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Corporate Tax Software

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Corporate Tax Software

Corporate tax software 1. Corporate tax software   Definitions You Need To Know Table of Contents Other options. Corporate tax software Exception. Corporate tax software Certain terms used in this publication are defined below. Corporate tax software The same term used in another publication may have a slightly different meaning. Corporate tax software Annual additions. Corporate tax software   Annual additions are the total of all your contributions in a year, employee contributions (not including rollovers), and forfeitures allocated to a participant's account. Corporate tax software Annual benefits. Corporate tax software   Annual benefits are the benefits to be paid yearly in the form of a straight life annuity (with no extra benefits) under a plan to which employees do not contribute and under which no rollover contributions are made. Corporate tax software Business. Corporate tax software   A business is an activity in which a profit motive is present and economic activity is involved. Corporate tax software Service as a newspaper carrier under age 18 or as a public official is not a business. Corporate tax software Common-law employee. Corporate tax software   A common-law employee is any individual who, under common law, would have the status of an employee. Corporate tax software A leased employee can also be a common-law employee. Corporate tax software   A common-law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way in which it is done. Corporate tax software For example, the employer: Provides the employee's tools, materials, and workplace, and Can fire the employee. Corporate tax software   Common-law employees are not self-employed and cannot set up retirement plans for income from their work, even if that income is self-employment income for social security tax purposes. Corporate tax software For example, common-law employees who are ministers, members of religious orders, full-time insurance salespeople, and U. Corporate tax software S. Corporate tax software citizens employed in the United States by foreign governments cannot set up retirement plans for their earnings from those employments, even though their earnings are treated as self-employment income. Corporate tax software   However, an individual may be a common-law employee and a self-employed person as well. Corporate tax software For example, an attorney can be a corporate common-law employee during regular working hours and also practice law in the evening as a self-employed person. Corporate tax software In another example, a minister employed by a congregation for a salary is a common-law employee even though the salary is treated as self-employment income for social security tax purposes. Corporate tax software However, fees reported on Schedule C (Form 1040), Profit or Loss From Business, for performing marriages, baptisms, and other personal services are self-employment earnings for qualified plan purposes. Corporate tax software Compensation. Corporate tax software   Compensation for plan allocations is the pay a participant received from you for personal services for a year. Corporate tax software You can generally define compensation as including all the following payments. Corporate tax software Wages and salaries. Corporate tax software Fees for professional services. Corporate tax software Other amounts received (cash or noncash) for personal services actually rendered by an employee, including, but not limited to, the following items. Corporate tax software Commissions and tips. Corporate tax software Fringe benefits. Corporate tax software Bonuses. Corporate tax software   For a self-employed individual, compensation means the earned income, discussed later, of that individual. Corporate tax software   Compensation generally includes amounts deferred in the following employee benefit plans. Corporate tax software These amounts are elective deferrals. Corporate tax software Qualified cash or deferred arrangement (section 401(k) plan). Corporate tax software Salary reduction agreement to contribute to a tax-sheltered annuity (section 403(b) plan), a SIMPLE IRA plan, or a SARSEP. Corporate tax software Section 457 nonqualified deferred compensation plan. Corporate tax software Section 125 cafeteria plan. Corporate tax software   However, an employer can choose to exclude elective deferrals under the above plans from the definition of compensation. Corporate tax software The limit on elective deferrals is discussed in chapter 2 under Salary Reduction Simplified Employee Pension (SARSEP) and in chapter 4. Corporate tax software Other options. Corporate tax software   In figuring the compensation of a participant, you can treat any of the following amounts as the employee's compensation. Corporate tax software The employee's wages as defined for income tax withholding purposes. Corporate tax software The employee's wages you report in box 1 of Form W-2, Wage and Tax Statement. Corporate tax software The employee's social security wages (including elective deferrals). Corporate tax software   Compensation generally cannot include either of the following items. Corporate tax software Nontaxable reimbursements or other expense allowances. Corporate tax software Deferred compensation (other than elective deferrals). Corporate tax software SIMPLE plans. Corporate tax software   A special definition of compensation applies for SIMPLE plans. Corporate tax software See chapter 3. Corporate tax software Contribution. Corporate tax software   A contribution is an amount you pay into a plan for all those participating in the plan, including self-employed individuals. Corporate tax software Limits apply to how much, under the contribution formula of the plan, can be contributed each year for a participant. Corporate tax software Deduction. Corporate tax software   A deduction is the plan contributions you can subtract from gross income on your federal income tax return. Corporate tax software Limits apply to the amount deductible. Corporate tax software Earned income. Corporate tax software   Earned income is net earnings from self-employment, discussed later, from a business in which your services materially helped to produce the income. Corporate tax software   You can also have earned income from property your personal efforts helped create, such as royalties from your books or inventions. Corporate tax software Earned income includes net earnings from selling or otherwise disposing of the property, but it does not include capital gains. Corporate tax software It includes income from licensing the use of property other than goodwill. Corporate tax software   Earned income includes amounts received for services by self-employed members of recognized religious sects opposed to social security benefits who are exempt from self-employment tax. Corporate tax software   If you have more than one business, but only one has a retirement plan, only the earned income from that business is considered for that plan. Corporate tax software Employer. Corporate tax software   An employer is generally any person for whom an individual performs or did perform any service, of whatever nature, as an employee. Corporate tax software A sole proprietor is treated as his or her own employer for retirement plan purposes. Corporate tax software However, a partner is not an employer for retirement plan purposes. Corporate tax software Instead, the partnership is treated as the employer of each partner. Corporate tax software Highly compensated employee. Corporate tax software   A highly compensated employee is an individual who: Owned more than 5% of the interest in your business at any time during the year or the preceding year, regardless of how much compensation that person earned or received, or For the preceding year, received compensation from you of more than $115,000 (if the preceding year is 2012, 2013, or 2014) and, if you so choose, was in the top 20% of employees when ranked by compensation. Corporate tax software Leased employee. Corporate tax software   A leased employee who is not your common-law employee must generally be treated as your employee for retirement plan purposes if he or she does all the following. Corporate tax software Provides services to you under an agreement between you and a leasing organization. Corporate tax software Has performed services for you (or for you and related persons) substantially full time for at least 1 year. Corporate tax software Performs services under your primary direction or control. Corporate tax software Exception. Corporate tax software   A leased employee is not treated as your employee if all the following conditions are met. Corporate tax software Leased employees are not more than 20% of your non-highly compensated work force. Corporate tax software The employee is covered under the leasing organization's qualified pension plan. Corporate tax software The leasing organization's plan is a money purchase pension plan that has all the following provisions. Corporate tax software Immediate participation. Corporate tax software (This requirement does not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000. Corporate tax software ) Full and immediate vesting. Corporate tax software A nonintegrated employer contribution rate of at least 10% of compensation for each participant. Corporate tax software However, if the leased employee is your common-law employee, that employee will be your employee for all purposes, regardless of any pension plan of the leasing organization. Corporate tax software Net earnings from self-employment. Corporate tax software   For SEP and qualified plans, net earnings from self-employment is your gross income from your trade or business (provided your personal services are a material income-producing factor) minus allowable business deductions. Corporate tax software Allowable deductions include contributions to SEP and qualified plans for common-law employees and the deduction allowed for the deductible part of your self-employment tax. Corporate tax software   Net earnings from self-employment does not include items excluded from gross income (or their related deductions) other than foreign earned income and foreign housing cost amounts. Corporate tax software   For the deduction limits, earned income is net earnings for personal services actually rendered to the business. Corporate tax software You take into account the income tax deduction for the deductible part of self-employment tax and the deduction for contributions to the plan made on your behalf when figuring net earnings. Corporate tax software   Net earnings include a partner's distributive share of partnership income or loss (other than separately stated items, such as capital gains and losses). Corporate tax software It does not include income passed through to shareholders of S corporations. Corporate tax software Guaranteed payments to limited partners are net earnings from self-employment if they are paid for services to or for the partnership. Corporate tax software Distributions of other income or loss to limited partners are not net earnings from self-employment. Corporate tax software   For SIMPLE plans, net earnings from self-employment is the amount on line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040), Self-Employment Tax, before subtracting any contributions made to the SIMPLE plan for yourself. Corporate tax software Qualified plan. Corporate tax software   A qualified plan is a retirement plan that offers a tax-favored way to save for retirement. Corporate tax software You can deduct contributions made to the plan for your employees. Corporate tax software Earnings on these contributions are generally tax free until distributed at retirement. Corporate tax software Profit-sharing, money purchase, and defined benefit plans are qualified plans. Corporate tax software A 401(k) plan is also a qualified plan. Corporate tax software Participant. Corporate tax software   A participant is an eligible employee who is covered by your retirement plan. Corporate tax software See the discussions of the different types of plans for the definition of an employee eligible to participate in each type of plan. Corporate tax software Partner. Corporate tax software   A partner is an individual who shares ownership of an unincorporated trade or business with one or more persons. Corporate tax software For retirement plans, a partner is treated as an employee of the partnership. Corporate tax software Self-employed individual. Corporate tax software   An individual in business for himself or herself, and whose business is not incorporated, is self-employed. Corporate tax software Sole proprietors and partners are self-employed. Corporate tax software Self-employment can include part-time work. Corporate tax software   Not everyone who has net earnings from self-employment for social security tax purposes is self-employed for qualified plan purposes. Corporate tax software See Common-law employee and Net earnings from self-employment , earlier. Corporate tax software   In addition, certain fishermen may be considered self-employed for setting up a qualified plan. Corporate tax software See Publication 595, Capital Construction Fund for Commercial Fishermen, for the special rules used to determine whether fishermen are self-employed. Corporate tax software Sole proprietor. Corporate tax software   A sole proprietor is an individual who owns an unincorporated business by himself or herself, including a single member limited liability company that is treated as a disregarded entity for tax purposes. Corporate tax software For retirement plans, a sole proprietor is treated as both an employer and an employee. 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The Corporate Tax Software

Corporate tax software 1. Corporate tax software   Nonresident Alien or Resident Alien? Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Nonresident Aliens Resident AliensGreen Card Test Substantial Presence Test Effect of Tax Treaties Dual-Status AliensFirst Year of Residency Choosing Resident Alien Status Last Year of Residency Nonresident Spouse Treated as a ResidentHow To Make the Choice Aliens From American Samoa or Puerto Rico Introduction You should first determine whether, for income tax purposes, you are a nonresident alien or a resident alien. Corporate tax software If you are both a nonresident and resident in the same year, you have a dual status. Corporate tax software Dual status is explained later. Corporate tax software Also explained later are a choice to treat your nonresident spouse as a resident and some other special situations. Corporate tax software Topics - This chapter discusses: How to determine if you are a nonresident, resident, or dual-status alien, and How to treat a nonresident spouse as a resident alien. Corporate tax software Useful Items - You may want to see: Form (and Instructions) 1040 U. Corporate tax software S. Corporate tax software Individual Income Tax Return 1040A U. Corporate tax software S. Corporate tax software Individual Income Tax Return 1040NR U. Corporate tax software S. Corporate tax software Nonresident Alien Income Tax Return 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) 8840 Closer Connection Exception Statement for Aliens 8843 Statement for Exempt Individuals and Individuals With a Medical Condition See chapter 12 for information about getting these forms. Corporate tax software Nonresident Aliens If you are an alien (not a U. Corporate tax software S. Corporate tax software citizen), you are considered a nonresident alien unless you meet one of the two tests described next under Resident Aliens. Corporate tax software Resident Aliens You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for calendar year 2013 (January 1–December 31). Corporate tax software Even if you do not meet either of these tests, you may be able to choose to be treated as a U. Corporate tax software S. Corporate tax software resident for part of the year. Corporate tax software See First-Year Choice under Dual-Status Aliens, later. Corporate tax software Green Card Test You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2013. Corporate tax software (However, see Dual-Status Aliens , later. Corporate tax software ) This is known as the “green card” test. Corporate tax software You are a lawful permanent resident of the United States at any time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. Corporate tax software You generally have this status if the U. Corporate tax software S. Corporate tax software Citizenship and Immigration Services (USCIS) (or its predecessor organization) has issued you an alien registration card, also known as a “green card. Corporate tax software ” You continue to have resident status under this test unless the status is taken away from you or is administratively or judicially determined to have been abandoned. Corporate tax software Resident status taken away. Corporate tax software   Resident status is considered to have been taken away from you if the U. Corporate tax software S. Corporate tax software government issues you a final administrative or judicial order of exclusion or deportation. Corporate tax software A final judicial order is an order that you may no longer appeal to a higher court of competent jurisdiction. Corporate tax software Resident status abandoned. Corporate tax software   An administrative or judicial determination of abandonment of resident status may be initiated by you, the USCIS, or a U. Corporate tax software S. Corporate tax software consular officer. Corporate tax software    If you initiate the determination, your resident status is considered to be abandoned when you file either of the following with the USCIS or U. Corporate tax software S. Corporate tax software consular officer. Corporate tax software Your application for abandonment. Corporate tax software Your Alien Registration Receipt Card attached to a letter stating your intent to abandon your resident status. Corporate tax software You must file the letter by certified mail, return receipt requested. Corporate tax software You must keep a copy of the letter and proof that it was mailed and received. Corporate tax software    Until you have proof your letter was received, you remain a resident alien for tax purposes even if the USCIS would not recognize the validity of your green card because it is more than ten years old or because you have been absent from the United States for a period of time. Corporate tax software   If the USCIS or U. Corporate tax software S. Corporate tax software consular officer initiates this determination, your resident status will be considered to be abandoned when the final administrative order of abandonment is issued. Corporate tax software If you are granted an appeal to a federal court of competent jurisdiction, a final judicial order is required. Corporate tax software   Under U. Corporate tax software S. Corporate tax software immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. Corporate tax software    A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. Corporate tax software See Expatriation Tax in chapter 4. Corporate tax software Termination of residency after June 3, 2004, and before June 17, 2008. Corporate tax software   If you terminated your residency after June 3, 2004, and before June 17, 2008, you will still be considered a U. Corporate tax software S. Corporate tax software resident for tax purposes until you notify the Secretary of Homeland Security and file Form 8854, Initial and Annual Expatriation Statement. Corporate tax software Termination of residency after June 16, 2008. Corporate tax software   For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4. Corporate tax software Substantial Presence Test You will be considered a U. Corporate tax software S. Corporate tax software resident for tax purposes if you meet the substantial presence test for calendar year 2013. Corporate tax software To meet this test, you must be physically present in the United States on at least: 31 days during 2013, and 183 days during the 3-year period that includes 2013, 2012, and 2011, counting: All the days you were present in 2013, and 1/3 of the days you were present in 2012, and 1/6 of the days you were present in 2011. Corporate tax software Example. Corporate tax software You were physically present in the United States on 120 days in each of the years 2011, 2012, and 2013. Corporate tax software To determine if you meet the substantial presence test for 2013, count the full 120 days of presence in 2013, 40 days in 2012 (1/3 of 120), and 20 days in 2011 (1/6 of 120). Corporate tax software Because the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2013. Corporate tax software The term United States includes the following areas. Corporate tax software All 50 states and the District of Columbia. Corporate tax software The territorial waters of the United States. Corporate tax software The seabed and subsoil of those submarine areas that are adjacent to U. Corporate tax software S. Corporate tax software territorial waters and over which the United States has exclusive rights under international law to explore and exploit natural resources. Corporate tax software The term does not include U. Corporate tax software S. Corporate tax software possessions and territories or U. Corporate tax software S. Corporate tax software airspace. Corporate tax software Days of Presence in the United States You are treated as present in the United States on any day you are physically present in the country at any time during the day. Corporate tax software However, there are exceptions to this rule. Corporate tax software Do not count the following as days of presence in the United States for the substantial presence test. Corporate tax software Days you commute to work in the United States from a residence in Canada or Mexico if you regularly commute from Canada or Mexico. Corporate tax software Days you are in the United States for less than 24 hours when you are in transit between two places outside the United States. Corporate tax software Days you are in the United States as a crew member of a foreign vessel. Corporate tax software Days you are unable to leave the United States because of a medical condition that arose while you are in the United States. Corporate tax software Days you are an exempt individual. Corporate tax software The specific rules that apply to each of these categories are discussed next. Corporate tax software Regular commuters from Canada or Mexico. Corporate tax software   Do not count the days on which you commute to work in the United States from your residence in Canada or Mexico if you regularly commute from Canada or Mexico. Corporate tax software You are considered to commute regularly if you commute to work in the United States on more than 75% of the workdays during your working period. Corporate tax software   For this purpose, “commute” means to travel to work and return to your residence within a 24-hour period. Corporate tax software “Workdays” are the days on which you work in the United States or Canada or Mexico. Corporate tax software “Working period” means the period beginning with the first day in the current year on which you are physically present in the United States to work and ending on the last day in the current year on which you are physically present in the United States to work. Corporate tax software If your work requires you to be present in the United States only on a seasonal or cyclical basis, your working period begins on the first day of the season or cycle on which you are present in the United States to work and ends on the last day of the season or cycle on which you are present in the United States to work. Corporate tax software You can have more than one working period in a calendar year, and your working period can begin in one calendar year and end in the following calendar year. Corporate tax software Example. Corporate tax software Maria Perez lives in Mexico and works for Compañía ABC in its office in Mexico. Corporate tax software She was assigned to her firm's office in the United States from February 1 through June 1. Corporate tax software On June 2, she resumed her employment in Mexico. Corporate tax software On 69 days, Maria commuted each morning from her home in Mexico to work in Compañía ABC's U. Corporate tax software S. Corporate tax software office. Corporate tax software She returned to her home in Mexico on each of those evenings. Corporate tax software On 7 days, she worked in her firm's Mexico office. Corporate tax software For purposes of the substantial presence test, Maria does not count the days she commuted to work in the United States because those days equal more than 75% of the workdays during the working period (69 workdays in the United States divided by 76 workdays in the working period equals 90. Corporate tax software 8%). Corporate tax software Days in transit. Corporate tax software   Do not count the days you are in the United States for less than 24 hours and you are in transit between two places outside the United States. Corporate tax software You are considered to be in transit if you engage in activities that are substantially related to completing travel to your foreign destination. Corporate tax software For example, if you travel between airports in the United States to change planes en route to your foreign destination, you are considered to be in transit. Corporate tax software However, you are not considered to be in transit if you attend a business meeting while in the United States. Corporate tax software This is true even if the meeting is held at the airport. Corporate tax software Crew members. Corporate tax software   Do not count the days you are temporarily present in the United States as a regular crew member of a foreign vessel (boat or ship) engaged in transportation between the United States and a foreign country or a U. Corporate tax software S. Corporate tax software possession. Corporate tax software However, this exception does not apply if you otherwise engage in any trade or business in the United States on those days. Corporate tax software Medical condition. Corporate tax software   Do not count the days you intended to leave, but could not leave the United States because of a medical condition or problem that arose while you were in the United States. Corporate tax software Whether you intended to leave the United States on a particular day is determined based on all the facts and circumstances. Corporate tax software For example, you may be able to establish that you intended to leave if your purpose for visiting the United States could be accomplished during a period that is not long enough to qualify you for the substantial presence test. Corporate tax software However, if you need an extended period of time to accomplish the purpose of your visit and that period would qualify you for the substantial presence test, you would not be able to establish an intent to leave the United States before the end of that extended period. Corporate tax software   In the case of an individual who is judged mentally incompetent, proof of intent to leave the United States can be determined by analyzing the individual's pattern of behavior before he or she was judged mentally incompetent. Corporate tax software   If you qualify to exclude days of presence because of a medical condition, you must file a fully completed Form 8843 with the IRS. Corporate tax software See Form 8843 , later. Corporate tax software   You cannot exclude any days of presence in the United States under the following circumstances. Corporate tax software You were initially prevented from leaving, were then able to leave, but remained in the United States beyond a reasonable period for making arrangements to leave. Corporate tax software You returned to the United States for treatment of a medical condition that arose during a prior stay. Corporate tax software The condition existed before your arrival in the United States and you were aware of the condition. Corporate tax software It does not matter whether you needed treatment for the condition when you entered the United States. Corporate tax software Exempt individual. Corporate tax software   Do not count days for which you are an exempt individual. Corporate tax software The term “exempt individual” does not refer to someone exempt from U. Corporate tax software S. Corporate tax software tax, but to anyone in the following categories. Corporate tax software An individual temporarily present in the United States as a foreign government-related individual under an “A” or “G” visa. Corporate tax software A teacher or trainee temporarily present in the United States under a “J” or “Q” visa, who substantially complies with the requirements of the visa. Corporate tax software A student temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa, who substantially complies with the requirements of the visa. Corporate tax software A professional athlete temporarily in the United States to compete in a charitable sports event. Corporate tax software   The specific rules for each of these four categories (including any rules on the length of time you will be an exempt individual) are discussed next. Corporate tax software Foreign government-related individuals. Corporate tax software   A foreign government-related individual is an individual (or a member of the individual's immediate family) who is temporarily present in the United States: As a full-time employee of an international organization, By reason of diplomatic status, or By reason of a visa (other than a visa that grants lawful permanent residence) that the Secretary of the Treasury determines represents full-time diplomatic or consular status. Corporate tax software Note. Corporate tax software You are considered temporarily present in the United States regardless of the actual amount of time you are present in the United States. Corporate tax software    An international organization is any public international organization that the President of the United States has designated by Executive Order as being entitled to the privileges, exemptions, and immunities provided for in the International Organizations Act. Corporate tax software An individual is a full-time employee if his or her work schedule meets the organization's standard full-time work schedule. Corporate tax software   An individual is considered to have full-time diplomatic or consular status if he or she: Has been accredited by a foreign government that is recognized by the United States, Intends to engage primarily in official activities for that foreign government while in the United States, and Has been recognized by the President, Secretary of State, or a consular officer as being entitled to that status. Corporate tax software Note. Corporate tax software If you are present in the United States under an “A” or “G” visa you are considered a foreign government-related individual (with full-time diplomatic or consular status). Corporate tax software None of your days count for purposes of the substantial presence test. Corporate tax software   Members of the immediate family include the individual's spouse and unmarried children (whether by blood or adoption) but only if the spouse's or unmarried children's visa statuses are derived from and dependent on the exempt individual's visa classification. Corporate tax software Unmarried children are included only if they: Are under 21 years of age, Reside regularly in the exempt individual's household, and Are not members of another household. Corporate tax software Teachers and trainees. Corporate tax software   A teacher or trainee is an individual, other than a student, who is temporarily in the United States under a “J” or “Q” visa and substantially complies with the requirements of that visa. Corporate tax software You are considered to have substantially complied with the visa requirements if you have not engaged in activities that are prohibited by U. Corporate tax software S. Corporate tax software immigration laws and could result in the loss of your visa status. Corporate tax software   Also included are immediate family members of exempt teachers and trainees. Corporate tax software See the definition of immediate family, earlier, under Foreign government-related individuals . Corporate tax software   You will not be an exempt individual as a teacher or trainee in 2013 if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years. Corporate tax software However, you will be an exempt individual if all of the following conditions are met. Corporate tax software You were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years, A foreign employer paid all of your compensation during 2013, and A foreign employer paid all of your compensation during each of the preceding 6 years you were present in the United States as a teacher or trainee. Corporate tax software A foreign employer includes an office or place of business of an American entity in a foreign country or a U. Corporate tax software S. Corporate tax software possession. Corporate tax software   If you qualify to exclude days of presence as a teacher or trainee, you must file a fully completed Form 8843 with the IRS. Corporate tax software See Form 8843 , later. Corporate tax software Example. Corporate tax software Carla was temporarily in the United States during the year as a teacher on a “J” visa. Corporate tax software Her compensation for the year was paid by a foreign employer. Corporate tax software Carla was treated as an exempt teacher for the previous 2 years but her compensation was not paid by a foreign employer. Corporate tax software She will not be considered an exempt individual for the current year because she was exempt as a teacher for at least 2 of the past 6 years. Corporate tax software If her compensation for the past 2 years had been paid by a foreign employer, she would be an exempt individual for the current year. Corporate tax software Students. Corporate tax software   A student is any individual who is temporarily in the United States on an “F,” “J,” “M,” or “Q” visa and who substantially complies with the requirements of that visa. Corporate tax software You are considered to have substantially complied with the visa requirements if you have not engaged in activities that are prohibited by U. Corporate tax software S. Corporate tax software immigration laws and could result in the loss of your visa status. Corporate tax software   Also included are immediate family members of exempt students. Corporate tax software See the definition of immediate family, earlier, under Foreign government-related individuals . Corporate tax software   You will not be an exempt individual as a student in 2013 if you have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless you meet both of the following requirements. Corporate tax software You establish that you do not intend to reside permanently in the United States. Corporate tax software You have substantially complied with the requirements of your visa. Corporate tax software The facts and circumstances to be considered in determining if you have demonstrated an intent to reside permanently in the United States include, but are not limited to, the following. Corporate tax software Whether you have maintained a closer connection to a foreign country (discussed later). Corporate tax software Whether you have taken affirmative steps to change your status from nonimmigrant to lawful permanent resident as discussed later under Closer Connection to a Foreign Country . Corporate tax software   If you qualify to exclude days of presence as a student, you must file a fully completed Form 8843 with the IRS. Corporate tax software See Form 8843 , later. Corporate tax software Professional athletes. Corporate tax software   A professional athlete who is temporarily in the United States to compete in a charitable sports event is an exempt individual. Corporate tax software A charitable sports event is one that meets the following conditions. Corporate tax software The main purpose is to benefit a qualified charitable organization. Corporate tax software The entire net proceeds go to charity. Corporate tax software Volunteers perform substantially all the work. Corporate tax software   In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in a sports event. Corporate tax software You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. Corporate tax software   If you qualify to exclude days of presence as a professional athlete, you must file a fully completed Form 8843 with the IRS. Corporate tax software See Form 8843 , next. Corporate tax software Form 8843. Corporate tax software   If you exclude days of presence in the United States because you fall into any of the following categories, you must file a fully completed Form 8843. Corporate tax software You were unable to leave the United States as planned because of a medical condition or problem. Corporate tax software You were temporarily in the United States as a teacher or trainee on a “J” or “Q” visa. Corporate tax software You were temporarily in the United States as a student on an “F,” “J,” “M,” or “Q” visa. Corporate tax software You were a professional athlete competing in a charitable sports event. Corporate tax software Attach Form 8843 to your 2013 income tax return. Corporate tax software If you do not have to file a return, send Form 8843 to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, by the due date for filing Form 1040NR or Form 1040NR-EZ. Corporate tax software The due date for filing is discussed in chapter 7. Corporate tax software If you do not timely file Form 8843, you cannot exclude the days you were present in the United States as a professional athlete or because of a medical condition that arose while you were in the United States. Corporate tax software This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements. Corporate tax software Closer Connection to a Foreign Country Even if you meet the substantial presence test, you can be treated as a nonresident alien if you: Are present in the United States for less than 183 days during the year, Maintain a tax home in a foreign country during the year, and Have a closer connection during the year to one foreign country in which you have a tax home than to the United States (unless you have a closer connection to two foreign countries, discussed next). Corporate tax software Closer connection to two foreign countries. Corporate tax software   You can demonstrate that you have a closer connection to two foreign countries (but not more than two) if you meet all of the following conditions. Corporate tax software You maintained a tax home beginning on the first day of the year in one foreign country. Corporate tax software You changed your tax home during the year to a second foreign country. Corporate tax software You continued to maintain your tax home in the second foreign country for the rest of the year. Corporate tax software You had a closer connection to each foreign country than to the United States for the period during which you maintained a tax home in that foreign country. Corporate tax software You are subject to tax as a resident under the tax laws of either foreign country for the entire year or subject to tax as a resident in both foreign countries for the period during which you maintained a tax home in each foreign country. Corporate tax software Tax home. Corporate tax software   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Corporate tax software Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. Corporate tax software If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Corporate tax software If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Corporate tax software   For determining whether you have a closer connection to a foreign country, your tax home must also be in existence for the entire current year, and must be located in the same foreign country to which you are claiming to have a closer connection. Corporate tax software Foreign country. Corporate tax software   In determining whether you have a closer connection to a foreign country, the term “foreign country” means: Any territory under the sovereignty of the United Nations or a government other than that of the United States, The territorial waters of the foreign country (determined under U. Corporate tax software S. Corporate tax software law), The seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the foreign country and over which the foreign country has exclusive rights under international law to explore and exploit natural resources, and Possessions and territories of the United States. Corporate tax software Establishing a closer connection. Corporate tax software   You will be considered to have a closer connection to a foreign country than the United States if you or the IRS establishes that you have maintained more significant contacts with the foreign country than with the United States. Corporate tax software In determining whether you have maintained more significant contacts with the foreign country than with the United States, the facts and circumstances to be considered include, but are not limited to, the following. Corporate tax software The country of residence you designate on forms and documents. Corporate tax software The types of official forms and documents you file, such as Form W-9, Form W-8BEN, or Form W-8ECI. Corporate tax software The location of: Your permanent home, Your family, Your personal belongings, such as cars, furniture, clothing, and jewelry, Your current social, political, cultural, professional, or religious affiliations, Your business activities (other than those that constitute your tax home), The jurisdiction in which you hold a driver's license, The jurisdiction in which you vote, and Charitable organizations to which you contribute. Corporate tax software It does not matter whether your permanent home is a house, an apartment, or a furnished room. Corporate tax software It also does not matter whether you rent or own it. Corporate tax software It is important, however, that your home be available at all times, continuously, and not solely for short stays. Corporate tax software When you cannot have a closer connection. Corporate tax software   You cannot claim you have a closer connection to a foreign country if either of the following applies: You personally applied, or took other steps during the year, to change your status to that of a permanent resident, or You had an application pending for adjustment of status during the current year. Corporate tax software Steps to change your status to that of a permanent resident include, but are not limited to, the filing of the following forms. Corporate tax software Form I-508, Waiver of Rights, Privileges, Exemptions and Immunities Form I-485, Application to Register Permanent Residence or Adjust Status Form I-130, Petition for Alien Relative, on your behalf Form I-140, Immigrant Petition for Alien Worker, on your behalf Form ETA-750, Application for Alien Employment Certification, on your behalf Form DS-230, Application for Immigrant Visa and Alien Registration Form 8840. Corporate tax software   You must attach a fully completed Form 8840 to your income tax return to claim you have a closer connection to a foreign country or countries. Corporate tax software   If you do not have to file a return, send the form to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, by the due date for filing Form 1040NR or Form 1040NR-EZ. Corporate tax software The due date for filing is discussed later in chapter 7. Corporate tax software   If you do not timely file Form 8840, you cannot claim a closer connection to a foreign country or countries. Corporate tax software This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements. Corporate tax software Effect of Tax Treaties The rules given here to determine if you are a U. Corporate tax software S. Corporate tax software resident do not override tax treaty definitions of residency. Corporate tax software If you are a dual-resident taxpayer, you can still claim the benefits under an income tax treaty. Corporate tax software A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Corporate tax software The income tax treaty between the two countries must contain a provision that provides for resolution of conflicting claims of residence (tie-breaker rule). Corporate tax software If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U. Corporate tax software S. Corporate tax software income tax. Corporate tax software For purposes other than figuring your tax, you will be treated as a U. Corporate tax software S. Corporate tax software resident. Corporate tax software For example, the rules discussed here do not affect your residency time periods as discussed later under Dual-Status Aliens . Corporate tax software Information to be reported. Corporate tax software   If you are a dual-resident taxpayer and you claim treaty benefits, you must file a return by the due date (including extensions) using Form 1040NR or Form 1040NR-EZ, and compute your tax as a nonresident alien. Corporate tax software You must also attach a fully completed Form 8833 if you determine your residency under a tax treaty and receive payments or income items totaling more than $100,000. Corporate tax software You may also have to attach Form 8938 (discussed in chapter 7). Corporate tax software See Reporting Treaty Benefits Claimed in chapter 9 for more information on reporting treaty benefits. Corporate tax software Dual-Status Aliens You can be both a nonresident alien and a resident alien during the same tax year. Corporate tax software This usually occurs in the year you arrive in or depart from the United States. Corporate tax software Aliens who have dual status should see chapter 6 for information on filing a return for a dual-status tax year. Corporate tax software First Year of Residency If you are a U. Corporate tax software S. Corporate tax software resident for the calendar year, but you were not a U. Corporate tax software S. Corporate tax software resident at any time during the preceding calendar year, you are a U. Corporate tax software S. Corporate tax software resident only for the part of the calendar year that begins on the residency starting date. Corporate tax software You are a nonresident alien for the part of the year before that date. Corporate tax software Residency starting date under substantial presence test. Corporate tax software   If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year. Corporate tax software However, you do not have to count up to 10 days of actual presence in the United States if on those days you establish that: You had a closer connection to a foreign country than to the United States, and Your tax home was in that foreign country. Corporate tax software See Closer Connection to a Foreign Country , earlier. Corporate tax software   In determining whether you can exclude up to 10 days, the following rules apply. Corporate tax software You can exclude days from more than one period of presence as long as the total days in all periods are not more than 10. Corporate tax software You cannot exclude any days in a period of consecutive days of presence if all the days in that period cannot be excluded. Corporate tax software Although you can exclude up to 10 days of presence in determining your residency starting date, you must include those days when determining whether you meet the substantial presence test. Corporate tax software Example. Corporate tax software Ivan Ivanovich is a citizen of Russia. Corporate tax software He came to the United States for the first time on January 6, 2013, to attend a business meeting and returned to Russia on January 10, 2013. Corporate tax software His tax home remained in Russia. Corporate tax software On March 1, 2013, he moved to the United States and resided here for the rest of the year. Corporate tax software Ivan is able to establish a closer connection to Russia for the period January 6–10. Corporate tax software Thus, his residency starting date is March 1. Corporate tax software Statement required to exclude up to 10 days of presence. Corporate tax software   You must file a statement with the IRS if you are excluding up to 10 days of presence in the United States for purposes of your residency starting date. Corporate tax software You must sign and date this statement and include a declaration that it is made under penalties of perjury. Corporate tax software The statement must contain the following information (as applicable). Corporate tax software Your name, address, U. Corporate tax software S. Corporate tax software taxpayer identification number (if any), and U. Corporate tax software S. Corporate tax software visa number (if any). Corporate tax software Your passport number and the name of the country that issued your passport. Corporate tax software The tax year for which the statement applies. Corporate tax software The first day that you were present in the United States during the year. Corporate tax software The dates of the days you are excluding in figuring your first day of residency. Corporate tax software Sufficient facts to establish that you have maintained your tax home in and a closer connection to a foreign country during the period you are excluding. Corporate tax software   Attach the required statement to your income tax return. Corporate tax software If you are not required to file a return, send the statement to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, on or before the due date for filing Form 1040NR or Form 1040NR-EZ. Corporate tax software The due date for filing is discussed in chapter 7. Corporate tax software   If you do not file the required statement as explained above, you cannot claim that you have a closer connection to a foreign country or countries. Corporate tax software Therefore, your first day of residency will be the first day you are present in the United States. Corporate tax software This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements. Corporate tax software Residency starting date under green card test. Corporate tax software   If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident. Corporate tax software   If you meet both the substantial presence test and the green card test, your residency starting date is the earlier of the first day during the year you are present in the United States under the substantial presence test or as a lawful permanent resident. Corporate tax software Residency during the preceding year. Corporate tax software   If you were a U. Corporate tax software S. Corporate tax software resident during any part of the preceding calendar year and you are a U. Corporate tax software S. Corporate tax software resident for any part of the current year, you will be considered a U. Corporate tax software S. Corporate tax software resident at the beginning of the current year. Corporate tax software This applies whether you are a resident under the substantial presence test or green card test. Corporate tax software Example. Corporate tax software Robert Bach is a citizen of Switzerland. Corporate tax software He came to the United States as a U. Corporate tax software S. Corporate tax software resident for the first time on May 1, 2012, and remained until November 5, 2012, when he returned to Switzerland. Corporate tax software Robert came back to the United States on March 5, 2013, as a lawful permanent resident and still resides here. Corporate tax software In calendar year 2013, Robert's U. Corporate tax software S. Corporate tax software residency is deemed to begin on January 1, 2013, because he qualified as a resident in calendar year 2012. Corporate tax software First-Year Choice If you do not meet either the green card test or the substantial presence test for 2012 or 2013 and you did not choose to be treated as a resident for part of 2012, but you meet the substantial presence test for 2014, you can choose to be treated as a U. Corporate tax software S. Corporate tax software resident for part of 2013. Corporate tax software To make this choice, you must: Be present in the United States for at least 31 days in a row in 2013, and Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of 2013. Corporate tax software For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States. Corporate tax software When counting the days of presence in (1) and (2) above, do not count the days you were in the United States under any of the exceptions discussed earlier under Days of Presence in the United States. Corporate tax software If you make the first-year choice, your residency starting date for 2013 is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. Corporate tax software You are treated as a U. Corporate tax software S. Corporate tax software resident for the rest of the year. Corporate tax software If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. Corporate tax software If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period. Corporate tax software Note. Corporate tax software You do not have to be married to make this choice. Corporate tax software Example 1. Corporate tax software Juan DaSilva is a citizen of the Philippines. Corporate tax software He came to the United States for the first time on November 1, 2013, and was here on 31 consecutive days (from November 1 through December 1, 2013). Corporate tax software Juan returned to the Philippines on December 1 and came back to the United States on December 17, 2013. Corporate tax software He stayed in the United States for the rest of the year. Corporate tax software During 2014, Juan was a resident of the United States under the substantial presence test. Corporate tax software Juan can make the first-year choice for 2013 because he was in the United States in 2013 for a period of 31 days in a row (November 1 through December 1) and for at least 75% of the days following (and including) the first day of his 31-day period (46 total days of presence in the United States divided by 61 days in the period from November 1 through December 31 equals 75. Corporate tax software 4%). Corporate tax software If Juan makes the first-year choice, his residency starting date will be November 1, 2013. Corporate tax software Example 2. Corporate tax software The facts are the same as in Example 1, except that Juan was also absent from the United States on December 24, 25, 29, 30, and 31. Corporate tax software He can make the first-year choice for 2013 because up to 5 days of absence are considered days of presence for purposes of the 75% requirement. Corporate tax software Statement required to make the first-year choice for 2013. Corporate tax software   You must attach a statement to Form 1040 to make the first-year choice for 2013. Corporate tax software The statement must contain your name and address and specify the following. Corporate tax software That you are making the first-year choice for 2013. Corporate tax software That you were not a resident in 2012. Corporate tax software That you are a resident under the substantial presence test in 2014. Corporate tax software The number of days of presence in the United States during 2014. Corporate tax software The date or dates of your 31-day period of presence and the period of continuous presence in the United States during 2013. Corporate tax software The date or dates of absence from the United States during 2013 that you are treating as days of presence. Corporate tax software You cannot file Form 1040 or the statement until you meet the substantial presence test for 2014. Corporate tax software If you have not met the test for 2014 as of April 15, 2014, you can request an extension of time for filing your 2013 Form 1040 until a reasonable period after you have met that test. Corporate tax software To request an extension to file until October 15, 2014, use Form 4868, Application for Automatic Extension of Time To File U. Corporate tax software S. Corporate tax software Individual Income Tax Return. Corporate tax software You can file the paper form or use one of the electronic filing options explained in the Form 4868 instructions. Corporate tax software You should pay with this extension the amount of tax you expect to owe for 2013 figured as if you were a nonresident alien the entire year. Corporate tax software You can use Form 1040NR or Form 1040NR-EZ to figure the tax. Corporate tax software Enter the tax on Form 4868. Corporate tax software If you do not pay the tax due, you will be charged interest on any tax not paid by the regular due date of your return, and you may be charged a penalty on the late payment. Corporate tax software   Once you make the first-year choice, you may not revoke it without the approval of the Internal Revenue Service. Corporate tax software   If you do not follow the procedures discussed here for making the first-year choice, you will be treated as a nonresident alien for all of 2013. Corporate tax software However, this does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing procedures and significant steps to comply with the procedures. Corporate tax software Choosing Resident Alien Status If you are a dual-status alien, you can choose to be treated as a U. Corporate tax software S. Corporate tax software resident for the entire year if all of the following apply. Corporate tax software You were a nonresident alien at the beginning of the year. Corporate tax software You are a resident alien or U. Corporate tax software S. Corporate tax software citizen at the end of the year. Corporate tax software You are married to a U. Corporate tax software S. Corporate tax software citizen or resident alien at the end of the year. Corporate tax software Your spouse joins you in making the choice. Corporate tax software This includes situations in which both you and your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year. Corporate tax software Note. Corporate tax software If you are single at the end of the year, you cannot make this choice. Corporate tax software If you make this choice, the following rules apply. Corporate tax software You and your spouse are treated as U. Corporate tax software S. Corporate tax software residents for the entire year for income tax purposes. Corporate tax software You and your spouse are taxed on worldwide income. Corporate tax software You and your spouse must file a joint return for the year of the choice. Corporate tax software Neither you nor your spouse can make this choice for any later tax year, even if you are separated, divorced, or remarried. Corporate tax software The special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you. Corporate tax software Note. Corporate tax software A similar choice is available if, at the end of the tax year, one spouse is a nonresident alien and the other spouse is a U. Corporate tax software S. Corporate tax software citizen or resident. Corporate tax software See Nonresident Spouse Treated as a Resident , later. Corporate tax software If you previously made that choice and it is still in effect, you do not need to make the choice explained here. Corporate tax software Making the choice. Corporate tax software   You should attach a statement signed by both spouses to your joint return for the year of the choice. Corporate tax software The statement must contain the following information. Corporate tax software A declaration that you both qualify to make the choice and that you choose to be treated as U. Corporate tax software S. Corporate tax software residents for the entire tax year. Corporate tax software The name, address, and taxpayer identification number (SSN or ITIN) of each spouse. Corporate tax software (If one spouse died, include the name and address of the person who makes the choice for the deceased spouse. Corporate tax software )   You generally make this choice when you file your joint return. Corporate tax software However, you also can make the choice by filing Form 1040X, Amended U. Corporate tax software S. Corporate tax software Individual Income Tax Return. Corporate tax software Attach Form 1040, Form 1040A, or Form 1040EZ and print “Amended” across the top of the corrected return. Corporate tax software If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. Corporate tax software   You generally must file the amended joint return within 3 years from the date you filed your original U. Corporate tax software S. Corporate tax software income tax return or 2 years from the date you paid your income tax for that year, whichever is later. Corporate tax software Last Year of Residency If you were a U. Corporate tax software S. Corporate tax software resident in 2013 but are not a U. Corporate tax software S. Corporate tax software resident during any part of 2014, you cease to be a U. Corporate tax software S. Corporate tax software resident on your residency termination date. Corporate tax software Your residency termination date is December 31, 2013, unless you qualify for an earlier date as discussed next. Corporate tax software Earlier residency termination date. Corporate tax software   You may qualify for a residency termination date that is earlier than December 31. Corporate tax software This date is: The last day in 2013 that you are physically present in the United States, if you met the substantial presence test, The first day in 2013 that you are no longer a lawful permanent resident of the United States, if you met the green card test, or The later of (1) or (2), if you met both tests. Corporate tax software You can use this date only if, for the remainder of 2013, your tax home was in a foreign country and you had a closer connection to that foreign country. Corporate tax software See Closer Connection to a Foreign Country , earlier. Corporate tax software    A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. Corporate tax software See Expatriation Tax in chapter 4. Corporate tax software Termination of residency. Corporate tax software   For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4. Corporate tax software De minimis presence. Corporate tax software   If you are a U. Corporate tax software S. Corporate tax software resident because of the substantial presence test and you qualify to use the earlier residency termination date, you can exclude up to 10 days of actual presence in the United States in determining your residency termination date. Corporate tax software In determining whether you can exclude up to 10 days, the following rules apply. Corporate tax software You can exclude days from more than one period of presence as long as the total days in all periods are not more than 10. Corporate tax software You cannot exclude any days in a period of consecutive days of presence if all the days in that period cannot be excluded. Corporate tax software Although you can exclude up to 10 days of presence in determining your residency termination date, you must include those days when determining whether you meet the substantial presence test. Corporate tax software Example. Corporate tax software Lola Bovary is a citizen of Malta. Corporate tax software She came to the United States for the first time on March 1, 2013, and resided here until August 25, 2013. Corporate tax software On December 12, 2013, Lola came to the United States for vacation and stayed here until December 16, 2013, when she returned to Malta. Corporate tax software She is able to establish a closer connection to Malta for the period December 12–16. Corporate tax software Lola is not a U. Corporate tax software S. Corporate tax software resident for tax purposes during 2014 and can establish a closer connection to Malta for the rest of calendar year 2013. Corporate tax software Lola is a U. Corporate tax software S. Corporate tax software resident under the substantial presence test for 2013 because she was present in the United States for 183 days (178 days for the period March 1 to August 25 plus 5 days in December). Corporate tax software Lola's residency termination date is August 25, 2013. Corporate tax software Residency during the next year. Corporate tax software   If you are a U. Corporate tax software S. Corporate tax software resident during any part of 2014 and you are a resident during any part of 2013, you will be treated as a resident through the end of 2013. Corporate tax software This applies whether you have a closer connection to a foreign country than the United States during 2013, and whether you are a resident under the substantial presence test or green card test. Corporate tax software Statement required to establish your residency termination date. Corporate tax software   You must file a statement with the IRS to establish your residency termination date. Corporate tax software You must sign and date this statement and include a declaration that it is made under penalties of perjury. Corporate tax software The statement must contain the following information (as applicable). Corporate tax software Your name, address, U. Corporate tax software S. Corporate tax software taxpayer identification number (if any), and U. Corporate tax software S. Corporate tax software visa number (if any). Corporate tax software Your passport number and the name of the country that issued your passport. Corporate tax software The tax year for which the statement applies. Corporate tax software The last day that you were present in the United States during the year. Corporate tax software Sufficient facts to establish that you have maintained your tax home in, and that you have a closer connection to, a foreign country following your last day of presence in the United States during the year or following the abandonment or rescission of your status as a lawful permanent resident during the year. Corporate tax software The date that your status as a lawful permanent resident was abandoned or rescinded. Corporate tax software Sufficient facts (including copies of relevant documents) to establish that your status as a lawful permanent resident has been abandoned or rescinded. Corporate tax software If you can exclude days under the de minimis presence rule, discussed earlier, include the dates of the days you are excluding and sufficient facts to establish that you have maintained your tax home in and that you have a closer connection to a foreign country during the period you are excluding. Corporate tax software   Attach the required statement to your income tax return. Corporate tax software If you are not required to file a return, send the statement to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, on or before the due date for filing Form 1040NR or Form 1040NR-EZ. Corporate tax software The due date for filing is discussed in chapter 7. Corporate tax software   If you do not file the required statement as explained above, you cannot claim that you have a closer connection to a foreign country or countries. Corporate tax software This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements. Corporate tax software Nonresident Spouse Treated as a Resident If, at the end of your tax year, you are married and one spouse is a U. Corporate tax software S. Corporate tax software citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U. Corporate tax software S. Corporate tax software resident. Corporate tax software This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year. Corporate tax software If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. Corporate tax software Neither you nor your spouse can claim under any tax treaty not to be a U. Corporate tax software S. Corporate tax software resident. Corporate tax software You are both taxed on worldwide income. Corporate tax software You must file a joint income tax return for the year you make the choice, but you and your spouse can file joint or separate returns in later years. Corporate tax software If you file a joint return under this provision, the special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you. Corporate tax software Example. Corporate tax software Bob and Sharon Williams are married and both are nonresident aliens at the beginning of the year. Corporate tax software In June, Bob became a resident alien and remained a resident for the rest of the year. Corporate tax software Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return. Corporate tax software Bob and Sharon must file a joint return for the year they make the choice, but they can file either joint or separate returns for later years. Corporate tax software How To Make the Choice Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. Corporate tax software It should contain the following information. Corporate tax software A declaration that one spouse was a nonresident alien and the other spouse a U. Corporate tax software S. Corporate tax software citizen or resident alien on the last day of your tax year, and that you choose to be treated as U. Corporate tax software S. Corporate tax software residents for the entire tax year. Corporate tax software The name, address, and identification number of each spouse. Corporate tax software (If one spouse died, include the name and address of the person making the choice for the deceased spouse. Corporate tax software ) Amended return. Corporate tax software   You generally make this choice when you file your joint return. Corporate tax software However, you can also make the choice by filing a joint amended return on Form 1040X. Corporate tax software Attach Form 1040, Form 1040A, or Form 1040EZ and print “Amended” across the top of the corrected return. Corporate tax software If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. Corporate tax software   You generally must file the amended joint return within 3 years from the date you filed your original U. Corporate tax software S. Corporate tax software income tax return or 2 years from the date you paid your income tax for that year, whichever is later. Corporate tax software Suspending the Choice The choice to be treated as a resident alien is suspended for any tax year (after the tax year you made the choice) if neither spouse is a U. Corporate tax software S. Corporate tax software citizen or resident alien at any time during the tax year. Corporate tax software This means each spouse must file a separate return as a nonresident alien for that year if either meets the filing requirements for nonresident aliens discussed in chapter 7. Corporate tax software Example. Corporate tax software Dick Brown was a resident alien on December 31, 2010, and married to Judy, a nonresident alien. Corporate tax software They chose to treat Judy as a resident alien and filed joint 2010 and 2011 income tax returns. Corporate tax software On January 10, 2012, Dick became a nonresident alien. Corporate tax software Judy had remained a nonresident alien throughout the period. Corporate tax software Dick and Judy could have filed joint or separate returns for 2012 because Dick was a resident alien for part of that year. Corporate tax software However, because neither Dick nor Judy is a resident alien at any time during 2013, their choice is suspended for that year. Corporate tax software If either meets the filing requirements for nonresident aliens discussed in chapter 7, they must file separate returns as nonresident aliens for 2013. Corporate tax software If Dick becomes a resident alien again in 2014, their choice is no longer suspended. Corporate tax software Ending the Choice Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier under Suspending the Choice ) or ended in one of the following ways. Corporate tax software If the choice is ended in one of the following ways, neither spouse can make this choice in any later tax year. Corporate tax software Revocation. Corporate tax software Either spouse can revoke the choice for any tax year, provided he or she makes the revocation by the due date for filing the tax return for that tax year. Corporate tax software The spouse who revokes the choice must attach a signed statement declaring that the choice is being revoked. Corporate tax software The statement must include the name, address, and identification number of each spouse. Corporate tax software (If one spouse dies, include the name and address of the person who is revoking the choice for the deceased spouse. Corporate tax software ) The statement also must include a list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income. Corporate tax software File the statement as follows. Corporate tax software If the spouse revoking the choice must file a return, attach the statement to the return for the first year the revocation applies. Corporate tax software If the spouse revoking the choice does not have to file a return, but does file a return (for example, to obtain a refund), attach the statement to the return. Corporate tax software If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where you filed the last joint return. Corporate tax software Death. Corporate tax software The death of either spouse ends the choice, beginning with the first tax year following the year the spouse died. Corporate tax software However, if the surviving spouse is a U. Corporate tax software S. Corporate tax software citizen or resident and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used. Corporate tax software If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died. Corporate tax software Legal separation. Corporate tax software A legal separation under a decree of divorce or separate maintenance ends the choice as of the beginning of the tax year in which the legal separation occurs. Corporate tax software Inadequate records. Corporate tax software The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records. Corporate tax software Aliens From American Samoa or Puerto Rico If you are a nonresident alien in the United States and a bona fide resident of American Samoa or Puerto Rico during the entire tax year, you are taxed, with certain exceptions, according to the rules for resident aliens of the United States. Corporate tax software For more information, see Bona Fide Residents of American Samoa or Puerto Rico in chapter 5. Corporate tax software If you are a nonresident alien from American Samoa or Puerto Rico who does not qualify as a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you are taxed as a nonresident alien. Corporate tax software Resident aliens who formerly were bona fide residents of American Samoa or Puerto Rico are taxed according to the rules for resident aliens. Corporate tax software Prev  Up  Next   Home   More Online Publications