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Tax Planning Us 1040

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Tax Relief for Victims of March 11 Floods in South Dakota

Updated 9/02/11 to include Yankton county.

SD-2011-19, August 24, 2011

ST. PAUL — Victims of flooding that began on March 11, 2011 in parts of South Dakota may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Charles Mix, Hughes, Stanley, Union and Yankton. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after March 11 and on or before June 30 have been postponed to June 30. This includes the April 18 deadline for filing 2010 individual income tax returns, making income tax payments and making 2010 contributions to an individual retirement account (IRA). This also includes the estimated tax payment for the second quarter of 2011 normally due June 15.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after March 11 and on or before March 28, 2011, as long as the deposits were made by March 28, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until June 30 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after March 11 and on or before June 30.

The IRS also gives affected taxpayers until June 30 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007), that are due to be performed on or after March 11 and on or before June 30.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after March 11 and on or before March 28 provided the taxpayer made these deposits by March 28.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “South Dakota/Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 20-Mar-2014

The Tax Planning Us 1040

Tax planning us 1040 5. Tax planning us 1040   Figuring Your Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Identification NumberF-1 and M-1 visa holders. Tax planning us 1040 J-1 visa holders. Tax planning us 1040 Filing StatusResident Aliens Nonresident Aliens Reporting Your Income DeductionsResident Aliens Nonresident Aliens ExemptionsResident Aliens Nonresident Aliens Itemized DeductionsResident Aliens Nonresident Aliens Tax Credits and PaymentsResident Aliens Nonresident Aliens Bona Fide Residents of American Samoa or Puerto Rico Introduction After you have determined your alien status, the source of your income, and if and how that income is taxed in the United States, your next step is to figure your tax. Tax planning us 1040 The information in this chapter is not as comprehensive for resident aliens as it is for nonresident aliens. Tax planning us 1040 Resident aliens should get publications, forms, and instructions for U. Tax planning us 1040 S. Tax planning us 1040 citizens, because the information for filing returns for resident aliens is generally the same as for U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 If you are both a nonresident alien and a resident alien in the same tax year, see chapter 6 for a discussion of dual-status aliens. Tax planning us 1040 Topics - This chapter discusses: Identification numbers, Filing status, Deductions, Exemptions, Tax credits and payments, and Special rules for bona fide residents of American Samoa and Puerto Rico. Tax planning us 1040 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 521 Moving Expenses 526 Charitable Contributions 535 Business Expenses 597 Information on the United States–Canada Income Tax Treaty Form (and Instructions) W-7 Application for IRS Individual Taxpayer Identification Number 1040 U. Tax planning us 1040 S. Tax planning us 1040 Individual Income Tax Return 1040NR U. Tax planning us 1040 S. Tax planning us 1040 Nonresident Alien Income Tax Return 1040NR-EZ U. Tax planning us 1040 S. Tax planning us 1040 Income Tax Return for Certain Nonresident Aliens With No Dependents 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 3903 Moving Expenses 4563 Exclusion of Income for Bona Fide Residents of American Samoa 8959 Additional Medicare Tax See chapter 12 for information about getting these publications and forms. Tax planning us 1040 Tax Year You must figure your income and file a tax return on the basis of an annual accounting period called a tax year. Tax planning us 1040 If you have not previously established a fiscal tax year, your tax year is the calendar year. Tax planning us 1040 A calendar year is 12 consecutive months ending on December 31. Tax planning us 1040 If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December or a 52–53 week year) and are considered to be a U. Tax planning us 1040 S. Tax planning us 1040 resident for any calendar year, you will be treated as a U. Tax planning us 1040 S. Tax planning us 1040 resident for any part of your fiscal year that falls within that calendar year. Tax planning us 1040 Identification Number A taxpayer identification number must be furnished on returns, statements, and other tax-related documents. Tax planning us 1040 For an individual, this is a social security number (SSN). Tax planning us 1040 If you do not have and are not eligible to get an SSN, you must apply for an individual taxpayer identification number (ITIN). Tax planning us 1040 An employer identification number (EIN) is required if you are engaged in a trade or business as a sole proprietor and have employees or a qualified retirement plan. Tax planning us 1040 You must furnish a taxpayer identification number if you are: An alien who has income effectively connected with the conduct of a U. Tax planning us 1040 S. Tax planning us 1040 trade or business at any time during the year, An alien who has a U. Tax planning us 1040 S. Tax planning us 1040 office or place of business at any time during the year, A nonresident alien spouse treated as a resident, as discussed in chapter 1, or Any other alien who files a tax return, an amended return, or a refund claim (but not information returns). Tax planning us 1040 Social security number (SSN). Tax planning us 1040   Generally, you can get an SSN if you have been lawfully admitted to the United States for permanent residence or under other immigration categories that authorize U. Tax planning us 1040 S. Tax planning us 1040 employment. Tax planning us 1040   To apply for this number, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration (SSA) office or call the SSA at 1-800-772-1213. Tax planning us 1040 You can also download Form SS-5 from the SSA's website at www. Tax planning us 1040 socialsecurity. Tax planning us 1040 gov/ssnumber/ss5. Tax planning us 1040 htm. Tax planning us 1040 You must visit an SSA office in person and submit your Form SS-5 along with original documentation showing your age, identity, immigration status, and authority to work in the United States. Tax planning us 1040 Generally, you will receive your card about 2 weeks after the SSA has all of the necessary information. Tax planning us 1040 F-1 and M-1 visa holders. Tax planning us 1040    If you are an F-1 or M-1 student, you must also show your Form I-20. Tax planning us 1040 For more information, see SSA Publication 05-10181, International Students and Social Security Numbers, available online at www. Tax planning us 1040 socialsecurity. Tax planning us 1040 gov/pubs/10181. Tax planning us 1040 html. Tax planning us 1040 J-1 visa holders. Tax planning us 1040   If you are a J-1 exchange visitor, you will also need to show your Form DS-2019. Tax planning us 1040 For more information, see SSA Publication 05-10107, Foreign Workers and Social Security Numbers, available online at www. Tax planning us 1040 socialsecurity. Tax planning us 1040 gov/pubs/10107. Tax planning us 1040 html. Tax planning us 1040 Individual taxpayer identification number (ITIN). Tax planning us 1040   If you do not have and are not eligible to get an SSN, you must apply for an ITIN. Tax planning us 1040 For details on how to do so, see Form W-7 and its instructions. Tax planning us 1040 Allow 6 to 10 weeks for the IRS to notify you of your ITIN. Tax planning us 1040 If you already have an ITIN, enter it wherever an SSN is required on your tax return. Tax planning us 1040   An ITIN is for tax use only. Tax planning us 1040 It does not entitle you to social security benefits or change your employment or immigration status under U. Tax planning us 1040 S. Tax planning us 1040 law. Tax planning us 1040   In addition to those aliens who are required to furnish a taxpayer identification number and are not eligible for an SSN, a Form W-7 must be filed for: Alien individuals who are claimed as dependents and are not eligible for an SSN, and Alien spouses who are claimed as exemptions and are not eligible for an SSN. Tax planning us 1040 Employer identification number (EIN). Tax planning us 1040   An individual may use an SSN (or ITIN) for individual taxes and an EIN for business taxes. Tax planning us 1040 To apply for an EIN, file Form SS-4, Application for Employer Identification Number, with the IRS. Tax planning us 1040 Filing Status The amount of your tax depends on your filing status. Tax planning us 1040 Your filing status is important in determining whether you can take certain deductions and credits. Tax planning us 1040 The rules for determining your filing status are different for resident aliens and nonresident aliens. Tax planning us 1040 Resident Aliens Resident aliens can use the same filing statuses available to U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 See your form instructions or Publication 501 for more information on filing status. Tax planning us 1040 Married filing jointly. Tax planning us 1040   Generally, you can file as married filing jointly only if both you and your spouse were resident aliens for the entire tax year, or if you make one of the choices discussed in chapter 1 to treat your spouse as a resident alien for the entire tax year. Tax planning us 1040 Qualifying widow(er). Tax planning us 1040   If your spouse died in 2011 or 2012, you did not remarry before the end of 2013, and you have a dependent child living with you, you may qualify to file as a qualifying widow(er) and use the joint return tax rates. Tax planning us 1040 This applies only if you could have filed a joint return with your spouse for the year your spouse died. Tax planning us 1040 Head of household. Tax planning us 1040   You can qualify as head of household if you are unmarried or considered unmarried on the last day of the year and you pay more than half the cost of keeping up a home for you and a qualifying person. Tax planning us 1040 You must be a resident alien for the entire tax year. Tax planning us 1040   You are considered unmarried for this purpose if your spouse was a nonresident alien at any time during the year and you do not make one of the choices discussed in chapter 1 to treat your spouse as a resident alien for the entire tax year. Tax planning us 1040 Note. Tax planning us 1040   Even if you are considered unmarried for head of household purposes because you are married to a nonresident alien, you may still be considered married for purposes of the earned income credit. Tax planning us 1040 In that case, you will not be entitled to the credit. Tax planning us 1040 See Publication 596 for more information. Tax planning us 1040 Nonresident Aliens If you are a nonresident alien filing Form 1040NR, you may be able to use one of the filing statuses discussed later. Tax planning us 1040 If you are filing Form 1040NR-EZ, you can only claim “Single nonresident alien” or “Married nonresident alien” as your filing status. Tax planning us 1040 Married nonresident alien. Tax planning us 1040   Married nonresident aliens who are not married to U. Tax planning us 1040 S. Tax planning us 1040 citizens or residents generally must use the Tax Table column or the Tax Computation Worksheet for married filing separate returns when determining the tax on income effectively connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 Exceptions. Tax planning us 1040   Married nonresident aliens normally cannot use the Tax Table column or the Tax Computation Worksheet for single individuals. Tax planning us 1040 However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a married resident of Canada, Mexico, South Korea, or are a married U. Tax planning us 1040 S. Tax planning us 1040 national. Tax planning us 1040 See the instructions for Form 1040NR or Form 1040NR-EZ to see if you qualify. Tax planning us 1040 U. Tax planning us 1040 S. Tax planning us 1040 national is defined later in this section under Qualifying widow(er) . Tax planning us 1040   A nonresident alien generally cannot file as married filing jointly. Tax planning us 1040 However, a nonresident alien who is married to a U. Tax planning us 1040 S. Tax planning us 1040 citizen or resident can choose to be treated as a resident and file a joint return on Form 1040, Form 1040A, or Form 1040EZ. Tax planning us 1040 For information on these choices, see chapter 1. Tax planning us 1040 If you do not make the choice to file jointly, file Form 1040NR or Form 1040NR-EZ and use the Tax Table column or the Tax Computation Worksheet for married individuals filing separately. Tax planning us 1040 Qualifying widow(er). Tax planning us 1040   You may be eligible to file as a qualifying widow(er) and use the joint return tax rates if all of the following conditions apply. Tax planning us 1040 You were a resident of Canada, Mexico, or South Korea, or a U. Tax planning us 1040 S. Tax planning us 1040 national (defined later). Tax planning us 1040 Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. Tax planning us 1040 You have a dependent child living with you. Tax planning us 1040 See the instructions for Form 1040NR for the rules for filing as a qualifying widow(er) with a dependent child. Tax planning us 1040   A U. Tax planning us 1040 S. Tax planning us 1040 national is an individual who, although not a U. Tax planning us 1040 S. Tax planning us 1040 citizen, owes his or her allegiance to the United States. Tax planning us 1040 U. Tax planning us 1040 S. Tax planning us 1040 nationals include American Samoans and Northern Mariana Islanders who chose to become U. Tax planning us 1040 S. Tax planning us 1040 nationals instead of U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 Head of household. Tax planning us 1040   You cannot file as head of household if you are a nonresident alien at any time during the tax year. Tax planning us 1040 However, if you are married, your spouse can qualify as a head of household if: Your spouse is a resident alien or U. Tax planning us 1040 S. Tax planning us 1040 citizen for the entire tax year, You do not choose to be treated as a resident alien, and Your spouse meets the other requirements for this filing status, as discussed earlier under Resident Aliens . Tax planning us 1040 Note. Tax planning us 1040   Even if your spouse is considered unmarried for head of household purposes because you are a nonresident alien, your spouse may still be considered married for purposes of the earned income credit. Tax planning us 1040 In that case, your spouse will not be entitled to the credit. Tax planning us 1040 See Publication 596 for more information. Tax planning us 1040 Estates and trusts. Tax planning us 1040   A nonresident alien estate or trust using Form 1040NR must use Tax Rate Schedule W in the Form 1040NR instructions when determining the tax on income effectively connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 Special rules for aliens from certain U. Tax planning us 1040 S. Tax planning us 1040 possessions. Tax planning us 1040   A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico for the entire tax year and who is temporarily working in the United States should read Bona Fide Residents of American Samoa or Puerto Rico, at the end of this chapter, for information about special rules. Tax planning us 1040 Reporting Your Income You must report each item of income that is taxable according to the rules in chapters 2, 3, and 4. Tax planning us 1040 For resident aliens, this includes income from sources both within and outside the United States. Tax planning us 1040 For nonresident aliens, this includes both income that is effectively connected with a trade or business in the United States (subject to graduated tax rates) and income from U. Tax planning us 1040 S. Tax planning us 1040 sources that is not effectively connected (subject to a flat 30% tax rate or lower tax treaty rate). Tax planning us 1040 Deductions Resident and nonresident aliens can claim similar deductions on their U. Tax planning us 1040 S. Tax planning us 1040 tax returns. Tax planning us 1040 However, nonresident aliens generally can claim only deductions related to income that is effectively connected with their U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 Resident Aliens You can claim the same deductions allowed to U. Tax planning us 1040 S. Tax planning us 1040 citizens if you are a resident alien for the entire tax year. Tax planning us 1040 While the discussion that follows contains some of the same general rules and guidelines that apply to you, it is specifically directed toward nonresident aliens. Tax planning us 1040 You should get Form 1040 and instructions for more information on how to claim your allowable deductions. Tax planning us 1040 Nonresident Aliens You can claim deductions to figure your effectively connected taxable income. Tax planning us 1040 You generally cannot claim deductions related to income that is not connected with your U. Tax planning us 1040 S. Tax planning us 1040 business activities. Tax planning us 1040 Except for personal exemptions, and certain itemized deductions, discussed later, you can claim deductions only to the extent they are connected with your effectively connected income. Tax planning us 1040 Ordinary and necessary business expenses. Tax planning us 1040   You can deduct all ordinary and necessary expenses in the operation of your U. Tax planning us 1040 S. Tax planning us 1040 trade or business to the extent they relate to income effectively connected with that trade or business. Tax planning us 1040 The deduction for travel expenses while in the United States is discussed under Itemized Deductions, later. Tax planning us 1040 For information about other business expenses, see Publication 535. Tax planning us 1040 Losses. Tax planning us 1040   You can deduct losses resulting from transactions that you entered into for profit and that you were not reimbursed for by insurance, etc. Tax planning us 1040 to the extent that they relate to income that is effectively connected with a trade or business in the United States. Tax planning us 1040 Educator expenses. Tax planning us 1040   If you were an eligible educator in 2013, you can deduct as an adjustment to income up to $250 in unreimbursed qualified expenses you paid or incurred during 2013 for books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment, and other equipment and materials used in the classroom. Tax planning us 1040 For more information, see your tax form instructions. Tax planning us 1040 Individual retirement arrangement (IRA). Tax planning us 1040   If you made contributions to a traditional IRA for 2013, you may be able to take an IRA deduction. Tax planning us 1040 But you must have taxable compensation effectively connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business to do so. Tax planning us 1040 A Form 5498 should be sent to you by May 31, 2014, that shows all contributions to your traditional IRA for 2013. Tax planning us 1040 If you were covered by a retirement plan (qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc. Tax planning us 1040 ) at work or through self-employment, your IRA deduction may be reduced or eliminated. Tax planning us 1040 But you can still make contributions to a traditional IRA even if you cannot deduct them. Tax planning us 1040 If you made nondeductible contributions to a traditional IRA for 2013, you must report them on Form 8606, Nondeductible IRAs. Tax planning us 1040   For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Tax planning us 1040 Moving expenses. Tax planning us 1040   If you are a nonresident alien temporarily in the United States earning taxable income for performing personal services, you can deduct moving expenses to the United States if you meet both of the following tests. Tax planning us 1040 You are a full-time employee for at least 39 weeks during the 12 months right after you move, or if you are self-employed, you work full time for at least 39 weeks during the first 12 months and 78 weeks during the first 24 months right after you move. Tax planning us 1040 Your new job location is at least 50 miles farther (by the shortest commonly traveled route) from your former home than your former job location was. Tax planning us 1040 If you had no former job location, the new job location must be at least 50 miles from your former home. Tax planning us 1040   You cannot deduct the moving expense you have when returning to your home abroad or moving to a foreign job site. Tax planning us 1040   Figure your deductible moving expenses to the United States on Form 3903, and deduct them on line 26 of Form 1040NR. Tax planning us 1040   For more information on the moving expense deduction, see Publication 521. Tax planning us 1040 Reimbursements. Tax planning us 1040   If your employer reimbursed you for allowable moving expenses under an accountable plan, your employer should have excluded these reimbursements from your income. Tax planning us 1040 You can only deduct allowable moving expenses that were not reimbursed by your employer or that were reimbursed but the reimbursement was included in your income. Tax planning us 1040 For more information, see Publication 521. Tax planning us 1040 Moving expense or travel expense. Tax planning us 1040   If you deduct moving expenses to the United States, you cannot also deduct travel expenses (discussed later under Itemized Deductions) while temporarily away from your tax home in a foreign country. Tax planning us 1040 Moving expenses are based on a change in your principal place of business while travel expenses are based on your temporary absence from your principal place of business. Tax planning us 1040 Self-employed SEP, SIMPLE, and qualified retirement plans. Tax planning us 1040   If you are self-employed, you may be able to deduct contributions to a SEP, SIMPLE, or qualified retirement plan that provides retirement benefits for yourself and your common-law employees, if any. Tax planning us 1040 To make deductible contributions for yourself, you must have net earnings from self-employment that are effectively connected with your U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040   Get Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans), for further information. Tax planning us 1040 Penalty on early withdrawal of savings. Tax planning us 1040   You must include in income all effectively connected interest income you receive or that is credited to your account during the year. Tax planning us 1040 Do not reduce it by any penalty you must pay on an early withdrawal from a time savings account. Tax planning us 1040 However, if the interest income is effectively connected with your U. Tax planning us 1040 S. Tax planning us 1040 trade or business during the year, you can deduct on line 30 of Form 1040NR the amount of the early withdrawal penalty that the banking institution charged. Tax planning us 1040 Student loan interest expense. Tax planning us 1040   If you paid interest on a student loan in 2013, you may be able to deduct up to $2,500 of the interest you paid. Tax planning us 1040 Generally, you can claim the deduction if all the following requirements are met. Tax planning us 1040 Your filing status is any filing status except married filing separately. Tax planning us 1040 Your modified adjusted gross income is less than $75,000. Tax planning us 1040 No one else is claiming an exemption for you on his or her 2013 tax return. Tax planning us 1040 You paid interest on a loan taken out only to pay tuition and other qualified higher education expenses for yourself, your spouse, someone who was your dependent when the loan was taken out, or someone you could have claimed as a dependent for the year the loan was taken out except that: The person filed a joint return, The person had gross income that was equal to or more than the exemption amount for that year ($3,900 for 2013), or You could be claimed as a dependent on someone else's return. Tax planning us 1040 The loan is not from a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan. Tax planning us 1040 The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out. Tax planning us 1040 The person for whom the expenses were paid or incurred was an eligible student. Tax planning us 1040 Use the worksheet in the Form 1040NR or Form 1040NR-EZ instructions to figure the deduction. Tax planning us 1040 For more information, see Publication 970, Tax Benefits for Education. Tax planning us 1040 Exemptions Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Tax planning us 1040 S. Tax planning us 1040 tax return. Tax planning us 1040 Resident Aliens You can claim personal exemptions and exemptions for dependents according to the dependency rules for U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 You can claim an exemption for your spouse on a separate return if your spouse had no gross income for U. Tax planning us 1040 S. Tax planning us 1040 tax purposes and was not the dependent of another taxpayer. Tax planning us 1040 You can claim this exemption even if your spouse has not been a resident alien for a full tax year or is an alien who has not come to the United States. Tax planning us 1040 You can claim an exemption for each person who qualifies as a dependent according to the rules for U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 The dependent must be a citizen or national (defined earlier) of the United States or be a resident of the United States, Canada, or Mexico for some part of the calendar year in which your tax year begins. Tax planning us 1040 Get Publication 501 for more information. Tax planning us 1040 Your spouse and each dependent for whom you claim an exemption must have either an SSN or an ITIN. Tax planning us 1040 See Identification Number, earlier. Tax planning us 1040 Nonresident Aliens Generally, if you are a nonresident alien engaged in a trade or business in the United States, you can claim only one personal exemption ($3,900 for 2013). Tax planning us 1040 You may be able to claim an exemption for a spouse and a dependent if you are described in any of the following discussions. Tax planning us 1040 Your spouse and each dependent for whom you claim an exemption must have either an SSN or an ITIN. Tax planning us 1040 See Identification Number, earlier. Tax planning us 1040 Residents of Mexico or Canada or U. Tax planning us 1040 S. Tax planning us 1040 nationals. Tax planning us 1040   If you are a resident of Mexico or Canada or a national of the United States (defined earlier), you can also claim a personal exemption for your spouse if your spouse had no gross income for U. Tax planning us 1040 S. Tax planning us 1040 tax purposes and cannot be claimed as the dependent on another U. Tax planning us 1040 S. Tax planning us 1040 taxpayer's return. Tax planning us 1040 In addition, you can claim exemptions for your dependents who meet certain tests. Tax planning us 1040 Residents of Mexico, Canada, or nationals of the United States must use the same rules as U. Tax planning us 1040 S. Tax planning us 1040 citizens to determine who is a dependent and for which dependents exemptions can be claimed. Tax planning us 1040 See Publication 501 for these rules. Tax planning us 1040 For purposes of these rules, dependents who are U. Tax planning us 1040 S. Tax planning us 1040 nationals meet the citizenship test discussed in Publication 501. Tax planning us 1040 Residents of South Korea. Tax planning us 1040   Nonresident aliens who are residents of South Korea may be able to claim exemptions for a spouse and children. Tax planning us 1040 The income tax treaty with South Korea imposes two additional requirements on South Korean residents: The spouse and all children claimed must live with the alien in the United States at some time during the tax year, and The additional deduction for the exemptions must be prorated based on the ratio of the alien's U. Tax planning us 1040 S. Tax planning us 1040 source gross income effectively connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business for the tax year to the alien's entire income from all sources during the tax year. Tax planning us 1040 Example. Tax planning us 1040 Mr. Tax planning us 1040 Park, a nonresident alien who is a resident of South Korea, lives temporarily in the United States with his wife and two children. Tax planning us 1040 During the tax year he receives U. Tax planning us 1040 S. Tax planning us 1040 compensation of $18,000. Tax planning us 1040 He also receives $6,000 of income from sources outside the United States that is not effectively connected with his U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 Thus, his total income for the year is $24,000. Tax planning us 1040 Mr. Tax planning us 1040 Park meets all requirements for claiming exemptions for his spouse and two children. Tax planning us 1040 The additional deduction for 2013 is $8,775 figured as follows: $18,000 $24,000 × $11,700* = $8,775               *3 × $3,900 = $11,700   Students and business apprentices from India. Tax planning us 1040   Students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty may be able to claim exemptions for their spouse and dependents. Tax planning us 1040   You can claim an exemption for your spouse if he or she had no gross income during the year and cannot be claimed as a dependent on another U. Tax planning us 1040 S. Tax planning us 1040 taxpayer's return. Tax planning us 1040   You can claim exemptions for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 See Publication 501 for these rules. Tax planning us 1040   List your spouse and dependents on line 7c of Form 1040NR. Tax planning us 1040 Enter the total on the appropriate line to the right of line 7c. Tax planning us 1040 Itemized Deductions Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Tax planning us 1040 However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 Resident Aliens You can claim the same itemized deductions as U. Tax planning us 1040 S. Tax planning us 1040 citizens, using Schedule A of Form 1040. Tax planning us 1040 These deductions include certain medical and dental expenses, state and local income taxes, real estate taxes, interest you paid on a home mortgage, charitable contributions, casualty and theft losses, and miscellaneous deductions. Tax planning us 1040 If you do not itemize your deductions, you can claim the standard deduction for your particular filing status. Tax planning us 1040 For further information, see Form 1040 and instructions. Tax planning us 1040 Nonresident Aliens You can deduct certain itemized deductions if you receive income effectively connected with your U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 These deductions include state and local income taxes, charitable contributions to U. Tax planning us 1040 S. Tax planning us 1040 organizations, casualty and theft losses, and miscellaneous deductions. Tax planning us 1040 Use Schedule A of Form 1040NR to claim itemized deductions. Tax planning us 1040 If you are filing Form 1040NR-EZ, you can only claim a deduction for state or local income taxes. Tax planning us 1040 If you are claiming any other itemized deduction, you must file Form 1040NR. Tax planning us 1040 Standard deduction. Tax planning us 1040   Nonresident aliens cannot claim the standard deduction. Tax planning us 1040 However, see Students and business apprentices from India , next. Tax planning us 1040 Students and business apprentices from India. Tax planning us 1040   A special rule applies to students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty. Tax planning us 1040 You can claim the standard deduction provided you do not claim itemized deductions. Tax planning us 1040   Use Worksheet 5-1 to figure your standard deduction. Tax planning us 1040 If you are married and your spouse files a return and itemizes deductions, you cannot take the standard deduction. Tax planning us 1040 State and local income taxes. Tax planning us 1040   You can deduct state and local income taxes you paid on income that is effectively connected with a trade or business in the United States. Tax planning us 1040 If you received a refund or rebate in 2013 of taxes you paid in an earlier year, do not reduce your deduction by that amount. Tax planning us 1040 Instead, you must include the refund or rebate in income if you deducted the taxes in the earlier year and the deduction reduced your tax. Tax planning us 1040 See Recoveries in Publication 525 for details on how to figure the amount to include in income. Tax planning us 1040 Charitable contributions. Tax planning us 1040   You can deduct your charitable contributions or gifts to qualified organizations subject to certain limits. Tax planning us 1040 Qualified organizations include organizations that are religious, charitable, educational, scientific, or literary in nature, or that work to prevent cruelty to children or animals. Tax planning us 1040 Certain organizations that promote national or international amateur sports competition are also qualified organizations. Tax planning us 1040 Foreign organizations. Tax planning us 1040   Contributions made directly to a foreign organization are not deductible. Tax planning us 1040 However, you can deduct contributions to a U. Tax planning us 1040 S. Tax planning us 1040 organization that transfers funds to a charitable foreign organization if the U. Tax planning us 1040 S. Tax planning us 1040 organization controls the use of the funds or if the foreign organization is only an administrative arm of the U. Tax planning us 1040 S. Tax planning us 1040 organization. Tax planning us 1040   For more information about organizations that qualify to receive charitable contributions, see Publication 526, Charitable Contributions. Tax planning us 1040 Worksheet 5-1. Tax planning us 1040 2013 Standard Deduction Worksheet for Students and Business Apprentices From India Caution. Tax planning us 1040 If you are married filing a separate return and your spouse itemizes deductions, do not complete this worksheet. Tax planning us 1040 You cannot take the standard deduction even if you were born before January 2, 1949, or are blind. Tax planning us 1040 1 Enter the amount shown below for your filing status. Tax planning us 1040           Single or married filing separately—$6,100 Qualifying widow(er)—$12,200 1. Tax planning us 1040           2 Can you be claimed as a dependent on someone else's U. Tax planning us 1040 S. Tax planning us 1040 income tax return?  No. Tax planning us 1040 Enter the amount from line 1 on line 4. Tax planning us 1040 Skip line 3 and go to line 5. Tax planning us 1040   Yes. Tax planning us 1040 Go to line 3. Tax planning us 1040         3 Is your earned income* more than $650?           Yes. Tax planning us 1040 Add $350 to your earned income. Tax planning us 1040 Enter the total. Tax planning us 1040           No. Tax planning us 1040 Enter $1,000 3. Tax planning us 1040       4 Enter the smaller of line 1 or line 3 4. Tax planning us 1040   5 If born before January 2, 1949, OR blind, enter $1,200 ($1,500 if single). Tax planning us 1040 If born before January 2, 1949, AND blind, enter $2,400 ($3,000 if single). Tax planning us 1040 Otherwise, enter -0- 5. Tax planning us 1040   6 Add lines 4 and 5. Tax planning us 1040 Enter the total here and on Form 1040NR, line 38 (or Form 1040NR-EZ, line 11). Tax planning us 1040 Print “Standard Deduction Allowed Under U. Tax planning us 1040 S. Tax planning us 1040 –India Income Tax Treaty” in the space to the left of these lines. Tax planning us 1040 This is your standard deduction for 2013. Tax planning us 1040 6. Tax planning us 1040   *Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Tax planning us 1040 It also includes any amount received as a scholarship that you must include in your income. Tax planning us 1040 Generally, your earned income is the total of the amount(s) you reported on Form 1040NR, lines 8,12,13, and 19, minus amounts on lines 27 and 31 (or Form 1040NR-EZ, lines 3 and 5, minus any amount on line 8). Tax planning us 1040 Contributions from which you benefit. Tax planning us 1040   If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Tax planning us 1040   If you pay more than the fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. Tax planning us 1040 For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Tax planning us 1040 Cash contributions. Tax planning us 1040   You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written record from the charity. Tax planning us 1040 The written record must include the name of the charity, date of the contribution, and the amount of the contribution. Tax planning us 1040   You may deduct a cash contribution of $250 or more only if you have a written statement from the charitable organization showing: The amount of any money contributed, Whether the organization gave you any goods or services in return for your contribution, and A description and estimate of the value of any goods or services described in (2). Tax planning us 1040 If you received only intangible religious benefits, the organization must state this, but it does not have to describe or value the benefit. Tax planning us 1040 Noncash contributions. Tax planning us 1040   For contributions not made in cash, the records you must keep depend on the amount of your deduction. Tax planning us 1040 See Publication 526 for details. Tax planning us 1040 For example, if you make a noncash contribution and the amount of your deduction is more than $500, you must complete and attach to your tax return Form 8283, Noncash Charitable Contributions. Tax planning us 1040 If you deduct more than $500 for a contribution of a motor vehicle, boat, or airplane, you must also attach a statement from the charitable organization to your return. Tax planning us 1040 If your total deduction is over $5,000, you also may have to get appraisals of the values of the property. Tax planning us 1040 If the donated property is valued at more than $5,000, you must obtain a qualified appraisal. Tax planning us 1040 You generally must attach to your tax return an appraisal of any property if your deduction for the property is more than $500,000. Tax planning us 1040 See Form 8283 and its instructions for details. Tax planning us 1040 Contributions of appreciated property. Tax planning us 1040   If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Tax planning us 1040 However, if you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Tax planning us 1040 Your basis in the property is generally what you paid for it. Tax planning us 1040 If you need more information about basis, get Publication 551, Basis of Assets. Tax planning us 1040   Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. Tax planning us 1040 For information about these rules, see Publication 526. Tax planning us 1040 Limit. Tax planning us 1040   The amount you can deduct in a tax year is limited in the same way it is for a citizen or resident of the United States. Tax planning us 1040 For a discussion of limits on charitable contributions and other information, get Publication 526. Tax planning us 1040 Casualty and theft losses. Tax planning us 1040   You can deduct your loss from fire, storm, shipwreck, or other casualty, or theft of property even though your property is not connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 The property can be personal use property or income-producing property not connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business. Tax planning us 1040 The property must be located in the United States at the time of the casualty or theft. Tax planning us 1040 You can deduct theft losses only in the year in which you discover the loss. Tax planning us 1040   The amount of the loss is the fair market value of the property immediately before the casualty or theft less its fair market value immediately after the casualty or theft (but not more than its cost or adjusted basis) less any insurance or other reimbursement. Tax planning us 1040 The fair market value of property immediately after a theft is considered zero, because you no longer have the property. Tax planning us 1040   If your property is covered by insurance, you should file a timely insurance claim for reimbursement. Tax planning us 1040 If you do not, you cannot deduct this loss as a casualty or theft loss. Tax planning us 1040   Figure your deductible casualty and theft losses on Form 4684, Casualties and Thefts. Tax planning us 1040 Losses from personal use property. Tax planning us 1040    You cannot deduct the first $100 of each casualty or theft loss to property held for personal use. Tax planning us 1040 You can deduct only the total of these losses for the year (reduced by the $100 limit) that is more than 10% of your adjusted gross income (line 37, Form 1040NR) for the year. Tax planning us 1040 Losses from income-producing property. Tax planning us 1040   These losses are not subject to the limitations that apply to personal use property. Tax planning us 1040 Use Section B of Form 4684 to figure your deduction for these losses. Tax planning us 1040 Job expenses and other miscellaneous deductions. Tax planning us 1040   You can deduct job expenses, such as allowable unreimbursed travel expenses (discussed next), and other miscellaneous deductions. Tax planning us 1040 Generally, the allowable deductions must be related to effectively connected income. Tax planning us 1040 Deductible expenses include: Union dues, Safety equipment and small tools needed for your job, Dues to professional organizations, Subscriptions to professional journals, Tax return preparation fees, and Casualty and theft losses of property used in performing services as an employee (employee property). Tax planning us 1040   Most miscellaneous itemized deductions are deductible only if they are more than 2% of your adjusted gross income (line 37, Form 1040NR). Tax planning us 1040 For more information on miscellaneous deductions, see the instructions for Form 1040NR. Tax planning us 1040 Travel expenses. Tax planning us 1040   You may be able to deduct your ordinary and necessary travel expenses while you are temporarily performing personal services in the United States. Tax planning us 1040 Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. Tax planning us 1040 You must be able to show you were present in the United States on an activity that required your temporary absence from your regular place of work. Tax planning us 1040   For example, if you have established a “tax home” through regular employment in a foreign country, and intend to return to similar employment in the same country at the end of your temporary stay in the United States, you can deduct reasonable travel expenses you paid. Tax planning us 1040 You cannot deduct travel expenses for other members of your family or party. Tax planning us 1040 Deductible travel expenses. Tax planning us 1040   If you qualify, you can deduct your expenses for: Transportation—airfare, local transportation, including train, bus, etc. Tax planning us 1040 , Lodging—rent paid, utilities (do not include telephone), hotel or motel room expenses, and Meal expenses—actual expenses allowed if you keep records of the amounts, or, if you do not wish to keep detailed records, you are generally allowed a standard meal allowance amount depending on the date and area of your travel. Tax planning us 1040 You generally can deduct only 50% of unreimbursed meal expenses. Tax planning us 1040 The standard meal allowance rates for high-cost areas are available at www. Tax planning us 1040 gsa. Tax planning us 1040 gov/perdiem. Tax planning us 1040 The rates for other areas are in Publication 463. Tax planning us 1040   Use Form 2106 or 2106-EZ to figure your allowable expenses that you claim on line 7 of Schedule A (Form 1040NR). Tax planning us 1040 Expenses allocable to U. Tax planning us 1040 S. Tax planning us 1040 tax-exempt income. Tax planning us 1040   You cannot deduct an expense, or part of an expense, that is allocable to U. Tax planning us 1040 S. Tax planning us 1040 tax-exempt income, including income exempt by tax treaty. Tax planning us 1040 Example. Tax planning us 1040 Irina Oak, a citizen of Poland, resided in the United States for part of the year to acquire business experience from a U. Tax planning us 1040 S. Tax planning us 1040 company. Tax planning us 1040 During her stay in the United States, she received a salary of $8,000 from her Polish employer. Tax planning us 1040 She received no other U. Tax planning us 1040 S. Tax planning us 1040 source income. Tax planning us 1040 She spent $3,000 on travel expenses, of which $1,000 were for meals. Tax planning us 1040 None of these expenses were reimbursed. Tax planning us 1040 Under the tax treaty with Poland, $5,000 of her salary is exempt from U. Tax planning us 1040 S. Tax planning us 1040 income tax. Tax planning us 1040 In filling out Form 2106-EZ, she must reduce her deductible meal expenses by half ($500). Tax planning us 1040 She must reduce the remaining $2,500 of travel expenses by 62. Tax planning us 1040 5% ($1,563) because 62. Tax planning us 1040 5% ($5,000 ÷ $8,000) of her salary is exempt from tax. Tax planning us 1040 She enters the remaining total of $937 on line 7 of Schedule A (Form 1040NR). Tax planning us 1040 She completes the remaining lines according to the instructions for Schedule A. Tax planning us 1040 More information. Tax planning us 1040   For more information about deductible expenses, reimbursements, and recordkeeping, get Publication 463. Tax planning us 1040 Tax Credits and Payments This discussion covers tax credits and payments for resident aliens, followed by a discussion of the credits and payments for nonresident aliens. Tax planning us 1040 Resident Aliens Resident aliens generally claim tax credits and report tax payments, including withholding, using the same rules that apply to U. Tax planning us 1040 S. Tax planning us 1040 citizens. Tax planning us 1040 The following items are some of the credits you may be able to claim. Tax planning us 1040 Foreign tax credit. Tax planning us 1040   You can claim a credit, subject to certain limits, for income tax you paid or accrued to a foreign country on foreign source income. Tax planning us 1040 You cannot claim a credit for taxes paid or accrued on excluded foreign earned income. Tax planning us 1040 To claim a credit for income taxes paid or accrued to a foreign country, you generally will file Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), with your Form 1040. Tax planning us 1040   For more information, get Publication 514, Foreign Tax Credit for Individuals. Tax planning us 1040 Child and dependent care credit. Tax planning us 1040   You may be able to take this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse, so that you can work or look for work. Tax planning us 1040 Generally, you must be able to claim an exemption for your dependent. Tax planning us 1040   For more information, get Publication 503, Child and Dependent Care Expenses, and Form 2441, Child and Dependent Care Expenses. Tax planning us 1040 Credit for the elderly or the disabled. Tax planning us 1040   You may qualify for this credit if you are 65 or older or if you retired on permanent and total disability. Tax planning us 1040 For more information on this credit, get Publication 524, Credit for the Elderly or the Disabled, and Schedule R (Form 1040A or 1040). Tax planning us 1040 Education credits. Tax planning us 1040   You may qualify for these credits if you paid qualified education expenses for yourself, your spouse, or your dependent. Tax planning us 1040 There are two education credits: the American Opportunity Credit and the lifetime learning credit. Tax planning us 1040 You cannot claim these credits if you are married filing separately. Tax planning us 1040 Use Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to figure the credit. Tax planning us 1040 For more information, see Publication 970. Tax planning us 1040 Retirement savings contributions credit. Tax planning us 1040   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Tax planning us 1040 You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than: $59,000, if your filing status is married filing jointly, $44,250, if your filing status is head of household, or $29,500, if your filing status is single, married filing separately, or qualifying widow(er). Tax planning us 1040 Use Form 8880, Credit for Qualified Retirement Savings Contributions, to figure the credit. Tax planning us 1040 For more information, see Publication 590. Tax planning us 1040 Child tax credit. Tax planning us 1040   You may be able to take this credit if you have a qualifying child. Tax planning us 1040   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Tax planning us 1040 Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Tax planning us 1040 Is a U. Tax planning us 1040 S. Tax planning us 1040 citizen, a U. Tax planning us 1040 S. Tax planning us 1040 national, or a resident alien. Tax planning us 1040 Did not provide over half of his or her own support for 2013. Tax planning us 1040 Lived with you more than half of 2013. Tax planning us 1040 Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Tax planning us 1040 Is claimed as a dependent on your return. Tax planning us 1040 An adopted child is always treated as your own child. Tax planning us 1040 An adopted child includes a child lawfully placed with you for legal adoption. Tax planning us 1040   See your form instructions for additional details. Tax planning us 1040 Adoption credit. Tax planning us 1040   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Tax planning us 1040 This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Tax planning us 1040 To claim the adoption credit, file Form 8839, Qualified Adoption Expenses, with your Form 1040. Tax planning us 1040 Earned income credit. Tax planning us 1040   You may qualify for an earned income credit of up to $3,250 if a child lived with you in the United States and your earned income and adjusted gross income were each less than $37,870 ($43,210 if married filing jointly). Tax planning us 1040 If two children lived with you in the United States and your earned income and adjusted gross income were each less than $43,038 ($48,378 if married filing jointly), your credit could be as much as $5,372. Tax planning us 1040 If three or more children lived with you in the United States and your earned income and adjusted gross income were each less than $46,227 ($51,567 if married filing jointly), your credit could be as much as $6,044. Tax planning us 1040 If you do not have a qualifying child and your earned income and adjusted gross income were each less than $14,340 ($19,680 if married filing jointly), your credit could be as much as $487. Tax planning us 1040 You cannot claim the earned income credit if your filing status is married filing separately. Tax planning us 1040    You and your spouse (if filing a joint return) and any qualifying child must have valid SSNs to claim this credit. Tax planning us 1040 You cannot claim the credit using an ITIN. Tax planning us 1040 If a social security card has a legend that says Not Valid for Employment and the number was issued so that you (or your spouse or your qualifying child) could receive a federally funded benefit, you cannot claim the earned income credit. Tax planning us 1040 An example of a federally funded benefit is Medicaid. Tax planning us 1040 If a card has this legend and the individual's immigration status has changed so that the individual is now a U. Tax planning us 1040 S. Tax planning us 1040 citizen or lawful permanent resident, ask the SSA to issue a new social security card without the legend. Tax planning us 1040 Other information. Tax planning us 1040   There are other eligibility rules that are not discussed here. Tax planning us 1040 For more information, get Publication 596, Earned Income Credit. Tax planning us 1040 Nonresident Aliens You can claim some of the same credits that resident aliens can claim. Tax planning us 1040 You can also report certain taxes you paid, are considered to have paid, or that were withheld from your income. Tax planning us 1040 Credits Credits are allowed only if you receive effectively connected income. Tax planning us 1040 You may be able to claim some of the following credits. Tax planning us 1040 Foreign tax credit. Tax planning us 1040   If you receive foreign source income that is effectively connected with a trade or business in the United States, you can claim a credit for any income taxes paid or accrued to any foreign country or U. Tax planning us 1040 S. Tax planning us 1040 possession on that income. Tax planning us 1040   If you do not have foreign source income effectively connected with a U. Tax planning us 1040 S. Tax planning us 1040 trade or business, you cannot claim credits against your U. Tax planning us 1040 S. Tax planning us 1040 tax for taxes paid or accrued to a foreign country or U. Tax planning us 1040 S. Tax planning us 1040 possession. Tax planning us 1040   You cannot take any credit for taxes imposed by a foreign country or U. Tax planning us 1040 S. Tax planning us 1040 possession on your U. Tax planning us 1040 S. Tax planning us 1040 source income if those taxes were imposed only because you are a citizen or resident of the foreign country or possession. Tax planning us 1040   If you claim a foreign tax credit, you generally will have to attach to your return a Form 1116. Tax planning us 1040 See Publication 514 for more information. Tax planning us 1040 Child and dependent care credit. Tax planning us 1040   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse, so that you can work or look for work. Tax planning us 1040 Generally, you must be able to claim an exemption for your dependent. Tax planning us 1040   Married nonresident aliens can claim the credit only if they choose to file a joint return with a U. Tax planning us 1040 S. Tax planning us 1040 citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Joint Return Test in Publication 503). Tax planning us 1040   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income from the United States for that tax year. Tax planning us 1040 Earned income generally means wages, salaries, and professional fees for personal services performed. Tax planning us 1040   For more information, get Publication 503. Tax planning us 1040 Education credits. Tax planning us 1040   If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Tax planning us 1040 However, if you are married and choose to file a joint return with a U. Tax planning us 1040 S. Tax planning us 1040 citizen or resident spouse as discussed in chapter 1, you may be eligible for these credits. Tax planning us 1040 Retirement savings contributions credit. Tax planning us 1040   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Tax planning us 1040 You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. Tax planning us 1040 Use Form 8880 to figure the credit. Tax planning us 1040 For more information, see Publication 590. Tax planning us 1040 Child tax credit. Tax planning us 1040   You may be able to take this credit if you have a qualifying child. Tax planning us 1040   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Tax planning us 1040 Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Tax planning us 1040 Is a U. Tax planning us 1040 S. Tax planning us 1040 citizen, a U. Tax planning us 1040 S. Tax planning us 1040 national, or a resident alien. Tax planning us 1040 Did not provide over half of his or her own support for 2013. Tax planning us 1040 Lived with you more than half of 2013. Tax planning us 1040 Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Tax planning us 1040 Is claimed as a dependent on your return. Tax planning us 1040 An adopted child is always treated as your own child. Tax planning us 1040 An adopted child includes a child lawfully placed with you for legal adoption. Tax planning us 1040   See your form instructions for additional details. Tax planning us 1040 Adoption credit. Tax planning us 1040   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Tax planning us 1040 This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Tax planning us 1040 To claim the adoption credit, file Form 8839 with your Form 1040NR. Tax planning us 1040   Married nonresident aliens can claim the credit only if they choose to file a joint return with a U. Tax planning us 1040 S. Tax planning us 1040 citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). Tax planning us 1040 Credit for prior year minimum tax. Tax planning us 1040   If you paid alternative minimum tax in a prior year, get Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts, to see if you qualify for this credit. Tax planning us 1040 Earned income credit. Tax planning us 1040   If you are a nonresident alien for any part of the tax year, you generally cannot get the earned income credit. Tax planning us 1040 However, if you are married and choose to file a joint return with a U. Tax planning us 1040 S. Tax planning us 1040 citizen or resident spouse as discussed in chapter 1, you may be eligible for the credit. Tax planning us 1040    You, your spouse, and any qualifying child must have valid SSNs to claim this credit. Tax planning us 1040 You cannot claim the credit using an ITIN. Tax planning us 1040 If a social security card has a legend that says Not Valid for Employment and the number was issued so that you (or your spouse or your qualifying child) could receive a federally funded benefit, you cannot claim the earned income credit. Tax planning us 1040 An example of a federally funded benefit is Medicaid. Tax planning us 1040 If a card has this legend and the individual's immigration status has changed so that the individual is now a U. Tax planning us 1040 S. Tax planning us 1040 citizen or lawful permanent resident, ask the SSA to issue a new social security card without the legend. Tax planning us 1040   See Publication 596 for more information on the credit. Tax planning us 1040 Tax Withheld You can claim the tax withheld during the year as a payment against your U. Tax planning us 1040 S. Tax planning us 1040 tax. Tax planning us 1040 You claim it on line 61 of Form 1040NR or on line 18 of Form 1040NR-EZ. Tax planning us 1040 The tax withheld reduces any tax you owe with Form 1040NR or Form 1040NR-EZ. Tax planning us 1040 Withholding from wages. Tax planning us 1040   Any federal income tax withheld from your wages during the tax year while you were a nonresident alien is allowed as a payment against your U. Tax planning us 1040 S. Tax planning us 1040 income tax liability for the same year. Tax planning us 1040 You can claim the income tax withheld whether or not you were engaged in a trade or business in the United States during the year, and whether or not the wages (or any other income) were connected with a trade or business in the United States. Tax planning us 1040 Excess social security tax withheld. Tax planning us 1040   If you have two or more employers, you may be able to claim a credit against your U. Tax planning us 1040 S. Tax planning us 1040 income tax liability for social security tax withheld in excess of the maximum required. Tax planning us 1040 See Social Security and Medicare Taxes in chapter 8 for more information. Tax planning us 1040 Additional Medicare Tax. Tax planning us 1040   Your employer is responsible for withholding the 0. Tax planning us 1040 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2013. Tax planning us 1040 If you do not owe Additional Medicare Tax, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959. Tax planning us 1040 Tax paid on undistributed long-term capital gains. Tax planning us 1040   If you are a shareholder in a mutual fund (or other regulated investment company) or real estate investment trust, you can claim a credit for your share of any taxes paid by the company on its undistributed long-term capital gains. Tax planning us 1040 You will receive information on Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, which you must attach to your return. Tax planning us 1040 Tax withheld at the source. Tax planning us 1040   You can claim as a payment any tax withheld at the source on investment and other fixed or determinable annual or periodic income paid to you. Tax planning us 1040 Fixed or determinable income includes interest, dividend, rental, and royalty income that you do not claim to be effectively connected income. Tax planning us 1040 Wage or salary payments can be fixed or determinable income to you, but usually are subject to withholding as discussed above. Tax planning us 1040 Taxes on fixed or determinable income are withheld at a 30% rate or at a lower treaty rate. Tax planning us 1040 Tax withheld on partnership income. Tax planning us 1040   If you are a foreign partner in a partnership, the partnership will withhold tax on your share of effectively connected taxable income from the partnership. Tax planning us 1040 The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Tax planning us 1040 A partnership that is publicly traded may withhold on your actual distributions of effectively connected income. Tax planning us 1040 In this case, the partnership will give you a statement on Form 1042-S. Tax planning us 1040 Claim the tax withheld as a payment on line 61b or 61d of Form 1040NR, as appropriate. Tax planning us 1040 Claiming tax withheld on your return. Tax planning us 1040   When you fill out your tax return, take extra care to enter the correct amount of any tax withheld shown on your information documents. Tax planning us 1040 The following table lists some of the more common information documents and shows where to find the amount of tax withheld. Tax planning us 1040 Form number Location  of tax  withheld RRB-1042S Box 12 SSA-1042S Box 9 W-2 Box 2 W-2c Box 2 1042-S Box 9 8805 Line 10 8288-A Box 2 Bona Fide Residents of American Samoa or Puerto Rico If you are a nonresident alien who is a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you generally are taxed the same as resident aliens. Tax planning us 1040 You should file Form 1040 and report all income from sources both in and outside the United States. Tax planning us 1040 However, you can exclude the income discussed in the following paragraphs. Tax planning us 1040 For tax purposes other than reporting income, however, you will be treated as a nonresident alien. Tax planning us 1040 For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Tax planning us 1040 There are also limits on what deductions and credits are allowed. Tax planning us 1040 See Nonresident Aliens under Deductions , Itemized Deductions , and Tax Credits and Payments in this chapter. Tax planning us 1040 Residents of Puerto Rico. Tax planning us 1040   If you are a bona fide resident of Puerto Rico for the entire year, you can exclude from gross income all income from sources in Puerto Rico (other than amounts for services performed as an employee of the United States or any of its agencies). Tax planning us 1040   If you report income on a calendar year basis and you do not have wages subject to withholding, file your return and pay your tax by June 15. Tax planning us 1040 You must also make your first payment of estimated tax by June 15. Tax planning us 1040 You cannot file a joint income tax return or make joint payments of estimated tax. Tax planning us 1040 However, if you are married to a U. Tax planning us 1040 S. Tax planning us 1040 citizen or resident, see Nonresident Spouse Treated as a Resident in chapter 1. Tax planning us 1040   If you earn wages subject to withholding, your U. Tax planning us 1040 S. Tax planning us 1040 income tax return is due by April 15. Tax planning us 1040 Your first payment of estimated tax is also due by April 15. Tax planning us 1040 For information on withholding and estimated tax, see chapter 8 . Tax planning us 1040 Residents of American Samoa. Tax planning us 1040   If you are a bona fide resident of American Samoa for the entire year, you can exclude from gross income all income from sources in American Samoa (other than amounts for services performed as an employee of the U. Tax planning us 1040 S. Tax planning us 1040 government or any of its agencies). Tax planning us 1040 An employee of the American Samoan government is not considered an employee of the U. Tax planning us 1040 S. Tax planning us 1040 government or any of its agencies for purposes of the exclusion. Tax planning us 1040 For more information about this exclusion, get Form 4563 and Publication 570, Tax Guide for Individuals With Income From U. Tax planning us 1040 S. Tax planning us 1040 Possessions. Tax planning us 1040 Prev  Up  Next   Home   More Online Publications