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File A 1040x Amended Return

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File A 1040x Amended Return

File a 1040x amended return Publication 1544 - Main Content Table of Contents Why Report These Payments? Who Must File Form 8300?What Payments Must Be Reported? What Is Cash? Taxpayer Identification Number (TIN) What Is a Related Transaction? What About Suspicious Transactions? When, Where, and What To File Examples Penalties How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). File a 1040x amended return Why Report These Payments? Drug dealers and smugglers often use large cash payments to “launder” money from illegal activities. File a 1040x amended return Laundering means converting “dirty” or illegally-gained money to “clean” money. File a 1040x amended return The government can often trace this laundered money through the payments you report. File a 1040x amended return Laws passed by Congress require you to report these payments. File a 1040x amended return Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities. File a 1040x amended return The USA PATRIOT Act of 2001 increased the scope of these laws to help trace funds used for terrorism. File a 1040x amended return Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. File a 1040x amended return For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. File a 1040x amended return Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. File a 1040x amended return However, you do not have to file Form 8300 if the transaction is not related to your trade or business. File a 1040x amended return For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. File a 1040x amended return Transaction defined. File a 1040x amended return    A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. File a 1040x amended return Person defined. File a 1040x amended return   A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. File a 1040x amended return   Exempt organizations, including employee plans, are also “persons. File a 1040x amended return ” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. File a 1040x amended return Foreign transactions. File a 1040x amended return   You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. File a 1040x amended return However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. File a 1040x amended return Bail received by court clerks. File a 1040x amended return   Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: Any federal offense involving a controlled substance, Racketeering, Money laundering, and Any state offense substantially similar to (1), (2), or (3) above. File a 1040x amended return For more information about the rules that apply to court clerks, see Section 1. File a 1040x amended return 6050I-2 of the Income Tax Regulations. File a 1040x amended return What Payments Must Be Reported? You must file Form 8300 to report cash paid to you if it is: Over $10,000, Received as: One lump sum of over $10,000, Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000, or Other previously unreportable payments that cause the total cash received within a 12-month period to total more than $10,000, Received in the course of your trade or business, Received from the same buyer (or agent), and Received in a single transaction or in related transactions (defined later). File a 1040x amended return What Is Cash? Cash is: The coins and currency of the United States (and any other country), and A cashier's check, bank draft, traveler's check, or money order you receive, if it has a face amount of $10,000 or less and you receive it in: A designated reporting transaction (defined later), or Any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300. File a 1040x amended return Cash may include a cashier's check even if it is called a “treasurer's check” or “bank check. File a 1040x amended return ” Cash does not include a check drawn on an individual's personal account. File a 1040x amended return A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. File a 1040x amended return These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Form 104. File a 1040x amended return Example 1. File a 1040x amended return You are a coin dealer. File a 1040x amended return Bob Green buys gold coins from you for $13,200. File a 1040x amended return He pays for them with $6,200 in U. File a 1040x amended return S. File a 1040x amended return currency and a cashier's check having a face amount of $7,000. File a 1040x amended return The cashier's check is treated as cash. File a 1040x amended return You have received more than $10,000 cash and must file Form 8300 for this transaction. File a 1040x amended return Example 2. File a 1040x amended return You are a retail jeweler. File a 1040x amended return Mary North buys an item of jewelry from you for $12,000. File a 1040x amended return She pays for it with a personal check payable to you in the amount of $9,600 and traveler's checks totaling $2,400. File a 1040x amended return Because the personal check is not treated as cash, you have not received more than $10,000 cash in the transaction. File a 1040x amended return You do not have to file Form 8300. File a 1040x amended return Example 3. File a 1040x amended return You are a boat dealer. File a 1040x amended return Emily Jones buys a boat from you for $16,500. File a 1040x amended return She pays for it with a cashier's check payable to you in the amount of $16,500. File a 1040x amended return The cashier's check is not treated as cash because its face amount is more than $10,000. File a 1040x amended return You do not have to file Form 8300 for this transaction. File a 1040x amended return Designated Reporting Transaction A designated reporting transaction is the retail sale of any of the following: A consumer durable, such as an automobile or boat. File a 1040x amended return A consumer durable is property, other than land or buildings, that: Is suitable for personal use, Can reasonably be expected to last at least 1 year under ordinary use, Has a sales price of more than $10,000, and Can be seen or touched (tangible property). File a 1040x amended return For example, a $20,000 car is a consumer durable, but a $20,000 dump truck or factory machine is not. File a 1040x amended return The car is a consumer durable even if you sell it to a buyer who will use it in a business. File a 1040x amended return A collectible (for example, a work of art, rug, antique, metal, gem, stamp, or coin). File a 1040x amended return Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction (or related transactions) is more than $10,000. File a 1040x amended return To figure the total sales price of all items sold for a trip or entertainment event, you include the sales price of items such as airfare, hotel rooms, and admission tickets. File a 1040x amended return Example. File a 1040x amended return You are a travel agent. File a 1040x amended return Ed Johnson asks you to charter a passenger airplane to take a group to a sports event in another city. File a 1040x amended return He also asks you to book hotel rooms and admission tickets for the group. File a 1040x amended return In payment, he gives you two money orders, each for $6,000. File a 1040x amended return You have received more than $10,000 cash in this designated reporting transaction. File a 1040x amended return You must file Form 8300. File a 1040x amended return Retail sale. File a 1040x amended return   The term “retail sale” means any sale made in the course of a trade or business that consists mainly of making sales to ultimate consumers. File a 1040x amended return   Thus, if your business consists mainly of making sales to ultimate consumers, all sales you make in the course of that business are retail sales. File a 1040x amended return This includes any sales of items that will be resold. File a 1040x amended return Broker or intermediary. File a 1040x amended return   A designated reporting transaction includes the retail sale of items (1), (2), or (3) of the preceding list, even if the funds are received by a broker or other intermediary, rather than directly by the seller. File a 1040x amended return Exceptions to Definition of Cash A cashier's check, bank draft, traveler's check, or money order you received in a designated reporting transaction is not treated as cash if one of the following exceptions applies. File a 1040x amended return Exception for certain bank loans. File a 1040x amended return   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is the proceeds from a bank loan. File a 1040x amended return As proof that it is from a bank loan, you may rely on a copy of the loan document, a written statement or lien instruction from the bank, or similar proof. File a 1040x amended return Example. File a 1040x amended return You are a car dealer. File a 1040x amended return Mandy White buys a new car from you for $11,500. File a 1040x amended return She pays you with $2,000 of U. File a 1040x amended return S. File a 1040x amended return currency and a cashier's check for $9,500 payable to you and her. File a 1040x amended return You can tell that the cashier's check is the proceeds of a bank loan because it includes instructions to you to have a lien put on the car as security for the loan. File a 1040x amended return For this reason, the cashier's check is not treated as cash. File a 1040x amended return You do not have to file Form 8300 for the transaction. File a 1040x amended return Exception for certain installment sales. File a 1040x amended return   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is received in payment on a promissory note or an installment sales contract (including a lease that is considered a sale for federal tax purposes). File a 1040x amended return However, this exception applies only if: You use similar notes or contracts in other sales to ultimate consumers in the ordinary course of your trade or business, and The total payments for the sale that you receive on or before the 60th day after the sale are 50% or less of the purchase price. File a 1040x amended return Exception for certain down payment plans. File a 1040x amended return   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if you received it in payment for a consumer durable or collectible, and all three of the following statements are true. File a 1040x amended return You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the date of sale. File a 1040x amended return You receive it more than 60 days before the date of sale. File a 1040x amended return You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. File a 1040x amended return Exception for travel and entertainment. File a 1040x amended return   A cashier's check, bank draft, traveler's check, or money order received for travel or entertainment is not treated as cash if all three of the following statements are true. File a 1040x amended return You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the earliest date that any travel or entertainment item (such as airfare) is furnished for the trip or entertainment event. File a 1040x amended return You receive it more than 60 days before the date on which the final payment is due. File a 1040x amended return You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. File a 1040x amended return Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. File a 1040x amended return If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. File a 1040x amended return If you do not know a person's TIN, you have to ask for it. File a 1040x amended return You may be subject to penalties for an incorrect or missing TIN. File a 1040x amended return There are three types of TINs. File a 1040x amended return The TIN for an individual, including a sole proprietor, is the individual's social security number (SSN). File a 1040x amended return The TIN for a nonresident alien individual who needs a TIN but is not eligible to get an SSN is an IRS individual taxpayer identification number (ITIN). File a 1040x amended return An ITIN has nine digits, similar to an SSN. File a 1040x amended return The TIN for other persons, including corporations, partnerships, and estates, is the employer identification number (EIN). File a 1040x amended return Exception. File a 1040x amended return   You are not required to provide the TIN of a person who is a nonresident alien individual or a foreign organization if that person or foreign organization: Does not have income effectively connected with the conduct of a U. File a 1040x amended return S. File a 1040x amended return trade or business; Does not have an office or place of business, or a fiscal or paying agent in the United States; Does not file a federal tax return; Does not furnish a withholding certificate described in §1. File a 1040x amended return 1441-1(e)(2) or (3) or 1. File a 1040x amended return 1441-5(c)(2)(iv) or (3)(iii) to the extent required under 1. File a 1040x amended return 1441-1(e)(4)(vii); Does not have to furnish a TIN on any return, statement, or other document as required by the income tax regulations under section 897 or 1445; or In the case of a nonresident alien individual, the individual has not chosen to file a joint federal income tax return with a spouse who is a U. File a 1040x amended return S. File a 1040x amended return citizen or resident. File a 1040x amended return What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. File a 1040x amended return If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. File a 1040x amended return For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. File a 1040x amended return Because they total $12,000 (more than $10,000), you must file Form 8300. File a 1040x amended return More than 24 hours between transactions. File a 1040x amended return   Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. File a 1040x amended return   For example, you are a travel agent. File a 1040x amended return A client pays you $8,000 in cash for a trip. File a 1040x amended return Two days later, the same client pays you $3,000 more in cash to include another person on the trip. File a 1040x amended return These are related transactions, and you must file Form 8300 to report them. File a 1040x amended return What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious. File a 1040x amended return A transaction is suspicious if it appears that a person is trying to cause you not to file Form 8300 or is trying to cause you to file a false or incomplete Form 8300, or if there is a sign of possible illegal activity. File a 1040x amended return If you are suspicious, you are encouraged to call the local IRS Criminal Investigation Division as soon as possible. File a 1040x amended return Or, you can call the FinCEN Financial Institution Hotline toll free at 1-866-556-3974. File a 1040x amended return When, Where, and What To File The amount you receive and when you receive it determine when you must file. File a 1040x amended return Generally, you must file Form 8300 within 15 days after receiving a payment. File a 1040x amended return If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. File a 1040x amended return More than one payment. File a 1040x amended return   In some transactions, the buyer may arrange to pay you in cash installment payments. File a 1040x amended return If the first payment is more than $10,000, you must file Form 8300 within 15 days. File a 1040x amended return If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. File a 1040x amended return When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. File a 1040x amended return   After you file Form 8300, you must start a new count of cash payments received from that buyer. File a 1040x amended return If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. File a 1040x amended return You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. File a 1040x amended return   If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. File a 1040x amended return Example. File a 1040x amended return On January 10, you receive a cash payment of $11,000. File a 1040x amended return You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. File a 1040x amended return By January 25, you must file a Form 8300 for the $11,000 payment. File a 1040x amended return By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. File a 1040x amended return Amending a Report?   If you are amending a report, check box 1a at the top of Form 8300. File a 1040x amended return Complete the form in its entirety (Parts I-IV) and include the amended information. File a 1040x amended return Do not attach a copy of the original report. File a 1040x amended return Where to file. File a 1040x amended return   Mail the form to the address given in the Form 8300 instructions. File a 1040x amended return Required statement to buyer. File a 1040x amended return   You must give a written or electronic statement to each person named on any Form 8300 you must file. File a 1040x amended return You can give the statement electronically only if the recipient agrees to receive it in that format. File a 1040x amended return The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. File a 1040x amended return It must state that you are also reporting this information to the IRS. File a 1040x amended return   You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. File a 1040x amended return    You must keep a copy of every Form 8300 you file for 5 years. File a 1040x amended return Examples Example 1. File a 1040x amended return Pat Brown is the sales manager for Small Town Cars. File a 1040x amended return On January 6, 2009, Jane Smith buys a new car from Pat and pays $18,000 in cash. File a 1040x amended return Pat asks for identification from Jane to get the necessary information to complete Form 8300. File a 1040x amended return A filled-in form is shown in this publication. File a 1040x amended return Pat must mail the form to the address shown in the form's instructions by January 21, 2009. File a 1040x amended return He must also send a statement to Jane by January 31, 2010. File a 1040x amended return Example 2. File a 1040x amended return Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. File a 1040x amended return Pat would have to file a Form 8300 by February 26 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2009, is a Saturday). File a 1040x amended return Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. File a 1040x amended return However, he could report it if he felt it was a suspicious transaction. File a 1040x amended return Penalties There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. File a 1040x amended return If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: $25,000, or The amount of cash you received and were required to report (up to $100,000). File a 1040x amended return There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. File a 1040x amended return If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. File a 1040x amended return These dollar amounts are based on Section 3571 of Title 18 of the U. File a 1040x amended return S. File a 1040x amended return Code. File a 1040x amended return The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. File a 1040x amended return This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. File a 1040x amended return Structuring means breaking up a large cash transaction into small cash transactions. File a 1040x amended return How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. File a 1040x amended return By selecting the method that is best for you, you will have quick and easy access to tax help. File a 1040x amended return Free help with your return. File a 1040x amended return   Free help in preparing your return is available nationwide from IRS-certified volunteers. File a 1040x amended return The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. File a 1040x amended return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. File a 1040x amended return To find the nearest VITA or TCE site, visit IRS. File a 1040x amended return gov or call 1-800-906-9887 or 1-800-829-1040. File a 1040x amended return   As part of the TCE program, AARP offers the Tax-Aide counseling program. File a 1040x amended return To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. File a 1040x amended return aarp. File a 1040x amended return org/money/taxaide. File a 1040x amended return   For more information on these programs, go to IRS. File a 1040x amended return gov and enter keyword “VITA” in the upper right-hand corner. File a 1040x amended return Internet. File a 1040x amended return You can access the IRS website at IRS. File a 1040x amended return gov 24 hours a day, 7 days a week to: Check the status of your 2011 refund. File a 1040x amended return Go to IRS. File a 1040x amended return gov and click on Where's My Refund. File a 1040x amended return Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. File a 1040x amended return If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). File a 1040x amended return Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. File a 1040x amended return E-file your return. File a 1040x amended return Find out about commercial tax preparation and e-file services available free to eligible taxpayers. File a 1040x amended return Download forms, including talking tax forms, instructions, and publications. File a 1040x amended return Order IRS products online. File a 1040x amended return Research your tax questions online. File a 1040x amended return Search publications online by topic or keyword. File a 1040x amended return Use the online Internal Revenue Code, regulations, or other official guidance. File a 1040x amended return View Internal Revenue Bulletins (IRBs) published in the last few years. File a 1040x amended return Figure your withholding allowances using the withholding calculator online at  www. File a 1040x amended return irs. File a 1040x amended return gov/individuals. File a 1040x amended return Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at  www. File a 1040x amended return irs. File a 1040x amended return gov/individuals. File a 1040x amended return Sign up to receive local and national tax news by email. File a 1040x amended return Get information on starting and operating a small business. File a 1040x amended return Phone. File a 1040x amended return Many services are available by phone. File a 1040x amended return   Ordering forms, instructions, and publications. File a 1040x amended return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. File a 1040x amended return You should receive your order within 10 days. File a 1040x amended return Asking tax questions. File a 1040x amended return Call the IRS with your tax questions at 1-800-829-1040. File a 1040x amended return Solving problems. File a 1040x amended return You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. File a 1040x amended return An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. File a 1040x amended return Call your local Taxpayer Assistance Center for an appointment. File a 1040x amended return To find the number, go to www. File a 1040x amended return irs. File a 1040x amended return gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File a 1040x amended return TTY/TDD equipment. File a 1040x amended return If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. File a 1040x amended return TeleTax topics. File a 1040x amended return Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. File a 1040x amended return Refund information. File a 1040x amended return You can check the status of your refund on the new IRS phone app. File a 1040x amended return Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. File a 1040x amended return IRS2Go is a new way to provide you with information and tools. File a 1040x amended return To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). File a 1040x amended return Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. File a 1040x amended return If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). File a 1040x amended return Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. File a 1040x amended return If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. File a 1040x amended return Other refund information. File a 1040x amended return To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. File a 1040x amended return Evaluating the quality of our telephone services. File a 1040x amended return To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. File a 1040x amended return One method is for a second IRS representative to listen in on or record random telephone calls. File a 1040x amended return Another is to ask some callers to complete a short survey at the end of the call. File a 1040x amended return Walk-in. File a 1040x amended return Many products and services are available on a walk-in basis. File a 1040x amended return   Products. File a 1040x amended return You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File a 1040x amended return Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. File a 1040x amended return Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. File a 1040x amended return Services. File a 1040x amended return You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. File a 1040x amended return An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. File a 1040x amended return If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. File a 1040x amended return No appointment is necessary—just walk in. File a 1040x amended return If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. File a 1040x amended return A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. File a 1040x amended return If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. File a 1040x amended return All other issues will be handled without an appointment. File a 1040x amended return To find the number of your local office, go to www. File a 1040x amended return irs. File a 1040x amended return gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. File a 1040x amended return Mail. File a 1040x amended return You can send your order for forms, instructions, and publications to the address below. File a 1040x amended return You should receive a response within 10 days after your request is received. File a 1040x amended return  Internal Revenue Service 1201 N. File a 1040x amended return Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. File a 1040x amended return   The Taxpayer Advocate Service (TAS) is your voice at the IRS. File a 1040x amended return Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. File a 1040x amended return We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. File a 1040x amended return Remember, the worst thing you can do is nothing at all. File a 1040x amended return   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. File a 1040x amended return You face (or your business is facing) an immediate threat of adverse action. File a 1040x amended return You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. File a 1040x amended return   If you qualify for our help, we’ll do everything we can to get your problem resolved. File a 1040x amended return You will be assigned to one advocate who will be with you at every turn. File a 1040x amended return We have offices in every state, the District of Columbia, and Puerto Rico. File a 1040x amended return Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. File a 1040x amended return And our services are always free. File a 1040x amended return   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. File a 1040x amended return Our tax toolkit at www. File a 1040x amended return TaxpayerAdvocate. File a 1040x amended return irs. File a 1040x amended return gov can help you understand these rights. File a 1040x amended return   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. File a 1040x amended return irs. File a 1040x amended return gov/advocate. File a 1040x amended return You can also call our toll-free number at 1-877-777-4778. File a 1040x amended return   TAS also handles large-scale or systemic problems that affect many taxpayers. File a 1040x amended return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. File a 1040x amended return irs. File a 1040x amended return gov/advocate. File a 1040x amended return Low Income Taxpayer Clinics (LITCs). File a 1040x amended return   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. File a 1040x amended return Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. File a 1040x amended return These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. File a 1040x amended return Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. File a 1040x amended return For more information and to find a clinic near you, see the LITC page on www. File a 1040x amended return irs. File a 1040x amended return gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. File a 1040x amended return This publication is also available by calling 1-800-829-3676 or at your local IRS office. File a 1040x amended return Free tax services. File a 1040x amended return   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. File a 1040x amended return Learn about free tax information from the IRS, including publications, services, and education and assistance programs. File a 1040x amended return The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. File a 1040x amended return The majority of the information and services listed in this publication are available to you free of charge. File a 1040x amended return If there is a fee associated with a resource or service, it is listed in the publication. File a 1040x amended return   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. File a 1040x amended return DVD for tax products. File a 1040x amended return You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. File a 1040x amended return Prior-year forms, instructions, and publications. File a 1040x amended return Tax Map: an electronic research tool and finding aid. File a 1040x amended return Tax law frequently asked questions. File a 1040x amended return Tax Topics from the IRS telephone response system. File a 1040x amended return Internal Revenue Code—Title 26 of the U. File a 1040x amended return S. File a 1040x amended return Code. File a 1040x amended return Links to other Internet based Tax Research Materials. File a 1040x amended return Fill-in, print, and save features for most tax forms. File a 1040x amended return Internal Revenue Bulletins. File a 1040x amended return Toll-free and email technical support. File a 1040x amended return Two releases during the year. File a 1040x amended return  – The first release will ship the beginning of January. File a 1040x amended return  – The final release will ship the beginning of March. File a 1040x amended return Purchase the DVD from National Technical Information Service (NTIS) at www. File a 1040x amended return irs. File a 1040x amended return gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). File a 1040x amended return This image is too large to be displayed in the current screen. File a 1040x amended return Please click the link to view the image. File a 1040x amended return Fill-in Form 8300 Prev  Up  Next   Home   More Online Publications
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Understanding Tax Return Preparer Credentials

For 2014, any tax professional with an IRS Preparer Tax Identification Number is authorized to prepare federal tax returns. Tax professionals, however, have differing levels of skills, education and expertise. There are several different types of return preparers with credentials.

An important difference in the types of practitioners is “representation rights”. Here is guidance on each credential:

UNLIMITED REPRESENTATION RIGHTS: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment/collection issues, and appeals.

Enrolled Agents – People with this credential are licensed by the IRS and specifically trained in federal tax planning, preparation and representation. Enrolled agents hold the most expansive license IRS grants and must pass a suitability check, as well as a three-part Special Enrollment Examination, a comprehensive exam that covers individual tax, business tax and representation issues. They complete 72 hours of continuing education every 3 years. For more information on enrolled agents, see Publication 4693-A, A Guide to the Enrolled Agent Program.

Certified Public Accountants – People with this credential are licensed by state boards of accountancy, the District of Columbia, and U.S. territories, and have passed the Uniform CPA Examination. They also must meet education, experience, and good character requirements established by their boards of accountancy. In addition, CPAs must comply with ethical requirements as well as complete specified levels of continuing education in order to maintain an active CPA license. CPAs can offer a range of services; some CPAs specialize in tax preparation and planning.

Attorneys – People with this credential are licensed by state courts or their designees, such as the state bar. Generally, requirements include completion of a degree in law, passage of an ethics and bar exam and on-going continuing education. Attorneys can offer a range of services; some attorneys specialize in tax preparation and planning.

LIMITED REPRESENTATION RIGHTS: Preparers without any of the above credentials (also known as “unenrolled preparers”) have limited practice rights and may only represent clients whose returns they prepared and signed and only at the initial audit level.

NOTE: Registered Tax Return Preparers – Certain preparers became RTRPs under an IRS program that IRS is no longer able to enforce due to a District Court injunction. RTRPs passed an IRS competency test on Form 1040 tax preparation.

REMINDER: Everyone described above must have an IRS issued preparer tax identification number (PTIN) in order to legally prepare your tax return for compensation. Make certain your preparer has one and enters it on your return filed with the IRS. They are not required to enter it on the copy they provide you.

Page Last Reviewed or Updated: 10-Feb-2014

The File A 1040x Amended Return

File a 1040x amended return 3. File a 1040x amended return   Exclusions From Gross Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident AliensForeign Earned Income and Housing Amount Nonresident AliensInterest Income Dividend Income Services Performed for Foreign Employer Gambling Winnings From Dog or Horse Racing Gain From the Sale of Your Main Home Scholarships and Fellowship GrantsExpenses that do not qualify. File a 1040x amended return Introduction Resident and nonresident aliens are allowed exclusions from gross income if they meet certain conditions. File a 1040x amended return An exclusion from gross income is generally income you receive that is not included in your U. File a 1040x amended return S. File a 1040x amended return income and is not subject to U. File a 1040x amended return S. File a 1040x amended return tax. File a 1040x amended return This chapter covers some of the more common exclusions allowed to resident and nonresident aliens. File a 1040x amended return Topics - This chapter discusses: Nontaxable interest, Nontaxable dividends, Certain compensation paid by a foreign employer, Gain from sale of home, and Scholarships and fellowship grants. File a 1040x amended return Useful Items - You may want to see: Publication 54 Tax Guide for U. File a 1040x amended return S. File a 1040x amended return Citizens and Resident Aliens Abroad 523 Selling Your Home See chapter 12 for information about getting these publications. File a 1040x amended return Resident Aliens Resident aliens may be able to exclude the following items from their gross income. File a 1040x amended return Foreign Earned Income and Housing Amount If you are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, you may qualify for the foreign earned income exclusion. File a 1040x amended return The exclusion is $97,600 in 2013. File a 1040x amended return In addition, you may be able to exclude or deduct certain foreign housing amounts. File a 1040x amended return You may also qualify if you are a bona fide resident of a foreign country and you are a citizen or national of a country with which the United States has an income tax treaty. File a 1040x amended return For more information, see Publication 54. File a 1040x amended return Foreign country. File a 1040x amended return    A foreign country is any territory under the sovereignty of a government other than that of the United States. File a 1040x amended return   The term “foreign country” includes the country's territorial waters and airspace, but not international waters and the airspace above them. File a 1040x amended return It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. File a 1040x amended return   The term “foreign country” does not include U. File a 1040x amended return S. File a 1040x amended return possessions or territories. File a 1040x amended return It does not include the Antarctic region. File a 1040x amended return Nonresident Aliens Nonresident aliens can exclude the following items from their gross income. File a 1040x amended return Interest Income Interest income that is not connected with a U. File a 1040x amended return S. File a 1040x amended return trade or business is excluded from income if it is from: Deposits (including certificates of deposit) with persons in the banking business, Deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law (if the interest paid or credited can be deducted by the association), and Amounts held by an insurance company under an agreement to pay interest on them. File a 1040x amended return State and local government obligations. File a 1040x amended return   Interest on obligations of a state or political subdivision, the District of Columbia, or a U. File a 1040x amended return S. File a 1040x amended return possession, generally is not included in income. File a 1040x amended return However, interest on certain private activity bonds, arbitrage bonds, and certain bonds not in registered form is included in income. File a 1040x amended return Portfolio interest. File a 1040x amended return   Interest and original issue discount that qualifies as portfolio interest is not subject to NRA withholding. File a 1040x amended return To qualify as portfolio interest, the interest must be paid on obligations issued after July 18, 1984, and otherwise subject to NRA withholding. File a 1040x amended return Note. File a 1040x amended return For obligations issued after March 18, 2012, portfolio interest does not include interest paid on debt that is not in registered form. File a 1040x amended return Before March 19, 2012, portfolio interest included interest on certain registered and nonregistered (bearer) bonds if the obligations meet the requirements described below. File a 1040x amended return Obligations in registered form. File a 1040x amended return   Portfolio interest includes interest paid on an obligation that is in registered form, and for which you have received documentation that the beneficial owner of the obligation is not a United States person. File a 1040x amended return   Generally, an obligation is in registered form if: (i) the obligation is registered as to both principal and any stated interest with the issuer (or its agent) and any transfer of the obligation may be effected only by surrender of the old obligation and reissuance to the new holder; (ii) the right to principal and stated interest with respect to the obligation may be transferred only through a book entry system maintained by the issuer or its agent; or (iii) the obligation is registered as to both principal and stated interest with the issuer or its agent and can be transferred both by surrender and reissuance and through a book entry system. File a 1040x amended return   An obligation that would otherwise be considered to be in registered form is not considered to be in registered form as of a particular time if it can be converted at any time in the future into an obligation that is not in registered form. File a 1040x amended return For more information on whether obligations are considered to be in registered form, see Portfolio interest in Publication 515. File a 1040x amended return Obligations not in registered form. File a 1040x amended return    For obligations issued before March 19, 2012, interest on an obligation that is not in registered form (bearer obligation) is portfolio interest if the obligation is foreign-targeted. File a 1040x amended return A bearer obligation is foreign-targeted if: There are arrangements to ensure that the obligation will be sold, or resold in connection with the original issue, only to a person who is not a United States person, Interest on the obligation is payable only outside the United States and its possessions, and The face of the obligation contains a statement that any United States person who holds the obligation will be subject to limits under the United States income tax laws. File a 1040x amended return   Documentation is not required for interest on bearer obligations to qualify as portfolio interest. File a 1040x amended return In some cases, however, you may need documentation for purposes of Form 1099 reporting and backup withholding. File a 1040x amended return Interest that does not qualify as portfolio interest. File a 1040x amended return   Payments to certain persons and payments of contingent interest do not qualify as portfolio interest. File a 1040x amended return You must withhold at the statutory rate on such payments unless some other exception, such as a treaty provision, applies. File a 1040x amended return Contingent interest. File a 1040x amended return   Portfolio interest does not include contingent interest. File a 1040x amended return Contingent interest is either of the following: Interest that is determined by reference to: Any receipts, sales, or other cash flow of the debtor or related person, Income or profits of the debtor or related person, Any change in value of any property of the debtor or a related person, or Any dividend, partnership distributions, or similar payments made by the debtor or a related person. File a 1040x amended return For exceptions, see Internal Revenue Code section 871(h)(4)(C). File a 1040x amended return Any other type of contingent interest that is identified by the Secretary of the Treasury in regulations. File a 1040x amended return Related persons. File a 1040x amended return   Related persons include the following. File a 1040x amended return Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. File a 1040x amended return ), and lineal descendants (children, grandchildren, etc. File a 1040x amended return ). File a 1040x amended return Any person who is a party to any arrangement undertaken for the purpose of avoiding the contingent interest rules. File a 1040x amended return Certain corporations, partnerships, and other entities. File a 1040x amended return For details, see Nondeductible Loss in chapter 2 of Publication 544. File a 1040x amended return Exception for existing debt. File a 1040x amended return   Contingent interest does not include interest paid or accrued on any debt with a fixed term that was issued: On or before April 7, 1993, or After April 7, 1993, pursuant to a written binding contract in effect on that date and at all times thereafter before that debt was issued. File a 1040x amended return Dividend Income The following dividend income is exempt from the 30% tax. File a 1040x amended return Certain dividends paid by foreign corporations. File a 1040x amended return   There is no 30% tax on U. File a 1040x amended return S. File a 1040x amended return source dividends you receive from a foreign corporation. File a 1040x amended return See Second exception under Dividends in chapter 2 for how to figure the amount of U. File a 1040x amended return S. File a 1040x amended return source dividends. File a 1040x amended return Certain interest-related dividends. File a 1040x amended return   There is no 30% tax on interest-related dividends from sources within the United States that you receive from a mutual fund or other regulated investment company in 2013. File a 1040x amended return The mutual fund will designate in writing which dividends are interest-related dividends. File a 1040x amended return Certain short-term capital gain dividends. File a 1040x amended return   There may not be any 30% tax on certain short-term capital gain dividends from sources within the United States that you receive from a mutual fund or other regulated investment company. File a 1040x amended return The mutual fund will designate in writing which dividends are short-term capital gain dividends. File a 1040x amended return This tax relief will not apply to you if you are present in the United States for 183 days or more during your tax year. File a 1040x amended return Services Performed for Foreign Employer If you were paid by a foreign employer, your U. File a 1040x amended return S. File a 1040x amended return source income may be exempt from U. File a 1040x amended return S. File a 1040x amended return tax, but only if you meet one of the situations discussed next. File a 1040x amended return Employees of foreign persons, organizations, or offices. File a 1040x amended return   Income for personal services performed in the United States as a nonresident alien is not considered to be from U. File a 1040x amended return S. File a 1040x amended return sources and is tax exempt if you meet all three of the following conditions. File a 1040x amended return You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U. File a 1040x amended return S. File a 1040x amended return corporation, a U. File a 1040x amended return S. File a 1040x amended return partnership, or a U. File a 1040x amended return S. File a 1040x amended return citizen or resident. File a 1040x amended return You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year. File a 1040x amended return Your pay for these services is not more than $3,000. File a 1040x amended return If you do not meet all three conditions, your income from personal services performed in the United States is U. File a 1040x amended return S. File a 1040x amended return source income and is taxed according to the rules in chapter 4. File a 1040x amended return   If your pay for these services is more than $3,000, the entire amount is income from a trade or business within the United States. File a 1040x amended return To find if your pay is more than $3,000, do not include any amounts you get from your employer for advances or reimbursements of business travel expenses, if you were required to and did account to your employer for those expenses. File a 1040x amended return If the advances or reimbursements are more than your expenses, include the excess in your pay for these services. File a 1040x amended return   A day means a calendar day during any part of which you are physically present in the United States. File a 1040x amended return Example 1. File a 1040x amended return During 2013, Henry Smythe, a nonresident alien from a nontreaty country, worked for an overseas office of a U. File a 1040x amended return S. File a 1040x amended return partnership. File a 1040x amended return Henry, who uses the calendar year as his tax year, was temporarily present in the United States for 60 days during 2013 performing personal services for the overseas office of the partnership. File a 1040x amended return That office paid him a total gross salary of $2,800 for those services. File a 1040x amended return During 2013, he was not engaged in a trade or business in the United States. File a 1040x amended return The salary is not considered U. File a 1040x amended return S. File a 1040x amended return source income and is exempt from U. File a 1040x amended return S. File a 1040x amended return tax. File a 1040x amended return Example 2. File a 1040x amended return The facts are the same as in Example 1, except that Henry's total gross salary for the services performed in the United States during 2013 was $4,500. File a 1040x amended return He received $2,875 in 2013, and $1,625 in 2014. File a 1040x amended return During 2013, he was engaged in a trade or business in the United States because the compensation for his personal services in the United States was more than $3,000. File a 1040x amended return Henry's salary is U. File a 1040x amended return S. File a 1040x amended return source income and is taxed under the rules in chapter 4. File a 1040x amended return Crew members. File a 1040x amended return   Compensation for services performed by a nonresident alien in connection with the individual's temporary presence in the United States as a regular crew member of a foreign vessel (for example, a boat or ship) engaged in transportation between the United States and a foreign country or U. File a 1040x amended return S. File a 1040x amended return possession is not U. File a 1040x amended return S. File a 1040x amended return source income and is exempt from U. File a 1040x amended return S. File a 1040x amended return tax. File a 1040x amended return This exemption does not apply to compensation for services performed on foreign aircraft. File a 1040x amended return Students and exchange visitors. File a 1040x amended return   Nonresident alien students and exchange visitors present in the United States under “F,” “J,” or “Q” visas can exclude from gross income pay received from a foreign employer. File a 1040x amended return   This group includes bona fide students, scholars, trainees, teachers, professors, research assistants, specialists, or leaders in a field of specialized knowledge or skill, or persons of similar description. File a 1040x amended return It also includes the alien's spouse and minor children if they come with the alien or come later to join the alien. File a 1040x amended return   A nonresident alien temporarily present in the United States under a “J” visa includes an alien individual entering the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. File a 1040x amended return Foreign employer. File a 1040x amended return   A foreign employer is: A nonresident alien individual, foreign partnership, or foreign corporation, or An office or place of business maintained in a foreign country or in a U. File a 1040x amended return S. File a 1040x amended return possession by a U. File a 1040x amended return S. File a 1040x amended return corporation, a U. File a 1040x amended return S. File a 1040x amended return partnership, or an individual who is a U. File a 1040x amended return S. File a 1040x amended return citizen or resident. File a 1040x amended return   The term “foreign employer” does not include a foreign government. File a 1040x amended return Pay from a foreign government that is exempt from U. File a 1040x amended return S. File a 1040x amended return income tax is discussed in chapter 10. File a 1040x amended return Income from certain annuities. File a 1040x amended return   Do not include in income any annuity received under a qualified annuity plan or from a qualified trust exempt from U. File a 1040x amended return S. File a 1040x amended return income tax if you meet both of the following conditions. File a 1040x amended return You receive the annuity only because: You performed personal services outside the United States while you were a nonresident alien, or You performed personal services inside the United States while you were a nonresident alien and you met the three conditions, described earlier, under Employees of foreign persons, organizations, or offices . File a 1040x amended return At the time the first amount is paid as an annuity under the plan (or by the trust), 90% or more of the employees for whom contributions or benefits are provided under the annuity plan (or under the plan of which the trust is a part) are U. File a 1040x amended return S. File a 1040x amended return citizens or residents. File a 1040x amended return   If the annuity qualifies under condition (1) but not condition (2) above, you do not have to include the amount in income if: You are a resident of a country that gives a substantially equal exclusion to U. File a 1040x amended return S. File a 1040x amended return citizens and residents, or You are a resident of a beneficiary developing country under Title V of the Trade Act of 1974. File a 1040x amended return   If you are not sure whether the annuity is from a qualified annuity plan or qualified trust, ask the person who made the payment. File a 1040x amended return Income affected by treaties. File a 1040x amended return   Income of any kind that is exempt from U. File a 1040x amended return S. File a 1040x amended return tax under a treaty to which the United States is a party is excluded from your gross income. File a 1040x amended return Income on which the tax is only limited by treaty, however, is included in gross income. File a 1040x amended return See chapter 9. File a 1040x amended return Gambling Winnings From Dog or Horse Racing You can exclude from your gross income winnings from legal wagers initiated outside the United States in a parimutuel pool with respect to a live horse or dog race in the United States. File a 1040x amended return Gain From the Sale of Your Main Home If you sold your main home, you may be able to exclude up to $250,000 of the gain on the sale of your home. File a 1040x amended return If you are married and file a joint return, you may be able to exclude up to $500,000. File a 1040x amended return For information on the requirements for this exclusion, see Publication 523. File a 1040x amended return This exclusion does not apply to nonresident aliens who are subject to the expatriation tax rules discussed in chapter 4. File a 1040x amended return Scholarships and Fellowship Grants If you are a candidate for a degree, you may be able to exclude from your income part or all of the amounts you receive as a qualified scholarship. File a 1040x amended return The rules discussed here apply to both resident and nonresident aliens. File a 1040x amended return If a nonresident alien receives a grant that is not from U. File a 1040x amended return S. File a 1040x amended return sources, it is not subject to U. File a 1040x amended return S. File a 1040x amended return tax. File a 1040x amended return See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your grant is from U. File a 1040x amended return S. File a 1040x amended return sources. File a 1040x amended return A scholarship or fellowship is excludable from income only if: You are a candidate for a degree at an eligible educational institution, and You use the scholarship or fellowship to pay qualified education expenses. File a 1040x amended return Candidate for a degree. File a 1040x amended return   You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an accredited educational institution that is authorized to provide: A program that is acceptable for full credit toward a bachelor's or higher degree, or A program of training to prepare students for gainful employment in a recognized occupation. File a 1040x amended return Eligible educational institution. File a 1040x amended return   An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. File a 1040x amended return Qualified education expenses. File a 1040x amended return   These are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. File a 1040x amended return These items must be required of all students in your course of instruction. File a 1040x amended return However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses. File a 1040x amended return Expenses that do not qualify. File a 1040x amended return   Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. File a 1040x amended return This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. File a 1040x amended return Scholarship or fellowship amounts used to pay these costs are taxable. File a 1040x amended return Amounts used to pay expenses that do not qualify. File a 1040x amended return   A scholarship amount used to pay any expense that does not qualify is taxable, even if the expense is a fee that must be paid to the institution as a condition of enrollment or attendance. File a 1040x amended return Payment for services. File a 1040x amended return   You cannot exclude from income the portion of any scholarship, fellowship, or tuition reduction that represents payment for past, present, or future teaching, research, or other services. File a 1040x amended return This is true even if all candidates for a degree are required to perform the services as a condition for receiving the degree. File a 1040x amended return Example. File a 1040x amended return On January 7, Maria Gomez is notified of a scholarship of $2,500 for the spring semester. File a 1040x amended return As a condition for receiving the scholarship, Maria must serve as a part-time teaching assistant. File a 1040x amended return Of the $2,500 scholarship, $1,000 represents payment for her services. File a 1040x amended return Assuming that Maria meets all other conditions, she can exclude no more than $1,500 from income as a qualified scholarship. File a 1040x amended return Prev  Up  Next   Home   More Online Publications