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Ammend Publication 54 - Additional Material Questions and AnswersThis section answers tax- related questions commonly asked by taxpayers living abroad. Ammend 1. Ammend Filing Requirements—Where, When, and How . Ammend 1) When are U. Ammend S. Ammend income tax returns due? . Ammend 2) I am going abroad this year and expect to qualify for the foreign earned income exclusion. Ammend How can I secure an extension of time to file my return, when should I file my return, and what forms are required? . Ammend 3) My entire income qualifies for the foreign earned income exclusion. Ammend Must I file a tax return? . Ammend 4) I was sent abroad by my company in November of last year. Ammend I plan to secure an extension of time on Form 2350 to file my tax return for last year because I expect to qualify for the foreign earned income exclusion under the physical presence test. Ammend However, if my company recalls me to the United States before the end of the qualifying period and I find I will not qualify for the exclusion, how and when should I file my return? . Ammend 5) I am a U. Ammend S. Ammend citizen and have no taxable income from the United States, but I have substantial income from a foreign source. Ammend Am I required to file a U. Ammend S. Ammend income tax return? . Ammend 6) I am a U. Ammend S. Ammend citizen who has retired, and I expect to remain in a foreign country. Ammend Do I have any further U. Ammend S. Ammend tax obligations? . Ammend 7) I have been a bona fide resident of a foreign country for over 5 years. Ammend Is it necessary for me to pay estimated tax? . Ammend 8) Will a check payable in foreign currency be acceptable in payment of my U. Ammend S. Ammend tax? . Ammend 9) I have met the test for physical presence in a foreign country and am filing returns for 2 years. Ammend Must I file a separate Form 2555 (or Form 2555-EZ) with each return? . Ammend 10) Does a Form 2555 (or 2555-EZ) with a Schedule C or Form W-2 attached constitute a return? . Ammend 11) On Form 2350, Application for Extension of Time To File U. Ammend S. Ammend Income Tax Return, I stated that I would qualify for the foreign earned income exclusion under the physical presence test. Ammend If I qualify under the bona fide residence test, can I file my return on that basis? . Ammend 12) I am a U. Ammend S. Ammend citizen who worked in the United States for 6 months last year. Ammend I accepted employment overseas in July of last year and expect to qualify for the foreign earned income exclusion. Ammend Should I file a return and pay tax on the income earned in the United States during the first 6 months and then, when I qualify, file another return covering the last 6 months of the year? . Ammend 13) I am a U. Ammend S. Ammend citizen. Ammend I have lived abroad for a number of years and recently realized that I should have been filing U. Ammend S. Ammend income tax returns. Ammend How do I correct this oversight in not having filed returns for these years? . Ammend 14) In 2008, I qualified to exclude my foreign earned income, but I did not claim this exclusion on the return I filed in 2009. Ammend I paid all outstanding taxes with the return. Ammend Can I file a claim for refund now? . Ammend 1) When are U. Ammend S. Ammend income tax returns due? Generally, for calendar year taxpayers, U. Ammend S. Ammend income tax returns are due on April 15. Ammend If you are a U. Ammend S. Ammend citizen or resident and both your tax home and your abode are outside the United States and Puerto Rico on the regular due date, an automatic extension is granted to June 15 for filing the return. Ammend Interest will be charged on any tax due, as shown on the return, from April 15. Ammend a) You should file Form 2350 by the due date of your return to request an extension of time to file. Ammend Form 2350 is a special form for those U. Ammend S. Ammend citizens or residents abroad who expect to qualify for the foreign earned income exclusion or the housing exclusion or deduction under either the bona fide residence test or physical presence test and would like to have an extension of time to delay filing until after they have qualified. Ammend b) If the extension is granted, you should file your return after you qualify, but by the approved extension date. Ammend c) You must file your Form 1040 with Form 2555 (or Form 2555-EZ). Ammend Generally, yes. Ammend Every U. Ammend S. Ammend citizen or resident who receives income must file a U. Ammend S. Ammend income tax return unless total income without regard to the foreign earned income exclusion is below an amount based on filing status. Ammend The income levels for filing purposes are discussed under Filing Requirements in chapter 1. Ammend If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. Ammend Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. Ammend You must report your worldwide income on the return. Ammend If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. Ammend S. Ammend income tax. Ammend However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. Ammend Yes. Ammend All U. Ammend S. Ammend citizens and resident aliens are subject to U. Ammend S. Ammend tax on their worldwide income. Ammend If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. Ammend S. Ammend income tax liability for the foreign taxes paid. Ammend Form 1116 is used to figure the allowable credit. Ammend Your U. Ammend S. Ammend tax obligation on your income is the same as that of a retired person living in the United States. Ammend (See the discussion on filing requirements in chapter 1 of this publication. Ammend ) U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 2) I am going abroad this year and expect to qualify for the foreign earned income exclusion. Ammend How can I secure an extension of time to file my return, when should I file my return, and what forms are required? a) You should file Form 2350 by the due date of your return to request an extension of time to file. Ammend Form 2350 is a special form for those U. Ammend S. Ammend citizens or residents abroad who expect to qualify for the foreign earned income exclusion or the housing exclusion or deduction under either the bona fide residence test or physical presence test and would like to have an extension of time to delay filing until after they have qualified. Ammend b) If the extension is granted, you should file your return after you qualify, but by the approved extension date. Ammend c) You must file your Form 1040 with Form 2555 (or Form 2555-EZ). Ammend Generally, yes. Ammend Every U. Ammend S. Ammend citizen or resident who receives income must file a U. Ammend S. Ammend income tax return unless total income without regard to the foreign earned income exclusion is below an amount based on filing status. Ammend The income levels for filing purposes are discussed under Filing Requirements in chapter 1. Ammend If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. Ammend Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. Ammend You must report your worldwide income on the return. Ammend If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. Ammend S. Ammend income tax. Ammend However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. Ammend Yes. Ammend All U. Ammend S. Ammend citizens and resident aliens are subject to U. Ammend S. Ammend tax on their worldwide income. Ammend If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. Ammend S. Ammend income tax liability for the foreign taxes paid. Ammend Form 1116 is used to figure the allowable credit. Ammend Your U. Ammend S. Ammend tax obligation on your income is the same as that of a retired person living in the United States. Ammend (See the discussion on filing requirements in chapter 1 of this publication. Ammend ) U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 3) My entire income qualifies for the foreign earned income exclusion. Ammend Must I file a tax return? Generally, yes. Ammend Every U. Ammend S. Ammend citizen or resident who receives income must file a U. Ammend S. Ammend income tax return unless total income without regard to the foreign earned income exclusion is below an amount based on filing status. Ammend The income levels for filing purposes are discussed under Filing Requirements in chapter 1. Ammend If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. Ammend Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. Ammend You must report your worldwide income on the return. Ammend If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. Ammend S. Ammend income tax. Ammend However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. Ammend Yes. Ammend All U. Ammend S. Ammend citizens and resident aliens are subject to U. Ammend S. Ammend tax on their worldwide income. Ammend If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. Ammend S. Ammend income tax liability for the foreign taxes paid. Ammend Form 1116 is used to figure the allowable credit. Ammend Your U. Ammend S. Ammend tax obligation on your income is the same as that of a retired person living in the United States. Ammend (See the discussion on filing requirements in chapter 1 of this publication. Ammend ) U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 4) I was sent abroad by my company in November of last year. Ammend I plan to secure an extension of time on Form 2350 to file my tax return for last year because I expect to qualify for the foreign earned income exclusion under the physical presence test. Ammend However, if my company recalls me to the United States before the end of the qualifying period and I find I will not qualify for the exclusion, how and when should I file my return? If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. Ammend Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. Ammend You must report your worldwide income on the return. Ammend If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. Ammend S. Ammend income tax. Ammend However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. Ammend Yes. Ammend All U. Ammend S. Ammend citizens and resident aliens are subject to U. Ammend S. Ammend tax on their worldwide income. Ammend If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. Ammend S. Ammend income tax liability for the foreign taxes paid. Ammend Form 1116 is used to figure the allowable credit. Ammend Your U. Ammend S. Ammend tax obligation on your income is the same as that of a retired person living in the United States. Ammend (See the discussion on filing requirements in chapter 1 of this publication. Ammend ) U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 5) I am a U. Ammend S. Ammend citizen and have no taxable income from the United States, but I have substantial income from a foreign source. Ammend Am I required to file a U. Ammend S. Ammend income tax return? Yes. Ammend All U. Ammend S. Ammend citizens and resident aliens are subject to U. Ammend S. Ammend tax on their worldwide income. Ammend If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. Ammend S. Ammend income tax liability for the foreign taxes paid. Ammend Form 1116 is used to figure the allowable credit. Ammend Your U. Ammend S. Ammend tax obligation on your income is the same as that of a retired person living in the United States. Ammend (See the discussion on filing requirements in chapter 1 of this publication. Ammend ) U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 6) I am a U. Ammend S. Ammend citizen who has retired, and I expect to remain in a foreign country. Ammend Do I have any further U. Ammend S. Ammend tax obligations? Your U. Ammend S. Ammend tax obligation on your income is the same as that of a retired person living in the United States. Ammend (See the discussion on filing requirements in chapter 1 of this publication. Ammend ) U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 7) I have been a bona fide resident of a foreign country for over 5 years. Ammend Is it necessary for me to pay estimated tax? U. Ammend S. Ammend taxpayers overseas have the same requirements for paying estimated tax as those in the United States. Ammend See the discussion under Estimated Tax in chapter 1. Ammend Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. Ammend S. Ammend taxation. Ammend Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. Ammend The first installment of estimated tax is due on April 15 of the year for which the income is earned. Ammend Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 8) Will a check payable in foreign currency be acceptable in payment of my U. Ammend S. Ammend tax? Generally, only U. Ammend S. Ammend currency is acceptable for payment of income tax. Ammend However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. Ammend Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 9) I have met the test for physical presence in a foreign country and am filing returns for 2 years. Ammend Must I file a separate Form 2555 (or Form 2555-EZ) with each return? Yes. Ammend A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. Ammend No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 10) Does a Form 2555 (or 2555-EZ) with a Schedule C or Form W-2 attached constitute a return? No. Ammend The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. Ammend Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 11) On Form 2350, Application for Extension of Time To File U. Ammend S. Ammend Income Tax Return, I stated that I would qualify for the foreign earned income exclusion under the physical presence test. Ammend If I qualify under the bona fide residence test, can I file my return on that basis? Yes. Ammend You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. Ammend You are not bound by the test indicated in the application for extension of time. Ammend You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. Ammend If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. Ammend No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 12) I am a U. Ammend S. Ammend citizen who worked in the United States for 6 months last year. Ammend I accepted employment overseas in July of last year and expect to qualify for the foreign earned income exclusion. Ammend Should I file a return and pay tax on the income earned in the United States during the first 6 months and then, when I qualify, file another return covering the last 6 months of the year? No. Ammend You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. Ammend After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. Ammend b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. Ammend This allows you to file only once and saves you from paying the tax and waiting for a refund. Ammend However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. Ammend If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. Ammend File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 13) I am a U. Ammend S. Ammend citizen. Ammend I have lived abroad for a number of years and recently realized that I should have been filing U. Ammend S. Ammend income tax returns. Ammend How do I correct this oversight in not having filed returns for these years? File the late returns as soon as possible, stating your reason for filing late. Ammend For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. Ammend It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend . Ammend 14) In 2008, I qualified to exclude my foreign earned income, but I did not claim this exclusion on the return I filed in 2009. Ammend I paid all outstanding taxes with the return. Ammend Can I file a claim for refund now? It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. Ammend A return filed before the due date is considered filed on the due date. Ammend 2. Ammend Meeting the Requirements of Either the Bona Fide Residence Test or the Physical Presence Test . Ammend 1) I recently came to Country X to work for the Orange Tractor Co. Ammend and I expect to be here for 5 or 6 years. Ammend I understand that upon the completion of 1 full year I will qualify for an exclusion or deduction under the bona fide residence test. Ammend Is this correct? . Ammend 2) I understand the physical presence test to be simply a matter of being physically present in a foreign country for at least 330 days within 12 consecutive months; but what are the criteria of the bona fide residence test? . Ammend 3) To meet the qualification of an uninterrupted period which includes an entire taxable year, do I have to be physically present in a foreign country for the entire year? . Ammend 4) I am a U. Ammend S. Ammend citizen and during 2012 was a bona fide resident of Country X. Ammend On January 15, 2013, I was notified that I was to be assigned to Country Y. Ammend I was recalled to New York for 90 days orientation and then went to Country Y, where I have been since. Ammend Although I was not in Country Y on January 1, I was a bona fide resident of Country X and was in Country Y on December 31, 2013. Ammend My family remained in Country X until completion of the orientation period, and my household goods were shipped directly to my new post. Ammend Am I a bona fide resident of a foreign country for 2013, or must I wait for the entire year of 2014 to become one? . Ammend 5) Due to illness, I returned to the United States before I completed my qualifying period to claim the foreign earned income exclusion. Ammend Can I figure the exclusion for the period I resided abroad? . Ammend 6) Can a resident alien of the United States qualify for an exclusion or deduction under the bona fide residence test or the physical presence test? . Ammend 7) On August 13 of last year I left the United States and arrived in Country Z to work for the Gordon Manufacturing Company. Ammend I expected to be able to exclude my foreign earned income under the physical presence test because I planned to be in Country Z for at least 1 year. Ammend However, I was reassigned back to the United States and left Country Z on July 1 of this year. Ammend Can I exclude any of my foreign earned income? . Ammend 1) I recently came to Country X to work for the Orange Tractor Co. Ammend and I expect to be here for 5 or 6 years. Ammend I understand that upon the completion of 1 full year I will qualify for an exclusion or deduction under the bona fide residence test. Ammend Is this correct? Not necessarily. Ammend The law provides that to qualify under this test for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, a person must be a “bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year. Ammend ” If, like most U. Ammend S. Ammend citizens, you file your return on a calendar year basis, the taxable year referred to in the law would be from January 1 to December 31 of any particular year. Ammend Unless you established residence in Country X on January 1, it would be more than 1 year before you would be a bona fide resident of a foreign country. Ammend Once you have completed your qualifying period, however, you are entitled to exclude the income or to claim the housing exclusion or deduction from the date you established bona fide residence. Ammend To be a bona fide resident of a foreign country, you must show that you entered a foreign country intending to remain there for an indefinite or prolonged period and, to that end, you are making your home in that country. Ammend Consideration is given to the type of quarters occupied, whether your family went with you, the type of visa, the employment agreement, and any other factor pertinent to show whether your stay in the foreign country is indefinite or prolonged. Ammend To claim the foreign earned income exclusion or foreign housing exclusion or deduction under this test, the period of foreign residence must include 1 full tax year (usually January 1 – December 31), but once you meet this time requirement, you figure the exclusions and the deduction from the date the residence actually began. Ammend No. Ammend Uninterrupted refers to the bona fide residence proper and not to the physical presence of the individual. Ammend During the period of bona fide residence in a foreign country, even during the first full year, you can leave the country for brief and temporary trips back to the United States or elsewhere for vacation, or even for business. Ammend To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from those trips, without unreasonable delay, to your foreign residence. Ammend Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. Ammend No. Ammend You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. Ammend If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. Ammend S. Ammend tax. Ammend Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. Ammend Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. Ammend No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend . Ammend 2) I understand the physical presence test to be simply a matter of being physically present in a foreign country for at least 330 days within 12 consecutive months; but what are the criteria of the bona fide residence test? To be a bona fide resident of a foreign country, you must show that you entered a foreign country intending to remain there for an indefinite or prolonged period and, to that end, you are making your home in that country. Ammend Consideration is given to the type of quarters occupied, whether your family went with you, the type of visa, the employment agreement, and any other factor pertinent to show whether your stay in the foreign country is indefinite or prolonged. Ammend To claim the foreign earned income exclusion or foreign housing exclusion or deduction under this test, the period of foreign residence must include 1 full tax year (usually January 1 – December 31), but once you meet this time requirement, you figure the exclusions and the deduction from the date the residence actually began. Ammend No. Ammend Uninterrupted refers to the bona fide residence proper and not to the physical presence of the individual. Ammend During the period of bona fide residence in a foreign country, even during the first full year, you can leave the country for brief and temporary trips back to the United States or elsewhere for vacation, or even for business. Ammend To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from those trips, without unreasonable delay, to your foreign residence. Ammend Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. Ammend No. Ammend You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. Ammend If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. Ammend S. Ammend tax. Ammend Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. Ammend Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. Ammend No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend . Ammend 3) To meet the qualification of “an uninterrupted period which includes an entire taxable year,” do I have to be physically present in a foreign country for the entire year? No. Ammend Uninterrupted refers to the bona fide residence proper and not to the physical presence of the individual. Ammend During the period of bona fide residence in a foreign country, even during the first full year, you can leave the country for brief and temporary trips back to the United States or elsewhere for vacation, or even for business. Ammend To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from those trips, without unreasonable delay, to your foreign residence. Ammend Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. Ammend No. Ammend You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. Ammend If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. Ammend S. Ammend tax. Ammend Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. Ammend Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. Ammend No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend . Ammend 4) I am a U. Ammend S. Ammend citizen and during 2012 was a bona fide resident of Country X. Ammend On January 15, 2013, I was notified that I was to be assigned to Country Y. Ammend I was recalled to New York for 90 days orientation and then went to Country Y, where I have been since. Ammend Although I was not in Country Y on January 1, I was a bona fide resident of Country X and was in Country Y on December 31, 2013. Ammend My family remained in Country X until completion of the orientation period, and my household goods were shipped directly to my new post. Ammend Am I a bona fide resident of a foreign country for 2013, or must I wait for the entire year of 2014 to become one? Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. Ammend No. Ammend You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. Ammend If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. Ammend S. Ammend tax. Ammend Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. Ammend Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. Ammend No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend . Ammend 5) Due to illness, I returned to the United States before I completed my qualifying period to claim the foreign earned income exclusion. Ammend Can I figure the exclusion for the period I resided abroad? No. Ammend You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. Ammend If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. Ammend S. Ammend tax. Ammend Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. Ammend Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. Ammend No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend . Ammend 6) Can a resident alien of the United States qualify for an exclusion or deduction under the bona fide residence test or the physical presence test? Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. Ammend Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. Ammend No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend . Ammend 7) On August 13 of last year I left the United States and arrived in Country Z to work for the Gordon Manufacturing Company. Ammend I expected to be able to exclude my foreign earned income under the physical presence test because I planned to be in Country Z for at least 1 year. Ammend However, I was reassigned back to the United States and left Country Z on July 1 of this year. Ammend Can I exclude any of my foreign earned income? No. Ammend You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. Ammend 3. Ammend Foreign Earned Income . Ammend 1) I am an employee of the U. Ammend S. Ammend Government working abroad. Ammend Can all or part of my government income earned abroad qualify for the foreign earned income exclusion? . Ammend 2) I qualify for the foreign earned income exclusion under the bona fide residence test. Ammend Does my foreign earned income include my U. Ammend S. Ammend dividends and the interest I receive on a foreign bank account? . Ammend 3) My company pays my foreign income tax on my foreign earnings. Ammend Is this taxable compensation? . Ammend 4) I live in an apartment in a foreign city for which my employer pays the rent. Ammend Should I include in my income the cost to my employer ($1,200 a month) or the fair market value of equivalent housing in the United States ($800 a month)? . Ammend 5) My U. Ammend S. Ammend employer pays my salary into my U. Ammend S. Ammend bank account. Ammend Is this income considered earned in the United States or is it considered foreign earned income? . Ammend 6) What is considered a foreign country? . Ammend 7) What is the source of earned income? . Ammend 1) I am an employee of the U. Ammend S. Ammend Government working abroad. Ammend Can all or part of my government income earned abroad qualify for the foreign earned income exclusion? No. Ammend The foreign earned income exclusion applies to your foreign earned income. Ammend Amounts paid by the United States or its agencies to their employees are not treated, for this purpose, as foreign earned income. Ammend No. Ammend The only income that is foreign earned income is income from the performance of personal services abroad. Ammend Investment income is not earned income. Ammend However, you must include it in gross income reported on your Form 1040. Ammend Yes. Ammend The amount is compensation for services performed. Ammend The tax paid by your company should be reported on Form 1040, line 7, and on Form 2555, Part IV, line 22(f) (or on Form 2555-EZ, Part IV, line 17). Ammend You must include in income the fair market value (FMV) of the facility provided, where it is provided. Ammend This will usually be the rent your employer pays. Ammend Situations when the FMV is not included in income are discussed in chapter 4 under Exclusion of Meals and Lodging. Ammend If you performed the services to earn this salary outside the United States, your salary is considered earned abroad. Ammend It does not matter that you are paid by a U. Ammend S. Ammend employer or that your salary is deposited in a U. Ammend S. Ammend bank account in the United States. Ammend The source of salary, wages, commissions, and other personal service income is the place where you perform the services. Ammend For the purposes of the foreign earned income exclusion and the foreign housing exclusion or deduction, any territory under the sovereignty of a countr
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Ammend Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. Ammend A pension is generally a series of payments made to you after you retire from work. Ammend Pension payments are made regularly and are for past services with an employer. Ammend An annuity is a series of payments under a contract. Ammend You can buy the contract alone or you can buy it with the help of your employer. Ammend Annuity payments are made regularly for more than one full year. Ammend Note. Ammend Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. Ammend Types of pensions and annuities. Ammend   Particular types of pensions and annuities include: Fixed period annuities. Ammend You receive definite amounts at regular intervals for a definite length of time. Ammend Annuities for a single life. Ammend You receive definite amounts at regular intervals for life. Ammend The payments end at death. Ammend Joint and survivor annuities. Ammend The first annuitant receives a definite amount at regular intervals for life. Ammend After he or she dies, a second annuitant receives a definite amount at regular intervals for life. Ammend The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. Ammend Variable annuities. Ammend You receive payments that may vary in amount for a definite length of time or for life. Ammend The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. Ammend Disability pensions. Ammend You are under minimum retirement age and receive payments because you retired on disability. Ammend If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. Ammend If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. Ammend A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. Ammend This plan must meet Internal Revenue Code requirements. Ammend It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. Ammend However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. Ammend A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. Ammend A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. Ammend   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. Ammend A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. Ammend It does not qualify for most of the tax benefits of a qualified plan. Ammend Annuity worksheets. Ammend   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. Ammend Request for a ruling. Ammend   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. Ammend This is treated as a request for a ruling. Ammend See Requesting a Ruling on Taxation of Annuity near the end of this publication. Ammend Withholding tax and estimated tax. Ammend   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. Ammend If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. Ammend Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. Ammend Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). Ammend These payments are also known as amounts received as an annuity. Ammend If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. Ammend In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. Ammend The amount of each payment that is more than the part that represents your net cost is taxable. Ammend Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. Ammend These terms are explained in the following discussions. Ammend Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. Ammend First, find your net cost of the contract as of the annuity starting date (defined later). Ammend To find this amount, you must first figure the total premiums, contributions, or other amounts paid. Ammend This includes the amounts your employer contributed if you were required to include these amounts in income. Ammend It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). Ammend From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. Ammend Any additional premiums paid for double indemnity or disability benefits. Ammend Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). Ammend The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. Ammend Example. Ammend On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. Ammend The annuity starting date is July 1. Ammend This is the date you use in figuring your investment in the contract and your expected return (discussed later). Ammend Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. Ammend Foreign employment. Ammend   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. Ammend The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. Ammend Foreign employment contributions while a nonresident alien. Ammend   In determining your cost, special rules apply if you are a U. Ammend S. Ammend citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. Ammend Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. Ammend Death benefit exclusion. Ammend   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. Ammend The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. Ammend How to adjust your total cost. Ammend   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. Ammend Add it to the cost or unrecovered cost of the annuity at the annuity starting date. Ammend See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. Ammend Net cost. Ammend   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. Ammend This is the unrecovered investment in the contract as of the annuity starting date. Ammend If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. Ammend Refund feature. Ammend   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. Ammend Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. Ammend   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. Ammend Zero value of refund feature. Ammend   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. Ammend   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). Ammend   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. Ammend Examples. Ammend The first example shows how to figure the value of the refund feature when there is only one beneficiary. Ammend Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. Ammend In both examples, the taxpayer elects to use Tables V through VIII. Ammend If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. Ammend Example 1. Ammend At age 65, Barbara bought for $21,053 an annuity with a refund feature. Ammend She will get $100 a month for life. Ammend Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. Ammend In this case, the contract cost and the total guaranteed return are the same ($21,053). Ammend Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. Ammend 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. Ammend For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). Ammend In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. Ammend Example 2. Ammend John died while still employed. Ammend His widow, Eleanor, age 48, receives $171 a month for the rest of her life. Ammend John's son, Elmer, age 9, receives $50 a month until he reaches age 18. Ammend John's contributions to the retirement fund totaled $7,559. Ammend 45, with interest on those contributions of $1,602. Ammend 53. Ammend The guarantee or total refund feature of the contract is $9,161. Ammend 98 ($7,559. Ammend 45 plus $1,602. Ammend 53). Ammend The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. Ammend 9 $71,614. Ammend 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. Ammend 0 5,400. Ammend 00   3) Total expected return   $77,014. Ammend 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. Ammend 45   2) Guaranteed amount (contributions of $7,559. Ammend 45 plus interest of $1,602. Ammend 53) $9,161. Ammend 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. Ammend 00   4) Net guaranteed amount $3,761. Ammend 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. Ammend 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. Ammend 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. Ammend See the discussion of expected return, later in this publication. Ammend Free IRS help. Ammend   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. Ammend Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. Ammend The following discussions explain how to figure the expected return with each type of annuity. Ammend A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. Ammend Fixed period annuity. Ammend   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. Ammend It is the total amount you will get beginning at the annuity starting date. Ammend You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). Ammend To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. Ammend Single life annuity. Ammend   If you are to get annuity payments for the rest of your life, find your expected return as follows. Ammend You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. Ammend These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). Ammend   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. Ammend See Adjustments to Tables I, II, V, VI, and VIA following Table I. Ammend Example. Ammend Henry bought an annuity contract that will give him an annuity of $500 a month for his life. Ammend If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. Ammend 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. Ammend 2 multiple by +. Ammend 1. Ammend His expected return would then be $115,800 ($6,000 × 19. Ammend 3). Ammend Annuity for shorter of life or specified period. Ammend   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. Ammend To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. Ammend Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. Ammend Example. Ammend Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. Ammend She was age 65 at her birthday nearest the annuity starting date. Ammend She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. Ammend 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. Ammend See Special Elections, later. Ammend Joint and survivor annuities. Ammend   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. Ammend To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. Ammend If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. Ammend See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. Ammend Example. Ammend John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. Ammend At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. Ammend The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. Ammend 0 Expected return $132,000 Different payments to survivor. Ammend   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. Ammend Example 1. Ammend Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. Ammend If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. Ammend 0 Multiple for Gerald, age 70 (from Table V)   16. Ammend 0 Difference: Multiple applicable to Mary   6. Ammend 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. Ammend 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. Ammend 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. Ammend Your husband died while still employed. Ammend Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. Ammend Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. Ammend You were 50 years old at the annuity starting date. Ammend Marie was 16 and Jean was 14. Ammend Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. Ammend 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. Ammend 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. Ammend 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. Ammend Computation Under the General Rule Note. Ammend Variable annuities use a different computation for determining the exclusion amounts. Ammend See Variable annuities later. Ammend Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. Ammend   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. Ammend See Death benefit exclusion , earlier. Ammend Step 2. Ammend   Figure your expected return. Ammend Step 3. Ammend   Divide Step 1 by Step 2 and round to three decimal places. Ammend This will give you the exclusion percentage. Ammend Step 4. Ammend   Multiply the exclusion percentage by the first regular periodic payment. Ammend The result is the tax-free part of each pension or annuity payment. Ammend   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. Ammend However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. Ammend   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. Ammend Step 5. Ammend   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. Ammend This will give you the tax-free part of the total payment for the year. Ammend    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. Ammend This fractional amount is multiplied by your exclusion percentage to get the tax-free part. Ammend Step 6. Ammend   Subtract the tax-free part from the total payment you received. Ammend The rest is the taxable part of your pension or annuity. Ammend Example 1. Ammend You purchased an annuity with an investment in the contract of $10,800. Ammend Under its terms, the annuity will pay you $100 a month for life. Ammend The multiple for your age (age 65) is 20. Ammend 0 as shown in Table V. Ammend Your expected return is $24,000 (20 × 12 × $100). Ammend Your cost of $10,800, divided by your expected return of $24,000, equals 45. Ammend 0%. Ammend This is the percentage you will not have to include in income. Ammend Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. Ammend If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). Ammend Example 2. Ammend Gerald bought a joint and survivor annuity. Ammend Gerald's investment in the contract is $62,712 and the expected return is $121,200. Ammend The exclusion percentage is 51. Ammend 7% ($62,712 ÷ $121,200). Ammend Gerald will receive $500 a month ($6,000 a year). Ammend Each year, until his net cost is recovered, $3,102 (51. Ammend 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. Ammend If Gerald dies, his wife will receive $350 a month ($4,200 a year). Ammend If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. Ammend 7%). Ammend Each year, until the entire net cost is recovered, his wife will receive $2,171. Ammend 40 (51. Ammend 7% of her payments received of $4,200) tax free. Ammend She will include $2,028. Ammend 60 ($4,200 − $2,171. Ammend 40) in her income tax return. Ammend Example 3. Ammend Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. Ammend Your two daughters each receive annual annuities of $1,800 until they reach age 18. Ammend Your husband contributed $25,576 to the plan. Ammend You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. Ammend Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. Ammend The exclusion percentage of 18. Ammend 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. Ammend Each full year $864 (18. Ammend 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. Ammend Each year, until age 18, $324 (18. Ammend 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. Ammend Part-year payments. Ammend   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. Ammend   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. Ammend For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. Ammend   If you received a fractional payment, follow Step 5, discussed earlier. Ammend This gives you the tax-free part of your total payment. Ammend Example. Ammend On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. Ammend The applicable multiple from Table V is 23. Ammend 3 (age 61). Ammend Her expected return is $34,950 ($125 × 12 × 23. Ammend 3). Ammend Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. Ammend 1%. Ammend Each payment received will consist of 63. Ammend 1% return of cost and 36. Ammend 9% taxable income, until her net cost of the contract is fully recovered. Ammend During the first year, Mary received three payments of $125, or $375, of which $236. Ammend 63 (63. Ammend 1% × $375) is a return of cost. Ammend The remaining $138. Ammend 37 is included in income. Ammend Increase in annuity payments. Ammend   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. Ammend All increases in the installment payments are fully taxable. Ammend   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. Ammend 72-5(a)(5) of the regulations. Ammend Example. Ammend Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. Ammend In figuring the taxable part, Joe elects to use Tables V through VIII. Ammend The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. Ammend His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. Ammend 0 × $1,764 annual payment). Ammend The exclusion percentage is $7,938 ÷ $35,280, or 22. Ammend 5%. Ammend During the year he received 11 monthly payments of $147, or $1,617. Ammend Of this amount, 22. Ammend 5% × $147 × 11 ($363. Ammend 83) is tax free as a return of cost and the balance of $1,253. Ammend 17 is taxable. Ammend Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). Ammend The tax-free part is still only 22. Ammend 5% of the annuity payments as of the annuity starting date (22. Ammend 5% × $147 × 12 = $396. Ammend 90 for a full year). Ammend The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. Ammend Variable annuities. Ammend   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. Ammend   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. Ammend If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. Ammend Example. Ammend Frank purchased a variable annuity at age 65. Ammend The total cost of the contract was $12,000. Ammend The annuity starting date is January 1 of the year of purchase. Ammend His annuity will be paid, starting July 1, in variable annual installments for his life. Ammend The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. Ammend   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. Ammend Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. Ammend The result is added to the previously figured periodic tax-free part. Ammend The sum is the amount of each future payment that will be tax free. Ammend Example. Ammend Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. Ammend Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. Ammend Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. Ammend 00 Amount received in second year 500. Ammend 00 Difference $100. Ammend 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. Ammend 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. Ammend 4) $5. Ammend 43 Revised annual tax-free part for third and later years ($600 + $5. Ammend 43) $605. Ammend 43 Amount taxable in third year ($1,200 − $605. Ammend 43) $594. Ammend 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. Ammend 72–4(d)(3) of the Income Tax Regulations. Ammend The statement must also show the following information: The annuity starting date and your age on that date. Ammend The first day of the first period for which you received an annuity payment in the current year. Ammend Your investment in the contract as originally figured. Ammend The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. Ammend Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. Ammend Exclusion limited to net cost. Ammend   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). Ammend This is the unrecovered investment in the contract as of the annuity starting date. Ammend   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. Ammend This deduction is not subject to the 2%-of-adjusted-gross-income limit. Ammend Example 1. Ammend Your annuity starting date is after 1986. Ammend Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. Ammend There is no refund feature. Ammend Your monthly annuity payment is $833. Ammend 33. Ammend Your exclusion ratio is 12% and you exclude $100 a month. Ammend Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. Ammend Thereafter, your annuity payments are fully taxable. Ammend Example 2. Ammend The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. Ammend The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. Ammend The exclusion ratio is 10. Ammend 8%, and your monthly exclusion is $90. Ammend After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). Ammend An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. Ammend Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. Ammend Exclusion not limited to net cost. Ammend   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. Ammend If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. Ammend The total exclusion may be more than your investment in the contract. Ammend How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. Ammend Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. Ammend These tables correspond to the old Tables I through IV. Ammend In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. Ammend If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. Ammend However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). Ammend Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. Ammend Contributions made both before July 1986 and after June 1986. Ammend   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. Ammend (See the examples below. Ammend )    Making the election. Ammend Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. Ammend 72–6 of the Income Tax Regulations. Ammend ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. Ammend   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. Ammend You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. Ammend    Advantages of election. Ammend In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. Ammend    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. Ammend If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. Ammend   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. Ammend Example 1. Ammend Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. Ammend Payment of the $42,000 contribution is guaranteed under a refund feature. Ammend Bill is 55 years old as of the annuity starting date. Ammend For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. Ammend       Pre- July 1986   Post- June 1986 A. Ammend Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. Ammend of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. Ammend Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. Ammend Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. Ammend 7   28. Ammend 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. Ammend Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . Ammend 079   . Ammend 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). Ammend The taxable part of his annuity is $22,080 ($24,000 minus $1,920). Ammend If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). Ammend Example 2. Ammend Al is age 62 at his nearest birthday to the annuity starting date. Ammend Al's wife is age 60 at her nearest birthday to the annuity starting date. Ammend The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. Ammend The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. Ammend Al makes the election described in Example 1 . Ammend For purposes of this example, assume the refund feature adjustment is zero. Ammend If an adjustment is required, IRS will figure the amount. Ammend See Requesting a Ruling on Taxation of Annuity near the end of this publication. Ammend       Pre-  July 1986   Post-  June 1986 A. Ammend Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. Ammend Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. Ammend Expected return         1) Multiple for both annuitants from Tables II and VI 25. Ammend 4   28. Ammend 8   2) Multiple for first annuitant from Tables I and V 16. Ammend 9   22. Ammend 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. Ammend 5   6. Ammend 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. Ammend Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . Ammend 209   . Ammend 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). Ammend The taxable part of his annuity is $9,216 ($12,000 − $2,784). Ammend The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. Ammend After Al's death, his widow will apply the same exclusion percentages (20. Ammend 9% and 2. Ammend 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. Ammend Annuity received after June 30, 1986. Ammend   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. Ammend Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. Ammend    Make the election by attaching the following statement to your income tax return. Ammend    “I elect, under section 1. Ammend 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. Ammend ”   The statement must also include your name, address, and social security number. Ammend   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. Ammend Disqualifying form of payment or settlement. Ammend   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. Ammend See regulations section 1. Ammend 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. Ammend You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. Ammend Worksheets for Determining Taxable Annuity Worksheets I and II. Ammend   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. Ammend 72–6(d)(6) Election. Ammend Worksheet I For Determining Taxable Annuity Under Regulations Section 1. Ammend 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. Ammend   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. Ammend )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. Ammend If not, the IRS will calculate the refund feature percentage. Ammend             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. Ammend   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. Ammend   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. Ammend   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. Ammend     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. Ammend 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. Ammend   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. Ammend )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. Ammend If not, the IRS will calculate the refund feature percentage. Ammend             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. Ammend   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. Ammend   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. Ammend Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. Ammend   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. Ammend   Actuarial Tables Please click here for the text description of the image. Ammend Actuarial Tables Please click here for the text description of the image. Ammend Actuarial Tables Please click here for the text description of the image. Ammend Actuarial tables Please click here for the text description of the image. Ammend Actuarial tables Please click here for the text description of the image. 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Ammend Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. Ammend If you make this request, you are asking for a ruling. Ammend User fee. Ammend   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. Ammend You should call the IRS for the proper fee. Ammend A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. Ammend Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. Ammend O. Ammend Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. Ammend When to make the request. Ammend   Please note that requests sent between February 1 and April 15 may experience some delay. Ammend We process requests in the order received, and we will reply to your request as soon as we can process it. Ammend If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. Ammend S. Ammend Individual Income Tax Return, to get an extension of time to file. Ammend Information you must furnish. Ammend   You must furnish the information listed below so the IRS can comply with your request. Ammend Failure to furnish the information will result in a delay in processing your request. Ammend Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. Ammend Copies of any documents showing distributions, annuity rates, and annuity options available to you. Ammend A copy of any Form 1099–R you received since your annuity began. Ammend A statement indicating whether you have filed your return for the year for which you are making the request. Ammend If you have requested an extension of time to file that return, please indicate the extension date. Ammend Your daytime phone number. Ammend Your current mailing address. Ammend A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. Ammend Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. Ammend A completed Tax Information Sheet (or facsimile) shown on the next page. Ammend Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. Ammend This statement must be signed by the retiree or the survivor annuitant. Ammend It cannot be signed by a representative. Ammend Tax Information Sheet Please click here for the text description of the image. Ammend Tax Information Sheet Please click here for the text description of the image. Ammend Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Ammend Free help with your tax return. Ammend   You can get free help preparing your return nationwide from IRS-certified volunteers. Ammend The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Ammend The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Ammend Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Ammend In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Ammend To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Ammend gov, download the IRS2Go app, or call 1-800-906-9887. Ammend   As part of the TCE program, AARP offers the Tax-Aide counseling program. Ammend To find the nearest AARP Tax-Aide site, visit AARP's website at www. Ammend aarp. Ammend org/money/taxaide or call 1-888-227-7669. Ammend For more information on these programs, go to IRS. Ammend gov and enter “VITA” in the search box. Ammend Internet. Ammend    IRS. Ammend gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Ammend Download the free IRS2Go app from the iTunes app store or from Google Play. Ammend Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Ammend Check the status of your 2013 refund with the Where's My Refund? application on IRS. Ammend gov or download the IRS2Go app and select the Refund Status option. Ammend The IRS issues more than 9 out of 10 refunds in less than 21 days. Ammend Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Ammend You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Ammend The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Ammend Use the Interactive Tax Assistant (ITA) to research your tax questions. Ammend No need to wait on the phone or stand in line. Ammend The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Ammend When you reach the response screen, you can print the entire interview and the final response for your records. Ammend New subject areas are added on a regular basis. Ammend  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Ammend gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Ammend You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Ammend The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Ammend When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Ammend Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Ammend You can also ask the IRS to mail a return or an account transcript to you. Ammend Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Ammend gov or by calling 1-800-908-9946. Ammend Tax return and tax account transcripts are generally available for the current year and the past three years. Ammend Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Ammend Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Ammend If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Ammend Check the status of your amended return using Where's My Amended Return? Go to IRS. Ammend gov and enter Where's My Amended Return? in the search box. Ammend You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Ammend It can take up to 3 weeks from the date you mailed it to show up in our system. Ammend Make a payment using one of several safe and convenient electronic payment options available on IRS. Ammend gov. Ammend Select the Payment tab on the front page of IRS. Ammend gov for more information. Ammend Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Ammend Figure your income tax withholding with the IRS Withholding Calculator on IRS. Ammend gov. Ammend Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Ammend Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Ammend gov. Ammend Request an Electronic Filing PIN by going to IRS. Ammend gov and entering Electronic Filing PIN in the search box. Ammend Download forms, instructions and publications, including accessible versions for people with disabilities. Ammend Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Ammend gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Ammend An employee can answer questions about your tax account or help you set up a payment plan. Ammend Before you visit, check the Office Locator on IRS. Ammend gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Ammend If you have a special need, such as a disability, you can request an appointment. Ammend Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Ammend Apply for an Employer Identification Number (EIN). Ammend Go to IRS. Ammend gov and enter Apply for an EIN in the search box. Ammend Read the Internal Revenue Code, regulations, or other official guidance. Ammend Read Internal Revenue Bulletins. Ammend Sign up to receive local and national tax news and more by email. Ammend Just click on “subscriptions” above the search box on IRS. Ammend gov and choose from a variety of options. Ammend    Phone. Ammend You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Ammend Download the free IRS2Go app from the iTunes app store or from Google Play. Ammend Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Ammend gov, or download the IRS2Go app. Ammend Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Ammend The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Ammend Mos