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Free Tax Usa 2010

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Free Tax Usa 2010

Free tax usa 2010 Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Free tax usa 2010 S. Free tax usa 2010 Taxpayer Identification NumbersUnexpected payment. Free tax usa 2010 Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Free tax usa 2010 Electronic reporting. Free tax usa 2010 Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Free tax usa 2010 S. Free tax usa 2010 Real Property InterestForeign corporations. Free tax usa 2010 Domestic corporations. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 real property holding corporations. Free tax usa 2010 Partnerships. Free tax usa 2010 Trusts and estates. Free tax usa 2010 Domestically controlled QIE. Free tax usa 2010 Late filing of certifications or notices. Free tax usa 2010 Certifications. Free tax usa 2010 Liability of agent or qualified substitute. Free tax usa 2010 Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Free tax usa 2010 Withholding of Tax In most cases, a foreign person is subject to U. Free tax usa 2010 S. Free tax usa 2010 tax on its U. Free tax usa 2010 S. Free tax usa 2010 source income. Free tax usa 2010 Most types of U. Free tax usa 2010 S. Free tax usa 2010 source income received by a foreign person are subject to U. Free tax usa 2010 S. Free tax usa 2010 tax of 30%. Free tax usa 2010 A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Free tax usa 2010 The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Free tax usa 2010 The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Free tax usa 2010 In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Free tax usa 2010 S. Free tax usa 2010 source income. Free tax usa 2010 Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Free tax usa 2010 NRA withholding does not include withholding under section 1445 of the Code (see U. Free tax usa 2010 S. Free tax usa 2010 Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Free tax usa 2010 A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Free tax usa 2010 However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Free tax usa 2010 S. Free tax usa 2010 person is not required to withhold. Free tax usa 2010 In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Free tax usa 2010 Withholding Agent You are a withholding agent if you are a U. Free tax usa 2010 S. Free tax usa 2010 or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Free tax usa 2010 A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Free tax usa 2010 S. Free tax usa 2010 branch of certain foreign banks and insurance companies. Free tax usa 2010 You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Free tax usa 2010 Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Free tax usa 2010 In most cases, the U. Free tax usa 2010 S. Free tax usa 2010 person who pays an amount subject to NRA withholding is the person responsible for withholding. Free tax usa 2010 However, other persons may be required to withhold. Free tax usa 2010 For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Free tax usa 2010 In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Free tax usa 2010 Liability for tax. Free tax usa 2010   As a withholding agent, you are personally liable for any tax required to be withheld. Free tax usa 2010 This liability is independent of the tax liability of the foreign person to whom the payment is made. Free tax usa 2010 If you fail to withhold and the foreign payee fails to satisfy its U. Free tax usa 2010 S. Free tax usa 2010 tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Free tax usa 2010   The applicable tax will be collected only once. Free tax usa 2010 If the foreign person satisfies its U. Free tax usa 2010 S. Free tax usa 2010 tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Free tax usa 2010 Determination of amount to withhold. Free tax usa 2010   You must withhold on the gross amount subject to NRA withholding. Free tax usa 2010 You cannot reduce the gross amount by any deductions. Free tax usa 2010 However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Free tax usa 2010   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Free tax usa 2010 In no case, however, should you withhold more than 30% of the total amount paid. Free tax usa 2010 Or, you may make a reasonable estimate of the amount from U. Free tax usa 2010 S. Free tax usa 2010 sources and put a corresponding part of the amount due in escrow until the amount from U. Free tax usa 2010 S. Free tax usa 2010 sources can be determined, at which time withholding becomes due. Free tax usa 2010 When to withhold. Free tax usa 2010   Withholding is required at the time you make a payment of an amount subject to withholding. Free tax usa 2010 A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Free tax usa 2010 A payment is considered made to a person if it is paid for that person's benefit. Free tax usa 2010 For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Free tax usa 2010 A payment also is considered made to a person if it is made to that person's agent. Free tax usa 2010   A U. Free tax usa 2010 S. Free tax usa 2010 partnership should withhold when any distributions that include amounts subject to withholding are made. Free tax usa 2010 However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Free tax usa 2010 S. Free tax usa 2010 partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Free tax usa 2010 If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Free tax usa 2010 A U. Free tax usa 2010 S. Free tax usa 2010 trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Free tax usa 2010 To the extent a U. Free tax usa 2010 S. Free tax usa 2010 trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Free tax usa 2010 Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Free tax usa 2010 (See Returns Required , later. Free tax usa 2010 ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Free tax usa 2010 Form 1099 reporting and backup withholding. Free tax usa 2010    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Free tax usa 2010 S. Free tax usa 2010 person. Free tax usa 2010 You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Free tax usa 2010 S. Free tax usa 2010 person that is subject to Form 1099 reporting if any of the following apply. Free tax usa 2010 The U. Free tax usa 2010 S. Free tax usa 2010 person has not provided its taxpayer identification number (TIN) in the manner required. Free tax usa 2010 The IRS notifies you that the TIN furnished by the payee is incorrect. Free tax usa 2010 There has been a notified payee underreporting. Free tax usa 2010 There has been a payee certification failure. Free tax usa 2010 In most cases, a TIN must be provided by a U. Free tax usa 2010 S. Free tax usa 2010 non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Free tax usa 2010 A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Free tax usa 2010 You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Free tax usa 2010 S. Free tax usa 2010 person. Free tax usa 2010 For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Free tax usa 2010 S. Free tax usa 2010 person subject to Form 1099 reporting. Free tax usa 2010 See Identifying the Payee , later, for more information. Free tax usa 2010 Also see Section S. Free tax usa 2010 Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Free tax usa 2010 Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Free tax usa 2010 Wages paid to employees. Free tax usa 2010   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Free tax usa 2010 See Pay for Personal Services Performed , later. Free tax usa 2010 Effectively connected income by partnerships. Free tax usa 2010   A withholding agent that is a partnership (whether U. Free tax usa 2010 S. Free tax usa 2010 or foreign) is also responsible for withholding on its income effectively connected with a U. Free tax usa 2010 S. Free tax usa 2010 trade or business that is allocable to foreign partners. Free tax usa 2010 See Partnership Withholding on Effectively Connected Income , later, for more information. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 real property interest. Free tax usa 2010   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Free tax usa 2010 S. Free tax usa 2010 real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Free tax usa 2010 S. Free tax usa 2010 real property interest to a shareholder, partner, or beneficiary that is a foreign person. Free tax usa 2010 See U. Free tax usa 2010 S. Free tax usa 2010 Real Property Interest , later. Free tax usa 2010 Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Free tax usa 2010 It does not apply to payments made to U. Free tax usa 2010 S. Free tax usa 2010 persons. Free tax usa 2010 Usually, you determine the payee's status as a U. Free tax usa 2010 S. Free tax usa 2010 or foreign person based on the documentation that person provides. Free tax usa 2010 See Documentation , later. Free tax usa 2010 However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Free tax usa 2010 Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Free tax usa 2010 However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 agent of foreign person. Free tax usa 2010   If you make a payment to a U. Free tax usa 2010 S. Free tax usa 2010 person and you have actual knowledge that the U. Free tax usa 2010 S. Free tax usa 2010 person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Free tax usa 2010 However, if the U. Free tax usa 2010 S. Free tax usa 2010 person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Free tax usa 2010   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Free tax usa 2010 S. Free tax usa 2010 person and not as a payment to a foreign person. Free tax usa 2010 You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Free tax usa 2010 Disregarded entities. Free tax usa 2010   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Free tax usa 2010 The payee of a payment made to a disregarded entity is the owner of the entity. Free tax usa 2010   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Free tax usa 2010   If the owner is a U. Free tax usa 2010 S. Free tax usa 2010 person, you do not apply NRA withholding. Free tax usa 2010 However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Free tax usa 2010 You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Free tax usa 2010 Flow-Through Entities The payees of payments (other than income effectively connected with a U. Free tax usa 2010 S. Free tax usa 2010 trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Free tax usa 2010 This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Free tax usa 2010 Income that is, or is deemed to be, effectively connected with the conduct of a U. Free tax usa 2010 S. Free tax usa 2010 trade or business of a flow-through entity is treated as paid to the entity. Free tax usa 2010 All of the following are flow-through entities. Free tax usa 2010 A foreign partnership (other than a withholding foreign partnership). Free tax usa 2010 A foreign simple or foreign grantor trust (other than a withholding foreign trust). Free tax usa 2010 A fiscally transparent entity receiving income for which treaty benefits are claimed. Free tax usa 2010 See Fiscally transparent entity , later. Free tax usa 2010 In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Free tax usa 2010 You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Free tax usa 2010 You must determine whether the owners or beneficiaries of a flow-through entity are U. Free tax usa 2010 S. Free tax usa 2010 or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Free tax usa 2010 You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Free tax usa 2010 If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Free tax usa 2010 See Documentation and Presumption Rules , later. Free tax usa 2010 Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Free tax usa 2010 Foreign partnerships. Free tax usa 2010    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Free tax usa 2010 If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Free tax usa 2010 However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Free tax usa 2010 If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Free tax usa 2010 Example 1. Free tax usa 2010 A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Free tax usa 2010 S. Free tax usa 2010 citizen. Free tax usa 2010 You make a payment of U. Free tax usa 2010 S. Free tax usa 2010 source interest to the partnership. Free tax usa 2010 It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Free tax usa 2010 S. Free tax usa 2010 citizen. Free tax usa 2010 The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Free tax usa 2010 You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Free tax usa 2010 Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Free tax usa 2010 Report the payment to the U. Free tax usa 2010 S. Free tax usa 2010 citizen on Form 1099-INT. Free tax usa 2010 Example 2. Free tax usa 2010 A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Free tax usa 2010 The second partnership has two partners, both nonresident alien individuals. Free tax usa 2010 You make a payment of U. Free tax usa 2010 S. Free tax usa 2010 source interest to the first partnership. Free tax usa 2010 It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Free tax usa 2010 In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Free tax usa 2010 The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Free tax usa 2010 Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Free tax usa 2010 Example 3. Free tax usa 2010 You make a payment of U. Free tax usa 2010 S. Free tax usa 2010 source dividends to a withholding foreign partnership. Free tax usa 2010 The partnership has two partners, both foreign corporations. Free tax usa 2010 You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Free tax usa 2010 You must treat the partnership as the payee of the dividends. Free tax usa 2010 Foreign simple and grantor trust. Free tax usa 2010   A trust is foreign unless it meets both of the following tests. Free tax usa 2010 A court within the United States is able to exercise primary supervision over the administration of the trust. Free tax usa 2010 One or more U. Free tax usa 2010 S. Free tax usa 2010 persons have the authority to control all substantial decisions of the trust. Free tax usa 2010   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Free tax usa 2010 A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Free tax usa 2010   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Free tax usa 2010 The payees of a payment made to a foreign grantor trust are the owners of the trust. Free tax usa 2010 However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Free tax usa 2010 If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Free tax usa 2010 Example. Free tax usa 2010 A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Free tax usa 2010 S. Free tax usa 2010 citizen. Free tax usa 2010 You make a payment of interest to the foreign trust. Free tax usa 2010 It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Free tax usa 2010 S. Free tax usa 2010 citizen. Free tax usa 2010 The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Free tax usa 2010 You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Free tax usa 2010 Report the payment to the nonresident aliens on Forms 1042-S. Free tax usa 2010 Report the payment to the U. Free tax usa 2010 S. Free tax usa 2010 citizen on Form 1099-INT. Free tax usa 2010 Fiscally transparent entity. Free tax usa 2010   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Free tax usa 2010 The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Free tax usa 2010 ). Free tax usa 2010 The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Free tax usa 2010 An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Free tax usa 2010 Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Free tax usa 2010   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Free tax usa 2010 Example. Free tax usa 2010 Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Free tax usa 2010 A has two interest holders, B and C. Free tax usa 2010 B is a corporation organized under the laws of country Y. Free tax usa 2010 C is a corporation organized under the laws of country Z. Free tax usa 2010 Both countries Y and Z have an income tax treaty in force with the United States. Free tax usa 2010 A receives royalty income from U. Free tax usa 2010 S. Free tax usa 2010 sources that is not effectively connected with the conduct of a trade or business in the United States. Free tax usa 2010 For U. Free tax usa 2010 S. Free tax usa 2010 income tax purposes, A is treated as a partnership. Free tax usa 2010 Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Free tax usa 2010 The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Free tax usa 2010 Accordingly, A is fiscally transparent in its jurisdiction, country X. Free tax usa 2010 B and C are not fiscally transparent under the laws of their respective countries of incorporation. Free tax usa 2010 Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Free tax usa 2010 Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Free tax usa 2010 S. Free tax usa 2010 source royalty income for purposes of the U. Free tax usa 2010 S. Free tax usa 2010 -Y income tax treaty. Free tax usa 2010 Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Free tax usa 2010 Therefore, A is not treated as fiscally transparent under the laws of country Z. Free tax usa 2010 Accordingly, C is not treated as deriving its share of the U. Free tax usa 2010 S. Free tax usa 2010 source royalty income for purposes of the U. Free tax usa 2010 S. Free tax usa 2010 -Z income tax treaty. Free tax usa 2010 Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Free tax usa 2010 This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Free tax usa 2010 You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Free tax usa 2010 An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Free tax usa 2010 A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Free tax usa 2010 In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Free tax usa 2010 You must determine whether the customers or account holders of a foreign intermediary are U. Free tax usa 2010 S. Free tax usa 2010 or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Free tax usa 2010 You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Free tax usa 2010 If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Free tax usa 2010 See Documentation and Presumption Rules , later. Free tax usa 2010 Nonqualified intermediary. Free tax usa 2010   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Free tax usa 2010 The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Free tax usa 2010 Example. Free tax usa 2010 You make a payment of interest to a foreign bank that is a nonqualified intermediary. Free tax usa 2010 The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Free tax usa 2010 S. Free tax usa 2010 person for whom the bank is collecting the payments. Free tax usa 2010 The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Free tax usa 2010 The account holders are the payees of the interest payment. Free tax usa 2010 You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Free tax usa 2010 S. Free tax usa 2010 person on Form 1099-INT. Free tax usa 2010 Qualified intermediary. Free tax usa 2010   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Free tax usa 2010 S. Free tax usa 2010 intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Free tax usa 2010 You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Free tax usa 2010 In this situation, the QI is required to withhold the tax. Free tax usa 2010 You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Free tax usa 2010   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Free tax usa 2010 If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Free tax usa 2010 S. Free tax usa 2010 person. Free tax usa 2010 Branches of financial institutions. Free tax usa 2010   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Free tax usa 2010 The countries with approved KYC rules are listed on IRS. Free tax usa 2010 gov. Free tax usa 2010 QI withholding agreement. Free tax usa 2010   Foreign financial institutions and foreign branches of U. Free tax usa 2010 S. Free tax usa 2010 financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Free tax usa 2010   A QI is entitled to certain simplified withholding and reporting rules. Free tax usa 2010 In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Free tax usa 2010   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Free tax usa 2010 These forms, and the procedures required to obtain a QI withholding agreement are available at www. Free tax usa 2010 irs. Free tax usa 2010 gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Free tax usa 2010 Documentation. Free tax usa 2010   A QI is not required to forward documentation obtained from foreign account holders to the U. Free tax usa 2010 S. Free tax usa 2010 withholding agent from whom the QI receives a payment of U. Free tax usa 2010 S. Free tax usa 2010 source income. Free tax usa 2010 The QI maintains such documentation at its location and provides the U. Free tax usa 2010 S. Free tax usa 2010 withholding agent with withholding rate pools. Free tax usa 2010 A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Free tax usa 2010   A QI is required to provide the U. Free tax usa 2010 S. Free tax usa 2010 withholding agent with information regarding U. Free tax usa 2010 S. Free tax usa 2010 persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Free tax usa 2010   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Free tax usa 2010 This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Free tax usa 2010 Form 1042-S reporting. Free tax usa 2010   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Free tax usa 2010 Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Free tax usa 2010 Collective refund procedures. Free tax usa 2010   A QI may seek a refund on behalf of its direct account holders. Free tax usa 2010 The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 branches of foreign banks and foreign insurance companies. Free tax usa 2010   Special rules apply to a U. Free tax usa 2010 S. Free tax usa 2010 branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Free tax usa 2010 If you agree to treat the branch as a U. Free tax usa 2010 S. Free tax usa 2010 person, you may treat the branch as a U. Free tax usa 2010 S. Free tax usa 2010 payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Free tax usa 2010 S. Free tax usa 2010 branch on which the agreement is evidenced. Free tax usa 2010 If you treat the branch as a U. Free tax usa 2010 S. Free tax usa 2010 payee, you are not required to withhold. Free tax usa 2010 Even though you agree to treat the branch as a U. Free tax usa 2010 S. Free tax usa 2010 person, you must report the payment on Form 1042-S. Free tax usa 2010   A financial institution organized in a U. Free tax usa 2010 S. Free tax usa 2010 possession is treated as a U. Free tax usa 2010 S. Free tax usa 2010 branch. Free tax usa 2010 The special rules discussed in this section apply to a possessions financial institution. Free tax usa 2010   If you are paying a U. Free tax usa 2010 S. Free tax usa 2010 branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Free tax usa 2010 S. Free tax usa 2010 person for amounts subject to NRA withholding. Free tax usa 2010 Consequently, amounts not subject to NRA withholding that are paid to a U. Free tax usa 2010 S. Free tax usa 2010 branch are not subject to Form 1099 reporting or backup withholding. Free tax usa 2010   Alternatively, a U. Free tax usa 2010 S. Free tax usa 2010 branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Free tax usa 2010 In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Free tax usa 2010 See Nonqualified Intermediaries under  Documentation, later. Free tax usa 2010   If the U. Free tax usa 2010 S. Free tax usa 2010 branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Free tax usa 2010 Withholding foreign partnership and foreign trust. Free tax usa 2010   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Free tax usa 2010 A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Free tax usa 2010   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Free tax usa 2010 A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Free tax usa 2010 You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Free tax usa 2010 WP and WT withholding agreements. Free tax usa 2010   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Free tax usa 2010 Also see the following items. Free tax usa 2010 Revenue Procedure 2004-21. Free tax usa 2010 Revenue Procedure 2005-77. Free tax usa 2010 Employer identification number (EIN). Free tax usa 2010   A completed Form SS-4 must be submitted with the application for being a WP or WT. Free tax usa 2010 The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Free tax usa 2010 Documentation. Free tax usa 2010   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Free tax usa 2010 The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Free tax usa 2010 The Form W-8IMY must contain the WP-EIN or WT-EIN. Free tax usa 2010 Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Free tax usa 2010 A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Free tax usa 2010 S. Free tax usa 2010 person. Free tax usa 2010 It also includes a foreign branch of a U. Free tax usa 2010 S. Free tax usa 2010 financial institution if the foreign branch is a qualified intermediary. Free tax usa 2010 In most cases, the U. Free tax usa 2010 S. Free tax usa 2010 branch of a foreign corporation or partnership is treated as a foreign person. Free tax usa 2010 Nonresident alien. Free tax usa 2010   A nonresident alien is an individual who is not a U. Free tax usa 2010 S. Free tax usa 2010 citizen or a resident alien. Free tax usa 2010 A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Free tax usa 2010 Married to U. Free tax usa 2010 S. Free tax usa 2010 citizen or resident alien. Free tax usa 2010   Nonresident alien individuals married to U. Free tax usa 2010 S. Free tax usa 2010 citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Free tax usa 2010 However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Free tax usa 2010 Wages paid to these individuals are subject to graduated withholding. Free tax usa 2010 See Wages Paid to Employees—Graduated Withholding . Free tax usa 2010 Resident alien. Free tax usa 2010   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Free tax usa 2010 Green card test. Free tax usa 2010 An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Free tax usa 2010 This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Free tax usa 2010 Substantial presence test. Free tax usa 2010 An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Free tax usa 2010 Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Free tax usa 2010   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Free tax usa 2010 This exception is for a limited period of time. Free tax usa 2010   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Free tax usa 2010 Note. Free tax usa 2010   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Free tax usa 2010 For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Free tax usa 2010 Resident of a U. Free tax usa 2010 S. Free tax usa 2010 possession. Free tax usa 2010   A bona fide resident of Puerto Rico, the U. Free tax usa 2010 S. Free tax usa 2010 Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Free tax usa 2010 S. Free tax usa 2010 citizen or a U. Free tax usa 2010 S. Free tax usa 2010 national is treated as a nonresident alien for the withholding rules explained here. Free tax usa 2010 A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Free tax usa 2010   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Free tax usa 2010 S. Free tax usa 2010 Possessions. Free tax usa 2010 Foreign corporations. Free tax usa 2010   A foreign corporation is one that does not fit the definition of a domestic corporation. Free tax usa 2010 A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Free tax usa 2010 Guam or Northern Mariana Islands corporations. Free tax usa 2010   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Free tax usa 2010 Note. Free tax usa 2010   The provisions discussed below under U. Free tax usa 2010 S. Free tax usa 2010 Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 Virgin Islands and American Samoa corporations. Free tax usa 2010   A corporation created or organized in, or under the laws of, the U. Free tax usa 2010 S. Free tax usa 2010 Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Free tax usa 2010 S. Free tax usa 2010 Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Free tax usa 2010 S. Free tax usa 2010 Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Free tax usa 2010 Foreign private foundations. Free tax usa 2010   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Free tax usa 2010 Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Free tax usa 2010 Other foreign organizations, associations, and charitable institutions. Free tax usa 2010   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Free tax usa 2010 In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Free tax usa 2010   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Free tax usa 2010   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 branches of foreign persons. Free tax usa 2010   In most cases, a payment to a U. Free tax usa 2010 S. Free tax usa 2010 branch of a foreign person is a payment made to the foreign person. Free tax usa 2010 However, you may treat payments to U. Free tax usa 2010 S. Free tax usa 2010 branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Free tax usa 2010 S. Free tax usa 2010 regulatory supervision as payments made to a U. Free tax usa 2010 S. Free tax usa 2010 person, if you and the U. Free tax usa 2010 S. Free tax usa 2010 branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Free tax usa 2010 For this purpose, a financial institution organized under the laws of a U. Free tax usa 2010 S. Free tax usa 2010 possession is treated as a U. Free tax usa 2010 S. Free tax usa 2010 branch. Free tax usa 2010 Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Free tax usa 2010 The payee is a U. Free tax usa 2010 S. Free tax usa 2010 person. Free tax usa 2010 The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Free tax usa 2010 In most cases, you must get the documentation before you make the payment. Free tax usa 2010 The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Free tax usa 2010 See Standards of Knowledge , later. Free tax usa 2010 If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Free tax usa 2010 For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Free tax usa 2010 The specific types of documentation are discussed in this section. Free tax usa 2010 However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Free tax usa 2010 As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Free tax usa 2010 Section 1446 withholding. Free tax usa 2010   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Free tax usa 2010 In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Free tax usa 2010 This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Free tax usa 2010 Joint owners. Free tax usa 2010    If you make a payment to joint owners, you need to get documentation from each owner. Free tax usa 2010 Form W-9. Free tax usa 2010   In most cases, you can treat the payee as a U. Free tax usa 2010 S. Free tax usa 2010 person if the payee gives you a Form W-9. Free tax usa 2010 The Form W-9 can be used only by a U. Free tax usa 2010 S. Free tax usa 2010 person and must contain the payee's taxpayer identification number (TIN). Free tax usa 2010 If there is more than one owner, you may treat the total amount as paid to a U. Free tax usa 2010 S. Free tax usa 2010 person if any one of the owners gives you a Form W-9. Free tax usa 2010 See U. Free tax usa 2010 S. Free tax usa 2010 Taxpayer Identification Numbers , later. Free tax usa 2010 U. Free tax usa 2010 S. Free tax usa 2010 persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Free tax usa 2010 Form W-8. Free tax usa 2010   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Free tax usa 2010 Until further notice, you can rely upon Forms W-8 that contain a P. Free tax usa 2010 O. Free tax usa 2010 box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Free tax usa 2010 S. Free tax usa 2010 person and that a street address is available. Free tax usa 2010 You may rely on Forms W-8 for which there is a U. Free tax usa 2010 S. Free tax usa 2010 mailing address provided you received the form prior to December 31, 2001. Free tax usa 2010   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Free tax usa 2010 You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Free tax usa 2010 S. Free tax usa 2010 possession. Free tax usa 2010 Other documentation. Free tax usa 2010   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Free tax usa 2010 The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Free tax usa 2010 These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Free tax usa 2010 Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Free tax usa 2010 Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Free tax usa 2010   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Free tax usa 2010   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Free tax usa 2010 For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Free tax usa 2010 Claiming treaty benefits. Free tax usa 2010   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Free tax usa 2010 S. Free tax usa 2010 TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Free tax usa 2010   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Free tax usa 2010   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Free tax usa 2010 See Fiscally transparent entity discussed earlier under Flow-Through Entities. Free tax usa 2010   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Free tax usa 2010 For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Free tax usa 2010   The exemptions from, or reduced rates of, U. Free tax usa 2010 S. Free tax usa 2010 tax vary under each treaty. Free tax usa 2010 You must check the provisions of the tax treaty that apply. Free tax usa 2010 Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Free tax usa 2010   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Free tax usa 2010 You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Free tax usa 2010 Exceptions to TIN requirement. Free tax usa 2010   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Free tax usa 2010 Income from marketable securities (discussed next). Free tax usa 2010 Unexpected payments to an individual (discussed under U. Free tax usa 2010 S. Free tax usa 2010 Taxpayer Identification Numbers ). Free tax usa 2010 Marketable securities. Free tax usa 2010   A Form W-8BEN provided to claim treaty benefits does not need a U. Free tax usa 2010 S. Free tax usa 2010 TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Free tax usa 2010 For this purpose, income from a marketable security consists of the following items. Free tax usa 2010 Dividends and interest from stocks and debt obligations that are actively traded. Free tax usa 2010 Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Free tax usa 2010 Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Free tax usa 2010 Income related to loans of any of the above securities. Free tax usa 2010 Offshore accounts. Free tax usa 2010   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Free tax usa 2010   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Free tax usa 2010 However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Free tax usa 2010 An offshore account is an account maintained at an office or branch of a U. Free tax usa 2010 S. Free tax usa 2010 or foreign bank or other financial institution at any location outside the United States. Free tax usa 2010   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Free tax usa 2010 This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Free tax usa 2010 In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Free tax usa 2010 Documentary evidence. Free tax usa 2010   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Free tax usa 2010 To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Free tax usa 2010 Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Free tax usa 2010 Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Free tax usa 2010 In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Free tax usa 2010 Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Free tax usa 2010   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Free tax usa 2010 (See Effectively Connected Income , later. Free tax usa 2010 )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Free tax usa 2010   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Free tax usa 2010 S. Free tax usa 2010 trade or business is subject to withholding under section 1446. Free tax usa 2010 If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Free tax usa 2010    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Free tax usa 2010 Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Free tax usa 2010   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Free tax usa 2010 S. Free tax usa 2010 possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Free tax usa 2010   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Free tax usa 2010   See Foreign Governments and Certain Other Foreign Organizations , later. Free tax usa 2010 Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Free tax usa 2010 The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Free tax usa 2010 The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Free tax usa 2010 Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Free tax usa 2010 S. Free tax usa 2010 Branches for United States Tax Withholding. Free tax usa 2010   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Free tax usa 2010 S. Free tax usa 2010 branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Free tax usa 2010 S. Free tax usa 2010 branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Free tax usa 2010 S. Free tax usa 2010 person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Free tax usa 2010 For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Free tax usa 2010 1446-5. Free tax usa 2010 Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Free tax usa 2010 A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Free tax usa 2010 The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Free tax usa 2010 The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Free tax usa 2010 Responsibilities. Free tax usa 2010   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Free tax usa 2010 However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Free tax usa 2010 Instead, it provides you with a withholding statement that contains withholding rate pool information. Free tax usa 2010 A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Free tax usa 2010 A qualified intermediary is required to provide you with information regarding U. Free tax usa 2010 S. Free tax usa 2010 persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Free tax usa 2010 S. Free tax usa 2010 person unless it has assumed Form 1099 reporting and backup withholding responsibility. Free tax usa 2010 For the alternative procedure for providing rate pool information for U. Free tax usa 2010 S. Free tax usa 2010 non-exempt persons, see the Form W-8IMY instructions. Free tax usa 2010   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Free tax usa 2010   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Free tax usa 2010 Primary responsibility not assumed. Free tax usa 2010   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Free tax usa 2010 Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Free tax usa 2010 S. Free tax usa 2010 person subject to Form 1099 reporting and/or backup withholding. Free tax usa 2010 The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Free tax usa 2010 Primary NRA withholding responsibility assumed. Free tax usa 2010   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Free tax usa 2010 S. Free tax usa 2010 person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Free tax usa 2010 The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Free tax usa 2010 Primary NRA and Form 1099 responsibility assumed. Free tax usa 2010   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Free tax usa 2010 It is not necessary to associate the payment with withholding rate pools. Free tax usa 2010 Example. Free tax usa 2010 You make a payment of dividends to a QI. Free tax usa 2010 It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Free tax usa 2010 S. Free tax usa 2010 individual who provides it with a Form W-9. Free tax usa 2010 Each customer is entitled to 20% of the dividend payment. Free tax usa 2010 The QI does not assume any primary withholding responsibility. Free tax usa 2010 The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Free tax usa 2010 S. Free tax usa 2010 individual. Free tax usa 2010 You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Free tax usa 2010 The part of the payment allocable to the U. Free tax usa 2010 S. Free tax usa 2010 individual (20%) is reportable on Form 1099-DIV. Free tax usa 2010 Smaller partnerships and trusts. Free tax usa 2010   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Free tax usa 2010 It is a foreign partnership or foreign simple or grantor trust. Free tax usa 2010 It is a direct account holder of the QI. Free tax usa 2010 It does not have any partner, beneficiary, or owner that is a U. Free tax usa 2010 S. Free tax usa 2010 person or a pass- through partner, beneficiary, or owner. Free tax usa 2010   For information on these rules, see section 4A. Free tax usa 2010 01 of the QI agreement. Free tax usa 2010 This is found in Appendix 3 of Revenue Procedure 2003-64. Free tax usa 2010 Also see Revenue Procedure 2004-21. Free tax usa 2010 Related partnerships and trusts. Free tax usa 2010    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Free tax usa 2010 It is a foreign partnership or foreign simple or grantor trust. Free tax usa 2010 It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Free tax usa 2010 For information on these rules, see section 4A. Free tax usa 2010 02 of the QI agreement. Free tax usa 2010 This is found in Appendix 3 of Revenue Procedure 2003-64. Free tax usa 2010 Also see Revenue Procedure 2005-77. Free tax usa 2010 Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Free tax usa 2010 S. Free tax usa 2010 branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Free tax usa 2010 S. Free tax usa 2010 branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Free tax usa 2010 The NQI, flow-through entity, or U. Free tax usa 2010 S. Free tax usa 2010 branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Free tax usa 2010 A withholding statement must be updated to keep the information accurate prior to each payment. Free tax usa 2010 Withholding statement. Free tax usa 2010   In most cases, a withholding statement must contain the following information. Free tax usa 2010 The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Free tax usa 2010 The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Free tax usa 2010 The status of the person for whom the documentation has been provided, such as whether the person is a U. Free tax usa 2010 S. Free tax usa 2010 exempt recipient (U. Free tax usa 2010 S. Free tax usa 2010 person exempt from Form 1099 reporting), U. Free tax usa 2010 S. Free tax usa 2010 non-exempt recipient (U. Free tax usa 2010 S. Free tax usa 2010 person subject to Form 1099 reporting), or a foreign person. Free tax usa 2010 For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Free tax usa 2010 S. Free tax usa 2010 branch. Free tax usa 2010 The type of recipient the person is, based on the recipient codes used on Form 1042-S. Free tax usa 2010 Information allocating each payment, by income type, to each payee (including U. Free tax usa 2010 S. Free tax usa 2010 exempt and U. Free tax usa 2010 S. Free tax usa 2010 non-exempt recipients) for whom documentation has been provided. Free tax usa 2010 The rate of withholding that applies to each foreign person to whom a payment is allocated. Free tax usa 2010 A foreign payee's country of residence. Free tax usa 2010 If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Free tax usa 2010 ). Free tax usa 2010 In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Free tax usa 2010 The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Free tax usa 2010 S. Free tax usa 2010 branch from which the payee will directly receive a payment. Free tax usa 2010 Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Free tax usa 2010 Alternative procedure. Free tax usa 2010   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Free tax usa 2010 S. Free tax usa 2010 exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Free tax usa 2010 To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Free tax usa 2010 You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Free tax usa 2010    This alternative procedure cannot be used for payments to U. Free tax usa 2010 S. Free tax usa 2010 non-exempt recipients. Free tax usa 2010 Therefore, an NQI must always provide you with allocation information for all U. Free tax usa 2010 S. Free tax usa 2010 non-exempt recipients prior to a payment being made. Free tax usa 2010 Pooled withholding information. Free tax usa 2010   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Free tax usa 2010 A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Free tax usa 2010 For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Free tax usa 2010 The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Free tax usa 2010 Failure to provide allocation information. Free tax usa 2010   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Free tax usa 2010 You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Free tax usa 2010 An NQI is deemed to have f
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The Free Tax Usa 2010

Free tax usa 2010 Index Symbols "Hours of service" limits, Individuals subject to hours of service limits. Free tax usa 2010 Form 2106, Hours of service limits. Free tax usa 2010 50% limit on meals, 50% limit on meals. Free tax usa 2010 A Accountable plans, Accountable Plans, Per diem allowance more than federal rate. Free tax usa 2010 Accounting to employer, Accountable Plans Adequate accounting, Adequate Accounting Independent contractors, Adequate accounting. Free tax usa 2010 Adequate records, What Are Adequate Records? Advertising Car display, Advertising display on car. Free tax usa 2010 Expenses, 3 - Advertising expenses. Free tax usa 2010 Signs, display racks, or other promotional material to be used on recipient's business premises, Exceptions. Free tax usa 2010 Airline clubs, Club dues and membership fees. Free tax usa 2010 Allocating costs, Separating costs. Free tax usa 2010 , Separating costs. Free tax usa 2010 , Allocating between business and nonbusiness. Free tax usa 2010 , Allocating total cost. Free tax usa 2010 Allowance (see Reimbursements) Armed forces Assigned overseas, Members of the Armed Forces. Free tax usa 2010 Assistance (see Tax help) Associated entertainment, Associated Test Athletic clubs, Club dues and membership fees. Free tax usa 2010 B Basis of car, Basis. Free tax usa 2010 (see also Depreciation of car) Bona fide business purpose, Bona fide business purpose. Free tax usa 2010 Box seats at entertainment events, Skyboxes and other private luxury boxes. Free tax usa 2010 Business travel, Trip Primarily for Business Outside U. Free tax usa 2010 S. Free tax usa 2010 , Travel Entirely for Business or Considered Entirely for Business Business use of car, Business and personal use. Free tax usa 2010 More-than-50%-use test. Free tax usa 2010 , More-than-50%-use test. Free tax usa 2010 Qualified business use, Qualified business use. Free tax usa 2010 C Canceled checks As evidence of business expenses, Canceled check. Free tax usa 2010 Car expenses, Car Expenses, Reporting inclusion amounts. Free tax usa 2010 Actual expenses, Actual Car Expenses Allowances for, Per Diem and Car Allowances, Allowance more than the federal rate. Free tax usa 2010 Business and personal use, Business and personal use. Free tax usa 2010 Combining expenses, Car expenses. Free tax usa 2010 Disposition of car, Disposition of a Car Fixed and variable rate (FAVR) allowance, Fixed and variable rate (FAVR). Free tax usa 2010 Form 2106, Car expenses. Free tax usa 2010 Leasing a car, truck, or van, Leasing a Car, Reporting inclusion amounts. Free tax usa 2010 Mileage rate (see Standard mileage rate) Taxes paid on car, Taxes paid on your car. Free tax usa 2010 Traffic tickets, Fines and collateral. Free tax usa 2010 Car pools, Car pools. Free tax usa 2010 Car rentals, Reporting inclusion amounts. Free tax usa 2010 Form 2106, Car rentals. Free tax usa 2010 Car, defined, Car defined. Free tax usa 2010 Car, truck, or van rentals, Leasing a Car, Reporting inclusion amounts. Free tax usa 2010 Casualty and theft losses Cars, Casualty and theft losses. Free tax usa 2010 Depreciation, Casualty or theft. Free tax usa 2010 Charitable organizations Benefit events for, Exception for events that benefit charitable organizations. Free tax usa 2010 Sports events to benefit, 5 - Charitable sports event. Free tax usa 2010 Club dues, Club dues and membership fees. Free tax usa 2010 Commuting expenses, Commuting expenses. Free tax usa 2010 Conventions, Conventions, Meetings at conventions. Free tax usa 2010 Country clubs, Club dues and membership fees. Free tax usa 2010 Cruise ships, Cruise Ships D Daily business mileage and expense log (Table 6-2), Table 5-2. Free tax usa 2010 Daily Business Mileage and Expense Log Name: Depreciation of car, Depreciation and section 179 deductions. Free tax usa 2010 (see also Section 179 deductions) Adjustment for using standard mileage rate, Depreciation adjustment when you used the standard mileage rate. Free tax usa 2010 Basis, Basis. Free tax usa 2010 Sales taxes, Sales taxes. Free tax usa 2010 Unrecovered basis, How to treat unrecovered basis. Free tax usa 2010 Casualty or theft, effect, Casualty or theft. Free tax usa 2010 Deduction, Depreciation and section 179 deductions. Free tax usa 2010 , Depreciation deduction for the year of disposition. Free tax usa 2010 Excess depreciation, Excess depreciation. Free tax usa 2010 Modified Accelerated Cost Recovery System (MACRS), Modified Accelerated Cost Recovery System (MACRS). Free tax usa 2010 Trade-in, effect, Car trade-in. Free tax usa 2010 , Trade-in. Free tax usa 2010 Trucks and vans, Trucks and vans. Free tax usa 2010 Depreciation of Car Section 179 deduction, Section 179 deduction. Free tax usa 2010 Directly-related entertainment, Directly-Related Test Disabled employees Impairment-related work expenses, Impairment-Related Work Expenses of Disabled Employees Documentary evidence, Documentary evidence. Free tax usa 2010 E Employer-provided vehicles, Employer-provided vehicle. Free tax usa 2010 Reporting requirements, Vehicle Provided by Your Employer Entertainment expenses, Entertainment, Individuals subject to hours of service limits. Free tax usa 2010 , Gift or entertainment. Free tax usa 2010 50% limit, Directly before or after business discussion. Free tax usa 2010 Determination of applicability (Figure A), 50% Limit Associated test, Associated Test Deductible, What Entertainment Expenses Are Deductible?, Expenses for spouses. Free tax usa 2010 Summary (Table 2-1), Exception for events that benefit charitable organizations. Free tax usa 2010 Directly-related test, Directly-Related Test Entertainment, defined, Entertainment. Free tax usa 2010 Form 2106, Meal and entertainment expenses. Free tax usa 2010 Tickets (see Tickets) Entertainment facilities Expenses for use of, Entertainment facilities. Free tax usa 2010 Estimates of expenses, How To Prove Expenses Exceptions to the 50% Limit, Exceptions to the 50% Limit Excess reimbursements (see Reimbursements) Extravagant expenses, Lavish or extravagant. Free tax usa 2010 , Lavish or extravagant expenses. Free tax usa 2010 F Fair market value of car, Fair market value. Free tax usa 2010 Farmers Form 1040, Schedule F, Self-employed. Free tax usa 2010 Federal crime investigations or prosecutions Federal employees engaged in, Exception for federal crime investigations or prosecutions. Free tax usa 2010 Federal rate for per diem, Standard Meal Allowance, The federal rate. Free tax usa 2010 Fee-basis officials, Officials Paid on a Fee Basis Fees you pay, Parking fees. Free tax usa 2010 Fixed and variable rate (FAVR) allowance, Fixed and variable rate (FAVR). Free tax usa 2010 Form 1040, Schedule C, Self-employed. Free tax usa 2010 Form 1040, Schedule F, Self-employed. Free tax usa 2010 Form 2106, How to choose. Free tax usa 2010 , Employees. Free tax usa 2010 , Full value included in your income. Free tax usa 2010 , Reporting your expenses under a nonaccountable plan. Free tax usa 2010 , Completing Forms 2106 and 2106-EZ Form 2106-EZ, Form 2106-EZ. Free tax usa 2010 Form 4562, Self-employed. Free tax usa 2010 Form 4797, Excess depreciation. Free tax usa 2010 Form W-2 Employer-provided vehicles, Value reported on Form W-2. Free tax usa 2010 Reimbursement of personal expenses, Reimbursement for personal expenses. Free tax usa 2010 Statutory employees, Statutory employees. Free tax usa 2010 Free tax services, Free help with your tax return. Free tax usa 2010 G Gifts, Gift or entertainment. Free tax usa 2010 , Gifts $25 limit, $25 limit. Free tax usa 2010 Combining for recordkeeping purposes, Gift expenses. Free tax usa 2010 Reporting requirements, Gifts. Free tax usa 2010 Golf clubs, Club dues and membership fees. Free tax usa 2010 H Hauling tools, Hauling tools or instruments. Free tax usa 2010 Help (see Tax help) High-low method Introduction, High-low method. Free tax usa 2010 Transition rules, High-low method. Free tax usa 2010 High-low rate method, High-low rate. Free tax usa 2010 Home office, Office in the home. Free tax usa 2010 Hotel clubs, Club dues and membership fees. Free tax usa 2010 I Impairment-related work expenses, Impairment-Related Work Expenses of Disabled Employees Incidental expenses Defined, Incidental expenses. Free tax usa 2010 Gifts, Incidental costs. Free tax usa 2010 No meals, incidentals only, Incidental-expenses-only method. Free tax usa 2010 Income-producing property, Income-producing property. Free tax usa 2010 Incomplete records, What If I Have Incomplete Records? Indefinite job assignment, Temporary assignment vs. Free tax usa 2010 indefinite assignment. Free tax usa 2010 Independent contractors, Rules for Independent Contractors and Clients Interest on car loans, Interest on car loans. Free tax usa 2010 Itinerants, Tax Home L Lavish or extravagant expenses, Lavish or extravagant. Free tax usa 2010 , Lavish or extravagant expenses. Free tax usa 2010 Leasing a car, truck, or van, Leasing a Car, Reporting inclusion amounts. Free tax usa 2010 Luxury private boxes at entertainment events, Skyboxes and other private luxury boxes. Free tax usa 2010 Luxury water travel, Luxury Water Travel M MACRS (Modified Accelerated Cost Recovery System), Modified Accelerated Cost Recovery System (MACRS). Free tax usa 2010 2011 chart (Table 4-1), Table 4-1. Free tax usa 2010 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Free tax usa 2010 ) Main place of business or work, Main place of business or work. Free tax usa 2010 Married taxpayers Performing artists, Special rules for married persons. Free tax usa 2010 Meal expenses, Meals 50% limit, 50% Limit Determination of applicability (Figure A), 50% Limit Exceptions, Exceptions to the 50% Limit Actual cost method, Actual Cost Form 2106, Meal and entertainment expenses. Free tax usa 2010 Major cities with higher allowances, Amount of standard meal allowance. Free tax usa 2010 Standard meal allowance, Standard Meal Allowance, Who can use the standard meal allowance. Free tax usa 2010 , The standard meal allowance. Free tax usa 2010 Meals, entertainment-related, A meal as a form of entertainment. Free tax usa 2010 Mileage rate (see Standard mileage rate) Military (see Armed forces) Missing children, photographs of, Reminder Modified Accelerated Cost Recovery System (MACRS), Modified Accelerated Cost Recovery System (MACRS). Free tax usa 2010 2011 chart (Table 4-1), Table 4-1. Free tax usa 2010 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Free tax usa 2010 ) N Nonaccountable plans, Nonaccountable Plans O Office in the home, Office in the home. Free tax usa 2010 Officials paid on fee basis, Officials Paid on a Fee Basis Overseas travel Conventions, Conventions Held Outside the North American Area Meal allowance, Standard meal allowance for areas outside the continental United States. Free tax usa 2010 Part of trip outside U. Free tax usa 2010 S. Free tax usa 2010 , Part of Trip Outside the United States P Parking fees, Parking fees. Free tax usa 2010 , Parking fees and tolls. Free tax usa 2010 Per diem allowances, Per Diem and Car Allowances, Allowance more than the federal rate. Free tax usa 2010 Defined, Reimbursement, allowance, or advance. Free tax usa 2010 Federal rate for, The federal rate. Free tax usa 2010 Per diem rates High-cost localities, High-low method. Free tax usa 2010 High-low method, High-low method. Free tax usa 2010 Regular federal method, Regular federal per diem rate method. Free tax usa 2010 Standard rate for unlisted localities, High-low method. Free tax usa 2010 , Regular federal per diem rate method. Free tax usa 2010 Transition rules, High-low method. Free tax usa 2010 , Federal per diem rate method. Free tax usa 2010 Performing artists, Expenses of Certain Performing Artists Personal property taxes, Personal property taxes. Free tax usa 2010 , Taxes paid on your car. Free tax usa 2010 Personal trips, Trip Primarily for Personal Reasons Outside U. Free tax usa 2010 S. Free tax usa 2010 , Travel Primarily for Personal Reasons Placed in service, cars, Placed in service. Free tax usa 2010 Probationary work period, Probationary work period. Free tax usa 2010 Proving business purpose, Proving business purpose. Free tax usa 2010 Public transportation Outside of U. Free tax usa 2010 S. Free tax usa 2010 travel, Public transportation. Free tax usa 2010 Publications (see Tax help) R Recordkeeping requirements, Recordkeeping, Examples of Records Adequate records, What Are Adequate Records? Daily business mileage and expense log (Table 6-2), Table 5-2. Free tax usa 2010 Daily Business Mileage and Expense Log Name: Destroyed records, Destroyed records. Free tax usa 2010 How to prove expenses (Table 5-1), Table 5-1. Free tax usa 2010 How To Prove Certain Business Expenses Incomplete records, What If I Have Incomplete Records? Reimbursed expenses, Reimbursed for expenses. Free tax usa 2010 Sampling to prove expenses, Sampling. Free tax usa 2010 Separating and combining expenses, Separating and Combining Expenses, If your return is examined. Free tax usa 2010 Three-year period of retention, How Long To Keep Records and Receipts Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Regular federal method Introduction, Regular federal per diem rate method. Free tax usa 2010 Transition rules, Federal per diem rate method. Free tax usa 2010 Reimbursements, Less than full value included in your income. Free tax usa 2010 , Contractor does not adequately account. Free tax usa 2010 Accountable plans, Accountable Plans Excess, Returning Excess Reimbursements, Nonaccountable Plans Form 2106, Reimbursements. Free tax usa 2010 Nonaccountable plans, Nonaccountable Plans Nondeductible expenses, Reimbursement of nondeductible expenses. Free tax usa 2010 Personal expenses, Reimbursement for personal expenses. Free tax usa 2010 Recordkeeping, Reimbursed for expenses. Free tax usa 2010 Reporting (Table 6-1), Table 6-1. Free tax usa 2010 Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements Unclaimed, Where To Report Reporting requirements, How To Report Per diem or car allowance, Reporting your expenses with a per diem or car allowance. Free tax usa 2010 Reimbursements, Reimbursements, Contractor does not adequately account. Free tax usa 2010 Reservists Transportation expenses, Armed Forces reservists. Free tax usa 2010 Traveling more than 100 miles from home, Armed Forces Reservists Traveling More Than 100 Miles From Home Returning excess reimbursements, Returning Excess Reimbursements Rural mail carriers, Rural mail carriers. Free tax usa 2010 S Section 179 deduction Amended return, How to choose. Free tax usa 2010 Deduction, Section 179 Deduction Limits, Limits. Free tax usa 2010 Self-employed persons, 2 - Self-employed. Free tax usa 2010 Reporting requirements, Self-employed. Free tax usa 2010 Skyboxes, Skyboxes and other private luxury boxes. Free tax usa 2010 Spouse, expenses for, Travel expenses for another individual. Free tax usa 2010 , Expenses for spouses. Free tax usa 2010 Standard meal allowance, Standard Meal Allowance, Who can use the standard meal allowance. Free tax usa 2010 , The standard meal allowance. Free tax usa 2010 Standard mileage rate, What's New, Standard Mileage Rate, The standard mileage rate. Free tax usa 2010 Depreciation adjustment for using, Depreciation adjustment when you used the standard mileage rate. Free tax usa 2010 Form 2106, Standard mileage rate. Free tax usa 2010 Statutory employees, Statutory employees. Free tax usa 2010 T Tables and figures 50% limit determination (Figure A), 50% Limit Daily business mileage and expense log (Table 6-2), Table 5-2. Free tax usa 2010 Daily Business Mileage and Expense Log Name: Entertainment expenses, determination of deductibility (Table 2-1), Table 2-1. Free tax usa 2010 When Are Entertainment Expenses Deductible? Maximum depreciation deduction for cars table, Maximum Depreciation Deduction for Cars Modified Accelerated Cost Recovery System (MACRS) 2011 chart (Table 4-1), Table 4-1. Free tax usa 2010 2013 MACRS Depreciation Chart (Use to Figure Depreciation for 2013. Free tax usa 2010 ) Proving expenses (Table 5-1), Table 5-1. Free tax usa 2010 How To Prove Certain Business Expenses Reporting reimbursements (Table 6-1), Table 6-1. Free tax usa 2010 Reporting Travel, Entertainment, Gift, and Car Expenses and Reimbursements Transportation expenses, determination of deductibility (Figure B), Gift or entertainment. Free tax usa 2010 , Illustration of transportation expenses. Free tax usa 2010 Travel expenses, determination of deductibility (Table 1-1), Table 1-1. Free tax usa 2010 Travel Expenses You Can Deduct Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Tax help, How To Get Tax Help Tax home, determination of, Tax Home Temporary job assignments, Temporary Assignment or Job Temporary work location, Temporary work location. Free tax usa 2010 Tickets, Entertainment tickets. Free tax usa 2010 , Gift or entertainment. Free tax usa 2010 Season or series tickets, Season or series tickets. Free tax usa 2010 Traffic violations, Fines and collateral. Free tax usa 2010 Tools Hauling tools, Hauling tools or instruments. Free tax usa 2010 Trade association meetings, Trade association meetings. Free tax usa 2010 Trade-in of car, Car trade-in. Free tax usa 2010 , Trade-in. Free tax usa 2010 Traffic tickets, Fines and collateral. Free tax usa 2010 Transients, Tax Home Transition rules, Transition Rules Example High-low method, High-low method. Free tax usa 2010 High-low method, High-low method. Free tax usa 2010 Regular federal method, Federal per diem rate method. Free tax usa 2010 Transportation expenses, Transportation, Depreciation deduction for the year of disposition. Free tax usa 2010 Car expenses, Car Expenses, Reporting inclusion amounts. Free tax usa 2010 Deductible (Figure B), Gift or entertainment. Free tax usa 2010 , Illustration of transportation expenses. Free tax usa 2010 five or more cars, Five or more cars. Free tax usa 2010 Form 2106, Transportation expenses. Free tax usa 2010 Transportation workers, Special rate for transportation workers. Free tax usa 2010 , Individuals subject to hours of service limits. Free tax usa 2010 Travel advance, Reimbursement, allowance, or advance. Free tax usa 2010 , Travel advance. Free tax usa 2010 (see also Reimbursements) Travel expenses, Travel, Cruise Ships Another individual accompanying taxpayer, Travel expenses for another individual. Free tax usa 2010 Away from home, Traveling Away From Home, Tax Home Deductible, What Travel Expenses Are Deductible?, Cruise Ships Summary of (Table 1-1), Table 1-1. Free tax usa 2010 Travel Expenses You Can Deduct Defined, Travel expenses defined. Free tax usa 2010 Going home on days off, Going home on days off. Free tax usa 2010 In U. Free tax usa 2010 S. Free tax usa 2010 , Travel in the United States Lodging, Standard Meal Allowance Luxury water travel, Luxury Water Travel Outside U. Free tax usa 2010 S. Free tax usa 2010 , Travel Outside the United States Travel to family home, Tax Home Different From Family Home Trucks and vans Depreciation, Trucks and vans. Free tax usa 2010 Transportation workers, Individuals subject to hours of service limits. Free tax usa 2010 Transportation workers' expenses, Special rate for transportation workers. Free tax usa 2010 Two places of work, Two places of work. Free tax usa 2010 U Unclaimed reimbursements, Where To Report Unions Trips from union hall to place of work, Union members' trips from a union hall. Free tax usa 2010 Unrecovered basis of car, How to treat unrecovered basis. Free tax usa 2010 V Volunteers, Volunteers. Free tax usa 2010 W Weekly travel expense and entertainment record (Table 6-3), THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Prev  Up     Home   More Online Publications