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Can I Amend My Taxes Online

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Can I Amend My Taxes Online

Can i amend my taxes online Publication 514 - Main Content Table of Contents Choosing To Take Credit or DeductionChoice Applies to All Qualified Foreign Taxes Making or Changing Your Choice Why Choose the Credit?Credit for Taxes Paid or Accrued Foreign Currency and Exchange Rates Foreign Tax Redetermination Who Can Take the Credit?U. Can i amend my taxes online S. Can i amend my taxes online Citizens Resident Aliens Nonresident Aliens What Foreign Taxes Qualify for the Credit?Tax Must Be Imposed on You You Must Have Paid or Accrued the Tax Tax Must Be the Legal and Actual Foreign Tax Liability Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) Foreign Taxes for Which You Cannot Take a CreditTaxes on Excluded Income Taxes for Which You Can Only Take an Itemized Deduction Taxes on Foreign Mineral Income Taxes From International Boycott Operations Taxes on Combined Foreign Oil and Gas Income Taxes of U. Can i amend my taxes online S. Can i amend my taxes online Persons Controlling Foreign Corporations and Partnerships Taxes Related to a Foreign Tax Credit Splitting Event How To Figure the CreditLimit on the Credit Separate Limit Income Allocation of Foreign Taxes Foreign Taxes From a Partnership or an S Corporation Figuring the Limit Qualified Dividends Capital Gains and Losses Allocation of Foreign and U. Can i amend my taxes online S. Can i amend my taxes online Losses Tax Treaties Carryback and CarryoverTime Limit on Tax Assessment Claim for Refund Taxes All Credited or All Deducted Married Couples How To Claim the CreditForm 1116 Records To Keep Simple Example — Filled-In Form 1116Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Comprehensive Example — Filled-In Form 1116Foreign earned income. Can i amend my taxes online Employee business expenses. Can i amend my taxes online Forms 1116 Computation of Taxable Income Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Unused Foreign Taxes How To Get Tax HelpLow Income Taxpayer Clinics Choosing To Take Credit or Deduction You can choose whether to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. Can i amend my taxes online You can change your choice for each year's taxes. Can i amend my taxes online To choose the foreign tax credit, in most cases you must complete Form 1116 and attach it to your U. Can i amend my taxes online S. Can i amend my taxes online tax return. Can i amend my taxes online However, you may qualify for the exception that allows you to claim the foreign tax credit without using Form 1116. Can i amend my taxes online See How To Figure the Credit , later. Can i amend my taxes online To choose to claim the taxes as an itemized deduction, use Schedule A (Form 1040), Itemized Deductions. Can i amend my taxes online Figure your tax both ways—claiming the credit and claiming the deduction. Can i amend my taxes online Then fill out your return the way that benefits you more. Can i amend my taxes online See Why Choose the Credit, later. Can i amend my taxes online Choice Applies to All Qualified Foreign Taxes As a general rule, you must choose to take either a credit or a deduction for all qualified foreign taxes. Can i amend my taxes online If you choose to take a credit for qualified foreign taxes, you must take the credit for all of them. Can i amend my taxes online You cannot deduct any of them. Can i amend my taxes online Conversely, if you choose to deduct qualified foreign taxes, you must deduct all of them. Can i amend my taxes online You cannot take a credit for any of them. Can i amend my taxes online See What Foreign Taxes Qualify for the Credit , later, for the meaning of qualified foreign taxes. Can i amend my taxes online There are exceptions to this general rule, which are described next. Can i amend my taxes online Exceptions for foreign taxes not allowed as a credit. Can i amend my taxes online   Even if you claim a credit for other foreign taxes, you can deduct any foreign tax that is not allowed as a credit if: You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act, You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time, You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time, You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property, You participated in or cooperated with an international boycott, You paid taxes in connection with the purchase or sale of oil or gas, or You paid or accrued taxes on income or gain in connection with a covered asset acquisition. Can i amend my taxes online Covered asset acquisitions include certain acquisitions that result in a stepped-up basis for U. Can i amend my taxes online S. Can i amend my taxes online tax purposes. Can i amend my taxes online For more information, see Internal Revenue Code section 901(m). Can i amend my taxes online The IRS intends to issue guidance that will explain this provision in greater detail. Can i amend my taxes online   For more information on these items, see Taxes for Which You Can Only Take an Itemized Deduction , later, under Foreign Taxes for Which You Cannot Take a Credit. Can i amend my taxes online Foreign taxes that are not income taxes. Can i amend my taxes online   In most cases, only foreign income taxes qualify for the foreign tax credit. Can i amend my taxes online Other taxes, such as foreign real and personal property taxes, do not qualify. Can i amend my taxes online But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. Can i amend my taxes online   In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. Can i amend my taxes online However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040). Can i amend my taxes online Carrybacks and carryovers. Can i amend my taxes online   There is a limit on the credit you can claim in a tax year. Can i amend my taxes online If your qualified foreign taxes exceed the credit limit, you may be able to carry over or carry back the excess to another tax year. Can i amend my taxes online If you deduct qualified foreign taxes in a tax year, you cannot use a carryback or carryover in that year. Can i amend my taxes online That is because you cannot take both a deduction and a credit for qualified foreign taxes in the same tax year. Can i amend my taxes online   For more information on the limit, see How To Figure the Credit , later. Can i amend my taxes online For more information on carrybacks and carryovers, see Carryback and Carryover , later. Can i amend my taxes online Making or Changing Your Choice You can make or change your choice to claim a deduction or credit at any time during the period within 10 years from the regular due date for filing the return (without regard to any extension of time to file) for the tax year in which the taxes were actually paid or accrued. Can i amend my taxes online You make or change your choice on your tax return (or on an amended return) for the year your choice is to be effective. Can i amend my taxes online Example. Can i amend my taxes online You paid foreign taxes for the last 13 years and chose to deduct them on your U. Can i amend my taxes online S. Can i amend my taxes online income tax returns. Can i amend my taxes online You were timely in both filing your returns and paying your U. Can i amend my taxes online S. Can i amend my taxes online tax liability. Can i amend my taxes online In February 2013, you file an amended return for tax year 2002 choosing to take a credit for your 2002 foreign taxes because you now realize that the credit is more advantageous than the deduction for that year. Can i amend my taxes online Because the regular due date of your 2002 return was April 15, 2003, this choice is timely (within 10 years). Can i amend my taxes online Because there is a limit on the credit for your 2002 foreign tax, you have unused 2002 foreign taxes. Can i amend my taxes online Ordinarily, you first carry back unused foreign taxes arising in 2002 to, and claim them as a credit in, the 2 preceding tax years. Can i amend my taxes online If you are unable to claim all of them in those 2 years, you carry them forward to the 10 years following the year in which they arose. Can i amend my taxes online Because you originally chose to deduct your foreign taxes and the 10-year period for changing the choice for 2000 and 2001 has passed, you cannot change your choice and carry the unused 2002 foreign taxes back to tax years 2000 and 2001. Can i amend my taxes online Because the 10-year periods for changing the choice have not passed for your 2003 through 2012 income tax returns, you can still choose to claim the credit for those years and carry forward any unused 2002 foreign taxes. Can i amend my taxes online However, you must reduce the unused 2002 foreign taxes that you carry forward by the amount that would have been allowed as a carryback if you had timely carried back the foreign tax to tax years 2000 and 2001. Can i amend my taxes online You cannot take a credit or a deduction for foreign taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. Can i amend my taxes online See Foreign Earned Income and Housing Exclusions under Foreign Taxes for Which You Cannot Take a Credit, later. Can i amend my taxes online Why Choose the Credit? The foreign tax credit is intended to relieve you of a double tax burden when your foreign source income is taxed by both the United States and the foreign country. Can i amend my taxes online In most cases, if the foreign tax rate is higher than the U. Can i amend my taxes online S. Can i amend my taxes online rate, there will be no U. Can i amend my taxes online S. Can i amend my taxes online tax on the foreign income. Can i amend my taxes online If the foreign tax rate is lower than the U. Can i amend my taxes online S. Can i amend my taxes online rate, U. Can i amend my taxes online S. Can i amend my taxes online tax on the foreign income will be limited to the difference between the rates. Can i amend my taxes online The foreign tax credit can only reduce U. Can i amend my taxes online S. Can i amend my taxes online taxes on foreign source income; it cannot reduce U. Can i amend my taxes online S. Can i amend my taxes online taxes on U. Can i amend my taxes online S. Can i amend my taxes online source income. Can i amend my taxes online Although no one rule covers all situations, in most cases it is better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction. Can i amend my taxes online This is because: A credit reduces your actual U. Can i amend my taxes online S. Can i amend my taxes online income tax on a dollar-for-dollar basis, while a deduction reduces only your income subject to tax, You can choose to take the foreign tax credit even if you do not itemize your deductions. Can i amend my taxes online You then are allowed the standard deduction in addition to the credit, and If you choose to take the foreign tax credit, and the taxes paid or accrued exceed the credit limit for the tax year, you may be able to carry over or carry back the excess to another tax year. Can i amend my taxes online (See Limit on credit under How To Figure the Credit, later. Can i amend my taxes online ) Example 1. Can i amend my taxes online For 2013, you and your spouse have adjusted gross income of $80,300, including $20,000 of dividend income from foreign sources. Can i amend my taxes online None of the dividends are qualified dividends. Can i amend my taxes online You file a joint return and can claim two $3,900 exemptions. Can i amend my taxes online You had to pay $2,000 in foreign income taxes on the dividend income. Can i amend my taxes online If you take the foreign taxes as an itemized deduction, your total itemized deductions are $15,000. Can i amend my taxes online Your taxable income then is $57,500 and your tax is $7,736. Can i amend my taxes online If you take the credit instead, your itemized deductions are only $13,000. Can i amend my taxes online Your taxable income then is $59,500 and your tax before the credit is $8,036. Can i amend my taxes online After the credit, however, your tax is only $6,036. Can i amend my taxes online Therefore, your tax is $1,700 lower ($7,736 − $6,036) by taking the credit. Can i amend my taxes online Example 2. Can i amend my taxes online In 2013, you receive investment income of $5,000 from a foreign country, which imposes a tax of $1,500 on that income. Can i amend my taxes online You report on your U. Can i amend my taxes online S. Can i amend my taxes online return this income as well as $56,000 of U. Can i amend my taxes online S. Can i amend my taxes online source wages and an allowable $49,000 partnership loss from a U. Can i amend my taxes online S. Can i amend my taxes online partnership. Can i amend my taxes online Your share of the partnership's gross income is $25,000 and your share of its expenses is $74,000. Can i amend my taxes online You are single, entitled to one $3,900 exemption, and have other itemized deductions of $6,850. Can i amend my taxes online If you deduct the foreign tax on your U. Can i amend my taxes online S. Can i amend my taxes online return, your taxable income is a negative $250 ($5,000 + $56,000 − $49,000 − $1,500 − $6,850 − $3,900) and your tax is $0. Can i amend my taxes online If you take the credit instead, your taxable income is $1,250 ($5,000 + $56,000 − $49,000 − $3,900 − $6,850) and your tax before the credit is $126. Can i amend my taxes online You can take a credit of only $113 because of limits discussed later. Can i amend my taxes online Your tax after the credit is $13 ($126 − $113), which is $13 more than if you deduct the foreign tax. Can i amend my taxes online If you choose the credit, you will have unused foreign taxes of $1,387 ($1,500 − $113). Can i amend my taxes online When deciding whether to take the credit or the deduction this year, you will need to consider whether you can benefit from a carryback or carryover of that unused foreign tax. Can i amend my taxes online Credit for Taxes Paid or Accrued You can claim the credit for a qualified foreign tax in the tax year in which you pay it or accrue it, depending on your method of accounting. Can i amend my taxes online “Tax year” refers to the tax year for which your U. Can i amend my taxes online S. Can i amend my taxes online return is filed, not the tax year for which your foreign return is filed. Can i amend my taxes online Accrual method of accounting. Can i amend my taxes online   If you use an accrual method of accounting, you can claim the credit only in the year in which you accrue the tax. Can i amend my taxes online You are using an accrual method of accounting if you report income when you earn it, rather than when you receive it, and you deduct your expenses when you incur them, rather than when you pay them. Can i amend my taxes online   In most cases, foreign taxes accrue when all the events have taken place that fix the amount of the tax and your liability to pay it. Can i amend my taxes online Generally, this occurs on the last day of the tax year for which your foreign return is filed. Can i amend my taxes online Contesting your foreign tax liability. Can i amend my taxes online   If you are contesting your foreign tax liability, you cannot accrue it and take a credit until the amount of foreign tax due is finally determined. Can i amend my taxes online However, if you choose to pay the tax liability you are contesting, you can take a credit for the amount you pay before a final determination of foreign tax liability is made. Can i amend my taxes online Once your liability is determined, the foreign tax credit is allowable for the year to which the foreign tax relates. Can i amend my taxes online If the amount of foreign taxes taken as a credit differs from the final foreign tax liability, you may have to adjust the credit, as discussed later under Foreign Tax Redetermination . Can i amend my taxes online You may have to post a bond. Can i amend my taxes online   If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. Can i amend my taxes online   The IRS can request this bond at any time without regard to the Time Limit on Tax Assessment discussed later under Carryback and Carryover. Can i amend my taxes online Cash method of accounting. Can i amend my taxes online   If you use the cash method of accounting, you can choose to take the credit either in the year you pay the tax or in the year you accrue it. Can i amend my taxes online You are using the cash method of accounting if you report income in the year you actually or constructively receive it, and deduct expenses in the year you pay them. Can i amend my taxes online Choosing to take credit in the year taxes accrue. Can i amend my taxes online   Even if you use the cash method of accounting, you can choose to take a credit for foreign taxes in the year they accrue. Can i amend my taxes online You make the choice by checking the box in Part II of Form 1116. Can i amend my taxes online Once you make that choice, you must follow it in all later years and take a credit for foreign taxes in the year they accrue. Can i amend my taxes online   In addition, the choice to take the credit when foreign taxes accrue applies to all foreign taxes qualifying for the credit. Can i amend my taxes online You cannot take a credit for some foreign taxes when paid and take a credit for others when accrued. Can i amend my taxes online   If you make the choice to take the credit when foreign taxes accrue and pay them in a later year, you cannot claim a deduction for any part of the previously accrued taxes. Can i amend my taxes online Credit based on taxes paid in earlier year. Can i amend my taxes online   If, in earlier years, you took the credit based on taxes paid, and this year you choose to take the credit based on taxes accrued, you may be able to take the credit this year for taxes from more than one year. Can i amend my taxes online Example. Can i amend my taxes online Last year you took the credit based on taxes paid. Can i amend my taxes online This year you chose to take the credit based on taxes accrued. Can i amend my taxes online During the year you paid foreign income taxes owed for last year. Can i amend my taxes online You also accrued foreign income taxes for this year that you did not pay by the end of the year. Can i amend my taxes online You can base the credit on your return for this year on both last year's taxes that you paid and this year's taxes that you accrued. Can i amend my taxes online Foreign Currency and Exchange Rates U. Can i amend my taxes online S. Can i amend my taxes online income tax is imposed on income expressed in U. Can i amend my taxes online S. Can i amend my taxes online dollars, while in most cases the foreign tax is imposed on income expressed in foreign currency. Can i amend my taxes online Therefore, fluctuations in the value of the foreign currency relative to the U. Can i amend my taxes online S. Can i amend my taxes online dollar may affect the foreign tax credit. Can i amend my taxes online Translating foreign currency into U. Can i amend my taxes online S. Can i amend my taxes online dollars. Can i amend my taxes online   If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. Can i amend my taxes online S. Can i amend my taxes online dollars. Can i amend my taxes online How and when you do this depends on your functional currency. Can i amend my taxes online In most cases, your functional currency is the U. Can i amend my taxes online S. Can i amend my taxes online dollar unless you are required to use the currency of a foreign country. Can i amend my taxes online   You must make all federal income tax determinations in your functional currency. Can i amend my taxes online The U. Can i amend my taxes online S. Can i amend my taxes online dollar is the functional currency for all taxpayers except some qualified business units. Can i amend my taxes online A qualified business unit is a separate and clearly identified unit of a trade or business that maintains separate books and records. Can i amend my taxes online Unless you are self-employed, your functional currency is the U. Can i amend my taxes online S. Can i amend my taxes online dollar. Can i amend my taxes online   Even if you are self-employed and have a qualified business unit, your functional currency is the U. Can i amend my taxes online S. Can i amend my taxes online dollar if any of the following apply. Can i amend my taxes online You conduct the business primarily in dollars. Can i amend my taxes online The principal place of business is located in the United States. Can i amend my taxes online You choose to or are required to use the dollar as your functional currency. Can i amend my taxes online The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. Can i amend my taxes online   If your functional currency is the U. Can i amend my taxes online S. Can i amend my taxes online dollar, you must immediately translate into dollars all items of income, expense, etc. Can i amend my taxes online , that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Can i amend my taxes online If there is more than one exchange rate, use the one that most properly reflects your income. Can i amend my taxes online In most cases, you can get exchange rates from banks and U. Can i amend my taxes online S. Can i amend my taxes online Embassies. Can i amend my taxes online   If your functional currency is not the U. Can i amend my taxes online S. Can i amend my taxes online dollar, make all income tax determinations in your functional currency. Can i amend my taxes online At the end of the year, translate the results, such as income or loss, into U. Can i amend my taxes online S. Can i amend my taxes online dollars to report on your income tax return. Can i amend my taxes online    For more information, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Rate of exchange for foreign taxes paid. Can i amend my taxes online   Use the rate of exchange in effect on the date you paid the foreign taxes to the foreign country unless you meet the exception discussed next. Can i amend my taxes online If your tax was withheld in foreign currency, use the rate of exchange in effect for the date on which the tax was withheld. Can i amend my taxes online If you make foreign estimated tax payments, you use the rate of exchange in effect for the date on which you made the estimated tax payment. Can i amend my taxes online   The exchange rate rules discussed here apply even if the foreign taxes are paid or accrued with respect to a foreign tax credit splitting event (discussed later). Can i amend my taxes online Exception. Can i amend my taxes online   If you claim the credit for foreign taxes on an accrual basis, in most cases you must use the average exchange rate for the tax year to which the taxes relate. Can i amend my taxes online This rule applies to accrued taxes relating to tax years beginning after 1997 and only under the following conditions. Can i amend my taxes online The foreign taxes are paid on or after the first day of the tax year to which they relate. Can i amend my taxes online The foreign taxes are paid not later than 2 years after the close of the tax year to which they relate. Can i amend my taxes online The foreign tax liability is not denominated in an inflationary currency (defined in the Form 1116 instructions). Can i amend my taxes online (This condition applies to taxes paid or accrued in tax years beginning after November 6, 2007. Can i amend my taxes online )   For all other foreign taxes, you should use the exchange rate in effect on the date you paid them. Can i amend my taxes online Election to use exchange rate on date paid. Can i amend my taxes online   If you have accrued foreign taxes that you are otherwise required to convert using the average exchange rate, you may elect to use the exchange rate in effect on the date the foreign taxes are paid if the taxes are denominated in a nonfunctional foreign currency. Can i amend my taxes online If any of the accrued taxes are unpaid, you must translate them into U. Can i amend my taxes online S. Can i amend my taxes online dollars using the exchange rate on the last day of the U. Can i amend my taxes online S. Can i amend my taxes online tax year to which those taxes relate. Can i amend my taxes online You may make the election for all nonfunctional currency foreign income taxes or only those nonfunctional currency foreign income taxes that are attributable to qualified business units with a U. Can i amend my taxes online S. Can i amend my taxes online dollar functional currency. Can i amend my taxes online Once made, the election applies to the tax year for which made and all subsequent tax years unless revoked with the consent of the IRS. Can i amend my taxes online The election is available for tax years beginning after 2004. Can i amend my taxes online It must be made by the due date (including extensions) for filing the tax return for the first tax year to which the election applies. Can i amend my taxes online Make the election by attaching a statement to the applicable tax return. Can i amend my taxes online The statement must identify whether the election is made for all foreign taxes or only for foreign taxes attributable to qualified business units with a U. Can i amend my taxes online S. Can i amend my taxes online dollar functional currency. Can i amend my taxes online Foreign Tax Redetermination A foreign tax redetermination is any change in your foreign tax liability that may affect your U. Can i amend my taxes online S. Can i amend my taxes online foreign tax credit claimed. Can i amend my taxes online The year in which to claim the credit remains the year to which the foreign taxes paid or accrued relate, even if the change in foreign tax liability occurs in a later year. Can i amend my taxes online If a foreign tax redetermination occurs, a redetermination of your U. Can i amend my taxes online S. Can i amend my taxes online tax liability is required if any of the following conditions apply. Can i amend my taxes online The accrued taxes when paid differ from the amounts claimed as a credit. Can i amend my taxes online The accrued taxes you claimed as a credit in one tax year are not paid within 2 years after the end of that tax year. Can i amend my taxes online If this applies to you, you must reduce the credit previously claimed by the amount of the unpaid taxes. Can i amend my taxes online You will not be allowed a credit for the unpaid taxes until you pay them. Can i amend my taxes online When you pay the accrued taxes, a new foreign tax redetermination occurs and you must translate the taxes into U. Can i amend my taxes online S. Can i amend my taxes online dollars using the exchange rate as of the date they were paid. Can i amend my taxes online The foreign tax credit is allowed for the year to which the foreign tax relates. Can i amend my taxes online See Rate of exchange for foreign taxes paid , earlier, under Foreign Currency and Exchange Rates. Can i amend my taxes online The foreign taxes you paid are refunded in whole or in part. Can i amend my taxes online For taxes taken into account when accrued but translated into dollars on the date of payment, the dollar value of the accrued tax differs from the dollar value of the tax paid because of fluctuations in the exchange rate between the date of accrual and the date of payment. Can i amend my taxes online However, no redetermination is required if the change in foreign tax liability for each foreign country is solely attributable to exchange rate fluctuations and is less than the smaller of: $10,000, or 2% of the total dollar amount of the foreign tax initially accrued for that foreign country for the U. Can i amend my taxes online S. Can i amend my taxes online tax year. Can i amend my taxes online In this case, you must adjust your U. Can i amend my taxes online S. Can i amend my taxes online tax in the tax year in which the accrued foreign taxes are paid. Can i amend my taxes online Notice to the Internal Revenue Service (IRS) of Redetermination You are required to notify the IRS about a foreign tax credit redetermination that affects your U. Can i amend my taxes online S. Can i amend my taxes online tax liability for each tax year affected by the redetermination. Can i amend my taxes online In most cases, you must file Form 1040X, Amended U. Can i amend my taxes online S. Can i amend my taxes online Individual Income Tax Return, with a revised Form 1116 and a statement that contains information sufficient for the IRS to redetermine your U. Can i amend my taxes online S. Can i amend my taxes online tax liability for the year or years affected. Can i amend my taxes online See Contents of statement , later. Can i amend my taxes online You are not required to attach Form 1116 for a tax year affected by a redetermination if: The amount of your creditable taxes paid or accrued during the tax year is not more than $300 ($600 if married filing a joint return) as a result of the foreign tax redetermination, and You meet the requirements listed under Exemption from foreign tax credit limit under How To Figure the Credit, later. Can i amend my taxes online There are other exceptions to this requirement. Can i amend my taxes online They are discussed later under Due date of notification to IRS . Can i amend my taxes online Contents of statement. Can i amend my taxes online   The statement must include all of the following. Can i amend my taxes online Your name, address, and taxpayer identification number. Can i amend my taxes online The tax year or years that are affected by the foreign tax redetermination. Can i amend my taxes online The date or dates the foreign taxes were accrued, if applicable. Can i amend my taxes online The date or dates the foreign taxes were paid. Can i amend my taxes online The amount of foreign taxes paid or accrued on each date (in foreign currency) and the exchange rate used to translate each amount. Can i amend my taxes online Information sufficient to determine any interest due from or owing to you, including the amount of any interest paid to you by the foreign government and the dates received. Can i amend my taxes online   In the case of any foreign taxes that were not paid before the date two years after the close of the tax year to which those taxes relate, you must provide the amount of those taxes in foreign currency and the exchange rate that was used to translate that amount when originally claimed as a credit. Can i amend my taxes online   If any foreign tax was refunded in whole or in part, you must provide the date and amount (in foreign currency) of each refund, the exchange rate that was used to translate each amount when originally claimed as a credit, and the exchange rate for the date the refund was received (for purposes of computing foreign currency gain or loss under Internal Revenue Code section 988). Can i amend my taxes online Due date of notification to IRS. Can i amend my taxes online   If you pay less foreign tax than you originally claimed a credit for, in most cases you must file a notification by the due date (with extensions) of your original return for your tax year in which the foreign tax redetermination occurred. Can i amend my taxes online There is no limit on the time the IRS has to redetermine and assess the correct U. Can i amend my taxes online S. Can i amend my taxes online tax due. Can i amend my taxes online If you pay more foreign tax than you originally claimed a credit for, you have 10 years to file a claim for refund of U. Can i amend my taxes online S. Can i amend my taxes online taxes. Can i amend my taxes online See Time Limit on Refund Claims , later. Can i amend my taxes online   Exceptions to this due date are explained in the next two paragraphs. Can i amend my taxes online Multiple redeterminations of U. Can i amend my taxes online S. Can i amend my taxes online tax liability for same tax year. Can i amend my taxes online   Where more than one foreign tax redetermination requires a redetermination of U. Can i amend my taxes online S. Can i amend my taxes online tax liability for the same tax year and those redeterminations occur in the same tax year or within two consecutive tax years, you can file for that tax year one notification (Form 1040X with a Form 1116 and the required statement) that reflects all those tax redeterminations. Can i amend my taxes online If you choose to file one notification, the due date for that notification is the due date of the original return (with extensions) for the year in which the first foreign tax redetermination that reduced your foreign tax liability occurred. Can i amend my taxes online However, foreign tax redeterminations with respect to the tax year for which a redetermination of U. Can i amend my taxes online S. Can i amend my taxes online tax liability is required may occur after the due date for providing that notification. Can i amend my taxes online In this situation, you may have to file more than one Form 1040X for that tax year. Can i amend my taxes online Additional U. Can i amend my taxes online S. Can i amend my taxes online tax due eliminated by foreign tax credit carryback or carryover. Can i amend my taxes online   If a foreign tax redetermination requires a redetermination of U. Can i amend my taxes online S. Can i amend my taxes online tax liability that would otherwise result in an additional amount of U. Can i amend my taxes online S. Can i amend my taxes online tax due, but the additional tax is eliminated by a carryback or carryover of an unused foreign tax, you do not have to amend your tax return for the year affected by the redetermination. Can i amend my taxes online Instead, you can notify the IRS by attaching a statement to the original return for the tax year in which the foreign tax redetermination occurred. Can i amend my taxes online You must file the statement by the due date (with extensions) of that return. Can i amend my taxes online The statement must show the amount of the unused foreign taxes paid or accrued and a detailed schedule showing the computation of the carryback or carryover (including the amounts carried back or over to the year for which a redetermination on U. Can i amend my taxes online S. Can i amend my taxes online tax liability is required). Can i amend my taxes online Failure-to-notify penalty. Can i amend my taxes online   If you fail to notify the IRS of a foreign tax redetermination and cannot show reasonable cause for the failure, you may have to pay a penalty. Can i amend my taxes online   For each month, or part of a month, that the failure continues, you pay a penalty of 5% of the tax due resulting from a redetermination of your U. Can i amend my taxes online S. Can i amend my taxes online tax. Can i amend my taxes online This penalty cannot be more than 25% of the tax due. Can i amend my taxes online Foreign tax refund. Can i amend my taxes online   If you receive a foreign tax refund without interest from the foreign government, you will not have to pay interest on the amount of tax due resulting from the adjustment to your U. Can i amend my taxes online S. Can i amend my taxes online tax for the time before the date of the refund. Can i amend my taxes online   However, if you receive a foreign tax refund with interest, you must pay interest to the IRS up to the amount of the interest paid to you by the foreign government. Can i amend my taxes online The interest you must pay cannot be more than the interest you would have had to pay on taxes that were unpaid for any other reason for the same period. Can i amend my taxes online Interest also is owed from the time you receive a refund until you pay the additional tax due. Can i amend my taxes online Foreign tax imposed on foreign refund. Can i amend my taxes online   If your foreign tax refund is taxed by the foreign country, you cannot take a separate credit or deduction for this additional foreign tax. Can i amend my taxes online However, when you refigure the foreign tax credit taken for the original foreign tax, reduce the amount of the refund by the foreign tax paid on the refund. Can i amend my taxes online Example. Can i amend my taxes online You paid a foreign income tax of $3,000 in 2011, and received a foreign tax refund of $500 in 2013 on which a foreign tax of $100 was imposed. Can i amend my taxes online When you refigure your credit for 2011, you must reduce the $3,000 you paid by $400. Can i amend my taxes online Time Limit on Refund Claims You have 10 years to file a claim for refund of U. Can i amend my taxes online S. Can i amend my taxes online tax if you find that you paid or accrued a larger foreign tax than you claimed a credit for. Can i amend my taxes online The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the taxes were actually paid or accrued. Can i amend my taxes online You have 10 years to file your claim regardless of whether you claim the credit for taxes paid or taxes accrued. Can i amend my taxes online The 10-year period applies to claims for refund or credit based on: Fixing math errors in figuring qualified foreign taxes, Reporting qualified foreign taxes not originally reported on the return, or Any other change in the size of the credit (including one caused by correcting the foreign tax credit limit). Can i amend my taxes online The special 10-year period also applies to making or changing your choice to claim a deduction or credit for foreign taxes. Can i amend my taxes online See Making or Changing Your Choice discussed earlier under Choosing To Take Credit or Deduction. Can i amend my taxes online Who Can Take the Credit? U. Can i amend my taxes online S. Can i amend my taxes online citizens, resident aliens, and nonresident aliens who paid foreign income tax and are subject to U. Can i amend my taxes online S. Can i amend my taxes online tax on foreign source income may be able to take a foreign tax credit. Can i amend my taxes online U. Can i amend my taxes online S. Can i amend my taxes online Citizens If you are a U. Can i amend my taxes online S. Can i amend my taxes online citizen, you are taxed by the United States on your worldwide income wherever you live. Can i amend my taxes online You are normally entitled to take a credit for foreign taxes you pay or accrue. Can i amend my taxes online Resident Aliens If you are a resident alien of the United States, you can take a credit for foreign taxes subject to the same general rules as U. Can i amend my taxes online S. Can i amend my taxes online citizens. Can i amend my taxes online If you are a bona fide resident of Puerto Rico for the entire tax year, you also come under the same rules. Can i amend my taxes online Usually, you can take a credit only for those foreign taxes imposed on income you actually or constructively received while you had resident alien status. Can i amend my taxes online For information on alien status, see Publication 519. Can i amend my taxes online Nonresident Aliens If you are a nonresident alien, you cannot take the credit in most cases. Can i amend my taxes online However, you may be able to take the credit if: You were a bona fide resident of Puerto Rico during your entire tax year, or You pay or accrue tax to a foreign country or U. Can i amend my taxes online S. Can i amend my taxes online possession on income from foreign sources that is effectively connected with a trade or business in the United States. Can i amend my taxes online But if you must pay tax to a foreign country or U. Can i amend my taxes online S. Can i amend my taxes online possession on income from U. Can i amend my taxes online S. Can i amend my taxes online sources only because you are a citizen or a resident of that country or U. Can i amend my taxes online S. Can i amend my taxes online possession, do not use that tax in figuring the amount of your credit. Can i amend my taxes online For information on alien status and effectively connected income, see Publication 519. Can i amend my taxes online What Foreign Taxes Qualify for the Credit? In most cases, the following four tests must be met for any foreign tax to qualify for the credit. Can i amend my taxes online The tax must be imposed on you. Can i amend my taxes online You must have paid or accrued the tax. Can i amend my taxes online The tax must be the legal and actual foreign tax liability. Can i amend my taxes online The tax must be an income tax (or a tax in lieu of an income tax). Can i amend my taxes online Certain foreign taxes do not qualify for the credit even if the four tests are met. Can i amend my taxes online See Foreign Taxes for Which You Cannot Take a Credit, later. Can i amend my taxes online Tax Must Be Imposed on You You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U. Can i amend my taxes online S. Can i amend my taxes online possession. Can i amend my taxes online For example, a tax that is deducted from your wages is considered to be imposed on you. Can i amend my taxes online You cannot shift the right to claim the credit by contract or other means. Can i amend my taxes online Foreign country. Can i amend my taxes online   A foreign country includes any foreign state and its political subdivisions. Can i amend my taxes online Income, war profits, and excess profits taxes paid or accrued to a foreign city or province qualify for the foreign tax credit. Can i amend my taxes online U. Can i amend my taxes online S. Can i amend my taxes online possessions. Can i amend my taxes online   For foreign tax credit purposes, all qualified taxes paid to U. Can i amend my taxes online S. Can i amend my taxes online possessions are considered foreign taxes. Can i amend my taxes online For this purpose, U. Can i amend my taxes online S. Can i amend my taxes online possessions include Puerto Rico and American Samoa. Can i amend my taxes online   When the term “foreign country” is used in this publication, it includes U. Can i amend my taxes online S. Can i amend my taxes online possessions unless otherwise stated. Can i amend my taxes online You Must Have Paid or Accrued the Tax In most cases, you can claim the credit only if you paid or accrued the foreign tax to a foreign country or U. Can i amend my taxes online S. Can i amend my taxes online possession. Can i amend my taxes online However, the paragraphs that follow describe some instances in which you can claim the credit even if you did not directly pay or accrue the tax yourself. Can i amend my taxes online Joint return. Can i amend my taxes online   If you file a joint return, you can claim the credit based on the total foreign income taxes paid or accrued by you and your spouse. Can i amend my taxes online Combined income. Can i amend my taxes online   If foreign tax is imposed on the combined income of two or more persons (for example, spouses), the tax is allocated among, and considered paid by, these persons on a pro rata basis in proportion to each person's portion of the combined income, as determined under foreign law and Regulations section 1. Can i amend my taxes online 901-2(f)(3)(iii). Can i amend my taxes online Combined income with respect to each foreign tax that is imposed on a combined basis (and combined income subject to tax exemption or preferential tax rates) is computed separately, and the tax on that combined income is allocated separately. Can i amend my taxes online   These rules apply to foreign taxes paid or accrued in tax years beginning after February 14, 2012. Can i amend my taxes online However, you can choose to apply the new rules to foreign taxes paid or accrued in tax years beginning after December 31, 2010, and before February 15, 2012. Can i amend my taxes online For more details, see paragraphs (f) and (h) of Regulations section 1. Can i amend my taxes online 901-2. Can i amend my taxes online For similar rules applicable to prior tax years, see Regulations section 1. Can i amend my taxes online 901-2 (revised as of April 1, 2011). Can i amend my taxes online Example. Can i amend my taxes online You and your spouse reside in Country X, which imposes income tax on your combined incomes. Can i amend my taxes online Both of you use the “u” as your functional currency. Can i amend my taxes online Country X apportions tax based on income. Can i amend my taxes online You had income of 30,000u and your spouse had income of 20,000u. Can i amend my taxes online Your filing status on your U. Can i amend my taxes online S. Can i amend my taxes online income tax return is married filing separately. Can i amend my taxes online You can claim only 60% (30,000u/50,000u) of the foreign taxes imposed on your income on your U. Can i amend my taxes online S income tax return. Can i amend my taxes online Your spouse can claim only 40% (20,000u/50,000u). Can i amend my taxes online Partner or S corporation shareholder. Can i amend my taxes online   If you are a member of a partnership, or a shareholder in an S corporation, you can claim the credit based on your proportionate share of the foreign income taxes paid or accrued by the partnership or the S corporation. Can i amend my taxes online These amounts will be shown on the Schedule K-1 you receive from the partnership or S corporation. Can i amend my taxes online However, if you are a shareholder in an S corporation that in turn owns stock in a foreign corporation, you cannot claim a credit for your share of foreign taxes paid by the foreign corporation. Can i amend my taxes online Beneficiary. Can i amend my taxes online   If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. Can i amend my taxes online This amount will be shown on the Schedule K-1 you receive from the estate or trust. Can i amend my taxes online However, you must show that the tax was imposed on income of the estate and not on income received by the decedent. Can i amend my taxes online Mutual fund shareholder. Can i amend my taxes online   If you are a shareholder of a mutual fund or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. Can i amend my taxes online You should receive from the mutual fund or other RIC a Form 1099-DIV, or similar statement, showing your share of the foreign income, and your share of the foreign taxes paid. Can i amend my taxes online If you do not receive this information, you will need to contact the fund. Can i amend my taxes online Controlled foreign corporation shareholder. Can i amend my taxes online   If you are a shareholder of a controlled foreign corporation and choose to be taxed at corporate rates on the amount you must include in gross income from that corporation, you can claim the credit based on your share of foreign taxes paid or accrued by the controlled foreign corporation. Can i amend my taxes online If you make this election, you must claim the credit by filing Form 1118, Foreign Tax Credit—Corporations. Can i amend my taxes online Controlled foreign corporation. Can i amend my taxes online   A controlled foreign corporation is a foreign corporation in which U. Can i amend my taxes online S. Can i amend my taxes online shareholders own more than 50% of the voting power or value of the stock. Can i amend my taxes online You are considered a U. Can i amend my taxes online S. Can i amend my taxes online shareholder if you own, directly or indirectly, 10% or more of the total voting power of all classes of the foreign corporation's stock. Can i amend my taxes online See Internal Revenue Code sections 951(b) and 958(b) for more information. Can i amend my taxes online Tax Must Be the Legal and Actual Foreign Tax Liability The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country. Can i amend my taxes online Only the legal and actual foreign tax liability that you paid or accrued during the year qualifies for the credit. Can i amend my taxes online Foreign tax refund. Can i amend my taxes online   You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. Can i amend my taxes online   For example, the United States has tax treaties with many countries allowing U. Can i amend my taxes online S. Can i amend my taxes online citizens and residents reductions in the rates of tax of those foreign countries. Can i amend my taxes online However, some treaty countries require U. Can i amend my taxes online S. Can i amend my taxes online citizens and residents to pay the tax figured without regard to the lower treaty rates and then claim a refund for the amount by which the tax actually paid is more than the amount of tax figured using the lower treaty rate. Can i amend my taxes online The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable. Can i amend my taxes online Subsidy received. Can i amend my taxes online   Tax payments a foreign country returns to you in the form of a subsidy do not qualify for the foreign tax credit. Can i amend my taxes online This rule applies even if the subsidy is given to a person related to you, or persons who participated with you in a transaction or a related transaction. Can i amend my taxes online A subsidy can be provided by any means but must be determined, directly or indirectly, in relation to the amount of tax, or to the base used to figure the tax. Can i amend my taxes online   The term “subsidy” includes any type of benefit. Can i amend my taxes online Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. Can i amend my taxes online Shareholder receiving refund for corporate tax in integrated system. Can i amend my taxes online   Under some foreign tax laws and treaties, a shareholder is considered to have paid part of the tax that is imposed on the corporation. Can i amend my taxes online You may be able to claim a refund of these taxes from the foreign government. Can i amend my taxes online You must include the refund (including any amount withheld) in your income in the year received. Can i amend my taxes online Any tax withheld from the refund is a qualified foreign tax. Can i amend my taxes online Example. Can i amend my taxes online You are a shareholder of a French corporation. Can i amend my taxes online You receive a $100 refund of the tax paid to France by the corporation on the earnings distributed to you as a dividend. Can i amend my taxes online The French government imposes a 15% withholding tax ($15) on the refund you received. Can i amend my taxes online You receive a check for $85. Can i amend my taxes online You include $100 in your income. Can i amend my taxes online The $15 of tax withheld is a qualified foreign tax. Can i amend my taxes online Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) In most cases, only income, war profits, and excess profits taxes (income taxes) qualify for the foreign tax credit. Can i amend my taxes online Foreign taxes on wages, dividends, interest, and royalties qualify for the credit in most cases. Can i amend my taxes online Furthermore, foreign taxes on income can qualify even though they are not imposed under an income tax law if the tax is in lieu of an income, war profits, or excess profits tax. Can i amend my taxes online See Taxes in Lieu of Income Taxes , later. Can i amend my taxes online Income Tax Simply because the levy is called an income tax by the foreign taxing authority does not make it an income tax for this purpose. Can i amend my taxes online A foreign levy is an income tax only if it meets both of the following requirements. Can i amend my taxes online It is a tax; that is, you have to pay it and you get no specific economic benefit (discussed below) from paying it. Can i amend my taxes online The predominant character of the tax is that of an income tax in the U. Can i amend my taxes online S. Can i amend my taxes online sense. Can i amend my taxes online A foreign levy may meet these requirements even if the foreign tax law differs from U. Can i amend my taxes online S. Can i amend my taxes online tax law. Can i amend my taxes online The foreign law may include in income items that U. Can i amend my taxes online S. Can i amend my taxes online law does not include, or it may allow certain exclusions or deductions that U. Can i amend my taxes online S. Can i amend my taxes online law does not allow. Can i amend my taxes online Specific economic benefit. Can i amend my taxes online   In most cases, you get a specific economic benefit if you receive, or are considered to receive, an economic benefit from the foreign country imposing the levy, and: If there is a generally imposed income tax, the economic benefit is not available on substantially the same terms to all persons subject to the income tax, or If there is no generally imposed income tax, the economic benefit is not available on substantially the same terms to the population of the foreign country in general. Can i amend my taxes online   You are considered to receive a specific economic benefit if you have a business transaction with a person who receives a specific economic benefit from the foreign country and, under the terms and conditions of the transaction, you receive directly or indirectly all or part of the benefit. Can i amend my taxes online   However, see the exception discussed later under Pension, unemployment, and disability fund payments . Can i amend my taxes online Economic benefits. Can i amend my taxes online   Economic benefits include the following. Can i amend my taxes online Goods. Can i amend my taxes online Services. Can i amend my taxes online Fees or other payments. Can i amend my taxes online Rights to use, acquire, or extract resources, patents, or other property the foreign country owns or controls. Can i amend my taxes online Discharges of contractual obligations. Can i amend my taxes online   In most cases, the right or privilege merely to engage in business is not an economic benefit. Can i amend my taxes online Dual-capacity taxpayers. Can i amend my taxes online   If you are subject to a foreign country's levy and you also receive a specific economic benefit from that foreign country, you are a “dual-capacity taxpayer. Can i amend my taxes online ” As a dual-capacity taxpayer, you cannot claim a credit for any part of the foreign levy, unless you establish that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for a direct or indirect specific economic benefit. Can i amend my taxes online    For more information on how to establish amounts paid under separate elements of a levy, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Pension, unemployment, and disability fund payments. Can i amend my taxes online   A foreign tax imposed on an individual to pay for retirement, old-age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. Can i amend my taxes online    No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. Can i amend my taxes online For more information about these agreements, see Publication 54. Can i amend my taxes online Soak-up taxes. Can i amend my taxes online   A foreign tax is not predominantly an income tax and does not qualify for credit to the extent it is a soak-up tax. Can i amend my taxes online A tax is a soak-up tax to the extent that liability for it depends on the availability of a credit for it against income tax imposed by another country. Can i amend my taxes online This rule applies only if and to the extent that the foreign tax would not be imposed if the credit were not available. Can i amend my taxes online Penalties and interest. Can i amend my taxes online   Amounts paid to a foreign government to satisfy a liability for interest, fines, penalties, or any similar obligation are not taxes and do not qualify for the credit. Can i amend my taxes online Taxes not based on income. Can i amend my taxes online   Foreign taxes based on gross receipts or the number of units produced, rather than on realized net income, do not qualify unless they are imposed in lieu of an income tax, as discussed next. Can i amend my taxes online Taxes based on assets, such as property taxes, do not qualify for the credit. Can i amend my taxes online Taxes in Lieu of Income Taxes A tax paid or accrued to a foreign country qualifies for the credit if it is imposed in lieu of an income tax otherwise generally imposed. Can i amend my taxes online A foreign levy is a tax in lieu of an income tax only if: It is not payment for a specific economic benefit as discussed earlier, and The tax is imposed in place of, and not in addition to, an income tax otherwise generally imposed. Can i amend my taxes online A tax in lieu of an income tax does not have to be based on realized net income. Can i amend my taxes online A foreign tax imposed on gross income, gross receipts or sales, or the number of units produced or exported can qualify for the credit. Can i amend my taxes online In most cases, a soak-up tax (discussed earlier) does not qualify as a tax in lieu of an income tax. Can i amend my taxes online However, if the foreign country imposes a soak-up tax in lieu of an income tax, the amount that does not qualify for foreign tax credit is the lesser of the following amounts. Can i amend my taxes online The soak-up tax. Can i amend my taxes online The foreign tax you paid that is more than the amount you would have paid if you had been subject to the generally imposed income tax. Can i amend my taxes online Foreign Taxes for Which You Cannot Take a Credit This part discusses the foreign taxes for which you cannot take a credit. Can i amend my taxes online These are: Taxes on excluded income, Taxes for which you can only take an itemized deduction, Taxes on foreign mineral income, Taxes from international boycott operations, A portion of taxes on combined foreign oil and gas income, Taxes of U. Can i amend my taxes online S. Can i amend my taxes online persons controlling foreign corporations and partnerships who fail to file required information returns, and Taxes related to a foreign tax splitting event. Can i amend my taxes online Taxes on Excluded Income You cannot take a credit for foreign taxes paid or accrued on certain income that is excluded from U. Can i amend my taxes online S. Can i amend my taxes online gross income. Can i amend my taxes online Foreign Earned Income and Housing Exclusions You must reduce your foreign taxes available for the credit by the amount of those taxes paid or accrued on income that is excluded from U. Can i amend my taxes online S. Can i amend my taxes online income under the foreign earned income exclusion or the foreign housing exclusion. Can i amend my taxes online See Publication 54 for more information on the foreign earned income and housing exclusions. Can i amend my taxes online Wages completely excluded. Can i amend my taxes online   If your wages are completely excluded, you cannot take a credit for any of the foreign taxes paid or accrued on these wages. Can i amend my taxes online Wages partly excluded. Can i amend my taxes online   If only part of your wages is excluded, you cannot take a credit for the foreign income taxes allocable to the excluded part. Can i amend my taxes online You find the amount allocable to your excluded wages by multiplying the foreign tax paid or accrued on foreign earned income received or accrued during the tax year by a fraction. Can i amend my taxes online   The numerator of the fraction is your foreign earned income and housing amounts excluded under the foreign earned income and housing exclusions for the tax year minus otherwise deductible expenses definitely related and properly apportioned to that income. Can i amend my taxes online Deductible expenses do not include the foreign housing deduction. Can i amend my taxes online   The denominator is your total foreign earned income received or accrued during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). Can i amend my taxes online If the foreign law taxes foreign earned income and some other income (for example, earned income from U. Can i amend my taxes online S. Can i amend my taxes online sources or a type of income not subject to U. Can i amend my taxes online S. Can i amend my taxes online tax), and the taxes on the other income cannot be segregated, the denominator of the fraction is the total amount of income subject to the foreign tax minus deductible expenses allocable to that income. Can i amend my taxes online Example. Can i amend my taxes online You are a U. Can i amend my taxes online S. Can i amend my taxes online citizen and a cash basis taxpayer, employed by Company X and living in Country A. Can i amend my taxes online Your records show the following: Foreign earned income received $125,000 Unreimbursed business travel expenses 20,000 Income tax paid to Country A 30,000 Exclusion of foreign earned  income and housing allowance 97,600     Because you can exclude part of your wages, you cannot claim a credit for part of the foreign taxes. Can i amend my taxes online To find that part, do the following. Can i amend my taxes online First, find the amount of business expenses allocable to excluded wages and therefore not deductible. Can i amend my taxes online To do this, multiply the otherwise deductible expenses by a fraction. Can i amend my taxes online That fraction is the excluded wages over your foreign earned income. Can i amend my taxes online   $20,000 × $97,600 $125,000 = $15,616             Next, find the numerator of the fraction by which you will multiply the foreign taxes paid. Can i amend my taxes online To do this, subtract business expenses allocable to excluded wages ($15,616) from excluded wages ($97,600). Can i amend my taxes online The result is $81,984. Can i amend my taxes online Then, find the denominator of the fraction by subtracting all your deductible expenses from all your foreign earned income ($125,000 − $20,000 = $105,000). Can i amend my taxes online Finally, multiply the foreign tax you paid by the resulting fraction. Can i amend my taxes online   $30,000 × $81,984  $105,000 = $23,424 The amount of Country A tax you cannot take a credit for is $23,424. Can i amend my taxes online Taxes on Income From Puerto Rico Exempt From U. Can i amend my taxes online S. Can i amend my taxes online Tax If you have income from Puerto Rican sources that is not taxable, you must reduce your foreign taxes paid or accrued by the taxes allocable to the exempt income. Can i amend my taxes online For information on figuring the reduction, see Publication 570. Can i amend my taxes online Possession Exclusion If you are a bona fide resident of American Samoa and exclude income from sources in American Samoa, you cannot take a credit for the taxes you pay or accrue on the excluded income. Can i amend my taxes online For more information on this exclusion, see Publication 570. Can i amend my taxes online Extraterritorial Income Exclusion You cannot take a credit for taxes you pay on qualifying foreign trade income excluded on Form 8873, Extraterritorial Income Exclusion. Can i amend my taxes online However, see Internal Revenue Code section 943(d) for an exception for certain withholding taxes. Can i amend my taxes online Taxes for Which You Can Only Take an Itemized Deduction You cannot claim a foreign tax credit for foreign income taxes paid or accrued under the following circumstances. Can i amend my taxes online However, you can claim an itemized deduction for these taxes. Can i amend my taxes online See Choosing To Take Credit or Deduction , earlier. Can i amend my taxes online Taxes Imposed By Sanctioned Countries (Section 901(j) Income) You cannot claim a foreign tax credit for income taxes paid or accrued to any country if the income giving rise to the tax is for a period (the sanction period) during which: The Secretary of State has designated the country as one that repeatedly provides support for acts of international terrorism, The United States has severed or does not conduct diplomatic relations with the country, or The United States does not recognize the country's government, and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act. Can i amend my taxes online The following countries meet this description for 2013. Can i amend my taxes online Income taxes paid or accrued to these countries in 2013 do not qualify for the credit. Can i amend my taxes online Cuba. Can i amend my taxes online Iran. Can i amend my taxes online Libya (but see Note later). Can i amend my taxes online North Korea. Can i amend my taxes online Sudan. Can i amend my taxes online Syria. Can i amend my taxes online Waiver of denial of the credit. Can i amend my taxes online   A waiver can be granted to a sanctioned country if the President of the United States determines that granting the waiver is in the national interest of the United States and will expand trade and investment opportunities for U. Can i amend my taxes online S. Can i amend my taxes online companies in the sanctioned country. Can i amend my taxes online The President must report to Congress his intentions to grant the waiver and his reasons for granting the waiver not less than 30 days before the date on which the waiver is granted. Can i amend my taxes online Note. Can i amend my taxes online Effective December 10, 2004, the President granted a waiver to Libya. Can i amend my taxes online Income taxes arising on or after this date qualify for the credit if they meet the other requirements in this publication. Can i amend my taxes online Limit on credit. Can i amend my taxes online   In figuring the foreign tax credit limit, discussed later, income from a sanctioned country is a separate category of foreign income unless a Presidential waiver is granted. Can i amend my taxes online You must fill out a separate Form 1116 for this income. Can i amend my taxes online This will prevent you from claiming a credit for foreign taxes paid or accrued to the sanctioned country. Can i amend my taxes online Example. Can i amend my taxes online You lived and worked in Iran until August, when you were transferred to Italy. Can i amend my taxes online You paid taxes to each country on the income earned in that country. Can i amend my taxes online You cannot claim a foreign tax credit for the foreign taxes paid on the income earned in Iran. Can i amend my taxes online Because the income earned in Iran is a separate category of foreign income, you must fill out a separate Form 1116 for that income. Can i amend my taxes online You cannot take a credit for taxes paid on the income earned in Iran, but that income is taxable by the United States. Can i amend my taxes online Figuring the credit when a sanction ends. Can i amend my taxes online    Table 1 lists the countries for which sanctions have ended or for which a Presidential waiver has been granted. Can i amend my taxes online For any of these countries, you can claim a foreign tax credit for the taxes paid or accrued to that country on the income for the period that begins after the end of the sanction period or the date the Presidential waiver was granted. Can i amend my taxes online Example. Can i amend my taxes online The sanctions against Country X ended on July 31. Can i amend my taxes online On August 19, you receive a distribution from a mutual fund of Country X income. Can i amend my taxes online The fund paid Country X income tax for you on the distribution. Can i amend my taxes online Because the distribution was made after the sanction ended, you may include the foreign tax paid on the distribution to compute your foreign tax credit. Can i amend my taxes online Amounts for the nonsanctioned period. Can i amend my taxes online   If a sanction period ends (or a Presidential waiver is granted) during your tax year and you are not able to determine the actual income and taxes for that period, you can allocate amounts to that period based on the number of days in the period that fall in your tax year. Can i amend my taxes online Multiply the income or taxes for the year by the following fraction to determine the amounts allocable to that period. Can i amend my taxes online   Number of nonsanctioned days in year  Number of days in year Example. Can i amend my taxes online You are a calendar year filer and received $20,000 of income from Country X in 2013 on which you paid tax of $4,500. Can i amend my taxes online Sanctions against Country X ended on July 11, 2013. Can i amend my taxes online You are unable to determine how much of the income or tax is for the nonsanctioned period. Can i amend my taxes online Because your tax year starts on January 1, and the Country X sanction ended on July 11, 2013, 173 days of your tax year are in the nonsanctioned period. Can i amend my taxes online You would compute the income for the nonsanctioned period as follows. Can i amend my taxes online 173 365 × $20,000 = $9,479             You would figure the tax for the nonsanctioned period as follows. Can i amend my taxes online 173 365 × $4,500 = $2,133 To figure your foreign tax credit, you would use $9,479 as the income from Country X and $2,133 as the tax. Can i amend my taxes online Further information. Can i amend my taxes online   The rules for figuring the foreign tax credit after a country's sanction period ends are more fully explained in Revenue Ruling 92-62, Cumulative Bulletin 1992-2, page 193. Can i amend my taxes online This Cumulative Bulletin can be found in many libraries and IRS offices. Can i amend my taxes online Table 1. Can i amend my taxes online Countries Removed From the Sanction List or Granted Presidential Waiver   Sanction Period Country Starting Date Ending Date Iraq February 1, 1991 June 27, 2004 Libya January 1, 1987 December 9, 2004* *Presidential waiver granted for qualified income taxes arising after December 9, 2004. Can i amend my taxes online Taxes Imposed on Certain Dividends You cannot claim a foreign tax credit for withholding tax (defined later ) on dividends paid or accrued if either of the following applies to the dividends. Can i amend my taxes online The dividends are on stock you held for less than 16 days during the 31-day period that begins 15 days before the ex-dividend date (defined later). Can i amend my taxes online The dividends are for a period or periods totaling more than 366 days on preferred stock you held for less than 46 days during the 91-day period that begins 45 days before the ex-dividend date. Can i amend my taxes online If the dividend is not for more than 366 days, rule (1) applies to the preferred stock. Can i amend my taxes online When figuring how long you held the stock, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. Can i amend my taxes online Regardless of how long you held the stock, you cannot claim the credit to the extent you have an obligation under a short sale or otherwise to make payments related to the dividend for positions in substantially similar or related property. Can i amend my taxes online Withholding tax. Can i amend my taxes online   For this purpose, withholding tax includes any tax determined on a gross basis. Can i amend my taxes online It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. Can i amend my taxes online Ex-dividend date. Can i amend my taxes online   The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. Can i amend my taxes online Example 1. Can i amend my taxes online You bought common stock from a foreign corporation on November 3. Can i amend my taxes online You sold the stock on November 19. Can i amend my taxes online You received a dividend on this stock because you owned it on the ex-dividend date of November 5. Can i amend my taxes online To claim the credit, you must have held the stock for at least 16 days within the 31-day period that began on October 21 (15 days before the ex-dividend date). Can i amend my taxes online Because you held the stock for 16 days, from November 4 until November 19, you are entitled to the credit. Can i amend my taxes online Example 2. Can i amend my taxes online The facts are the same as in Example 1 except that you sold the stock on November 14. Can i amend my taxes online You held the stock for only 11 days. Can i amend my taxes online You are not entitled to the credit. Can i amend my taxes online Exception. Can i amend my taxes online   If you are a securities dealer who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes paid on dividends regardless of how long you held the stock or whether you were obligated to make payments for positions in substantially similar or related property. Can i amend my taxes online See section 901(k)(4) of the Internal Revenue Code for more information. Can i amend my taxes online Taxes Withheld on Income or Gain (Other Than Dividends) For income or gain (other than dividends) paid or accrued on property, you cannot claim a foreign tax credit for withholding tax (defined later): If you have not held the property for at least 16 days during the 31-day period that begins 15 days before the date on which the right to receive the payment arises, or To the extent you have to make related payments on positions in substantially similar or related property. Can i amend my taxes online When figuring how long you held the property, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. Can i amend my taxes online Withholding tax. Can i amend my taxes online   For this purpose, withholding tax includes any tax determined on a gross basis. Can i amend my taxes online It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. Can i amend my taxes online Exception for dealers. Can i amend my taxes online   If you are a dealer in property who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes withheld on income or gain from that property regardless of how long you held it or whether you have to make related payments on positions in substantially similar or related property. Can i amend my taxes online See section 901(I)(2) of the Internal Revenue Code for more information. Can i amend my taxes online Covered Asset Acquisition ???You cannot take a credit for the disqualified portion of any foreign tax paid or accrued in connection with a covered asset acquisition. Can i amend my taxes online A covered asset acquisition includes certain acquisitions that result in a stepped-up basis for U. Can i amend my taxes online S. Can i amend my taxes online tax purposes but not for foreign tax purposes. Can i amend my taxes online For more information, see Internal Revenue Code section 901(m). Can i amend my taxes online The IRS intends to issue guidance that will explain this provision in greater detail. Can i amend my taxes online Taxes in Connection With the Purchase or Sale of Oil or Gas You cannot claim a foreign tax credit for taxes paid or accrued to a foreign country in connection with the purchase or sale of oil or gas extracted in that country if you do not have an economic interest in the oil or gas, and the purchase price or sales price is different from the fair market value of the oil or gas at the time of purchase or sale. Can i amend my taxes online Taxes on Foreign Mineral Income You must reduce any taxes paid or accrued to a foreign country or possession on mineral income from that country or possession if you were allowed a deduction for percentage depletion for any part of the mineral income. Can i amend my taxes online For details, see Regulations section 1. Can i amend my taxes online 901-3. Can i amend my taxes online Taxes From International Boycott Operations If you participate in or cooperate with an international boycott during the tax year, your foreign taxes resulting from boycott activities will reduce the total taxes available for credit. Can i amend my taxes online See the instructions for line 12 in the Form 1116 instructions to figure this reduction. Can i amend my taxes online In most cases, this rule does not apply to employees with wages who are working and living in boycotting countries, or to retirees with pensions who are living in these countries. Can i amend my taxes online List of boycotting countries. Can i amend my taxes online   A list of the countries which may require participation in or cooperation with an international boycott is published by the Department of the Treasury. Can i amend my taxes online As of November 2013, the following countries are listed. Can i amend my taxes online Iraq. Can i amend my taxes online Kuwait. Can i amend my taxes online Lebanon. Can i amend my taxes online Libya. Can i amend my taxes online Qatar. Can i amend my taxes online Saudi Arabia. Can i amend my taxes online Syria. Can i amend my taxes online United Arab Emirates. Can i amend my taxes online Yemen. Can i amend my taxes online    For information concerning changes to the list, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Determinations of whether the boycott rule applies. Can i amend my taxes online   You may request a determination from the Internal Revenue Service as to whether a particular operation constitutes participation in or cooperation with an international boycott. Can i amend my taxes online The procedures for obtaining a determination from the Service are outlined in Revenue Procedure 77-9 in Cumulative Bulletin 1977-1. Can i amend my taxes online Cumulative Bulletins are available in most IRS offices and you are welcome to read them there. Can i amend my taxes online Public inspection. Can i amend my taxes online   A determination and any related background file is open to public inspection. Can i amend my taxes online However, your identity and certain other information will remain confidential. Can i amend my taxes online Reporting requirements. Can i amend my taxes online   You must file a report with the IRS if you or any of the following persons have operations in or related to a boycotting country or with the government, a company, or a national of a boycotting country. Can i amend my taxes online A foreign corporation in which you own 10% or more of the voting power of all voting stock but only if you own the stock of the foreign corporation directly or through foreign entities. Can i amend my taxes online A partnership in which you are a partner. Can i amend my taxes online A trust you are treated as owning. Can i amend my taxes online Form 5713 required. Can i amend my taxes online   If you have to file a report, you must use Form 5713, International Boycott Report, and attach all supporting schedules. Can i amend my taxes online See the Instructions for Form 5713 for information on when and where to file the form. Can i amend my taxes online Penalty for failure to file. Can i amend my taxes online   If you willfully fail to make a report, in addition to other penalties, you may be fined $25,000 or imprisoned for no more than one year, or both. Can i amend my taxes online Taxes on Combined Foreign Oil and Gas Income You must reduce your foreign taxes by a portion of any foreign taxes imposed on combined foreign oil and gas income. Can i amend my taxes online The amount of the reduction is the amount by which your foreign oil and gas taxes exceed the amount of your combined foreign oil and gas income multiplied by a fraction equal to your pre-credit U. Can i amend my taxes online S. Can i amend my taxes online tax liability (Form 1040, line 44) divided by your worldwide taxable income. Can i amend my taxes online You may be entitled to carry over to other years taxes reduced under this rule. Can i amend my taxes online See Internal Revenue Code section 907(f). Can i amend my taxes online Combined foreign oil and gas income means the sum of foreign oil related income and foreign oil and gas extraction income. Can i amend my taxes online Foreign oil and gas taxes are the sum of foreign oil and gas extraction taxes and foreign oil related taxes. Can i amend my taxes online Taxes of U. Can i amend my taxes online S. Can i amend my taxes online Persons Controlling Foreign Corporations and Partnerships If you had control of a foreign corporation or a foreign partnership for the annual accounting period of that corporation or partnership that ended with or within your tax year, you may have to file an annual information return. Can i amend my taxes online If you do not file the required information return, you may have to reduce the foreign taxes that may be used for the foreign tax credit. Can i amend my taxes online See Penalty for not filing Form 5471 or Form 8865 , later. Can i amend my taxes online U. Can i amend my taxes online S. Can i amend my taxes online persons controlling foreign corporations. Can i amend my taxes online   If you are a U. Can i amend my taxes online S. Can i amend my taxes online citizen or resident who had control of a foreign corporation for an uninterrupted period of at least 30 days during the annual accounting period of that corporation, you may have to file an annual information return on Form 5471, Information Return of U. Can i amend my taxes online S. Can i amend my taxes online Persons With Respect To Certain Foreign Corporations. Can i amend my taxes online Under this rule, you generally had control of a foreign corporation if at any time during your tax year you owned: Stock possessing more than 50% of the total combined voting power of all classes of stock entitled to vote, or More than 50% of the total value of shares of all classes of stock of the foreign corporation. Can i amend my taxes online U. Can i amend my taxes online S. Can i amend my taxes online persons controlling foreign partnerships. Can i amend my taxes online   If you are a U. Can i amend my taxes online S. Can i amend my taxes online citizen or resident who had control of a foreign partnership at any time during the partnership's tax year, you may have to file
 
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FAQs on New Payment Card Reporting Requirements

By law, reporting began in early 2012 for payment card and third-party network transactions that occurred in 2011. Details on the reporting requirements are in these FAQs.

General FAQs on Payment Card and Third Party Network Transactions

Payment Card Transactions FAQs

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The Can I Amend My Taxes Online

Can i amend my taxes online 6. Can i amend my taxes online   Tip Income Table of Contents Introduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. Can i amend my taxes online Reporting Tips to Your EmployerElectronic tip statement. Can i amend my taxes online Final report. Can i amend my taxes online Reporting Tips on Your Tax Return Allocated Tips Introduction This chapter is for employees who receive tips. Can i amend my taxes online All tips you receive are income and are subject to federal income tax. Can i amend my taxes online You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. Can i amend my taxes online The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. Can i amend my taxes online Reporting your tip income correctly is not difficult. Can i amend my taxes online You must do three things. Can i amend my taxes online Keep a daily tip record. Can i amend my taxes online Report tips to your employer. Can i amend my taxes online Report all your tips on your income tax return. Can i amend my taxes online  This chapter will explain these three things and show you what to do on your tax return if you have not done the first two. Can i amend my taxes online This chapter will also show you how to treat allocated tips. Can i amend my taxes online For information on special tip programs and agreements, see Publication 531. Can i amend my taxes online Useful Items - You may want to see: Publication 531 Reporting Tip Income 1244 Employee's Daily Record of Tips and Report to Employer Form (and Instructions) 4137 Social Security and Medicare Tax on Unreported Tip Income 4070 Employee's Report of Tips to Employer Keeping a Daily Tip Record Why keep a daily tip record. Can i amend my taxes online   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Can i amend my taxes online How to keep a daily tip record. Can i amend my taxes online   There are two ways to keep a daily tip record. Can i amend my taxes online You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Can i amend my taxes online You should keep your daily tip record with your tax or other personal records. Can i amend my taxes online You must keep your records for as long as they are important for administration of the federal tax law. Can i amend my taxes online For information on how long to keep records, see How long to keep records in chapter 1. Can i amend my taxes online    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Can i amend my taxes online To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. Can i amend my taxes online Also, Publication 1244 is available online at www. Can i amend my taxes online irs. Can i amend my taxes online gov/pub/irs-pdf/p1244. Can i amend my taxes online pdf. Can i amend my taxes online Publication 1244 includes a 1-year supply of Form 4070A. Can i amend my taxes online Each day, write in the information asked for on the form. Can i amend my taxes online   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Can i amend my taxes online Although you do not report these tips to your employer, you must report them on your tax return. Can i amend my taxes online   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Can i amend my taxes online Then, each workday, write the date and the following information. Can i amend my taxes online Cash tips you get directly from customers or from other employees. Can i amend my taxes online Tips from credit and debit card charge customers that your employer pays you. Can i amend my taxes online The value of any noncash tips you get, such as tickets, passes, or other items of value. Can i amend my taxes online The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Can i amend my taxes online Electronic tip record. Can i amend my taxes online   You can use an electronic system provided by your employer to record your daily tips. Can i amend my taxes online If you do, you must receive and keep a paper copy of this record. Can i amend my taxes online Service charges. Can i amend my taxes online    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Can i amend my taxes online This is part of your wages, not a tip. Can i amend my taxes online See examples below. Can i amend my taxes online Example 1. Can i amend my taxes online Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Can i amend my taxes online Jane’s bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Can i amend my taxes online Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Can i amend my taxes online Do not include the 18% charge in your tip diary. Can i amend my taxes online Service charges that are paid to you are considered wages, not tips. Can i amend my taxes online Example 2. Can i amend my taxes online Good Food Restaurant also includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Can i amend my taxes online David’s bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of his charges for food and beverages at the bottom of the bill beneath the signature line. Can i amend my taxes online Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Can i amend my taxes online Be sure to include this amount in your tip diary. Can i amend my taxes online Reporting Tips to Your Employer Why report tips to your employer. Can i amend my taxes online   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Can i amend my taxes online What tips to report. Can i amend my taxes online   Report to your employer only cash, check, and debit and credit card tips you receive. Can i amend my taxes online   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Can i amend my taxes online   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Can i amend my taxes online Do not report to your employer any portion of the tips you receive that you pass on to other employees. Can i amend my taxes online However, you must report tips you receive from other employees. Can i amend my taxes online    Do not report the value of any noncash tips, such as tickets or passes, to your employer. Can i amend my taxes online You do not pay social security, Medicare, Additional Medicare or railroad retirement taxes on these tips. Can i amend my taxes online How to report. Can i amend my taxes online    If your employer does not give you any other way to report tips, you can use Form 4070. Can i amend my taxes online Fill in the information asked for on the form, sign and date the form, and give it to your employer. Can i amend my taxes online To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Can i amend my taxes online   If you do not use Form 4070, give your employer a statement with the following information. Can i amend my taxes online Your name, address, and social security number. Can i amend my taxes online Your employer's name, address, and business name (if it is different from your employer's name). Can i amend my taxes online The month (or the dates of any shorter period) in which you received tips. Can i amend my taxes online The total tips required to be reported for that period. Can i amend my taxes online You must sign and date the statement. Can i amend my taxes online Be sure to keep a copy with your tax or other personal records. Can i amend my taxes online   Your employer may require you to report your tips more than once a month. Can i amend my taxes online However, the statement cannot cover a period of more than 1 calendar month. Can i amend my taxes online Electronic tip statement. Can i amend my taxes online   Your employer can have you furnish your tip statements electronically. Can i amend my taxes online When to report. Can i amend my taxes online   Give your report for each month to your employer by the 10th of the next month. Can i amend my taxes online If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Can i amend my taxes online Example. Can i amend my taxes online You must report your tips received in September 2014 by October 10, 2014. Can i amend my taxes online Final report. Can i amend my taxes online   If your employment ends during the month, you can report your tips when your employment ends. Can i amend my taxes online Penalty for not reporting tips. Can i amend my taxes online   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, and Additional Medicare taxes or railroad retirement tax you owe on the unreported tips. Can i amend my taxes online (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Can i amend my taxes online ) The penalty amount is in addition to the taxes you owe. Can i amend my taxes online   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Can i amend my taxes online To do so, attach a statement to your return explaining why you did not report them. Can i amend my taxes online Giving your employer money for taxes. Can i amend my taxes online   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Can i amend my taxes online If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Can i amend my taxes online   If you do not give your employer enough money, your employer will apply your regular pay and any money you give in the following order. Can i amend my taxes online All taxes on your regular pay. Can i amend my taxes online Social security, Medicare, and Additional Medicare taxes or railroad retirement taxes on your reported tips. Can i amend my taxes online Federal, state, and local income taxes on your reported tips. Can i amend my taxes online    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Can i amend my taxes online If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Can i amend my taxes online See Publication 505, Tax Withholding and Estimated Tax, for more information. Can i amend my taxes online    Uncollected taxes. Can i amend my taxes online You must report on your tax return any social security and Medicare taxes or railroad retirement tax that remained uncollected at the end of 2013. Can i amend my taxes online These uncollected taxes will be shown on your 2013 Form W-2. Can i amend my taxes online See Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Can i amend my taxes online Reporting Tips on Your Tax Return How to report tips. Can i amend my taxes online    Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1. Can i amend my taxes online What tips to report. Can i amend my taxes online   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Can i amend my taxes online Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Can i amend my taxes online Add to the amount in box 1 only the tips you did not report to your employer. Can i amend my taxes online    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Can i amend my taxes online    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Can i amend my taxes online   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Can i amend my taxes online Cash and charge tips you received that totaled less than $20 for any month. Can i amend my taxes online The value of noncash tips, such as tickets, passes, or other items of value. Can i amend my taxes online Example. Can i amend my taxes online Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Can i amend my taxes online Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Can i amend my taxes online He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Can i amend my taxes online Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. Can i amend my taxes online He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Can i amend my taxes online Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Can i amend my taxes online    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Can i amend my taxes online To report these taxes, you must file a return even if you would not otherwise have to file. Can i amend my taxes online You must use Form 1040. Can i amend my taxes online (You cannot file Form 1040EZ or Form 1040A. Can i amend my taxes online )    Use Form 4137 to figure social security and Medicare taxes. Can i amend my taxes online Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Can i amend my taxes online Use Form 8959 to figure Additional Medicare Tax. Can i amend my taxes online    If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Can i amend my taxes online To get railroad retirement credit, you must report tips to your employer. Can i amend my taxes online Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer. Can i amend my taxes online   You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Can i amend my taxes online For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Can i amend my taxes online   If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Can i amend my taxes online You must report these amounts as additional tax on your return. Can i amend my taxes online Unlike the uncollected portion of the regular (1. Can i amend my taxes online 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported in box 12 of Form W-2 with code B. Can i amend my taxes online    To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Can i amend my taxes online You must report these taxes on Form 1040, line 60. Can i amend my taxes online See the instructions for Form 1040, line 60. Can i amend my taxes online (You cannot file Form 1040EZ or Form 1040A. Can i amend my taxes online ) Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Can i amend my taxes online They are not included in box 1 with your wages and reported tips. Can i amend my taxes online If box 8 is blank, this discussion does not apply to you. Can i amend my taxes online What are allocated tips. Can i amend my taxes online   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Can i amend my taxes online Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Can i amend my taxes online No income, social security, Medicare, Additional Medicare or railroad retirement taxes are withheld on allocated tips. Can i amend my taxes online How were your allocated tips figured. Can i amend my taxes online   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Can i amend my taxes online Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Can i amend my taxes online For information about the exact allocation method used, ask your employer. Can i amend my taxes online Must you report your allocated tips on your tax return. Can i amend my taxes online   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Can i amend my taxes online Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Can i amend my taxes online Add to the amount in box 1 only the tips you did not report to your employer. Can i amend my taxes online This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated figures. Can i amend my taxes online   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Can i amend my taxes online How to report allocated tips. Can i amend my taxes online   Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Can i amend my taxes online (You cannot file Form 1040A or Form 1040EZ when you have allocated tips. Can i amend my taxes online )    Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Can i amend my taxes online Complete Form 4137, and include the allocated tips on line 1 of the form. Can i amend my taxes online See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Can i amend my taxes online Prev  Up  Next   Home   More Online Publications