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Ammending A Tax Return

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Ammending A Tax Return

Ammending a tax return 2. Ammending a tax return   Source of Income Table of Contents Introduction Topics - This chapter discusses: Resident Aliens Nonresident AliensInterest Income Dividends Guarantee of Indebtedness Personal Services Transportation Income Scholarships, Grants, Prizes, and Awards Pensions and Annuities Rents or Royalties Real Property Personal Property Community Income Introduction After you have determined your alien status, you must determine the source of your income. Ammending a tax return This chapter will help you determine the source of different types of income you may receive during the tax year. Ammending a tax return This chapter also discusses special rules for married individuals who are domiciled in a country with community property laws. Ammending a tax return Topics - This chapter discusses: Income source rules, and Community income. Ammending a tax return Resident Aliens A resident alien's income is generally subject to tax in the same manner as a U. Ammending a tax return S. Ammending a tax return citizen. Ammending a tax return If you are a resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U. Ammending a tax return S. Ammending a tax return tax return. Ammending a tax return You must report these amounts from sources within and outside the United States. Ammending a tax return Nonresident Aliens A nonresident alien usually is subject to U. Ammending a tax return S. Ammending a tax return income tax only on U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return Under limited circumstances, certain foreign source income is subject to U. Ammending a tax return S. Ammending a tax return tax. Ammending a tax return See Foreign Income in chapter 4. Ammending a tax return The general rules for determining U. Ammending a tax return S. Ammending a tax return source income that apply to most nonresident aliens are shown in Table 2-1. Ammending a tax return The following discussions cover the general rules as well as the exceptions to these rules. Ammending a tax return Not all items of U. Ammending a tax return S. Ammending a tax return source income are taxable. Ammending a tax return See chapter 3. Ammending a tax return Interest Income Generally, U. Ammending a tax return S. Ammending a tax return source interest income includes the following items. Ammending a tax return Interest on bonds, notes, or other interest-bearing obligations of U. Ammending a tax return S. Ammending a tax return residents or domestic corporations. Ammending a tax return Interest paid by a domestic or foreign partnership or foreign corporation engaged in a U. Ammending a tax return S. Ammending a tax return trade or business at any time during the tax year. Ammending a tax return Original issue discount. Ammending a tax return Interest from a state, the District of Columbia, or the U. Ammending a tax return S. Ammending a tax return Government. Ammending a tax return The place or manner of payment is immaterial in determining the source of the income. Ammending a tax return A substitute interest payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as the interest on the transferred security. Ammending a tax return Exceptions. Ammending a tax return   U. Ammending a tax return S. Ammending a tax return source interest income does not include the following items. Ammending a tax return Interest paid by a resident alien or a domestic corporation on obligations issued before August 10, 2010, if for the 3-year period ending with the close of the payer's tax year preceding the interest payment, at least 80% of the payer's total gross income: Is from sources outside the United States, and Is attributable to the active conduct of a trade or business by the individual or corporation in a foreign country or a U. Ammending a tax return S. Ammending a tax return possession. Ammending a tax return However, the interest will be considered U. Ammending a tax return S. Ammending a tax return source interest income if either of the following apply. Ammending a tax return The recipient of the interest is related to the resident alien or domestic corporation. Ammending a tax return See section 954(d)(3) for the definition of related person. Ammending a tax return The terms of the obligation are significantly modified after August 9, 2010. Ammending a tax return Any extension of the term of the obligation is considered a significant modification. Ammending a tax return Interest paid by a foreign branch of a domestic corporation or a domestic partnership on deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law if the interest paid or credited can be deducted by the association. Ammending a tax return Interest on deposits with a foreign branch of a domestic corporation or domestic partnership, but only if the branch is in the commercial banking business. Ammending a tax return Dividends In most cases, dividend income received from domestic corporations is U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return Dividend income from foreign corporations is usually foreign source income. Ammending a tax return Exceptions to both of these rules are discussed below. Ammending a tax return A substitute dividend payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as a distribution on the transferred security. Ammending a tax return Dividend equivalent payments. Ammending a tax return   U. Ammending a tax return S. Ammending a tax return source dividends also include all dividend equivalent payments. Ammending a tax return Dividend equivalent payments include substitute dividends, payments made pursuant to a specified notional principal contract, and all similar payments that, directly or indirectly, are contingent on or determined by reference to, the payment of a dividend from U. Ammending a tax return S. Ammending a tax return sources. Ammending a tax return    The Internal Revenue Service has issued final regulations that would affect the treatment of dividend equivalent payments and specified notional principal contracts. Ammending a tax return You can view this regulation at www. Ammending a tax return irs. Ammending a tax return gov/irb/2013-52_IRB/ar08. Ammending a tax return html. Ammending a tax return First exception. Ammending a tax return   Dividends received from a domestic corporation are not U. Ammending a tax return S. Ammending a tax return source income if the corporation elects to take the American Samoa economic development credit. Ammending a tax return Second exception. Ammending a tax return   Part of the dividends received from a foreign corporation is U. Ammending a tax return S. Ammending a tax return source income if 25% or more of its total gross income for the 3-year period ending with the close of its tax year preceding the declaration of dividends was effectively connected with a trade or business in the United States. Ammending a tax return If the corporation was formed less than 3 years before the declaration, use its total gross income from the time it was formed. Ammending a tax return Determine the part that is U. Ammending a tax return S. Ammending a tax return source income by multiplying the dividend by the following fraction. Ammending a tax return   Foreign corporation's gross income connected with a U. Ammending a tax return S. Ammending a tax return trade or business for the 3-year period     Foreign corporation's gross income from all sources for that period   Guarantee of Indebtedness Certain amounts received directly or indirectly, for the provision of a guarantee of indebtedness issued after September 27, 2010, are U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return They must be paid by a noncorporate resident or U. Ammending a tax return S. Ammending a tax return corporation or by any foreign person if the amounts are effectively connected with the conduct of a U. Ammending a tax return S. Ammending a tax return trade or business. Ammending a tax return For more information, see Internal Revenue Code sections 861(a)(9) and 862(a)(9). Ammending a tax return Personal Services All wages and any other compensation for services performed in the United States are considered to be from sources in the United States. Ammending a tax return The only exceptions to this rule are discussed in chapter 3 under Employees of foreign persons, organizations, or offices, and under Crew members. Ammending a tax return If you are an employee and receive compensation for labor or personal services performed both inside and outside the United States, special rules apply in determining the source of the compensation. Ammending a tax return Compensation (other than certain fringe benefits) is sourced on a time basis. Ammending a tax return Certain fringe benefits (such as housing and education) are sourced on a geographical basis. Ammending a tax return Or, you may be permitted to use an alternative basis to determine the source of compensation. Ammending a tax return See Alternative Basis , later. Ammending a tax return Multi-level marketing. Ammending a tax return   Certain companies sell products through a multi-level marketing arrangement, such that an upper-tier distributor, who has sponsored a lower-tier distributor, is entitled to a payment from the company based on certain activities of that lower-tier distributor. Ammending a tax return Generally, depending on the facts, payments from such multi-level marketing companies to independent (non-employee) distributors (upper-tier distributors) that are based on the sales or purchases of persons whom they have sponsored (lower-tier distributors) constitute income for the performance of personal services in recruiting, training, and supporting the lower-tier distributors. Ammending a tax return The source of such income is generally based on where the services of the upper-tier distributor are performed, and may, depending on the facts, be considered multi-year compensation, with the source of income determined over the period to which such compensation is attributable. Ammending a tax return Self-employed individuals. Ammending a tax return   If you are self-employed, you determine the source of compensation for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. Ammending a tax return In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. Ammending a tax return Time Basis Use a time basis to figure your U. Ammending a tax return S. Ammending a tax return source compensation (other than the fringe benefits discussed later). Ammending a tax return Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed services in the United States during the year     Total number of days you performed services during the year   You can use a unit of time less than a day in the above fraction, if appropriate. Ammending a tax return The time period for which the compensation is made does not have to be a year. Ammending a tax return Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. Ammending a tax return Example 1. Ammending a tax return Christina Brooks, a resident of the Netherlands, worked 240 days for a U. Ammending a tax return S. Ammending a tax return company during the tax year. Ammending a tax return She received $80,000 in compensation. Ammending a tax return None of it was for fringe benefits. Ammending a tax return Christina performed services in the United States for 60 days and performed services in the Netherlands for 180 days. Ammending a tax return Using the time basis for determining the source of compensation, $20,000 ($80,000 × 60/240) is her U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return Example 2. Ammending a tax return Rob Waters, a resident of South Africa, is employed by a corporation. Ammending a tax return His annual salary is $100,000. Ammending a tax return None of it is for fringe benefits. Ammending a tax return During the first quarter of the year he worked entirely within the United States. Ammending a tax return On April 1, Rob was transferred to Singapore for the remainder of the year. Ammending a tax return Rob is able to establish that the first quarter of the year and the last 3 quarters of the year are two separate, distinct, and continuous periods of time. Ammending a tax return Accordingly, $25,000 of Rob's annual salary is attributable to the first quarter of the year (. Ammending a tax return 25 × $100,000). Ammending a tax return All of it is U. Ammending a tax return S. Ammending a tax return source income because he worked entirely within the United States during that quarter. Ammending a tax return The remaining $75,000 is attributable to the last three quarters of the year. Ammending a tax return During those quarters, he worked 150 days in Singapore and 30 days in the United States. Ammending a tax return His periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time. Ammending a tax return Of this $75,000, $12,500 ($75,000 × 30/180) is U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return Multi-year compensation. Ammending a tax return   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. Ammending a tax return Multi-year compensation is compensation that is included in your income in one tax year but that is attributable to a period that includes two or more tax years. Ammending a tax return   You determine the period to which the compensation is attributable based on the facts and circumstances of your case. Ammending a tax return For example, an amount of compensation that specifically relates to a period of time that includes several calendar years is attributable to the entire multi-year period. Ammending a tax return   The amount of compensation treated as from U. Ammending a tax return S. Ammending a tax return sources is figured by multiplying the total multi-year compensation by a fraction. Ammending a tax return The numerator of the fraction is the number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in the United States in connection with the project. Ammending a tax return The denominator of the fraction is the total number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in connection with the project. Ammending a tax return Geographical Basis Compensation you receive as an employee in the form of the following fringe benefits is sourced on a geographical basis. Ammending a tax return Housing. Ammending a tax return Education. Ammending a tax return Local transportation. Ammending a tax return Tax reimbursement. Ammending a tax return Hazardous or hardship duty pay as defined in Regulations section 1. Ammending a tax return 861-4(b)(2)(ii)(D)(5). Ammending a tax return Moving expense reimbursement. Ammending a tax return The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence. Ammending a tax return Principal place of work. Ammending a tax return   The above fringe benefits, except for tax reimbursement and hazardous or hardship duty pay, are sourced based on your principal place of work. Ammending a tax return Your principal place of work is usually the place where you spend most of your working time. Ammending a tax return This could be your office, plant, store, shop, or other location. Ammending a tax return If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. Ammending a tax return   If you have more than one job at any time, your main job location depends on the facts in each case. Ammending a tax return The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. Ammending a tax return Housing. Ammending a tax return   The source of a housing fringe benefit is determined based on the location of your principal place of work. Ammending a tax return A housing fringe benefit includes payments to you or on your behalf (and your family's if your family resides with you) only for the following. Ammending a tax return Rent. Ammending a tax return Utilities (except telephone charges). Ammending a tax return Real and personal property insurance. Ammending a tax return Occupancy taxes not deductible under section 164 or 216(a). Ammending a tax return Nonrefundable fees for securing a leasehold. Ammending a tax return Rental of furniture and accessories. Ammending a tax return Household repairs. Ammending a tax return Residential parking. Ammending a tax return Fair rental value of housing provided in kind by your employer. Ammending a tax return   A housing fringe benefit does not include: Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation), The cost of buying property, including principal payments on a mortgage, The cost of domestic labor (maids, gardeners, etc. Ammending a tax return ), Pay television subscriptions, Improvements and other expenses that increase the value or appreciably prolong the life of property, Purchased furniture or accessories, Depreciation or amortization of property or improvements, The value of meals or lodging that you exclude from gross income, or The value of meals or lodging that you deduct as moving expenses. Ammending a tax return Education. Ammending a tax return   The source of an education fringe benefit for the education expenses of your dependents is determined based on the location of your principal place of work. Ammending a tax return An education fringe benefit includes payments only for the following expenses for education at an elementary or secondary school. Ammending a tax return Tuition, fees, academic tutoring, special needs services for a special needs student, books, supplies, and other equipment. Ammending a tax return Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance. Ammending a tax return Local transportation. Ammending a tax return   The source of a local transportation fringe benefit is determined based on the location of your principal place of work. Ammending a tax return Your local transportation fringe benefit is the amount that you receive as compensation for local transportation for you or your spouse or dependents at the location of your principal place of work. Ammending a tax return The amount treated as a local transportation fringe benefit is limited to actual expenses incurred for local transportation and the fair rental value of any employer-provided vehicle used predominantly by you, your spouse, or your dependents for local transportation. Ammending a tax return Actual expenses do not include the cost (including interest) of any vehicle purchased by you or on your behalf. Ammending a tax return Tax reimbursement. Ammending a tax return   The source of a tax reimbursement fringe benefit is determined based on the location of the jurisdiction that imposed the tax for which you are reimbursed. Ammending a tax return Moving expense reimbursement. Ammending a tax return   The source of a moving expense reimbursement is generally based on the location of your new principal place of work. Ammending a tax return However, the source is determined based on the location of your former principal place of work if you provide sufficient evidence that such determination of source is more appropriate under the facts and circumstances of your case. Ammending a tax return Sufficient evidence generally requires an agreement between you and your employer, or a written statement of company policy, which is reduced to writing before the move and which is entered into or established to induce you or other employees to move to another country. Ammending a tax return The written statement or agreement must state that your employer will reimburse you for moving expenses that you incur to return to your former principal place of work regardless of whether you continue to work for your employer after returning to that location. Ammending a tax return It may contain certain conditions upon which the right to reimbursement is determined as long as those conditions set forth standards that are definitely ascertainable and can only be fulfilled prior to, or through completion of, your return move to your former principal place of work. Ammending a tax return Alternative Basis If you are an employee, you can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your compensation than the time or geographical basis. Ammending a tax return If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your compensation. Ammending a tax return Also, if your total compensation from all sources is $250,000 or more, check “Yes” to both questions on line K on page 5 of Form 1040NR, and attach a written statement to your tax return that sets forth all of the following. Ammending a tax return Your name and social security number (written across the top of the statement). Ammending a tax return The specific compensation income, or the specific fringe benefit, for which you are using the alternative basis. Ammending a tax return For each item in (2), the alternative basis of allocation of source used. Ammending a tax return For each item in (2), a computation showing how the alternative allocation was computed. Ammending a tax return A comparison of the dollar amount of the U. Ammending a tax return S. Ammending a tax return compensation and foreign compensation sourced under both the alternative basis and the time or geographical basis discussed earlier. Ammending a tax return Transportation Income Transportation income is income from the use of a vessel or aircraft or for the performance of services directly related to the use of any vessel or aircraft. Ammending a tax return This is true whether the vessel or aircraft is owned, hired, or leased. Ammending a tax return The term “vessel or aircraft” includes any container used in connection with a vessel or aircraft. Ammending a tax return All income from transportation that begins and ends in the United States is treated as derived from sources in the United States. Ammending a tax return If the transportation begins or ends in the United States, 50% of the transportation income is treated as derived from sources in the United States. Ammending a tax return For transportation income from personal services, 50% of the income is U. Ammending a tax return S. Ammending a tax return source income if the transportation is between the United States and a U. Ammending a tax return S. Ammending a tax return possession. Ammending a tax return For nonresident aliens, this only applies to income derived from, or in connection with, an aircraft. Ammending a tax return For information on how U. Ammending a tax return S. Ammending a tax return source transportation income is taxed, see chapter 4. Ammending a tax return Scholarships, Grants, Prizes, and Awards Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. Ammending a tax return However, see Activities to be performed outside the United States , later. Ammending a tax return For example, payments for research or study in the United States made by the United States, a noncorporate U. Ammending a tax return S. Ammending a tax return resident, or a domestic corporation, are from U. Ammending a tax return S. Ammending a tax return sources. Ammending a tax return Similar payments from a foreign government or foreign corporation are foreign source payments even though the funds may be disbursed through a U. Ammending a tax return S. Ammending a tax return agent. Ammending a tax return Payments made by an entity designated as a public international organization under the International Organizations Immunities Act are from foreign sources. Ammending a tax return Activities to be performed outside the United States. Ammending a tax return   Scholarships, fellowship grants, targeted grants, and achievement awards received by nonresident aliens for activities performed, or to be performed, outside the United States are not U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return    These rules do not apply to amounts paid as salary or other compensation for services. Ammending a tax return See Personal Services, earlier, for the source rules that apply. Ammending a tax return Pensions and Annuities If you receive a pension from a domestic trust for services performed both in and outside the United States, part of the pension payment is from U. Ammending a tax return S. Ammending a tax return sources. Ammending a tax return That part is the amount attributable to earnings of the pension plan and the employer contributions made for services performed in the United States. Ammending a tax return This applies whether the distribution is made under a qualified or nonqualified stock bonus, pension, profit-sharing, or annuity plan (whether or not funded). Ammending a tax return If you performed services as an employee of the United States, you may receive a distribution from the U. Ammending a tax return S. Ammending a tax return Government under a plan, such as the Civil Service Retirement System, that is treated as a qualified pension plan. Ammending a tax return Your U. Ammending a tax return S. Ammending a tax return source income is the otherwise taxable amount of the distribution that is attributable to your total U. Ammending a tax return S. Ammending a tax return Government basic pay other than tax-exempt pay for services performed outside the United States. Ammending a tax return Rents or Royalties Your U. Ammending a tax return S. Ammending a tax return source income includes rent and royalty income received during the tax year from property located in the United States or from any interest in that property. Ammending a tax return U. Ammending a tax return S. Ammending a tax return source income also includes rents or royalties for the use of, or for the privilege of using, in the United States, intangible property such as patents, copyrights, secret processes and formulas, goodwill, trademarks, franchises, and similar property. Ammending a tax return Real Property Real property is land and buildings and generally anything built on, growing on, or attached to land. Ammending a tax return Gross income from sources in the United States includes gains, profits, and income from the sale or other disposition of real property located in the United States. Ammending a tax return Natural resources. Ammending a tax return   The income from the sale of products of any farm, mine, oil or gas well, other natural deposit, or timber located in the United States and sold in a foreign country, or located in a foreign country and sold in the United States, is partly from sources in the United States. Ammending a tax return For information on determining that part, see section 1. Ammending a tax return 863-1(b) of the regulations. Ammending a tax return Table 2-1. Ammending a tax return Summary of Source Rules for Income of Nonresident Aliens Item of income Factor determining source Salaries, wages, other compensation Where services performed Business income:   Personal services Where services performed Sale of inventory—purchased Where sold Sale of inventory—produced Allocation Interest Residence of payer Dividends Whether a U. Ammending a tax return S. Ammending a tax return or foreign corporation* Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. Ammending a tax return Where property is used Sale of real property Location of property Sale of personal property Seller's tax home (but see Personal Property , later, for exceptions) Pension distributions attributable to contributions Where services were performed that earned the pension Investment earnings on pension contributions Location of pension trust Sale of natural resources Allocation based on fair market value of product at export terminal. Ammending a tax return For more information, see section 1. Ammending a tax return 863-1(b) of the regulations. Ammending a tax return *Exceptions include: a) Dividends paid by a U. Ammending a tax return S. Ammending a tax return corporation are foreign source if the corporation elects the  American Samoa economic development credit. Ammending a tax return  b) Part of a dividend paid by a foreign corporation is U. Ammending a tax return S. Ammending a tax return source if at least 25% of the  corporation's gross income is effectively connected with a U. Ammending a tax return S. Ammending a tax return trade or business for the  3 tax years before the year in which the dividends are declared. Ammending a tax return Personal Property Personal property is property, such as machinery, equipment, or furniture, that is not real property. Ammending a tax return Gain or loss from the sale or exchange of personal property generally has its source in the United States if you have a tax home in the United States. Ammending a tax return If you do not have a tax home in the United States, the gain or loss generally is considered to be from sources outside the United States. Ammending a tax return Tax home. Ammending a tax return   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Ammending a tax return Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. Ammending a tax return If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Ammending a tax return If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Ammending a tax return Inventory property. Ammending a tax return   Inventory property is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. Ammending a tax return Income from the sale of inventory that you purchased is sourced where the property is sold. Ammending a tax return Generally, this is where title to the property passes to the buyer. Ammending a tax return For example, income from the sale of inventory in the United States is U. Ammending a tax return S. Ammending a tax return source income, whether you purchased it in the United States or in a foreign country. Ammending a tax return   Income from the sale of inventory property that you produced in the United States and sold outside the United States (or vice versa) is partly from sources in the United States and partly from sources outside the United States. Ammending a tax return For information on making this allocation, see section 1. Ammending a tax return 863-3 of the regulations. Ammending a tax return   These rules apply even if your tax home is not in the United States. Ammending a tax return Depreciable property. Ammending a tax return   To determine the source of any gain from the sale of depreciable personal property, you must first figure the part of the gain that is not more than the total depreciation adjustments on the property. Ammending a tax return You allocate this part of the gain to sources in the United States based on the ratio of U. Ammending a tax return S. Ammending a tax return depreciation adjustments to total depreciation adjustments. Ammending a tax return The rest of this part of the gain is considered to be from sources outside the United States. Ammending a tax return   For this purpose, “U. Ammending a tax return S. Ammending a tax return depreciation adjustments” are the depreciation adjustments to the basis of the property that are allowable in figuring taxable income from U. Ammending a tax return S. Ammending a tax return sources. Ammending a tax return However, if the property is used predominantly in the United States during a tax year, all depreciation deductions allowable for that year are treated as U. Ammending a tax return S. Ammending a tax return depreciation adjustments. Ammending a tax return But there are some exceptions for certain transportation, communications, and other property used internationally. Ammending a tax return   Gain from the sale of depreciable property that is more than the total depreciation adjustments on the property is sourced as if the property were inventory property, as discussed above. Ammending a tax return   A loss is sourced in the same way as the depreciation deductions were sourced. Ammending a tax return However, if the property was used predominantly in the United States, the entire loss reduces U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return   The basis of property usually means the cost (money plus the fair market value of other property or services) of property you acquire. Ammending a tax return Depreciation is an amount deducted to recover the cost or other basis of a trade or business asset. Ammending a tax return The amount you can deduct depends on the property's cost, when you began using the property, how long it will take to recover your cost, and which depreciation method you use. Ammending a tax return A depreciation deduction is any deduction for depreciation or amortization or any other allowable deduction that treats a capital expenditure as a deductible expense. Ammending a tax return Intangible property. Ammending a tax return   Intangible property includes patents, copyrights, secret processes or formulas, goodwill, trademarks, trade names, or other like property. Ammending a tax return The gain from the sale of amortizable or depreciable intangible property, up to the previously allowable amortization or depreciation deductions, is sourced in the same way as the original deductions were sourced. Ammending a tax return This is the same as the source rule for gain from the sale of depreciable property. Ammending a tax return See Depreciable property , earlier, for details on how to apply this rule. Ammending a tax return   Gain in excess of the amortization or depreciation deductions is sourced in the country where the property is used if the income from the sale is contingent on the productivity, use, or disposition of that property. Ammending a tax return If the income is not contingent on the productivity, use, or disposition of the property, the income is sourced according to your tax home as discussed earlier. Ammending a tax return If payments for goodwill do not depend on its productivity, use, or disposition, their source is the country in which the goodwill was generated. Ammending a tax return Sales through offices or fixed places of business. Ammending a tax return   Despite any of the earlier rules, if you do not have a tax home in the United States, but you maintain an office or other fixed place of business in the United States, treat the income from any sale of personal property (including inventory property) that is attributable to that office or place of business as U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return However, this rule does not apply to sales of inventory property for use, disposition, or consumption outside the United States if your office or other fixed place of business outside the United States materially participated in the sale. Ammending a tax return   If you have a tax home in the United States but maintain an office or other fixed place of business outside the United States, income from sales of personal property, other than inventory, depreciable property, or intangibles, that is attributable to that foreign office or place of business may be treated as U. Ammending a tax return S. Ammending a tax return source income. Ammending a tax return The income is treated as U. Ammending a tax return S. Ammending a tax return source income if an income tax of less than 10% of the income from the sale is paid to a foreign country. Ammending a tax return This rule also applies to losses if the foreign country would have imposed an income tax of less than 10% had the sale resulted in a gain. Ammending a tax return Community Income If you are married and you or your spouse is subject to the community property laws of a foreign country, a U. Ammending a tax return S. Ammending a tax return state, or a U. Ammending a tax return S. Ammending a tax return possession, you generally must follow those laws to determine the income of yourself and your spouse for U. Ammending a tax return S. Ammending a tax return tax purposes. Ammending a tax return But you must disregard certain community property laws if: Both you and your spouse are nonresident aliens, or One of you is a nonresident alien and the other is a U. Ammending a tax return S. Ammending a tax return citizen or resident and you do not both choose to be treated as U. Ammending a tax return S. Ammending a tax return residents as explained in chapter 1. Ammending a tax return In these cases, you and your spouse must report community income as explained later. Ammending a tax return Earned income. Ammending a tax return   Earned income of a spouse, other than trade or business income and a partner's distributive share of partnership income, is treated as the income of the spouse whose services produced the income. Ammending a tax return That spouse must report all of it on his or her separate return. Ammending a tax return Trade or business income. Ammending a tax return   Trade or business income, other than a partner's distributive share of partnership income, is treated as the income of the spouse carrying on the trade or business. Ammending a tax return That spouse must report all of it on his or her separate return. Ammending a tax return Partnership income (or loss). Ammending a tax return   A partner's distributive share of partnership income (or loss) is treated as the income (or loss) of the partner. Ammending a tax return The partner must report all of it on his or her separate return. Ammending a tax return Separate property income. Ammending a tax return   Income derived from the separate property of one spouse (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that spouse. Ammending a tax return That spouse must report all of it on his or her separate return. Ammending a tax return Use the appropriate community property law to determine what is separate property. Ammending a tax return Other community income. Ammending a tax return   All other community income is treated as provided by the applicable community property laws. Ammending a tax return Prev  Up  Next   Home   More Online Publications
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Suspicious e-Mails and Identity Theft

The Internal Revenue Service has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by scamsters trying to gain access to consumers’ financial information in order to steal their identity and assets. When identity theft takes place over the Internet, it is called phishing.

Suspicious e-Mail/Phishing

Phishing (as in “fishing for information” and “hooking” victims) is a scam where Internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund.

Phishing and Other Schemes Using the IRS Name

The IRS periodically alerts taxpayers to, and maintains a list of, phishing schemes using the IRS name, logo or Web site clone. If you've received an e-mail, phone call or fax claiming to come from the IRS that seemed a little suspicious, you just may find it on this list.

News Releases

  • IR-2013-84, IRS Warns of Pervasive Telephone Scam
  • IR-2013-17, IRS Intensifies National Crackdown on Identity Theft; Part of Wider Effort to Protect Taxpayers, Prevent Refund Fraud
  • IR-2013-3, National Taxpayer Advocate Delivers Annual Report to Congress; Focuses on Tax Reform, IRS Funding and Identity Theft
  • IR-2012-29, Tax Scam Warning: Beware of Phony Refund Scheme Abusing Popular College Tax Credit; Senior Citizens, Working Families and Church Members Are Targets
  • IR-2012-23, IRS Releases the Dirty Dozen Tax Scams for 2012
  • IR-2011-73, IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scams
  • IR-2009-71, IRS Alerts Public to New Identity Theft Scams
  • IR-2008-11, IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting
  • IR-2007-183, IRS Warns of E-Mail Scam Soliciting Donations to California Wildfire Victims
  • IR-2007-148, IRS Warns of New E-mail Scam Offering Cash for Participation in “Member Satisfaction Survey”
  • IR-2007-109, IRS Warns Taxpayers of New E-mail Scams
  • IR-2007-75, IRS Warns of Phony e-Mails Claiming to Come from the IRS
  • IR-2006-116, Electronic Federal Tax Payment System Cited in New E-mail Scam
  • IR-2006-104, IRS Renews E-mail Alert Following New Scams
  • IR-2006-49, IRS Establishes e-Mail Box for Taxpayers to Report Phony e-Mails

Fact Sheets

  • FS-2014-3, IRS Criminal Investigation Combats Identity Theft Refund Fraud
  • FS-2014-2, Tips for Taxpayers, Victims about Identity Theft and Tax Returns
  • FS-2014-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts
  • FS-2013-4, IRS Criminal Investigation Combats Identity Theft Refund Fraud
  • FS-2013-3, Tips for Taxpayers, Victims about Identity Theft and Tax Returns
  • FS-2013-2, IRS Combats Identity Theft and Refund Fraud on Many Fronts 
  • FS-2012-7, Protect Yourself from Identity Theft
  • FS-2010-9, Online Scams that Impersonate the IRS
  • FS-2009-4, The Official Internal Revenue Service Web Site Is IRS.gov
  • FS-2008-9, Identity Theft E-mail Scams a Growing Problem

Videos

Articles

You Can Help Shut Down Phishing Schemes

The good news is that you can help shut down these schemes and prevent others from being victimized. If you receive a suspicious e-mail that claims to come from the IRS, you can relay that e-mail to a new IRS mailbox, phishing@irs.gov. Follow instructions in the link below for sending the bogus e-mail to ensure that it retains critical elements found in the original e-mail. The IRS can use the information, URLs and links in the suspicious e-mails you send to trace the hosting Web site and alert authorities to help shut down the fraudulent sites. Unfortunately, due to the expected volume, the IRS will not be able to acknowledge receipt or respond to you.

Identity Theft

Identity theft can be committed through e-mail (phishing) or other means, such as regular mail, fax or telephone, or even by going through someone's trash.

Identity theft occurs when someone uses your personal information such as your name, Social Security number or other identifying information without your permission to commit fraud or other crimes. Typically, identity thieves use someone’s personal data to empty the victim’s financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name, file fraudulent tax returns or even commit crimes. People whose identities have been stolen can spend months or years — and their hard-earned money — cleaning up the mess thieves have made of their good name and credit record. In the meantime, victims may lose job opportunities, be refused loans, education, housing or cars, or even get arrested for crimes they didn't commit.

Employment Verification Contacts

You may receive a call from an IRS employee requesting verification of income and/or withholding information that has been reported to the IRS through other means. This contact may be made through a telephone call or a faxed request.  

If you receive a telephone call or a fax from someone claiming to be with the IRS and you are not comfortable providing the information, you should contact our customer service line at 1-800-829-4933 to verify the validity of the call or fax. You may then contact the IRS employee who requested the information and provide the required information.

Recent Schemes

The IRS periodically alerts taxpayers to schemes that fraudulently use the IRS name, logo or Web site clone to to gain access to consumers’ financial information in order to steal their identity and assets. The scams may take place through e-mail, fax or phone. The IRS also maintains a list of phishing and other schemes.

For more information on various schemes, see the following:

To Report Fraud

For other than phishing schemes, you may report the fraudulent misuse of the IRS name, logo, forms or other IRS property by calling the TIGTA toll-free hotline at 1-800-366-4484 or visiting the TIGTA Web site.

Other Federal Resources

For more information on understanding and preventing identity theft and suspicious e-mails (phishing), or dealing with their aftermath, check out the following federal resources:

Page Last Reviewed or Updated: 14-Mar-2014

The Ammending A Tax Return

Ammending a tax return 4. Ammending a tax return   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents What's New Introduction Full-time student. Ammending a tax return Adjusted gross income. Ammending a tax return Distributions received by spouse. Ammending a tax return Testing period. Ammending a tax return What's New Modified AGI limit for retirement savings contributions credit increased. Ammending a tax return  For 2013, you may be able to claim the retirement savings contributions credit if your modified AGI is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). Ammending a tax return Introduction You may be able to take a tax credit if you make eligible contributions (defined later) to a qualified retirement plan, an eligible deferred compensation plan, or an individual retirement arrangement (IRA). Ammending a tax return You may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). Ammending a tax return This credit could reduce the federal income tax you pay dollar for dollar. Ammending a tax return    Can you claim the credit?   If you make eligible contributions to a qualified retirement plan, an eligible deferred compensation plan, or an IRA, you can claim the credit if all of the following apply. Ammending a tax return You were born before January 2, 1996. Ammending a tax return You are not a full-time student (explained next). Ammending a tax return No one else, such as your parent(s), claims an exemption for you on their tax return. Ammending a tax return Your adjusted gross income (defined below) is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). Ammending a tax return Full-time student. Ammending a tax return   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. Ammending a tax return You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full time. Ammending a tax return Adjusted gross income. Ammending a tax return   This is generally the amount on line 38 of your 2013 Form 1040; line 22 of your 2013 Form 1040A; or line 37 of your 2013 Form 1040NR. Ammending a tax return However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. Ammending a tax return Eligible contributions. Ammending a tax return   These include: Contributions to a traditional or Roth IRA, Salary reduction contributions (elective deferrals, including amounts designated as after-tax Roth contributions) to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. Ammending a tax return They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or section 403(b) annuity. Ammending a tax return For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. Ammending a tax return Reducing eligible contributions. Ammending a tax return   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included above under Eligible contributions. Ammending a tax return Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. Ammending a tax return   Do not reduce your eligible contributions by any of the following. Ammending a tax return The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. Ammending a tax return Distributions that are taxable as the result of an in-plan rollover to your designated Roth account. Ammending a tax return Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. Ammending a tax return Loans from a qualified employer plan treated as a distribution. Ammending a tax return Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). Ammending a tax return Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). Ammending a tax return Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. Ammending a tax return Distributions from a military retirement plan. Ammending a tax return Distributions from an inherited IRA by a nonspousal beneficiary. Ammending a tax return Distributions received by spouse. Ammending a tax return   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. Ammending a tax return Testing period. Ammending a tax return   The testing period consists of the year for which you claim the credit, the period after the end of that year and before the due date (including extensions) for filing your return for that year, and the 2 tax years before that year. Ammending a tax return Example. Ammending a tax return You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. Ammending a tax return You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible deferred compensation plan in 2012. Ammending a tax return Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. Ammending a tax return You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. Ammending a tax return You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you received in 2011, 2012, 2013, and 2014. Ammending a tax return Maximum eligible contributions. Ammending a tax return   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. Ammending a tax return Effect on other credits. Ammending a tax return   The amount of this credit will not change the amount of your refundable tax credits. Ammending a tax return A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. Ammending a tax return Maximum credit. Ammending a tax return   This is a nonrefundable credit. Ammending a tax return The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits) in any year. Ammending a tax return If your tax liability is reduced to zero because of other nonrefundable credits, such as the credit for child and dependent care expenses, then you will not be entitled to this credit. Ammending a tax return How to figure and report the credit. Ammending a tax return   The amount of the credit you can get is based on the contributions you make and your credit rate. Ammending a tax return Your credit rate can be as low as 10% or as high as 50%. Ammending a tax return Your credit rate depends on your income and your filing status. Ammending a tax return See Form 8880 to determine your credit rate. Ammending a tax return   The maximum contribution taken into account is $2,000 per person. Ammending a tax return On a joint return, up to $2,000 is taken into account for each spouse. Ammending a tax return   Figure the credit on Form 8880. Ammending a tax return Report the credit on line 50 of your Form 1040; line 32 of your Form 1040A; or line 47 of your Form 1040NR and attach Form 8880 to your return. Ammending a tax return Prev  Up  Next   Home   More Online Publications