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previous pagePrevious Page: Instructions for Schedule H (Form 1040), Household Employment Taxes - Contact List for State Unemployment Tax Agencies
next pageNext Page: Instructions for Schedule J (Form 1040), Income Averaging for Farmers and Fishermen - General Instructions
 Use previous pagenext page to find additional occurrences of topic items.Index for these Instructions
taxmap/instr/i1040sj-000.htm#TXMP23f6ea8a

2008 Instructions for Schedule J


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taxmap/instr/i1040sj-000.htm#TXMP70d1f1a4

Income Averaging for Farmers and Fishermen(p1)


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2008

taxmap/instr/i1040sj-000.htm#TXMP1275f772
Use Schedule J (Form 1040) to elect to figure your 2008 income tax by averaging, over the previous 3 years (base years), all or part of your 2008 taxable income from your trade or business of farming or fishing. This election may give you a lower tax if your 2008 income from farming or fishing is high and your taxable income for one or more of the 3 prior years was low.
In order to qualify for this election, you are not required to have been in the business of farming or fishing during any of the base years.
You may elect to average farming or fishing income even if your filing status was not the same in the election year and the base years.
This election does not apply when figuring your alternative minimum tax on Form 6251. Also, you do not 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.
taxmap/instr/i1040sj-000.htm#TXMP1ef9dc34

What's New(p1)


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taxmap/instr/i1040sj-000.htm#TXMP2198311f

Exxon Valdez litigation.(p1)

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If you received taxable income from this civil action, you may qualify to include the amount received as fishing income for income averaging purposes. See Settlement from Exxon Valdez litigation on page 2.
taxmap/instr/i1040sj-000.htm#TXMP3d98abfa

New rules for averaging farming and fishing income.(p1)

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The four items discussed below are effective for tax years beginning after July 22, 2008. However, you can apply these provisions to tax years beginning after December 31, 2003, and before July 23, 2008, if all provisions are consistently applied in each tax year.
taxmap/instr/i1040sj-000.htm#TXMP48b0fbf2

Farming and fishing businesses.(p1)
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If you conduct both farming and fishing businesses, you must figure elected farm income by combining income, gains, losses, and deductions attributable to your farming and fishing businesses.
taxmap/instr/i1040sj-000.htm#TXMP550d9984

Lessors of fishing vessels.(p1)
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A lessor of a fishing vessel is engaged in a fishing business for income averaging purposes with respect to payments received under the lease, but only if the lease payments are (a) based on a share of the catch (or a share of the proceeds from the sale of the catch) from the lessee's use of the vessel in a fishing business (not a fixed payment), and (b) determined under a written lease agreement entered into before the lessee begins any significant fishing activities resulting in the catch.
taxmap/instr/i1040sj-000.htm#TXMP505047e5

Crew members on fishing vessels.(p1)
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A crew member on a fishing vessel is engaged in a fishing business for income averaging purposes with respect to the compensation earned as a crew member on a vessel engaged in a fishing business, but only if the compensation is based on a share of the catch (or a share of the proceeds from the sale of the catch).
taxmap/instr/i1040sj-000.htm#TXMP29e512f4

Merchant Marine Capital Construction Fund (CCF) deposits.(p1)
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If you reduced your taxable income on Form 1040, line 43, or Form 1040NR, line 40, by any amount deposited into a CCF account, take into account the CCF reduction in figuring taxable income for income averaging purposes. Also, the CCF reduction is treated as a deduction attributable to your fishing business in figuring elected farm income. However, if any earnings (without regard to the carryback of any net operating or net capital loss) from the operation of agreement vessels in the fisheries of the United States or in the foreign or domestic commerce of the United States are not attributable to your fishing business, such amounts are not deductible when figuring elected farm income.
previous pagePrevious Page: Instructions for Schedule H (Form 1040), Household Employment Taxes - Contact List for State Unemployment Tax Agencies
next pageNext Page: Instructions for Schedule J (Form 1040), Income Averaging for Farmers and Fishermen - General Instructions
 Use previous pagenext page to find additional occurrences of topic items.Index for these Instructions