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1040x H&r Block

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1040x H&r Block

1040x h&r block Publication 901 - Main Content Table of Contents Application of Treaties Tax Exemptions Provided by TreatiesPersonal Services Income Professors, Teachers, and Researchers Students and Apprentices Wages and Pensions Paid by a Foreign Government Explanation of TablesTable 1 Table 2 Table 3 Application of Treaties The United States has income tax treaties with a number of foreign countries. 1040x h&r block Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U. 1040x h&r block S. 1040x h&r block income taxes on certain items of income they receive from sources within the United States. 1040x h&r block These reduced rates and exemptions vary among countries and specific items of income. 1040x h&r block If there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR. 1040x h&r block Also see Publication 519. 1040x h&r block Many of the individual states of the United States tax the income of their residents. 1040x h&r block Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income. 1040x h&r block Tax treaties reduce the U. 1040x h&r block S. 1040x h&r block taxes of residents of foreign countries. 1040x h&r block With certain exceptions, they do not reduce the U. 1040x h&r block S. 1040x h&r block taxes of U. 1040x h&r block S. 1040x h&r block citizens or residents. 1040x h&r block U. 1040x h&r block S. 1040x h&r block citizens and residents are subject to U. 1040x h&r block S. 1040x h&r block income tax on their worldwide income. 1040x h&r block Treaty provisions generally are reciprocal (apply to both treaty countries); therefore, a U. 1040x h&r block S. 1040x h&r block citizen or resident who receives income from a treaty country may refer to the tables in this publication to see if a tax treaty might affect the tax to be paid to that foreign country. 1040x h&r block Foreign taxing authorities sometimes require certification from the U. 1040x h&r block S. 1040x h&r block Government that an applicant filed an income tax return as a U. 1040x h&r block S. 1040x h&r block citizen or resident, as part of the proof of entitlement to the treaty benefits. 1040x h&r block See Form 8802, Application for United States Residency Certification, to request a certification. 1040x h&r block Disclosure of a treaty-based position that reduces your tax. 1040x h&r block   If you take the position that any U. 1040x h&r block S. 1040x h&r block tax is overruled or otherwise reduced by a U. 1040x h&r block S. 1040x h&r block treaty (a treaty-based position), you generally must disclose that position on Form 8833 and attach it to your return. 1040x h&r block If you are not required to file a return because of your treaty-based position, you must file a return anyway to report your position. 1040x h&r block The filing of Form 8833 does not apply to a reduced rate of withholding tax on noneffectively connected income, such as dividends, interest, rents or royalties, or to a reduced rate of tax on pay received for services performed as an employee, including pensions, annuities, and social security. 1040x h&r block For more information, see Publication 519 and the Form 8833 instructions. 1040x h&r block   If you fail to file Form 8833, you may have to pay a $1,000 penalty. 1040x h&r block Corporations are subject to a $10,000 penalty for each failure. 1040x h&r block Tax Exemptions Provided by Treaties In addition to the tables in the back of this publication, this publication contains discussions of the exemptions from tax and certain other effects of the tax treaties on the following types of income. 1040x h&r block Pay for certain personal services performed in the United States. 1040x h&r block Pay of a professor, teacher, or researcher who teaches or performs research in the United States for a limited time. 1040x h&r block Amounts received for maintenance and studies by a foreign student or apprentice who is here for study or experience. 1040x h&r block Wages, salaries, and pensions paid by a foreign government. 1040x h&r block Personal Services Income Pay for certain personal services performed in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if you are a resident of one of the countries discussed below, if you are in the United States for a limited number of days, and if you meet certain other conditions. 1040x h&r block For this purpose, the word “day” means a day during any part of which you are physically present in the United States. 1040x h&r block Terms defined. 1040x h&r block   Several terms appear in many of the discussions that follow. 1040x h&r block The exact meanings of the terms are determined by the particular tax treaty under discussion; thus, the meanings vary among treaties. 1040x h&r block The definitions that follow are, therefore, general definitions that may not give the exact meaning intended by a particular treaty. 1040x h&r block   The terms fixed base and permanent establishment generally mean a fixed place of business, such as a place of management, a branch, an office, a factory, a warehouse, or a mining site, through which an enterprise carries on its business. 1040x h&r block   The term borne by generally means having ultimate financial accounting responsibility for, or providing the monetary resources for, an expenditure or payment, even if another entity in another location actually made the expenditure or payment. 1040x h&r block Australia Income that residents of Australia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Pay that residents of Australia receive for labor or personal services performed in the United States as employees (dependent personal services), including services as a director of a company, is exempt from U. 1040x h&r block S. 1040x h&r block income tax if: The residents are in the United States for no more than 183 days during the tax year, The pay is paid by, or on behalf of, an employer or company that is not a resident of the United States, and The pay is not deductible in determining the taxable income of the trade or business of the employer (or company) in the United States. 1040x h&r block These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Australia who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Austria Income that residents of Austria receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Austria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Austria who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Income received by a resident of Austria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block Bangladesh Income that residents of Bangladesh receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, or Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Bangladesh receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to pubic entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Bangladesh who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Regardless of these limits, income of Bangladesh entertainers is exempt from U. 1040x h&r block S. 1040x h&r block income tax if their visit to the United States is wholly or mainly supported by public funds of Bangladesh, its political subdivisions, or local authorities. 1040x h&r block Income received from employment as a member of the regular complement of a ship or an aircraft operated by a Bangladesh enterprise in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block If the ship or aircraft is operated by a U. 1040x h&r block S. 1040x h&r block enterprise, the income is subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block If the resident of Bangladesh is a shareholder in a U. 1040x h&r block S. 1040x h&r block corporation, these exemptions do not apply to directors' fees received as a member of the board of directors of the U. 1040x h&r block S. 1040x h&r block corporation. 1040x h&r block The amount received by the shareholder that is more than the amount paid to a director that is not a shareholder is subject to U. 1040x h&r block S. 1040x h&r block tax at the rate of 15%. 1040x h&r block Barbados Income that residents of Barbados receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 89 days during the tax year, Earn net income for independent services provided to U. 1040x h&r block S. 1040x h&r block residents that is not more than $5,000 (there is no dollar limit if the contractors are not U. 1040x h&r block S. 1040x h&r block residents), and Do not have a regular base available in the United States for performing the services. 1040x h&r block If they have a regular base available in the United States but otherwise meet the conditions for exemption, they are taxed only on the income attributable to the regular base. 1040x h&r block Income that residents of Barbados receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block tax if the residents meet four requirements. 1040x h&r block They are in the United States for no more than 183 days during the calendar year. 1040x h&r block The income earned in the calendar year in the United States is not more than $5,000. 1040x h&r block Their income is paid by or for an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The income is not borne by a permanent establishment or regular base of the employer in the United States. 1040x h&r block Income of a Barbadian resident from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block These exemptions do not apply to Barbadian resident public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $250 per day or $4,000 in the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 1040x h&r block However, the exemptions do apply regardless of these limits on gross receipts if the entertainer's visit to the United States is substantially supported by Barbadian public funds or if the entertainer's services are provided to a nonprofit organization. 1040x h&r block Belgium Income that residents of Belgium receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040x h&r block Income that residents of Belgium receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block The exemption does not apply to directors' fees and similar payments received by a resident of Belgium for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Belgium who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Income received by a resident of Belgium for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block Bulgaria Income that residents of Bulgaria receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040x h&r block Under Article 5 (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 1040x h&r block Income that residents of Bulgaria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block The exemption does not apply to directors' fees and similar payments received by a resident of Bulgaria as a member of the board of directors of a U. 1040x h&r block S. 1040x h&r block company. 1040x h&r block Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Bulgaria who earn more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Income received by a resident of Bulgaria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block Canada Income that residents of Canada receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article VII (Business Profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040x h&r block Under Article V (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 1040x h&r block Income that residents of Canada receive for personal services performed as employees (dependent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block tax if it is not more than $10,000 for the year. 1040x h&r block If the income is more than $10,000 for the year, it is exempt only if: The residents are present in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and The income is not paid by, or on behalf of, a U. 1040x h&r block S. 1040x h&r block resident, and is not borne by a permanent establishment in the United States. 1040x h&r block Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Canada who derive more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the calendar year are subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block However, this article does not apply to athletes participating in team sports in leagues with regularly scheduled games in both Canada and the United States. 1040x h&r block Pay received by a resident of Canada for employment regularly done in more than one country on a ship, aircraft, motor vehicle, or train operated by a Canadian resident is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block China, People's Republic of Income that residents of the People's Republic of China receive for personal services as independent contractors or self-employed individuals (independent personal services) that they perform during the tax year in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are present in the United States for no more than 183 days in the calendar year, and Do not have a fixed base regularly available in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 1040x h&r block Pay received by residents of the People's Republic of China for services performed as employees (dependent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block tax if: The residents are present in the United States for no more than 183 days in the calendar year, The pay is paid by or for an employer who is not a U. 1040x h&r block S. 1040x h&r block resident, and The pay is not borne by a permanent establishment or fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to directors' fees for service on the board of directors of a U. 1040x h&r block S. 1040x h&r block corporation. 1040x h&r block These exemptions generally do not apply to income received as a public entertainer (such as a theater, motion picture, radio, or television artist, musician, or athlete). 1040x h&r block However, income of athletes or public entertainers from China participating in a cultural exchange program agreed upon by the U. 1040x h&r block S. 1040x h&r block and Chinese governments is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Commonwealth of Independent States Income that residents of a C. 1040x h&r block I. 1040x h&r block S. 1040x h&r block member receive for performing personal services in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if those residents are in the United States for no more than 183 days during the tax year. 1040x h&r block Pay received by an employee who is a member of the regular complement of a ship or aircraft operated in international traffic by a C. 1040x h&r block I. 1040x h&r block S. 1040x h&r block member or a resident of a C. 1040x h&r block I. 1040x h&r block S. 1040x h&r block member is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Cyprus Income that residents of Cyprus receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are present in the United States for less than 183 days in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 1040x h&r block Pay received by residents of Cyprus from services performed as employees (dependent personal services), including services as an officer of a corporation, is exempt from U. 1040x h&r block S. 1040x h&r block income tax if: The residents are in the United States for less than 183 days during the tax year, The pay is paid by or for an employer who is not a U. 1040x h&r block S. 1040x h&r block resident, and The pay is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 1040x h&r block Pay received by a Cyprus resident for performing personal services as an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of Cyprus is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block These exemptions do not apply to Cyprus resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $500 per day or $5,000 for the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 1040x h&r block Directors' fees received by residents of Cyprus for service on the board of directors of a U. 1040x h&r block S. 1040x h&r block corporation are exempt from U. 1040x h&r block S. 1040x h&r block income tax to the extent of a reasonable fixed amount payable to all directors for each day of attendance at directors' meetings held in the United States. 1040x h&r block Czech Republic Income that residents of the Czech Republic receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are present in the United States for no more than 183 days in any 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available, they are taxed only on income attributable to the fixed base. 1040x h&r block Income that residents of the Czech Republic receive for employment in the United States (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following three requirements are met. 1040x h&r block The resident is present in the United States for no more than 183 days in any 12-month period. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to income residents of the Czech Republic receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year. 1040x h&r block Regardless of these limits, income of Czech entertainers and sportsmen is exempt from U. 1040x h&r block S. 1040x h&r block income tax if their visit to the United States is substantially supported by public funds of the Czech Republic, its political subdivisions, or local authorities, or the visit is made pursuant to a specific arrangement between the United States and the Czech Republic. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of the Czech Republic as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block Income from employment as a member of the regular complement of a ship or aircraft operated by a Czech enterprise in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block If the ship or aircraft is operated by a U. 1040x h&r block S. 1040x h&r block enterprise, the income is subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Denmark Income that residents of Denmark receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Denmark receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of Denmark as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, and athletes) from Denmark who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Income received by a resident of Denmark for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block Egypt Income that residents of Egypt receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they are in the United States for no more than 89 days during the tax year. 1040x h&r block Income that residents of Egypt receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet four requirements. 1040x h&r block They are in the United States for no more than 89 days during the tax year. 1040x h&r block They are employees of a resident of, or a permanent establishment in, Egypt. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block Their income is subject to Egyptian tax. 1040x h&r block This exemption does not apply to pay received by a resident of Egypt who is an employee and member of the regular complement of a ship or an aircraft operated in international traffic by a resident of the United States. 1040x h&r block These exemptions do not apply to Egyptian resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes), who earn income for services as public entertainers if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 1040x h&r block Estonia Income that residents of Estonia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Estonia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following requirements are met. 1040x h&r block The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of Estonia as a member of the board of directors or similar body of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a United States enterprise is subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block These exemptions do not apply to income residents of Estonia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 1040x h&r block Regardless of these limits, income of Estonian entertainers or athletes is exempt from U. 1040x h&r block S. 1040x h&r block income tax if their visit to the United States is wholly or mainly supported by public funds of Estonia, its political subdivisions, or local authorities. 1040x h&r block Finland Income that residents of Finland receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Finland receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet three requirements. 1040x h&r block They are in the United States for no more than 183 days during any 12-month period. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block Their income is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 1040x h&r block The exemption does not apply to pay received by a resident of Finland who is an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of the United States. 1040x h&r block These exemptions do not apply to income residents of Finland receive as public entertainers or sportsmen if the gross income, including reimbursed expenses, is more than $20,000 for their personal activities in the United States during the calendar year. 1040x h&r block France Income that residents of France receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of France receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet three requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block Income for services performed by a resident of France as an employee and member of the regular complement of a ship or an aircraft operated in international traffic is exempt from tax in the United States. 1040x h&r block These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, or musicians), or sportsmen from France who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Regardless of these limits, income of French entertainers or sportsmen is exempt from U. 1040x h&r block S. 1040x h&r block tax if their visit is principally supported by public funds of France. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of France as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block Germany Income that residents of Germany receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040x h&r block Income that residents of Germany receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block tax if the residents meet three requirements. 1040x h&r block They are in the United States for no more than 183 days during the calendar year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block The income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block Pay received by a resident of Germany for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block The exemption does not apply to directors' fees and other similar payments received by a resident of Germany for services performed in the United States as a member of the board of directors of a company resident in the United States. 1040x h&r block Income residents of Germany receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes is subject to U. 1040x h&r block S. 1040x h&r block tax if their gross receipts, including reimbursed expenses, from their entertainment activities in the United States are more than $20,000 during the calendar year. 1040x h&r block Income of German entertainers or athletes is exempt from U. 1040x h&r block S. 1040x h&r block tax if their visit to the United States is substantially supported by public funds of Germany, its political subdivisions, or local authorities. 1040x h&r block Greece Income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they are in the United States for no more than 183 days during the tax year and the pay is not more than $10,000. 1040x h&r block The pay, regardless of amount, is exempt from U. 1040x h&r block S. 1040x h&r block income tax if it is for labor or personal services performed as employees of, or under contract with, a resident of Greece or a Greek corporation or other entity of Greece, and if the residents are in the United States for no more than 183 days during the tax year. 1040x h&r block Hungary Income that residents of Hungary receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available in the United States. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Hungary receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet three requirements. 1040x h&r block They are in the United States for no more than 183 days during the tax year. 1040x h&r block Their income is paid by or on behalf of an employer who is not a resident of the United States. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block Pay received by an employee who is a member of the regular complement of a ship or aircraft operated by a Hungarian enterprise in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block If the ship or aircraft is operated by a U. 1040x h&r block S. 1040x h&r block enterprise, the pay is subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Iceland Income that residents of Iceland receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 1040x h&r block Income that residents of Iceland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block The exemption does not apply to directors' fees and similar payments received by a resident of Iceland as a member of the board of directors of a U. 1040x h&r block S. 1040x h&r block company. 1040x h&r block Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Iceland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Income received by a resident of Iceland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block India Income that residents of India receive for performing personal services in the United States during the tax year as independent contractors or self-employed individuals (independent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are present in the United States for no more than 89 days during the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available, they are taxed only on income attributable to the fixed base. 1040x h&r block Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet three requirements. 1040x h&r block They are present in the United States for no more than 183 days during the tax year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States. 1040x h&r block The exemption does not apply to pay received by a resident of India for services performed as an employee aboard a ship or aircraft operated in international traffic by a U. 1040x h&r block S. 1040x h&r block enterprise. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by an Indian resident as a member of the board of directors of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block These exemptions do not apply to income residents of India receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their net income is more than $1,500 during the tax year for their entertainment activities in the United States. 1040x h&r block Regardless of this limit, the income of Indian entertainers and athletes is exempt from U. 1040x h&r block S. 1040x h&r block tax if their visit to the United States is wholly or substantially supported from the public funds of the Indian Government, its political subdivisions, or local authorities. 1040x h&r block Indonesia Income that residents of Indonesia receive for performing personal services as individual contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are present in the United States for no more than 119 days during any consecutive 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040x h&r block Income that residents of Indonesia receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet three requirements. 1040x h&r block They are present in the United States no more than 119 days during any consecutive 12-month period. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block The income is not borne or reimbursed by a permanent establishment the employer has in the United States. 1040x h&r block Pay received by an individual for services performed as an employee aboard a ship or aircraft operated by an Indonesian resident in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block tax if the individual is a member of the regular complement of the ship or aircraft. 1040x h&r block These exemptions do not apply to income residents of Indonesia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their gross receipts, including reimbursed expenses, are more than $2,000 during any consecutive 12-month period. 1040x h&r block Regardless of these limits, income of Indonesian entertainers and athletes is exempt from U. 1040x h&r block S. 1040x h&r block tax if their visit to the United States is substantially supported or sponsored by the Indonesian Government and the Indonesian competent authority certifies that the entertainers or athletes qualify for this exemption. 1040x h&r block Ireland Income that residents of Ireland receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Ireland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of Ireland as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block However, amounts received for attending meetings in Ireland are not subject to U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block Income received by a resident of Ireland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax. 1040x h&r block These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Ireland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Israel Income that residents of Israel receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they are in the United States for no more than 182 days during the tax year. 1040x h&r block Income that residents of Israel receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet four requirements. 1040x h&r block They are in the United States for no more than 182 days during the tax year. 1040x h&r block They are employees of a resident of, or a permanent establishment in, Israel. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block Their income is subject to Israeli tax. 1040x h&r block The exemption does not apply to pay received by an employee for labor or personal services performed as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block These exemptions do not apply to income that residents of Israel receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes), if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 1040x h&r block Italy Income that residents of Italy receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Italy receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following requirements are met. 1040x h&r block The residents are in the United States for no more than 183 days during the tax year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of Italy for services performed in the United States as a member of the board of directors of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Pay received for employment regularly exercised aboard a ship or aircraft operated by a U. 1040x h&r block S. 1040x h&r block enterprise is subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block These exemptions do not apply to income residents of Italy receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) if they are present in the United States for more than 90 days during the tax year or their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year for their entertainment activities in the United States. 1040x h&r block Jamaica Income that residents of Jamaica receive for the performance of personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 89 days during the tax year, Do not have a fixed base regularly available to them in the United States for performing their services, and Earn net income for those services that is not more than $5,000 during the tax year if the income is from a U. 1040x h&r block S. 1040x h&r block contractor. 1040x h&r block If they have a fixed base available in the United States, they are taxed only on the income that is attributable to the fixed base. 1040x h&r block There is no dollar limit for condition (3) if the contractor is from a country other than the United States. 1040x h&r block Income that residents of Jamaica receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet four requirements. 1040x h&r block They are in the United States for no more than 183 days during the tax year. 1040x h&r block Their income is paid by or for an employer who is not a resident of the United States. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block Their net income received for the services is not more than $5,000 during the tax year. 1040x h&r block Pay received from employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a Jamaican enterprise is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block If the ship or aircraft is operated by a U. 1040x h&r block S. 1040x h&r block enterprise, the pay is subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block These exemptions do not apply to income that residents of Jamaica receive for performing services in the United States as entertainers, such as theater, motion picture, radio, or television artists, musicians, or athletes, if the gross receipts (excluding reimbursements for expenses) from the services are more than $400 a day or $5,000 for the tax year. 1040x h&r block Directors' fees received by residents of Jamaica for services performed in the United States as members of boards of directors of U. 1040x h&r block S. 1040x h&r block corporations are exempt from U. 1040x h&r block S. 1040x h&r block tax if the fees (excluding reimbursed expenses) are not more than $400 per day for each day the directors are present in the United States to perform the services. 1040x h&r block Japan Income that residents of Japan receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (business profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 1040x h&r block Income that residents of Japan receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block The exemption does not apply to directors' fees and similar payments received by a resident of Japan for services performed as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block The exemption does not apply to a resident of Japan who performs services as an employee aboard a ship or an aircraft operated in international traffic by a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Japan who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Kazakhstan Income that residents of Kazakhstan receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if: The residents are in the United States for no more than 183 days in any consecutive 12-month period, and The income is not attributable to a fixed base in the United States which is regularly available to the residents. 1040x h&r block If the residents have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040x h&r block Income that residents of Kazakhstan receive for employment in the United States (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following three requirements are met. 1040x h&r block The resident is in the United States for no more than 183 days in any 12-month period. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block Income derived by a resident of Kazakhstan from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of Kazakhstan as a member of the board of directors or similar body of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Korea, South Income that residents of South Korea receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block tax if the residents: Are in the United States for no more than 182 days during the tax year, Earn income for those services that is not more than $3,000 during the tax year, and Do not maintain a fixed base in the United States for more than 182 days during the tax year. 1040x h&r block If they maintain a fixed base in the United States for more than 182 days, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Korea receive for labor or personal services performed in the United States as employees (dependent personal services), including pay for services performed as an officer of a corporation, is exempt from U. 1040x h&r block S. 1040x h&r block tax if the residents meet four requirements. 1040x h&r block They are in the United States for no more than 182 days during the tax year. 1040x h&r block They are employees of a resident of Korea or of a permanent establishment maintained in Korea. 1040x h&r block Their compensation is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block Their income for those services is not more than $3,000. 1040x h&r block Pay received by employees who are members of the regular complement of a ship or aircraft operated by a resident of Korea in international traffic is exempt. 1040x h&r block Latvia Income that residents of Latvia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040x h&r block Income that residents of Latvia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following requirements are met. 1040x h&r block The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 1040x h&r block S. 1040x h&r block enterprise. 1040x h&r block The exemptions do not apply to directors' fees and similar payments received by a resident of Latvia as a member of the board of directors or similar body of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The exemptions do not apply to income residents of Latvia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 1040x h&r block Regardless of these limits, income of Latvian entertainers or athletes is exempt from U. 1040x h&r block S. 1040x h&r block income tax if their visit to the United States is wholly or mainly supported by public funds of Latvia, its political subdivisions, or local authorities. 1040x h&r block Lithuania Income that residents of Lithuania receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 1040x h&r block Income that residents of Lithuania receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following requirements are met. 1040x h&r block The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 1040x h&r block S. 1040x h&r block enterprise. 1040x h&r block The exemptions do not apply to directors' fees and similar payments received by a resident of Lithuania as a member of the board of directors or similar body of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The exemptions do not apply to income residents of Lithuania receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 1040x h&r block Regardless of these limits, income of Lithuanian entertainers or athletes is exempt from U. 1040x h&r block S. 1040x h&r block income tax if their visit to the United States is wholly or mainly supported by public funds of Lithuania, its political subdivisions, or local authorities. 1040x h&r block Luxembourg Income that residents of Luxembourg receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 1040x h&r block If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 1040x h&r block Income that residents of Luxembourg receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 1040x h&r block The exemption does not apply to pay received for employment exercised continuously or predominantly aboard a ship or aircraft operated in international traffic by a U. 1040x h&r block S. 1040x h&r block enterprise. 1040x h&r block The exemptions do not apply to directors' fees and similar payments received by a resident of Luxembourg for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block The exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Luxembourg who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 1040x h&r block Malta Income that residents of Malta receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 1040x h&r block Under that provision, business profits are exempt from U. 1040x h&r block S. 1040x h&r block income tax unless the individual has a permanent establishment in the United States. 1040x h&r block If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 1040x h&r block Income that residents of Malta receive for services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet the following requirements. 1040x h&r block They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 1040x h&r block Their income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block The exemption does not apply to directors' fees and similar payments received by a resident of Malta for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 1040x h&r block Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Malta who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 1040x h&r block S. 1040x h&r block tax. 1040x h&r block Income received by a resident of Malta for employment aboard a ship or an aircraft operated in international traffic is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the individual is a member of the regular complement of the ship or aircraft. 1040x h&r block Mexico Income that residents of Mexico receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 182 days in a 12-month period, and Do not have a fixed base that they regularly use for performing the services. 1040x h&r block If they have a fixed base available, they are taxed only on income attributable to the fixed base. 1040x h&r block Income that residents of Mexico receive for employment in the United States (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block tax if the following three requirements are met. 1040x h&r block The resident is present in the United States for no more than 183 days in a 12-month period. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a resident of the United States. 1040x h&r block The income is not borne by a permanent establishment or fixed base that the employer has in the United States. 1040x h&r block These exemptions do not apply to directors' fees and similar payments received by a resident of Mexico for services performed outside Mexico as a director or overseer of a company that is a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block These exemptions do not apply to income residents of Mexico receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if the income, including reimbursed expenses, is more than $3,000 during the tax year for their entertainment activities in the United States. 1040x h&r block This includes income from activities performed in the United States relating to the entertainer or athlete's reputation, such as endorsements of commercial products. 1040x h&r block Regardless of this limit, the income of Mexican entertainers and athletes is exempt from U. 1040x h&r block S. 1040x h&r block tax if their visit to the United States is substantially supported by public funds of Mexico, its political subdivisions, or local authorities. 1040x h&r block Morocco Income that residents of Morocco receive for performing personal services as independent contractors or as self-employed persons (independent personal services) in the United States during the tax year is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents: Are in the United States for no more than 182 days during the tax year, Do not maintain a fixed base in the United States for more than 89 days during the tax year, and Earn total income for those services that is not more than $5,000. 1040x h&r block If they have a fixed base in the United States for more than 89 days, they are taxed only on the income attributable to the fixed base. 1040x h&r block Income that residents of Morocco receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the residents meet three requirements. 1040x h&r block They are in the United States for less than 183 days during the tax year. 1040x h&r block They are employees of a resident of Morocco or of a permanent establishment of a resident of a country other than Morocco if the permanent establishment is located in Morocco. 1040x h&r block Their income is not borne by a permanent establishment that the employer has in the United States. 1040x h&r block Compensation received for services performed by a member of the board of directors of a corporation does not qualify for this exemption. 1040x h&r block Income received by an individual for performing labor or personal services as an employee aboard a ship or an aircraft operated in international traffic by a Moroccan resident is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the individual is a member of the regular complement of the ship or aircraft. 1040x h&r block These exemptions do not apply to income received for services performed in the United States by professional entertainers, including theater, film, radio, and television performers, musicians, and athletes, unless the services are performed by, or for the account of, a Moroccan nonprofit organization. 1040x h&r block Netherlands Income that residents of the Netherlands receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the income is not attributable to a fixed base in the United States that is regularly available for performing the services. 1040x h&r block Income that residents of the Netherlands receive for employment in the United States (dependent personal services) is exempt from U. 1040x h&r block S. 1040x h&r block income tax if the following three requirements are met. 1040x h&r block The resident is in the United States for no more than 183 days during the tax year. 1040x h&r block The income is paid by, or on behalf of, an employer who is not a U. 1040x h&r block S. 1040x h&r block resident. 1040x h&r block The income is not borne by a permanent establishment or fixed base the employer has in the United States. 1040x h&r block Income received by a Netherlands resident for employment as a member of the regular complement of a ship or
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Income

Are My Social Security or Railroad Retirement Tier I Benefits Taxable?
Determine whether any of your benefits (and those of your spouse if you are married filing a joint tax return) are taxable.

Do I Have Cancellation of Debt Income on My Personal Residence?
Determine if you have to include in income any of the debt that was cancelled on your principal residence.

Is My Pension or Annuity Payment Taxable?
Determine if your pension or annuity payment is taxable.

Do I Need To Claim My Gambling Winnings and Can I Deduct My Gambling Losses?
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Page Last Reviewed or Updated: 14-Feb-2014

The 1040x H&r Block

1040x h&r block 3. 1040x h&r block   Limit on Annual Additions Table of Contents Ministers and church employees. 1040x h&r block Includible Compensation for Your Most Recent Year of ServiceMost Recent Year of Service Includible Compensation The first component of MAC is the limit on annual additions. 1040x h&r block This is a limit on the total contributions (elective deferrals, nonelective contributions, and after-tax contributions) that can be made to your 403(b) account. 1040x h&r block The limit on annual additions generally is the lesser of: $51,000 for 2013 and $52,000 for 2014, or 100% of your includible compensation for your most recent year of service. 1040x h&r block More than one 403(b) account. 1040x h&r block If you contributed to more than one 403(b) account, you must combine the contributions made to all 403(b) accounts on your behalf by your employer. 1040x h&r block Ministers and church employees. 1040x h&r block   If you are a minister or a church employee, you may be able to increase your limit on annual additions or use different rules when figuring your limit on annual additions. 1040x h&r block For more information, see chapter 5. 1040x h&r block Participation in a qualified plan. 1040x h&r block If you participated in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pensions of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. 1040x h&r block You can use Part I of Worksheet 1 in chapter 9 to figure your limit on annual additions. 1040x h&r block Includible Compensation for Your Most Recent Year of Service Definition. 1040x h&r block   Generally, includible compensation for your most recent year of service is the amount of taxable wages and benefits you received from the employer that maintained a 403(b) account for your benefit during your most recent year of service. 1040x h&r block When figuring your includible compensation for your most recent year of service, keep in mind that your most recent year of service may not be the same as your employer's most recent annual work period. 1040x h&r block This can happen if your tax year is not the same as your employer's annual work period. 1040x h&r block When figuring includible compensation for your most recent year of service, do not mix compensation or service of one employer with compensation or service of another employer. 1040x h&r block Most Recent Year of Service Your most recent year of service is your last full year of service, ending on the last day of your tax year that you worked for the employer that maintained a 403(b) account on your behalf. 1040x h&r block Tax year different from employer's annual work period. 1040x h&r block   If your tax year is not the same as your employer's annual work period, your most recent year of service is made up of parts of at least two of your employer's annual work periods. 1040x h&r block Example. 1040x h&r block A professor who reports her income on a calendar-year basis is employed on a full-time basis by a university that operates on an academic year (October through May). 1040x h&r block To figure her includible compensation for 2013, the professor's most recent year of service is her service from January through May 2013 and from October through December 2013. 1040x h&r block Figuring Your Most Recent Year of Service To figure your most recent year of service, begin by determining what is a full year of service for your position. 1040x h&r block A full year of service is equal to full-time employment for your employer's annual work period. 1040x h&r block After identifying a full year of service, begin counting the service you have provided for your employer starting with the service provided in the current year. 1040x h&r block Part-time or employed only part of the year. 1040x h&r block   If you are a part-time or a full-time employee who is employed for only part of the year, your most recent year of service is your service this year and your service for as many previous years as is necessary to total 1 full year of service. 1040x h&r block To determine your most recent year of service, add the following periods of service: Your service during the year for which you are figuring the limit on annual additions, and Your service during your preceding tax years until the total service equals 1 year of service or you have figured all of your service with the employer. 1040x h&r block Example. 1040x h&r block You were employed on a full-time basis from July through December 2011 (1/2 year of service), July through December 2012 (1/2 year of service), and October through December 2013 (1/4 year of service). 1040x h&r block Your most recent year of service for computing your limit on annual additions for 2013 is the total of your service during 2013 (1/4 year of service), your service during 2012 (1/2 year of service), and your service during the months October through December 2011 (1/4 year of service). 1040x h&r block Not yet employed for 1 year. 1040x h&r block   If, at the close of the year, you have not yet worked for your employer for 1 year (including time you worked for the same employer in all earlier years), use the period of time you have worked for the employer as your most recent year of service. 1040x h&r block Includible Compensation After identifying your most recent year of service, the next step is to identify the includible compensation associated with that full year of service. 1040x h&r block Includible compensation is not the same as income included on your tax return. 1040x h&r block Compensation is a combination of income and benefits received in exchange for services provided to your employer. 1040x h&r block Generally, includible compensation is the amount of income and benefits: Received from the employer who maintains your 403(b) account, and Must be included in your income. 1040x h&r block Includible compensation includes the following amounts. 1040x h&r block Elective deferrals (employer's contributions made on your behalf under a salary reduction agreement). 1040x h&r block Amounts contributed or deferred by your employer under a section 125 cafeteria plan. 1040x h&r block Amounts contributed or deferred, at the election of the employee, under an eligible section 457 nonqualified deferred compensation plan (state or local government or tax-exempt organization plan). 1040x h&r block  Note. 1040x h&r block For information about treating elective deferrals under section 457 plans as Roth contributions, see Publication 575. 1040x h&r block Wages, salaries, and fees for personal services earned with the employer maintaining your 403(b) account. 1040x h&r block Income otherwise excluded under the foreign earned income exclusion. 1040x h&r block Pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan. 1040x h&r block Includible compensation does not include the following items. 1040x h&r block Your employer's contributions to your 403(b) account. 1040x h&r block Compensation earned while your employer was not an eligible employer. 1040x h&r block Your employer's contributions to a qualified plan that: Are on your behalf, and Are excludable from income. 1040x h&r block The cost of incidental life insurance. 1040x h&r block See Cost of Incidental Life Insurance, later. 1040x h&r block If you are a church employee or a foreign missionary, figure includible compensation using the rules explained in chapter 5. 1040x h&r block Contributions after retirement. 1040x h&r block   Nonelective contributions may be made for an employee for up to 5 years after retirement. 1040x h&r block These contributions would be based on includible compensation for the last year of service before retirement. 1040x h&r block Cost of Incidental Life Insurance Includible compensation does not include the cost of incidental life insurance. 1040x h&r block If all of your 403(b) accounts invest only in mutual funds, then you have no incidental life insurance. 1040x h&r block If you have an annuity contract, a portion of the cost of that contract may be for incidental life insurance. 1040x h&r block If so, the cost of the insurance is taxable to you in the year contributed and is considered part of your basis when distributed. 1040x h&r block Your employer will include the cost of your insurance as taxable wages in box 1 of Form W-2. 1040x h&r block Not all annuity contracts include life insurance. 1040x h&r block Contact your plan administrator to determine if your contract includes incidental life insurance. 1040x h&r block If it does, you will need to figure the cost of life insurance each year the policy is in effect. 1040x h&r block Figuring the cost of incidental life insurance. 1040x h&r block If you have determined that part of the cost of your annuity contract is for an incidental life insurance premium, you will need to determine the amount of the premium and subtract it from your includible compensation. 1040x h&r block To determine the amount of the life insurance premiums, you will need to know the following information. 1040x h&r block The value of your life insurance contract, which is the amount payable upon your death. 1040x h&r block The cash value of your life insurance contract at the end of the tax year. 1040x h&r block Your age on your birthday nearest the beginning of the policy year. 1040x h&r block Your current life insurance protection under an ordinary retirement income life insurance policy, which is the amount payable upon your death minus the cash value of the contract at the end of the year. 1040x h&r block You can use Worksheet A, in chapter 9, to determine the cost of your incidental life insurance. 1040x h&r block Example. 1040x h&r block Your new contract provides that your beneficiary will receive $10,000 if you should die before retirement. 1040x h&r block Your cash value in the contract at the end of the first year is zero. 1040x h&r block Your current life insurance protection for the first year is $10,000 ($10,000 − 0). 1040x h&r block The cash value in the contract at the end of year two is $1,000, and the current life insurance protection for the second year is $9,000 ($10,000 – $1,000). 1040x h&r block The 1-year cost of the protection can be calculated by using Figure 3-1, Table of One-Year Term Premiums for $1,000 Life Insurance Protection . 1040x h&r block The premium rate is determined based on your age on your birthday nearest the beginning of the policy year. 1040x h&r block Figure 3-1. 1040x h&r block Table of One-Year Term Premiums for $1,000 Life Insurance Protection Age Cost   Age Cost   Age Cost 0 $0. 1040x h&r block 70   35 $0. 1040x h&r block 99   70 $20. 1040x h&r block 62 1 0. 1040x h&r block 41   36 1. 1040x h&r block 01   71 22. 1040x h&r block 72 2 0. 1040x h&r block 27   37 1. 1040x h&r block 04   72 25. 1040x h&r block 07 3 0. 1040x h&r block 19   38 1. 1040x h&r block 06   73 27. 1040x h&r block 57 4 0. 1040x h&r block 13   39 1. 1040x h&r block 07   74 30. 1040x h&r block 18 5 0. 1040x h&r block 13   40 1. 1040x h&r block 10   75 33. 1040x h&r block 05 6 0. 1040x h&r block 14   41 1. 1040x h&r block 13   76 36. 1040x h&r block 33 7 0. 1040x h&r block 15   42 1. 1040x h&r block 20   77 40. 1040x h&r block 17 8 0. 1040x h&r block 16   43 1. 1040x h&r block 29   78 44. 1040x h&r block 33 9 0. 1040x h&r block 16   44 1. 1040x h&r block 40   79 49. 1040x h&r block 23 10 0. 1040x h&r block 16   45 1. 1040x h&r block 53   80 54. 1040x h&r block 56 11 0. 1040x h&r block 19   46 1. 1040x h&r block 67   81 60. 1040x h&r block 51 12 0. 1040x h&r block 24   47 1. 1040x h&r block 83   82 66. 1040x h&r block 74 13 0. 1040x h&r block 28   48 1. 1040x h&r block 98   83 73. 1040x h&r block 07 14 0. 1040x h&r block 33   49 2. 1040x h&r block 13   84 80. 1040x h&r block 35 15 0. 1040x h&r block 38   50 2. 1040x h&r block 30   85 88. 1040x h&r block 76 16 0. 1040x h&r block 52   51 2. 1040x h&r block 52   86 99. 1040x h&r block 16 17 0. 1040x h&r block 57   52 2. 1040x h&r block 81   87 110. 1040x h&r block 40 18 0. 1040x h&r block 59   53 3. 1040x h&r block 20   88 121. 1040x h&r block 85 19 0. 1040x h&r block 61   54 3. 1040x h&r block 65   89 133. 1040x h&r block 40 20 0. 1040x h&r block 62   55 4. 1040x h&r block 15   90 144. 1040x h&r block 30 21 0. 1040x h&r block 62   56 4. 1040x h&r block 68   91 155. 1040x h&r block 80 22 0. 1040x h&r block 64   57 5. 1040x h&r block 20   92 168. 1040x h&r block 75 23 0. 1040x h&r block 66   58 5. 1040x h&r block 66   93 186. 1040x h&r block 44 24 0. 1040x h&r block 68   59 6. 1040x h&r block 06   94 206. 1040x h&r block 70 25 0. 1040x h&r block 71   60 6. 1040x h&r block 51   95 228. 1040x h&r block 35 26 0. 1040x h&r block 73   61 7. 1040x h&r block 11   96 250. 1040x h&r block 01 27 0. 1040x h&r block 76   62 7. 1040x h&r block 96   97 265. 1040x h&r block 09 28 0. 1040x h&r block 80   63 9. 1040x h&r block 08   98 270. 1040x h&r block 11 29 0. 1040x h&r block 83   64 10. 1040x h&r block 41   99 281. 1040x h&r block 05 30 0. 1040x h&r block 87   65 11. 1040x h&r block 90       31 0. 1040x h&r block 90   66 13. 1040x h&r block 51       32 0. 1040x h&r block 93   67 15. 1040x h&r block 20       33 0. 1040x h&r block 96   68 16. 1040x h&r block 92       34 0. 1040x h&r block 98   69 18. 1040x h&r block 70                       If the current published premium rates per $1,000 of insurance protection charged by an insurer for individual 1-year term life insurance premiums available to all standard risks are lower than those in the preceding table, you can use the lower rates for figuring the cost of insurance in connection with individual policies issued by the same insurer. 1040x h&r block Example 1. 1040x h&r block Lynne Green, age 44, and her employer enter into a 403(b) plan that will provide her with a $500 a month annuity upon retirement at age 65. 1040x h&r block The agreement also provides that if she should die before retirement, her beneficiary will receive the greater of $20,000 or the cash surrender value in the life insurance contract. 1040x h&r block Using the facts presented we can determine the cost of Lynne's life insurance protection as shown in Table 3-1. 1040x h&r block Lynne's employer has included $28 for the cost of the life insurance protection in her current year's income. 1040x h&r block When figuring her includible compensation for this year, Lynne will subtract $28. 1040x h&r block Table 3-1. 1040x h&r block Worksheet A. 1040x h&r block Cost of Incidental Life Insurance Note. 1040x h&r block Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 1040x h&r block This amount will be used to figure includible compensation for your most recent year of service. 1040x h&r block 1. 1040x h&r block Enter the value of the contract (amount payable upon your death) 1. 1040x h&r block $20,000. 1040x h&r block 00 2. 1040x h&r block Enter the cash value in the contract at the end of the year 2. 1040x h&r block 0. 1040x h&r block 00 3. 1040x h&r block Subtract line 2 from line 1. 1040x h&r block This is the value of your current life insurance protection 3. 1040x h&r block $20,000. 1040x h&r block 00 4. 1040x h&r block Enter your age on your birthday nearest the beginning of the policy year 4. 1040x h&r block 44 5. 1040x h&r block Enter the 1-year term premium for $1,000 of life insurance based on your age. 1040x h&r block (From Figure 3-1) 5. 1040x h&r block $1. 1040x h&r block 40 6. 1040x h&r block Divide line 3 by $1,000 6. 1040x h&r block 20 7. 1040x h&r block Multiply line 6 by line 5. 1040x h&r block This is the cost of your incidental life insurance 7. 1040x h&r block $28. 1040x h&r block 00 Example 2. 1040x h&r block Lynne's cash value in the contract at the end of the second year is $1,000. 1040x h&r block In year two, the cost of Lynne's life insurance is calculated as shown in Table 3-2. 1040x h&r block In year two, Lynne's employer will include $29. 1040x h&r block 07 in her current year's income. 1040x h&r block Lynne will subtract this amount when figuring her includible compensation. 1040x h&r block Table 3-2. 1040x h&r block Worksheet A. 1040x h&r block Cost of Incidental Life Insurance Note. 1040x h&r block Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 1040x h&r block This amount will be used to figure includible compensation for your most recent year of service. 1040x h&r block 1. 1040x h&r block Enter the value of the contract (amount payable upon your death) 1. 1040x h&r block $20,000. 1040x h&r block 00 2. 1040x h&r block Enter the cash value in the contract at the end of the year 2. 1040x h&r block $1,000. 1040x h&r block 00 3. 1040x h&r block Subtract line 2 from line 1. 1040x h&r block This is the value of your current life insurance protection 3. 1040x h&r block $19,000. 1040x h&r block 00 4. 1040x h&r block Enter your age on your birthday nearest the beginning of the policy year 4. 1040x h&r block 45 5. 1040x h&r block Enter the 1-year term premium for $1,000 of life insurance based on your age. 1040x h&r block (From Figure 3-1) 5. 1040x h&r block $1. 1040x h&r block 53 6. 1040x h&r block Divide line 3 by $1,000 6. 1040x h&r block 19 7. 1040x h&r block Multiply line 6 by line 5. 1040x h&r block This is the cost of your incidental life insurance 7. 1040x h&r block $29. 1040x h&r block 07 Figuring Includible Compensation for Your Most Recent Year of Service You can use Worksheet B in chapter 9 to determine your includible compensation for your most recent year of service. 1040x h&r block Example. 1040x h&r block Floyd has been periodically working full-time for a local hospital since September 2011. 1040x h&r block He needs to figure his limit on annual additions for 2014. 1040x h&r block The hospital's normal annual work period for employees in Floyd's general type of work runs from January to December. 1040x h&r block During the periods that Floyd was employed with the hospital, the hospital has always been eligible to provide a 403(b) plan to employees. 1040x h&r block Additionally, the hospital has never provided the employees with a 457 deferred compensation plan, a transportation fringe benefit plan, or a cafeteria plan. 1040x h&r block Floyd has never worked abroad and there is no life insurance provided under the plan. 1040x h&r block Table 3-3 shows the service Floyd provided to his employer, his compensation for the periods worked, his elective deferrals, and his taxable wages. 1040x h&r block Table 3-3. 1040x h&r block Floyd's Compensation Note. 1040x h&r block This table shows information Floyd will use to figure includible compensation for his most recent year of service. 1040x h&r block   Year Years of Service Taxable Wages Elective Deferrals 2014 6/12 of  a year $42,000 $2,000 2013 4/12 of  a year $16,000 $1,650 2012 4/12 of  a year $16,000 $1,650 Before Floyd can figure his limit on annual additions, he must figure includible compensation for his most recent year of service. 1040x h&r block Because Floyd is not planning to work the entire 2014 year, his most recent year of service will include the time he is planning to work in 2014 plus time he worked in the preceding 3 years until the time he worked for the hospital totals 1 year. 1040x h&r block If the total time he worked is less than 1 year, Floyd will treat it as if it were 1 year. 1040x h&r block He figures his most recent year of service shown in the following list. 1040x h&r block Time he will work in 2014 is 6/12 of a year. 1040x h&r block Time worked in 2013 is 4/12 of a year. 1040x h&r block All of this time will be used to determine Floyd's most recent year of service. 1040x h&r block Time worked in 2012 is 4/12 of a year. 1040x h&r block Floyd only needs 2 months of the 4 months he worked in 2012 to have enough time to total 1 full year. 1040x h&r block Because he needs only one-half of the actual time he worked, Floyd will use only one-half of his income earned during that period to calculate wages that will be used in figuring his includible compensation. 1040x h&r block Using the information provided in Table 3-3, wages for Floyd's most recent year of service are $66,000 ($42,000 + $16,000 + $8,000). 1040x h&r block His includible compensation for his most recent year of service is figured as shown in Table 3-4. 1040x h&r block After figuring his includible compensation, Floyd determines his limit on annual additions for 2014 to be $52,000, the lesser of his includible compensation, $70,475 (Table 3-4), and the maximum amount of $52,000. 1040x h&r block Table 3-4. 1040x h&r block Worksheet B. 1040x h&r block Includible Compensation for Your Most Recent Year of Service1 Note. 1040x h&r block Use this worksheet to figure includible compensation for your most recent year of service. 1040x h&r block 1. 1040x h&r block Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service 1. 1040x h&r block $66,000 2. 1040x h&r block Enter elective deferrals excluded from your gross income for your most recent year of service2 2. 1040x h&r block 4,4753 3. 1040x h&r block Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service 3. 1040x h&r block -0- 4. 1040x h&r block Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government, or of a tax-exempt organization) for your most recent year of service 4. 1040x h&r block -0- 5. 1040x h&r block Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service 5. 1040x h&r block -0- 6. 1040x h&r block Enter your foreign earned income exclusion for your most recent year of service 6. 1040x h&r block -0- 7. 1040x h&r block Add lines 1, 2, 3, 4, 5, and 6 7. 1040x h&r block 70,475 8. 1040x h&r block Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service 8. 1040x h&r block -0- 9. 1040x h&r block Enter compensation that was both: Earned during your most recent year of service, and Earned while your employer was not qualified to maintain a 403(b) plan 9. 1040x h&r block -0- 10. 1040x h&r block Add lines 8 and 9 10. 1040x h&r block -0- 11. 1040x h&r block Subtract line 10 from line 7. 1040x h&r block This is your includible compensation for your most recent year of service 11. 1040x h&r block 70,475 1Use estimated amounts if figuring includible compensation before the end of the year. 1040x h&r block 2Elective deferrals made to a designated Roth account are not excluded from your gross income and should not be included on this line. 1040x h&r block  3$4,475 ($2,000 + $1,650 + $825). 1040x h&r block Prev  Up  Next   Home   More Online Publications