaller of:
• The amount on line 1 or
}
• $29,050 if single or married filing separately; ........ 15.
$58,100 if married filing jointly or qualifying widow(er); or
$38,900 if head of household
16. Enter the smaller of line 14 or line 15 .............................. 16.
17. Subtract line 10 from line 1. If zero or less, enter -0- ....... 17.
18. Enter the larger of line 16 or line 17 ...........................................䊳18.
If lines 15 and 16 are the same, skip lines 19 and 20 and go to line 21. Otherwise, go to line 19.
19. Subtract line 16 from line 15 ................................................䊳19.
20. Multiply line 19 by 5% (.05) ................................................................ 20.
If lines 1 and 15 are the same, skip lines 21 through 33 and go to line 34. Otherwise, go to line 21.
21. Enter the smaller of line 1 or line 13 ............................... 21.
22. Enter the amount from line 19 (if line 19 is blank, enter -0-) ................ 22.
23. Subtract line 22 from line 21. If zero or less, enter -0- ................................䊳23.
24. Multiply line 23 by 15% (.15) ............................................................... 24.
If Schedule D, line 19, is zero or blank, skip lines 25 through 30 and go to line 31. Otherwise, go to line 25.
25. Enter the smaller of line 9 above or Schedule D, line 19 ................... 25.
26. Add lines 10 and 18 ............................ 26.
27. Enter the amount from line 1 above .................. 27.
28. Subtract line 27 from line 26. If zero or less, enter -0- .................... 28.
29. Subtract line 28 from line 25. If zero or less, enter -0- ................................䊳29.
30. Multiply line 29 by 25% (.25) ............................................................... 30.
If Schedule D, line 18, is zero or blank, skip lines 31 through 33 and go to line 34. Otherwise, go to line 31.
31. Add lines 18, 19, 23, and 29 ................................................... 31.
32. Subtract line 31 from line 1 ................................................... 32.
33. Multiply line 32 by 28% (.28) ............................................................... 33.
34. Figure the tax on the amount on line 18. Use the Tax Table or Tax Computation Worksheet, whichever applies .......... 34.
35. Add lines 20, 24, 30, 33, and 34 ............................................................. 35.
36. Figure the tax on the amount on line 1. Use the Tax Table or Tax Computation Worksheet, whichever applies ........... 36.
37. Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 35 or line 36. Also
include this amount on Form 1040, line 43 ....................................................... 37.
*If applicable, enter instead the smaller amount you entered on the dotted line next to line 4e of Form 4952.
D-9
Userid: ________ Leading adjust: 0/-20/-20% ❏Draft ❏Ok to Print
PAGER/SGML Fileid: I1040SE.XML ( 3-Nov-2004) (Init. & date)
Filename: D:\USERS\pzqbb\documents\Epicfiles\04i1040Sch_E.xml
Page 1 of 6 of 2004 Instructions for Schedule E (Form 1040) 11:29 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedule E (Form 1040)
Use Schedule E (Form 1040) to report income or loss from rental real estate, royalties,
partnerships, S corporations, estates, trusts, and residual interests in REMICs.
Supplemental You can attach your own schedule(s) to report income or loss from any of these sources.
Use the same format as on Schedule E.
Income and Enter separately on Schedule E the total income and the total loss for each part. Enclose
loss figures in (parentheses).
Loss Section references are to the Internal Revenue Code.
Qualified nonrecourse financing is financ- it is a trade or business activity, and if so,
ing for which no one is personally liable for whether you materially participated in the
General Instructions
repayment and is: activity for the tax year.
At-Risk Rules •Borrowed by you in connection with See the Instructions for Form 8582 to
holding real property,
Generally, you must complete Form 6198 determine whether you materially partici-
•Not convertible from a debt obligation
to figure your allowable loss if you have: pated in the activity and for the definition
to an ownership interest, and of “rental activity.”
•A loss from an activity carried on as a •Loaned or guaranteed by any federal,
trade or business or for the production of See Pub. 925 for special rules that apply
state, or local government, or borrowed by
income, and to rentals of:
you from a qualified person.
•Amounts in the activity for which you •Substantially nondepreciable prop-
are not at risk. Qualified person. A qualified person is a erty,
person who actively and regularly engages
The at-risk rules generally limit the •Property incidental to development
in the business of lending money, such as a
amount of loss (including loss on the dispo- activities, and
bank or savings and loan association. A
sition of assets) you can claim to the •Property to activities in which you
qualified person cannot be:
amount you could actually lose in the activ- materially participate.
•Related to you (unless the nonre-
ity. However, the at-risk rules do not apply
course financing obtained is commercially Activities That Are Not Passive
to losses from an activity of holding real
reasonable and on the same terms as loans
property, if you acquired your interest in Activities
involving unrelated persons),
the activity before 1987 and the property Activities of real estate professionals. If
was placed in service before 1987. The ac- •The seller of the property (or a person you were a real estate professional in 2004,
tivity of holding mineral property does not related to the seller), or any rental real estate activity in which you
qualify for this exception. •A person who receives a fee due to materially participated is not a passive ac-
your investment in real property (or a per- tivity. You were a real estate professional
In most cases, you are not at risk for
son related to that person). only if you met both of the following con-
amounts such as the following.
ditions.
•Nonrecourse loans used to finance the Passive Activity Loss Rules
activity, to acquire property used in the ac- 1. More than half of the personal serv-
The passive activity loss rules may limit the
tivity, or to acquire your interest in the ac- ices you performed in trades or businesses
amount of losses you can deduct. These
tivity that are not secured by your own were performed in real property trades or
rules apply to losses in Parts I, II, and III,
property (other than property used in the businesses in which you materially partici-
and line 40 of Schedule E.
activity). However, there is an exception pated.
for certain nonrecourse financing borrowed Losses from passive activities may be 2. You performed more than 750 hours
by you in connection with holding real subject first to the at-risk rules. Losses de- of services in real property trades or busi-
property. See
Qualified nonrecourse fi-
ductible under the at-risk rules are then nesses in which you materially partici-
nancing
below. subject to the passive activity loss rules. pated.
•Cash, property, or borrowed amounts You generally can deduct losses from
used in the activity (or contributed to the For purposes of this rule, each interest in
passive activities only to the extent of in-
activity, or used to acquire your interest in rental real estate is a separate activity, un-
come from passive activities. An exception
the activity) that are protected against loss less you elect to treat all your interests in
applies to certain rental real estate activities
by a guarantee, stop-loss agreement, or rental real estate as one activity. To make
(explained on page E-2).
other similar arrangement (excluding casu- this election, attach a statement to your
alty insurance and insurance against tort Passive Activity original tax return that declares you are a
liability). qualifying taxpayer for the year and you are
A passive activity is any business activity
•Amounts borrowed for use in the ac- making the election under section
in which you did not materially participate
tivity from a person who has an interest in 469(c)(7)(A). The election applies for the
and any rental activity, except as explained
the activity (other than as a creditor) or who year made and all later years in which you
on this page and page E-2. If you are a
is related, under section 465(b)(3), to a per- are a real estate professional. You can re-
limited partner, you generally are not
son (other than you) having such an inter- voke the election only if your facts and
treated as having materially participated in
est. circumstances materially change.
the partnership’s activities for the year.
Qualified nonrecourse financing. Quali- The rental of real or personal property is If you are married filing jointly, either
fied nonrecourse financing is treated as an generally a rental activity under the passive you or your spouse must separately meet
amount at risk if it is secured by real prop- activity loss rules, but exceptions apply. If both of the above conditions, without tak-
erty used in an activity of holding real prop- your rental of property is not treated as a ing into account services performed by the
erty that is subject to the at-risk rules. rental activity, you must determine whether other spouse.
E-1
Cat. No. 24332T
Page 2 of 6 of 2004 Instructions for Schedule E (Form 1040) 11:29 - 3-NOV-2004
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A real property trade or business is any significant and bona fide sense. Such man- •Any transaction resulting in a tax
real property development, redevelopment, agement decisions include: credit of more than $250,000, if you held
construction, reconstruction, acquisition, the asset generating the credit for 45 days
•Approving new tenants,
conversion, rental, operation, management, or less.
•Deciding on rental terms,
leasing, or brokerage trade or business. See the Instructions for Form 8886 for
•Approving capital or repair expendi-
Services you performed as an employee are more details and exceptions.
tures, and
not treated as performed in a real property •Other similar decisions.
trade or business unless you owned more Tax Shelter Registration
than 5% of the stock (or more than 5% of You are not considered to actively par- Number
the capital or profits interest) in the em- ticipate if, at any time during the tax year, Complete and attach Form 8271 if you are
ployer. your interest (including your spouse’s in- claiming or reporting any income, deduc-
terest) in the activity was less than 10% by
If you were a real estate professional for tion, loss, credit, or other tax benefit, from
value of all interests in the activity.
2004, complete line 43 on page 2 of Sched- an interest purchased or otherwise acquired
ule E. Modified adjusted gross income. This is in a tax shelter required to be registered
your adjusted gross income from Form with the IRS.
Other activities. The rental of your home 1040, line 36, without taking into account:
that you also used for personal purposes is Form 8271 is used to report the name,
not a passive activity. See the instructions •Any passive activity loss, tax shelter registration number, and identi-
for line 2 on page E-3. fying number of the tax shelter. There is a
•Rental real estate losses allowed
$250 penalty if you do not report the regis-
under the exception for real estate profes-
A working interest in an oil or gas well tration number of the tax shelter on your tax
sionals (explained on page E-1),
that you held directly or through an entity return.
that did not limit your liability is not a •Taxable social security or tier 1 rail-
passive activity even if you did not materi- road retirement benefits,
ally participate. •Deductible contributions to a tradi-
tional IRA or certain other qualified retire-
Royalty income not derived in the ordi-
Specific Instructions
ment plans under section 219,
nary course of a trade or business reported
on Schedule E generally is not considered •The student loan interest deduction,
income from a passive activity. •The tuition and fees deduction, Filers of Form 1041
For more details on passive activities, •The deduction for one-half of self-em- If you are a fiduciary filing Schedule E with
see the Instructions for Form 8582 and Pub. ployment tax, and Form 1041, enter the estate’s or trust’s em-
925. •Any excluded amounts under an ployer identification number (EIN) in the
employer’s adoption assistance program.
Exception for Certain Rental Real space for “Your social security number.”
Estate Activities However, if you file Form 8815, include
in your modified adjusted gross income the
If you meet all three of the following condi- savings bond interest excluded on line 14
tions, your rental real estate losses are not of that form.
limited by the passive activity loss rules. If
Part I
you do not meet all three of these condi- Reportable Transaction
tions, see the Instructions for Form 8582 to Income or Loss From
Disclosure Statement
find out if you must complete and attach
Form 8582 to figure any losses allowed. Use Form 8886 to disclose information for Rental Real Estate and
each reportable transaction in which you
1. Rental real estate activities are your Royalties
participated. Form 8886 must be filed for
only passive activities. each tax year that your federal income tax Use Part I to report:
2. You do not have any prior year unal- liability is affected by your participation in •Income and expenses from rental real
lowed losses from any passive activities. the transaction. You may have to pay a estate (including personal property leased
3. All of the following apply if you have penalty if you are required to file Form with real estate), and
an overall net loss from these activities: 8886 but do not do so. The following are •Royalty income and expenses.
reportable transactions.
a. You actively participated (defined be- See the instructions for lines 3 and 4 to
low) in all of the rental real estate activities; •Any transaction that is the same as or determine if you should report your rental
substantially similar to tax avoidance trans-
b. If married filing separately, you lived real estate and royalty income on Schedule
actions identified by the IRS.
apart from your spouse all year; C, Schedule C-EZ, or Form 4835 instead of
•Any transaction offered under condi-
c. Your overall net loss from these ac- Schedule E.
tions of confidentiality for which you paid
tivities is $25,000 or less ($12,500 or less if If you own a part interest in a rental real
an advisor a minimum fee.
married filing separately); estate property, report only your part of the
•Any transaction for which you have
d. You have no current or prior year income and expenses on Schedule E.
contractual protection against disallowance
unallowed credits from passive activities; of the tax benefits. Complete lines 1 and 2 for each rental
and
real estate property. Leave these lines blank
•Any transaction resulting in a loss of
e. Your modified adjusted gross income for each royalty property.
at least $2 million in any single tax year or
(defined later) is $100,000 or less ($50,000 $4 million in any combination of tax years.
or less if married filing separately). If you have more than three rental real
(At least $50,000 for a single tax year if the estate or royalty properties, complete and
loss arose from a foreign currency transac-
Active participation. You can meet the ac- attach as many Schedules E as you need to
tion defined in section 988(c)(1), whether
tive participation requirement without reg- list them. But fill in the “Totals” column on
or not the loss flows through from an S
ular, continuous, and substantial only one Schedule E. The figures in the
corporation or partnership.)
involvement in real estate activities. But “Totals” column on that Schedule E should
you must have participated in making man- •Any transaction resulting in a be the combined totals of all your Sched-
agement decisions or arranging for others book-tax difference of more than $10 mil- ules E. If you are also using page 2 of
to provide services (such as repairs) in a lion on a gross basis. Schedule E, use the same Schedule E on
E-2
Page 3 of 6 of 2004 Instructions for Schedule E (Form 1040) 11:29 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
which you entered the combined totals for •Any days you used the unit as your If you were in the real estate sales busi-
Part I. main home before or after renting it or of- ness, include on line 3 only the rent re-
fering it for rent, if you rented or tried to ceived from real estate (including personal
Personal property. Do not use Schedule E rent it for at least 12 consecutive months (or property leased with real estate) you held
to report income and expenses from the for a period of less than 12 consecutive for investment or speculation. Do not use
rental of personal property, such as equip- months at the end of which you sold or Schedule E to report income and expenses
ment or vehicles. Instead, use Schedule C exchanged it). from rentals of real estate held for sale to
or C-EZ if you are in the business of renting customers in the ordinary course of your
Check “Yes” if you or your family used
personal property. You are in the business real estate sales business. Instead, use
the unit for personal purposes in 2004 more
of renting personal property if the primary Schedule C or C-EZ for these rentals.
than the greater of:
purpose for renting the property is income For more details on rental income, use
or profit and you are involved in the rental 1. 14 days, or TeleTax topic 414 (see page 8 of the Form
activity with continuity and regularity. 2. 10% of the total days it was rented to 1040 instructions) or see Pub. 527.
others at a fair rental price.
If your rental of personal property is not Rental income from farm production or
a business, see the Instructions for Form crop shares. Report farm rental income
Otherwise, check “No.”
1040, lines 21 and 35, to find out how to and expenses on Form 4835 if:
report the income and expenses. If you checked “No,” you can deduct all •You received rental income based on
your expenses for the rental part, subject to
Extraterritorial income exclusion. Except crops or livestock produced by the tenant,
the
At-Risk Rules
and the
Passive Activity
as otherwise provided in the Internal Reve- and
Loss Rules
explained beginning on page
nue Code, gross income includes all in- •You did not manage or operate the
E-1.
come from whatever source derived. Gross farm to any great extent.
If you checked “Yes” and rented the
income, however, does not include extra- unit out for fewer than 15 days, do not
territorial income that is qualifying foreign Line 4
report the rental income and do not deduct
trade income. Use Form 8873 to figure the any rental expenses. If you itemize deduc- Report on line 4 royalties from oil, gas, or
extraterritorial income exclusion. Report it tions on Schedule A, you can deduct allow- mineral properties (not including operating
on Schedule E as explained in the Instruc- able interest, taxes, and casualty losses. interests); copyrights; and patents. Use a
tions for Form 8873.
separate column (A, B, or C) for each roy-
If you checked “Yes” and rented the alty property. Be sure to enter the total of
Line 1 unit out for at least 15 days, you may not be all your royalties in the “Totals” column
able to deduct all your rental expenses. You
For rental real estate property only, show even if you have only one source of royal-
can deduct all of the following expenses for
all of the following. ties.
the rental part on Schedule E.
•The kind of property you rented (for If you received $10 or more in royalties
•Mortgage interest.
example, townhouse). during 2004, the payer should send you a
•Real estate taxes.
•The street address, city or town, and Form 1099-MISC or similar statement by
•Casualty losses.
state. You do not have to give the ZIP code. January 31, 2005, showing the amount you
•Other rental expenses not related to
•Your percentage of ownership in the received.
your use of the unit as a home, such as
property, if less than 100%. If you are in business as a self-employed
advertising expenses and rental agents’ writer, inventor, artist, etc., report your roy-
fees.
Line 2 alty income and expenses on Schedule C or
If any income is left after deducting C-EZ.
If you rented out a dwelling unit that you these expenses, you can deduct other ex-
also used for personal purposes during the You may be able to treat amounts re-
penses, including depreciation, up to the
year, you may not be able to deduct all the ceived as “royalties” for the transfer of a
amount of remaining income. You can
expenses for the rental part. “Dwelling patent or amounts received on the disposal
carry over to 2005 the amounts you cannot
unit” (unit) means a house, apartment, con- of coal and iron ore as the sale of a capital
deduct.
dominium, or similar property. asset. For details, see Pub. 544.
See Pub. 527 for details.
A day of personal use is any day, or part Enter on line 4 the gross amount of roy-
of a day, that the unit was used by: alty income, even if state or local taxes
Line 3 were withheld from oil or gas payments
•You for personal purposes;
If you received rental income from real es- you received. Include taxes withheld by the
•Any other person for personal pur- tate (including personal property leased producer on line 16.
poses, if that person owns part of the unit with real estate) and you were not in the
(unless rented to that person under a real estate business, report the income on General Instructions for
“shared equity” financing agreement); line 3. Include income received for renting
•Anyone in your family (or in the fam- Lines 5 Through 21
a room or other space. If you received serv-
ily of someone else who owns part of the Enter your rental and royalty expenses for
ices or property instead of money as rent,
unit), unless the unit is rented at a fair rental each property in the appropriate column.
report the fair market value of what you
price to that person as his or her main You can deduct all ordinary and necessary
received as rental income.
home; expenses, such as taxes, interest, repairs,
Be sure to enter the total of all your rents
•Anyone who pays less than a fair insurance, management fees, agents’ com-
in the “Totals” column even if you have
rental price for the unit; or missions, and depreciation.
only one property.
•Anyone under an agreement that lets Do not deduct the value of your own
If you provided significant services to
you use some other unit. labor or amounts paid for capital invest-
the renter, such as maid service, report the ments or capital improvements.
Do not count as personal use: rental activity on Schedule C or C-EZ, not
•Any day you spent working substan- on Schedule E. Significant services do not Enter your total expenses for mortgage
tially full time repairing and maintaining include the furnishing of heat and light, interest (line 12), total expenses before de-
the unit, even if family members used it for cleaning of public areas, trash collection, or preciation expense or depletion (line 19),
recreational purposes on that day, or similar services. and depreciation expenses or depletion
E-3
Page 4 of 6 of 2004 Instructions for Schedule E (Form 1040) 11:29 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
(line 20) in the “Totals” column even if you Do not deduct legal fees paid or in- Line 17
have only one property. curred to defend or protect title to property,
You can deduct the cost of ordinary and
to recover property, or to develop or im-
Renting out part of your home. If you rent necessary telephone calls related to your
prove property. Instead, you must capital-
out only part of your home or other prop- rental activities or royalty income (for ex-
ize these fees and add them to the
erty, deduct the part of your expenses that ample, calls to the renter). However, the
property’s basis.
applies to the rented part. base rate (including taxes and other
Credit or deduction for access expendi- charges) for local telephone service for the
Lines 12 and 13
tures. You may be able to claim a tax first telephone line into your residence is a
In general, to determine the interest ex-
credit for eligible expenditures paid or in- personal expense and is not deductible.
pense allocable to your rental activities,
curred in 2004 to provide access to your you must have records to show how the
business for individuals with disabilities. Line 20
proceeds of each debt were used. Specific
See Form 8826 for details. Depreciation is the annual deduction you
tracing rules apply for allocating debt pro-
You can also deduct up to $15,000 of must take to recover the cost or other basis
ceeds and repayment. See Pub. 535 for de-
qualified costs paid or incurred in 2004 to of business or investment property having a
tails.
remove architectural or transportation bar- useful life substantially beyond the tax
If you have a mortgage on your rental
riers to individuals with disabilities and the year. Land is not depreciable.
property, enter on line 12 the amount of
elderly. interest you paid for 2004 to banks or other Depreciation starts when you first use
You cannot take both the credit and the financial institutions. Be sure to fill in the the property in your business or for the
deduction for the same expenditures. See “Totals” column. production of income. It ends when you
Pub. 535 for details. deduct all your depreciable cost or other
Do not deduct prepaid interest when you basis or no longer use the property in your
paid it. You can deduct it only in the year to
Line 6 business or for the production of income.
which it is properly allocable. Points, in-
You can deduct ordinary and necessary cluding loan origination fees, charged only See the Instructions for Form 4562 to
auto and travel expenses related to your for the use of money must be deducted over figure the amount of depreciation to enter
rental activities, including 50% of meal ex- the life of the loan. on line 20. Be sure to fill in the “Totals”
penses incurred while traveling away from column.
If you paid $600 or more in interest on a
home. You generally can either deduct mortgage during 2004, the recipient should You must complete and attach Form
your actual expenses or take the standard send you a Form 1098 or similar statement 4562 only if you are claiming:
mileage rate. You must use actual expenses by January 31, 2005, showing the total in-
if you used more than four vehicles simul- •Depreciation on property first placed
terest received from you.
taneously in your rental activities (as in in service during 2004;
If you paid more mortgage interest than
fleet operations). You cannot use actual ex- •Depreciation on listed property (de-
is shown on your Form 1098 or similar
penses for a leased vehicle if you previ- fined in the Instructions for Form 4562),
statement, see Pub. 535 to find out if you
ously used the standard mileage rate for including a vehicle, regardless of the date it
can deduct part or all of the additional inter-
that vehicle. was placed in service; or
est. If you can, enter the entire deductible
You can use the standard mileage rate •A section 179 expense deduction or
amount on line 12. Attach a statement to
for 2004 only if: amortization of costs that began in 2004.
your return explaining the difference. Write
•You owned the vehicle and used the “See attached” in the left margin next to See Pub. 527 for more information on
standard mileage rate for the first year you line 12. depreciation of residential rental property.
placed the vehicle in service, or See Pub. 946 for a more comprehensive
Note. If the recipient was not a financial
•You leased the vehicle and are using guide to depreciation.
institution or you did not receive a Form
the standard mileage rate for the entire 1098 from the recipient, report your de- If you own mineral property or an oil,
lease period (except the period, if any, ductible mortgage interest on line 13. gas, or geothermal well, you may be able to
before 1998). take a deduction for depletion. See Pub.
If you and at least one other person
If you deduct actual auto expenses: 535 for details.
(other than your spouse if you file a joint
•Include on line 6 the rental activity return) were liable for and paid interest on
portion of the cost of gasoline, oil, repairs, the mortgage, and the other person received Line 22
insurance, tires, etc., and Form 1098, report your share of the deduct- If you have amounts for which you are not
•Show auto rental or lease payments on ible interest on line 13. Attach a statement at risk, use Form 6198 to determine the
line 18 and depreciation on line 20. to your return showing the name and ad- amount of your deductible loss. Enter that
dress of the person who received Form
If you take the standard mileage rate, amount in the appropriate column of
1098. In the left margin next to line 13,
multiply the number of miles you drove Schedule E, line 22. In the space to the left
write “See attached.”
your auto in connection with your rental of line 22, write “Form 6198.” Attach Form
activities by 37.5 cents. Include this 6198 to your return. For details on the
amount and your parking fees and tolls on Line 14 at-risk rules, see page E-1.
line 6. You can deduct the cost of repairs made to
If you claim any auto expenses (actual keep your property in good working condi- Line 23
or the standard mileage rate), you must tion. Repairs generally do not add signifi- Do not complete line 23 if the amount on
complete Part V of Form 4562 and attach cant value to the property or extend its life. line 22 is from royalty properties.
Form 4562 to your tax return. Examples of repairs are fixing a broken
lock or painting a room. Improvements that If you have a rental real estate loss from
See Pub. 527 and Pub. 463 for details. increase the value of the property or extend a passive activity (defined on page E-1), the
its life, such as replacing a roof or renovat- amount of loss you can deduct may be lim-
Line 10 ing a kitchen, must be capitalized and de- ited by the passive activity loss rules. You
Include on line 10 fees for tax advice and preciated (that is, they cannot be deducted may need to complete Form 8582 to figure
the preparation of tax forms related to your in full in the year they are paid or incurred). the amount of loss, if any, to enter on line
rental real estate or royalty properties. See the instructions for line 20. 23.
E-4
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Partners and S corporation shareholders 2. You owned at least a 10% direct or
If your rental real estate loss is not from should get a separate statement of income, indirect interest in a foreign partnership
a passive activity or you meet the exception expenses, deductions, and credits for each while U.S. persons controlled that partner-
for certain rental real estate activities (ex- activity engaged in by the partnership and S ship.
plained on page E-2), you do not have to corporation. If you are subject to the at-risk 3. You had an acquisition, disposition,
complete Form 8582. Enter the loss from rules for any activity, use Form 6198 to or change in proportional interest of a for-
line 22 on line 23. figure the amount of any deductible loss. If eign partnership that:
the activity is nonpassive, enter any deduct- a. Increased your direct interest to at
ible loss from Form 6198 on the appropri- least 10% or reduced your direct interest of
ate line in Part II, column (h), of Schedule at least 10% to less than 10%, or
E.
Parts II and III
b. Changed your direct interest by at
•If you have a passive activity loss, you
If you need more space in Part II or III to least a 10% interest.
generally need to complete Form 8582 to
list your income or losses, attach a continu- 4. You contributed property to a foreign
figure the amount of the allowable loss to
ation sheet using the same format as shown partnership in exchange for a partnership
enter in Part II, column (f), for that activity.
in Part II or III. However, be sure to com- interest if:
But if you are a general partner or an S
plete the “Totals” columns for lines 29a corporation shareholder reporting your a. Immediately after the contribution,
and 29b, or lines 34a and 34b, as appropri- share of a partnership or an S corporation you owned, directly or indirectly, at least a
ate. If you also completed Part I on more loss from a rental real estate activity and 10% interest in the partnership, or
than one Schedule E, use the same Sched- you meet all three of the conditions listed b. The fair market value of the property
ule E on which you entered the combined on page E-2 under
Exception for Certain
you contributed to the partnership in ex-
totals in Part I.
Rental Real Estate Activities
, you do not change for a partnership interest, when ad-
have to complete Form 8582. Instead, enter
Tax preference items. If you are a partner, ded to other contributions of property you
your allowable loss in Part II, column (f).
a shareholder in an S corporation, or a ben- made to the partnership during the preced-
If you have passive activity income,
eficiary of an estate or trust, you must take ing 12-month period, exceeds $100,000.
complete Part II, column (g), for that activ-
into account your share of preferences and ity. Also, you may have to file Form 8865 to
adjustments from these entities for the al- report certain dispositions by a foreign
If you have nonpassive income or
ternative minimum tax on Form 6251 or partnership of property you previously con-
losses, complete Part II, columns (h)
Schedule I of Form 1041. tributed to that partnership if you were a
through (j), as appropriate. partner at the time of the disposition.
Partnerships For more details, including penalties for
See the Schedule K-1 instructions before failing to file Form 8865, see Form 8865
Part II
entering on your return other partnership and its separate instructions.
items from a passive activity or income or
Income or Loss From S Corporations
loss from any publicly traded partnership.
Partnerships and S If you are a shareholder in an S corporation,
You can deduct unreimbursed ordinary
Corporations your share of the corporation’s aggregate
and necessary expenses you paid on behalf losses and deductions (combined income,
of the partnership if you were required to
If you are a member of a partnership or losses, and deductions) is limited to the ad-
pay these expenses under the partnership
joint venture or a shareholder in an S corpo- justed basis of your corporate stock and any
agreement. See the instructions for line 27
ration, use Part II to report your share of the debt the corporation owes you. Any loss or
on page E-6 for how to report these ex-
partnership or S corporation income (even deduction not allowed this year because of
penses.
if not received) or loss. the basis limitation can be carried forward
Report allowable interest expense paid
You should receive a Schedule K-1 and deducted in a later year subject to the
or incurred from debt-financed acquisitions
from the partnership or S corporation. You basis limitation for that year.
in Part II or on Schedule A depending on
should also receive a copy of the Partner’s If you are claiming a deduction for your
the type of expenditure to which the inter-
or Shareholder’s Instructions for Schedule share of an aggregate loss, attach to your
est is allocated. See Pub. 535 for details.
K-1. Your copy of Schedule K-1 and its return a computation of the adjusted basis
instructions will tell you where on your If you claimed a credit for federal tax on of your corporate stock and of any debt the
return to report your share of the items. If gasoline or other fuels on your 2003 Form corporation owes you. See the Schedule
you did not receive these instructions with 1040 based on information received from K-1 instructions for details.
your Schedule K-1, see page 7 of the Form the partnership, enter as income in column
1040 instructions for how to get a copy. Do After applying the basis limitation, the
(g) or column (j), whichever applies, the
not attach Schedules K-1 to your return. deductible amount of your aggregate losses
amount of the credit claimed for 2003.
Keep them for your records. and deductions may be further reduced by
Part or all of your share of partnership the at-risk rules and the passive activity
If you are treating items on your tax income or loss from the operation of the loss rules. See page E-1.
return differently from the way the partner- business may be considered net earnings
ship (other than an electing large partner- Distributions of prior year accumulated
from self-employment that must be re-
ship) or S corporation reported them on its earnings and profits of S corporations are
ported on Schedule SE. Enter the amount
return, you may have to file Form 8082. If dividends and are reported on Form 1040,
from Schedule K-1 (Form 1065), box 14,
you are a partner in an electing large part- line 9a.
code A (or from Schedule K-1 (Form
nership, you must report the items shown 1065-B), box 9 (code K1)), on Schedule Interest expense relating to the acquisi-
on Schedule K-1 (Form 1065-B) on your SE, after you reduce this amount by any tion of shares in an S corporation may be
tax return the same way that the partnership allowable expenses attributable to that in- fully deductible on Schedule E. For details,
reported the items on Schedule K-1. come. see Pub. 535.
Special rules that limit losses. Please note Foreign partnerships. If you are a U.S. Your share of the net income of an S
the following. person, you may have to file Form 8865 if corporation is not subject to self-employ-
any of the following applies.
•If you have a current year loss, or a ment tax.
prior year unallowed loss, from a partner- 1. You controlled a foreign partnership
ship or an S corporation, see
At-Risk Rules
(that is, you owned more than a 50% direct
and
Passive Activity Loss Rules
on page or indirect interest in the partnership).
E-1.
E-5
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If you are treating REMIC items on
8582), enter in the applicable column of
Line 27 your tax return differently from the way the
line 28 your current year ordinary income REMIC reported them on its return, you
If you answered “Yes” on line 27, follow or loss from the partnership or S corpora- may have to file Form 8082.
the instructions below. If you fail to follow tion. Report each related item in the appli-
these instructions, the IRS may send you a cable column of a separate line following If you are the holder of a residual inter-
notice of additional tax due because the the line on which you reported the current est in more than one REMIC, attach a con-
tinuation sheet using the same format as in
amounts reported by the partnership or S year ordinary income or loss. Also enter a Part IV. Enter the totals of columns (d) and
corporation on Schedule K-1 do not match description of the related item (for exam- (e) on line 39 of Schedule E. If you also
the amounts you reported on your tax re- ple, depletion) in column (a) of the same completed Part I on more than one Sched-
turn. line. ule E, use the same Schedule E on which
If you are required to file Form 8582,
Losses Not Allowed in Prior you entered the combined totals in Part I.
see the Instructions for Form 8582 before
Years Due to the At-Risk or Basis REMIC income or loss is not income or
completing Schedule E.
Limitations loss from a passive activity.
•Enter your total prior year unallowed Note. If you are the holder of a regular
losses that are now deductible on a separate interest in a REMIC, do not use Schedule E
line in column (h) of line 28. Do not com- to report the income you received. Instead,
Part III
bine these losses with, or net them against, report it on Form 1040, line 8a.
any current year amounts from the partner- Income or Loss From
ship or S corporation. Column (c). Report the total of the
Estates and Trusts
•Enter “PYA” (prior year amount) in amounts shown on Schedule(s) Q, line 2c.
If you are a beneficiary of an estate or trust,
column (a) of the same line. This is the smallest amount you are allowed
use Part III to report your part of the in- to report as your taxable income (Form
come (even if not received) or loss. You
Prior Year Unallowed Losses 1040, line 42). It is also the smallest
should receive a Schedule K-1 (Form 1041)
From a Passive Activity Not amount you are allowed to report as your
from the fiduciary. Your copy of Schedule alternative minimum taxable income
Reported on Form 8582 K-1 and its instructions will tell you where (AMTI) (Form 6251, line 28).
•Enter on a separate line in column (f) on your return to report the items from If the amount in column (c) is larger
of line 28 your total prior year unallowed Schedule K-1. Do not attach Schedule K-1 than your taxable income would otherwise
losses not reported on Form 8582. Such to your return. Keep it for your records. be, enter the amount from column (c) on
losses include prior year unallowed losses If you are treating items on your tax Form 1040, line 42. Similarly, if the
that are now deductible because you did not return differently from the way the estate or amount in column (c) is larger than your
have an overall loss from all passive activi- trust reported them on its return, you may AMTI would otherwise be, enter the
ties or you disposed of your entire interest have to file Form 8082. amount from column (c) on Form 6251,
in a passive activity in a fully taxable trans- If you have estimated taxes credited to line 28. Write “Sch. Q” on the dotted line to
action. Do not combine these losses with, you from a trust (Schedule K-1, line 14a), the left of this amount on Form 1040 or
or net them against, any current year write “ES payment claimed” and the 6251.
amounts from the partnership or S corpora- amount on the dotted line next to line 37.
tion. Note. These rules also apply to estates and
Do not include this amount in the total on trusts that hold a residual interest in a
line 37. Instead, enter the amount on Form
•Enter “PYA” (prior year amount) in REMIC. Be sure to make the appropriate
1040, line 64.
column (a) of the same line. entries on the comparable lines on Form
A U.S. person who transferred property 1041.
Unreimbursed Partnership to a foreign trust may have to report the
Expenses income received by the trust as a result of
Do not include the amount
the transferred property if, during 2004, the
•You can deduct unreimbursed ordi-
shown in column (c) in the total
trust had a U.S. beneficiary. See section
nary and necessary partnership expenses
on line 39 of Schedule E.
679. An individual who received a distribu-
you paid on behalf of the partnership on tion from, or who was the grantor of or
Schedule E if you were required to pay transferor to, a foreign trust must also com- Column (e). Report the total of the
these expenses under the partnership agree- plete Part III of Schedule B (Form 1040) amounts shown on Schedule(s) Q, line 3b.
ment (except amounts deductible only as and may have to file Form 3520. In addi- If you itemize your deductions on Schedule
itemized deductions, which you must enter tion, the owner of a foreign trust must en- A, include this amount on line 22.
on Schedule A). sure that the trust files an annual
•Enter unreimbursed partnership ex- information return on Form 3520-A.
penses from nonpassive activities on a sep-
arate line in column (h) of line 28. Do not
Part V
combine these expenses with, or net them
against, any other amounts from the part-
Part IV Summary
nership. Income or Loss From Real
•If the expenses are from a passive ac- Line 42
tivity and you are not required to file Form Estate Mortgage Investment You will not be charged a penalty for un-
8582, enter the expenses related to a pas- Conduits (REMICs) derpayment of estimated tax if:
sive activity on a separate line in column (f) If you are the holder of a residual interest in
of line 28. Do not combine these expenses 1. Your gross farming or fishing income
a REMIC, use Part IV to report your total
with, or net them against, any other for 2003 or 2004 is at least two-thirds of
share of the REMIC’s taxable income or
amounts from the partnership. your gross income, and
loss for each quarter included in your tax
•Enter “UPE” (unreimbursed partner- 2. You file your 2004 tax return and pay
year. You should receive Schedule Q the tax due by March 1, 2005.
ship expenses) in column (a) of the same (Form 1066) and instructions from the
line. REMIC for each quarter. Do not attach
Schedules Q to your return. Keep them for
your records.
Line 28
For nonpassive income or loss (and passive
losses for which you are not filing Form
E-6
Userid: ________ Leading adjust: -7/-7/-7% ❏Draft ❏Ok to Print
PAGER/SGML Fileid: I1040SF.XML (28-Oct-2004) (Init. & date)
Filename: D:\USERS\xm9cb\documents\documents\Epicfiles\2004\04I1040SchF_d2.XML
Page 1 of 6 of 2004 Instructions for Schedule F 16:55 - 28-OCT-2004
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Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedule F
Use Schedule F (Form 1040) to report farm income and expenses. File it with Form 1040,
1041, 1065, or 1065-B.
Profit or Loss This activity may subject you to state and local taxes and other requirements such as
business licenses and fees. Check with your state and local governments for more informa-
From Farming tion.
Additional information. Pub. 225 has samples of filled-in forms and schedules, and lists
important dates that apply to farmers.
Section references are to the Internal Revenue Code unless otherwise noted.
losses due to death of livestock or damage
Disclosure Statement
in the Instructions for
to crops or other farm property. Schedule C on page C-1.
What’s New
•Form 4797 to report sales, exchanges, Estimated Tax
•For certain business start-up costs or involuntary conversions (other than
paid or incurred after October 22, 2004, If you had to make estimated tax payments
from a casualty or theft) of certain farm
you can elect to deduct up to $5,000. This in 2004 and you underpaid your estimated
property. Also use this form to report sales
limit is reduced by the amount by which tax, you will not be charged a penalty if
of livestock held for draft, breeding, sport,
your start-up costs exceed $50,000. Also, both of the following apply.
or dairy purposes.
the amortization period for certain business •Your gross farming or fishing income
•Form 4835 to report rental income
start-up costs paid or incurred after October for 2003 or 2004 is at least two-thirds of
based on farm production or crop shares if
22, 2004, has been increased to 15 years. your gross income.
you did not materially participate (for
For details, see Pub. 225. self-employment tax purposes) in the man- •You file your 2004 tax return and pay
•You can elect to deduct certain forest- agement or operation of the farm. This in- the tax due by March 1, 2005.
ation and reforestation costs paid or in- come is not subject to self-employment tax. For details, see Pub. 225.
curred after October 22, 2004, instead of See Pub. 225.
amortizing them over 84 months. This elec- •Form 8824 to report like-kind ex-
tion does not apply to estates and trusts. changes.
Also, the dollar limitation for amortization
Specific Instructions
on certain forestation and reforestation Heavy highway vehicle use tax. If you use
costs paid or incurred after October 22, certain highway trucks, truck-trailers, Filers of Forms 1041,
2004, has been eliminated. For details, see tractor-trailers, or buses in your farming
Pub. 225. 1065, and 1065-B
business, you may have to pay a federal
highway motor vehicle use tax. See the In- Do not complete the block labeled “Social
structions for Form 2290 to find out if you security number (SSN).” Instead, enter
owe this tax. your employer identification number (EIN)
General Instructions
on line D.
Information returns. You may have to file
Other Schedules and Forms information returns for wages paid to em-
You May Have To File ployees, certain payments of fees and other Line B
nonemployee compensation, interest, rents,
•Schedule E, Part I, to report rental in- On line B, enter one of the 14 principal
royalties, annuities, and pensions. You may
come from pastureland that is based on a agricultural activity codes listed in Part IV
also have to file an information return if
flat charge. Report on Schedule F, line 10, on page 2 of Schedule F. Select the code
you sold $5,000 or more of consumer prod-
pasture income received from taking care that best describes the source of most of
ucts to a person on a buy-sell, deposit-com-
of someone else’s livestock. your income.
mission, or other similar basis for resale.
•Schedule J to figure your tax by aver- For details, see the 2004 General Instruc-
aging your farm income over the previous 3 tions for Forms 1099, 1098, 5498, and
years. Doing so may reduce your tax. Line C
W-2G.
•Schedule SE to pay self-employment If you use the cash method, check the box
tax on income from your farming business. If you received cash of more than labeled “Cash.” Complete Schedule F,
$10,000 in one or more related transactions
•Form 4562 to claim depreciation on Parts I and II. Generally, report income in
in your farming business, you may have to
assets placed in service in 2004, to claim the year in which you actually or construc-
file Form 8300. For details, see Pub. 1544.
amortization that began in 2004, to make an tively received it and deduct expenses in
election under section 179 to expense cer- the year you paid them. However, if the
Reportable transaction disclosure payment of an expenditure creates an asset
tain property, or to report information on statement. If you entered into a reportable having a useful life that extends substan-
vehicles and other listed property. transaction in 2004, you must use Form tially beyond the close of the year, it may
•Form 4684 to report a casualty or theft 8886 to disclose information if your federal not be deductible or may be deductible only
gain or loss involving farm business prop- in part for the year of the payment. See Pub.
income tax liability is affected by your par-
erty including livestock held for draft, 225.
ticipation in the transaction. You may have
breeding, sport, or dairy purposes. to pay a penalty if you are required to file If you use the accrual method, check the
See Pub. 225 for more information on Form 8886 but do not do so. For more box labeled “Accrual.” Complete Schedule
how to report various farm losses, such as information, see
Reportable Transaction
F, Parts II, III, and line 11. Generally, re-
F-1
Cat. No. 17152R
Page 2 of 6 of 2004 Instructions for Schedule F 16:55 - 28-OCT-2004
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port income in the year in which you earned ties only to the extent of income from pas- You may also receive Form 1099-MISC
it and deduct expenses in the year you in- sive activities. For details, see Pub. 925. for other types of income. In this case, re-
curred them, even if you did not pay them port it on whichever line best describes the
in that year. Accrual basis taxpayers are put income. For example, if you received a
on a cash basis for deducting business ex- Form 1099-MISC for custom farming
penses owed to a related cash-basis tax- work, include this amount on line 9, “Cus-
Part I. Farm Income—
payer. Other rules determine the timing of tom hire (machine work) income.”
deductions based on economic perform-
Cash Method
ance. See Pub. 538.
Farming syndicates cannot use the cash In Part I, show income received for items
method of accounting. A farming syndicate listed on lines 1 through 10. Generally, Lines 5a and 5b
may be a partnership, any other count both the cash actually or construc- If you received distributions from a cooper-
noncorporate group, or an S corporation if: tively received and the fair market value of ative in 2004, you should receive
•The interests in the business have ever goods or other property received for these Form 1099-PATR. On line 5a, show your
been for sale in a way that would require items. Income is constructively received total distributions from cooperatives. This
registration with any federal or state agency when it is credited to your account or set includes patronage dividends, nonpatron-
or aside for you to use. However, direct pay- age distributions, per-unit retain alloca-
•More than 35% of the loss during any ments or counter-cyclical payments re- tions, and redemption of nonqualified
tax year is shared by limited partners or ceived under the Farm Security and Rural notices and per-unit retain allocations.
limited entrepreneurs. A limited partner is Investment Act of 2002 are required to be
one who can lose only the amount invested Show patronage dividends received in
included in income only in the year of ac-
or required to be invested in the partner- cash and the dollar amount of qualified
tual receipt.
ship. A limited entrepreneur is a person written notices of allocation. If you re-
who does not take any active part in manag- If you ran the farm yourself and re- ceived property as patronage dividends, re-
ing the business. ceived rents based on crop shares or farm port the fair market value of the property as
production, report these rents as income on income. Include cash advances received
line 4. from a marketing cooperative. If you re-
Line D ceived per-unit retains in cash, show the
You need an employer identification num- amount of cash. If you received qualified
ber (EIN) only if you had a qualified retire- per-unit retain certificates, show the stated
Sales of Livestock
ment plan or were required to file an dollar amount of the certificates.
employment, excise, estate, trust, partner- Because of Weather- Do not include as income on line 5b
ship, or alcohol, tobacco, and firearms tax Related Conditions patronage dividends from buying personal
return. If you need an EIN, see the Instruc-
tions for Form SS-4. If you do not have an or family items, capital assets, or deprecia-
If you sold livestock because of drought,
EIN, leave line D blank. Do not enter your ble assets. Enter these amounts on line 5a
flood, or other weather-related conditions,
SSN. only. If you do not report patronage divi-
you can elect to report the income from the dends from these items as income, you
sale in the year after the year of sale if all of must subtract the amount of the dividend
the following apply. from the cost or other basis of these items.
Line E •Your main business is farming.
Material participation. For the definition •You can show that you sold the live-
of material participation for purposes of the stock only because of weather-related con-
passive activity rules, see the instructions Lines 6a and 6b
ditions.
for Schedule C, line G, on page C-2. If you Enter on line 6a the total of the following
•Your area qualified for federal aid.
meet any of the material participation tests amounts.
described in those instructions, check the See Pub. 225 for details.
“Yes” box. •Direct payments.
If you are a retired or disabled farmer, •Counter-cyclical payments.
you are treated as materially participating •Price support payments.
in a farming business if you materially par- Forms 1099 or •Market gain from the repayment of a
ticipated 5 of the 8 years preceding your CCC-1099-G
retirement or disability. Also, a surviving secured Commodity Credit Corporation
spouse is treated as materially participating (CCC) loan for less than the original loan
If you received Forms 1099 or
in a farming activity if the real property amount.
CCC-1099-G showing amounts paid to
used for farming meets the estate tax rules •Diversion payments.
you, first determine if the amounts are to be
for special valuation of farm property included with farm income. Then, use the •Cost-share payments (sight drafts).
passed from a qualifying decedent, and the following chart to determine where to re-
surviving spouse actively manages the •Payments in the form of materials
port the income on Schedule F. Include the
farm. (such as fertilizer or lime) or services (such
Form 1099 or CCC-1099-G amounts in the
Check the “No” box if you did not mate- as grading or building dams).
total amount reported on that line.
rially participate. If you checked “No” and These amounts are government payments
you have a loss from this business, see Where to
Limit on passive losses
below. If you have you received, usually reported to you on
Form report
a profit from this business activity but have Form 1099-G. You may also receive Form
current year losses from other passive ac- CCC-1099-G from the Department of Ag-
1099-PATR ............ Line 5a
tivities or prior year unallowed passive ac- riculture showing the amounts and types of
1099-A ............... Line 7b
tivity losses, see the Instructions for Form payments made to you.
1099-MISC
8582.
On line 6b, report only the taxable
(for crop insurance) .... Line 8a
Limit on passive losses. If you checked the amount. For example, do not report the
1099-G or CCC-1099-G
“No” box and you have a loss from this market gain shown on Form CCC-1099-G
business, you may have to use Form 8582 (for disaster payments) . . Line 8a on line 6b if you elected to report CCC loan
to figure your allowable loss, if any, to (for other agricultural proceeds as income in the year received
enter on Schedule F, line 36. Generally, program payments) ..... Line 6a
you can deduct losses from passive activi- (see
Lines 7a Through 7c
on page F-3). No
F-2
Page 3 of 6 of 2004 Instructions for Schedule F 16:55 - 28-OCT-2004
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gain results from redemption of the com- 2003 and elected to include in income for
modity because you previously reported 2004.
Part II. Farm
the CCC loan proceeds as income. You are
treated as repurchasing the commodity for
Expenses
the amount of the loan repayment. How- Do not deduct the following.
Line 10
ever, if you did not report the CCC loan •Personal or living expenses (such as
proceeds under the election, you must re- Use this line to report income not shown on taxes, insurance, or repairs on your home)
port the market gain on line 6b. lines 1 through 9, such as the following. that do not produce farm income.
•Illegal federal irrigation subsidies. See •Expenses of raising anything you or
Pub. 225. your family used.
•Bartering income.
Lines 7a Through 7c •The value of animals you raised that
•Income from cancellation of debt.
Commodity Credit Corporation (CCC) died.
Generally, if a debt is canceled or forgiven,
loans. Generally, you do not report CCC •Inventory losses.
you must include the canceled amount in
loan proceeds as income. However, if you income. If a federal agency, financial insti- •Personal losses.
pledge part or all of your production to tution, or credit union canceled or forgave a
secure a CCC loan, you may elect to report If you were repaid for any part of an
debt you owed of $600 or more, it should
the loan proceeds as income in the year you expense, you must subtract the amount you
send you a Form 1099-C, or similar state-
receive them, instead of the year you sell were repaid from the deduction.
ment, by January 31, 2005, showing the
the crop. If you make this election (or made amount of debt canceled in 2004. However, Capitalizing costs of property. If you pro-
the election in a prior year), report loan certain solvent farmers can exclude can- duced real or tangible personal property or
proceeds you received in 2004 on line 7a. celed qualified farm indebtedness from in- acquired property for resale, certain ex-
Attach a statement to your return showing come. To find out if you must include any penses must be included in inventory costs
the details of the loan(s). cancellation of debt in income, see Pub. or capitalized. These expenses include the
Forfeited CCC loans. Include the full 225. direct costs of the property and the share of
amount forfeited on line 7b, even if you any indirect costs allocable to that property.
•State gasoline or fuel tax refund you
reported the loan proceeds as income. However, these rules generally do not ap-
received in 2004.
If you did not elect to report the loan ply to expenses of:
•The amount of credit for federal tax
proceeds as income, also include the for- paid on fuels claimed on your 2003 Form 1. Producing any plant that has a
feited amount on line 7c. 1040. preproductive period of 2 years or less,
If you did elect to report the loan pro- •The amount of credit for alcohol used 2. Raising animals, or
ceeds as income, you generally will not as fuel that was entered on Form 6478. 3. Replanting certain crops if they were
have an entry on line 7c. But if the amount •Any recapture of excess depreciation, lost or damaged by reason of freezing tem-
forfeited is different from your basis in the including any section 179 expense deduc- peratures, disease, drought, pests, or casu-
commodity, you may have an entry on tion, if the business use percentage of any alty.
line 7c. listed property decreased to 50% or less in
See Pub. 225 for details on the tax con- 2004. Use Form 4797 to figure the recap-
Exceptions 1 and 2 above do
sequences of electing to report CCC loan ture. See the instructions for Schedule C,
not apply to tax shelters, farm-
proceeds as income or forfeiting CCC line 13, on page C-4 for the definition of
ing syndicates, or partnerships
loans. listed property.
required to use the accrual
•The inclusion amount on leased listed
method of accounting under section 447 or
property (other than vehicles) when the
448.
business use percentage drops to 50% or
Lines 8a Through 8d But you may be able to currently deduct
less. See Pub. 946 to figure the amount. rather than capitalize the expenses of pro-
In general, you must report crop insurance •Any recapture of the deduction for ducing a plant with a preproductive period
proceeds in the year you receive them. Fed- clean-fuel vehicles used in your farming of more than 2 years. See
Election to
eral crop disaster payments are treated as business and clean-fuel vehicle refueling
deduct certain preproductive period ex-
crop insurance proceeds. However, if 2004 property. For details on how to figure re-
penses
below.
was the year of damage, you can elect to capture, see Pub. 535.
include certain proceeds in income for Do not reduce your deductions on lines
•The gain or loss on the sale of com-
2005. To make this election, check the box 12 through 34e by the preproductive period
modity futures contracts if the contracts
on line 8c and attach a statement to your expenses you must capitalize. Instead,
were made to protect you from price
return. See Pub. 225 for a description of the enter the total amount capitalized in paren-
changes. These are a form of business in-
proceeds for which an election can be made theses on line 34f. See
Preproductive pe-
surance and are considered hedges. If you
and for what you must include in your
riod expenses
on page F-6 for details.
had a loss in a closed futures contract, en-
statement. If you revoked an election made before
close it in parentheses.
Generally, if you elect to defer any eligi- 1989 to deduct preproductive period ex-
ble crop insurance proceeds, you must de-
For property acquired and
penses for animals, you must continue to
fer all such crop insurance proceeds
hedging positions established,
apply the alternative depreciation rules to
(including federal disaster payments).
you must clearly identify on
property placed in service while your elec-
Enter on line 8a the total crop insurance
your books and records both the
tion was in effect. Also, the expenses you
proceeds you received in 2004, even if you
hedging transaction and the item(s) or ag-
previously chose to deduct will have to be
elect to include them in income for 2005.
gregate risk that is being hedged.
recaptured as ordinary income when you
dispose of the animals.
Enter on line 8b the taxable amount of Purchase or sales contracts are not true
the proceeds you received in 2004. Do not hedges if they offset losses that already oc- Election to deduct certain preproductive
include proceeds you elect to include in curred. If you bought or sold commodity period expenses. If the preproductive pe-
income for 2005. futures with the hope of making a profit due riod of any plant you produce is more than
Enter on line 8d the amount, if any, of to favorable price changes, report the profit 2 years, you can elect to currently deduct
crop insurance proceeds you received in or loss on Form 6781 instead of this line. the expenses rather than capitalize them.
F-3
Page 4 of 6 of 2004 Instructions for Schedule F 16:55 - 28-OCT-2004
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But you cannot make this election for the ously used the standard mileage rate for For details, see Pub. 225.
costs of planting or growing citrus or al- that vehicle.
mond groves that are incurred before the You can take the standard mileage rate
end of the 4th tax year beginning with the for 2004 only if you: Line 15
tax year you planted them in their perma- •Owned the vehicle and use the stan-
nent grove. By deducting the preproductive Enter amounts paid for custom hire or ma-
dard mileage rate for the first year you
period expenses for which you can make chine work (the machine operator fur-
placed the vehicle in service or
this election, you are treated as having nished the equipment).
•Leased the vehicle and are using the
made the election. Do not include amounts paid for rental
standard mileage rate for the entire lease or lease of equipment that you operated
In the case of a partnership or S
period (except the period, if any, before yourself. Instead, report those amounts on
corporation, the election must
1998). line 26a.
be made by the partner or share-
If you deduct actual expenses:
holder. This election cannot be
•Include on line 12 the business portion
made by tax shelters, farming syndicates,
of expenses for gasoline, oil, repairs, insur-
or partners in partnerships required to use
Line 16
ance, tires, license plates, etc., and
the accrual method of accounting under
You can deduct depreciation of buildings,
•Show depreciation on line 16 and rent
section 447 or 448.
improvements, cars and trucks, machinery,
or lease payments on line 26a.
If you make the election to deduct and other farm equipment of a permanent
If you take the standard mileage rate,
preproductive expenses for plants, any gain nature.
multiply the number of business miles by
you realize when disposing of the plants is Do not deduct depreciation on your
37.5 cents. Add to this amount your park-
ordinary income up to the amount of the home, furniture or other personal items,
ing fees and tolls, and enter the total on line
preproductive expenses you deducted. land, livestock you bought or raised for re-
12. Do not deduct depreciation, rent or
Also, the alternative depreciation rules ap- sale, or other property in your inventory.
lease payments, or your actual operating
ply to property placed in service in any tax expenses.
year your election is in effect. Unless you You can also elect under section 179 to
obtain IRS consent, you must make this If you claim any car or truck expenses expense a portion of the cost of certain
election for the first tax year in which you (actual or the standard mileage rate), you property you bought in 2004 for use in your
engage in a farming business involving the must provide the information requested on farming business.
production of property subject to the capi- Form 4562, Part V. Be sure to attach Form For details, including when you must
talization rules. You cannot revoke this 4562 to your return. complete and attach Form 4562, see the
election without IRS consent. For details, see Pub. 463. instructions for Schedule C, line 13, on
For details, see Pub. 225. page C-4.
Prepaid farm supplies. Generally, if you
use the cash method of accounting and your Line 14
prepaid farm supplies are more than 50% of Line 17
Deductible soil and water conservation ex-
your other deductible farm expenses, your penses generally are those that are paid to Deduct contributions to employee benefit
deduction for those supplies may be lim- conserve soil and water or to prevent ero- programs that are not an incidental part of a
ited. Prepaid farm supplies include ex- sion of land used for farming. These ex- pension or profit-sharing plan included on
penses for feed, seed, fertilizer, and similar penses include (but are not limited to) the line 25. Examples are accident and health
farm supplies not used or consumed during cost of leveling, grading and terracing, con- plans, group-term life insurance, and de-
the year. They also include the cost of poul- tour furrowing, the construction, control, pendent care assistance programs. If you
try that would be allowable as a deduction and protection of diversion channels, drain- made contributions on your behalf as a
in a later tax year if you were to (a) capital- age ditches, earthen dams, watercourses, self-employed person to a dependent care
ize the cost of poultry bought for use in outlets and ponds, the eradication of brush, assistance program, complete Form 2441,
your farming business and deduct it ratably and the planting of windbreaks. Parts I and III, to figure your deductible
over the lesser of 12 months or the useful contributions to that program.
These expenses can be deducted only if
life of the poultry and (b) deduct the cost of they are consistent with a conservation plan
poultry bought for resale in the year you Do not include on line 17 any contribu-
approved by the Natural Resources Conser-
sell or otherwise dispose of it. tions you made on your behalf as a self-em-
vation Service of the Department of Agri- ployed person to an accident and health
If the limit applies, you can deduct pre- culture for the area in which your land is plan or for group-term life insurance. You
paid farm supplies that do not exceed 50% located. If no plan exists, the expenses must may be able to deduct on Form 1040, line
of your other deductible farm expenses in be consistent with a plan of a comparable 31, the amount you paid for health insur-
the year of payment. You can deduct the state agency. You cannot deduct the ex- ance on behalf of yourself, your spouse,
excess only in the year you use or consume penses if they were paid or incurred for and dependents even if you do not itemize
the supplies (other than poultry, which is land used in farming in a foreign country. your deductions. See the instructions for
deductible as explained above). For details Form 1040, line 31, for details.
Do not deduct expenses you paid or in-
and exceptions to these rules, see Pub. 225. curred to drain or fill wetlands, to prepare
land for center pivot irrigation systems, or
to clear land. Line 18
Line 12 Your deduction cannot exceed 25% of If you use the cash method, you cannot
You can deduct the actual expenses of run- your gross income from farming (exclud- deduct when paid the cost of feed your
ning your car or truck or take the standard ing certain gains from selling assets such as livestock will consume in a later year un-
mileage rate. You must use actual expenses farm machinery and land). If your conser- less all of the following apply.
if you used your vehicle for hire or you vation expenses are more than the limit, the •The payment was for the purchase of
used more than four vehicles simultane- excess can be carried forward and deducted feed rather than a deposit.
ously in your farming business (such as in in later tax years. However, the amount
fleet operations). You cannot use actual ex- deductible for any 1 year cannot exceed the •The prepayment had a business pur-
penses for a leased vehicle if you previ- 25% gross income limit for that year. pose and was not made merely to avoid tax.
F-4
Page 5 of 6 of 2004 Instructions for Schedule F 16:55 - 28-OCT-2004
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•Deducting the prepayment will not return) were liable for and paid interest on Lines 26a and 26b
materially distort your income. the mortgage and the other person received
the Form 1098, include your share of the If you rented or leased vehicles, machinery,
If all of the above apply, you can deduct interest on line 23b. Attach a statement to or equipment, enter on line 26a the business
the prepaid feed, which is subject to the your return showing the name and address portion of your rental cost. But if you
overall limit for
Prepaid farm supplies
ex- of the person who received the Form 1098. leased a vehicle for a term of 30 days or
plained on page F-4. If all of the above do In the margin next to line 23b, enter “See more, you may have to reduce your deduc-
not apply, you can deduct the prepaid feed attached.” tion by an inclusion amount. See Pub. 463
only in the year it is consumed. to figure your inclusion amount.
Do not deduct interest you prepaid in
2004 for later years; include only the part Enter on line 26b amounts paid to rent
that applies to 2004. or lease other property such as pasture or
Line 20 farmland.
Do not include the cost of transportation
incurred in purchasing livestock held for Line 24
resale as freight paid. Instead, add these Line 27
costs to the cost of the livestock, and deduct Enter the amounts you paid for farm labor.
them when the livestock is sold. Do not include amounts paid to yourself. Enter amounts you paid for repairs and
Reduce your deduction by the amounts maintenance of farm buildings, machinery,
claimed on: and equipment. You can also include what
•Form 5884, Work Opportunity Credit, you paid for tools of short life or minimal
Line 22 line 2; cost, such as shovels and rakes.
Deduct on this line premiums paid for farm •Form 8844, Empowerment Zone and Do not deduct repairs or maintenance on
business insurance. Deduct on line 17 Renewal Community Employment Credit, your home.
amounts paid for employee accident and line 2;
health insurance. Amounts credited to a re- •Form 8845, Indian Employment
serve for self-insurance or premiums paid Credit, line 4;
for a policy that pays for your lost earnings Line 31
•Form 8861, Welfare-to-Work Credit,
due to sickness or disability are not deduct- You can deduct the following taxes on this
line 2; and
ible. line.
•Form 8884, New York Liberty Zone •Real estate and personal property
Business Employee Credit, line 2. taxes on farm business assets.
Count the cost of boarding farm labor
Lines 23a and 23b •Social security and Medicare taxes
but not the value of any products they used
Interest allocation rules. The tax treatment you paid to match what you are required to
from the farm. Count only what you paid
of interest expense differs depending on its withhold from farm employees’ wages and
household help to care for farm laborers.
type. For example, home mortgage interest any federal unemployment tax paid.
and investment interest are treated differ-
If you provided taxable fringe
•Federal highway use tax.
ently. “Interest allocation” rules require
benefits to your employees,
Do not deduct the following taxes on
you to allocate (classify) your interest ex-
such as personal use of a car, do
this line.
pense so it is deducted on the correct line of
not include in farm labor the
•Federal income taxes, including your
your return and receives the right tax treat-
amounts you depreciated or deducted else-
self-employment tax. However, you can
ment. These rules could affect how much
where.
deduct one-half of your self-employment
interest you are allowed to deduct on
tax on Form 1040, line 30.
Schedule F.
•Estate and gift taxes.
Generally, you allocate interest expense Line 25
by tracing how the proceeds of the loan are •Taxes assessed for improvements,
Enter your deduction for contributions to
used. See Pub. 535 for details. such as paving and sewers.
employee pension, profit-sharing, or annu- •Taxes on your home or personal use
If you paid interest on a debt secured by ity plans. If the plan included you as a property.
your main home and any of the proceeds self-employed person, enter contributions
from that debt were used in your farming •State and local sales taxes on property
made as an employer on your behalf on
business, see Pub. 535 to figure the amount purchased for use in your farming business.
Form 1040, line 32, not on Schedule F.
to include on lines 23a and 23b. Instead, treat these taxes as part of the cost
Generally, you must file the applicable of the property.
How to report. If you have a mortgage on form listed below if you maintain a pen- •Other taxes not related to your farm-
real property used in your farming business sion, profit-sharing, or other funded-de- ing business.
(other than your main home), enter on line ferred compensation plan. The filing
23a the interest you paid for 2004 to banks requirement is not affected by whether or
or other financial institutions for which you not the plan qualified under the Internal
received a Form 1098 (or similar state- Revenue Code, or whether or not you claim Line 32
ments). If you did not receive a Form 1098, a deduction for the current tax year. There Enter amounts you paid for gas, electricity,
enter the interest on line 23b. is a penalty for failure to timely file these water, etc., for business use on the farm. Do
forms.
If you paid more mortgage interest than not include personal utilities. You cannot
is shown on Form 1098, see Pub. 535 to deduct the base rate (including taxes) of the
Form 5500. File this form for a plan that is
find out if you can deduct the additional first telephone line into your residence,
not a one-participant plan (see below).
interest. If you can, include the amount on even if you use it for your farming busi-
Form 5500-EZ. File this form for a
line 23a. Attach a statement to your return ness. But you can deduct expenses you paid
one-participant plan. A one-participant
explaining the difference and enter “See for your farming business that are more
plan is a plan that only covers you (or you
attached” in the margin next to line 23a. than the cost of the base rate for the first
and your spouse).
If you and at least one other person phone line. For example, if you had a sec-
(other than your spouse if you file a joint For details, see Pub. 560. ond phone line, you can deduct the business
F-5
Page 6 of 6 of 2004 Instructions for Schedule F 16:55 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
percentage of the charges for that line, in- business travel and 50% of your business are protected against loss by a guarantee,
cluding the base rate charges. meals and entertainment. But there are ex- stop-loss agreement, or other similar ar-
ceptions and limitations. See the instruc- rangement (excluding casualty insurance
tions for Schedule C, lines 24a through 24c, and insurance against tort liability).
on page C-5. •Amounts borrowed for use in the ac-
Lines 34a Through 34f tivity from a person who has an interest in
Preproductive period expenses. If you had
Include all ordinary and necessary farm ex- the activity, other than as a creditor, or who
preproductive period expenses in 2004 and
penses not deducted elsewhere on Schedule is related under section 465(b)(3) to a per-
you decided to capitalize them, you must
F, such as advertising, office supplies, etc. son (other than you) having such an inter-
enter the total of these expenses in paren-
Do not include fines or penalties paid to a est.
theses on line 34f and enter “263A” in the
government for violating any law. space to the left of the total. Subtract the If all amounts are at risk in this business,
amount on line 34f from the total of lines
At-risk loss deduction. Any loss from this check box 37a and enter your loss on line
12 through 34e. Enter the result on line 35.
activity that was not allowed as a deduction 36. But if you checked the “No” box on line
last year because of the at-risk rules is E, you may need to complete Form 8582 to
For details, see
Capitalizing costs of
treated as a deduction allocable to this ac- figure your allowable loss to enter on line
property
on page F-3 and Pub. 225.
tivity in 2004. 36. See the Instructions for Form 8582.
If you checked box 37b, see Form 6198
Bad debts. See Pub. 535.
to determine the amount of your deductible
Business start-up costs. You can elect to Line 36 loss and enter that amount on line 36. But if
amortize certain business start-up costs If you have a loss, the amount of loss you you checked the “No” box on line E, your
paid or incurred before October 23, 2004, can deduct this year may be limited. Go on loss may be further limited. See the Instruc-
over 60 months or more beginning with the to line 37 before entering your loss on line tions for Form 8582. If your at-risk amount
month your business began. For certain 36. If you checked the “No” box on Sched- is zero or less, enter -0- on line 36. Be sure
business start-up costs paid or incurred af- ule F, line E, also see the Instructions for to attach Form 6198 to your return. If you
ter October 22, 2004, you can elect to de- Form 8582. Enter the net profit or deducti- checked box 37b and you do not attach
duct up to $5,000 for the year your business ble loss here and on Form 1040, line 18, Form 6198, the processing of your tax re-
began. This limit is reduced by the amount and Schedule SE, line 1. Estates and trusts turn may be delayed.
by which your start-up costs exceed should enter the net profit or deductible Any loss from this activity not allowed
$50,000. You can elect to amortize any re- loss here and on Form 1041, line 6. Partner- for 2004 because of the at-risk rules is
maining qualified business start-up costs ships should stop here and enter the profit treated as a deduction allocable to the activ-
over 15 years. For details, see Pub. 225. For or loss on this line and on Form 1065, line 5 ity in 2005.
amortization that begins in 2004, you must (or Form 1065-B, line 7).
complete and attach Form 4562. For details, see Pub. 925 and the
If you have a net profit on line 36, this Instructions for Form 6198.
Business use of your home. You may be amount is earned income and may qualify
able to deduct certain expenses for business you for the earned income credit if you
use of your home, subject to limitations. meet certain conditions. See the instruc-
Use the worksheet in Pub. 587 to figure tions for Form 1040, lines 65a and 65b, for
your allowable deduction. Do not use Form details.
Part III. Farm
8829.
Clean-fuel vehicles and clean-fuel vehicle
Income—Accrual
refueling property. You may be able to de- Line 37
duct part of the cost of qualified clean-fuel
Method
vehicle property used in your farming busi- At-risk rules. Generally, if you have a loss If you use the accrual method, report farm
ness and qualified clean-fuel vehicle re- from a farming activity and amounts in the income when you earn it, not when you
fueling property. See Pub. 535. activity for which you are not at risk, you receive it. Generally, you must include ani-
will have to complete Form 6198 to figure mals and crops in your inventory if you use
Forestation and reforestation costs. You your allowable loss. The at-risk rules gen- this method. See Pub. 225 for exceptions,
can elect to amortize certain forestation and erally limit the amount of loss (including inventory methods, how to change methods
reforestation costs over 84 months. You loss on the disposition of assets) you can of accounting, and for rules that require
can also elect to expense up to $10,000 claim to the amount you could actually lose certain costs to be capitalized or included in
($5,000 if married filing separately) of cer- in the activity. inventory.
tain forestation and reforestation costs paid
or incurred after October 22, 2004, for each Check box 37b if you have amounts for
qualified timber property. The amortization which you are not at risk in this activity,
election does not apply to trusts and the such as the following. Lines 39a Through 41c
expense election does not apply to estates •Nonrecourse loans used to finance the
and trusts. For details, see Pub. 225. For See the instructions for lines 5a through 7c
activity, to acquire property used in the ac-
amortization that begins in 2004, you must that begin on page F-2.
tivity, or to acquire the activity that are not
complete and attach Form 4562. secured by your own property (other than
property used in the activity). However,
Legal and professional fees. You can de- there is an exception for certain nonre-
duct on this line fees for tax advice related Line 44
course financing borrowed by you in con-
to your farming business and for prepara- See the instructions for line 10 on page F-3.
nection with holding real property.
tion of the tax forms related to your farming
business. •Cash, property, or borrowed amounts
used in the activity (or contributed to the
Travel, meals, and entertainment. Gener- activity, or used to acquire the activity) that
ally, you can deduct expenses for farm
F-6
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PAGER/SGML Fileid: I1040SJ.XML (28-Oct-2004) (Init. & date)
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Page 1 of 8 of 2004 Instructions for Schedule J 10:51 - 28-OCT-2004
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Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedule J
Use Schedule J (Form 1040) to elect to figure your 2004 tax by averaging, over the previous
3 years (base years), all or part of your 2004 taxable income from your trade or business of
Income farming or fishing. Making this election may give you a lower tax if your 2004 income from
farming or fishing is high and your taxable income for one or more of the 3 prior years was
Averaging for low.
This election does not apply when figuring your tentative minimum tax on Form 6251
(that is, you cannot average your AMT income from farming or fishing). Also, you do not
Farmers and have to recompute, because of this election, the tax liability of any minor child who was
required to use your tax rates in the prior years.
Fishermen
Your elected farm income is the amount •Contract harvesting of an agricultural
of your taxable income from farming or or horticultural commodity grown or raised
What’s New
fishing that you elect to include on line 2. by someone else, or
Fishermen. You can use Schedule J to av- You do not have to include all of your •Merely buying or reselling plants or
erage your income from your fishing busi- taxable income from farming or fishing on animals grown or raised by someone else.
ness by electing to include taxable income line 2. It may be to your advantage to in-
from fishing in elected farm income on clude less than the full amount, depending Fishing business. A fishing business is the
line 2. on how the amount you include on line 2 trade or business of fishing in which the
affects your tax bracket for the current and fish harvested, either in whole or in part,
Alternative minimum tax (AMT). Filing prior 3 tax years. are intended to enter commerce or enter
Schedule J may reduce your total tax for commerce through sale, barter, or trade.
2004 even if you owe AMT. Your elected farm income cannot ex- This includes:
ceed your taxable income. Also, the portion 1. The catching, taking, or harvesting of
of your elected farm income treated as a net fish;
capital gain cannot exceed the smaller of
General Instructions
2. The attempted catching, taking, or
your total net capital gain or your net capi-
harvesting of fish;
tal gain attributable to your farming or fish-
Prior Year Tax Returns ing business. If your elected farm income 3. Any other activity which can reasona-
You may need copies of your original or includes net capital gain, you must allocate bly be expected to result in the catching,
amended income tax returns for 2001, an equal portion of the net capital gain to taking, or harvesting of fish; or
2002, and 2003 to figure your tax on each of the base years. If, for any base year, 4. Any operations at sea in support of, or
Schedule J. If you do not have copies of you had a capital loss that resulted in a in preparation for, any activity described in
those returns, you can get them by filing capital loss carryover to the next tax year, (1) through (3) above.
Form 4506. There is a $39 fee for each do not reduce the elected farm income allo-
return requested. If you want a free tran- cated to that base year by any part of the
script of your tax return, use Form 4506–T. The word fish means finfish, mollusks,
carryover.
See your Form 1040 instruction booklet to crustaceans, and all other forms of marine
find out how to get these forms. Keep a animal and plant life other than marine
Farming business. A farming business is
copy of your 2004 income tax return for use mammals and birds.
the trade or business of cultivating land or
in 2005, 2006, or 2007. raising or harvesting any agricultural or A fishing business does not include any
horticultural commodity. This includes: scientific research activity which is con-
Additional Information ducted by a scientific research vessel.
1. Operating a nursery or sod farm;
See Regulations section 1.1301-1 for more
2. Raising or harvesting of trees bearing
details.
Generally, income, gains,
fruits, nuts, or other crops;
losses, and deductions from
3. Raising ornamental trees (but not ev-
farming or fishing are reported
ergreen trees that are more than 6 years old
TIP
on:
Specific Instructions
when severed from the roots); •
Form 1040, line 7, to the extent of
4. Raising, shearing, feeding, caring for,
wages and other compensation you
training, and managing animals; and
Line 2
received as a shareholder in an S
5. Leasing land to a tenant engaged in a
corporation engaged in a farming
farming business, but only if the lease pay-
Elected Farm Income
or fishing business;
ments are (a) based on a share of the
To figure elected farm income, first figure •
Schedule C or C-EZ;
tenant’s production (not a fixed amount),
your taxable income from farming or fish- •
Schedule D;
and (b) determined under a written agree-
ing. This includes all income, gains, losses, •
Schedule E, Part II;
ment entered into before the tenant begins
and deductions attributable to any farming significant activities on the land. •
Schedule F;
or fishing business. However, it does not •
Form 4797; and
include gain from the sale or other disposi-
A farming business does not include:
tion of land. •
Form 4835.
J-1
Cat. No. 25514J
Page 2 of 8 of 2004 Instructions for Schedule J 10:51 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2001 Taxable Income Worksheet—Line 5
Keep for Your Records
Complete this worksheet if you did not use Schedule J to figure your tax for both 2002 and 2003 and your 2001 taxable
income was zero or less. See the instructions below before completing this worksheet.
1. Figure the taxable income from your 2001 tax return (or as previously adjusted) without limiting it
to zero. If you had an NOL for 2001, do not include any NOL carryovers or carrybacks to 2001.
Enter the result as a positive amount ............................................... 1.
2. If there is a loss on your 2001 Schedule D, line 18, add that loss (as a positive
amount) and your 2001 capital loss carryover to 2002. Subtract from that sum
the amount of the loss on your 2001 Schedule D, line 17, and enter the result . . . 2.
3. If you had an NOL for 2001, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to
2001 that were not used in 2001 and were carried to years after 2001 ......... 3.
4. Add lines 2 and 3 ............................................................. 4.
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 5 .......... 5.
on line 5 the amount from your 2001 Instructions for 2001 Taxable
Line 4 Schedule J, line 3. Income Worksheet
Figure the tax on the amount on line 3 using Line 2. Any net capital loss deduction on
If you figured your tax for 2001, 2002,
the 2004 Tax Table, Tax Computation your 2001 Schedule D, line 18, is not al-
and 2003 without using Schedule J, enter
Worksheet, or Qualified Dividends and lowed for income averaging purposes to the
on line 5 the taxable income from your
Capital Gain Tax Worksheet from your extent it did not reduce your capital loss
2001 tax return (or as previously adjusted
2004 Form 1040 instruction booklet, or use carryover to 2002. This could happen if the
by the IRS, an amended return, etc.). But if
the Schedule D Tax Worksheet. Enter the taxable income before subtracting exemp-
that amount is zero or less, complete the
tax on line 4. tions shown on your 2001 Form 1040,
worksheet above to figure the amount to line 37 (or as previously adjusted), was less
enter on line 5. than zero. Enter the amount by which your
2001 capital loss carryover to 2002 (the
Line 5 If you filed your 2001 tax return using sum of your short- and long-term capital
TeleFile, enter the taxable income from
If you used Schedule J to figure your tax for loss carryovers) exceeds the excess of the
your TeleFile Tax Record. If you did not
2003 (that is, you entered the amount from loss on your 2001 Schedule D, line 17, over
file a tax return for 2001, use the amount
that Schedule J, line 22, on Form 1040, the loss on your 2001 Schedule D, line 18.
you would have reported as your taxable
line 41, or on Form 1040X), enter on line 5 If you had any net operating loss (NOL)
income had you been required to file a tax
the amount from your 2003 Schedule J, line carrybacks to 2001, be sure you refigured
return. Be sure to keep all your records for
11. If you used Schedule J to figure your your 2001 capital loss carryover to 2002.
2001 for at least 3 years after April 15,
tax for 2002 but not 2003, enter on line 5
2005 (or the date you file your 2004 tax
the amount from your 2002 Schedule J, line Line 3. If you had an NOL for 2001, enter
return, if later), even if you did not file a tax
15. If you used Schedule J to figure your the amount of that NOL as figured on the
return for 2001.
tax for 2001 but not 2002 nor 2003, enter 2001 Form 1045, Schedule A, line 27, you
2001 Tax Rate Schedules—Line 8
Schedule Y-2—Use if your 2001 filing status was
Schedule X—Use if your 2001 filing status was Single Married filing separately
If Schedule Enter on
of the
If Schedule J, Enter on
of the
J, line 7, is:
But not
Schedule J,
amount
line 7, is:
But not
Schedule J,
amount
Over— over —
line 8
over— Over — over—
line 8
over—
$0 $27,050 ........... 15% $0 $0 $22,600 ........... 15% $0
27,050 65,550 $4,057.50 + 27.5% 27,050 22,600 54,625 $3,390.00 + 27.5% 22,600
65,550 136,750 14,645.00 + 30.5% 65,550 54,625 83,250 12,196.88 + 30.5% 54,625
136,750 297,350 36,361.00 + 35.5% 136,750 83,250 148,675 20,927.50 + 35.5% 83,250
297,350 ............. 93,374.00 + 39.1% 297,350 148,675 ............. 44,153.38 + 39.1% 148,675
Schedule Y-1—Use if your 2001 filing status was Married Schedule Z—Use if your 2001 filing status was Head of
filing jointly or Qualifying widow(er) household
If Schedule Enter on
of the
If Schedule J, Enter on
of the
J, line 7, is:
But not
Schedule J,
amount
line 7, is:
But not
Schedule J,
amount
Over— over —
line 8
over— Over — over—
line 8
over—
$0 $45,200 ........... 15% $0 $0 $36,250 ........... 15% $0
45,200 109,250 $6,780.00 + 27.5% 45,200 36,250 93,650 $5,437.50 + 27.5% 36,250
109,250 166,500 24,393.75 + 30.5% 109,250 93,650 151,650 21,222.50 + 30.5% 93,650
166,500 297,350 41,855.00 + 35.5% 166,500 151,650 297,350 38,912.50 + 35.5% 151,650
297,350 ............ 88,306.75 + 39.1% 297,350 297,350 ............. 90,636.00 + 39.1% 297,350
J-2
Page 3 of 8 of 2004 Instructions for Schedule J 10:51 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2001 Capital Gain Tax Worksheet—Line 8
Keep for Your Records
Use this worksheet only if you entered capital gain distributions directly on line 13 of your 2001 Form 1040 (or line 10 of your 2001 Form 1040A)
and checked the box on that line and elected farm income included on Schedule J, lines 5 and 6, does not include any net capital gain.
1. Amount from Schedule J, line 7 ...................................... 1.
2. Amount from your 2001 Form 1040, line 13 (or Form 1040A, line 10) ........... 2.
3. Subtract line 2 from line 1. If zero or less, enter -0- ........................ 3.
4. Figure the tax on the amount on line 3. Use the 2001 Tax Rate Schedules on page J-2 ................... 4.
5. Enter the smaller of:
•The amount on line 1 above or
•$27,050 if single for 2001; $45,200 if married filing ............ 5.
jointly or qualifying widow(er); $22,600 if married
filing separately; or $36,250 if head of household.
}
6. Enter the amount from line 3 ........................................ 6.
7. Subtract line 6 from line 5. If zero or less, enter -0- and go to line 9 ............. 7.
8. Multiply line 7 by 10% (.10) .......................................................... 8.
9. Enter the smaller of line 1 or line 2 ................................... 9.
10. Enter the amount from line 7 ........................................ 10.
11. Subtract line 10 from line 9. If zero or less, enter -0- and go to line 13 ........... 11.
12. Multiply line 11 by 20% (.20) ......................................................... 12.
13. Add lines 4, 8, and 12 .............................................................. 13.
14. Figure the tax on the amount on line 1. Use the 2001 Tax Rate Schedules on page J-2 ................... 14.
15. Tax. Enter the smaller of line 13 or line 14 here and on Schedule J, line 8. . . . ....................... 15.
filed with Form 1045 or Form 1040X. If 2003. John has $18,000 of elected farm was remaining to carry to 2001 after the
you did not have an NOL for 2001, enter income on line 2. The taxable income NOL was carried back to 2000. To com-
the portion, if any, of the NOL carryovers before subtracting exemptions shown on plete line 1 of the worksheet, John com-
and carrybacks to 2001 that were not used his 2001 Form 1040, line 37, was $3,900. A bines the $9,000 NOL deduction with the
in 2001 and were carried to years after deduction for exemptions of $2,900 was $1,000 from his 2001 Form 1040, line 39.
2001. shown on line 38, and line 39, taxable in- The result is a negative $8,000, John’s
come, was $1,000. However, John had a 2001 taxable income, which he enters as a
Example.
John Farmington did not use $22,300 NOL in 2002, $9,000 of which
income averaging for 2001, 2002, nor
2001 Tax Computation Worksheet for Certain Dependents and
Nonresident Alien Individuals — Line 8
Keep for Your Records
Use this worksheet only if you, or your spouse if filing jointly, did not receive (before offset) an advance payment of your
2001 taxes and (a) you, or your spouse if filing jointly, could be claimed as a dependent on someone else’s 2001 tax return or
(b) you filed Form 1040NR for 2001.
Special Rules. If:
•The 2001 Capital Gain Tax Worksheet above applies, use this worksheet to figure the tax on lines 4 and 14 of
the 2001 Capital Gain Tax Worksheet.
•Part IV of the 2001 Schedule D applies, use this worksheet to figure the tax on lines 25 and 39 of Part IV. If the
2001 Schedule D Tax Worksheet applies, use this worksheet to figure the tax on lines 15 and 36 of the
Schedule D Tax Worksheet.
1. Figure the tax on the amount on Schedule J, line 7 (or the applicable line of the worksheet or
schedule listed above). Use the 2001 Tax Rate Schedules on page J-2 ..................... 1.
2. Is the amount on line 1 more than the amount shown below for your 2001 filing status?
•Single or married filing separately—$900
•Married filing jointly or qualifying widow(er)—$1,800
•Head of household—$1,500
Yes. Enter: $300 if single or married filing separately for 2001; $500 if
head of household; $600 if married filing jointly or qualifying widow(er).
}
.......... 2.
No. Divide the amount on line 1 by 3.0.
3. Subtract line 2 from line 1. Enter the result here and on Schedule J, line 8 (or the applicable line
of the worksheet or schedule listed above) ......................................... 3.
J-3
Page 4 of 8 of 2004 Instructions for Schedule J 10:51 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2002 Taxable Income Worksheet—Line 9
Keep for Your Records
positive amount on line 1 of the 2001 work- lines 25 and 39, or on the Schedule D Tax return, if later), even if you did not file a tax
sheet. Worksheet, lines 15 and 36). return for 2002.
Exception. You must use the 2001 Tax Instructions for 2002 Taxable
When John filed his 2001 tax return, he Computation Worksheet for Certain De- Income Worksheet
had a $3,000 net capital loss deduction on pendents and Nonresident Alien Individu-
Schedule D, line 18 (which was also en- Line 2. Any net capital loss deduction on
als on page J-3 if you, or your spouse if
tered on Form 1040, line 13), a $7,000 loss your 2002 Schedule D, line 18, is not al-
filing jointly, did not receive (before offset)
on Schedule D, line 17, and a $4,000 capi- lowed for income averaging purposes to the
an advance payment of your 2001 taxes and
tal loss carryover to 2002. However, when extent it did not reduce your capital loss
either of the following apply.
John carried back the 2002 NOL to 2001, carryover to 2003. This could happen if the
he refigured his 2001 capital loss carryover •You, or your spouse if filing jointly, taxable income before subtracting exemp-
to 2002 as $7,000. John adds the $3,000 could be claimed as a dependent on some- tions shown on your 2002 Form 1040,
from Schedule D, line 18, and the $7,000 one else’s 2001 tax return. line 39 (or as previously adjusted), was less
carryover. He subtracts from the result the •You filed Form 1040NR for 2001. than zero. Enter the amount by which your
$7,000 loss on his Schedule D, line 17, and 2002 capital loss carryover to 2003 (the
If the 2001 Capital Gain Tax Worksheet
enters $3,000 on line 2 of the worksheet. sum of your short- and long-term capital
or Schedule D also applies, follow the
Spe-
loss carryovers) exceeds the excess of the
John had $1,000 of taxable income in
cial Rules
on the worksheet on page J-3 to loss on your 2002 Schedule D, line 17, over
2001 that reduced the 2002 NOL car- figure your tax. the loss on your 2002 Schedule D, line 18.
ryback. The $2,900 of exemptions and If you had any NOL carrybacks to 2002, be
$3,000 net capital loss deduction also re- sure you refigured your 2002 capital loss
duced the amount of the 2002 NOL car- carryover to 2003.
Line 9
ryback. Therefore, only $2,100 was
available to carry to 2003 and later years, as If you used Schedule J to figure your tax for Line 3. If you had an NOL for 2002, enter
shown on his 2002 Form 1045, Schedule B, 2003 (that is, you entered the amount from the amount of that NOL as figured on the
line 9. John enters the $2,100 on line 3 of that Schedule J, line 22, on Form 1040, 2002 Form 1045, Schedule A, line 27, you
the worksheet, and $5,100 on line 4. He line 41, or on Form 1040X), enter on line 9 filed with Form 1045 or Form 1040X. If
then subtracts the $5,100 from the $8,000 the amount from your 2003 Schedule J, line you did not have an NOL for 2002, enter
on line 1 and enters the result, $2,900, on 15. If you used Schedule J to figure your the portion, if any, of the NOL carryovers
line 5 of the worksheet. He enters a nega- tax for 2002 but not 2003, enter on line 9 and carrybacks to 2002 that were not used
tive $2,900 on Schedule J, line 5. He com- the amount from your 2002 Schedule J, line in 2002 and were carried to years after
bines that amount with the $6,000 on 3. 2002.
Schedule J, line 6, and enters $3,100 on
Example.
John Farmington did not use
If you figured your tax for both 2002
Schedule J, line 7. income averaging for 2001, 2002, nor
and 2003 without using Schedule J, enter
2003. The taxable income before sub-
on line 9 the taxable income from your
tracting exemptions on his 2002 Form
2002 tax return (or as previously adjusted
1040, line 39, is a negative $30,000. A de-
by the IRS, an amended return, etc.). But if
Line 8 duction for exemptions of $3,000 is shown
that amount is zero or less, complete the
If line 7 is zero, enter -0- on line 8. Other- on line 40, and line 41, taxable income, is
worksheet below to figure the amount to
wise, figure the tax on the amount on line 7 limited to zero. John subtracts from the
enter on line 9.
using: $30,000 loss the $3,000 deduction for ex-
If you filed your 2002 tax return using emptions. The result is a negative $33,000,
•The 2001 Tax Rate Schedules on TeleFile, enter the taxable income from John’s 2002 taxable income, which he en-
page J-2, your TeleFile Tax Record. If you did not ters as a positive amount on line 1 of the
•The 2001 Capital Gain Tax Work- file a tax return for 2002, use the amount 2002 worksheet.
sheet on page J-3, or you would have reported as your taxable
•The Schedule D you filed for 2001 income had you been required to file a tax John had a $3,000 net capital loss de-
(but use the 2001 Tax Rate Schedules on return. Be sure to keep all your records for duction on Schedule D, line 18 (which was
page J-2 instead of the 2001 Tax Table 2002 until at least 3 years after April 15, also entered on Form 1040, line 13), and a
when figuring the tax on Schedule D, 2005 (or the date you file your 2004 tax $7,000 loss on Schedule D, line 17 (as ad-
Complete this worksheet if you did not use Schedule J to figure your tax for 2003 and your 2002 taxable income was zero or
less. See the instructions above before completing this worksheet.
1. Figure the taxable income from your 2002 tax return (or as previously adjusted) without limiting it
to zero. If you had an NOL for 2002, do not include any NOL carryovers or carrybacks to 2002.
Enter the result as a positive amount ............................................... 1.
2. If there is a loss on your 2002 Schedule D, line 18, add that loss (as a positive
amount) and your 2002 capital loss carryover to 2003. Subtract from that sum
the amount of the loss on your 2002 Schedule D, line 17, and enter the result . . 2.
3. If you had an NOL for 2002, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to
2002 that were not used in 2002 and were carried to years after 2002 ........ 3.
4. Add lines 2 and 3 ............................................................. 4.
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 9 .......... 5.
J-4
Page 5 of 8 of 2004 Instructions for Schedule J 10:51 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2002 Tax Rate Schedules—Line 12
Schedule Y-2—Use if your 2002 filing status was
Schedule X—Use if your 2002 filing status was Single Married filing separately
If Schedule J, Enter on
of the
If Schedule J, Enter on
of the
line 11, is:
But not
Schedule J,
amount
line 11, is:
But not
Schedule J,
amount
Over— over —
line 12
over— Over — over —
line 12
over—
$0 $6,000 ........... 10% $0 $0 $6,000 ........... 10% $0
6,000 27,950 $600.00 + 15% 6,000 6,000 23,350 $600.00 + 15% 6,000
27,950 67,700 3,892.50 + 27% 27,950 23,350 56,425 3,202.50 + 27% 23,350
67,700 141,250 14,625.00 + 30% 67,700 56,425 85,975 12,132.75 + 30% 56,425
141,250 307,050 36,690.00 + 35% 141,250 85,975 153,525 20,997.75 + 35% 85,975
307,050 ............. 94,720.00 + 38.6% 307,050 153,525 ............. 44,640.25 + 38.6% 153,525
Schedule Y-1—Use if your 2002 filing status was Married Schedule Z—Use if your 2002 filing status was Head of
filing jointly or Qualifying widow(er) household
If Schedule J, Enter on
of the
If Schedule J, Enter on
of the
line 11, is:
But not
Schedule J,
amount
line 11, is:
But not
Schedule J,
amount
Over— over —
line 12
over— Over — over —
line 12
over—
$0 $12,000 .......... 10% $0 $0 $10,000 ........... 10% $0
12,000 46,700 $1,200.00 + 15% 12,000 10,000 37,450 $1,000.00 + 15% 10,000
46,700 112,850 6,405.00 + 27% 46,700 37,450 96,700 5,117.50 + 27% 37,450
112,850 171,950 24,265.50 + 30% 112,850 96,700 156,600 21,115.00 + 30% 96,700
171,950 307,050 41,995.50 + 35% 171,950 156,600 307,050 39,085.00 + 35% 156,600
307,050 ............ 89,280.50 + 38.6% 307,050 307,050 ............. 91,742.50 + 38.6% 307,050
2002 Capital Gain Tax Worksheet—Line 12
Keep for Your Records
Use this worksheet only if you entered capital gain distributions directly on line 13 of your 2002 Form 1040 (or line 10 of your 2002 Form 1040A)
and checked the box on that line and elected farm income on Schedule J, lines 9 and 10, does not include any net capital gain.
1. Amount from Schedule J, line 11 ..................................... 1.
2. Amount from your 2002 Form 1040, line 13 (or Form 1040A, line 10) ........... 2.
3. Subtract line 2 from line 1. If zero or less, enter -0- ........................ 3.
4. Figure the tax on the amount on line 3. Use the 2002 Tax Rate Schedules above . . . . . ................. 4.
5. Enter the smaller of:
•The amount on line 1 above or
•$27,950 if single for 2002; $46,700 if married
................. 5.
filing jointly or qualifying widow(er); $23,350 if
married filing separately; or $37,450 if head of
household.
}
6. Enter the amount from line 3 ........................................ 6.
7. Subtract line 6 from line 5. If zero or less, enter -0- and go to line 9 ............. 7.
8. Multiply line 7 by 10% (.10) ......................................................... 8.
9. Enter the smaller of line 1 or line 2 ................................... 9.
10. Enter the amount from line 7 ........................................ 10.
11. Subtract line 10 from line 9. If zero or less, enter -0- and go to line 13 ........... 11.
12. Multiply line 11 by 20% (.20) ........................................................ 12.
13. Add lines 4, 8, and 12 ............................................................. 13.
14. Figure the tax on the amount on line 1. Use the 2002 Tax Rate Schedules above . . . . . ................. 14.
15. Tax. Enter the smaller of line 13 or line 14 here and on Schedule J, line 12 . . . ...................... 15.
justed). He also had a $7,000 capital loss $3,000 capital loss deduction, and his 2005, he will enter the negative $1,700
carryover to 2003. John adds the $3,000 $4,700 standard deduction were not al- amount on his 2005 Schedule J as his 2002
from Schedule D, line 18, and the $7,000 lowed in figuring the NOL. John had a taxable income for income averaging pur-
carryover. He subtracts from the result the $22,300 loss on his 2002 Schedule F, the poses.
$7,000 loss on his Schedule D, line 17, and only other item on his 2002 tax return.
enters $3,000 on line 2 of the worksheet. John enters $25,300 on line 4 and
John enters $22,300 on line 3 of the $7,700 on line 5. He enters $7,700 as a Line 12
worksheet, the 2002 NOL from his 2002 negative amount on Schedule J, line 9. He If line 11 is zero or less, enter -0- on line 12.
Form 1045, Schedule A, line 27. Of the enters $6,000 on Schedule J, line 10, and a
Otherwise, figure the tax on the amount on
$33,000 negative taxable income, the negative $1,700 on Schedule J, line 11. If
$3,000 deduction for exemptions, the he uses Schedule J to figure his tax for line 11 using:
J-5
Page 6 of 8 of 2004 Instructions for Schedule J 10:51 - 28-OCT-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
2003 Taxable Income Worksheet—Line 13
Keep for Your Records
taxable income before subtracting exemp- his Form 1040, line 38, was a negative
•The 2002 Tax Rate Schedules on tions shown on your 2003 Form 1040, $1,000). John adds the $3,000 from Sched-
page J-5, line 38 (or as previously adjusted), was less ule D, line 18, and the $5,000 carryover. He
•The 2002 Capital Gain Tax Work- than zero. Enter the amount by which your reduces the result by the $7,000 loss on his
sheet on page J-5, or 2003 capital loss carryover to 2004 (the Schedule D, line 17a, and enters $1,000 on
•The Schedule D you filed for 2002 sum of your short- and long-term capital line 2 of the worksheet.
(but use the 2002 Tax Rate Schedules on loss carryovers) exceeds the excess of the
page J-5 instead of the 2002 Tax Table loss on your 2003 Schedule D, line 17a, John enters -0- on line 3 of the work-
when figuring the tax on Schedule D, over the loss on your 2003 Schedule D, line sheet because he does not have an NOL for
lines 25 and 39, or on the Schedule D Tax 18. 2003 and did not have an NOL carryover
Worksheet, lines 15 and 36). from 2003 available to carry to 2004 and
Line 3. If you had an NOL for 2003, enter later years. The NOLD for 2003 of $2,100
the amount of that NOL as figured on the was reduced to zero because it did not ex-
2003 Form 1045, Schedule A, line 27, you ceed his modified taxable income of
filed with Form 1045 or Form 1040X. If $4,100. Modified taxable income is figured
you did not have an NOL for 2003, enter
Line 13 by adding back the $3,000 net capital loss
the portion, if any, of the NOL carryovers deduction and the $3,050 of exemptions to
If you used Schedule J to figure your tax for and carrybacks to 2003 that were not used negative taxable income (figured without
2003 (that is, you entered the amount from in 2003 and were carried to years after regard to the NOLD) of $1,950. John enters
that Schedule J, line 22, on Form 1040, 2003. $1,000 on line 4 and $3,050 on line 5. He
line 41, or on Form 1040X), enter on line enters $3,050 as a negative amount on
Example.
John Farmington did not use
13 the amount from that Schedule J, line 3. Schedule J, line 13. He enters $6,000 on
income averaging for 2001, 2002, nor
If you did not use Schedule J to figure Schedule J, line 14, and $2,950 on Sched-
2003. The taxable income before sub-
your tax for 2003, enter on line 13 the tax- ule J, line 15. If he uses Schedule J to figure
tracting exemptions on his 2003
able income from your 2003 tax return (or his tax for 2005, he will enter $2,950 on his
Form 1040, line 38, is a negative $1,000.
as previously adjusted by the IRS, an 2005 Schedule J as his 2003 taxable in-
This amount includes an NOL deduction
amended return, etc.). But if that amount is come for income averaging purposes.
(NOLD) on his 2003 Form 1040, line 21, of
zero or less, complete the worksheet below $2,100. The $2,100 is the portion of the
to figure the amount to enter on line 13. 2002 NOL that was remaining from 2001
to be carried to 2003. See the examples that
If you filed your 2003 tax return using Line 16
begin on pages J-3 and J-4. A deduction for
TeleFile, enter the taxable income from exemptions of $3,050 is shown on Form If line 15 is zero or less, enter -0- on line 16.
your TeleFile Tax Record. If you did not 1040, line 39, and line 40, taxable income, Otherwise, figure the tax on the amount on
file a tax return for 2003, use the amount is limited to zero. John does not have an line 15 using:
you would have reported as your taxable NOL for 2003. John subtracts from the
income had you been required to file a tax •The 2003 Tax Rate Schedules on page
$1,000 negative amount on Form 1040, line
return. Be sure to keep all your records for J-7,
38, the $3,050 deduction for exemptions.
2003 until at least 3 years after April 15, The result is a negative $4,050, John’s •The 2003 Qualified Dividends and
2005 (or the date you file your 2004 tax 2003 taxable income, which he enters as a Capital Gain Tax Worksheet on page J-8,
return, if later), even if you did not file a tax positive amount on line 1 of the 2003 work- or
return for 2003. sheet. •The Schedule D you filed for 2003
Instructions for 2003 Taxable (but use the 2003 Tax Rate Schedules on
John had a $3,000 net capital loss de-
Income Worksheet page J-7 instead of the 2003 Tax Table
duction on Schedule D, line 18 (which was when figuring the tax on Schedule D, lines
Line 2. Any net capital loss deduction on also entered on Form 1040, line 13a), a 50 and 52, or on the Schedule D Tax Work-
your 2003 Schedule D, line 18, is not al- $7,000 loss on Schedule D, line 17a, and a sheet, lines 48 and 50).
lowed for income averaging purposes to the $5,000 capital loss carryover to 2004 (his
extent it did not reduce your capital loss 2003 capital loss carryover to 2004 was
carryover to 2004. This could happen if the $5,000, not $4,000, because the amount on
Complete this worksheet if your 2003 taxable income is zero or less. See the instructions above before completing this
worksheet.
1. Figure the taxable income from your 2003 tax return (or as previously adjusted) without limiting it
to zero. If you had an NOL for 2003, do not include any NOL carryovers or carrybacks to 2003.
Enter the result as a positive amount ............................................... 1.
2. If there is a loss on your 2003 Schedule D, line 18, add that loss (as a positive
amount) and your 2003 capital loss carryover to 2004. Subtract from that sum
the amount of the loss on your 2003 Schedule D, line 17a, and enter the result 2.
3. If you had an NOL for 2003, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to
2003 that were not used in 2003 and were carried to years after 2003 ........ 3.
4. Add lines 2 and 3 ............................................................. 4.
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 13 ......... 5.
J-6
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2003 Tax Rate Schedules—Line 16
Schedule Y-2—Use if your 2003 filing status was
Schedule X—Use if your 2003 filing status was Single Married filing separately
If Schedule J, Enter on
of the
If Schedule J, Enter on
of the
line 15, is:
But not
Schedule J,
amount
line 15, is:
But not
Schedule J,
amount
Over— over —
line 16
over— Over — over—
line 16
over—
$0 $7,000 ........... 10% $0 $0 $7,000 ........... 10% $0
7,000 28,400 $700.00 + 15% 7,000 7,000 28,400 $700.00 + 15% 7,000
28,400 68,800 3,910.00 + 25% 28,400 28,400 57,325 3,910.00 + 25% 28,400
68,800 143,500 14,010.00 + 28% 68,800 57,325 87,350 11,141.25 + 28% 57,325
143,500 311,950 34,926.00 + 33% 143,500 87,350 155,975 19,548.25 + 33% 87,350
311,950 ............. 90,514.50 + 35% 311,950 155,975 ............. 42,194.50 + 35% 155,975
Schedule Y-1—Use if your 2003 filing status was Married Schedule Z—Use if your 2003 filing status was Head of
filing jointly or Qualifying widow(er) household
If Schedule J, Enter on
of the
If Schedule J, Enter on
of the
line 15, is:
But not
Schedule J,
amount
line15, is:
But not
Schedule J,
amount
Over— over —
line 16
over— Over — over—
line 16
over—
$0 $14,000 ........... 10% $0 $0 $10,000 ........... 10% $0
14,000 56,800 $1,400.00 + 15% 14,000 10,000 38,050 $1,000.00 + 15% 10,000
56,800 114,650 7,820.00 + 25% 56,800 38,050 98,250 5,207.50 + 25% 38,050
114,650 174,700 22,282.50 + 28% 114,650 98,250 159,100 20,257.50 + 28% 98,250
174,700 311,950 39,096.50 + 33% 174,700 159,100 311,950 37,295.50 + 33% 159,100
311,950 ............ 84,389.00 + 35% 311,950 311,950 ............. 87,736.00 + 35% 311,950
J-7
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2003 Qualified Dividends and Capital Gain Tax Worksheet—Line 16
Keep for Your Records
amended your return or the IRS made
Lines 18, 19, and 20 changes to it, enter the corrected amount.
If you filed your 2001, 2002, or 2003 tax
return using TeleFile, enter your tax from
your TeleFile Tax Record. If you
Use this worksheet only if:
•You entered (a) qualified dividends on your 2003 Form 1040, line 9b (or your 2003 Form 1040A, line 9b) or (b) capital gain
distributions directly on your 2003 Form 1040, line 13a (or your 2003 Form 1040A, line 10a) and checked the box on that line and
•Your elected farm income on Schedule J, line 2, does not include any net capital gain.
1. Amount from Schedule J, line 15 ........................................... 1.
2. Enter the total of the amounts from your 2003 Form 1040, lines
9b and 13a (or Form 1040A, lines 9b and 10a) .............. 2.
3. Amount, if any, from your 2003 Form 4952, line 4g .......... 3.
4. Subtract line 3 from 2. If zero or less, enter -0- ................................. 4.
5. Enter the smaller of:
•The amount on line 1 above or
•$56,800 if married filing jointly or qualifying widow(er) for
}
............... 5.
2003,
$28,400 if single or married filing separately, or
$38,050 if head of household.
6. Subtract line 4 from line 1. If zero or less, enter -0- .............................. 6.
7. Subtract line 6 from line 5. If zero or less, enter -0- and go to line 13 .................. 7.
8. Enter the total of the amounts from your 2003 Form 1040, lines
9b and 13b (or Form 1040A, lines 9b and 10b) ............. 8.
9. Enter the smaller of line 7 or 8 ............................................ 9.
10. Multiply line 8 by 5% (.05) ..............................................................10.
11. Subtract line 9 from line 7. If zero, go to line 13 ................................ 11.
12. Multiply line 11 by 10% (.10) ............................................................12.
13. Enter the smaller of line 1 or line 4 ......................................... 13.
14. Enter the amount from line 7 .............................................. 14.
15. Subtract line 14 from line 13. If zero or less, enter -0- and go to line 23 ................ 15.
16. Enter the total of the amounts from your 2003 Form 1040, lines
9b and 13b (or Form 1040A, lines 9b and 10b) .............16.
17. Enter the amount from line 9 (if line 9 is blank, enter -0-) ......17.
18. Subtract line 17 from line 16 ..........................18.
19. Enter the smaller of line 15 or line 18 ....................................... 19.
20. Multiply line 19 by 15% (.15) ............................................................20.
21. Subtract line 19 from line 15. If zero, go to line 23 .............................. 21.
22. Multiply line 21 by 20% (.20) ............................................................22.
23. Figure the tax on the amount on line 6. Use the 2003 Tax Rate Schedules on page J-7 .....................23.
24. Add lines 10, 12, 20, 22, and 23 ...........................................................24.
25. Figure the tax on the amount on line 1. Use the 2003 Tax Rate Schedules on page J-7 .....................25.
26. Tax. Enter the smaller of line 24 or line 25 here and on Schedule J, line 16 ............................26.
J-8
Userid: ________ Leading adjust: 0/0/0% ❏Draft ❏Ok to Print
PAGER/SGML Fileid: I1040SSE.XML ( 6-Oct-2004) (Init. & date)
Filename: D:\USERS\qjfcb\documents\Epicfiles\2004\04i1040Sch_SE.xml
Page 1 of 4 of 2004 Instructions for Schedule SE (Form 1040) 11:05 - 6-OCT-2004
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Department of the Treasury
Internal Revenue Service
2004 Instructions for Schedule SE (Form 1040)
Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employment.
The Social Security Administration uses the information from Schedule SE to figure your
Self-Employment benefits under the social security program. This tax applies no matter how old you are and
even if you are already getting social security or Medicare benefits.
Tax Additional information. See Pub. 533.
Section references are to the Internal Revenue Code.
IRS approval, you will be exempt from of a religious sect recognized as being in
paying SE tax on those net earnings. If you existence at all times since December 31,
General Instructions
had no other income subject to SE tax, 1950, and which has provided a reasonable
enter “Exempt—Form 4361” on Form level of living for its dependent members,
What’s New 1040, line 57. However, if you had other you are exempt from SE tax if you received
For 2004, the maximum amount of earnings of $400 or more subject to SE tax, IRS approval by filing Form 4029. In this
self-employment income subject to social see line A at the top of Long Schedule SE. case, do not file Schedule SE. Instead, enter
security tax is $87,900. “Exempt—Form 4029” on Form 1040,
If you have ever filed Form
line 57. See Pub. 517 for details.
Who Must File Schedule SE
2031 to elect social security
U.S. Citizens Employed by
coverage on your earnings as a
You must file Schedule SE if:
minister, you cannot revoke
Foreign Governments or
•Your net earnings from self-employ-
that election.
International Organizations
ment (see page SE-2) from other than If you must pay SE tax, include this in-
church employee income were $400 or You must pay SE tax on income you earned
come on either Short or Long Schedule SE,
more, or as a U.S. citizen employed by a foreign
line 2. But do not report it on Long Sched- government (or, in certain cases, by a
•You had church employee income of ule SE, line 5a; it is not considered church wholly owned instrumentality of a foreign
$108.28 or more—see
Employees of
employee income. Also, include on line 2: government or an international organiza-
Churches and Church Organizations
be- tion under the International Organizations
•The rental value of a home or an al-
low. Immunities Act) for services performed in
lowance for a home furnished to you (in- the United States, Puerto Rico, Guam,
Who Must Pay cluding payments for utilities), and American Samoa, the Commonwealth of
•The value of meals and lodging pro-
Self-Employment (SE) Tax? the Northern Mariana Islands (CNMI), or
vided to you, your spouse, and your depen- the Virgin Islands. Report income from this
Self-Employed Persons dents for your employer’s convenience. employment on either Short or Long
You must pay SE tax if you had net earn- However, do not include on line 2: Schedule SE, line 2. If you performed serv-
ings of $400 or more as a self-employed •Retirement benefits you received ices elsewhere as an employee of a foreign
person. If you are in business for yourself from a church plan after retirement, or government or an international organiza-
or you are a farmer, you are self-employed. tion, those earnings are exempt from SE
•The rental value of a home or an al- tax.
You must also pay SE tax on your share lowance for a home furnished to you (in-
of certain partnership income and your cluding payments for utilities) after U.S. Citizens or Resident Aliens
guaranteed payments. See
Partnership In-
retirement. Living Outside the United States
come or Loss
on page SE-2. If you were a duly ordained minister If you are a self-employed U.S. citizen or
who was an employee of a church and you
Employees of Churches and resident alien living outside the United
must pay SE tax, the unreimbursed busi-
Church Organizations States, in most cases you must pay SE tax.
ness expenses that you incurred as a church You cannot reduce your foreign earnings
If you had church employee income of employee are allowed only as an itemized from self-employment by your foreign
$108.28 or more, you must pay SE tax. deduction for income tax purposes. Sub- earned income exclusion.
Church employee income is wages you re- tract the allowable amount from your SE
ceived as an employee (other than as a min- earnings when figuring your SE tax. Exception. The United States has social
ister or member of a religious order) of a security agreements with many countries to
If you were a U.S. citizen or resident
church or qualified church-controlled or- eliminate dual taxes under two social secur-
alien serving outside the United States as a
ganization that has a certificate in effect ity systems. Under these agreements, you
minister or member of a religious order and
electing an exemption from employer so- must generally pay social security and
you must pay SE tax, you cannot reduce
cial security and Medicare taxes. Medicare taxes to only the country you live
your net earnings by the foreign housing in.
Ministers and Members of exclusion or deduction.
Religious Orders The United States now has social secur-
See Pub. 517 for details.
In most cases, you must pay SE tax on sala- ity agreements with the following coun-
Members of Certain Religious
ries and other income for services you per- tries: Australia, Austria, Belgium, Canada,
Sects
formed as a minister, a member of a Chile, Finland, France, Germany, Greece,
religious order who has not taken a vow of If you have conscientious objections to so- Ireland, Italy, Luxembourg, the Nether-
poverty, or a Christian Science practitioner. cial security insurance because of your lands, Norway, Portugal, South Korea,
But if you filed Form 4361 and received membership in and belief in the teachings Spain, Sweden, Switzerland, and the
SE-1
Cat. No. 24334P
Page 2 of 4 of 2004 Instructions for Schedule SE (Form 1040) 11:05 - 6-OCT-2004
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United Kingdom. Additional agreements on the other spouse’s Schedule C, C-EZ, or Partnership Income or Loss
are expected in the future. If you have ques- F (except income not included in net earn- If you were a general or limited partner in a
tions about international social security ings from self-employment as explained on partnership, include on line 1 or line 2,
agreements, you can: page SE-3). Enter on the dotted line to the whichever applies, the amount of net earn-
left of Schedule SE, line 3, “Community
•Visit the Social Security Administra- ings from self-employment from Schedule
Income Taxed to Spouse” and the amount
tion (SSA) website at
www.socialsecurity.
K-1 (Form 1065), box 14, with code A, and
gov/international
, of any net profit or (loss) allocated to your Schedule K-1 (Form 1065-B), box 9. Gen-
spouse as community income. Combine
•Call the SSA Office of International eral partners should reduce this amount
that amount with the total of lines 1 and 2
Programs at (410) 965-4538 or (410) before entering it on Schedule SE by any
and enter the result on line 3.
965-0377 (long-distance charges may ap- section 179 expense deduction claimed, un-
ply), or reimbursed partnership expenses claimed,
If you are not the spouse who carried on and depletion claimed on oil and gas
•Write to Social Security Administra- the business and you had no other income properties. If you reduce the amount you
tion, Office of International Programs, P.O. subject to SE tax, enter “Exempt Commu- enter on Schedule SE, attach an explana-
Box 17741, Baltimore, MD 21235-7741. nity Income” on Form 1040, line 57; do not tion.
If your self-employment income is ex- file Schedule SE. However, if you had
empt from SE tax, you should get a state- If a partner died and the partnership
other earnings subject to SE tax of $400 or
ment from the appropriate agency of the continued, include in SE income the
more, enter on the dotted line to the left of
foreign country verifying that your deceased’s distributive share of the
Schedule SE, line 3, “Exempt Community
self-employment income is subject to so- partnership’s ordinary income or loss
Income” and the amount of net profit or
cial security coverage in that country. If the through the end of the month in which he or
(loss) from Schedule C, C-EZ, or F allo-
foreign country will not issue the state- she died. See section 1402(f).
cated to you as community income. If that
ment, contact the SSA at the address shown amount is a net profit, subtract it from the If you were married and both you and
above. Do not complete Schedule SE. In- total of lines 1 and 2, and enter the result on your spouse were partners in a partnership,
stead, attach a copy of the statement to line 3. If that amount is a loss, treat it as a each of you must pay SE tax on your own
Form 1040 and enter “Exempt, see attached positive amount, add it to the total of lines 1 share of the partnership income. Each of
statement” on Form 1040, line 57. and 2, and enter the result on line 3. you must file a Schedule SE and report the
More Than One Business partnership income or loss on Schedule E
(Form 1040), Part II, for income tax pur-
Community income included
If you had two or more businesses, your net poses.
on Schedule(s) C, C-EZ, or F
earnings from self-employment are the
must be divided for income tax
combined net earnings from all of your SE income belongs to the person who is
purposes on the basis of the
businesses. If you had a loss in one busi- the member of the partnership and cannot
community property laws.
ness, it reduces the income from another. be treated as SE income by the nonmember
Figure the combined SE tax on one Sched- spouse even in community property states.
ule SE. Fiscal Year Filers Share Farming
If your tax year is a fiscal year, use the tax
Joint Returns rate and earnings base that apply at the time You are considered self-employed if you
Show the name of the spouse with SE in- the fiscal year begins. Do not prorate the produced crops or livestock on someone
come on Schedule SE. If both spouses have tax or earnings base for a fiscal year that else’s land for a share of the crops or live-
SE income, each must file a separate overlaps the date of a rate or earnings base stock produced (or a share of the proceeds
Schedule SE. However, if one spouse qual- change. from the sale of them). This applies even if
ifies to use Short Schedule SE and the other you paid another person (an agent) to do the
has to use Long Schedule SE, both can use actual work or management for you. Report
the same form. One spouse should com- your net earnings for income tax purposes
plete the front and the other the back.
Specific Instructions
on Schedule F (Form 1040) and for SE tax
Include the total profits or losses from purposes on Schedule SE. See Pub. 225 for
Read the chart on page 1 of Schedule SE to
all businesses on Form 1040, as appropri- details.
see if you can use Section A, Short Sched-
ate. Enter the combined SE tax on Form ule SE, or if you must use Section B, Long
1040, line 57. Other Income and Losses
Schedule SE. For either section, you need
to know what to include as net earnings Included in Net Earnings
Community Income from self-employment. Read the following From Self-Employment
In most cases, if any of the income from a instructions to see what to include as net
business (including farming) is community 1. Rental income from a farm if, as land-
earnings and how to fill in either Short or
income, all of the income from that busi- lord, you materially participated in the pro-
Long Schedule SE, lines 1 and 2. Enter all
ness is SE earnings of the spouse who car- duction or management of the production
negative amounts in parentheses.
ried on the business. The facts in each case of farm products on this land. This income
will determine which spouse carried on the is farm earnings. To determine whether you
business. If you and your spouse are part- materially participated in farm manage-
ners in a partnership, see
Partnership In-
Net Earnings From ment or production, do not consider the ac-
come or Loss
on this page. tivities of any agent who acted for you. The
Self-Employment material participation tests are explained in
If you and your spouse had community Pub. 225.
income and file separate returns, attach What Is Included in Net
Schedule SE to the return of the spouse 2. Cash or a payment-in-kind from the
Earnings From
with the SE income. Also, attach Department of Agriculture for participating
Self-Employment?
Schedule(s) C, C-EZ, or F to the return of in a land diversion program.
each spouse. In most cases, net earnings include your net 3. Payments for the use of rooms or
profit from a farm or nonfarm business. If
If you are the spouse who carried on the other space when you also provided sub-
you were a partner in a partnership, see the
business, you must include on Schedule stantial services. Examples are hotel
SE, line 3, the net profit or (loss) reported following instructions. rooms, boarding houses, tourist camps or
SE-2
Page 3 of 4 of 2004 Instructions for Schedule SE (Form 1040) 11:05 - 6-OCT-2004
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homes, parking lots, warehouses, and stor-
Earnings From Self-Employment
) or as an e. The amount of the payment depended
age garages. primarily on policies sold by or credited to
employee or employee representative
your account during the last year of the
under the railroad retirement system.
4. Income from the retail sale of news- agreement, or the extent to which those pol-
papers and magazines if you were age 18 or 2. Fees received for services performed icies remain in force for some period after
older and kept the profits. as a notary public. If you had no other in- termination, or both.
come subject to SE tax, enter “Exempt-No-
5. Amounts received by current or for- f. The amount of the payment did not
tary” on Form 1040, line 57. However, if
mer self-employed insurance agents and depend to any extent on length of service or
salespersons that are: you had other earnings of $400 or more overall earnings from services performed
subject to SE tax, enter “Exempt-Notary”
a. Paid after retirement but figured as a for the company (regardless of whether eli-
and the amount of your net profit as a no-
percentage of commissions received from gibility for the payment depended on length
tary public from Schedule C or Schedule
the paying company before retirement, of service).
C-EZ on the dotted line to the left of Sched-
b. Renewal commissions, or ule SE, line 3. Subtract that amount from
c. Deferred commissions paid after re- the total of lines 1 and 2 and enter the result Statutory Employee Income
tirement for sales made before retirement. on line 3. If you were required to check the box on
However, certain termination payments re- 3. Income you received as a retired part- Schedule C or C-EZ, line 1, because you
ceived by former insurance salespersons ner under a written partnership plan that were a statutory employee, do not include
are not included in net earnings from provides for lifelong periodic retirement the net profit or (loss) from that Schedule
self-employment (as explained in item 9 payments if you had no other interest in the C, line 31 (or the net profit from Schedule
under
Income and Losses Not Included in
partnership and did not perform services C-EZ, line 3), on Short or Long Schedule
Net Earnings From Self-Employment
on for it during the year. SE, line 2. But if you file Long Schedule
this page). 4. Income from real estate rentals if you SE, be sure to include statutory employee
6. Income of certain crew members of did not receive the income in the course of social security wages and tips from Form
fishing vessels with crews of normally a trade or business as a real estate dealer. W-2 on line 8a.
fewer than 10 people. See Pub. 595 for de- Report this income on Schedule E.
tails. 5. Income from farm rentals (including Optional Methods
7. Fees as a state or local government rentals paid in crop shares) if, as landlord,
employee if you were paid only on a fee you did not materially participate in the How Can the Optional Methods
basis and the job was not covered under a production or management of the produc- Help You?
federal-state social security coverage tion of farm products on the land. See Pub.
agreement. Social security coverage. The optional
225 for details. methods may give you credit toward your
8. Interest received in the course of any 6. Dividends on shares of stock and in- social security coverage even though you
trade or business, such as interest on notes terest on bonds, notes, etc., if you did not have a loss or a small amount of income
or accounts receivable. receive the income in the course of your from self-employment.
9. Fees and other payments received by trade or business as a dealer in stocks or
you for services as a director of a corpora- securities. Earned income credit (EIC). Using the op-
tion. tional methods may qualify you to claim
7. Gain or loss from:
10. Recapture amounts under sections the EIC or give you a larger credit if your
179 and 280F that you included in gross a. The sale or exchange of a capital as- net earnings from self-employment (deter-
income because the business use of the set; mined without using the optional methods)
property dropped to 50% or less. Do not b. The sale, exchange, involuntary con- are less than $1,600. Figure the EIC with
include amounts you recaptured on the dis- version, or other disposition of property un- and without using the optional methods to
position of property. See Form 4797. less the property is stock in trade or other see if the optional methods will benefit you.
11. Fees you received as a professional property that would be includible in inven-
fiduciary. This may also apply to fees paid tory, or held primarily for sale to customers Additional child tax credit. Using the op-
to you as a nonprofessional fiduciary if the in the ordinary course of the business; or tional methods may qualify you to claim
fees relate to active participation in the op- the additional child tax credit or give you a
c. Certain transactions in timber, coal,
eration of the estate’s business, or the man- larger credit if your net earnings from
or domestic iron ore.
agement of an estate that required extensive self-employment (determined without us-
8. Net operating losses from other years.
management activities over a long period ing the optional methods) are less than
of time. 9. Termination payments you received $1,600. Figure the additional child tax
as a former insurance salesperson if all of
12. Gain or loss from section 1256 con- credit with and without using the optional
the following conditions are met.
tracts or related property by an options or methods to see if the optional methods will
commodities dealer in the normal course of benefit you.
a. The payment was received from an
dealing in or trading section 1256 con- insurance company because of services you
tracts. Child and dependent care credit. The op-
performed as an insurance salesperson for tional methods may help you qualify for
the company. this credit or give you a larger credit if your
b. The payment was received after ter-
Income and Losses Not net earnings from self-employment (deter-
mination of your agreement to perform
Included in Net Earnings mined without using the optional methods)
services for the company. are less than $1,600. Figure this credit with
From Self-Employment c. You did not perform any services for and without using the optional methods to
the company after termination and before see if the optional methods will benefit you.
1. Salaries, fees, etc., subject to social the end of the year in which you received
security or Medicare tax that you received the payment. Self-employed health insurance deduction.
for performing services as an employee, in-
d. You entered into a covenant not to The optional methods of computing net
cluding services performed as a public offi-
earnings from self-employment may be
compete against the company for at least a
cial (except as a fee basis government
used to figure your self-employed health
1-year period beginning on the date of ter-
employee as explained in item 7 under
insurance deduction.
Other Income and Losses Included in Net
mination.
SE-3
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Using the optional methods
your share of the gross income after it is self-employment is limited to 5 years. The
may give you the benefits de-
reduced by all guaranteed payments made 5 years do not have to be consecutive.
scribed on page SE-3, but they
by the partnership. If you were a limited Under this method, you report on Part
may also increase your SE tax.
partner, include only guaranteed payments II, line 17, two-thirds of your gross non-
for services you actually rendered to or on farm income, up to $1,600, as your net
Farm Optional Method behalf of the partnership. earnings. But you cannot report less than
You may use this method to figure your net your actual net earnings from nonfarm
Nonfarm Optional Method
earnings from farm self-employment if self-employment.
your gross farm income was $2,400 or less You may be able to use this method to fig- You can change the method after you
or your net farm profits were less than ure your net earnings from nonfarm file your return. That is, you can change
$1,733. Net farm profits is the total of the self-employment if your net nonfarm prof- from the regular to the optional method or
amounts from: its were less than $1,733 and also less than from the optional to the regular method. To
72.189% of your gross nonfarm income.
•Schedule F (Form 1040), line 36, and do so, file Form 1040X.
Net nonfarm profits is the total of the
•Schedule K-1 (Form 1065), box 14, Figure your share of gross income from
amounts from:
with code A (from farm partnerships). a nonfarm partnership in the same manner
•Schedule C (Form 1040), line 31,
There is no limit on how many years as a farm partnership. See
Farm Optional
•Schedule C-EZ (Form 1040), line 3,
you can use this method.
Method
on this page for details.
•Schedule K-1 (Form 1065), box 14,
Under this method, you report on Part Using Both Optional
with code A (from other than farm partner-
II, line 15, two-thirds of your gross farm ships), and Methods
income, up to $1,600, as your net earnings. •Schedule K-1 (Form 1065-B),
This method can increase or decrease your If you can use both methods, you can report
box 9.
net earnings from farm self-employment less than your total actual net earnings from
even if the farming business had a loss. farm and nonfarm self-employment, but
To use this method, you also must be
you cannot report less than your actual net
regularly self-employed. You meet this re-
You can change the method after you earnings from nonfarm self-employment
quirement if your actual net earnings from
file your return. That is, you can change alone.
self-employment were $400 or more in 2 of
from the regular to the optional method or the 3 years preceding the year you use the
from the optional to the regular method. To If you use both methods to figure net
nonfarm method. The net earnings of $400
do this, file Form 1040X. earnings, you cannot report more than
or more could be from either farm or non- $1,600 of net earnings from self-employ-
For a farm partnership, figure your share farm earnings or both. The net earnings in- ment.
of gross income based on the partnership clude your distributive share of partnership
agreement. With guaranteed payments, income or loss subject to SE tax. Use of the
your share of the partnership’s gross in- nonfarm optional method from nonfarm
come is your guaranteed payments plus
SE-4
Page 77 of 79 of Instructions 1040 10:50 - 3-NOV-2004
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Index to Instructions
Foreign Tax Credit .................. 36 Presidential Election $3 Check-Off ........ 16
AForeign-Source Income ................ 19 Private Delivery Services .............. 15
Address Change .................... 16 Form W-2 ........................ 19 Public Debt— Gift To Reduce the ......... 58
Addresses of IRS Centers ........ Back Cover Forms W-2, 1098, and 1099 — Where To Publications — How To Get .............. 7
Adjusted Gross Income .............. 26-31 Report Certain Items From .......... 14-15
Adoption Expenses: Forms — How To Get .................. 7
Credit for ....................... 39 Q
Employer-Provided Benefits for ......... 19 Qualified Dividends ......20, 33-34, D-1*, D-2*
Advance Earned Income Credit Payments .... 39 GQualified Dividends and Capital Gain
Alimony Paid ...................... 30 Gambling .................... 24, A-6* Tax Worksheet ................. 33-34
Alimony Received ................... 21 Gifts to Charity ....................A-4* Qualified Retirement Plans — Deduction for . . . 30
Alternative Minimum Tax ............ 35-36 Golden Parachute Payments ............. 40 Qualified Tuition Program Earnings . . . 11, 24, 39
Amended Return .................... 58 Group-Term Life Insurance — Uncollected
Amount You Owe ................. 55-56 Tax on ........................ 40 R
Annuities ...................... 22-24 Railroad Retirement Benefits:
Archer MSAs ............... 24, 31, 39, 40 HTreated as a Pension ................ 22
Treated as Social Security ............ 24
At-Risk Rules .............C-6*, E-1*, F-6* Head of Household .................. 17 Records — How Long To Keep ........... 58
Attachments to the Return .............. 57 Health Insurance
Deduction — Self-Employed ........... 30 Refund ........................ 54-55
Health Savings Accounts ......11, 24, 29, 39, 40 Refund Information ................... 8
BHelp With Unresolved Tax Issues .......... 6Refund Offset ...................... 54
Blindness — Proof of ................. 31 Home— Sale of ...................D-2* Refunds, Credits, or Offsets of State and
Business Income and Expenses Local Income Taxes .............. 20-21
(Schedule C) ....................C-1* Household Employment Taxes ........... 39 Rental Income and Expenses (Schedule E) . . . E-2*
Business Use of Home .......A-6*, C-6*, F-6* Reservists, Expenses of ..............11, 26
IRetirement Plan Deduction — Self-Employed . . 30
CIncome ........................ 19-25 Retirement Savings Contributions Credit ..... 36
Capital Gain Distributions .......... 21, D-1* Income Tax Withholding (Federal) ......40, 57 Rights of Taxpayers .................. 57
Capital Gains and Losses (Schedule D) .....D-1* Individual Retirement Arrangements (IRAs): Rollovers ....................22, 23-24
Contributions to (line 25) .........11, 26-27
Casualty and Theft Losses .............A-5* Credit for Contributions to ............ 36 Roth IRAs ......................22, 26
Charity — Gifts to ..................A-4* Distributions from (lines 15a and 15b) ..... 22 Rounding Off to Whole Dollars .......... 19
Child and Dependent Care Nondeductible Contributions to .....22, 26-27 Royalties ........................E-3*
Expenses — Credit for ............... 36 Injured Spouse Claim ................. 54
Child tax credits ........... 11, 18, 37-38, 54 Innocent Spouse Relief ................ 57
Children of Divorced or Separated Parents .... 18 S
Installment Payments ...............10, 55
Clean-Fuel Vehicles .................. 31 S Corporations ................E-5*, E-6*
Interest:
Commissioner’s Message ............... 2Sale of Home .....................D-2*
Late Payment of Tax ................ 59
Community Property States ............. 19 Scholarship and Fellowship Grants ........ 19
Penalty on Early Withdrawal of Savings . . . 30
Contributions to Reduce Debt Held by the Self-Employment Tax:
Interest Income:
Public ......................... 58 Deduction for One-Half of ............ 30
Exclusion of Savings Bond Interest ......B-1* Income Subject to ...............SE-2*
Corrective Distributions ............... 19 Nominee ......................B-1* Signing Your Return ............... 56-57
Customer Service Standards .............. 6Tax-Exempt ................. 20, B-1* Single Person ...................... 16
Taxable .................... 19, B-1* Social Security and Equivalent Railroad
DInterest You Paid ..................A-3* Retirement Benefits .............. 24-25
Daycare Center Expenses .............. 36 Itemized Deductions or Standard Social Security Number .............16, 58
Deduction .................... 31-32
Death of a Taxpayer ................. 58 Standard Deduction or Itemized
Debt Held by the Public, Gift to Reduce ..... 58 Deduction .................... 31-32
Dependent Care Benefits ............... 19 KState and Local Income Taxes — Taxable
Dependents: Kidnapped Child — Parent of ............ 58 Refunds, Credits, or Offsets of ........ 20-21
Exemptions for ................... 18 Statutory Employees ......... 19, C-3*, C-6*
Standard Deduction ................ 32 LStudent Loan Interest Deduction .......... 28
Who Can Be Claimed as ............. 18 Line Instructions for Form 1040 ........ 16-57
Direct Deposit of Refund ............ 54-55 Long-Term Care Insurance ......... 30, A-1* T
Dividends: Lump-Sum Distributions ............... 24
Nominees ......................B-1* Tax and Credits .................. 31-40
Nondividend Distributions ............ 20 Figured by the IRS ............ 33, 36, 44
M
Ordinary Dividends ................ 20 Other Taxes:
Married Persons:
Qualified Dividends ....20, 33-34, D-1*, D-2* Alternative Minimum Tax ......... 35-36
Filing Joint Returns ................ 17 IRAs and Other Tax-Favored Accounts . . . 39
Divorced or Separated Parents — Children of . . 18 Filing Separate Returns .............. 17 Lump-Sum Distributions ............ 24
Donations .......................A-4* Living Apart ..................... 17 Recapture ..................... 40
Dual-Status Aliens .................12, 17 Section 72(m)(5) ................. 40
Medical and Dental Expenses ...........A-1*
Tax Computation Worksheet ..........11, 72
Mileage Rates, Standard . . . 11, A-1*, A-4*, C-3*
ETax Rate Schedules ................11, 76
Miscellaneous Itemized Deductions . . . A-5*, A-6*
Earned Income Credit (EIC) .........11, 41-53 Tax Table ...................... 60-71
Mortgage Interest Credit ........... 39, A-4*
Combat Pay, Nontaxable ...........11, 43 Taxes You Paid ...................A-2*
Moving Expenses .................11, 29
Education: Taxpayer Advocate — Office of ............ 6
Credits .................... 36, A-6* Teachers— Deduction for .............. 26
N
Expenses ............ 11, 28-29, 36, A-6* Telephone Assistance:
Recapture of Education Credits ......... 33 Name Change ....................16, 58 Federal Tax Information ............. 8-10
Savings Accounts ................24, 39 National Debt — Gift To Reduce the ........ 58 TeleTax ........................8-9
Educator Expenses ................... 26 Nonresident Alien .............. 12, 16, 17 Third Party Designee ................. 56
Elderly Persons: Tip Income .....................19, 39
Credit for ....................... 36 O
Expenses for Care of ................ 36 Tips Reported to Employer — Uncollected
Offsets .......................... 54
Standard Deduction ................ 32 Tax on ........................ 40
Order Blank for Forms and Publications ..... 73
Electronic Filing Trusts — Foreign ...................B-2*
Original Issue Discount (OID) ..........B-2*
(
e-file
)............ 3, 7, 12, 14, 16, 54, 55, Tuition and Fees Deduction ...........11, 29
Other Income ...................... 24
56-57 Tuition Program Earnings ......... 11, 24, 39
Other Taxes ..................... 39-40
Employee Business Expenses ...........A-5*
Estates and Trusts ..................E-6* U
P
Estimated Tax .............. 40, 55, 56, 57 U.S. Citizens and Resident Aliens Living
Partnership Expenses — Unreimbursed .....E-6*
Everyday Tax Solutions ............... 59 Abroad ......................12, 19
Partnerships ..................E-5*, E-6*
Excess Salary Deferrals ............... 19 Unemployment Compensation ........... 24
Passive Activity:
Excess Social Security and Tier 1 RRTA Losses ................C-2*, E-1*, F-2*
Tax Withheld .................... 54 W
Material Participation ..........C-2*, F-2*
Exemptions .....................18, 33 What if You Cannot Pay? ............10, 55
Payments ...................... 40-54
Extension of Time To File ............12, 54 When Should You File? ............... 12
Penalty: Where Do You File? .........12, Back Cover
Early Withdrawal of Savings ........... 30
FWho Must File ...................12, 13
Estimated Tax .................. 55-56
Farm Income and Expenses (Schedule F) ....F-1* Who Should File .................... 12
Frivolous Return .................. 59
Farm Income Averaging (Schedule J) ...... J-1* Late Filing ...................... 59 Widows and Widowers, Qualifying ........ 17
Fee-Basis Government Officials, Late Payment .................... 59 Winnings — Prizes, Gambling, and Lotteries
Expenses of ...................11, 26 Other ......................... 59 (Other Income) ................... 24
Filing Requirements ................ 12-13 Pensions and Annuities .............. 22-24 Withholding— Federal Income Tax ......40, 57
Filing Status — Which Box To Check ..... 16-17 Performing Artists, Expenses of ........11, 26
Foreign Accounts and Trusts ...........B-2*
* These items may not be included in this package. To reduce printing costs, we have sent you only the forms you may need based on what you filed last year.
4
I.R.S. SPECIFICATIONS TO BE REMOVED BEFORE PRINTING
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT
INSTRUCTIONS TO PRINTERS
PACKAGE 1040-OTC, FOLIO 132 OF 132
MARGINS; TOP 13mm (1⁄2"), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216mm (81⁄2") x 279mm (11")
PERFORATE: ON FOLD
Layer 1
Color=Solid Black
Printed on recycled paper
What’s new for 2004 (page 11)
Free tax help (pages 7 and 58)
How to make a gift to reduce debt
held by the public (page 58)
Tax table (page 60)
How to get forms and publications
(page 7)
What’s Inside? Instructions for Form 1040
How to avoid common mistakes
(page 57)
When to file (page 12)
How to comment on forms (page 75)
Where Do You
File?
Envelopes without enough postage will
be returned to you by the post office.
Your envelope may need additional
postage if it contains more than five
pages or is oversized (for example, it is over 1⁄4"
thick). Also, include your complete return address.
If an envelope addressed to “Internal Revenue
Service Center” came with this booklet, please use
it. If you do not have one or if you moved during
the year, mail your return to the Internal Revenue
Service Center shown that applies to you.
Help with unresolved tax issues
(page 6)
Index (inside back cover)
Commissioner’s message (page 2)
IRS e-file and free file options (page 3)
IF you live in...
Alabama, Florida, Georgia, Mississippi, North Carolina, Rhode Island,
South Carolina, West Virginia
Maine, Massachusetts, New Hampshire, New York, Vermont
Connecticut, Delaware, Illinois, Indiana, Iowa, Kansas, Michigan,
Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Wisconsin
District of Columbia, Maryland, New Jersey, Pennsylvania
Arkansas, Colorado, Kentucky, Louisiana, New Mexico, Oklahoma,
Tennessee, Texas
Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon,
Utah, Virginia, Washington, Wyoming
Ohio*
All APO and FPO addresses, American Samoa, nonpermanent residents of
Guam or the Virgin Islands**, Puerto Rico (or if excluding income under
Internal Revenue Code section 933), dual-status aliens, a foreign country:
U.S. citizens and those filing Form 2555, 2555-EZ, or 4563
* If you live in Ohio and file your return after June 30, 2005, use: Internal Revenue Service Center, Fresno, CA 93888-0002 (if you are not enclosing a check
or money order); or Internal Revenue Service Center, Fresno, CA 93888-0102 (if you are enclosing a check or money order).
Are enclosing a check or money
order...
Are not enclosing a check or
money order...
Internal Revenue Service Center
Atlanta, GA 39901-0002
Internal Revenue Service Center
Andover, MA 05501-0002
Internal Revenue Service Center
Kansas City, MO 64999-0002
Internal Revenue Service Center
Philadelphia, PA 19255-0002
Internal Revenue Service Center
Austin, TX 73301-0002
Internal Revenue Service Center
Fresno, CA 93888-0002
Internal Revenue Service Center
Memphis, TN 37501-0002
Internal Revenue Service Center
Philadelphia, PA 19255-0215 USA
Internal Revenue Service Center
Atlanta, GA 39901-0102
Internal Revenue Service Center
Andover, MA 05501-0102
Internal Revenue Service Center
Kansas City, MO 64999-0102
Internal Revenue Service Center
Philadelphia, PA 19255-0102
Internal Revenue Service Center
Austin, TX 73301-0102
Internal Revenue Service Center
Fresno, CA 93888-0102
Internal Revenue Service Center
Memphis, TN 37501-0102
Internal Revenue Service Center
Philadelphia, PA 19255-0215 USA
THEN use this address if you:
TIP
** Permanent residents of Guam should use: Department of Revenue and Taxation, Government of Guam, P.O. Box 23607, GMF, GU 96921;
permanent residents of the Virgin Islands should use: V.I. Bureau of Internal Revenue, 9601 Estate Thomas, Charlotte Amalie, St. Thomas, VI 00802.

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