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Aarp tax help locations Publication 929 - Main Content Table of Contents Part 1. Aarp tax help locations Rules for All Dependents Filing RequirementsEarned Income Only Unearned Income Only Both Earned and Unearned Income Other Filing Requirements Should a Return Be Filed Even If Not Required? Responsibility for Child's ReturnThird party designee. Aarp tax help locations Designated as representative. Aarp tax help locations IRS notice. Aarp tax help locations Standard DeductionStandard Deduction of Zero Dependent's Own Exemption Withholding From WagesExceptions. Aarp tax help locations Part 2. Aarp tax help locations Tax on Unearned Income of Certain ChildrenWhich Parent's Return To Use Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, Lines A–C) Step 1. Aarp tax help locations Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Aarp tax help locations Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Aarp tax help locations Figuring the Child's Tax (Form 8615, Part III) Alternative Minimum Tax Illustrated Example Part 1. Aarp tax help locations Rules for All Dependents This part of the publication discusses the filing requirements for dependents, who is responsible for a child's return, how to figure a dependent's standard deduction and exemption (if any), and whether a dependent can claim exemption from federal income tax withholding. Aarp tax help locations Filing Requirements Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind. Aarp tax help locations A dependent may have to file a return even if his or her income is less than the amount that would normally require a return. Aarp tax help locations See Other Filing Requirements, later. Aarp tax help locations The following sections apply to dependents with: Earned income only, Unearned income only, and Both earned and unearned income. Aarp tax help locations  To find out whether a dependent must file, read the section that applies, or use Table 1. Aarp tax help locations Earned Income Only A dependent whose gross income is only earned income must file a return if the gross income is more than the amount listed in the following table. Aarp tax help locations Marital Status Amount Single   Under 65 and not blind $6,100 Either 65 or older or blind $7,600 65 or older and blind $9,100 Married*   Under 65 and not blind $6,100 Either 65 or older or blind $7,300 65 or older and blind $8,500 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Aarp tax help locations Example. Aarp tax help locations William is 16. Aarp tax help locations His mother claims an exemption for him on her income tax return. Aarp tax help locations He worked part time on weekends during the school year and full time during the summer. Aarp tax help locations He earned $7,000 in wages. Aarp tax help locations He did not have any unearned income. Aarp tax help locations He must file a tax return because he has earned income only and his gross income is more than $6,100. Aarp tax help locations If he is blind, he does not have to file a return because his gross income is not more than $7,600. Aarp tax help locations Unearned Income Only A dependent whose gross income is only unearned income must file a return if the gross income is more than the amount listed in the following table. Aarp tax help locations Marital Status Amount Single   Under 65 and not blind $1,000 Either 65 or older or blind $2,500 65 or older and blind $4,000 Married*   Under 65 and not blind $1,000 Either 65 or older or blind $2,200 65 or older and blind $3,400 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Aarp tax help locations Example. Aarp tax help locations Sarah is 18 and single. Aarp tax help locations Her parents can claim an exemption for her on their income tax return. Aarp tax help locations She received $1,970 of taxable interest and dividend income. Aarp tax help locations She did not work during the year. Aarp tax help locations She must file a tax return because she has unearned income only and her gross income is more than $1,000. Aarp tax help locations If she is blind, she does not have to file a return because she has unearned income only and her gross income is not more than $2,500. Aarp tax help locations Election to report child's unearned income on parent's return. Aarp tax help locations   A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. Aarp tax help locations See Parent's Election To Report Child's Interest and Dividends in Part 2. Aarp tax help locations If the parent makes this election, the child does not have to file a return. Aarp tax help locations Both Earned and Unearned Income A dependent who has both earned and unearned income generally must file a return if the dependent's gross income is more than line 5 of the following worksheet. Aarp tax help locations Filing Requirement Worksheet for Most Dependents 1. Aarp tax help locations Enter dependent's earned income plus $350     2. Aarp tax help locations Minimum amount   $1,000 3. Aarp tax help locations Compare lines 1 and 2. Aarp tax help locations Enter the larger amount     4. Aarp tax help locations Maximum amount   6,100 5. Aarp tax help locations Compare lines 3 and 4. Aarp tax help locations Enter the smaller amount     6. Aarp tax help locations Enter the dependent's gross income. Aarp tax help locations If line 6 is more than line 5, the dependent must file an income tax return. Aarp tax help locations If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Aarp tax help locations       Table 1. Aarp tax help locations 2013 Filing Requirements for Dependents If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return. Aarp tax help locations   See the definitions of “dependent,”“earned income,”“unearned income,” and “gross income” in the Glossary. Aarp tax help locations   Single dependents—Were you either age 65 or older or blind?     No. Aarp tax help locations You must file a return if any of the following apply. Aarp tax help locations       Your unearned income was over $1,000. Aarp tax help locations Your earned income was over $6,100. Aarp tax help locations Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Aarp tax help locations         Yes. Aarp tax help locations You must file a return if any of the following apply. Aarp tax help locations     Your unearned income was over $2,500 ($4,000 if 65 or older and blind), Your earned income was over $7,600 ($9,100 if 65 or older and blind), Your gross income was more than the larger of—       $2,500 ($4,000 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind). Aarp tax help locations       Married dependents—Were you either age 65 or older or blind?     No. Aarp tax help locations You must file a return if any of the following apply. Aarp tax help locations       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Aarp tax help locations Your unearned income was over $1,000. Aarp tax help locations Your earned income was over $6,100. Aarp tax help locations Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Aarp tax help locations       Yes. Aarp tax help locations You must file a return if any of the following apply. Aarp tax help locations       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Aarp tax help locations Your unearned income was over $2,200 ($3,400 if 65 or older and blind), Your earned income was over $7,300 ($8,500 if 65 or older and blind), Your gross income was more than the larger of—       $2,200 ($3,400 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind). Aarp tax help locations       Example 1. Aarp tax help locations Joe is 20, single, not blind, and a full-time college student. Aarp tax help locations He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. Aarp tax help locations He received $200 taxable interest income and earned $2,750 from a part-time job. Aarp tax help locations He does not have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) is not more than $3,100, the amount on line 5 of his filled-in Filing Requirement Worksheet for Most Dependents (shown next). Aarp tax help locations Filled-in Example 1 Filing Requirement Worksheet  for Most Dependents 1. Aarp tax help locations Enter dependent's earned income plus $350   $ 3,100 2. Aarp tax help locations Minimum amount   1,000 3. Aarp tax help locations Compare lines 1 and 2. Aarp tax help locations Enter the larger amount   3,100 4. Aarp tax help locations Maximum amount   6,100 5. Aarp tax help locations Compare lines 3 and 4. Aarp tax help locations Enter the smaller amount   3,100 6. Aarp tax help locations Enter the dependent's gross income. Aarp tax help locations If line 6 is more than line 5, the dependent must file an income tax return. Aarp tax help locations If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Aarp tax help locations   $ 2,950   Example 2. Aarp tax help locations The facts are the same as in Example 1 except that Joe had $600 taxable interest income. Aarp tax help locations He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,100, the amount on line 5 of his filled-in worksheet (shown next). Aarp tax help locations Filled-in Example 2 Filing Requirement Worksheet for Most Dependents 1. Aarp tax help locations Enter dependent's earned income plus $350   $ 3,100 2. Aarp tax help locations Minimum amount   1,000 3. Aarp tax help locations Compare lines 1 and 2. Aarp tax help locations Enter the larger amount   3,100 4. Aarp tax help locations Maximum amount   6,100 5. Aarp tax help locations Compare lines 3 and 4. Aarp tax help locations Enter the smaller amount   3,100 6. Aarp tax help locations Enter the dependent's gross income. Aarp tax help locations If line 6 is more than line 5, the dependent must file an income tax return. Aarp tax help locations If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Aarp tax help locations   $ 3,350   Age 65 or older or blind. Aarp tax help locations A dependent who is age 65 or older or blind must file a return if his or her gross income is more than line 7 of the following worksheet. Aarp tax help locations Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Aarp tax help locations Enter dependent's earned income plus $350     2. Aarp tax help locations Minimum amount   $1,000 3. Aarp tax help locations Compare lines 1 and 2. Aarp tax help locations Enter the larger amount     4. Aarp tax help locations Maximum amount   6,100 5. Aarp tax help locations Compare lines 3 and 4. Aarp tax help locations Enter the smaller amount     6. Aarp tax help locations Enter the amount from the following table that applies to the dependent       Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Aarp tax help locations Add lines 5 and 6. Aarp tax help locations Enter the total     8. Aarp tax help locations Enter the dependent's gross income. Aarp tax help locations If line 8 is more than line 7, the dependent must file an income tax return. Aarp tax help locations If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more     Example 3. Aarp tax help locations The facts are the same as in Example 2 except that Joe is also blind. Aarp tax help locations He does not have to file a return because his gross income of $3,350 is not more than $4,600, the amount on line 7 of his filled-in Filing Requirement Worksheet for Dependents Who Are Age 65 or Older or Blind (shown next). Aarp tax help locations   Filled-in Example 3 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Aarp tax help locations Enter dependent's earned income plus $350   $3,100 2. Aarp tax help locations Minimum amount   1,000 3. Aarp tax help locations Compare lines 1 and 2. Aarp tax help locations Enter the larger amount   3,100 4. Aarp tax help locations Maximum amount   6,100 5. Aarp tax help locations Compare lines 3 and 4. Aarp tax help locations Enter the smaller amount   3,100 6. Aarp tax help locations Enter the amount from the following table that applies to the dependent   1,500   Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Aarp tax help locations Add lines 5 and 6. Aarp tax help locations Enter the total   4,600 8. Aarp tax help locations Enter the dependent's gross income. Aarp tax help locations If line 8 is more than line 7, the dependent must file an income tax return. Aarp tax help locations If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more   $3,350 Other Filing Requirements Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return. Aarp tax help locations A dependent must file a tax return if he or she owes any other taxes, such as: Social security and Medicare taxes on tips not reported to his or her employer or on wages received from an employer who did not withhold these taxes, Uncollected social security and Medicare or railroad retirement taxes on tips reported to his or her employer or on group-term life insurance, Alternative minimum tax, Additional tax on a health savings account from Form 8889, Part III, Recapture taxes, such as the tax from recapture of an education credit, or Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. Aarp tax help locations But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself. Aarp tax help locations A dependent must also file a tax return if he or she: Had wages of $108. Aarp tax help locations 28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or Had net earnings from self-employment of at least $400. Aarp tax help locations Spouse itemizes. Aarp tax help locations   A dependent must file a return if the dependent's spouse itemizes deductions on a separate return and the dependent has $5 or more of gross income (earned and/or unearned). Aarp tax help locations Should a Return Be Filed Even If Not Required? Even if a dependent does not meet any of the filing requirements discussed earlier, he or she should file a tax return if either of the following applies. Aarp tax help locations Income tax was withheld from his or her income. Aarp tax help locations He or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, or refundable American opportunity education credit. Aarp tax help locations See the tax return instructions to find out who qualifies for these credits. Aarp tax help locations  By filing a return, the dependent can get a refund. Aarp tax help locations Responsibility for Child's Return Generally, a child is responsible for filing his or her own tax return and for paying any tax, penalties, or interest on that return. Aarp tax help locations If a child cannot file his or her own return for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. Aarp tax help locations Signing the child's return. Aarp tax help locations   If the child cannot sign his or her return, a parent or guardian must sign the child's name followed by the words “By (signature), parent (or guardian) for minor child. Aarp tax help locations ” Authority of parent or guardian. Aarp tax help locations   A parent or guardian who signs a return on a child's behalf can deal with the IRS on all matters connected with the return. Aarp tax help locations   In general, a parent or guardian who does not sign the child's return can only provide information concerning the child's return and pay the child's tax. Aarp tax help locations That parent or guardian is not entitled to receive information from the IRS or legally bind the child to a tax liability arising from the return. Aarp tax help locations Third party designee. Aarp tax help locations   A child's parent or guardian who does not sign the child's return may be authorized, as a third party designee, to discuss the processing of the return with the IRS as well as provide information concerning the return. Aarp tax help locations The child or the person signing the return on the child's behalf must check the “Yes” box in the “Third Party Designee” area of the return and name the parent or guardian as the designee. Aarp tax help locations   If designated, a parent or guardian can respond to certain IRS notices and receive information about the processing of the return and the status of a refund or payment. Aarp tax help locations This designation does not authorize the parent or guardian to receive any refund check, bind the child to any tax liability, or otherwise represent the child before the IRS. Aarp tax help locations See the return instructions for more information. Aarp tax help locations Designated as representative. Aarp tax help locations   A parent or guardian who does not sign the child's return may be designated as the child's representative by the child or the person signing the return on the child's behalf. Aarp tax help locations Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. Aarp tax help locations See Publication 947, Practice Before the IRS and Power of Attorney, for more information. Aarp tax help locations   If designated, a parent or guardian can receive information about the child's return but cannot legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives. Aarp tax help locations IRS notice. Aarp tax help locations   If you or the child receives a notice from the IRS concerning the child's return or tax liability, you should immediately inform the IRS that the notice concerns a child. Aarp tax help locations The notice will show who to contact. Aarp tax help locations The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority. Aarp tax help locations Child's earnings. Aarp tax help locations   For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. Aarp tax help locations This is true even if, under state law, the parent has the right to the earnings and may actually have received them. Aarp tax help locations If the child does not pay the tax due on this income, the parent may be liable for the tax. Aarp tax help locations Child's expenses. Aarp tax help locations   Deductions for payments that are made out of a child's earnings are the child's, even if the payments are made by the parent. Aarp tax help locations Example. Aarp tax help locations You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. Aarp tax help locations You made the payments out of your child's earnings. Aarp tax help locations These items can be deducted only on the child's return. Aarp tax help locations Standard Deduction The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of: $1,000, or The individual's earned income plus $350, but not more than the regular standard deduction (generally $6,100). Aarp tax help locations However, the standard deduction may be higher for a dependent who: Is 65 or older, or Is blind. Aarp tax help locations Certain dependents cannot claim any standard deduction. Aarp tax help locations See Standard Deduction of Zero , later. Aarp tax help locations Worksheet 1. Aarp tax help locations   Use Worksheet 1 to figure the dependent's standard deduction. Aarp tax help locations Worksheet 1. Aarp tax help locations Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent. Aarp tax help locations If you were 65 or older and/or blind, check the correct number of boxes below. Aarp tax help locations Put the total number of boxes checked in box c and go to line 1. Aarp tax help locations a. Aarp tax help locations You 65 or older   Blind   b. Aarp tax help locations Your spouse, if claiming  spouse's exemption 65 or older   Blind   c. Aarp tax help locations Total boxes checked         1. Aarp tax help locations Enter your earned income (defined below) plus $350. Aarp tax help locations If none, enter -0-. Aarp tax help locations 1. Aarp tax help locations     2. Aarp tax help locations Minimum amount. Aarp tax help locations   2. Aarp tax help locations $1,000   3. Aarp tax help locations Compare lines 1 and 2. Aarp tax help locations Enter the larger of the two amounts here. Aarp tax help locations 3. Aarp tax help locations     4. Aarp tax help locations Enter on line 4 the amount shown below for your filing status. Aarp tax help locations       Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 4. Aarp tax help locations     5. Aarp tax help locations Standard deduction. Aarp tax help locations         a. Aarp tax help locations Compare lines 3 and 4. Aarp tax help locations Enter the smaller amount here. Aarp tax help locations If under 65 and not blind, stop here. Aarp tax help locations This is your standard deduction. Aarp tax help locations Otherwise, go on to line 5b. Aarp tax help locations 5a. Aarp tax help locations     b. Aarp tax help locations If 65 or older or blind, multiply $1,500 ($1,200 if married) by the number in box c above. Aarp tax help locations Enter the result here. Aarp tax help locations 5b. Aarp tax help locations     c. Aarp tax help locations Add lines 5a and 5b. Aarp tax help locations This is your standard deduction for 2013. Aarp tax help locations 5c. Aarp tax help locations     Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Aarp tax help locations It also includes any amount received as a scholarship that you must include in income. Aarp tax help locations   Example 1. Aarp tax help locations Michael is single, age 15, and not blind. Aarp tax help locations His parents can claim him as a dependent on their tax return. Aarp tax help locations He has taxable interest income of $800 and wages of $150. Aarp tax help locations He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. Aarp tax help locations On line 3, he enters $1,000, the larger of $500 or $1,000. Aarp tax help locations Michael enters $6,100 on line 4. Aarp tax help locations On line 5a, he enters $1,000, the smaller of $1,000 or $6,100. Aarp tax help locations His standard deduction is $1,000. Aarp tax help locations Example 2. Aarp tax help locations Judy, a full-time student, is single, age 22, and not blind. Aarp tax help locations Her parents can claim her as a dependent on their tax return. Aarp tax help locations She has dividend income of $275 and wages of $2,500. Aarp tax help locations She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. Aarp tax help locations On line 3, she enters $2,850, the larger of $2,850 or $1,000. Aarp tax help locations She enters $6,100 on line 4. Aarp tax help locations On line 5a, she enters $2,850 (the smaller of $2,850 or $6,100) as her standard deduction. Aarp tax help locations Example 3. Aarp tax help locations Amy, who is single, is claimed as a dependent on her parents' tax return. Aarp tax help locations She is 18 years old and blind. Aarp tax help locations She has taxable interest income of $1,000 and wages of $2,000. Aarp tax help locations She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. Aarp tax help locations She enters $2,350 (the larger of $2,350 or $1,000) on line 3, $6,100 on line 4, and $2,350 (the smaller of $2,350 or $6,100) on line 5a. Aarp tax help locations Because Amy is blind, she checks the box for blindness and enters “1” in box c at the top of Worksheet 1. Aarp tax help locations She enters $1,500 (the number in box c times $1,500) on line 5b. Aarp tax help locations Her standard deduction on line 5c is $3,850 ($2,350 + $1,500). Aarp tax help locations Standard Deduction of Zero The standard deduction for the following dependents is zero. Aarp tax help locations A married dependent filing a separate return whose spouse itemizes deductions. Aarp tax help locations A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period. Aarp tax help locations A nonresident or dual-status alien dependent, unless the dependent is married to a U. Aarp tax help locations S. Aarp tax help locations citizen or resident alien at the end of the year and chooses to be treated as a U. Aarp tax help locations S. Aarp tax help locations resident for the year. Aarp tax help locations See Publication 519, U. Aarp tax help locations S. Aarp tax help locations Tax Guide for Aliens, for information on making this choice. Aarp tax help locations Example. Aarp tax help locations Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. Aarp tax help locations However, her husband elects to file a separate return and itemize his deductions. Aarp tax help locations Because he itemizes, Jennifer's standard deduction on her return is zero. Aarp tax help locations She can, however, itemize any of her allowable deductions. Aarp tax help locations Dependent's Own Exemption A person who can be claimed as a dependent on another taxpayer's return cannot claim his or her own exemption. Aarp tax help locations This is true even if the other taxpayer does not actually claim the exemption. Aarp tax help locations Example. Aarp tax help locations James and Barbara can claim their child, Ben, as a dependent on their return. Aarp tax help locations Ben is a college student who works during the summer and must file a tax return. Aarp tax help locations Ben cannot claim his own exemption on his return. Aarp tax help locations This is true even if James and Barbara do not claim him as a dependent on their return. Aarp tax help locations Withholding From Wages Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. Aarp tax help locations If the employee claims exemption from withholding on Form W-4, the employer will not withhold federal income tax. Aarp tax help locations The exemption from withholding does not apply to social security and Medicare taxes. Aarp tax help locations Conditions for exemption from withholding. Aarp tax help locations   An employee can claim exemption from withholding for 2014 only if he or she meets both of the following conditions. Aarp tax help locations For 2013, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability. Aarp tax help locations For 2014, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability. Aarp tax help locations Dependents. Aarp tax help locations   An employee who is a dependent ordinarily cannot claim exemption from withholding if both of the following are true. Aarp tax help locations The employee's gross income will be more than $1,000, the minimum standard deduction for 2014. Aarp tax help locations The employee's unearned income will be more than $350. Aarp tax help locations Exceptions. Aarp tax help locations   An employee may be able to claim exemption from withholding even if the employee is a dependent, if the employee: Is age 65 or older, Is blind, or Will claim on his or her 2014 tax return: Adjustments to income, Tax credits, or Itemized deductions. Aarp tax help locations The above exceptions do not apply to supplemental wages greater than $1,000,000. Aarp tax help locations For more information, see Exemption From Withholding in chapter 1 of Publication 505. Aarp tax help locations Example. Aarp tax help locations Guy is 17 and a student. Aarp tax help locations During the summer he works part time at a grocery store. Aarp tax help locations He expects to earn about $1,200 this year. Aarp tax help locations He also worked at the store last summer and received a refund of all his withheld income tax because he did not have a tax liability. Aarp tax help locations The only other income he expects during the year is $375 interest on a savings account. Aarp tax help locations He expects that his parents will be able to claim him as a dependent on their tax return. Aarp tax help locations He is not blind and will not claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return. Aarp tax help locations Guy cannot claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,000 (the minimum standard deduction amount) and his unearned income will be more than $350. Aarp tax help locations Claiming exemption from withholding. Aarp tax help locations    To claim exemption from withholding, an employee must enter “Exempt” in the space provided on Form W-4, line 7. Aarp tax help locations The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer. Aarp tax help locations Renewing an exemption from withholding. Aarp tax help locations   An exemption from withholding is good for only one year. Aarp tax help locations An employee must file a new Form W-4 by February 15 each year to continue the exemption. Aarp tax help locations Part 2. Aarp tax help locations Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. Aarp tax help locations If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Aarp tax help locations (See Parent's Election To Report Child's Interest and Dividends , later. Aarp tax help locations ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Aarp tax help locations (See Tax for Certain Children Who Have Unearned Income , later. Aarp tax help locations ) For these rules, the term “child” includes a legally adopted child and a stepchild. Aarp tax help locations These rules apply whether or not the child is a dependent. Aarp tax help locations These rules do not apply if neither of the child's parents were living at the end of the year. Aarp tax help locations Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Aarp tax help locations The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Aarp tax help locations Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Aarp tax help locations Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Aarp tax help locations Parents are married. Aarp tax help locations   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Aarp tax help locations Parents not living together. Aarp tax help locations   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Aarp tax help locations If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Aarp tax help locations   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in Publication 501. Aarp tax help locations Parents are divorced. Aarp tax help locations   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Aarp tax help locations Custodial parent remarried. Aarp tax help locations   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Aarp tax help locations Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Aarp tax help locations Do not use the return of the noncustodial parent. Aarp tax help locations   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Aarp tax help locations If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Aarp tax help locations Parents never married. Aarp tax help locations   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Aarp tax help locations If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Aarp tax help locations Widowed parent remarried. Aarp tax help locations   If a widow or widower remarries, the new spouse is treated as the child's other parent. Aarp tax help locations The rules explained earlier under Custodial parent remarried apply. Aarp tax help locations Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Aarp tax help locations If you do, your child will not have to file a return. Aarp tax help locations You can make this election only if all the following conditions are met. Aarp tax help locations Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Aarp tax help locations Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Aarp tax help locations The child's gross income was less than $10,000. Aarp tax help locations The child is required to file a return unless you make this election. Aarp tax help locations The child does not file a joint return for the year. Aarp tax help locations No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Aarp tax help locations No federal income tax was withheld from your child's income under the backup withholding rules. Aarp tax help locations You are the parent whose return must be used when applying the special tax rules for children. Aarp tax help locations (See Which Parent's Return To Use , earlier. Aarp tax help locations ) These conditions are also shown in Figure 1. Aarp tax help locations Certain January 1 birthdays. Aarp tax help locations   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Aarp tax help locations You cannot make this election for such a child unless the child was a full-time student. Aarp tax help locations   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Aarp tax help locations You cannot make this election for such a child. Aarp tax help locations How to make the election. Aarp tax help locations    Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. Aarp tax help locations (If you make this election, you cannot file Form 1040A or Form 1040EZ. Aarp tax help locations ) Attach a separate Form 8814 for each child for whom you make the election. Aarp tax help locations You can make the election for one or more children and not for others. Aarp tax help locations Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Aarp tax help locations Rate may be higher. Aarp tax help locations   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Aarp tax help locations This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Aarp tax help locations However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Aarp tax help locations Deductions you cannot take. Aarp tax help locations   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Aarp tax help locations The additional standard deduction if the child is blind. Aarp tax help locations The deduction for a penalty on an early withdrawal of your child's savings. Aarp tax help locations Itemized deductions (such as your child's investment expenses or charitable contributions). Aarp tax help locations Figure 1. Aarp tax help locations Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Aarp tax help locations Figure 1. Aarp tax help locations Can You Include Your Child's Income On Your Tax Return? Deductible investment interest. Aarp tax help locations   If you use Form 8814, your child's unearned income is considered your unearned income. Aarp tax help locations To figure the limit on your deductible investment interest, add the child's unearned income to yours. Aarp tax help locations However, if your child received qualified dividends, capital gain distributions, or Alaska Permanent Fund dividends, see chapter 3 of Publication 550 for information about how to figure the limit. Aarp tax help locations Alternative minimum tax. Aarp tax help locations    If your child received tax-exempt interest (or exempt-interest dividends paid by a regulated investment company) from certain private activity bonds, you must determine if that interest is a tax preference item for alternative minimum tax (AMT) purposes. Aarp tax help locations If it is, you must include it with your own tax preference items when figuring your AMT. Aarp tax help locations See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details. Aarp tax help locations Reduced deductions or credits. Aarp tax help locations   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following. Aarp tax help locations Deduction for contributions to a traditional individual retirement arrangement (IRA). Aarp tax help locations Deduction for student loan interest. Aarp tax help locations Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Aarp tax help locations Credit for child and dependent care expenses. Aarp tax help locations Child tax credit. Aarp tax help locations Education tax credits. Aarp tax help locations Earned income credit. Aarp tax help locations Penalty for underpayment of estimated tax. Aarp tax help locations   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Aarp tax help locations If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Aarp tax help locations Get Publication 505 for more information. Aarp tax help locations Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Aarp tax help locations Only the amount over $2,000 is added to your income. Aarp tax help locations The amount over $2,000 is shown on Form 8814, line 6. Aarp tax help locations Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Aarp tax help locations Include the amount from Form 8814, line 12, on Form 1040 or Form 1040NR, line 21. Aarp tax help locations If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040 or Form 1040NR, line 21. Aarp tax help locations On the dotted line next to line 21, enter “Form 8814” and the total of the Form 8814, line 12 amounts. Aarp tax help locations Note. Aarp tax help locations The tax on the first $2,000 is figured on Form 8814, Part II. Aarp tax help locations See Figuring Additional Tax , later. Aarp tax help locations Qualified dividends. Aarp tax help locations   Enter on Form 8814, line 2a, any ordinary dividends your child received. Aarp tax help locations This amount may include qualified dividends. Aarp tax help locations Qualified dividends are those dividends reported on Form 1040, line 9b, or Form 1040NR, line 10b, and are eligible for lower tax rates that apply to a net capital gain. Aarp tax help locations For detailed information about qualified dividends, see Publication 550. Aarp tax help locations   If your child received qualified dividends, the amount of these dividends that is added to your income must be reported on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Aarp tax help locations You do not include these dividends on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Aarp tax help locations   Enter the child's qualified dividends on Form 8814, line 2b. Aarp tax help locations But do not include this amount on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Aarp tax help locations Instead, include the amount from Form 8814, line 9, on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Aarp tax help locations (The amount on Form 8814, line 9, may be less than the amount on Form 8814, line 2b, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Aarp tax help locations ) Capital gain distributions. Aarp tax help locations   Enter on Form 8814, line 3, any capital gain distributions your child received. Aarp tax help locations The amount of these distributions that is added to your income must be reported on Schedule D (Form 1040), line 13, or, if you are not required to file Schedule D, on Form 1040, line 13, or Form 1040NR, line 14. Aarp tax help locations You do not include it on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Aarp tax help locations   Include the amount from Form 8814, line 10, on Schedule D, line 13; Form 1040, line 13; or Form 1040NR, line 14, whichever applies. Aarp tax help locations (The amount on Form 8814, line 10, may be less than the amount on Form 8814, line 3, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Aarp tax help locations ) Collectibles (28% rate) gain. Aarp tax help locations    If any of the child's capital gain distributions are reported on Form 1099-DIV as collectibles (28% rate) gain, you must determine how much to also include on line 4 of the 28% Rate Gain Worksheet, in the instructions for Schedule D, line 18. Aarp tax help locations Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Aarp tax help locations The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. Aarp tax help locations The denominator is the child's total capital gain distribution. Aarp tax help locations Enter the result on line 4 of the 28% Rate Gain Worksheet. Aarp tax help locations Unrecaptured section 1250 gain. Aarp tax help locations   If any of the child's capital gain distributions are reported on Form 1099-DIV as unrecaptured section 1250 gain, you must determine how much to include on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the instructions for Schedule D, line 19. Aarp tax help locations Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Aarp tax help locations The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. Aarp tax help locations The denominator is the child's total capital gain distribution. Aarp tax help locations Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11. Aarp tax help locations Section 1202 gain. Aarp tax help locations   If any of the child's capital gain distributions are reported as section 1202 gain (gain on qualified small business stock) on Form 1099-DIV, part or all of that gain may be eligible for the section 1202 exclusion. Aarp tax help locations (For information about the exclusion, see chapter 4 of Publication 550. Aarp tax help locations ) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Aarp tax help locations The numerator is the part of the child's total capital gain distribution that is section 1202 gain. Aarp tax help locations The denominator is the child's total capital gain distribution. Aarp tax help locations Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. Aarp tax help locations In some cases, the exclusion is more than 50%. Aarp tax help locations See the instructions for Schedule D for details and information on how to report the exclusion amount. Aarp tax help locations Example. Aarp tax help locations Fred is 6 years old. Aarp tax help locations In 2013, he received dividend income of $2,100, which included $1,575 of ordinary dividends and a $525 capital gain distribution from a mutual fund. Aarp tax help locations (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain. Aarp tax help locations ) All of the ordinary dividends are qualified dividends. Aarp tax help locations He has no other income and is not subject to backup withholding. Aarp tax help locations No estimated tax payments were made under his name and social security number. Aarp tax help locations Fred's parents elect to include Fred's income on their tax return instead of filing a return for him. Aarp tax help locations They figure the amount to report on Form 1040, lines 9a and 9b, the amount to report on their Schedule D, line 13, and the amount to report on Form 1040, line 21, as follows. Aarp tax help locations They leave lines 1a and 1b of Form 8814 blank because Fred does not have any interest income. Aarp tax help locations They enter his ordinary dividends of $1,575 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. Aarp tax help locations They enter the amount of Fred's capital gain distributions, $525, on line 3. Aarp tax help locations Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,100, on line 4. Aarp tax help locations They subtract the base amount on line 5, $2,000, from the amount on line 4, $2,100, and enter the result, $100, on line 6. Aarp tax help locations This is the total amount from Form 8814 to be reported on their return. Aarp tax help locations Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions. Aarp tax help locations They divide the amount on line 2b, $1,575, by the amount on line 4, $2,100. Aarp tax help locations They enter the result, . Aarp tax help locations 75, on line 7. Aarp tax help locations They divide the amount on line 3, $525, by the amount on line 4, $2,100. Aarp tax help locations They enter the result, . Aarp tax help locations 25, on line 8. Aarp tax help locations They multiply the amount on line 6, $100, by the decimal on line 7, . Aarp tax help locations 75, and enter the result, $75, on line 9. Aarp tax help locations They multiply the amount on line 6, $100, by the decimal on line 8, . Aarp tax help locations 25, and enter the result, $25, on line 10. Aarp tax help locations They include the amount from line 9, $75, on lines 9a and 9b of their Form 1040 and enter “Form 8814 – $75” on the dotted lines next to lines 9a and 9b. Aarp tax help locations They include the amount from line 10, $25, on line 13 of their Schedule D (Form 1040) and enter “Form 8814 – $25” on the dotted line next to Schedule D, line 13. Aarp tax help locations They enter $100 ($75 + $25) on line 11 and -0- ($100 – $100) on line 12. Aarp tax help locations Because the amount on line 12 is -0-, they do not include any amount from Form 8814 on their Form 1040, line 21. Aarp tax help locations Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Aarp tax help locations This tax is added to the tax figured on your income. Aarp tax help locations This additional tax is the smaller of: 10% x (your child's gross income − $1,000), or $100. Aarp tax help locations Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44, or Form 1040NR, line 42. Aarp tax help locations Check box a on Form 1040, line 44, or Form 1040NR, line 42. Aarp tax help locations Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Aarp tax help locations If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Aarp tax help locations Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR. Aarp tax help locations When Form 8615 must be filed. Aarp tax help locations   Form 8615 must be filed for a child if all of the following statements are true. Aarp tax help locations The child's unearned income was more than $2,000. Aarp tax help locations The child is required to file a return for 2013. Aarp tax help locations The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Aarp tax help locations At least one of the child's parents was alive at the end of 2013. Aarp tax help locations The child does not file a joint return for 2013. Aarp tax help locations These conditions are also shown in Figure 2. Aarp tax help locations Certain January 1 birthdays. Aarp tax help locations   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Aarp tax help locations IF a child was born on. Aarp tax help locations . Aarp tax help locations . Aarp tax help locations THEN, at the end of 2013, the child is considered to be. Aarp tax help locations . Aarp tax help locations . Aarp tax help locations January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Aarp tax help locations The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Aarp tax help locations  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Aarp tax help locations  ***Do not use Form 8615 for this child. Aarp tax help locations Figure 2. Aarp tax help locations Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Aarp tax help locations Figure 2. Aarp tax help locations Do You Have To Use Form 8615 To Figure Your Child's Tax? Providing Parental Information (Form 8615, Lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Aarp tax help locations (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Aarp tax help locations ) On line C, check the box for the parent's filing status. Aarp tax help locations See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615. Aarp tax help locations Parent with different tax year. Aarp tax help locations   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Aarp tax help locations Example. Aarp tax help locations Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). Aarp tax help locations Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). Aarp tax help locations Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615. Aarp tax help locations Parent's return information not known timely. Aarp tax help locations   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Aarp tax help locations   You can use any reasonable estimate. Aarp tax help locations This includes using information from last year's return. Aarp tax help locations If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Aarp tax help locations   When you get the correct information, file an amended return on Form 1040X, Amended U. Aarp tax help locations S. Aarp tax help locations Individual Income Tax Return. Aarp tax help locations Extension of time to file. Aarp tax help locations   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Aarp tax help locations S. Aarp tax help locations Individual Income Tax Return. Aarp tax help locations See the instructions for Form 4868 for details. Aarp tax help locations    An extension of time to file is not an extension of time to pay. Aarp tax help locations You must make an accurate estimate of the tax for 2013. Aarp tax help locations If you do not pay the full amount due by the regular due date, the child will owe interest and may also be charged penalties. Aarp tax help locations See Form 4868 and its instructions. Aarp tax help locations Parent's return information not available. Aarp tax help locations   If a child cannot get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS). Aarp tax help locations How to request. Aarp tax help locations   After the end of the tax year, send a signed, written request for the information to the Internal Revenue Service Center where the parent's return will be filed. Aarp tax help locations (The IRS cannot process a request received before the end of the tax year. Aarp tax help locations )    You should also consider getting an extension of time to file the child's return, because there may be a delay in getting the requested information. Aarp tax help locations   The request must contain all of the following. Aarp tax help locations A statement that you are making the request to comply with section 1(g) of the Internal Revenue Code and that you have tried to get the information from the parent. Aarp tax help locations Proof of the child's age (for example, a copy of the child's birth certificate). Aarp tax help locations Evidence the child has more than $2,000 of unearned income (for example, a copy of the child's prior year tax return or copies of Forms 1099 for the current year). Aarp tax help locations The name, address, social security number (if known), and filing status (if known) of the parent whose information is to be shown on Form 8615. Aarp tax help locations    A child's legal representative making the request should include a copy of his or her Power of Attorney, such as Form 2848, or proof of legal guardianship. Aarp tax help locations Step 1. Aarp tax help locations Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Aarp tax help locations To do that, use Form 8615, Part I. Aarp tax help locations Line 1 (Unearned Income) If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Aarp tax help locations Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Aarp tax help locations Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed. Aarp tax help locations If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Aarp tax help locations However, use the following worksheet if: the child has excluded any foreign earned income, deducted a loss from self-employment, or has a net operating loss from another year. Aarp tax help locations Alternate Worksheet for Form 8615, Line 1 A. Aarp tax help locations Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23   B. Aarp tax help locations Enter the total of any net loss  from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from the child's Form 1040 or Form 1040NR. Aarp tax help locations Enter this total as a positive number (greater than zero)   C. Aarp tax help locations Add line A and line B and  enter the total   D. Aarp tax help locations Enter the child's earned income plus any amount from the child's Form 1040, line 30, or the child's Form 1040NR, line 30     Generally, the child's earned income is the total of the amounts reported on Form 1040, lines 7, 12, and 18 (if line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)   E. Aarp tax help locations Subtract line D from line C. Aarp tax help locations Enter the result here and on Form 8615, line 1   Unearned income defined. Aarp tax help locations   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. Aarp tax help locations It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Aarp tax help locations Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Aarp tax help locations Nontaxable income. Aarp tax help locations   For this purpose, unearned income includes only amounts the child must include in gross income. Aarp tax help locations Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Aarp tax help locations Capital loss. Aarp tax help locations   A child's capital losses are taken into account in figuring the child's unearned income. Aarp tax help locations Capital losses are first applied against capital gains. Aarp tax help locations If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from the child's interest, dividends, and other unearned income. Aarp tax help locations Any difference over $3,000 is carried to the next year. Aarp tax help locations Income from property received as a gift. Aarp tax help locations   A child's unearned income includes all income produced by property belonging to the child. Aarp tax help locations This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Aarp tax help locations   A child's unearned income includes income produced by property given as a gift to the child. Aarp tax help locations This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Aarp tax help locations Example. Aarp tax help locations Amanda Black, age 13, received the following income. Aarp tax help locations Dividends—$800 Wages—$2,100 Taxable interest—$1,200 Tax-exempt interest—$100 Capital gains—$300 Capital losses—($200) The dividends were qualified dividends on stock given to her by her grandparents. Aarp tax help locations Amanda's unearned income is $2,100. Aarp tax help locations This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Aarp tax help locations Her wages are earned (not unearned) income because they are received for work actually performed. Aarp tax help locations Her tax-exempt interest is not included because it is nontaxable. Aarp tax help locations Trust income. Aarp tax help locations   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Aarp tax help locations   However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. Aarp tax help locations See the Form 8615 instructions for details. Aarp tax help locations Adjustment to income. Aarp tax help locations   In figuring the amount to enter on line 1, the child's unearned income is reduced by any penalty on the early withdrawal of savings. Aarp tax help locations Line 2 (Deductions) If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2. Aarp tax help locations If the child itemizes deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29 (or Schedule A (Form 1040NR), line 15), that are directly connected with the production of the unearned income entered on line 1, or $2,000. Aarp tax help locations Directly connected. Aarp tax help locations   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Aarp tax help locations These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Aarp tax help locations    These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Aarp tax help locations Only the amount greater than 2% of the child's adjusted gross income can be deducted. Aarp tax help locations See Publication 529, Miscellaneous Deductions, for more information. Aarp tax help locations Example 1. Aarp tax help locations Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with his unearned income. Aarp tax help locations His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Aarp tax help locations Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly-connected itemized deductions of $300. Aarp tax help locations Example 2. Aarp tax help locations Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Aarp tax help locations She has no other income. Aarp tax help locations She has itemized deductions of $1,050 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with the production of her unearned income. Aarp tax help locations Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Aarp tax help locations The amount on line 2 is $2,050. Aarp tax help locations This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Aarp tax help locations Line 3 Subtract line 2 from line 1 and enter the result on this line. Aarp tax help locations If zero or less, do not complete the rest of the form. Aarp tax help locations However, you must still attach Form 8615 to the child's tax return. Aarp tax help locations Figure the tax on the child's taxable income in the normal manner. Aarp tax help locations Line 4 (Child's Taxable Income) Enter on line 4 the child's taxable income from Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Aarp tax help locations Child files Form 2555 or 2555-EZ. Aarp tax help locations   If the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) is used to figure the child's tax. Aarp tax help locations Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4. Aarp tax help locations Line 5 (Net Unearned Income) A child's net unearned income cannot be more than his or her taxable income. Aarp tax help locations Enter on Form 8615, line 5, the smaller of line 3 or line 4. Aarp tax help locations This is the child's net unearned income. Aarp tax help locations If zero or less, do not complete the rest of the form. Aarp tax help locations However, you must still attach Form 8615 to the child's tax return. Aarp tax help locations Figure the tax on the child's taxable income in the normal manner. Aarp tax help locations Step 2. Aarp tax help locations Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Aarp tax help locations The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Aarp tax help locations When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Aarp tax help locations For example, do not refigure the medical expense deduction. Aarp tax help locations Figure the tentative tax on Form 8615, lines 6 through 13. Aarp tax help locations Line 6 (Parent's Taxable Income) Enter on line 6 the amount from the parent's Form 1040, line 43; Form 1040A, line 27; Form 1040EZ, line 6; Form 1040NR, line 41; or Form 1040NR-EZ, line 14. Aarp tax help locations If the parent's taxable income is zero or less, enter zero on line 6. Aarp tax help locations Parent files Form 2555 or 2555-EZ. Aarp tax help locations   If the parent files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet in the Form 1040 instructions is used to figure the parent's tax. Aarp tax help locations Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the parent's taxable income, on line 6 of Form 8615. Aarp tax help locations Line 7 (Net Unearned Income of Other Children) If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Aarp tax help locations Do not include the amount from line 5 of the Form 8615 being completed. Aarp tax help locations (The term “other child” means any other child whose Form 8615 uses the tax information of the parent identified on Lines A and B of Form 8615. Aarp tax help locations ) Example. Aarp tax help locations Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Aarp tax help locations The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon—$800 Jerry—$600 Mike—$1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Aarp tax help locations Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Aarp tax help locations Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Aarp tax help locations Other children's information not available. Aarp tax help locations   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Aarp tax help locations Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C) . Aarp tax help locations Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income) Enter on this line the total of lines 5, 6, and 7. Aarp tax help locations You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9. Aarp tax help locations Net capital gain. Aarp tax help locations   Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D, line 16. Aarp tax help locations If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14. Aarp tax help locations Qualified dividends. Aarp tax help locations   Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR. Aarp tax help locations Net capital gain and qualified dividends on line 8. Aarp tax help locations   If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero. Aarp tax help locations   If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero. Aarp tax help locations   If the child, parent, or any other child has net capital gain, figure the amount of net capital gain included on line 8 by adding together the net capital gain amounts included on lines 5, 6, and 7 of Form 8615. Aarp tax help locations   If the child, parent, or any other child has qualified dividends, figure the amount of qualified dividends included on line 8 by adding together the qualified dividend amounts included on lines 5, 6, and 7. Aarp tax help locations   Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. Aarp tax help locations See the instructions for Form 8615 for more details. Aarp tax help locations Note. Aarp tax help locations The amount of any net capital gain or qualified dividends is not separately reported on line 8. Aarp tax help locations It is  needed, however, when figuring the tax on line 9. Aarp tax help locations Line 9 (Tax on Parent's Taxable Income Plus Children's Net Unearned Income) Figure the tax on the amount on line 8 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040, 1040A, or 1040NR instructions), the Schedule D Tax Worksheet (in the Schedule D instructions), or Schedule J (Form 1040), as follows. Aarp tax help locations If line 8 does not include any net capital gain or qualified dividends, use the Tax Table or Tax Computation Worksheet to figure this tax. Aarp tax help locations But if Schedule J, Income Averaging for Farmers and Fishermen, is used to figure the tax on the parent's return, use it to figure this tax. Aarp tax help locations If line 8 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. Aarp tax help locations For details, see the instructions for Form 8615, line 9. Aarp tax help locations However, if the child, parent, or any other child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. Aarp tax help locations But if Schedule J is used to figure the tax on the parent's return, use it to figure this tax. Aarp tax help locations Child files Form 2555 or 2555-EZ. Aarp tax help locations   If line 8 includes any net capital gain or qualified dividends and the child, or any other child filing Form 8615, also files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 9 tax, next, to figure the line 9 tax. Aarp tax help locations Using the Schedule D Tax Worksheet for line 9 tax. Aarp tax help locations    Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 9 tax on Form 8615 if the child, parent, or any other child has unrecaptured section 1250 gain or 28% rate gain. Aarp tax help locations If you must use the Schedule D Tax Worksheet, first complete any Schedule D and any actual Schedule D Tax Worksheet required for the child, parent, or any other child. Aarp tax help locations Then figure the line 9 tax using another Schedule D Tax Worksheet. Aarp tax help locations (Do not attach this Schedule D Tax Worksheet to the child's return. Aarp tax help locations )   Complete this Schedule D Tax Worksheet as follows. Aarp tax help locations On line 1, enter the amount from Form 8615, line 8. Aarp tax help locations On line 2, enter the qualified dividends included on Form 8615, line 8. Aarp tax help locations (See the earlier discussion for line 8. Aarp tax help locations ) On line 3, enter the total of the amounts, if any, on line 4g of all Forms 4952 filed by the child, parent, or any other child. Aarp tax help locations On line 4, enter the total of the amounts, if any, on line 4e of all Forms 4952 filed by the child, parent, or any other child. Aarp tax help locations If applicable, include instead the smaller amount entered on the dotted line next to line 4e. Aarp tax help locations On lines 5 and 6, follow the worksheet instructions. Aarp tax help locations On line 7, enter the net capital gain included on Form 8615, line 8. Aarp tax help locations (See the earlier discussion for line 8. Aarp tax help locations ) On lines 8 through 10, follow the worksheet instructions. Aarp tax help locations On line 11, enter zero if neither the child, nor the parent, nor any other child has unrecaptured section 1250 gain (Schedule D, line 19) or 28% rate gain (Schedule D, line 18). Aarp tax help locations Otherwise, enter the amount of unrecaptured section 1250 gain and 28% rate gain included in the net capital gain on line 8 of Form 8615. Aarp tax help locations Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11). Aarp tax help locations If the Foreign Earned Income Tax Worksheet was used to figure the parent's tax or the tax of any child, go to step 10 below. Aarp tax help locations Otherwise, skip steps 10, 11, and 12 below, and go to step 13. Aarp tax help locations Determine whether there is a line 8 capital gain excess as follows. Aarp tax help locations Add the amounts on line 2 of all Foreign Earned Income Tax Worksheets completed by the parent or any child for whom Form 8615 is filed. Aarp tax help locations (But for each child do not add more than the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Aarp tax help locations ) Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet. Aarp tax help locations Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. Aarp tax help locations If the result is more than zero, that amount is the line 8 capital gain excess. Aarp tax help locations If the result is zero or less, there is no line 8 capital gain excess. Aarp tax help locations If there is no line 8 capital gain excess, skip step 12 below and go to step 13. Aarp tax help locations If there is a line 8 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 13, but in its entirety and with the following additional modifications. Aarp tax help locations (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet. Aarp tax help locations ) Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess. Aarp tax help locations Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 8 capital gain excess not used in (a) above. Aarp tax help locations If the child, parent, or any other child has 28% rate gain, reduce the amount you would otherwise enter on line 8 of Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax), shown later, (but not below zero) by the line 8 capital gain excess, and refigure the amount on line 11 of this Schedule D Tax Worksheet. Aarp tax help locations If the child, parent, or any other child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 8 of Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) (but not below zero) by the line 8 capital gain excess not used in 12(c), and refigure the amount on line 11 of this Schedule D Tax Worksheet. Aarp tax help locations Complete lines 12 through 45 following the worksheet instructions. Aarp tax help locations Use the parent's filing status to complete lines 15, 42, and 44. Aarp tax help locations Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line
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The Aarp Tax Help Locations

Aarp tax help locations 4. Aarp tax help locations   Filing U. Aarp tax help locations S. Aarp tax help locations Tax Returns Table of Contents Who Must FileFiling Requirement if Possession Income Is Excluded When To FileExtension of Time To File Where To File Special Rules for Completing Your U. Aarp tax help locations S. Aarp tax help locations Tax ReturnU. Aarp tax help locations S. Aarp tax help locations Armed Forces. Aarp tax help locations Deductions if Possession Income Is Excluded Foreign Tax Credit if Possession Income Is Excluded Self-Employment Tax Additional Medicare Tax Net Investment Income Tax Paying Your TaxesEstimated Tax Double TaxationCompetent Authority Assistance The information in chapter 3 will tell you if a U. Aarp tax help locations S. Aarp tax help locations income tax return is required for your situation. Aarp tax help locations If a U. Aarp tax help locations S. Aarp tax help locations return is required, your next step is to see if you meet the filing requirements. Aarp tax help locations If you do meet the filing requirements, the information presented in this chapter will help you understand the special procedures involved. Aarp tax help locations This chapter discusses: Filing requirements, When to file your return, Where to send your return, How to adjust your deductions and credits if you are excluding income from American Samoa or Puerto Rico, How to make estimated tax payments and pay self-employment tax, and How to request assistance in resolving instances of double taxation. Aarp tax help locations Who Must File If you are not required to file a possession tax return that includes your worldwide income, you must generally file a U. Aarp tax help locations S. Aarp tax help locations income tax return if your gross income is at least the amount shown in Table 4-1, later, for your filing status and age. Aarp tax help locations If you were a bona fide resident of American Samoa or Puerto Rico and are able to exclude your possession income from your U. Aarp tax help locations S. Aarp tax help locations tax return, your filing requirement may be less than the amount in Table 4-1. Aarp tax help locations For details, see the information under Filing Requirement if Possession Income Is Excluded , later. Aarp tax help locations Some individuals (such as those who can be claimed as a dependent on another person's return or who owe certain taxes, such as self-employment tax) must file a tax return even though the gross income is less than the amount shown in Table 4-1 for their filing status and age. Aarp tax help locations For more information, see the Form 1040 instructions. Aarp tax help locations Filing Requirement if Possession Income Is Excluded If you were a bona fide resident of American Samoa or Puerto Rico and qualify to exclude possession income on your U. Aarp tax help locations S. Aarp tax help locations tax return, you must determine your adjusted filing requirement. Aarp tax help locations Generally, your filing requirement is based on the total of your (and your spouse's if filing a joint return) personal exemption(s) plus your standard deduction. Aarp tax help locations Personal exemption. Aarp tax help locations   When figuring your filing requirement, your personal exemption is allowed in full. Aarp tax help locations Do not reduce it for this purpose. Aarp tax help locations Do not include exemptions for your dependents. Aarp tax help locations Allowable standard deduction. Aarp tax help locations   Unless your filing status is married filing separately, the minimum income level at which you must file a return is based, in part, on the standard deduction for your filing status and age. Aarp tax help locations Because the standard deduction applies to all types of income, it must be divided between your excluded income and income from other sources. Aarp tax help locations Multiply the regular standard deduction for your filing status and age (this is zero if you are married filing a separate return; all others, see Form 1040 instructions) by the following fraction:      Gross income subject to U. Aarp tax help locations S. Aarp tax help locations income tax     Gross income from all sources (including excluded possession income)   Example. Aarp tax help locations Barbara Spruce, a U. Aarp tax help locations S. Aarp tax help locations citizen, is single, under 65, and a bona fide resident of American Samoa. Aarp tax help locations During 2013, she received $20,000 of income from American Samoa sources (qualifies for exclusion) and $8,000 of income from sources outside the possession (subject to U. Aarp tax help locations S. Aarp tax help locations income tax). Aarp tax help locations Her allowable standard deduction for 2013 is figured as follows:   $8,000 $28,000 × $6,100 (regular standard deduction) = $1,743   Adjusted filing requirement. Aarp tax help locations   Figure your adjusted filing requirement by adding the amount of your allowable standard deduction to the amount of your personal exemption. Aarp tax help locations You must file a U. Aarp tax help locations S. Aarp tax help locations income tax return if your gross income is at least the amount shown on line 3 of the following worksheet. Aarp tax help locations    1. Aarp tax help locations Enter the allowable standard deduction you figured earlier under Allowable standard deduction . Aarp tax help locations If your filing status is married filing separately, enter -0-   2. Aarp tax help locations Personal exemption. Aarp tax help locations If your filing status is married filing jointly, enter $7,800; if someone can claim you as a dependent, enter -0-; otherwise, enter $3,900   3. Aarp tax help locations Add lines 1 and 2. Aarp tax help locations You must file a U. Aarp tax help locations S. Aarp tax help locations income tax return if your gross income from sources outside the relevant possession is at least this amount   Table 4-1. Aarp tax help locations 2013 Filing Requirements Chart for Most Taxpayers IF your filing status is. Aarp tax help locations . Aarp tax help locations . Aarp tax help locations AND at the end of 2013 you were*. Aarp tax help locations . Aarp tax help locations . Aarp tax help locations THEN file a return if your gross income** was at least. Aarp tax help locations . Aarp tax help locations . Aarp tax help locations single under 65 $10,000 65 or older $11,500 married filing jointly*** under 65 (both spouses) $20,000 65 or older (one spouse) $21,200 65 or older (both spouses) $22,400 married filing separately any age $3,900 head of household under 65 $12,850 65 or older $14,350 qualifying widow(er)  with dependent child under 65 $16,100 65 or older $17,300 * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. Aarp tax help locations ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you can exclude part or all of it). Aarp tax help locations Do not include social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013, or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). Aarp tax help locations If (a) or (b) applies, see the instructions for Form 1040 or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must include in gross income. Aarp tax help locations *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900 you must file a return regardless of your age. Aarp tax help locations Example 1. Aarp tax help locations James and Joan Thompson, one over 65, are U. Aarp tax help locations S. Aarp tax help locations citizens and bona fide residents of Puerto Rico during the entire tax year. Aarp tax help locations They file a joint income tax return. Aarp tax help locations During 2013, they received $35,000 of income from Puerto Rico sources (qualifies for exclusion) and $6,000 of income from sources outside Puerto Rico (subject to U. Aarp tax help locations S. Aarp tax help locations income tax). Aarp tax help locations Their allowable standard deduction for 2013 is figured as follows:   $6,000 $41,000 × $13,400 ( standard deduction for 65 or older (one spouse) ) = $1,961   The Thompsons do not have to file a U. Aarp tax help locations S. Aarp tax help locations income tax return because their gross income subject to U. Aarp tax help locations S. Aarp tax help locations tax ($6,000) is less than their allowable standard deduction plus their personal exemptions ($1,961+ $7,800= $9,761). Aarp tax help locations Example 2. Aarp tax help locations Barbara Spruce (see Example under Allowable standard deduction, earlier), however, must file a U. Aarp tax help locations S. Aarp tax help locations income tax return because her gross income subject to U. Aarp tax help locations S. Aarp tax help locations tax ($8,000) is more than her allowable standard deduction plus her personal exemption ($1,743 + $3,900 = $5,643). Aarp tax help locations If you must file a U. Aarp tax help locations S. Aarp tax help locations income tax return, you may be able to file a paperless return using IRS e-file. Aarp tax help locations See your form instructions or visit our website at IRS. Aarp tax help locations gov. Aarp tax help locations When To File If you file on a calendar year basis, the due date for filing your U. Aarp tax help locations S. Aarp tax help locations income tax return is April 15 following the end of your tax year. Aarp tax help locations If you use a fiscal year (a year ending on the last day of a month other than December), the due date is the 15th day of the 4th month after the end of your fiscal year. Aarp tax help locations If any due date falls on a Saturday, Sunday, or legal holiday, your tax return is due on the next business day. Aarp tax help locations For your 2013 tax return, the due date is April 15, 2014. Aarp tax help locations If you mail your federal tax return, it is considered timely if it bears an official postmark dated on or before the due date, including any extensions. Aarp tax help locations If you use a private delivery service designated by the IRS, generally the postmark date is the date the private delivery service records in its database or marks on the mailing label. Aarp tax help locations See your form instructions for a list of designated private delivery services. Aarp tax help locations Extension of Time To File You can get an extension of time to file your U. Aarp tax help locations S. Aarp tax help locations income tax return. Aarp tax help locations Special rules apply for those living outside the United States. Aarp tax help locations Automatic 6-Month Extension If you cannot file your 2013 return by the due date, you can get an automatic 6-month extension of time to file. Aarp tax help locations Example. Aarp tax help locations If your return must be filed by April 15, 2014, you will have until October 15, 2014, to file. Aarp tax help locations Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. Aarp tax help locations If you do not pay the amount due by the regular due date (generally April 15), you will owe interest on any unpaid tax from the original due date to the date you pay the tax. Aarp tax help locations You may also be charged penalties (see the Instructions for Form 4868). Aarp tax help locations How to get the automatic extension. Aarp tax help locations   You can get the automatic 6-month extension if you do one of the following by the due date for filing your return. Aarp tax help locations E-file Form 4868 using your personal computer or a tax professional. Aarp tax help locations E-file and pay by credit or debit card. Aarp tax help locations Your payment must be at least $1. Aarp tax help locations You may pay by phone or over the Internet. Aarp tax help locations Do not file Form 4868. Aarp tax help locations File a paper Form 4868. Aarp tax help locations If you are a fiscal year taxpayer, you must file a paper Form 4868. Aarp tax help locations See Form 4868 for information on getting an extension using these options. Aarp tax help locations When to file. Aarp tax help locations   You must request the automatic extension by the due date for your return. Aarp tax help locations You can file your return any time before the 6-month extension period ends. Aarp tax help locations When you file your return. Aarp tax help locations   Enter any payment you made related to the extension of time to file on Form 1040, line 68. Aarp tax help locations If you file Form 1040A, U. Aarp tax help locations S. Aarp tax help locations Individual Income Tax Return, or Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, include that payment in your total payments on Form 1040A, line 41, or Form 1040EZ, line 9. Aarp tax help locations Also enter “Form 4868” and the amount paid in the space to the left of the entry space for line 41 or line 9. Aarp tax help locations You cannot ask the Internal Revenue Service to figure your tax if you use the extension of time to file. Aarp tax help locations Individuals Outside the United States and Puerto Rico You are allowed an automatic 2-month extension (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if: You are a U. Aarp tax help locations S. Aarp tax help locations citizen or resident, and On the due date of your return: You are living outside of the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. Aarp tax help locations However, if you pay the tax due after the regular due date (generally April 15), interest will be charged from April 15 until the date the tax is paid. Aarp tax help locations If you serve in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. Aarp tax help locations For more information, see Publication 3, Armed Forces' Tax Guide. Aarp tax help locations Married taxpayers. Aarp tax help locations   If you file a joint return, only one spouse has to qualify for this automatic extension. Aarp tax help locations However, if you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies. Aarp tax help locations How to get the extension. Aarp tax help locations   To use this special automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. Aarp tax help locations (See the situations listed under (2), earlier. Aarp tax help locations ) Extension beyond 2 months. Aarp tax help locations   If you cannot file your 2013 return within the automatic 2-month extension period, you can get an additional 4-month extension, for a total of 6 months. Aarp tax help locations File Form 4868 by the end of the automatic extension period (June 16, 2014 for calendar year taxpayers). Aarp tax help locations Be sure to check the box on Form 4868, line 8, if appropriate. Aarp tax help locations   In addition to this 6-month extension, taxpayers who are out of the country (as defined under (2) earlier) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Aarp tax help locations   To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Aarp tax help locations Send the letter by the extended due date (October 15 for calendar year taxpayers) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   You will not receive any notification from the IRS unless your request is denied for being untimely. Aarp tax help locations Where To File Use the addresses listed below if you have to file Form 1040 with the United States and you are excluding possession income from American Samoa or Puerto Rico. Aarp tax help locations If you are not including a check or a money order, send your U. Aarp tax help locations S. Aarp tax help locations tax return and all attachments to:   Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Aarp tax help locations S. Aarp tax help locations tax return and all attachments to:  Internal Revenue Service P. Aarp tax help locations O. Aarp tax help locations Box 1303 Charlotte, NC 28201-1303 USA Also send your U. Aarp tax help locations S. Aarp tax help locations return to these addresses if you are attaching Form 5074 or Form 8689. Aarp tax help locations If you are not in either of the above categories, send your return to the address shown in the Form 1040 instructions for the possession or state in which you reside. Aarp tax help locations Special Rules for Completing Your U. Aarp tax help locations S. Aarp tax help locations Tax Return If you are not excluding possession income from your U. Aarp tax help locations S. Aarp tax help locations tax return, follow the instructions for the specific forms you file. Aarp tax help locations However, you may not qualify to claim the earned income credit (EIC). Aarp tax help locations Earned income credit. Aarp tax help locations   Even if you maintain a household in one of the possessions discussed in this publication that is your main home and the home of your qualifying child, you cannot claim the earned income credit on your U. Aarp tax help locations S. Aarp tax help locations tax return. Aarp tax help locations This credit is available only if you maintain the household in the United States or you are serving on extended active duty in the U. Aarp tax help locations S. Aarp tax help locations Armed Forces. Aarp tax help locations U. Aarp tax help locations S. Aarp tax help locations Armed Forces. Aarp tax help locations   U. Aarp tax help locations S. Aarp tax help locations military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. Aarp tax help locations Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. Aarp tax help locations Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. Aarp tax help locations Income from American Samoa or Puerto Rico excluded. Aarp tax help locations   You will not be allowed to take deductions and credits that apply to the excluded income. Aarp tax help locations The additional information you need follows. Aarp tax help locations Deductions if Possession Income Is Excluded Deductions that specifically apply to your excluded possession income, such as employee business expenses, are not allowable on your U. Aarp tax help locations S. Aarp tax help locations income tax return. Aarp tax help locations Deductions that do not specifically apply to any particular type of income must be divided between your excluded income from sources in the relevant possession and income from all other sources to find the part that you can deduct on your U. Aarp tax help locations S. Aarp tax help locations tax return. Aarp tax help locations Examples of such deductions are alimony payments, the standard deduction, and certain itemized deductions (such as medical expenses, charitable contributions, real estate taxes, and mortgage interest on your home). Aarp tax help locations Figuring the deduction. Aarp tax help locations   To find the part of a deduction that is allowable, multiply the deduction by the following fraction. Aarp tax help locations   Gross income subject to U. Aarp tax help locations S. Aarp tax help locations income tax     Gross income from all sources (including excluded possession income)   Adjustments to Income Your adjusted gross income equals your gross income minus certain deductions (adjustments). Aarp tax help locations Moving expense deduction. Aarp tax help locations   Generally, expenses of a move to a possession are directly attributable to wages, salaries, and other earned income from that possession. Aarp tax help locations Likewise, the expenses of a move back to the United States are generally attributable to U. Aarp tax help locations S. Aarp tax help locations earned income. Aarp tax help locations   If you are claiming expenses for a move to a relevant possession, how and where you will deduct the expenses depends on your status as a bona fide resident and if any of your possession income is excluded on your U. Aarp tax help locations S. Aarp tax help locations tax return. Aarp tax help locations For more information, see Moving expense deduction in chapter 3 under the name of the relevant possession. Aarp tax help locations   If you are claiming expenses for a move from a U. Aarp tax help locations S. Aarp tax help locations possession to the United States, use Form 3903 to figure your deductible expenses and enter the amount on Form 1040, line 26. Aarp tax help locations For purposes of deducting moving expenses, the possessions are considered part of the United States. Aarp tax help locations See Publication 521, Moving Expenses, for information about what expenses are deductible. Aarp tax help locations Self-employment tax deduction. Aarp tax help locations   Generally, if you are reporting self-employment income on your U. Aarp tax help locations S. Aarp tax help locations return, you can include the deductible part of your self-employment tax on Form 1040, line 27. Aarp tax help locations This is an income tax deduction only; it is not a deduction in figuring net earnings from self-employment (for self-employment tax). Aarp tax help locations   However, if you are a bona fide resident of American Samoa or Puerto Rico and you exclude all of your self-employment income from gross income, you cannot take the deduction on Form 1040, line 27, because the deduction is related to excluded income. Aarp tax help locations   If only part of your self-employment income is excluded, the part of the deduction that is based on the nonexcluded income is allowed. Aarp tax help locations This would happen if, for instance, you have two businesses and only the income from one of them is excludable. Aarp tax help locations   For purposes of the deduction only, figure the self-employment tax on the nonexcluded income by multiplying your total self-employment tax (from Schedule SE (Form 1040)), Self-Employment Tax) by the following fraction. Aarp tax help locations   Self-employment income subject to U. Aarp tax help locations S. Aarp tax help locations income tax     Total self-employment income (including excluded possession income)   The result is your self-employment tax on nonexcluded income. Aarp tax help locations Include the deductible part of this amount on Form 1040, line 27. Aarp tax help locations Individual retirement arrangement (IRA) deduction. Aarp tax help locations   Do not take excluded income into account when figuring your deductible IRA contribution. Aarp tax help locations Standard Deduction The standard deduction is composed of the regular standard deduction amount and the additional standard deduction for taxpayers who are blind or age 65 or over. Aarp tax help locations To find the amount you can claim on Form 1040, line 40, first figure your full standard deduction according to the Instructions for Form 1040. Aarp tax help locations Then multiply your full standard deduction by the following fraction. Aarp tax help locations   Gross income subject to U. Aarp tax help locations S. Aarp tax help locations income tax     Gross income from all sources (including excluded possession income)   In the space above line 40, enter “Standard deduction modified due to income excluded under section 931 (if American Samoa) or section 933 (if Puerto Rico). Aarp tax help locations ” This calculation may not be the same as the one you used to determine if you need to file a U. Aarp tax help locations S. Aarp tax help locations tax return. Aarp tax help locations Itemized Deductions Most itemized deductions do not apply to a particular type of income. Aarp tax help locations However, itemized deductions can be divided into three categories. Aarp tax help locations Those that apply specifically to excluded income, such as employee business expenses, are not deductible. Aarp tax help locations Those that apply specifically to income subject to U. Aarp tax help locations S. Aarp tax help locations income tax, which might also be employee business expenses, are fully allowable under the Instructions for Schedule A (Form 1040), Itemized Deductions. Aarp tax help locations Those that do not apply to specific income must be allocated between your gross income subject to U. Aarp tax help locations S. Aarp tax help locations income tax and your total gross income from all sources. Aarp tax help locations The example given later shows how to figure the deductible part of each type of expense that is not related to specific income. Aarp tax help locations Example. Aarp tax help locations In 2013, you and your spouse are both under 65 and U. Aarp tax help locations S. Aarp tax help locations citizens who are bona fide residents of Puerto Rico during the entire tax year. Aarp tax help locations You file a joint income tax return. Aarp tax help locations During 2013, you earned $20,000 from Puerto Rican sources (excluded from U. Aarp tax help locations S. Aarp tax help locations gross income) and your spouse earned $60,000 from the U. Aarp tax help locations S. Aarp tax help locations Government. Aarp tax help locations You have $16,000 of itemized deductions that do not apply to any specific type of income. Aarp tax help locations These are medical expenses of $4,000, real estate taxes of $5,000, home mortgage interest of $6,000, and charitable contributions of $1,000 (cash contributions). Aarp tax help locations You determine the amount of each deduction that you can claim on your Schedule A (Form 1040), Itemized Deductions, by multiplying the deduction by the fraction shown under Figuring the deduction , earlier under Deductions if Possession Income is Excluded. Aarp tax help locations   Medical Expenses   $60,000$80,000 × $4,000 = $3,000  (enter on line 1  of Schedule A)     Real Estate Taxes   $60,000$80,000 × $5,000 = $3,750  (enter on line 6  of Schedule A)     Home Mortgage Interest   $60,000$80,000 × $6,000 = $4,500  (enter on line 10 or 11 of  Schedule A)     Charitable Contributions (cash contributions)   $60,000$80,000 × $1,000 = $750  (enter on line 16 of Schedule A)   Enter on Schedule A (Form 1040) only the allowable portion of each deduction. Aarp tax help locations Overall limitation on itemized deductions. Aarp tax help locations   If your adjusted gross income (discussed earlier) is over $300,000 if married filing jointly or qualifying widow(er); $275,000 if head of household; $250,000 if single; or $150,000 if married filing separately; see the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040), to figure your itemized deductions. Aarp tax help locations Personal Exemptions Personal exemptions are allowed in full even if excluding possession income. Aarp tax help locations However, depending upon your adjusted gross income and filing status, the amount you can deduct may be reduced. Aarp tax help locations See the Deduction for Exemptions Worksheet—Line 42 in the instructions for Form 1040. Aarp tax help locations Foreign Tax Credit if Possession Income Is Excluded If you must report American Samoa or Puerto Rico source income on your U. Aarp tax help locations S. Aarp tax help locations tax return, you can claim a foreign tax credit for income taxes paid to the possession on that income. Aarp tax help locations However, you cannot claim a foreign tax credit for taxes paid on possession income that is excluded on your U. Aarp tax help locations S. Aarp tax help locations tax return. Aarp tax help locations The foreign tax credit is generally figured on Form 1116. Aarp tax help locations If you have income, such as U. Aarp tax help locations S. Aarp tax help locations Government wages, that is not excludable, and you also have possession source income that is excludable, you must figure the credit by reducing your foreign taxes paid or accrued by the taxes based on the excluded income. Aarp tax help locations You make this reduction for each separate income category. Aarp tax help locations To find the amount of this reduction, use the following formula for each income category. Aarp tax help locations Excluded income from possession sources less deductible expenses based on that income x Tax paid or accrued to the possession = Reduction in foreign taxes Total income subject to possession tax less deductible expenses based on that income Enter the amount of the reduction on Form 1116, line 12. Aarp tax help locations For more information on the foreign tax credit, see Publication 514. Aarp tax help locations Example. Aarp tax help locations Jason and Lynn Reddy are U. Aarp tax help locations S. Aarp tax help locations citizens who were bona fide residents of Puerto Rico during all of 2013. Aarp tax help locations They file a joint tax return. Aarp tax help locations The following table shows their excludable and taxable income for U. Aarp tax help locations S. Aarp tax help locations federal income tax purposes. Aarp tax help locations   Taxable   Excludable Jason's wages from  U. Aarp tax help locations S. Aarp tax help locations Government $25,000     Lynn's wages from Puerto Rico  corp. Aarp tax help locations     $15,000 Dividend from Puerto Rico corp. Aarp tax help locations doing business in Puerto Rico     200 Dividend from U. Aarp tax help locations S. Aarp tax help locations  corp. Aarp tax help locations doing business  in U. Aarp tax help locations S. Aarp tax help locations * 1,000     Totals $26,000   $15,200 * Income from sources outside Puerto Rico is taxable. Aarp tax help locations   Jason and Lynn must file 2013 income tax returns with both Puerto Rico and the United States. Aarp tax help locations They have gross income of $26,000 for U. Aarp tax help locations S. Aarp tax help locations tax purposes. Aarp tax help locations They paid taxes to Puerto Rico of $4,000 ($3,980 on their wages and $20 on the dividend from the Puerto Rico corporation). Aarp tax help locations They figure their foreign tax credit on two Forms 1116, which they must attach to their U. Aarp tax help locations S. Aarp tax help locations return. Aarp tax help locations They fill out one Form 1116 for wages and one Form 1116 for the dividend. Aarp tax help locations Jason and Lynn figure the Puerto Rico taxes on excluded income as follows. Aarp tax help locations   Wages: ($15,000 ÷ $40,000) × $3,980 = $1,493   Dividend: ($200 ÷ $200) × $20 = $20 They enter $1,493 on Form 1116, line 12, for wages and $20 on the second Form 1116, line 12, for the dividend. Aarp tax help locations Self-Employment Tax Self-employment tax includes both social security and Medicare taxes for individuals who are self-employed. Aarp tax help locations A U. Aarp tax help locations S. Aarp tax help locations citizen or resident alien who is self-employed must pay self-employment tax on net self-employment earnings of $400 or more. Aarp tax help locations This rule applies whether or not the earnings are excludable from gross income (or whether or not a U. Aarp tax help locations S. Aarp tax help locations income tax return must otherwise be filed). Aarp tax help locations Bona fide residents of the possessions discussed in this publication are considered U. Aarp tax help locations S. Aarp tax help locations residents for this purpose and are subject to the self-employment tax. Aarp tax help locations Forms to file. Aarp tax help locations   If you have net self-employment income and are subject to self-employment tax, file one of the following with the United States. Aarp tax help locations If you are required to file Form 1040 with the United States, complete Schedule SE (Form 1040) and attach it to your Form 1040. Aarp tax help locations If you are not required to file Form 1040 with the United States and you are a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, file Form 1040-SS. Aarp tax help locations If you are a resident of Puerto Rico, you can file the Spanish-language Form 1040-PR instead. Aarp tax help locations Do not file forms 1040-SS or 1040-PR with Form 1040. Aarp tax help locations If you are required to pay Additional Medicare Tax (discussed later) on your self-employment income, attach Form 8959, Additional Medicare Tax to Form 1040, Form 1040-SS, or Form 1040-PR, as applicable. Aarp tax help locations Chapter 11 Bankruptcy cases. Aarp tax help locations   While you are a debtor in a chapter 11 bankruptcy case, your net profit or loss from self-employment will be included on the income tax return (Form 1041, U. Aarp tax help locations S. Aarp tax help locations Income Tax Return for Estates and Trusts) of the bankruptcy estate. Aarp tax help locations However, you—not the bankruptcy estate—are responsible for paying self-employment tax on your net earnings from self-employment. Aarp tax help locations   Use Schedule SE (Form 1040), Form 1040-SS, or Form 1040-PR, as determined above, to figure your correct amount of self-employment tax. Aarp tax help locations   For other reporting requirements, see Chapter 11 Bankruptcy Cases in the Instructions for Form 1040. Aarp tax help locations Additional Medicare Tax Beginning in 2013, a 0. Aarp tax help locations 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). Aarp tax help locations Medicare wages and self-employment income are combined to determine if income exceeds the threshold. Aarp tax help locations A self-employment loss should not be considered for purposes of this tax. Aarp tax help locations RRTA compensation should be separately compared to the threshold. Aarp tax help locations Your employer is responsible for withholding the 0. Aarp tax help locations 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. Aarp tax help locations You should consider this withholding, if applicable, in determining whether you need to make estimated tax payments. Aarp tax help locations There are no special rules for U. Aarp tax help locations S. Aarp tax help locations citizens and nonresident aliens living abroad for purposes of this provision. Aarp tax help locations Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Aarp tax help locations For more information, see Form 8959, Additional Medicare Tax, and its instructions or visit www. Aarp tax help locations irs. Aarp tax help locations gov and enter the following words in the search box: Additional Medicare Tax. Aarp tax help locations You cannot include the Additional Medicare Tax as a deductible part of your self-employment tax. Aarp tax help locations Net Investment Income Tax Beginning in 2013, the Net Investment Income Tax (NIIT) imposes a 3. Aarp tax help locations 8% tax on the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Aarp tax help locations Bona fide residents of Puerto Rico and American Samoa who may have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer’s modified adjusted gross income from non-territory sources exceeds a specified threshold amount. Aarp tax help locations The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Aarp tax help locations Bona fide residents must take into account any additional tax liability associated with the NIIT when calculating your estimated tax payments. Aarp tax help locations Forms to file. Aarp tax help locations   If you are a bona fide resident of American Samoa and Puerto Rico and you are required to pay the NIIT, you must file Form 1040 with the United States and attach Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts. Aarp tax help locations For more information, see Form 8960 and its instructions. Aarp tax help locations Paying Your Taxes You may find that not all of your income tax has been paid through withholding by either the United States or the possession. Aarp tax help locations This is often true if you have income that is not subject to withholding, such as self-employment, interest, or rental income. Aarp tax help locations In this situation, you may need to make estimated tax payments. Aarp tax help locations Estimated Tax If your estimated income tax obligation is to the United States, use the worksheet in the Form 1040-ES package to figure your estimated tax, including self-employment tax. Aarp tax help locations Include the Additional Medicare Tax and Net Investment Income Tax if applicable. Aarp tax help locations If you are paying by check or money order, use the payment vouchers in the Form 1040-ES package. Aarp tax help locations Or, you can make your payments electronically and not have to file any paper forms. Aarp tax help locations See the Form 1040-ES instructions for information on making payments. Aarp tax help locations Double Taxation Mutual agreement procedures exist to settle issues where there is inconsistent tax treatment between the IRS and the taxing authorities of the following possessions. Aarp tax help locations American Samoa. Aarp tax help locations The Commonwealth of Puerto Rico. Aarp tax help locations The Commonwealth of the Northern Mariana Islands. Aarp tax help locations Guam. Aarp tax help locations The U. Aarp tax help locations S. Aarp tax help locations Virgin Islands. Aarp tax help locations These issues usually involve allocations of income, deductions, credits, or allowances between related persons; determinations of residency; and determinations of the source of income and related expenses. Aarp tax help locations Competent Authority Assistance The tax coordination agreements between the United States and the possession tax departments contain provisions allowing the competent authorities of the United States and the relevant possession to resolve, by mutual agreement, inconsistent tax treatment by the two jurisdictions. Aarp tax help locations How to make your request. Aarp tax help locations   Your request for competent authority assistance must include all the information listed in Revenue Procedure 2006-23, 2006-20 I. Aarp tax help locations R. Aarp tax help locations B. Aarp tax help locations 900 available at www. Aarp tax help locations irs. Aarp tax help locations gov/pub/irs-irbs/irb06-49. Aarp tax help locations pdf. Aarp tax help locations    Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. Aarp tax help locations S. Aarp tax help locations competent authority assistance under tax treaties. Aarp tax help locations As noted, an update to Revenue Procedure 2006-23 will be published in the future. Aarp tax help locations   Your request must be in the form of a letter addressed to the Deputy Commissioner (International) LB&I. Aarp tax help locations It must contain a statement that competent authority assistance is requested under the mutual agreement procedure with the possession. Aarp tax help locations You (or a person having authority to sign your federal return) must sign and date the request. Aarp tax help locations    Send your written request for U. Aarp tax help locations S. Aarp tax help locations assistance under this procedure to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, N. Aarp tax help locations W. Aarp tax help locations  Routing: M4-365 Washington, DC 20224 (Attention: TAIT) Nonresident aliens generally must present their initial request for assistance to the relevant possession tax agency. Aarp tax help locations Credit or Refund In addition to the tax assistance request, if you seek a credit or refund of any overpayment of U. Aarp tax help locations S. Aarp tax help locations tax paid on the income in question, you should file a claim on Form 1040X, Amended U. Aarp tax help locations S. Aarp tax help locations Individual Income Tax Return. Aarp tax help locations Indicate on the form that a request for assistance under the mutual agreement procedure with the possession has been filed. Aarp tax help locations Attach a copy of the request to the form. Aarp tax help locations Also, you should take whatever steps must be taken under the possession tax code to prevent the expiration of the statutory period for filing a claim for credit or refund of a possession tax. Aarp tax help locations See Revenue Procedure 2006-54 (or its successor), section 9, for complete information. Aarp tax help locations Prev  Up  Next   Home   More Online Publications