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Amendment To Tax Return

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Amendment To Tax Return

Amendment to tax return 11. Amendment to tax return   Departing Aliens and the Sailing or Departure Permit Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Aliens Not Required To Obtain Sailing or Departure Permits Aliens Required To Obtain Sailing or Departure PermitsGetting a Sailing or Departure Permit Forms To File Paying Taxes and Obtaining Refunds Bond To Ensure Payment Filing Annual U. Amendment to tax return S. Amendment to tax return Income Tax Returns Introduction Before leaving the United States, all aliens (except those listed under Aliens Not Required To Obtain Sailing or Departure Permits must obtain a certificate of compliance. Amendment to tax return This document, also popularly known as the sailing permit or departure permit, is part of the income tax form you must file before leaving. Amendment to tax return You will receive a sailing or departure permit after filing a Form 1040-C or Form 2063. Amendment to tax return These forms are discussed in this chapter. Amendment to tax return To find out if you need a sailing or departure permit, first read Aliens Not Required To Obtain Sailing or Departure Permits . Amendment to tax return If you do not fall into one of the categories in that discussion, you must obtain a sailing or departure permit. Amendment to tax return Read Aliens Required To Obtain Sailing or Departure Permits . Amendment to tax return Topics - This chapter discusses: Who needs a sailing permit, How to get a sailing permit, and Forms you file to get a sailing permit. Amendment to tax return Useful Items - You may want to see: Form (and Instructions) 1040-C U. Amendment to tax return S. Amendment to tax return Departing Alien Income Tax Return 2063 U. Amendment to tax return S. Amendment to tax return Departing Alien Income Tax Statement See chapter 12 for information about getting these forms. Amendment to tax return Aliens Not Required To Obtain Sailing or Departure Permits If you are included in one of the following categories, you do not have to get a sailing or departure permit before leaving the United States. Amendment to tax return If you are in one of these categories and do not have to get a sailing or departure permit, you must be able to support your claim for exemption with proper identification or give the authority for the exemption. Amendment to tax return Category 1. Amendment to tax return   Representatives of foreign governments with diplomatic passports, whether accredited to the United States or other countries, members of their households, and servants accompanying them. Amendment to tax return Servants who are leaving, but not with a person with a diplomatic passport, must get a sailing or departure permit. Amendment to tax return However, they can get a sailing or departure permit on Form 2063 without examination of their income tax liability by presenting a letter from the chief of their diplomatic mission certifying that: Their name appears on the “White List” (a list of employees of diplomatic missions), and They do not owe to the United States any income tax, and will not owe any tax up to and including the intended date of departure. Amendment to tax return   The statement must be presented to an IRS office. Amendment to tax return Category 2. Amendment to tax return    Employees of international organizations and foreign governments (other than diplomatic representatives exempt under category 1) and members of their households: Whose compensation for official services is exempt from U. Amendment to tax return S. Amendment to tax return tax under U. Amendment to tax return S. Amendment to tax return tax laws (described in chapter 10), and Who receive no other income from U. Amendment to tax return S. Amendment to tax return sources. Amendment to tax return If you are an alien in category (1) or (2), above, who filed the waiver under section 247(b) of the Immigration and Nationality Act, you must get a sailing or departure permit. Amendment to tax return This is true even if your income is exempt from U. Amendment to tax return S. Amendment to tax return tax because of an income tax treaty, consular agreement, or international agreement. Amendment to tax return Category 3. Amendment to tax return   Alien students, industrial trainees, and exchange visitors, including their spouses and children, who enter on an “F-1,” “F-2,” “H-3,” “H-4,” “J-1,” “J-2,” or “Q” visa only and who receive no income from U. Amendment to tax return S. Amendment to tax return sources while in the United States under those visas other than: Allowances to cover expenses incident to study or training in the United States, such as expenses for travel, maintenance, and tuition, The value of any services or food and lodging connected with this study or training, Income from employment authorized by the U. Amendment to tax return S. Amendment to tax return Citizenship and Immigration Services (USCIS), or Interest income on deposits that is not effectively connected with a U. Amendment to tax return S. Amendment to tax return trade or business. Amendment to tax return (See Interest Income in chapter 3. Amendment to tax return ) Category 4. Amendment to tax return   Alien students, including their spouses and children, who enter on an “M-1” or “M-2” visa only and who receive no income from U. Amendment to tax return S. Amendment to tax return sources while in the United States under those visas, other than: Income from employment authorized by the U. Amendment to tax return S. Amendment to tax return Citizenship and Immigration Services (USCIS) or Interest income on deposits that is not effectively connected with a U. Amendment to tax return S. Amendment to tax return trade or business. Amendment to tax return (See Interest Income in chapter 3. Amendment to tax return ) Category 5. Amendment to tax return   Certain other aliens temporarily in the United States who have received no taxable income during the tax year up to and including the date of departure or during the preceding tax year. Amendment to tax return If the IRS has reason to believe that an alien has received income subject to tax and that the collection of income tax is jeopardized by departure, it may then require the alien to obtain a sailing or departure permit. Amendment to tax return Aliens in this category are: Alien military trainees who enter the United States for training under the sponsorship of the Department of Defense and who leave the United States on official military travel orders, Alien visitors for business on a “B-1” visa, or on both a “B-1” visa and a “B-2” visa, who do not remain in the United States or a U. Amendment to tax return S. Amendment to tax return possession for more than 90 days during the tax year, Alien visitors for pleasure on a “B-2” visa, Aliens in transit through the United States or any of its possessions on a “C-1” visa, or under a contract, such as a bond agreement, between a transportation line and the Attorney General, and Aliens who enter the United States on a border-crossing identification card or for whom passports, visas, and border-crossing identification cards are not required, if they are: Visitors for pleasure, Visitors for business who do not remain in the United States or a U. Amendment to tax return S. Amendment to tax return possession for more than 90 days during the tax year, or In transit through the United States or any of its possessions. Amendment to tax return Category 6. Amendment to tax return   Alien residents of Canada or Mexico who frequently commute between that country and the United States for employment, and whose wages are subject to the withholding of U. Amendment to tax return S. Amendment to tax return tax. Amendment to tax return Aliens Required To Obtain Sailing or Departure Permits If you do not fall into one of the categories listed under Aliens Not Required To Obtain Sailing or Departure Permits, you must obtain a sailing or departure permit. Amendment to tax return To obtain a permit, file Form 1040-C or Form 2063 (whichever applies) with your local IRS office before you leave the United States. Amendment to tax return See Forms To File , later. Amendment to tax return You must also pay all the tax shown as due on Form 1040-C and any taxes due for past years. Amendment to tax return See Paying Taxes and Obtaining Refunds , later. Amendment to tax return Getting a Sailing or Departure Permit The following discussion covers when and where to get your sailing permit. Amendment to tax return Where to get a sailing or departure permit. Amendment to tax return   If you have been working in the United States, you should get the permit from an IRS office in the area of your employment, or you may obtain one from an IRS office in the area of your departure. Amendment to tax return When to get a sailing or departure permit. Amendment to tax return   You should get your sailing or departure permit at least 2 weeks before you plan to leave. Amendment to tax return You cannot apply earlier than 30 days before your planned departure date. Amendment to tax return Do not wait until the last minute in case there are unexpected problems. Amendment to tax return Papers to submit. Amendment to tax return   Getting your sailing or departure permit will go faster if you bring to the IRS office papers and documents related to your income and your stay in the United States. Amendment to tax return Bring the following records with you if they apply. Amendment to tax return Your passport and alien registration card or visa. Amendment to tax return Copies of your U. Amendment to tax return S. Amendment to tax return income tax returns filed for the past 2 years. Amendment to tax return If you were in the United States for less than 2 years, bring the income tax returns you filed for that period. Amendment to tax return Receipts for income taxes paid on these returns. Amendment to tax return Receipts, bank records, canceled checks, and other documents that prove your deductions, business expenses, and dependents claimed on your returns. Amendment to tax return A statement from each employer showing wages paid and tax withheld from January 1 of the current year to the date of departure if you were an employee. Amendment to tax return If you were self-employed, you must bring a statement of income and expenses up to the date you plan to leave. Amendment to tax return Proof of estimated tax payments for the past year and this year. Amendment to tax return Documents showing any gain or loss from the sale of personal property and/or real property, including capital assets and merchandise. Amendment to tax return Documents relating to scholarship or fellowship grants including: Verification of the grantor, source, and purpose of the grant. Amendment to tax return Copies of the application for, and approval of, the grant. Amendment to tax return A statement of the amount paid, and your duties and obligations under the grant. Amendment to tax return A list of any previous grants. Amendment to tax return Documents indicating you qualify for any special tax treaty benefits claimed. Amendment to tax return Document verifying your date of departure from the United States, such as an airline ticket. Amendment to tax return Document verifying your U. Amendment to tax return S. Amendment to tax return taxpayer identification number, such as a social security card or an IRS issued Notice CP 565 showing your individual taxpayer identification number (ITIN). Amendment to tax return Note. Amendment to tax return   If you are married and reside in a community property state, also bring the above-listed documents for your spouse. Amendment to tax return This applies whether or not your spouse requires a permit. Amendment to tax return Forms To File If you must get a sailing or departure permit, you must file Form 2063 or Form 1040-C. Amendment to tax return Employees in the IRS office can assist in filing these forms. Amendment to tax return Both forms have a “certificate of compliance” section. Amendment to tax return When the certificate of compliance is signed by an agent of the Field Assistance Area Director, it certifies that your U. Amendment to tax return S. Amendment to tax return tax obligations have been satisfied according to available information. Amendment to tax return Your Form 1040-C copy of the signed certificate, or the one detached from Form 2063, is your sailing or departure permit. Amendment to tax return Form 2063 This is a short form that asks for certain information but does not include a tax computation. Amendment to tax return The following departing aliens can get their sailing or departure permits by filing Form 2063. Amendment to tax return Aliens, whether resident or nonresident, who have had no taxable income for the tax year up to and including the date of departure and for the preceding year, if the period for filing the income tax return for that year has not expired. Amendment to tax return Resident aliens who have received taxable income during the tax year or preceding year and whose departure will not hinder the collection of any tax. Amendment to tax return However, if the IRS has information indicating that the aliens are leaving to avoid paying their income tax, they must file a Form 1040-C. Amendment to tax return Aliens in either of these categories who have not filed an income tax return or paid income tax for any tax year must file the return and pay the income tax before they can be issued a sailing or departure permit on Form 2063. Amendment to tax return The sailing or departure permit detached from Form 2063 can be used for all departures during the current year. Amendment to tax return However, the IRS may cancel the sailing or departure permit for any later departure if it believes the collection of income tax is jeopardized by that later departure. Amendment to tax return Form 1040-C If you must get a sailing or departure permit and you do not qualify to file Form 2063, you must file Form 1040-C. Amendment to tax return Ordinarily, all income received or reasonably expected to be received during the tax year up to and including the date of departure must be reported on Form 1040-C and the tax on it must be paid. Amendment to tax return When you pay any tax shown as due on the Form 1040-C, and you file all returns and pay all tax due for previous years, you will receive a sailing or departure permit. Amendment to tax return However, the IRS may permit you to furnish a bond guaranteeing payment instead of paying the taxes for certain years. Amendment to tax return See Bond To Ensure Payment , discussed later. Amendment to tax return The sailing or departure permit issued under the conditions in this paragraph is only for the specific departure for which it is issued. Amendment to tax return Returning to the United States. Amendment to tax return   If you furnish the IRS with information showing, to the satisfaction of the IRS, that you intend to return to the United States and that your departure does not jeopardize the collection of income tax, you can get a sailing or departure permit by filing Form 1040-C without having to pay the tax shown on it. Amendment to tax return You must, however, file all income tax returns that have not yet been filed as required, and pay all income tax that is due on these returns. Amendment to tax return   Your Form 1040-C must include all income received and reasonably expected to be received during the entire year of departure. Amendment to tax return The sailing or departure permit issued with this Form 1040-C can be used for all departures during the current year. Amendment to tax return However, the Service may cancel the sailing or departure permit for any later departure if the payment of income tax appears to be in jeopardy. Amendment to tax return Joint return on Form 1040-C. Amendment to tax return   Departing husbands and wives who are nonresident aliens cannot file joint returns. Amendment to tax return However, if both spouses are resident aliens, they can file a joint return on Form 1040-C if: Both spouses can reasonably be expected to qualify to file a joint return at the normal close of their tax year, and The tax years of the spouses end at the same time. Amendment to tax return Paying Taxes and Obtaining Refunds You must pay all tax shown as due on the Form 1040-C at the time of filing it, except when a bond is furnished, or the IRS is satisfied that your departure does not jeopardize the collection of income tax. Amendment to tax return You must also pay any taxes due for past years. Amendment to tax return If the tax computation on Form 1040-C results in an overpayment, there is no tax to pay at the time you file that return. Amendment to tax return However, the IRS cannot provide a refund at the time of departure. Amendment to tax return If you are due a refund, you must file either Form 1040NR or Form 1040NR-EZ at the end of the tax year. Amendment to tax return Bond To Ensure Payment Usually, you must pay the tax shown as due on Form 1040-C when you file it. Amendment to tax return However, if you pay all taxes due that you owe for prior years, you can furnish a bond guaranteeing payment instead of paying the income taxes shown as due on the Form 1040-C or the tax return for the preceding year if the period for filing that return has not expired. Amendment to tax return The bond must equal the tax due plus interest to the date of payment as figured by the IRS. Amendment to tax return Information about the form of bond and security on it can be obtained from your IRS office. Amendment to tax return Filing Annual U. Amendment to tax return S. Amendment to tax return Income Tax Returns Form 1040-C is not an annual U. Amendment to tax return S. Amendment to tax return income tax return. Amendment to tax return If an income tax return is required by law, that return must be filed even though a Form 1040-C has already been filed. Amendment to tax return Chapters 5 and 7 discuss filing an annual U. Amendment to tax return S. Amendment to tax return income tax return. Amendment to tax return The tax paid with Form 1040-C should be taken as a credit against the tax liability for the entire tax year on your annual U. Amendment to tax return S. Amendment to tax return income tax return. Amendment to tax return Prev  Up  Next   Home   More Online Publications
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More than Half of all Income Tax Returns Have Been Received. IRS Issues Publication on Business Expenses

 

IR-2014-32, March 20, 2014

WASHINGTON — With the tax deadline getting closer, the IRS has received more than half of all the returns it expects to receive during 2014, the agency announced today. The IRS received more than 75 million individual tax returns as of March 14 and projects that it will receive about 149 million individual income tax returns by the end of the year.

Millions of individual tax filers have business income either as sole proprietors or as sub contractors. Many individual filers also have unreimbursed business expenses. The IRS recently issued Publication 535, Business Expenses, which provides valuable information for these filers. The publication contains useful hints for Tax Year 2013, for which many taxpayers are still completing returns and for Tax Year 2014, for which taxpayers are tracking expenses and making financial decisions.

For Tax Year 2013

Optional safe harbor method to determine the business use of a home deduction, also known as the simplified option for claiming the home office deduction. Beginning in 2013, taxpayers can use the optional safe harbor method to determine the deduction for the business use of a home. 

Standard mileage rate. Beginning in 2013, the standard mileage rate for the cost of operating a car, van, pickup, or panel truck for each mile of business use is 56.5 cents per mile.

Additional Medicare Tax. Beginning in 2013, a 0.9% 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) with dependent child.

Medicare wages and self-employment income are combined to determine if a taxpayer’s income exceeds the threshold. RRTA compensation should be separately compared to the threshold. 

For Tax Year 2014

Standard mileage rate. Beginning in 2014, the standard mileage rate for the cost of operating a car, van, pickup, or panel truck for each mile of business use is 56 cents per mile.

  [The filing season statistics table follows.]

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2014 FILING SEASON STATISTICS

Cumulative statistics comparing 3/15/13 and 3/14/14

Individual Income Tax Returns:

2013

2014

% Change

Total Receipts

74,882,000

75,100,000

0.3

Total Processed

69,153,000

73,157,000

5.8

 

 

 

 

E-filing Receipts:

 

 

 

TOTAL           

68,029,000

68,966,000

1.4

Tax Professionals

40,117,000

39,413,000

-1.8

Self-prepared

27,912,000

29,553,000

5.9

 

 

 

 

Web Usage:

 

 

 

Visits to IRS.gov

218,469,657

195,637,190

-10.4

 

 

 

 

Total Refunds:

 

 

 

Number

60,243,000

61,645,000

2.3

Amount

$172.494

Billion

$179.793

Billion

4.2

Average refund

$2,863

$2,917

1.9

 

 

 

 

Direct Deposit Refunds:

 

 

 

Number

52,414,000

52,770,000

0.7

Amount

$157.786

Billion

$158.983

Billion

0.8

Average refund

$3,010

$3,013

0.08

 

Page Last Reviewed or Updated: 21-Mar-2014

The Amendment To Tax Return

Amendment to tax return 8. Amendment to tax return   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Amendment to tax return Reporting tax withheld. Amendment to tax return Nominees. Amendment to tax return Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Amendment to tax return Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Amendment to tax return Alternative minimum tax treatment. Amendment to tax return How To Report Dividend IncomeInvestment interest deducted. Amendment to tax return Reminder Foreign-source income. Amendment to tax return  If you are a U. Amendment to tax return S. Amendment to tax return citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Amendment to tax return S. Amendment to tax return law. Amendment to tax return This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Amendment to tax return Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Amendment to tax return This chapter also explains how to report dividend income on your tax return. Amendment to tax return Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Amendment to tax return You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Amendment to tax return However, some amounts you receive that are called dividends are actually interest income. Amendment to tax return (See Dividends that are actually interest under Taxable Interest in chapter 7. Amendment to tax return ) Most distributions are paid in cash (or check). Amendment to tax return However, distributions can consist of more stock, stock rights, other property, or services. Amendment to tax return Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Amendment to tax return Tax on unearned income of certain children. Amendment to tax return   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Amendment to tax return If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Amendment to tax return If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Amendment to tax return    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Amendment to tax return Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Amendment to tax return   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Amendment to tax return Beneficiary of an estate or trust. Amendment to tax return    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Amendment to tax return You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Amendment to tax return , from the fiduciary. Amendment to tax return Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Amendment to tax return Social security number (SSN) or individual taxpayer identification number (ITIN). Amendment to tax return    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Amendment to tax return This includes payers of dividends. Amendment to tax return If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Amendment to tax return For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Amendment to tax return Backup withholding. Amendment to tax return   Your dividend income is generally not subject to regular withholding. Amendment to tax return However, it may be subject to backup withholding to ensure that income tax is collected on the income. Amendment to tax return Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Amendment to tax return   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Amendment to tax return For more information, see Backup Withholding in chapter 4. Amendment to tax return Stock certificate in two or more names. Amendment to tax return   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Amendment to tax return Form 1099-DIV. Amendment to tax return   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Amendment to tax return Keep this form with your records. Amendment to tax return You do not have to attach it to your tax return. Amendment to tax return Dividends not reported on Form 1099-DIV. Amendment to tax return   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Amendment to tax return For example, you may receive distributive shares of dividends from partnerships or S corporations. Amendment to tax return These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Amendment to tax return , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Amendment to tax return Reporting tax withheld. Amendment to tax return   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Amendment to tax return Nominees. Amendment to tax return   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Amendment to tax return Form 1099-MISC. Amendment to tax return   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Amendment to tax return See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Amendment to tax return Incorrect amount shown on a Form 1099. Amendment to tax return   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Amendment to tax return The new Form 1099 you receive will be marked “Corrected. Amendment to tax return ” Dividends on stock sold. Amendment to tax return   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Amendment to tax return Dividends received in January. Amendment to tax return   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Amendment to tax return You report the dividend in the year it was declared. Amendment to tax return Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Amendment to tax return They are paid out of earnings and profits and are ordinary income to you. Amendment to tax return This means they are not capital gains. Amendment to tax return You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Amendment to tax return Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Amendment to tax return Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Amendment to tax return They should be shown in box 1b of the Form 1099-DIV you receive. Amendment to tax return The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Amendment to tax return 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Amendment to tax return 6%. Amendment to tax return 20% on any amount that otherwise would be taxed at a 39. Amendment to tax return 6% rate. Amendment to tax return To qualify for the maximum rate, all of the following requirements must be met. Amendment to tax return The dividends must have been paid by a U. Amendment to tax return S. Amendment to tax return corporation or a qualified foreign corporation. Amendment to tax return (See Qualified foreign corporation , later. Amendment to tax return ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Amendment to tax return You meet the holding period (discussed next). Amendment to tax return Holding period. Amendment to tax return   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Amendment to tax return The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Amendment to tax return Instead, the seller will get the dividend. Amendment to tax return   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Amendment to tax return See the examples later. Amendment to tax return Exception for preferred stock. Amendment to tax return   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Amendment to tax return If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Amendment to tax return Example 1. Amendment to tax return You bought 5,000 shares of XYZ Corp. Amendment to tax return common stock on July 9, 2013. Amendment to tax return XYZ Corp. Amendment to tax return paid a cash dividend of 10 cents per share. Amendment to tax return The ex-dividend date was July 16, 2013. Amendment to tax return Your Form 1099-DIV from XYZ Corp. Amendment to tax return shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Amendment to tax return However, you sold the 5,000 shares on August 12, 2013. Amendment to tax return You held your shares of XYZ Corp. Amendment to tax return for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Amendment to tax return The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Amendment to tax return You have no qualified dividends from XYZ Corp. Amendment to tax return because you held the XYZ stock for less than 61 days. Amendment to tax return Example 2. Amendment to tax return Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Amendment to tax return You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Amendment to tax return The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Amendment to tax return Example 3. Amendment to tax return You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Amendment to tax return ABC Mutual Fund paid a cash dividend of 10 cents a share. Amendment to tax return The ex-dividend date was July 16, 2013. Amendment to tax return The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Amendment to tax return Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Amendment to tax return However, you sold the 10,000 shares on August 12, 2013. Amendment to tax return You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Amendment to tax return Holding period reduced where risk of loss is diminished. Amendment to tax return   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Amendment to tax return You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Amendment to tax return You were grantor (writer) of an option to buy substantially identical stock or securities. Amendment to tax return Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Amendment to tax return   For information about how to apply condition (3), see Regulations section 1. Amendment to tax return 246-5. Amendment to tax return Qualified foreign corporation. Amendment to tax return   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Amendment to tax return The corporation is incorporated in a U. Amendment to tax return S. Amendment to tax return possession. Amendment to tax return The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Amendment to tax return For a list of those treaties, see Table 8-1. Amendment to tax return The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Amendment to tax return See Readily tradable stock , later. Amendment to tax return Exception. Amendment to tax return   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Amendment to tax return Readily tradable stock. Amendment to tax return   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Amendment to tax return For a list of the exchanges that meet these requirements, see www. Amendment to tax return sec. Amendment to tax return gov/divisions/marketreg/mrexchanges. Amendment to tax return shtml. Amendment to tax return Dividends that are not qualified dividends. Amendment to tax return   The following dividends are not qualified dividends. Amendment to tax return They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Amendment to tax return Capital gain distributions. Amendment to tax return Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Amendment to tax return S. Amendment to tax return building and loan associations, U. Amendment to tax return S. Amendment to tax return savings and loan associations, federal savings and loan associations, and similar financial institutions. Amendment to tax return (Report these amounts as interest income. Amendment to tax return ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Amendment to tax return Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Amendment to tax return Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Amendment to tax return Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Amendment to tax return Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Amendment to tax return Table 8-1. Amendment to tax return Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Amendment to tax return Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Amendment to tax return This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Amendment to tax return Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Amendment to tax return If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Amendment to tax return If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Amendment to tax return You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Amendment to tax return But you may be able to deduct the service charge. Amendment to tax return See chapter 28 for more information about deducting expenses of producing income. Amendment to tax return In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Amendment to tax return If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Amendment to tax return When figuring this amount, use the fair market value of the stock on the dividend payment date. Amendment to tax return Money Market Funds Report amounts you receive from money market funds as dividend income. Amendment to tax return Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Amendment to tax return Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Amendment to tax return They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Amendment to tax return Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Amendment to tax return Undistributed capital gains of mutual funds and REITs. Amendment to tax return    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Amendment to tax return You must treat your share of these gains as distributions, even though you did not actually receive them. Amendment to tax return However, they are not included on Form 1099-DIV. Amendment to tax return Instead, they are reported to you in box 1a of Form 2439. Amendment to tax return   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Amendment to tax return   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Amendment to tax return You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Amendment to tax return Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Amendment to tax return Basis adjustment. Amendment to tax return   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Amendment to tax return Additional information. Amendment to tax return   For more information on the treatment of distributions from mutual funds, see Publication 550. Amendment to tax return Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Amendment to tax return You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Amendment to tax return On Form 1099-DIV, a nondividend distribution will be shown in box 3. Amendment to tax return If you do not receive such a statement, you report the distribution as an ordinary dividend. Amendment to tax return Basis adjustment. Amendment to tax return   A nondividend distribution reduces the basis of your stock. Amendment to tax return It is not taxed until your basis in the stock is fully recovered. Amendment to tax return This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Amendment to tax return If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Amendment to tax return   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Amendment to tax return Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Amendment to tax return See Holding Period in chapter 14. Amendment to tax return Example. Amendment to tax return You bought stock in 2000 for $100. Amendment to tax return In 2003, you received a nondividend distribution of $80. Amendment to tax return You did not include this amount in your income, but you reduced the basis of your stock to $20. Amendment to tax return You received a nondividend distribution of $30 in 2013. Amendment to tax return The first $20 of this amount reduced your basis to zero. Amendment to tax return You report the other $10 as a long-term capital gain for 2013. Amendment to tax return You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Amendment to tax return Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Amendment to tax return These distributions are, at least in part, one form of a return of capital. Amendment to tax return They may be paid in one or more installments. Amendment to tax return You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Amendment to tax return For more information on liquidating distributions, see chapter 1 of Publication 550. Amendment to tax return Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Amendment to tax return Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Amendment to tax return Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Amendment to tax return Taxable stock dividends and stock rights. Amendment to tax return   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Amendment to tax return You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Amendment to tax return The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Amendment to tax return The distribution is in convertible preferred stock and has the same result as in (2). Amendment to tax return The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Amendment to tax return The distribution is on preferred stock. Amendment to tax return (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Amendment to tax return )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Amendment to tax return If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Amendment to tax return Preferred stock redeemable at a premium. Amendment to tax return   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Amendment to tax return For more information, see chapter 1 of Publication 550. Amendment to tax return Basis. Amendment to tax return   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Amendment to tax return If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Amendment to tax return Fractional shares. Amendment to tax return    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Amendment to tax return However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Amendment to tax return Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Amendment to tax return Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Amendment to tax return Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Amendment to tax return    Report these transactions on Form 8949 with the correct box checked. Amendment to tax return   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Amendment to tax return Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Amendment to tax return Example. Amendment to tax return You own one share of common stock that you bought on January 3, 2004, for $100. Amendment to tax return The corporation declared a common stock dividend of 5% on June 29, 2013. Amendment to tax return The fair market value of the stock at the time the stock dividend was declared was $200. Amendment to tax return You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Amendment to tax return You figure your gain or loss as follows: Fair market value of old stock $200. Amendment to tax return 00 Fair market value of stock dividend (cash received) +10. Amendment to tax return 00 Fair market value of old stock and stock dividend $210. Amendment to tax return 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Amendment to tax return 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Amendment to tax return 76 Total $100. Amendment to tax return 00 Cash received $10. Amendment to tax return 00 Basis (cost) of stock dividend − 4. Amendment to tax return 76 Gain $5. Amendment to tax return 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Amendment to tax return Scrip dividends. Amendment to tax return   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Amendment to tax return The certificate is generally nontaxable when you receive it. Amendment to tax return If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Amendment to tax return   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Amendment to tax return You must include its fair market value in income on the date you receive it. Amendment to tax return Other Distributions You may receive any of the following distributions during the year. Amendment to tax return Exempt-interest dividends. Amendment to tax return   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Amendment to tax return Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Amendment to tax return Information reporting requirement. Amendment to tax return   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Amendment to tax return This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Amendment to tax return Alternative minimum tax treatment. Amendment to tax return   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Amendment to tax return See Alternative Minimum Tax (AMT) in chapter 30 for more information. Amendment to tax return Dividends on insurance policies. Amendment to tax return    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Amendment to tax return However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Amendment to tax return    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Amendment to tax return Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Amendment to tax return Report any taxable distributions on insurance policies on Form 1040, line 21. Amendment to tax return Dividends on veterans' insurance. Amendment to tax return   Dividends you receive on veterans' insurance policies are not taxable. Amendment to tax return In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Amendment to tax return Patronage dividends. Amendment to tax return   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Amendment to tax return   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Amendment to tax return But you must reduce the basis (cost) of the items bought. Amendment to tax return If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Amendment to tax return   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Amendment to tax return Alaska Permanent Fund dividends. Amendment to tax return    Do not report these amounts as dividends. Amendment to tax return Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Amendment to tax return How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Amendment to tax return Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Amendment to tax return Report qualified dividends on line 9b of Form 1040 or Form 1040A. Amendment to tax return If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Amendment to tax return See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Amendment to tax return If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Amendment to tax return You cannot use Form 1040EZ if you receive any dividend income. Amendment to tax return Form 1099-DIV. Amendment to tax return   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Amendment to tax return Even if you do not receive Form 1099-DIV, you must report all your dividend income. Amendment to tax return   See Form 1099-DIV for more information on how to report dividend income. Amendment to tax return Form 1040A or 1040. Amendment to tax return    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Amendment to tax return If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Amendment to tax return   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Amendment to tax return If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Amendment to tax return If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Amendment to tax return   Enter on line 6 the total of the amounts listed on line 5. Amendment to tax return Also enter this total on line 9a of Form 1040A or 1040. Amendment to tax return Qualified dividends. Amendment to tax return   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Amendment to tax return The amount in box 1b is already included in box 1a. Amendment to tax return Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Amendment to tax return   Do not include any of the following on line 9b. Amendment to tax return Qualified dividends you received as a nominee. Amendment to tax return See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Amendment to tax return Dividends on stock for which you did not meet the holding period. Amendment to tax return See Holding period , earlier under Qualified Dividends. Amendment to tax return Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Amendment to tax return Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Amendment to tax return Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Amendment to tax return   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Amendment to tax return Enter qualified dividends on line 2 of the worksheet. Amendment to tax return Investment interest deducted. Amendment to tax return   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Amendment to tax return Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Amendment to tax return This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Amendment to tax return For more information about the limit on investment interest, see Investment expenses in chapter 23. Amendment to tax return Expenses related to dividend income. Amendment to tax return   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Amendment to tax return See chapter 28 for general information about deducting expenses of producing income. Amendment to tax return More information. Amendment to tax return    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Amendment to tax return Prev  Up  Next   Home   More Online Publications