H & R Block 2001 Income Tax Guide : Learn How the New Tax Laws Will Save You Money

by H&R BLOCK

• ISBN13: 9780684871875
• ISBN10: 0684871874
• Format: Paperback
• Copyright: 2001-01-01
• Publisher: Simon & Schuster (P)

Summary

From the world's largest provider of tax services comes the time-and money-saving guide tailored to the needs of middle-income taxpayers, complete with step-by-step instructions and easy-to-understand information about the latest tax laws. Two-color throughout. Forms, tables and charts.

Table of Contents

Directory of Tables and Illustrated Forms	ix
Directory of Special Topics	xi
Foreword: The Form 1040 Family	15	(6)
Finding Information in Your Guide	15	(1)
How to Use Your Guide	16	(1)
Commonly Asked Tax Questions	17	(2)
Line-by-Line Overview of Form 1040	19	(2)
A Look at the Current Tax Scene	21	(12)
What's New for 2000	21	(3)
Looking Ahead to 2001	24	(1)
Tried and True Tax-Saving Ideas	24	(1)
Most Overlooked Deductions	25	(1)
Filled-In Form 1040	25	(8)
I. Taking Time to Organize	33	(18)
Chart: Where to File Your Return	34	(1)
Determine If You Must File a Tax Return
Gross Income Filing Requirements	35	(2)
Other Filing Requirements	37	(1)
Filing Requirements of Foreign Nationals	38	(1)
Decide Which Form to File
Form 1040EZ	39	(1)
Form 1040A	40	(1)
Form 1040	40	(1)
Form 1040NR	41	(2)
Prepare and File Your Tax Return
Gather Your Tax Data	43	(3)
Set Up Your Worksheets	46	(1)
Complete Your Tax Forms	46	(1)
Review and Check Your Work	46	(1)
File Your Tax Return	47	(4)
II. Getting Started on Form 1040	51	(20)
Chart: Qualifying a Dependent	52	(1)
Fill In the Heading Completely and Accurately
Heading Information	53	(2)
Presidential Election Campaign Fund	54	(1)
Use the Most Favorable Filing Status
Your Marital Status	55	(1)
Married Taxpayers	56	(1)
Married Filing Jointly	56	(1)
Married Filing Separately	56	(1)
Married, Qualifying as Unmarried	57	(1)
Unmarried Taxpayers	57	(3)
Single	58	(1)
Head of Household	58	(1)
Widow(er) With Dependent Child	59	(1)
Flowchart: What Filing Status Should I Use?	60	(2)
Claim All of Your Personal and Dependent Exemptions
Personal Exemptions	62	(1)
Exemptions for Dependents	62	(7)
Gross Income	63	(1)
Support	64	(3)
Member of Household or Relationship	67	(1)
Citizenship or Residence	68	(1)
Joint Return	68	(1)
Filled-In Dependency Support Worksheet	69	(2)
III. Reporting Your Income On Form 1040	71	(96)
Chart: Where to Report W-2, 1098, and 1099 Items	72	(1)
Wages, Tips, and Other Compensation
Employee Compensation	73	(5)
Your Form W-2, Box by Box	74	(3)
Figuring Your Wages and Withholding	77	(1)
Tip Income	77	(1)
Interest Income
Form 1099-INT	78	(1)
Deposit Arrangements	79	(1)
U.S. Savings Bonds	79	(1)
Other Bond Interest	80	(1)
Unstated Interest	80	(1)
Exempt Interest	80	(1)
Reporting Interest on Schedule B	81	(1)
Dividends
Form 1099-DIV	82	(1)
Ordinary Dividends	83	(1)
Capital Gain Distributions	83	(1)
Nontaxable Distributions	84	(1)
Liquidation Distributions	84	(1)
Stock Dividends and Rights	84	(1)
Nondividend Dividends	85	(1)
Reporting Dividends on Schedule B	85	(1)
State and Local Income Tax Refunds
Form 1099-G	86	(1)
State and Local Tax Refunds	86	(1)
Filled-In State and Local Income Tax Refund Worksheet	87	(1)
Alimony Received
Alimony Received	88	(1)
Agreements Made or Modified After 1984	88	(1)
Pre-1985 Agreements	89	(1)
Child Support	90	(1)
Other Payments That Are Not Alimony	90	(1)
Business Income or Loss
Schedule C-EZ	91	(1)
Net Business Loss	92	(1)
Completing Schedule C	92	(5)
Self-Employment Tax	97	(1)
Information Returns	97	(1)
Filled-In Schedule C	97	(4)
Gains or Losses I
Reporting Sales and Exchanges	101	(6)
Bad Debts	107	(1)
Sales and Exchanges of Securities	108	(2)
Schedule-D Transactions	110	(1)
Sale of Your Home	111	(2)
Filled-In Schedule D	113	(2)
Gains or Losses II
Selling Business Property	115	(4)
Filled-In Form 4797	119	(2)
Like-Kind Exchanges	121	(1)
Installment Sales	122	(1)
Filled-In Form 8824	123	(2)
Involuntary Conversions	125	(1)
Filled-In Form 6252	126	(3)
Filled-In Form 4684, Section B	129	(1)
Flowchart: How to Use Form 4797 and Schedule D	130	(1)
Income From Retirement Plans
Reporting Retirement Income	131	(2)
Form 1099-R	132	(1)
Penalty Taxes	133	(1)
Distributions From Traditional IRAs	134	(1)
Pensions and Annuities	135	(1)
Lump-Sum Distributions	136	(3)
Rollovers Between Retirement Plans	136	(1)
Distributions From Employer Plans	137	(1)
Distributions From Roth IRAs	138	(1)
Distributions From Education IRAs	138	(1)
Rents, Royalties, and Other Schedule E Income
Rents	139	(5)
Gross Rental Income	140	(1)
Rental Expenses	140	(3)
Checklist of Rental Expenses	143	(1)
Royalties	144	(1)
Partnership Income	144	(1)
S Corporation Income	145	(1)
Estate and Trust Income	145	(1)
At-Risk Limitations	145	(1)
Passive Loss Limitations	145	(1)
Real Estate Mortgage Investment Conduits	146	(1)
Filled-In Worksheet for Supplemental Income	147	(1)
Filled-In Schedule E	148	(2)
Farm Income or Loss
Completing Schedule F	150	(3)
Farm Income	150	(2)
Farm Expenses	152	(1)
Completing Form 4835	153	(1)
Self-Employment Tax	153	(1)
Estimated Tax	153	(1)
Filled-In Schedules F and SE	153	(2)
Unemployment Compensation
Government Programs	155	(1)
Supplemental Unemployment Benefits	156	(1)
Other Types of Unemployment Benefits	156	(1)
Social Security and Tier 1 Railroad Retirement Benefits
Form SSA-1099	157	(1)
Amount of Taxable Benefits	158	(1)
Lump-Sum Payments	158	(1)
Filled-In Social Security Worksheet	159	(1)
Other Income
Taxable Other Income	160	(3)
Exempt or Excludable Income	163	(4)
IV. Deductions Related to Business, Rentals, or Employment	167	(36)
Flowchart: Can You Deduct Home-Office Expenses?	168	(1)
Depreciation and Amortization
Depreciable Property	169	(1)
MACRS Property	170	(6)
Listed Property	173	(1)
Section 179 Expense Deduction	174	(2)
Other Depreciable Property	176	(1)
ACRS Property	177	(1)
Amortization	178	(1)
Filled-In Form 4562	179	(1)
Class Lives and Recovery Periods Tables	180	(2)
MACRS Percentages Tables	182	(4)
ACRS Percentages Tables	186	(1)
Inclusion Amount Tables	187	(1)
Travel, Transportation, and Education Expenses
Travel Expenses	188	(2)
Meal and Entertainment Expenses	190	(1)
Gifts	191	(1)
Transportation Expenses	192	(4)
Records of Business Expenses	196	(1)
Education Expenses	196	(2)
Business Use of Your Home
Qualifying for a Home-Office Deduction	198	(1)
Computing Your Home-Office Deduction	199	(1)
Where to Deduct Home-Office Expenses	200	(2)
Filled-In Form 8829	202	(1)
V. Adjustments to Income	203	(26)
List of Adjustments to Income	204	(1)
Your Individual Retirement Arrangement (IRA)
Traditional IRAs	205	(2)
When to Contribute	206	(1)
Contribution Limits	206	(1)
Deductible Contributions	206	(1)
Roth IRAs	207	(1)
Nondeductible Contributions to a Traditional IRA	208	(3)
Rollovers	210	(1)
Which IRA Option Is Right for Me?	211	(1)
Converting a Traditional IRA to a Roth IRA	211	(2)
Deduction for Student Loan Interest
How to Claim the Deduction	213	(1)
Qualified Student Loan	213	(1)
Deduction Limits	214	(1)
Medical Savings Accounts
Medical Savings Accounts	215	(2)
Eligibility	215	(1)
Contributions	215	(1)
Distributions	216	(1)
Form 1099-MSA	216	(1)
Form 8853	216	(1)
Moving Expenses
Moving Expense Requirements	217	(2)
When to Deduct Moving Expenses	219	(1)
Identifying Your Deductible Moving Expenses	220	(1)
Adjustments for the Self-Employed
Self-Employment Tax Deduction	221	(1)
Self-Employed Health Insurance Deduction	221	(1)
Self-Employed Retirement Plans	222	(3)
Keogh Plans	222	(2)
Simplified Employee Pension (SEP)	224	(1)
Simple Plans	224	(1)
Penalty Tax on Excess Contributions	224	(1)
Other Adjustments to Income
Penalty on Early Withdrawal of Savings	225	(1)
Alimony Deduction	225	(2)
Performing Artists' Expenses	227	(1)
Fee Basis Government Officials	227	(1)
Jury Duty Fees	227	(1)
Reforestation Expenses	227	(1)
Supplemental Unemployment	227	(1)
Section 501(c)(18) Pension Plans	227	(1)
Clean-Burning Fuel Vehicles	227	(1)
Personal Property Rental Expenses	228	(1)
VI. Itemized Deductions on Schedule A	229	(32)
List of Itemized Deductions	230	(2)
Medical and Dental Expenses
Computing Deductible Medical Expenses	232	(2)
Reimbursements of Health-Care Expenses	234	(1)
Nondeductible Health-Care Expenses	234	(1)
Checklist of Deductible Medical and Dental Expenses	235	(1)
Checklist of Nondeductible Medical Expenses	236	(1)
Taxes You Paid
State and Local Income Taxes	237	(1)
State, Local and Foreign Real Estate Taxes	238	(1)
Personal Property Taxes	238	(1)
Other Taxes	238	(1)
Checklist of Nondeductible Taxes	238	(1)
Interest You Paid
Qualified Residence Interest	239	(2)
Investment Interest	241	(1)
Nondeductible Interest	241	(2)
Filled-In Form 4952	243	(1)
Gifts to Charity
Reporting Your Contributions	244	(1)
Qualified Organizations	244	(1)
Special Types of Charitable Contributions	245	(1)
Contributions of Property	246	(1)
Limits on Charitable Deductions	247	(1)
Nondeductible Contributions	248	(1)
Recordkeeping for Contributions	249	(1)
Casualty and Theft Losses
Casualties and Thefts Defined	250	(1)
The Amount of Casualty or Theft Loss	251	(1)
Evidence of Casualty or Theft	252	(1)
Valuation of Property	252	(1)
When to Deduct a Casualty or Theft Loss	252	(1)
Disaster Area Losses	252	(1)
Form 4684, Section A	252	(3)
Miscellaneous Deductions
Limited Deductible Items	255	(3)
Employee Business Expenses	255	(3)
Income Tax Determination Expenses	258	(1)
Investment Expenses	258	(1)
Fully Deductible Items	258	(1)
Total Itemized Deductions	259	(1)
Filled-In Form 2106	260	(1)
VII. Your Tax Computation	261	(18)
Tax Computation Flowchart	262	(1)
Figuring Your Taxable Income
Taxable Income	263	(1)
Standard Deduction	264	(1)
Itemized Deductions	265	(1)
Exemptions	266	(1)
Computing Your Tax
Using the Tax Table	267	(1)
Using the Tax Rate Schedules	267	(1)
Filled-In Form 1040, Page 2	268	(1)
Using the Capital Gain Tax Worksheet	269	(1)
Using Schedule D	269	(1)
Child Under Age 14: Tax Computation	270	(1)
Filled-In Form 8814	271	(1)
Filled-In Form 8615	271	(1)
Farm Income Averaging	272	(1)
Ten-Year Averaging and Capital Gain Election	272	(3)
Alternative Minimum Tax
Form 6251 Filing Requirements	275	(1)
Completing Form 6251	276	(3)
VIII. Limited Tax Credits	279	(34)
Flowchart: Qualifying for the Child- and Dependent-Care Credit	280	(1)
Foreign Tax Credit
Qualifications to Claim the Credit	281	(2)
Form 1116	283	(1)
Credit for Child- and Dependent-Care Expenses
Qualifications to Claim the Credit	284	(2)
Qualifying Expenses	286	(1)
Identification Requirements	287	(1)
Computing the Credit	287	(2)
Dependent-Care Benefits	289	(1)
Filled-In Forms 2441	290	(2)
Credit for the Elderly or the Disabled
Qualified Individual	292	(1)
Income Limits	293	(1)
Computing the Credit	293	(2)
Filled-In Schedule R	295	(1)
Education Credits
Rules That Apply to Both Credits	296	(1)
Hope Credit	297	(1)
Lifetime Learning Credit	298	(1)
Credit Phaseout	298	(1)
Filled-In Form 8863	299	(1)
Child Tax Credit
The Child Tax Credit	300	(3)
Qualifying for the Credit	300	(1)
Calculating the Credit	301	(1)
Filled-In Child Tax Credit Worksheet	302	(1)
Adoption Credit
When to Claim the Credit	303	(1)
Qualified Expenses	303	(1)
Eligible Child	304	(1)
Amount of the Credit	304	(1)
Form W-7A	305	(1)
Filled-in Form 8839	306	(1)
Other Credits
General Business Credit	307	(5)
Mortgage Interest Credit	312	(1)
Credit for Prior-Year AMT	312	(1)
Electric Vehicle Credit	312	(1)
Nonconventional Fuel Credit	312	(1)
IX. Other Taxes, Payments, and Refund or Amount You Owe	313	(28)
Your Rights as a Taxpayer	314	(1)
Self-Employment Tax
Self-Employment Income	315	(1)
Social Security and Medicare Tax Rates	316	(1)
Schedule SE	316	(1)
Filled-In Schedule SE	317	(1)
Optional Methods of Computing Your Self-Employment Tax	318	(1)
Payroll Taxes for Your Household Employees
Household Employee Defined	319	(1)
Wages Paid to Household Employees	319	(1)
Schedule H, Household Employment Taxes	320	(2)
Filled-In Schedule H	322	(1)
Various Other Taxes
Social Security and Medicare Tax on Unreported Tips	323	(1)
Retirement Plan Taxes	323	(3)
Advance Earned Income Credit	326	(1)
Write-In Taxes	326	(2)
Earned Income Credit and the Additional Child Tax Credit
Earned Income Credit	328	(3)
Additional Child Tax Credit	331	(1)
Filled-In Child Tax Credit Worksheets	332	(2)
Filled-In EIC Worksheet	334	(1)
Filled-In Form 8812	335	(2)
Tax Payments and Refund or Amount You Owe
Total Federal Income Tax Withheld	337	(1)
Estimated Income Tax Payments	337	(1)
Excess Social Security Tax	337	(1)
Amount Paid With Extension Request	337	(1)
Other Refundable Credits	337	(1)
Total Tax Payments	338	(1)
Refund or Balance Due	338	(1)
Sign Your Return	338	(1)
Underpayment of Estimated Tax	339	(2)
X. Your Advance Tax Payments	341	(10)
Calendar of 2001 Tax Dates	342	(1)
Planning Your Withholding for 2001 Taxes
Form W-4	343	(2)
Withholding Allowances	344	(1)
Form W-4P	345	(1)
Form W4-S	345	(1)
Form W-4V	345	(1)
Filled-In Form W-4	346	(1)
Planning Your 2001 Estimated Tax Payments
Estimated Tax Requirements	347	(1)
Farmers and Fishers	348	(1)
How to Pay Estimated Tax	348	(1)
Filled-In Form 1040-ES Voucher	349	(1)
Filled-In 2001 Estimated Tax Worksheet	350	(1)
XI. The Short Forms	351	(10)
Filled-In Form 1040EZ	352	(1)
Form 1040EZ and Form 1040A
Form 1040EZ	353	(1)
Form 1040A	353	(4)
Filled-In Form 1040A	357	(4)
XII. Tax Planning Ideas for Now and the Future	361	(20)
Your Rights as a Taxpayer, Continued	362	(1)
After You File Your Return
Common-Sense Recordkeeping	363	(2)
Amending Your Tax Return	365	(1)
Dealing With the IRS	366	(3)
Filled-In Form 1040X	369	(1)
Tax Topics of Special Interest
Tax Planning Throughout the Year	370	(3)
Your Children and the Tax Laws	373	(3)
Tax Consequences of Divorce	376	(3)
Gift and Estate Tax Essentials
Gift Tax	379	(1)
The Unified Credit	380	(1)
Generation-Skipping Transfer Tax	380	(1)
Estate Tax	380	(1)
XIII. An Encyclopedia of Tax	381	(72)
Allocated Tips	381	(1)
Barter Transactions	381	(1)
Basis of Property	382	(6)
Business and Passive Activity Topics	388	(13)
Asset Acquisition Costs	388	(1)
Business versus Hobby	388	(2)
Changing Depreciation Accounting	390	(1)
Employee versus Self-Employed	391	(1)
Information Reporting Requirements	392	(3)
Limitation on Losses and Credits	395	(4)
Net Operating Loss (NOL)	399	(2)
Child-Care Providers	401	(1)
Clergy: Special Tax Rules	401	(1)
Community Property States	402	(1)
Creative Works, Expenses of	403	(1)
Fishing, Business of	403	(2)
Foreclosure and Debt Discharge, Income From	405	(4)
Foreign Issues of U.S. Taxation	409	(7)
Foreign Earned Income, Exclusion of	410	(1)
Foreign National: Departing the United States	411	(1)
Foreign National: Dependent of U.S. Taxpayer	411	(1)
Foreign National: U.S. Resident or Nonresident	411	(2)
Foreign National: U.S. Taxation of Nonresident or Dual-Status Alien	413	(1)
U.S. Income Tax Treaties	414	(1)
U.S. Possessions Income	415	(1)
Installment Sales	416	(4)
Internal Revenue Service	420	(5)
Recent Changes at the IRS	420	(1)
Innocent Spouse Relief	421	(1)
Interest: Abatement Due to IRS Error	421	(1)
Nonfiler Program	422	(1)
Injured Spouse	423	(1)
Statute of Limitations for Assessments and Refunds	423	(1)
Tax-Related Penalties	424	(1)
Low-Income Housing Credit	425	(1)
Medical Expenses: Individuals with Handicaps	426	(1)
Military Personnel	426	(2)
Natural Resources Topics	428	(3)
Depletion: Gas, Oil, and Mineral Property	428	(2)
Depletion: Timber Property	430	(1)
Gas and Oil: Intangible Drilling Costs	430	(1)
Reforestation Expenditures	431	(1)
Partnership Schedule K-1	431	(1)
Repayment of Previously Reported Income	432	(1)
Repossession of Property	432	(4)
General Rule for Repossessions	433	(1)
Repossession of Principal Residence	433	(1)
Repossession of Qualified Real Property	434	(2)
Retirement Plans, Important Details	436	(5)
Annuity in Exchange for Property	436	(1)
Keogh Plans	436	(2)
Section 401(k) Plans	438	(1)
Simplified Employee Pension Plans	439	(1)
Saving Incentive Match Plan for Employees (SIMPLE)	440	(1)
Tax-Sheltered Annuities	440	(1)
Royalties, Classification of	441	(1)
Shared-Equity Agreements	442	(1)
State Tax Returns: Jurisdiction	443	(1)
Statutory Employee	443	(1)
Stocks and Other Securities	444	(9)
Bonds	444	(3)
Mutual Funds	447	(1)
Mortgaged-Backed Securities	448	(1)
Unit Investment Trusts	448	(1)
REMICs and Other Collateralized Debt Obligations	449	(1)
Real Estate Investment Trusts (REITs)	449	(1)
Short Sales	449	(1)
Options and Commodities Trading	450	(2)
Worthless Section 1242 or 1244 Stock	452	(1)
XIV. A Glossary of Tax Terms	453	(12)
XV. Tax Tables, Worksheets, and Tax Forms	465	(98)
Self-Interview Tax Data Organizer	467	(6)
2000 Tax Table	473	(12)
2000 Tax Rate Schedules	485	(2)
Form 1040EZ	487	(2)
Form 1040A	489	(2)
Schedule 1, Interest and Dividend Income for From 1040A Filers	491	(2)
Schedule 2, Child- or Dependent-Care Expenses for Form 1040A Filers	493	(2)
Form 1040, U.S. Individual Income Tax Return	495	(2)
Schedule A, Itemized Deductions	497	(1)
Schedule B, Interest and Ordinary Dividends	498	(1)
Schedule C, Profit or Loss From Business	499	(2)
Principal Business or Professional Activity Codes	501	(2)
Schedule D, Capital Gains and Losses	503	(2)
Schedule E, Supplemental Income and Loss	505	(2)
Schedule EIC, Earned Income Credit	507	(2)
Schedule F, Profit or Loss From Farming	509	(2)
Schedule H, Household Employment Taxes	511	(2)
Schedule SE, Self-Employment Tax	513	(2)
Form 1116, Foreign Tax Credit	515	(2)
Form 2106, Employee Business Expenses	517	(2)
Form 2441, Child and Dependent Care Expenses	519	(2)
Form 3903, Moving Expenses	521	(2)
Form 4562, Depreciation/Amortization	523	(2)
Form 4684, Casualties and Thefts	525	(2)
Form 4797, Sales of Business Property	527	(2)
Form 6251, AMT-Individuals	529	(2)
Form 8606, Nondeductible IRAs	531	(2)
Form 8615, Tax for Children Under Age 14, Who Have Investment Income of more than $1,400	533	(2)
Form 8812, Additional Child Tax Credit	535	(2)
Form 8829, Expenses for Business Use of Your Home	537	(2)
Form 8839, Qualified Adoption Expenses	539	(2)
Form 8863, Education Credits	541	(2)
Head of Household Worksheet	543	(1)
Expenses of Maintaining a Home	543	(1)
Dependency Support Worksheet	544	(1)
Record of Salaries and Wages From Several Employers	545	(1)
Pension/Annuity Worksheet	545	(1)
Taxable Recovery of Previously Deducted Amount Worksheet	546	(1)
Taxable Social Security/Equivalent Tier 1 RR Benefits Worksheet	547	(1)
2000 Inclusion Amounts for Leased Automobiles	548	(1)
Statement of Business Use of Home	549	(1)
Depreciation Worksheet-All Methods	550	(1)
IRA Contribution Worksheet	551	(2)
Itemized Deduction Limitation Worksheet	553	(1)
Exemption Limitation Worksheet	553	(1)
Capital Gain Tax Worksheet	554	(1)
Capital Loss Carryover Worksheet	554	(1)
Child Tax Credit Worksheets	555	(2)
Earned Income Credit Worksheet	557	(1)
Earned Income Credit Table	558	(3)
2001 Estimated Tax Worksheet	561	(2)
Index	563