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Do State Taxes

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Do State Taxes

Do state taxes 7. Do state taxes   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. Do state taxes Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. Do state taxes Useful Items - You may want to see: Forms (and Instructions) 1040 U. Do state taxes S. Do state taxes Individual Income Tax Return 1040A U. Do state taxes S. Do state taxes Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Do state taxes S. Do state taxes Nonresident Alien Income Tax Return 1040NR-EZ U. Do state taxes S. Do state taxes Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. Do state taxes What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. Do state taxes Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. Do state taxes The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). Do state taxes Under U. Do state taxes S. Do state taxes 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. Do state taxes Extensions of time to file. Do state taxes   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. Do state taxes You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). Do state taxes Use Form 4868 to get the extension to October 15. Do state taxes In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Do state taxes To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Do state taxes Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Do state taxes   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. Do state taxes S. Do state taxes citizens and resident aliens abroad who expect to qualify for special tax treatment). Do state taxes    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. Do state taxes You may be able to file your return electronically. Do state taxes See IRS e-file in your form instructions. Do state taxes Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. Do state taxes If you are any of the following, you must file a return. Do state taxes A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. Do state taxes (But see Exceptions , later. Do state taxes ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. Do state taxes S. Do state taxes sources, or Your income is exempt from income tax. Do state taxes A nonresident alien individual not engaged in a trade or business in the United States with U. Do state taxes S. Do state taxes income on which the tax liability was not satisfied by the withholding of tax at the source. Do state taxes A representative or agent responsible for filing the return of an individual described in (1) or (2). Do state taxes A fiduciary for a nonresident alien estate or trust. Do state taxes You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. Do state taxes For example, if you have no U. Do state taxes S. Do state taxes business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. Do state taxes For information on what is timely, see When to file for deductions and credits under When To File, later. Do state taxes Exceptions. Do state taxes   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. Do state taxes Your only U. Do state taxes S. Do state taxes trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. Do state taxes You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. Do state taxes Even if you have left the United States and filed a Form 1040-C, U. Do state taxes S. Do state taxes Departing Alien Income Tax Return, on departure, you still must file an annual U. Do state taxes S. Do state taxes income tax return. Do state taxes If you are married and both you and your spouse are required to file, you must each file a separate return. Do state taxes Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. Do state taxes You do not claim any dependents. Do state taxes You cannot be claimed as a dependent on someone else's U. Do state taxes S. Do state taxes tax return. Do state taxes If you were married, you do not claim an exemption for your spouse. Do state taxes Your taxable income is less than $100,000. Do state taxes The only itemized deduction you can claim is for state and local income taxes. Do state taxes Note. Do state taxes Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. Do state taxes See chapter 5. Do state taxes Your only U. Do state taxes S. Do state taxes source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. Do state taxes (If you had taxable interest or dividend income, you cannot use this form. Do state taxes ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. Do state taxes You are not claiming any tax credits. Do state taxes This is not an “expatriation return. Do state taxes ” See Expatriation Tax in chapter 4. Do state taxes The only taxes you owe are: The income tax from the Tax Table. Do state taxes The social security and Medicare tax from Form 4137 or Form 8919. Do state taxes You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. Do state taxes You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. Do state taxes If you do not meet all of the above conditions, you must file Form 1040NR. Do state taxes When To File If you are an employee and you receive wages subject to U. Do state taxes S. Do state taxes income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. Do state taxes For the 2013 calendar year, file your return by April 15, 2014. Do state taxes If you are not an employee who receives wages subject to U. Do state taxes S. Do state taxes income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Do state taxes For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. Do state taxes ) Extensions of time to file. Do state taxes   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. Do state taxes For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). Do state taxes You must file the extension by the regular due date of your return. Do state taxes   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). Do state taxes To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Do state taxes Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Do state taxes When to file for deductions and credits. Do state taxes   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. Do state taxes For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. Do state taxes However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. Do state taxes The allowance of the following credits is not affected by this time requirement. Do state taxes Credit for withheld taxes. Do state taxes Credit for excise tax on certain uses of gasoline and special fuels. Do state taxes Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. Do state taxes Protective return. Do state taxes   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. Do state taxes S. Do state taxes trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. Do state taxes By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. Do state taxes You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. Do state taxes   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. Do state taxes To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. Do state taxes   You can follow the same procedure if you believe you have no U. Do state taxes S. Do state taxes tax liability because of a U. Do state taxes S. Do state taxes tax treaty. Do state taxes Be sure to also complete item L on page 5 of Form 1040NR. Do state taxes Waiver of filing deadline. Do state taxes   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. Do state taxes S. Do state taxes income tax return (including a protective return) and you cooperate with the IRS in determining your U. Do state taxes S. Do state taxes income tax liability for the tax year for which you did not file a return. Do state taxes Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. Do state taxes  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Do state taxes O. Do state taxes Box 1303 Charlotte, NC 28201-1303 Aliens from the U. Do state taxes S. Do state taxes Virgin Islands. Do state taxes    If you are a bona fide resident of the U. Do state taxes S. Do state taxes Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. Do state taxes S. Do state taxes Virgin Islands and file your income tax returns at the following address. Do state taxes Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. Do state taxes Thomas, VI 00802   Report all income from U. Do state taxes S. Do state taxes sources, as well as income from other sources, on your return. Do state taxes For information on filing U. Do state taxes S. Do state taxes Virgin Islands returns, contact the U. Do state taxes S. Do state taxes Virgin Islands Bureau of Internal Revenue. Do state taxes   Chapter 8 discusses withholding from U. Do state taxes S. Do state taxes wages of U. Do state taxes S. Do state taxes Virgin Islanders. Do state taxes Aliens from Guam or the Commonwealth of the Northern Mariana Islands. Do state taxes   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. Do state taxes Report all income, including income from U. Do state taxes S. Do state taxes sources, on your return. Do state taxes It is not necessary to file a separate U. Do state taxes S. Do state taxes income tax return. Do state taxes    Bona fide residents of Guam should file their Guam returns at the following address. Do state taxes   Department of Revenue and Taxation Government of Guam P. Do state taxes O. Do state taxes Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. Do state taxes   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Do state taxes O. Do state taxes Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. Do state taxes 570, Tax Guide for Individuals With Income From U. Do state taxes S. Do state taxes Possessions, for information on where to file your return. Do state taxes Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. Do state taxes S. Do state taxes Individual Income Tax Return. Do state taxes Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. Do state taxes If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. Do state taxes ) to Form 1040X. Do state taxes Print “Amended” across the top. Do state taxes Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. Do state taxes A return filed before the final due date is considered to have been filed on the due date. Do state taxes Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. Do state taxes FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. Do state taxes The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. Do state taxes The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. Do state taxes However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. Do state taxes A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. Do state taxes Filing requirements. Do state taxes   FinCEN Form 105 filing requirements follow. Do state taxes Recipients. Do state taxes   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. Do state taxes Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. Do state taxes   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. Do state taxes Travelers. Do state taxes   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. Do state taxes Penalties. Do state taxes   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. Do state taxes Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. Do state taxes More information. Do state taxes   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. Do state taxes Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. Do state taxes A resident alien of the United States for any part of the tax year. Do state taxes A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. Do state taxes S. Do state taxes income tax treaty. Do state taxes See Effect of Tax Treaties in chapter 1. Do state taxes A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. Do state taxes See chapter 1 for information about this election. Do state taxes A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. Do state taxes See Publication 570, Tax Guide for Individuals With Income From U. Do state taxes S. Do state taxes Possessions, for a definition of bona fide resident. Do state taxes You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). Do state taxes The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. Do state taxes Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. Do state taxes S. Do state taxes person. Do state taxes You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. Do state taxes More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. Do state taxes Penalties The law provides penalties for failure to file returns or pay taxes as required. Do state taxes Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. Do state taxes You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. Do state taxes If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. Do state taxes Filing late. Do state taxes   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. Do state taxes The penalty is based on the tax not paid by the due date (without regard to extensions). Do state taxes The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. Do state taxes Fraud. Do state taxes   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. Do state taxes Return over 60 days late. Do state taxes   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Do state taxes Exception. Do state taxes   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. Do state taxes Paying tax late. Do state taxes   You will have to pay a failure-to-pay penalty of ½ of 1% (. Do state taxes 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. Do state taxes This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. Do state taxes   The monthly rate of the failure-to-pay penalty is half the usual rate (. Do state taxes 25% instead of . Do state taxes 50%) if an installment agreement is in effect for that month. Do state taxes You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. Do state taxes   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. Do state taxes If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. Do state taxes   This penalty cannot be more than 25% of your unpaid tax. Do state taxes You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. Do state taxes Combined penalties. Do state taxes   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. Do state taxes However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Do state taxes Accuracy-related penalty. Do state taxes   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. Do state taxes The penalty is equal to 20% of the underpayment. Do state taxes The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. Do state taxes The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. Do state taxes Negligence or disregard. Do state taxes   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. Do state taxes Negligence also includes failure to keep adequate books and records. Do state taxes You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. Do state taxes   The term “disregard” includes any careless, reckless, or intentional disregard. Do state taxes Adequate disclosure. Do state taxes   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. Do state taxes See Disclosure statement , later. Do state taxes   This exception will not apply to an item that is attributable to a tax shelter. Do state taxes In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. Do state taxes Substantial understatement of income tax. Do state taxes   You understate your tax if the tax shown on your return is less than the correct tax. Do state taxes The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. Do state taxes However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. Do state taxes   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. Do state taxes However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. Do state taxes Substantial authority. Do state taxes   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. Do state taxes Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. Do state taxes Disclosure statement. Do state taxes   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. Do state taxes You must also have a reasonable basis for treating the item the way you did. Do state taxes   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. Do state taxes   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. Do state taxes Transaction lacking economic substance. Do state taxes   For more information on economic substance, see section 7701(o). Do state taxes Foreign financial asset. Do state taxes   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. Do state taxes Reasonable cause. Do state taxes   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. Do state taxes You must also show that you acted in good faith. Do state taxes This does not apply to a transaction that lacks economic substance. Do state taxes Filing erroneous claim for refund or credit. Do state taxes   You may have to pay a penalty if you file an erroneous claim for refund or credit. Do state taxes The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. Do state taxes However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. Do state taxes The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. Do state taxes Frivolous tax submission. Do state taxes   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. Do state taxes A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. Do state taxes For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. Do state taxes irs. Do state taxes gov/irb/2010-17_irb/ar13. Do state taxes html. Do state taxes   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. Do state taxes This includes altering or striking out the preprinted language above the space provided for your signature. Do state taxes   This penalty is added to any other penalty provided by law. Do state taxes Fraud. Do state taxes   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. Do state taxes Failure to supply taxpayer identification number. Do state taxes   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. Do state taxes You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. Do state taxes   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. Do state taxes The number must be shown on the Form 1099-INT or other statement the bank sends you. Do state taxes If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. Do state taxes (You also may be subject to “backup” withholding of income tax. Do state taxes )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. Do state taxes Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. Do state taxes Prev  Up  Next   Home   More Online Publications
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Understanding your CP23 Notice

We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You have a balance due because of these changes.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully — it will explain how much money you owe on your taxes.
  • Check the list of payments we applied to your account to see if we applied all the payments you made.
  • Correct the copy of your tax return that you kept for your records.
  • Pay the amount you owe by the date on the notice's payment coupon if you agree with the notice.
  • If you disagree with the notice, please contact us at the toll-free number listed on its top right-hand corner (within 60 days of the notice’s date).
  • Make payment arrangements if you can't pay the full amount you owe.

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Answers to Common Questions

What should I do if I find you misapplied a payment or haven't credited a payment that I made?
Contact us with your information at the toll-free number listed on your notice. Please have your documentation (such as cancelled checks, amended return, etc.) ready when you call. Our representative will discuss the issue with you and give you further instructions.

What should I do if I disagree with the changes you made?
Contact us at the toll free number listed on the top right-hand corner of your notice.

How do I adjust my estimated tax payments?
You can adjust your estimated tax payments by completing a Form 1040-ES, Estimated Tax for Individuals. See Publication 505, Tax Withholding and Estimated Tax for more information.

What should I do if I need to make another correction to my tax return?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.

Do I have to pay interest on the amount I owe?
Interest will accrue on the amount you owe unless you pay it by the requested date on the notice's payment coupon.

Do I receive a penalty if I cannot pay the full amount?
Yes. You usually will receive a late payment penalty. Notice 746, Information About Your Notice, Penalty and Interest has more information about penalties and interest.

What happens if I cannot pay the full amount I owe?
You can arrange to make a payment plan with us if you can't pay the full amount you owe.

How can I set up a payment plan?
Call the toll-free number listed on the top right-hand corner of your notice to discuss payment options, or learn more about payment arrangements.

What happens if I don't pay?
We can file a Notice of Federal Tax Lien. The lien gives us a legal claim to your property for payment for your tax debt.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 03-Mar-2014

The Do State Taxes

Do state taxes 1. Do state taxes   Bona Fide Residence Table of Contents Presence TestDays of Presence in the United States or Relevant Possession Significant Connection Tax HomeExceptions Closer ConnectionException for Year of Move Special Rules in the Year of a MoveYear of Moving to a Possession Year of Moving From a Possession Reporting a Change in Bona Fide ResidenceWho Must File Penalty for Not Filing Form 8898 In order to qualify for certain tax benefits (see chapter 3), you must be a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI for the entire tax year. Do state taxes Generally, you are a bona fide resident of one of these possessions (the relevant possession) if, during the tax year, you: Meet the presence test, Do not have a tax home outside the relevant possession, and Do not have a closer connection to the United States or to a foreign country than to the relevant possession. Do state taxes Special rule for members of the U. Do state taxes S. Do state taxes Armed Forces. Do state taxes   If you are a member of the U. Do state taxes S. Do state taxes Armed Forces who qualified as a bona fide resident of the relevant possession in an earlier tax year, your absence from that possession during the current tax year in compliance with military orders will not affect your status as a bona fide resident. Do state taxes Likewise, being in a possession solely in compliance with military orders will not qualify you for bona fide residency. Do state taxes Also see the special income source rule for members of the U. Do state taxes S. Do state taxes Armed Forces in chapter 2, under Compensation for Labor or Personal Services . Do state taxes Special rule for civilian spouse of active duty member of the U. Do state taxes S. Do state taxes Armed Forces. Do state taxes   If you are the civilian spouse of an active duty servicemember, under Military Spouses Residency Relief Act (MSRRA) you can choose to keep your prior residence or domicile for tax purposes (tax residence) when accompanying the servicemember spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U. Do state taxes S. Do state taxes possession. Do state taxes Before relocating, you and your spouse must have the same tax residence. Do state taxes If you are a civilian spouse and choose to keep your prior tax residence after such relocation, the source of income for services performed (for example, wages, salaries, tips, or self-employment) by you is considered to be (the jurisdiction of) the prior tax residence. Do state taxes As a result, the amount of income tax withholding (from Form(s) W-2, Wage and Tax Statement) that you are able to claim on your federal return, as well as the need to file a state or U. Do state taxes S. Do state taxes possession return, may be affected. Do state taxes For more information, consult with state, local, or U. Do state taxes S. Do state taxes possession tax authorities regarding your tax obligations under MSRRA. Do state taxes Presence Test If you are a U. Do state taxes S. Do state taxes citizen or resident alien, you will satisfy the presence test for the entire tax year if you meet one of the following conditions. Do state taxes You were present in the relevant possession for at least 183 days during the tax year. Do state taxes You were present in the relevant possession for at least 549 days during the 3-year period that includes the current tax year and the 2 immediately preceding tax years. Do state taxes During each year of the 3-year period, you must be present in the relevant possession for at least 60 days. Do state taxes You were present in the United States for no more than 90 days during the tax year. Do state taxes You had earned income in the United States of no more than a total of $3,000 and were present for more days in the relevant possession than in the United States during the tax year. Do state taxes Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Do state taxes You had no significant connection to the United States during the tax year. Do state taxes Special rule for nonresident aliens. Do state taxes   Conditions (1) through (5) above do not apply to nonresident aliens of the United States. Do state taxes Instead, nonresident aliens must meet the substantial presence test discussed in chapter 1 of Publication 519. Do state taxes In that discussion, substitute the name of the possession for “United States” and “U. Do state taxes S. Do state taxes ” wherever they appear. Do state taxes Disregard the discussion in that chapter about a Closer Connection to a Foreign Country. Do state taxes Days of Presence in the United States or Relevant Possession Generally, you are treated as being present in the United States or in the relevant possession on any day that you are physically present in that location at any time during the day. Do state taxes Days of presence in a possession. Do state taxes   You are considered to be present in the relevant possession on any of the following days. Do state taxes Any day you are physically present in that possession at any time during the day. Do state taxes Any day you are outside of the relevant possession in order to receive, or to accompany any of the following family members to receive, qualifying medical treatment (see Qualifying Medical Treatment , later). Do state taxes Your parent. Do state taxes Your spouse. Do state taxes Your child, who is your son, daughter, stepson, or stepdaughter. Do state taxes This includes an adopted child or child lawfully placed with you for legal adoption. Do state taxes This also includes a foster child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Do state taxes Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. Do state taxes   If, during a single day, you are physically present: In the United States and in the relevant possession, that day is considered a day of presence in the relevant possession; or In two possessions, that day is considered a day of presence in the possession where your tax home is located (see Tax Home , later). Do state taxes Days of presence in the United States. Do state taxes   You are considered to be present in the United States on any day that you are physically present in the United States at any time during the day. Do state taxes However, do not count the following days as days of presence in the United States. Do state taxes Any day you are temporarily present in the United States in order to receive, or to accompany a parent, spouse, or child who is receiving, qualifying medical treatment. Do state taxes “Child” is defined under item 2c earlier. Do state taxes “Qualifying medical treatment” is defined later. Do state taxes Any day you are temporarily present in the United States because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. Do state taxes Any day you are in the United States for less than 24 hours when you are traveling between two places outside the United States. Do state taxes Any day you are temporarily present in the United States as a professional athlete to compete in a charitable sports event (defined later). Do state taxes Any day you are temporarily in the United States as a student (defined later). Do state taxes Any day you are in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). Do state taxes Qualifying Medical Treatment Such treatment is generally provided by (or under the supervision of) a physician for an illness, injury, impairment, or physical or mental condition. Do state taxes The treatment generally involves: Any period of inpatient care that requires an overnight stay in a hospital or hospice, and any period immediately before or after that inpatient care to the extent it is medically necessary, or Any temporary period of inpatient care in a residential medical care facility for medically necessary rehabilitation services. Do state taxes With respect to each qualifying medical treatment, you must prepare (or obtain) and maintain documentation supporting your claim that such treatment meets the criteria to be considered days of presence in the relevant possession. Do state taxes You must be able to produce this documentation within 30 days if requested by the IRS or tax administrator for the relevant possession. Do state taxes You must keep the following documentation. Do state taxes Records that provide: The patient's name and relationship to you (if the medical treatment is provided to a person you accompany); The name and address of the hospital, hospice, or residential medical care facility where the medical treatment was provided; The name, address, and telephone number of the physician who provided the medical treatment; The date(s) on which the medical treatment was provided; and Receipt(s) of payment for the medical treatment. Do state taxes Signed certification by the providing or supervising physician that the medical treatment met the requirements for being qualified medical treatment, and setting forth: The patient's name, A reasonably detailed description of the medical treatment provided by (or under the supervision of) the physician, The dates on which the medical treatment was provided, and The medical facts that support the physician's certification and determination that the treatment was medically necessary. Do state taxes Charitable Sports Event A charitable sports event is one that meets all of the following conditions. Do state taxes The main purpose is to benefit a qualified charitable organization. Do state taxes The entire net proceeds go to charity. Do state taxes Volunteers perform substantially all the work. Do state taxes In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in the charitable sports event. Do state taxes 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. Do state taxes Student To qualify as a student, you must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by a school described in (1) above or by a state, county, or local government agency. Do state taxes The 5 calendar months do not have to be consecutive. Do state taxes Full-time student. Do state taxes   A full-time student is a person who is enrolled for the number of hours or courses the school considers to be full-time attendance. Do state taxes However, school attendance exclusively at night is not considered full-time attendance. Do state taxes School. Do state taxes   The term “school” includes elementary schools, middle schools, junior and senior high schools, colleges, universities, and technical, trade, and mechanical schools. Do state taxes It does not include on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. Do state taxes Significant Connection One way in which you can meet the presence test is to have no significant connection to the United States during the tax year. Do state taxes This section looks at the factors that determine if a significant connection exists. Do state taxes You are treated as having a significant connection to the United States if you: Have a permanent home in the United States, Are currently registered to vote in any political subdivision of the United States, or Have a spouse or child (see item 2c under Days of presence in a possession , earlier) who is under age 18 whose main home is in the United States, other than: A child who is in the United States because he or she is the child of divorced or legally separated parents and is living with a custodial parent under a custodial decree or multiple support agreement, or A child who is in the United States as a student. Do state taxes For the purpose of determining if you have a significant connection to the United States, the term “spouse” does not include a spouse from whom you are legally separated under a decree of divorce or separate maintenance. Do state taxes Permanent home. Do state taxes   A permanent home generally includes an accommodation such as a house, an apartment, or a furnished room that is either owned or rented by you or your spouse. Do state taxes The dwelling unit must be available at all times, continuously, not only for short stays. Do state taxes Exception for rental property. Do state taxes   If you or your spouse own the dwelling unit and at any time during the tax year it is rented to someone else at fair rental value, it will be considered your permanent home only if you or your spouse use that property for personal purposes for more than the greater of: 14 days, or 10% of the number of days during that tax year that the property is rented to others at a fair rental value. Do state taxes   You are treated as using rental property for personal purposes on any day the property is not being rented to someone else at fair rental value for the entire day. Do state taxes   A day of personal use of a dwelling unit is also any day that the unit is used by any of the following persons. Do state taxes You or any other person who has an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement. Do state taxes A member of your family or a member of the family of any other person who has an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Do state taxes Family includes only brothers and sisters, half-brothers and half-sisters, spouses, ancestors (parents, grandparents, etc. Do state taxes ), and lineal descendants (children, grandchildren, etc. Do state taxes ). Do state taxes Anyone under an arrangement that lets you use some other dwelling unit. Do state taxes Anyone at less than a fair rental price. Do state taxes   However, any day you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Do state taxes Whether your property is used mainly for this purpose is determined in light of all the facts and circumstances, such as: The amount of time you devote to repair and maintenance work, How often during the tax year you perform repair and maintenance work on this property, and The presence and activities of companions. Do state taxes   See Publication 527, Residential Rental Property, for more information about personal use of a dwelling unit. Do state taxes Example—significant connection. Do state taxes Ann Green, a U. Do state taxes S. Do state taxes citizen, is a sales representative for a company based in Guam. Do state taxes Ann lives with her spouse and young children in their house in Guam, where she is also registered to vote. Do state taxes Her business travel requires her to spend 120 days in the United States and another 120 days in foreign countries. Do state taxes When traveling on business, Ann generally stays at hotels but sometimes stays with her brother, who lives in the United States. Do state taxes Ann's stays are always of short duration and she asks her brother's permission to stay with him. Do state taxes Her brother's house is not her permanent home, nor does she have any other accommodations in the United States that would be considered her permanent home. Do state taxes Ann satisfies the presence test because she has no significant connection to the United States. Do state taxes Example—presence test. Do state taxes Eric and Wanda Brown live for part of the year in a condominium, which they own, in the CNMI. Do state taxes They also own a house in Maine where they live for 120 days every year to be near their grown children and grandchildren. Do state taxes The Browns are retired and their only income is from pension payments, dividends, interest, and social security benefits. Do state taxes In 2013, they spent only 175 days in the CNMI because of a 70-day vacation to Europe and Asia. Do state taxes Thus, in 2013, the Browns were not present in the CNMI for at least 183 days, were present in the United States for more than 90 days, and had a significant connection to the United States because of their permanent home. Do state taxes However, the Browns still satisfied the presence test with respect to the CNMI because they had no earned income in the United States and were physically present for more days in the CNMI than in the United States. Do state taxes Tax Home You will have met the tax home test if you did not have a tax home outside the relevant possession during any part of the tax year. Do state taxes Your tax home is your regular or main place of business, employment, or post of duty regardless of where you maintain your family home. Do state taxes 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. Do state taxes If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Do state taxes Exceptions There are some special rules regarding tax home that provide exceptions to the general rule stated above. Do state taxes Students and Government Officials Disregard the following days when determining whether you have a tax home outside the relevant possession. Do state taxes Days you were temporarily in the United States as a student (see Student under Days of Presence in the United States or Relevant Possession, earlier). Do state taxes Days you were in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). Do state taxes Seafarers You will not be considered to have a tax home outside the relevant possession solely because you are employed on a ship or other seafaring vessel that is predominantly used in local and international waters. Do state taxes For this purpose, a vessel is considered to be predominantly used in local and international waters if, during the tax year, the total amount of time it is used in international waters and in the waters within 3 miles of the relevant possession exceeds the total amount of time it is used in the territorial waters of the United States, another possession, or any foreign country. Do state taxes Example. Do state taxes In 2013, Sean Silverman, a U. Do state taxes S. Do state taxes citizen, was employed by a fishery and spent 250 days at sea on a fishing vessel. Do state taxes When not at sea, Sean lived with his spouse at a house they own in American Samoa. Do state taxes The fishing vessel on which Sean works departs and arrives at various ports in American Samoa, other possessions, and foreign countries, but was in international or American Samoa's local waters for 225 days. Do state taxes For purposes of determining bona fide residency of American Samoa, Sean will not be considered to have a tax home outside that possession solely because of his employment on board the fishing vessel. Do state taxes Year of Move If you are moving to or from a possession during the year, you may still be able to meet the tax home test for that year. Do state taxes See Special Rules in the Year of a Move , later in this chapter. Do state taxes Closer Connection You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to the relevant U. Do state taxes S. Do state taxes possession. Do state taxes You will be considered to have a closer connection to a possession than to the United States or to a foreign country if you have maintained more significant contacts with the possession(s) than with the United States or foreign country. Do state taxes In determining if you have maintained more significant contacts with the relevant possession, the facts and circumstances to be considered include, but are not limited to, the following. Do state taxes The location of your permanent home. Do state taxes The location of your family. Do state taxes The location of personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family. Do state taxes The location of social, political, cultural, professional, or religious organizations with which you have a current relationship. Do state taxes The location where you conduct your routine personal banking activities. Do state taxes The location where you conduct business activities (other than those that go into determining your tax home). Do state taxes The location of the jurisdiction in which you hold a driver's license. Do state taxes The location of the jurisdiction in which you vote. Do state taxes The location of charitable organizations to which you contribute. Do state taxes The country of residence you designate on forms and documents. Do state taxes The types of official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification. Do state taxes Your connections to the relevant possession will be compared to the total of your connections with the United States and foreign countries. Do state taxes Your answers to the questions on Form 8898, Part III, will help establish the jurisdiction to which you have a closer connection. Do state taxes Example—closer connection to the United States. Do state taxes Marcos Reyes, a U. Do state taxes S. Do state taxes citizen, moved to Puerto Rico in 2013 to start an investment consulting and venture capital business. Do state taxes His spouse and two teenage children remained in California to allow the children to complete high school. Do state taxes He traveled back to the United States regularly to see his spouse and children, to engage in business activities, and to take vacations. Do state taxes Marcos had an apartment available for his full-time use in Puerto Rico, but remained a joint owner of the residence in California where his spouse and children lived. Do state taxes Marcos and his family had automobiles and personal belongings such as furniture, clothing, and jewelry located at both residences. Do state taxes Although Marcos was a member of the Puerto Rico Chamber of Commerce, he also belonged to and had current relationships with social, political, cultural, and religious organizations in California. Do state taxes Marcos received mail in California, including bank and brokerage statements and credit card bills. Do state taxes He conducted his personal banking activities in California. Do state taxes He held a California driver's license and was also registered to vote there. Do state taxes Based on all of the particular facts and circumstances pertaining to Marcos, he was not a bona fide resident of Puerto Rico in 2013 because he had a closer connection to the United States than to Puerto Rico. Do state taxes Closer connection to another possession. Do state taxes   Generally, possessions are not treated as foreign countries. Do state taxes Therefore, a closer connection to a possession other than the relevant possession will not be treated as a closer connection to a foreign country. Do state taxes Example—tax home and closer connection to possession. Do state taxes Pearl Blackmon, a U. Do state taxes S. Do state taxes citizen, is a permanent employee of a hotel in Guam, but works only during the tourist season. Do state taxes For the remainder of each year, Pearl lives with her spouse and children in the CNMI, where she has no outside employment. Do state taxes Most of Pearl's personal belongings, including her automobile, are located in the CNMI. Do state taxes She is registered to vote in, and has a driver's license issued by, the CNMI. Do state taxes She does her personal banking in the CNMI and routinely lists her CNMI address as her permanent address on forms and documents. Do state taxes Pearl satisfies the presence test with respect to both Guam and the CNMI. Do state taxes She satisfies the tax home test with respect to Guam, because her regular place of business is in Guam. Do state taxes Pearl satisfies the closer connection test with respect to both Guam and the CNMI, because she does not have a closer connection to the United States or to any foreign country. Do state taxes Pearl is considered a bona fide resident of Guam, the location of her tax home. Do state taxes Exception for Year of Move If you are moving to or from a possession during the year, you may still be able to meet the closer connection test for that year. Do state taxes See Special Rules in the Year of a Move , next. Do state taxes Special Rules in the Year of a Move If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year. Do state taxes Year of Moving to a Possession You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following. Do state taxes You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move. Do state taxes In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year. Do state taxes You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move. Do state taxes Example. Do state taxes Dwight Wood, a U. Do state taxes S. Do state taxes citizen, files returns on a calendar year basis. Do state taxes He lived in the United States from January 2007 through May 2013. Do state taxes In June 2013 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. Do state taxes From July 1 through December 31, 2013 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. Do state taxes If he is a bona fide resident of the USVI during all of 2014 through 2016, he will satisfy the tax home and closer connection tests for 2013. Do state taxes If Dwight also satisfies the presence test in 2013, he will be considered a bona fide resident of the USVI for the entire 2013 tax year. Do state taxes Year of Moving From a Possession In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following. Do state taxes You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence. Do state taxes In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year. Do state taxes You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move. Do state taxes Example. Do state taxes Jean Aspen, a U. Do state taxes S. Do state taxes citizen, files returns on a calendar year basis. Do state taxes From January 2010 through December 2012, Jean was a bona fide resident of American Samoa. Do state taxes Jean continued to live there until September 6, 2013, when she accepted new employment and moved to Hawaii. Do state taxes Jean's principal place of business from January 1 through September 5, 2013 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. Do state taxes If Jean continues to live and work in Hawaii for the rest of 2013 and throughout years 2014 through 2016, she will satisfy the tax home and closer connection tests for 2013 with respect to American Samoa. Do state taxes If Jean also satisfies the presence test in 2013, she will be considered a bona fide resident for the entire 2013 tax year. Do state taxes Puerto Rico You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you: Are a U. Do state taxes S. Do state taxes citizen, Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move, Cease to be a bona fide resident of Puerto Rico during the tax year, Cease to have a tax home in Puerto Rico during the tax year, and Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico. Do state taxes Example. Do state taxes Randy White, a U. Do state taxes S. Do state taxes citizen, files returns on a calendar year basis. Do state taxes For all of 2011 and 2012, Randy was a bona fide resident of Puerto Rico. Do state taxes From January through April 2013, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. Do state taxes On May 5, 2013, Randy moved and changed his tax home to Nevada. Do state taxes Later that year he established a closer connection to the United States than to Puerto Rico. Do state taxes Randy did not satisfy the presence test for 2013 with respect to Puerto Rico, nor the tax home or closer connection tests. Do state taxes However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2013, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2013. Do state taxes Reporting a Change in Bona Fide Residence If you became or ceased to be a bona fide resident of a U. Do state taxes S. Do state taxes possession, you may need to file Form 8898. Do state taxes This applies to the U. Do state taxes S. Do state taxes possessions of American Samoa, the CNMI, Guam, Puerto Rico, and the USVI. Do state taxes Who Must File You must file Form 8898 for the tax year in which you meet both of the following conditions. Do state taxes Your worldwide gross income (defined below) in that tax year is more than $75,000. Do state taxes You meet one of the following. Do state taxes You take a position for U. Do state taxes S. Do state taxes tax purposes that you became a bona fide resident of a U. Do state taxes S. Do state taxes possession after a tax year for which you filed a U. Do state taxes S. Do state taxes income tax return as a citizen or resident alien of the United States but not as a bona fide resident of the possession. Do state taxes You are a citizen or resident alien of the United States who takes the position for U. Do state taxes S. Do state taxes tax purposes that you ceased to be a bona fide resident of a U. Do state taxes S. Do state taxes possession after a tax year for which you filed an income tax return (with the IRS, the possession tax authority, or both) as a bona fide resident of the possession. Do state taxes You take the position for U. Do state taxes S. Do state taxes tax purposes that you became a bona fide resident of Puerto Rico or American Samoa after a tax year for which you were required to file an income tax return as a bona fide resident of the CNMI, Guam, or the USVI. Do state taxes Worldwide gross income. Do state taxes   Worldwide gross income means all income you received in the form of money, goods, property, and services, including any income from sources outside the United States (even if you can exclude part or all of it) and before any deductions, credits, or rebates. Do state taxes Example. Do state taxes You are a U. Do state taxes S. Do state taxes citizen who moved to the CNMI in December 2012, but did not become a bona fide resident of that possession until the 2013 tax year. Do state taxes You must file Form 8898 for the 2013 tax year if your worldwide gross income for that year was more than $75,000. Do state taxes Penalty for Not Filing Form 8898 If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. Do state taxes You may also owe this penalty if you do not include all the information required by the form or the form includes incorrect information. Do state taxes In either case, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect. Do state taxes This is in addition to any criminal penalty that may be imposed. Do state taxes Prev  Up  Next   Home   More Online Publications