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Efile 1040nr Ez 540nr Short

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Efile 1040nr Ez 540nr Short

Efile 1040nr ez 540nr short Index A Accounting method Accrual, Accrual Method, Accrual method. Efile 1040nr ez 540nr short Automatic procedures, Automatic change procedures. Efile 1040nr ez 540nr short Cash, Cash Method, Cash method. Efile 1040nr ez 540nr short Change in, Change in Accounting Method Combination, Combination Method Special, Special Methods Accounting periods, Accounting Periods Accrual method Income - general rule, Income—General Rule Income - special rules, Income—Special Rules Of accounting, Accrual Method Adjusted basis, Adjusted basis. Efile 1040nr ez 540nr short Administrator, Executor or administrator. Efile 1040nr ez 540nr short Alternative fuel vehicle refueling property credit, Alternative fuel vehicle refueling property credit (Form 8911). Efile 1040nr ez 540nr short Alternative motor vehicle credit, Alternative motor vehicle credit (Form 8910). Efile 1040nr ez 540nr short Appeal rights, Appeals. Efile 1040nr ez 540nr short Appreciation, Appreciation. Efile 1040nr ez 540nr short Audits, Examinations (audits). Efile 1040nr ez 540nr short Automobile (see Car expenses) B Bad debts, Bad Debts Barter income, Bartering for Property or Services Basis of property, Basis. Efile 1040nr ez 540nr short Bribes, Expenses You Cannot Deduct Business expenses, Business Expenses Business income, Business Income Business use of your home, Business Use of Your Home C Canceled debt, Canceled Debt Cancellation of qualified real property business debt, Cancellation of qualified real property business debt. Efile 1040nr ez 540nr short Capital gain or loss, Is My Gain or Loss Ordinary or Capital? Car expenses, Car and Truck Expenses, Methods for Deducting Car and Truck Expenses Carbon dioxide sequestration credit, Carbon dioxide sequestration credit (Form 8933). Efile 1040nr ez 540nr short Cash discount, Cash discounts. Efile 1040nr ez 540nr short , Cash discounts. Efile 1040nr ez 540nr short Cash method Expenses, Expenses Income, Income Changing accounting method, Changing accounting method. Efile 1040nr ez 540nr short Charitable contributions, Expenses You Cannot Deduct Child employed by parent, Child employed by parent. Efile 1040nr ez 540nr short Claim for refund, Refunds. Efile 1040nr ez 540nr short Collection of tax, Collections. Efile 1040nr ez 540nr short Combination method of accounting, Combination Method Comments on publication, Comments and suggestions. Efile 1040nr ez 540nr short Condemned property, Condemned property. Efile 1040nr ez 540nr short Consignments, Consignments. Efile 1040nr ez 540nr short Construction allowances, Construction allowances. Efile 1040nr ez 540nr short Cost of goods sold, How To Figure Cost of Goods Sold Credit Alternative fuel vehicle refueling property, Alternative fuel vehicle refueling property credit (Form 8911). Efile 1040nr ez 540nr short Alternative motor vehicle, Alternative motor vehicle credit (Form 8910). Efile 1040nr ez 540nr short Carbon dioxide sequestration, Carbon dioxide sequestration credit (Form 8933). Efile 1040nr ez 540nr short Disabled access, Disabled access credit (Form 8826). Efile 1040nr ez 540nr short Distilled spirits, Distilled spirits credit (Form 8906). Efile 1040nr ez 540nr short Employer-provided childcare, Credit for employer-provided childcare facilities and services (Form 8882). Efile 1040nr ez 540nr short How to claim, How To Claim the Credit Indian coal, Renewable electricity, refined coal, and Indian coal production credit (Form 8835). Efile 1040nr ez 540nr short Investment, Investment credit (Form 3468). Efile 1040nr ez 540nr short Low sulfur diesel fuel production, Low sulfur diesel fuel production credit (Form 8896). Efile 1040nr ez 540nr short Low-income housing, Low-income housing credit (Form 8586). Efile 1040nr ez 540nr short New markets, New markets credit (Form 8874). Efile 1040nr ez 540nr short Nonconventional source fuel, Nonconventional source fuel credit (Form 8907). Efile 1040nr ez 540nr short Orphan drug, Orphan drug credit (Form 8820). Efile 1040nr ez 540nr short Qualified plug-in electric drive motor vehicle, Qualified plug-in electric drive motor vehicle credit (Form 8936). Efile 1040nr ez 540nr short Refined coal, Renewable electricity, refined coal, and Indian coal production credit (Form 8835). Efile 1040nr ez 540nr short Renewable electricity, Renewable electricity, refined coal, and Indian coal production credit (Form 8835). Efile 1040nr ez 540nr short Small employer health insurance premiums, Credit for small employer health insurance premiums (Form 8941). Efile 1040nr ez 540nr short Small employer pension plan startup costs, Credit for small employer pension plan startup costs (Form 8881). Efile 1040nr ez 540nr short Taxes paid on certain employee tips, Credit for employer social security and Medicare taxes paid on certain employee tips (Form 8846). Efile 1040nr ez 540nr short Work opportunity, Work opportunity credit (Form 5884). Efile 1040nr ez 540nr short D Damages, Damages. Efile 1040nr ez 540nr short Debt Bad, Bad Debts Canceled, Canceled Debt Qualified real property business, Qualified real property business debt. Efile 1040nr ez 540nr short Refund offset against, Offset against debts. Efile 1040nr ez 540nr short Definitions Accounting methods, Accounting Methods Accounting periods, Accounting Periods Barter, Bartering for Property or Services Basis, Basis. Efile 1040nr ez 540nr short Business bad debt, Business bad debt. Efile 1040nr ez 540nr short Calendar tax year, Calendar tax year. Efile 1040nr ez 540nr short Cash discount, Cash discounts. Efile 1040nr ez 540nr short , Cash discounts. Efile 1040nr ez 540nr short Disposition of property, What Is a Disposition of Property? Drawing account, Merchandise withdrawn from sale. Efile 1040nr ez 540nr short Entertainment expenses, Entertainment expenses. Efile 1040nr ez 540nr short Fair market value, Fair market value. Efile 1040nr ez 540nr short Fiscal tax year, Fiscal tax year. Efile 1040nr ez 540nr short Fringe benefit, Fringe benefits. Efile 1040nr ez 540nr short Local transportation expenses, Local transportation expenses. Efile 1040nr ez 540nr short Necessary expense, Introduction Net operating loss, Net Operating Losses (NOLs) Nonbusiness bad debt, Nonbusiness bad debts. Efile 1040nr ez 540nr short Ordinary expense, Introduction Principal place of business, Principal place of business. Efile 1040nr ez 540nr short Qualified long-term real property, Qualified long-term real property. Efile 1040nr ez 540nr short Qualified real property business debt, Cancellation of qualified real property business debt. Efile 1040nr ez 540nr short Rent, Rent Expense Restricted property, Other Income Retail space, Retail space. Efile 1040nr ez 540nr short Self-employment (SE) tax, Self-Employment (SE) Tax Sole proprietor, Sole proprietor. Efile 1040nr ez 540nr short Tax home, Local transportation expenses. Efile 1040nr ez 540nr short Trade discount, Trade discounts. Efile 1040nr ez 540nr short , Cash discounts. Efile 1040nr ez 540nr short Travel expenses, Travel, Meals, and Entertainment Depreciation Deduction, Depreciation Listed property, Listed property. Efile 1040nr ez 540nr short Depreciation, recapture, Recapture of depreciation. Efile 1040nr ez 540nr short Direct seller, Direct seller. Efile 1040nr ez 540nr short , Real estate agent or direct seller. Efile 1040nr ez 540nr short Disabled access credit, Disabled access credit (Form 8826). Efile 1040nr ez 540nr short Disposition of property Business property, Introduction Installment sale, Installment sales. Efile 1040nr ez 540nr short , Installment sales. Efile 1040nr ez 540nr short Like-kind exchange, Like-kind exchanges. Efile 1040nr ez 540nr short , Like-kind exchanges. Efile 1040nr ez 540nr short , Exchange of like-kind property. Efile 1040nr ez 540nr short Nontaxable exchange, Nontaxable exchanges. Efile 1040nr ez 540nr short Sale of a business, Sale of a business. Efile 1040nr ez 540nr short Distilled spirits credit, Distilled spirits credit (Form 8906). Efile 1040nr ez 540nr short Dividend income, Interest and Dividend Income Donation of inventory, Donation of inventory. Efile 1040nr ez 540nr short Drawing account, Merchandise withdrawn from sale. Efile 1040nr ez 540nr short Due date of return, When Is My Tax Return Due? E e-file, IRS e-file (Electronic Filing) Economic injury, Economic injury. Efile 1040nr ez 540nr short EFTPS, EFTPS Electronic filing, IRS e-file (Electronic Filing) Employee, Employee. Efile 1040nr ez 540nr short Employee benefit programs, Fringe benefits. Efile 1040nr ez 540nr short Employees' pay, Employees' Pay Employer identification number (EIN), Employer identification number (EIN). Efile 1040nr ez 540nr short Employment taxes About, Employment Taxes Deduction for, Employment taxes. Efile 1040nr ez 540nr short Entertainment expenses, Entertainment expenses. Efile 1040nr ez 540nr short (see Travel expenses) Escrow, payments placed in, Payment placed in escrow. Efile 1040nr ez 540nr short Estimated tax, How Do I Pay Income Tax? Examinations (audits), Examinations (audits). Efile 1040nr ez 540nr short Excise taxes About, Excise Taxes Deduction for, Excise taxes. Efile 1040nr ez 540nr short Executor, Executor or administrator. Efile 1040nr ez 540nr short Expenses, Business Expenses Bad debts, Bad Debts Car, Car and Truck Expenses Depreciation, Depreciation Employees' pay, Employees' Pay Entertainment, Travel, Meals, and Entertainment Home, business use, Business Use of Your Home Insurance, Insurance Interest, Interest Legal and professional fees, Legal and Professional Fees Meals, Travel, Meals, and Entertainment Nondeductible, Expenses You Cannot Deduct Other, Other Expenses You Can Deduct Pension plans, Pension Plans Rent, Rent Expense Taxes, Taxes Travel, Travel, Meals, and Entertainment Truck, Car and Truck Expenses F Fair market value, Fair market value. Efile 1040nr ez 540nr short Filing business taxes, Filing and Paying Business Taxes Fishing crew member, Fishing crew member. Efile 1040nr ez 540nr short , Fishing crew member. Efile 1040nr ez 540nr short Form 1040 (tax return), How Do I File? 1040-ES (estimated tax), How Do I Pay Income Tax? 1040-V (voucher), Balance due. Efile 1040nr ez 540nr short 1099-B (barter), Information returns. Efile 1040nr ez 540nr short 1099-MISC (miscellaneous), Form 1099-MISC. Efile 1040nr ez 540nr short , Information returns. Efile 1040nr ez 540nr short 1128 (change tax year), Change in tax year. Efile 1040nr ez 540nr short 2210 (underpayment of estimated tax), Penalty for underpayment of tax. Efile 1040nr ez 540nr short 2290 (excise tax for heavy trucks), Form 2290. Efile 1040nr ez 540nr short 3115 (change accounting method), Change in Accounting Method 3468 (investment credit), Investment credit (Form 3468). Efile 1040nr ez 540nr short 3800 (general business credit), Useful Items - You may want to see: 4562 (depreciation), Form 4562. Efile 1040nr ez 540nr short 4684 (casualty and theft), Casualties and thefts. Efile 1040nr ez 540nr short 4797 (sale of business property), Dispositions of business property and depreciable property. Efile 1040nr ez 540nr short , Condemned property. Efile 1040nr ez 540nr short , Listed property. Efile 1040nr ez 540nr short 4868 (extension), When Is My Tax Return Due? 5884 (work opportunity credit), Work opportunity credit (Form 5884). Efile 1040nr ez 540nr short 6251 (alternative minimum tax), Useful Items - You may want to see: 6252 (installment sale), Installment sales. Efile 1040nr ez 540nr short 720 (excise tax return), Form 720. Efile 1040nr ez 540nr short 8300 (cash payments over $10,000), Form 8300. Efile 1040nr ez 540nr short 8586 (low-income housing), Low-income housing credit (Form 8586). Efile 1040nr ez 540nr short 8594 (asset acquisition), Sale of a business. Efile 1040nr ez 540nr short 8820 (orphan drug credit), Orphan drug credit (Form 8820). Efile 1040nr ez 540nr short 8824 (like-kind exchange), Like-kind exchanges. Efile 1040nr ez 540nr short , Like-kind exchanges. Efile 1040nr ez 540nr short 8826 (disabled access credit), Disabled access credit (Form 8826). Efile 1040nr ez 540nr short 8829 (business in home), Deduction limit. Efile 1040nr ez 540nr short 8835 (renewable electricity, coal credit), Renewable electricity, refined coal, and Indian coal production credit (Form 8835). Efile 1040nr ez 540nr short 8846 (credit for social security on tip income), Credit for employer social security and Medicare taxes paid on certain employee tips (Form 8846). Efile 1040nr ez 540nr short 8857 (innocent spouse), Innocent spouse relief. Efile 1040nr ez 540nr short 8874 (new markets credit), New markets credit (Form 8874). Efile 1040nr ez 540nr short 8879 (self-selected PIN), Using an Authorized IRS e-file Provider 8881 (pension plan startup costs credit), Credit for small employer pension plan startup costs (Form 8881). Efile 1040nr ez 540nr short 8882 (employer-provided childcare credit), Credit for employer-provided childcare facilities and services (Form 8882). Efile 1040nr ez 540nr short 8886 (transaction statement), Reminders 8896 (low sulfur diesel fuel production credit), Low sulfur diesel fuel production credit (Form 8896). Efile 1040nr ez 540nr short 8906 (distilled spirits credit), Distilled spirits credit (Form 8906). Efile 1040nr ez 540nr short 8907 (nonconventional fuel credit), Nonconventional source fuel credit (Form 8907). Efile 1040nr ez 540nr short 8910 (alternative vehicle credit), Alternative motor vehicle credit (Form 8910). Efile 1040nr ez 540nr short , Car and Truck Expenses 8911 (alternative fuel refueling property credit), Alternative fuel vehicle refueling property credit (Form 8911). Efile 1040nr ez 540nr short 8933 (carbon dioxide sequestration credit), Carbon dioxide sequestration credit (Form 8933). Efile 1040nr ez 540nr short 8936 (qualified plug-in electric drive motor vehicle), Qualified plug-in electric drive motor vehicle credit (Form 8936). Efile 1040nr ez 540nr short 8941 (small employer health insurance premiums), Credit for small employer health insurance premiums (Form 8941). Efile 1040nr ez 540nr short 982 (discharge of indebtedness), Exclusions Schedule C (sole proprietor), How Do I File? Schedule C-EZ (sole proprietor), How Do I File? Schedule SE (self-employment tax), Who must pay self-employment tax. Efile 1040nr ez 540nr short SS-4 (application for EIN), Employer identification number (EIN). Efile 1040nr ez 540nr short SS-5 (application for SSN), Social security number (SSN). Efile 1040nr ez 540nr short W-2 (report wages), Form W-2. Efile 1040nr ez 540nr short W-4 (employee withholding), Employee. Efile 1040nr ez 540nr short W-7 (application for ITIN), Individual taxpayer identification number (ITIN). Efile 1040nr ez 540nr short W-9 (request for TIN), Other payee. Efile 1040nr ez 540nr short Fringe benefits, Fringe benefits. Efile 1040nr ez 540nr short Fuel taxes, Fuel taxes. Efile 1040nr ez 540nr short G Gains and losses, Gains and losses. Efile 1040nr ez 540nr short General business credits, General Business Credits, Business Credits Gross profit Accuracy, Testing Gross Profit Accuracy Additions to, Additions to Gross Profit Guidelines for selected occupations, Guidelines for Selected Occupations (see also Occupations, selected) H Health insurance, deduction for self-employed, Self-employed health insurance deduction. Efile 1040nr ez 540nr short Home, business use of, Business Use of Your Home Hotels, boarding houses, and apartments, Hotels, boarding houses, and apartments. Efile 1040nr ez 540nr short Husband and wife business, Business owned and operated by spouses. Efile 1040nr ez 540nr short I Identification numbers, Identification Numbers Income, Items That Are Not Income (see also Not income) Accounting for your, Accounting for Your Income Barter, Bartering for Property or Services Business, Business Income Damages, Damages. Efile 1040nr ez 540nr short Gains and losses, Gains and losses. Efile 1040nr ez 540nr short Kickbacks, Kickbacks. Efile 1040nr ez 540nr short Kinds of income, Kinds of Income Lost income payments, Lost income payments. Efile 1040nr ez 540nr short Other, Other Income Paid to a third party, Income paid to a third party. Efile 1040nr ez 540nr short Personal property rent, Personal Property Rents Promissory notes, Promissory notes. Efile 1040nr ez 540nr short Recapture of depreciation, Recapture of depreciation. Efile 1040nr ez 540nr short Recovery of items previously deducted, Recovery of items previously deducted. Efile 1040nr ez 540nr short Rental, Real Estate Rents, Personal Property Rents Restricted property, Restricted property. Efile 1040nr ez 540nr short Income tax About, Income Tax Deduction for, Income taxes. Efile 1040nr ez 540nr short How to pay, How Do I Pay Income Tax? Underpayment penalty, Penalty for underpayment of tax. Efile 1040nr ez 540nr short Income tax return, who must file, Do I Have To File an Income Tax Return? Independent contractor, Independent contractor. Efile 1040nr ez 540nr short , Employment Taxes, Sole proprietor or independent contractor. Efile 1040nr ez 540nr short Individual taxpayer identification number (ITIN), Individual taxpayer identification number (ITIN). Efile 1040nr ez 540nr short Information returns, Information Returns Information, How to get more, How To Get More Information Innocent spouse relief, Innocent spouse relief. Efile 1040nr ez 540nr short Installment sales, Installment sales. Efile 1040nr ez 540nr short Insurance Expense, Insurance Nondeductible premiums, Nondeductible premiums. Efile 1040nr ez 540nr short Prepayment, Prepayment. Efile 1040nr ez 540nr short Proceeds, Insurance proceeds. Efile 1040nr ez 540nr short Self-employed health, Self-employed health insurance deduction. Efile 1040nr ez 540nr short Insurance agent Former, Insurance agent, former. Efile 1040nr ez 540nr short Retired, Insurance agent, retired. Efile 1040nr ez 540nr short Interest Expenses, Interest Income, Interest and Dividend Income Inventories, Inventories Investment credit, Investment credit (Form 3468). Efile 1040nr ez 540nr short K Kickbacks, Kickbacks. Efile 1040nr ez 540nr short , Expenses You Cannot Deduct L Lease bonus, Lease bonus. Efile 1040nr ez 540nr short Lease cancellation payments, Lease cancellation payments. Efile 1040nr ez 540nr short Legal fees, Legal and Professional Fees Like-kind exchanges, Like-kind exchanges. Efile 1040nr ez 540nr short , Exchange of like-kind property. Efile 1040nr ez 540nr short Limited liability company, Limited liability company (LLC). Efile 1040nr ez 540nr short Listed property, Listed property. Efile 1040nr ez 540nr short Lobbying expense, Expenses You Cannot Deduct Local transportation expenses, Local transportation expenses. Efile 1040nr ez 540nr short Lodging, Meals and lodging. Efile 1040nr ez 540nr short Long-term capital gain or loss, Is My Capital Gain or Loss Short Term or Long Term? Lost income payments, Lost income payments. Efile 1040nr ez 540nr short Low sulfur diesel fuel production credit, Low sulfur diesel fuel production credit (Form 8896). Efile 1040nr ez 540nr short Low-income housing credit, Low-income housing credit (Form 8586). Efile 1040nr ez 540nr short M Meals, Meals and lodging. Efile 1040nr ez 540nr short (see Travel expenses) Methods for figuring net earnings, Methods for Figuring Net Earnings Mileage rate for vehicles, Standard mileage rate. Efile 1040nr ez 540nr short Motor vehicle, alternative credit, Alternative motor vehicle credit (Form 8910). Efile 1040nr ez 540nr short N Net operating losses, Net Operating Losses (NOLs) Net profit or loss, Introduction New markets credit, New markets credit (Form 8874). Efile 1040nr ez 540nr short Newspaper carrier or distributor, Newspaper carrier or distributor. Efile 1040nr ez 540nr short Newspaper or magazine vendor, Newspaper or magazine vendor. Efile 1040nr ez 540nr short Nonbusiness bad debt, Nonbusiness bad debts. Efile 1040nr ez 540nr short Nonconventional source fuel credit, Nonconventional source fuel credit (Form 8907). Efile 1040nr ez 540nr short Nondeductible insurance premiums, Nondeductible premiums. Efile 1040nr ez 540nr short Nonemployee compensation, Introduction Nontaxable exchanges, Nontaxable exchanges. Efile 1040nr ez 540nr short Not income Appreciation, Appreciation. Efile 1040nr ez 540nr short Consignments, Consignments. Efile 1040nr ez 540nr short Constructions allowances, Construction allowances. Efile 1040nr ez 540nr short Exchange of like-kind property, Exchange of like-kind property. Efile 1040nr ez 540nr short Leasehold improvements, Leasehold improvements. Efile 1040nr ez 540nr short Loans, Loans. Efile 1040nr ez 540nr short Sales tax, Sales tax. Efile 1040nr ez 540nr short Not-for-profit activities, Not-for-Profit Activities Notary public, Notary public. Efile 1040nr ez 540nr short , Notary public. Efile 1040nr ez 540nr short O Occupations, selected Administrator, Executor or administrator. Efile 1040nr ez 540nr short Direct seller, Direct seller. Efile 1040nr ez 540nr short , Real estate agent or direct seller. Efile 1040nr ez 540nr short Executor, Executor or administrator. Efile 1040nr ez 540nr short Fishing crew member, Fishing crew member. Efile 1040nr ez 540nr short Insurance agent, former, Insurance agent, former. Efile 1040nr ez 540nr short Insurance agent, retired, Insurance agent, retired. Efile 1040nr ez 540nr short Newspaper carrier or distributor, Newspaper carrier or distributor. Efile 1040nr ez 540nr short Newspaper or magazine vendor, Newspaper or magazine vendor. Efile 1040nr ez 540nr short Notary public, Notary public. Efile 1040nr ez 540nr short Public official, Public official. Efile 1040nr ez 540nr short Real estate agent, Real estate agent or direct seller. Efile 1040nr ez 540nr short Securities dealer, Securities dealer. Efile 1040nr ez 540nr short Securities trader, Securities trader. Efile 1040nr ez 540nr short Office in the home, Office in the home. Efile 1040nr ez 540nr short (see also Business use of your home) Optional methods, using both, Using Both Optional Methods Ordinary gain or loss, Is My Gain or Loss Ordinary or Capital? Orphan drug credit, Orphan drug credit (Form 8820). Efile 1040nr ez 540nr short P Parking fees, Parking fees and tolls. Efile 1040nr ez 540nr short Partners, husband and wife, Business owned and operated by spouses. Efile 1040nr ez 540nr short Pay, kinds of, Kinds of pay. Efile 1040nr ez 540nr short Paying Business taxes, Filing and Paying Business Taxes Income tax, How Do I Pay Income Tax? Payments to third parties, Payments to third parties. Efile 1040nr ez 540nr short Penalties and fines, Expenses You Cannot Deduct Penalty Failure to file Form 8300, Penalties. Efile 1040nr ez 540nr short Failure to file information returns, Penalties. Efile 1040nr ez 540nr short Failure to furnish correct payee statements, Penalties. Efile 1040nr ez 540nr short Underpayment of tax, Penalty for underpayment of tax. Efile 1040nr ez 540nr short Waiver of, Waiver of penalties. Efile 1040nr ez 540nr short Pension plans, Pension Plans Personal property tax, Personal property tax. Efile 1040nr ez 540nr short Prepaid expense Extends useful life, Prepayment. Efile 1040nr ez 540nr short Rent, Rent paid in advance. Efile 1040nr ez 540nr short Professional fees, Legal and Professional Fees Promissory notes, Promissory notes. Efile 1040nr ez 540nr short Public official, Public official. Efile 1040nr ez 540nr short Punitive damages, Punitive damages. Efile 1040nr ez 540nr short Q Qualified plug-in electric drive motor vehicle credit, Qualified plug-in electric drive motor vehicle credit (Form 8936). Efile 1040nr ez 540nr short Qualified real property business debt, Qualified real property business debt. Efile 1040nr ez 540nr short R Real estate Agent, Real estate agent or direct seller. Efile 1040nr ez 540nr short Dealer, Real estate dealer. Efile 1040nr ez 540nr short Rent, Real Estate Rents Taxes, Real estate taxes. Efile 1040nr ez 540nr short Recovery of items previously deducted, Recovery of items previously deducted. Efile 1040nr ez 540nr short Refund Inquiries, Refund inquiries. Efile 1040nr ez 540nr short Offsets against debts, Offset against debts. Efile 1040nr ez 540nr short Related persons Unreasonable rent, Unreasonable rent. Efile 1040nr ez 540nr short Renewable electricity, refined coal, and Indian coal production credit, Renewable electricity, refined coal, and Indian coal production credit (Form 8835). Efile 1040nr ez 540nr short Rent expense, Rent Expense Rental income, Real Estate Rents Repayment of income, Repayment of income. Efile 1040nr ez 540nr short Reportable transaction disclosure statement, Reminders Reporting self-employment tax, Reporting Self-Employment Tax Restricted property, Restricted property. Efile 1040nr ez 540nr short Retirement plans (see Pension plans) S Salaries, Employees' Pay Sale of a business, Sale of a business. Efile 1040nr ez 540nr short Sale of property, What Is a Disposition of Property? (see also Disposition of property) Sales of assets, Introduction Sales tax, Sales tax. Efile 1040nr ez 540nr short Schedule C, How Do I File? Schedule C-EZ, How Do I File? Schedule SE (Form 1040), Who must pay self-employment tax. Efile 1040nr ez 540nr short Schedule SE, filing requirement, Reporting Self-Employment Tax SE tax About, Self-Employment (SE) Tax Aliens, Aliens. Efile 1040nr ez 540nr short Child employed by parent, Child employed by parent. Efile 1040nr ez 540nr short Church employee, Church employee. Efile 1040nr ez 540nr short Community property income, Community Property Income Deduction for, Self-employment tax. Efile 1040nr ez 540nr short Earning credits, Earning credits in 2013 and 2014. Efile 1040nr ez 540nr short Effects of using an optional method, Effects of using an optional method. Efile 1040nr ez 540nr short Farm optional method, Farm Optional Method Fiscal year filer, Fiscal Year Filer Fishing crew member, Fishing crew member. Efile 1040nr ez 540nr short Gain or loss, Gain or Loss Government employee, State or local government employee. Efile 1040nr ez 540nr short , Foreign government or international organization employee. Efile 1040nr ez 540nr short Joint return, Joint return. Efile 1040nr ez 540nr short Lost income payments, Lost Income Payments Maximum earnings For 2011, What's New for 2013, Maximum earnings subject to SE tax. Efile 1040nr ez 540nr short Subject to, Maximum earnings subject to self-employment tax. Efile 1040nr ez 540nr short Methods for figuring net earnings, Methods for Figuring Net Earnings More than one business, More Than One Business, More than one business. Efile 1040nr ez 540nr short Nonfarm optional method, Nonfarm Optional Method Notary public, Notary public. Efile 1040nr ez 540nr short Optional methods Farm, Farm Optional Method Nonfarm, Nonfarm Optional Method Rate, SE tax rate. Efile 1040nr ez 540nr short Regular method, Regular Method Residing abroad, U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen or resident alien residing abroad. Efile 1040nr ez 540nr short Special rules and exceptions, Special Rules and Exceptions Tax rate, SE tax rate. Efile 1040nr ez 540nr short Time limit for posting income, The Social Security Administration (SSA) time limit for posting self-employment income. Efile 1040nr ez 540nr short Who must pay, Who Must Pay SE Tax? Why use an optional method, Why use an optional method? Section 179 Deduction, Section 179 deduction. Efile 1040nr ez 540nr short Property, Section 179 property. Efile 1040nr ez 540nr short Securities Dealer, Securities dealer. Efile 1040nr ez 540nr short Trader, Securities trader. Efile 1040nr ez 540nr short Self-employed health insurance deduction, Self-employed health insurance deduction. Efile 1040nr ez 540nr short Self-employment tax (see SE tax) Settlement payments, Settlement payments. Efile 1040nr ez 540nr short Short-term capital gain or loss, Is My Capital Gain or Loss Short Term or Long Term? Signature, electronic, Electronic signatures. Efile 1040nr ez 540nr short Small Business Administration, Small Business Administration Small employer health insurance premiums credit, Credit for small employer health insurance premiums (Form 8941). Efile 1040nr ez 540nr short Social security coverage, Social security coverage. Efile 1040nr ez 540nr short Social security number (SSN), Social security number (SSN). Efile 1040nr ez 540nr short Sole proprietor, Sole proprietor. Efile 1040nr ez 540nr short , Sole proprietor or independent contractor. Efile 1040nr ez 540nr short Sport utility vehicle, Section 179 deduction. Efile 1040nr ez 540nr short Standard mileage rate, Standard mileage rate. Efile 1040nr ez 540nr short For 2011, What's New for 2013 Statutory employee, Statutory employee. Efile 1040nr ez 540nr short Suggestions for publication, Comments and suggestions. Efile 1040nr ez 540nr short SUV, Section 179 deduction. Efile 1040nr ez 540nr short T Tax home, Local transportation expenses. Efile 1040nr ez 540nr short , Travel expenses. Efile 1040nr ez 540nr short Tax preparation fees, Tax preparation fees. Efile 1040nr ez 540nr short Tax refund Claim for, Refunds. Efile 1040nr ez 540nr short Offset against debts, Offset against debts. Efile 1040nr ez 540nr short Tax return How to file, How Do I File? Who must file, Do I Have To File an Income Tax Return? Tax year, Accounting Periods Calendar, Calendar tax year. Efile 1040nr ez 540nr short Change in, Change in tax year. Efile 1040nr ez 540nr short Fiscal, Fiscal tax year. Efile 1040nr ez 540nr short Taxes Deduction for, Taxes Employment, Employment Taxes, Employment taxes. Efile 1040nr ez 540nr short Excise, Excise Taxes, Excise taxes. Efile 1040nr ez 540nr short Fuel, Fuel taxes. Efile 1040nr ez 540nr short Income, Income Tax, Income taxes. Efile 1040nr ez 540nr short Paid on certain employee tips, Credit for employer social security and Medicare taxes paid on certain employee tips (Form 8846). Efile 1040nr ez 540nr short Personal property, Personal property tax. Efile 1040nr ez 540nr short Real estate, Real estate taxes. Efile 1040nr ez 540nr short Sales, Sales tax. Efile 1040nr ez 540nr short Self-employment, Self-Employment (SE) Tax, Self-employment tax. Efile 1040nr ez 540nr short Taxpayer rights, Declaration of Taxpayer Rights Third parties, Payments to, Payments to third parties. Efile 1040nr ez 540nr short Tolls, Parking fees and tolls. Efile 1040nr ez 540nr short Trade discount, Trade discounts. Efile 1040nr ez 540nr short , Trade discounts. Efile 1040nr ez 540nr short Trade or business, Trade or business. Efile 1040nr ez 540nr short Trailer park owner, Trailer park owner. Efile 1040nr ez 540nr short Transportation expenses, Local transportation expenses. Efile 1040nr ez 540nr short Travel expenses, Travel expenses. Efile 1040nr ez 540nr short U Underpayment of tax penalty, Penalty for underpayment of tax. Efile 1040nr ez 540nr short Uniform capitalization rules, Uniform Capitalization Rules W Wages, Employees' Pay Work opportunity credit, Work opportunity credit (Form 5884). Efile 1040nr ez 540nr short Prev  Up     Home   More Online Publications
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Understanding your CP567 Notice

We rejected your application for an Individual Taxpayer Identification Number (ITIN). You may not be eligible for an ITIN. Your documents may be invalid. We may not have received a reply when we asked for more information.

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Effective June 22, 2012, the IRS has made interim changes that affect the Individual Taxpayer Identification Number (ITIN) application process. Some of the information below, including the documentation requirements for individuals seeking an ITIN, has been superseded by these changes. Taxpayers and their representatives should review these changes, which are further explained in these Frequently Asked Questions, before requesting an ITIN.


What you need to do

  • Read your notice to see why we rejected your application.
  • Make sure you don't qualify for a Social Security number (SSN) and you qualify for an ITIN.
  • Make sure your documents are correct.
  • Send us the information we've requested.
  • Send us a new application. Fill it out completely. Answer all the questions. Attach the correct documents. Attach copies of your tax return and paperwork to it.

You may want to...


Answers to Common Questions

What is an ITIN?
It is a number for you to use on federal tax documents.

Who needs an ITIN?
A non-citizen who has to file a federal tax return or a tax reporting document and does not qualify for an SSN needs an ITIN.

What happens to the tax return I sent with the application?
We'll process your return without an ITIN. You'll need to reapply for an ITIN and attach a copy of the return to your application to get a refund.

I sent you documents when I applied for an ITIN. When will you return them?
We will return your documents within 60 days from your notice's date. Call us at the number on your notice if you don't receive your documents by then.

Whom can I talk to about my rejection?
You can call the telephone number on the top right corner of the notice.

Do I need to file a new tax return when I reapply?
No. Just attach a copy of it to the application. Indicate it is a copy. Send the application with your paperwork to the address on the notice.

Do I always need to attach a copy of my tax return to my application?
No. Not if you meet one of five exceptions. Read Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number ITIN to see if you meet an exception.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP567, Page 1

Notice CP567, Page 2

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 

Page Last Reviewed or Updated: 14-Mar-2014

The Efile 1040nr Ez 540nr Short

Efile 1040nr ez 540nr short 4. Efile 1040nr ez 540nr short   Foreign Earned Income and Housing: Exclusion – Deduction Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Who Qualifies for the Exclusions and the Deduction? RequirementsTax Home in Foreign Country Bona Fide Residence Test Physical Presence Test Waiver of Time Requirements U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Travel Restrictions Foreign Earned Income Foreign Earned Income ExclusionLimit on Excludable Amount Choosing the Exclusion Foreign Housing Exclusion and DeductionHousing Amount Foreign Housing Exclusion Foreign Housing Deduction Married Couples Form 2555 and Form 2555-EZForm 2555-EZ Form 2555 Topics - This chapter discusses: Who qualifies for the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, The requirements that must be met to claim either exclusion or the deduction, How to figure the foreign earned income exclusion, and How to figure the foreign housing exclusion and the foreign housing deduction. Efile 1040nr ez 540nr short Useful Items - You may want to see: Publication 519 U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Tax Guide for Aliens 570 Tax Guide for Individuals With Income from U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Possessions 596 Earned Income Credit (EIC) Form (and Instructions) 1040X Amended U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Individual Income Tax Return 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion See chapter 7 for information about getting these publications and forms. Efile 1040nr ez 540nr short Who Qualifies for the Exclusions and the Deduction? If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction. Efile 1040nr ez 540nr short If you are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. Efile 1040nr ez 540nr short However, you may qualify to exclude from income up to $97,600 of your foreign earnings. Efile 1040nr ez 540nr short In addition, you can exclude or deduct certain foreign housing amounts. Efile 1040nr ez 540nr short See Foreign Earned Income Exclusion and Foreign Housing Exclusion and Deduction, later. Efile 1040nr ez 540nr short You also may be entitled to exclude from income the value of meals and lodging provided to you by your employer. Efile 1040nr ez 540nr short See Exclusion of Meals and Lodging, later. Efile 1040nr ez 540nr short Requirements To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements. Efile 1040nr ez 540nr short Your tax home must be in a foreign country. Efile 1040nr ez 540nr short You must have foreign earned income. Efile 1040nr ez 540nr short You must be one of the following. Efile 1040nr ez 540nr short A U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Efile 1040nr ez 540nr short A U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Efile 1040nr ez 540nr short A U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen or a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. Efile 1040nr ez 540nr short See Publication 519 to find out if you are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short resident alien for tax purposes and whether you keep that alien status when you temporarily work abroad. Efile 1040nr ez 540nr short If you are a nonresident alien married to a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen or resident alien, and both you and your spouse choose to treat you as a resident alien, you are a resident alien for tax purposes. Efile 1040nr ez 540nr short For information on making the choice, see the discussion in chapter 1 under Nonresident Alien Spouse Treated as a Resident . Efile 1040nr ez 540nr short Waiver of minimum time requirements. Efile 1040nr ez 540nr short   The minimum time requirements for bona fide residence and physical presence can be waived if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Efile 1040nr ez 540nr short This is fully explained under Waiver of Time Requirements , later. Efile 1040nr ez 540nr short   See Figure 4-A and information in this chapter to determine if you are eligible to claim either exclusion or the deduction. Efile 1040nr ez 540nr short Tax Home in Foreign Country To qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, your tax home must be in a foreign country throughout your period of bona fide residence or physical presence abroad. Efile 1040nr ez 540nr short Bona fide residence and physical presence are explained later. Efile 1040nr ez 540nr short Tax Home 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. Efile 1040nr ez 540nr short Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Efile 1040nr ez 540nr short Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. Efile 1040nr ez 540nr short If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live. Efile 1040nr ez 540nr short If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work. Efile 1040nr ez 540nr short You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. Efile 1040nr ez 540nr short However, your abode is not necessarily in the United States while you are temporarily in the United States. Efile 1040nr ez 540nr short Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. Efile 1040nr ez 540nr short “Abode” has been variously defined as one's home, habitation, residence, domicile, or place of dwelling. Efile 1040nr ez 540nr short It does not mean your principal place of business. Efile 1040nr ez 540nr short “Abode” has a domestic rather than a vocational meaning and does not mean the same as “tax home. Efile 1040nr ez 540nr short ” The location of your abode often will depend on where you maintain your economic, family, and personal ties. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You are employed on an offshore oil rig in the territorial waters of a foreign country and work a 28-day on/28-day off schedule. Efile 1040nr ez 540nr short You return to your family residence in the United States during your off periods. Efile 1040nr ez 540nr short You are considered to have an abode in the United States and do not satisfy the tax home test in the foreign country. Efile 1040nr ez 540nr short You cannot claim either of the exclusions or the housing deduction. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short For several years, you were a marketing executive with a producer of machine tools in Toledo, Ohio. Efile 1040nr ez 540nr short In November of last year, your employer transferred you to London, England, for a minimum of 18 months to set up a sales operation for Europe. Efile 1040nr ez 540nr short Before you left, you distributed business cards showing your business and home addresses in London. Efile 1040nr ez 540nr short You kept ownership of your home in Toledo but rented it to another family. Efile 1040nr ez 540nr short You placed your car in storage. Efile 1040nr ez 540nr short In November of last year, you moved your spouse, children, furniture, and family pets to a home your employer rented for you in London. Efile 1040nr ez 540nr short Shortly after moving, you leased a car and you and your spouse got British driving licenses. Efile 1040nr ez 540nr short Your entire family got library cards for the local public library. Efile 1040nr ez 540nr short You and your spouse opened bank accounts with a London bank and secured consumer credit. Efile 1040nr ez 540nr short You joined a local business league and both you and your spouse became active in the neighborhood civic association and worked with a local charity. Efile 1040nr ez 540nr short Your abode is in London for the time you live there. Efile 1040nr ez 540nr short You satisfy the tax home test in the foreign country. Efile 1040nr ez 540nr short Please click here for the text description of the image. Efile 1040nr ez 540nr short Figure 4–A Can I Claim the Exclusion or Deduction? Temporary or Indefinite Assignment The location of your tax home often depends on whether your assignment is temporary or indefinite. Efile 1040nr ez 540nr short If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away-from-home expenses (for travel, meals, and lodging), but you would not qualify for the foreign earned income exclusion. Efile 1040nr ez 540nr short If your new work assignment is for an indefinite period, your new place of employment becomes your tax home and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. Efile 1040nr ez 540nr short If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. Efile 1040nr ez 540nr short If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. Efile 1040nr ez 540nr short If you expect it to last for more than 1 year, it is indefinite. Efile 1040nr ez 540nr short If you expect it to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. Efile 1040nr ez 540nr short Once your expectation changes, it is indefinite. Efile 1040nr ez 540nr short Foreign Country To meet the bona fide residence test or the physical presence test, you must live in or be present in a foreign country. Efile 1040nr ez 540nr short A foreign country includes any territory under the sovereignty of a government other than that of the United States. Efile 1040nr ez 540nr short The term “foreign country” includes the country's airspace and territorial waters, but not international waters and the airspace above them. Efile 1040nr ez 540nr short It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. Efile 1040nr ez 540nr short The term “foreign country” does not include Antarctica or U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short possessions such as Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Virgin Islands, and Johnston Island. Efile 1040nr ez 540nr short For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, the terms “foreign,” “abroad,” and “overseas” refer to areas outside the United States and those areas listed or described in the previous sentence. Efile 1040nr ez 540nr short American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands Residence or presence in a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short possession does not qualify you for the foreign earned income exclusion. Efile 1040nr ez 540nr short You may, however, qualify for an exclusion of your possession income on your U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short return. Efile 1040nr ez 540nr short American Samoa. Efile 1040nr ez 540nr short   There is a possession exclusion available to individuals who are bona fide residents of American Samoa for the entire tax year. Efile 1040nr ez 540nr short Gross income from sources within American Samoa may be eligible for this exclusion. Efile 1040nr ez 540nr short Income that is effectively connected with the conduct of a trade or business within American Samoa also may be eligible for this exclusion. Efile 1040nr ez 540nr short Use Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, to figure the exclusion. Efile 1040nr ez 540nr short Guam and the Commonwealth of the Northern Mariana Islands. Efile 1040nr ez 540nr short   An exclusion will be available to residents of Guam and the Commonwealth of the Northern Mariana Islands if, and when, new implementation agreements take effect between the United States and those possessions. Efile 1040nr ez 540nr short   For more information, see Publication 570. Efile 1040nr ez 540nr short Puerto Rico and U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Virgin Islands Residents of Puerto Rico and the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Virgin Islands cannot claim the foreign earned income exclusion or the foreign housing exclusion. Efile 1040nr ez 540nr short Puerto Rico. Efile 1040nr ez 540nr short   Generally, if you are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen who is a bona fide resident of Puerto Rico for the entire tax year, you are not subject to U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short tax on income from Puerto Rican sources. Efile 1040nr ez 540nr short This does not include amounts paid for services performed as an employee of the United States. Efile 1040nr ez 540nr short However, you are subject to U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short tax on your income from sources outside Puerto Rico. Efile 1040nr ez 540nr short In figuring your U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short tax, you cannot deduct expenses allocable to income not subject to tax. Efile 1040nr ez 540nr short Bona Fide Residence Test You meet the bona fide residence test if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Efile 1040nr ez 540nr short You can use the bona fide residence test to qualify for the exclusions and the deduction only if you are either: A U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen, or A U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect. Efile 1040nr ez 540nr short You do not automatically acquire bona fide resident status merely by living in a foreign country or countries for 1 year. Efile 1040nr ez 540nr short If you go to a foreign country to work on a particular job for a specified period of time, you ordinarily will not be regarded as a bona fide resident of that country even though you work there for 1 tax year or longer. Efile 1040nr ez 540nr short The length of your stay and the nature of your job are only two of the factors to be considered in determining whether you meet the bona fide residence test. Efile 1040nr ez 540nr short Bona fide residence. Efile 1040nr ez 540nr short   To meet the bona fide residence test, you must have established a bona fide residence in a foreign country. Efile 1040nr ez 540nr short   Your bona fide residence is not necessarily the same as your domicile. Efile 1040nr ez 540nr short Your domicile is your permanent home, the place to which you always return or intend to return. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You could have your domicile in Cleveland, Ohio, and a bona fide residence in Edinburgh, Scotland, if you intend to return eventually to Cleveland. Efile 1040nr ez 540nr short The fact that you go to Scotland does not automatically make Scotland your bona fide residence. Efile 1040nr ez 540nr short If you go there as a tourist, or on a short business trip, and return to the United States, you have not established bona fide residence in Scotland. Efile 1040nr ez 540nr short But if you go to Scotland to work for an indefinite or extended period and you set up permanent quarters there for yourself and your family, you probably have established a bona fide residence in a foreign country, even though you intend to return eventually to the United States. Efile 1040nr ez 540nr short You are clearly not a resident of Scotland in the first instance. Efile 1040nr ez 540nr short However, in the second, you are a resident because your stay in Scotland appears to be permanent. Efile 1040nr ez 540nr short If your residency is not as clearly defined as either of these illustrations, it may be more difficult to decide whether you have established a bona fide residence. Efile 1040nr ez 540nr short Determination. Efile 1040nr ez 540nr short   Questions of bona fide residence are determined according to each individual case, taking into account factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad. Efile 1040nr ez 540nr short   To meet the bona fide residence test, you must show the Internal Revenue Service (IRS) that you have been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Efile 1040nr ez 540nr short The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. Efile 1040nr ez 540nr short IRS cannot make this determination until you file Form 2555. Efile 1040nr ez 540nr short Statement to foreign authorities. Efile 1040nr ez 540nr short   You are not considered a bona fide resident of a foreign country if you make a statement to the authorities of that country that you are not a resident of that country, and the authorities: Hold that you are not subject to their income tax laws as a resident, or Have not made a final decision on your status. Efile 1040nr ez 540nr short Special agreements and treaties. Efile 1040nr ez 540nr short   An income tax exemption provided in a treaty or other international agreement will not in itself prevent you from being a bona fide resident of a foreign country. Efile 1040nr ez 540nr short Whether a treaty prevents you from becoming a bona fide resident of a foreign country is determined under all provisions of the treaty, including specific provisions relating to residence or privileges and immunities. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen employed in the United Kingdom by a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short employer under contract with the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Armed Forces. Efile 1040nr ez 540nr short You are not subject to the North Atlantic Treaty Status of Forces Agreement. Efile 1040nr ez 540nr short You may be a bona fide resident of the United Kingdom. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen in the United Kingdom who qualifies as an “employee” of an armed service or as a member of a “civilian component” under the North Atlantic Treaty Status of Forces Agreement. Efile 1040nr ez 540nr short You are not a bona fide resident of the United Kingdom. Efile 1040nr ez 540nr short Example 3. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen employed in Japan by a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short employer under contract with the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Armed Forces. Efile 1040nr ez 540nr short You are subject to the agreement of the Treaty of Mutual Cooperation and Security between the United States and Japan. Efile 1040nr ez 540nr short Being subject to the agreement does not make you a bona fide resident of Japan. Efile 1040nr ez 540nr short Example 4. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen employed as an “official” by the United Nations in Switzerland. Efile 1040nr ez 540nr short You are exempt from Swiss taxation on the salary or wages paid to you by the United Nations. Efile 1040nr ez 540nr short This does not prevent you from being a bona fide resident of Switzerland. Efile 1040nr ez 540nr short Effect of voting by absentee ballot. Efile 1040nr ez 540nr short   If you are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen living abroad, you can vote by absentee ballot in any election held in the United States without risking your status as a bona fide resident of a foreign country. Efile 1040nr ez 540nr short   However, if you give information to the local election officials about the nature and length of your stay abroad that does not match the information you give for the bona fide residence test, the information given in connection with absentee voting will be considered in determining your status, but will not necessarily be conclusive. Efile 1040nr ez 540nr short Uninterrupted period including entire tax year. Efile 1040nr ez 540nr short   To meet the bona fide residence test, you must reside in a foreign country or countries for an uninterrupted period that includes an entire tax year. Efile 1040nr ez 540nr short An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar year basis. Efile 1040nr ez 540nr short   During the period of bona fide residence in a foreign country, you can leave the country for brief or temporary trips back to the United States or elsewhere for vacation or business. Efile 1040nr ez 540nr short To keep your status as a bona fide resident of a foreign country, you must have a clear intention of returning from such trips, without unreasonable delay, to your foreign residence or to a new bona fide residence in another foreign country. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You arrived with your family in Lisbon, Portugal, on November 1, 2011. Efile 1040nr ez 540nr short Your assignment is indefinite, and you intend to live there with your family until your company sends you to a new post. Efile 1040nr ez 540nr short You immediately established residence there. Efile 1040nr ez 540nr short You spent April of 2012 at a business conference in the United States. Efile 1040nr ez 540nr short Your family stayed in Lisbon. Efile 1040nr ez 540nr short Immediately following the conference, you returned to Lisbon and continued living there. Efile 1040nr ez 540nr short On January 1, 2013, you completed an uninterrupted period of residence for a full tax year (2012), and you meet the bona fide residence test. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short Assume the same facts as in Example 1, except that you transferred back to the United States on December 13, 2012. Efile 1040nr ez 540nr short You would not meet the bona fide residence test because your bona fide residence in the foreign country, although it lasted more than a year, did not include a full tax year. Efile 1040nr ez 540nr short You may, however, qualify for the foreign earned income exclusion or the housing exclusion or deduction under the physical presence test (discussed later). Efile 1040nr ez 540nr short Bona fide resident for part of a year. Efile 1040nr ez 540nr short   Once you have established bona fide residence in a foreign country for an uninterrupted period that includes an entire tax year, you are a bona fide resident of that country for the period starting with the date you actually began the residence and ending with the date you abandon the foreign residence. Efile 1040nr ez 540nr short Your period of bona fide residence can include an entire tax year plus parts of 2 other tax years. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You were a bona fide resident of Singapore from March 1, 2011, through September 14, 2013. Efile 1040nr ez 540nr short On September 15, 2013, you returned to the United States. Efile 1040nr ez 540nr short Since you were a bona fide resident of a foreign country for all of 2012, you were also a bona fide resident of a foreign country from March 1, 2011, through the end of 2011 and from January 1, 2013, through September 14, 2013. Efile 1040nr ez 540nr short Reassignment. Efile 1040nr ez 540nr short   If you are assigned from one foreign post to another, you may or may not have a break in foreign residence between your assignments, depending on the circumstances. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You were a resident of Pakistan from October 1, 2012, through November 30, 2013. Efile 1040nr ez 540nr short On December 1, 2013, you and your family returned to the United States to wait for an assignment to another foreign country. Efile 1040nr ez 540nr short Your household goods also were returned to the United States. Efile 1040nr ez 540nr short Your foreign residence ended on November 30, 2013, and did not begin again until after you were assigned to another foreign country and physically entered that country. Efile 1040nr ez 540nr short Since you were not a bona fide resident of a foreign country for the entire tax year of 2012 or 2013 you do not meet the bona fide residence test in either year. Efile 1040nr ez 540nr short You may, however, qualify for the foreign earned income exclusion or the housing exclusion or deduction under the physical presence test, discussed later. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short Assume the same facts as in Example 1, except that upon completion of your assignment in Pakistan you were given a new assignment to Turkey. Efile 1040nr ez 540nr short On December 1, 2013, you and your family returned to the United States for a month's vacation. Efile 1040nr ez 540nr short On January 2, 2014, you arrived in Turkey for your new assignment. Efile 1040nr ez 540nr short Because you did not interrupt your bona fide residence abroad, you meet the bona fide residence test. Efile 1040nr ez 540nr short Physical Presence Test You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. Efile 1040nr ez 540nr short The 330 days do not have to be consecutive. Efile 1040nr ez 540nr short Any U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen or resident alien can use the physical presence test to qualify for the exclusions and the deduction. Efile 1040nr ez 540nr short The physical presence test is based only on how long you stay in a foreign country or countries. Efile 1040nr ez 540nr short This test does not depend on the kind of residence you establish, your intentions about returning, or the nature and purpose of your stay abroad. Efile 1040nr ez 540nr short 330 full days. Efile 1040nr ez 540nr short   Generally, to meet the physical presence test, you must be physically present in a foreign country or countries for at least 330 full days during a 12-month period. Efile 1040nr ez 540nr short You can count days you spent abroad for any reason. Efile 1040nr ez 540nr short You do not have to be in a foreign country only for employment purposes. Efile 1040nr ez 540nr short You can be on vacation. Efile 1040nr ez 540nr short   You do not meet the physical presence test if illness, family problems, a vacation, or your employer's orders cause you to be present for less than the required amount of time. Efile 1040nr ez 540nr short Exception. Efile 1040nr ez 540nr short   You can be physically present in a foreign country or countries for less than 330 full days and still meet the physical presence test if you are required to leave a country because of war or civil unrest. Efile 1040nr ez 540nr short See Waiver of Time Requirements, later. Efile 1040nr ez 540nr short Full day. Efile 1040nr ez 540nr short   A full day is a period of 24 consecutive hours, beginning at midnight. Efile 1040nr ez 540nr short Travel. Efile 1040nr ez 540nr short    When you leave the United States to go directly to a foreign country or when you return directly to the United States from a foreign country, the time you spend on or over international waters does not count toward the 330-day total. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You leave the United States for France by air on June 10. Efile 1040nr ez 540nr short You arrive in France at 9:00 a. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on June 11. Efile 1040nr ez 540nr short Your first full day of physical presence in France is June 12. Efile 1040nr ez 540nr short Passing over foreign country. Efile 1040nr ez 540nr short   If, in traveling from the United States to a foreign country, you pass over a foreign country before midnight of the day you leave, the first day you can count toward the 330-day total is the day following the day you leave the United States. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You leave the United States by air at 9:30 a. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on June 10 to travel to Kenya. Efile 1040nr ez 540nr short You pass over western Africa at 11:00 p. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on June 10 and arrive in Kenya at 12:30 a. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on June 11. Efile 1040nr ez 540nr short Your first full day in a foreign country is June 11. Efile 1040nr ez 540nr short Change of location. Efile 1040nr ez 540nr short   You can move about from one place to another in a foreign country or to another foreign country without losing full days. Efile 1040nr ez 540nr short If any part of your travel is not within any foreign country and takes less than 24 hours, you are considered to be in a foreign country during that part of travel. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You leave Ireland by air at 11:00 p. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on July 6 and arrive in Sweden at 5:00 a. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on July 7. Efile 1040nr ez 540nr short Your trip takes less than 24 hours and you lose no full days. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short You leave Norway by ship at 10:00 p. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on July 6 and arrive in Portugal at 6:00 a. Efile 1040nr ez 540nr short m. Efile 1040nr ez 540nr short on July 8. Efile 1040nr ez 540nr short Since your travel is not within a foreign country or countries and the trip takes more than 24 hours, you lose as full days July 6, 7, and 8. Efile 1040nr ez 540nr short If you remain in Portugal, your next full day in a foreign country is July 9. Efile 1040nr ez 540nr short In United States while in transit. Efile 1040nr ez 540nr short   If you are in transit between two points outside the United States and are physically present in the United States for less than 24 hours, you are not treated as present in the United States during the transit. Efile 1040nr ez 540nr short You are treated as traveling over areas not within any foreign country. Efile 1040nr ez 540nr short    Please click here for the text description of the image. Efile 1040nr ez 540nr short Figure 4-B How to figure the 12-month period. Efile 1040nr ez 540nr short   There are four rules you should know when figuring the 12-month period. Efile 1040nr ez 540nr short Your 12-month period can begin with any day of the month. Efile 1040nr ez 540nr short It ends the day before the same calendar day, 12 months later. Efile 1040nr ez 540nr short Your 12-month period must be made up of consecutive months. Efile 1040nr ez 540nr short Any 12-month period can be used if the 330 days in a foreign country fall within that period. Efile 1040nr ez 540nr short You do not have to begin your 12-month period with your first full day in a foreign country or end it with the day you leave. Efile 1040nr ez 540nr short You can choose the 12-month period that gives you the greatest exclusion. Efile 1040nr ez 540nr short In determining whether the 12-month period falls within a longer stay in the foreign country, 12-month periods can overlap one another. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You are a construction worker who works on and off in a foreign country over a 20-month period. Efile 1040nr ez 540nr short You might pick up the 330 full days in a 12-month period only during the middle months of the time you work in the foreign country because the first few and last few months of the 20-month period are broken up by long visits to the United States. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short You work in New Zealand for a 20-month period from January 1, 2012, through August 31, 2013, except that you spend 28 days in February 2012 and 28 days in February 2013 on vacation in the United States. Efile 1040nr ez 540nr short You are present in New Zealand for at least 330 full days during each of the following two 12-month periods: January 1, 2012 – December 31, 2012 and September 1, 2012 – August 31, 2013. Efile 1040nr ez 540nr short By overlapping the 12-month periods in this way, you meet the physical presence test for the whole 20-month period. Efile 1040nr ez 540nr short See Figure 4-B, on the previous page. Efile 1040nr ez 540nr short Waiver of Time Requirements Both the bona fide residence test and the physical presence test contain minimum time requirements. Efile 1040nr ez 540nr short The minimum time requirements can be waived, however, if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Efile 1040nr ez 540nr short You must be able to show that you reasonably could have expected to meet the minimum time requirements if not for the adverse conditions. Efile 1040nr ez 540nr short To qualify for the waiver, you must actually have your tax home in the foreign country and be a bona fide resident of, or be physically present in, the foreign country on or before the beginning date of the waiver. Efile 1040nr ez 540nr short Early in 2014, the IRS will publish in the Internal Revenue Bulletin a list of the only countries that qualify for the waiver for 2013 and the effective dates. Efile 1040nr ez 540nr short If you left one of the countries on or after the date listed for each country, you can meet the bona fide residence test or physical presence test for 2013 without meeting the minimum time requirement. Efile 1040nr ez 540nr short However, in figuring your exclusion, the number of your qualifying days of bona fide residence or physical presence includes only days of actual residence or presence within the country. Efile 1040nr ez 540nr short U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Travel Restrictions If you are present in a foreign country in violation of U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short law, you will not be treated as a bona fide resident of a foreign country or as physically present in a foreign country while you are in violation of the law. Efile 1040nr ez 540nr short Income that you earn from sources within such a country for services performed during a period of violation does not qualify as foreign earned income. Efile 1040nr ez 540nr short Your housing expenses within that country (or outside that country for housing your spouse or dependents) while you are in violation of the law cannot be included in figuring your foreign housing amount. Efile 1040nr ez 540nr short For 2013, the only country to which travel restrictions applied was Cuba. Efile 1040nr ez 540nr short The restrictions applied for the entire year. Efile 1040nr ez 540nr short However, individuals working at the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Naval Base at Guantanamo Bay in Cuba are not in violation of U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short law. Efile 1040nr ez 540nr short Personal service income earned by individuals at the base is eligible for the foreign earned income exclusion provided the other requirements are met. Efile 1040nr ez 540nr short Foreign Earned Income To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income. Efile 1040nr ez 540nr short Foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements. Efile 1040nr ez 540nr short Your tax home is in a foreign country. Efile 1040nr ez 540nr short You meet either the bona fide residence test or the physical presence test. Efile 1040nr ez 540nr short To determine whether your tax home is in a foreign country, see Tax Home in Foreign Country, earlier. Efile 1040nr ez 540nr short To determine whether you meet either the bona fide residence test or the physical presence test, see Bona Fide Residence Test and Physical Presence Test, earlier. Efile 1040nr ez 540nr short Foreign earned income does not include the following amounts. Efile 1040nr ez 540nr short The value of meals and lodging that you exclude from your income because the meals and lodging were furnished for the convenience of your employer. Efile 1040nr ez 540nr short Pension or annuity payments you receive, including social security benefits (see Pensions and annuities, later). Efile 1040nr ez 540nr short Pay you receive as an employee of the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government. Efile 1040nr ez 540nr short (See U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government Employees, later. Efile 1040nr ez 540nr short ) Amounts you include in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualified annuity contract. Efile 1040nr ez 540nr short Any unallowable moving expense deduction that you choose to recapture as explained under Moving Expense Attributable to Foreign Earnings in 2 Years in chapter 5. Efile 1040nr ez 540nr short Payments you receive after the end of the tax year following the tax year in which you performed the services that earned the income. Efile 1040nr ez 540nr short Earned income. Efile 1040nr ez 540nr short   This is pay for personal services performed, such as wages, salaries, or professional fees. Efile 1040nr ez 540nr short The list that follows classifies many types of income into three categories. Efile 1040nr ez 540nr short The column headed Variable Income lists income that may fall into either the earned income category, the unearned income category, or partly into both. Efile 1040nr ez 540nr short For more information on earned and unearned income, see Earned and Unearned Income, later. Efile 1040nr ez 540nr short Earned Income Unearned Income Variable Income Salaries and wages Dividends Business profits Commissions Interest Royalties Bonuses Capital gains Rents Professional fees Gambling winnings Scholarships and fellowships Tips Alimony     Social security benefits     Pensions     Annuities     In addition to the types of earned income listed, certain noncash income and allowances or reimbursements are considered earned income. Efile 1040nr ez 540nr short Noncash income. Efile 1040nr ez 540nr short   The fair market value of property or facilities provided to you by your employer in the form of lodging, meals, or use of a car is earned income. Efile 1040nr ez 540nr short Allowances or reimbursements. Efile 1040nr ez 540nr short   Earned income includes allowances or reimbursements you receive, such as the following amounts. Efile 1040nr ez 540nr short    Cost-of-living allowances. Efile 1040nr ez 540nr short Overseas differential. Efile 1040nr ez 540nr short Family allowance. Efile 1040nr ez 540nr short Reimbursement for education or education allowance. Efile 1040nr ez 540nr short Home leave allowance. Efile 1040nr ez 540nr short Quarters allowance. Efile 1040nr ez 540nr short Reimbursement for moving or moving allowance (unless excluded from income as discussed later in Reimbursement of employee expenses under Earned and Unearned Income). Efile 1040nr ez 540nr short Source of Earned Income The source of your earned income is the place where you perform the services for which you received the income. Efile 1040nr ez 540nr short Foreign earned income is income you receive for working in a foreign country. Efile 1040nr ez 540nr short Where or how you are paid has no effect on the source of the income. Efile 1040nr ez 540nr short For example, income you receive for work done in Austria is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen, a bona fide resident of Canada, and working as a mining engineer. Efile 1040nr ez 540nr short Your salary is $76,800 per year. Efile 1040nr ez 540nr short You also receive a $6,000 cost-of-living allowance, and a $6,000 education allowance. Efile 1040nr ez 540nr short Your employment contract did not indicate that you were entitled to these allowances only while outside the United States. Efile 1040nr ez 540nr short Your total income is $88,800. Efile 1040nr ez 540nr short You work a 5-day week, Monday through Friday. Efile 1040nr ez 540nr short After subtracting your vacation, you have a total of 240 workdays in the year. Efile 1040nr ez 540nr short You worked in the United States during the year for 6 weeks (30 workdays). Efile 1040nr ez 540nr short The following shows how to figure the part of your income that is for work done in Canada during the year. Efile 1040nr ez 540nr short   Number of days worked in Canada during the year (210) × Total income ($88,800) = $77,700     Number of days of work during the year for which payment was made (240)   Your foreign source earned income is $77,700. Efile 1040nr ez 540nr short Earned and Unearned Income Earned income was defined earlier as pay for personal services performed. Efile 1040nr ez 540nr short Some types of income are not easily identified as earned or unearned income. Efile 1040nr ez 540nr short Some of these types of income are further explained here. Efile 1040nr ez 540nr short Income from a sole proprietorship or partnership. Efile 1040nr ez 540nr short   Income from a business in which capital investment is an important part of producing the income may be unearned income. Efile 1040nr ez 540nr short If you are a sole proprietor or partner and your personal services are also an important part of producing the income, the part of the income that represents the value of your personal services will be treated as earned income. Efile 1040nr ez 540nr short Capital a factor. Efile 1040nr ez 540nr short   If capital investment is an important part of producing income, no more than 30% of your share of the net profits of the business is earned income. Efile 1040nr ez 540nr short   If you have no net profits, the part of your gross profit that represents a reasonable allowance for personal services actually performed is considered earned income. Efile 1040nr ez 540nr short Because you do not have a net profit, the 30% limit does not apply. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen and meet the bona fide residence test. Efile 1040nr ez 540nr short You invest in a partnership based in Cameroon that is engaged solely in selling merchandise outside the United States. Efile 1040nr ez 540nr short You perform no services for the partnership. Efile 1040nr ez 540nr short At the end of the tax year, your share of the net profits is $80,000. Efile 1040nr ez 540nr short The entire $80,000 is unearned income. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short Assume that in Example 1 you spend time operating the business. Efile 1040nr ez 540nr short Your share of the net profits is $80,000; 30% of your share of the profits is $24,000. Efile 1040nr ez 540nr short If the value of your services for the year is $15,000, your earned income is limited to the value of your services, $15,000. Efile 1040nr ez 540nr short Capital not a factor. Efile 1040nr ez 540nr short   If capital is not an income-producing factor and personal services produce the business income, the 30% rule does not apply. Efile 1040nr ez 540nr short The entire amount of business income is earned income. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You and Lou Green are management consultants and operate as equal partners in performing services outside the United States. Efile 1040nr ez 540nr short Because capital is not an income- producing factor, all the income from the partnership is considered earned income. Efile 1040nr ez 540nr short Income from a corporation. Efile 1040nr ez 540nr short   The salary you receive from a corporation is earned income only if it represents a reasonable allowance as compensation for work you do for the corporation. Efile 1040nr ez 540nr short Any amount over what is considered a reasonable salary is unearned income. Efile 1040nr ez 540nr short Example 1. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen and an officer and stockholder of a corporation in Honduras. Efile 1040nr ez 540nr short You perform no work or service of any kind for the corporation. Efile 1040nr ez 540nr short During the tax year you receive a $10,000 “salary” from the corporation. Efile 1040nr ez 540nr short The $10,000 clearly is not for personal services and is unearned income. Efile 1040nr ez 540nr short Example 2. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen and work full time as secretary-treasurer of your corporation. Efile 1040nr ez 540nr short During the tax year you receive $100,000 as salary from the corporation. Efile 1040nr ez 540nr short If $80,000 is a reasonable allowance as pay for the work you did, then $80,000 is earned income. Efile 1040nr ez 540nr short Stock options. Efile 1040nr ez 540nr short   You may have earned income if you disposed of stock that you got by exercising a stock option granted to you under an employee stock purchase plan. Efile 1040nr ez 540nr short   If your gain on the disposition of stock you got by exercising an option is treated as capital gain, your gain is unearned income. Efile 1040nr ez 540nr short   However, if you disposed of the stock less than 2 years after you were granted the option or less than 1 year after you got the stock, part of the gain on the disposition may be earned income. Efile 1040nr ez 540nr short It is considered received in the year you disposed of the stock and earned in the year you performed the services for which you were granted the option. Efile 1040nr ez 540nr short Any part of the earned income that is due to work you did outside the United States is foreign earned income. Efile 1040nr ez 540nr short   See Publication 525, Taxable and Nontaxable Income, for a discussion of the treatment of stock options. Efile 1040nr ez 540nr short Pensions and annuities. Efile 1040nr ez 540nr short    For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, amounts received as pensions or annuities are unearned income. Efile 1040nr ez 540nr short Royalties. Efile 1040nr ez 540nr short   Royalties from the leasing of oil and mineral lands and patents generally are a form of rent or dividends and are unearned income. Efile 1040nr ez 540nr short   Royalties received by a writer are earned income if they are received: For the transfer of property rights of the writer in the writer's product, or Under a contract to write a book or series of articles. Efile 1040nr ez 540nr short Rental income. Efile 1040nr ez 540nr short   Generally, rental income is unearned income. Efile 1040nr ez 540nr short If you perform personal services in connection with the production of rent, up to 30% of your net rental income can be considered earned income. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short Larry Smith, a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen living in Australia, owns and operates a rooming house in Sydney. Efile 1040nr ez 540nr short If he is operating the rooming house as a business that requires capital and personal services, he can consider up to 30% of net rental income as earned income. Efile 1040nr ez 540nr short On the other hand, if he just owns the rooming house and performs no personal services connected with its operation, except perhaps making minor repairs and collecting rents, none of his net income from the house is considered earned income. Efile 1040nr ez 540nr short It is all unearned income. Efile 1040nr ez 540nr short Professional fees. Efile 1040nr ez 540nr short   If you are engaged in a professional occupation (such as a doctor or lawyer), all fees received in the performance of these services are earned income. Efile 1040nr ez 540nr short Income of an artist. Efile 1040nr ez 540nr short   Income you receive from the sale of paintings you created is earned income. Efile 1040nr ez 540nr short Scholarships and fellowships. Efile 1040nr ez 540nr short   Any portion of a scholarship or fellowship grant that is paid to you for teaching, research or other services is considered earned income if you must include it in your gross income. Efile 1040nr ez 540nr short If the payer of the grant is required to provide you with a Form W-2, Wage and Tax Statement, these amounts will be listed as wages. Efile 1040nr ez 540nr short    Certain scholarship and fellowship income may be exempt under other provisions. Efile 1040nr ez 540nr short See Publication 970, Tax Benefits for Education, chapter 1. Efile 1040nr ez 540nr short Use of employer's property or facilities. Efile 1040nr ez 540nr short   If you receive fringe benefits in the form of the right to use your employer's property or facilities, the fair market value of that right is earned income. Efile 1040nr ez 540nr short Fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being required to buy or sell, and both having reasonable knowledge of all the necessary facts. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You are privately employed and live in Japan all year. Efile 1040nr ez 540nr short You are paid a salary of $6,000 a month. Efile 1040nr ez 540nr short You live rent-free in a house provided by your employer that has a fair rental value of $3,000 a month. Efile 1040nr ez 540nr short The house is not provided for your employer's convenience. Efile 1040nr ez 540nr short You report on the calendar-year, cash basis. Efile 1040nr ez 540nr short You received $72,000 salary from foreign sources plus $36,000 fair rental value of the house, or a total of $108,000 of earned income. Efile 1040nr ez 540nr short Reimbursement of employee expenses. Efile 1040nr ez 540nr short   If you are reimbursed under an accountable plan (defined below) for expenses you incur on your employer's behalf and you have adequately accounted to your employer for the expenses, do not include the reimbursement for those expenses in your earned income. Efile 1040nr ez 540nr short   The expenses for which you are reimbursed are not considered allocable (related) to your earned income. Efile 1040nr ez 540nr short If expenses and reimbursement are equal, there is nothing to allocate to excluded income. Efile 1040nr ez 540nr short If expenses are more than the reimbursement, the unreimbursed expenses are considered to have been incurred in producing earned income and must be divided between your excluded and included income in determining the amount of unreimbursed expenses you can deduct. Efile 1040nr ez 540nr short (See chapter 5. Efile 1040nr ez 540nr short ) If the reimbursement is more than the expenses, no expenses remain to be divided between excluded and included income and the excess reimbursement must be included in earned income. Efile 1040nr ez 540nr short   These rules do not apply to the following individuals. Efile 1040nr ez 540nr short Straight-commission salespersons. Efile 1040nr ez 540nr short Employees who have arrangements with their employers under which taxes are not withheld on a percentage of the commissions because the employers consider that percentage to be attributable to the employees' expenses. Efile 1040nr ez 540nr short Accountable plan. Efile 1040nr ez 540nr short   An accountable plan is a reimbursement or allowance arrangement that includes all three of the following rules. Efile 1040nr ez 540nr short The expenses covered under the plan must have a business connection. Efile 1040nr ez 540nr short The employee must adequately account to the employer for these expenses within a reasonable period of time. Efile 1040nr ez 540nr short The employee must return any excess reimbursement or allowance within a reasonable period of time. Efile 1040nr ez 540nr short Reimbursement of moving expenses. Efile 1040nr ez 540nr short   Reimbursement of moving expenses may be earned income. Efile 1040nr ez 540nr short You must include as earned income: Any reimbursements of, or payments for, nondeductible moving expenses, Reimbursements that are more than your deductible expenses and that you do not return to your employer, Any reimbursements made (or treated as made) under a nonaccountable plan (any plan that does not meet the rules listed above for an accountable plan), even if they are for deductible expenses, and Any reimbursement of moving expenses you deducted in an earlier year. Efile 1040nr ez 540nr short This section discusses reimbursements that must be included in earned income. Efile 1040nr ez 540nr short Publication 521, Moving Expenses, discusses additional rules that apply to moving expense deductions and reimbursements. Efile 1040nr ez 540nr short   The rules for determining when the reimbursement is considered earned or where the reimbursement is considered earned may differ somewhat from the general rules previously discussed. Efile 1040nr ez 540nr short   Although you receive the reimbursement in one tax year, it may be considered earned for services performed, or to be performed, in another tax year. Efile 1040nr ez 540nr short You must report the reimbursement as income on your return in the year you receive it, even if it is considered earned during a different year. Efile 1040nr ez 540nr short Move from U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short to foreign country. Efile 1040nr ez 540nr short   If you move from the United States to a foreign country, your moving expense reimbursement is generally considered pay for future services to be performed at the new location. Efile 1040nr ez 540nr short The reimbursement is considered earned solely in the year of the move if you qualify for the exclusion for a period that includes at least 120 days during that tax year. Efile 1040nr ez 540nr short   If you are neither a bona fide resident of nor physically present in a foreign country or countries for a period that includes 120 days during the year of the move, a portion of the reimbursement is considered earned in the year of the move and a portion is considered earned in the year following the year of the move. Efile 1040nr ez 540nr short To figure the amount earned in the year of the move, multiply the reimbursement by a fraction. Efile 1040nr ez 540nr short The numerator (top number) is the number of days in your qualifying period that fall within the year of the move, and the denominator (bottom number) is the total number of days in the year of the move. Efile 1040nr ez 540nr short   The difference between the total reimbursement and the amount considered earned in the year of the move is the amount considered earned in the year following the year of the move. Efile 1040nr ez 540nr short The part earned in each year is figured as shown in the following example. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen working in the United States. Efile 1040nr ez 540nr short You were told in October 2012 that you were being transferred to a foreign country. Efile 1040nr ez 540nr short You arrived in the foreign country on December 15, 2012, and you are a bona fide resident for the remainder of 2012 and all of 2013. Efile 1040nr ez 540nr short Your employer reimbursed you $2,000 in January 2013 for the part of the moving expense that you were not allowed to deduct. Efile 1040nr ez 540nr short Because you did not qualify for the exclusion under the bona fide residence test for at least 120 days in 2012 (the year of the move), the reimbursement is considered pay for services performed in the foreign country for both 2012 and 2013. Efile 1040nr ez 540nr short You figure the part of the reimbursement for services performed in the foreign country in 2012 by multiplying the total reimbursement by a fraction. Efile 1040nr ez 540nr short The fraction is the number of days during which you were a bona fide resident in 2012 (the year of the move) divided by 366. Efile 1040nr ez 540nr short The remaining part of the reimbursement is for services performed in the foreign country in 2013. Efile 1040nr ez 540nr short This computation is used only to determine when the reimbursement is considered earned. Efile 1040nr ez 540nr short You would include the amount of the reimbursement in income in 2013, the year you received it. Efile 1040nr ez 540nr short Move between foreign countries. Efile 1040nr ez 540nr short   If you move between foreign countries, any moving expense reimbursement that you must include in income will be considered earned in the year of the move if you qualify for the foreign earned income exclusion for a period that includes at least 120 days in the year of the move. Efile 1040nr ez 540nr short Move to U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short   If you move to the United States, the moving expense reimbursement that you must include in income is generally considered to be U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short source income. Efile 1040nr ez 540nr short   However, if under either an agreement between you and your employer or a statement of company policy that is reduced to writing before your move to the foreign country, your employer will reimburse you for your move back to the United States regardless of whether you continue to work for the employer, the includible reimbursement is considered compensation for past services performed in the foreign country. Efile 1040nr ez 540nr short The includible reimbursement is considered earned in the year of the move if you qualify for the foreign earned income exclusion for a period that includes at least 120 days during that year. Efile 1040nr ez 540nr short Otherwise, you treat the includible reimbursement as received for services performed in the foreign country in the year of the move and the year immediately before the year of the move. Efile 1040nr ez 540nr short   See the discussion under Move from U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short to foreign country , earlier, to figure the amount of the includible reimbursement considered earned in the year of the move. Efile 1040nr ez 540nr short The amount earned in the year before the year of the move is the difference between the total includible reimbursement and the amount earned in the year of the move. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short citizen employed in a foreign country. Efile 1040nr ez 540nr short You retired from employment with your employer on March 31, 2013, and returned to the United States after having been a bona fide resident of the foreign country for several years. Efile 1040nr ez 540nr short A written agreement with your employer entered into before you went abroad provided that you would be reimbursed for your move back to the United States. Efile 1040nr ez 540nr short In April 2013, your former employer reimbursed you $4,000 for the part of the cost of your move back to the United States that you were not allowed to deduct. Efile 1040nr ez 540nr short Because you were not a bona fide resident of a foreign country or countries for a period that included at least 120 days in 2013 (the year of the move), the includible reimbursement is considered pay for services performed in the foreign country for both 2013 and 2012. Efile 1040nr ez 540nr short You figure the part of the moving expense reimbursement for services performed in the foreign country for 2013 by multiplying the total includible reimbursement by a fraction. Efile 1040nr ez 540nr short The fraction is the number of days of foreign residence during the year (90) divided by the number of days in the year (365). Efile 1040nr ez 540nr short The remaining part of the includible reimbursement is for services performed in the foreign country in 2012. Efile 1040nr ez 540nr short You report the amount of the includible reimbursement in 2013, the year you received it. Efile 1040nr ez 540nr short    In this example, if you met the physical presence test for a period that included at least 120 days in 2013, the moving expense reimbursement would be considered earned entirely in the year of the move. Efile 1040nr ez 540nr short Storage expense reimbursements. Efile 1040nr ez 540nr short   If you are reimbursed for storage expenses, the reimbursement is for services you perform during the period of time for which the storage expenses are incurred. Efile 1040nr ez 540nr short U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government Employees For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, foreign earned income does not include any amounts paid by the United States or any of its agencies to its employees. Efile 1040nr ez 540nr short This includes amounts paid from both appropriated and nonappropriated funds. Efile 1040nr ez 540nr short The following organizations (and other organizations similarly organized and operated under United States Army, Navy, or Air Force regulations) are integral parts of the Armed Forces, agencies, or instrumentalities of the United States. Efile 1040nr ez 540nr short United States Armed Forces exchanges. Efile 1040nr ez 540nr short Commissioned and noncommissioned officers' messes. Efile 1040nr ez 540nr short Armed Forces motion picture services. Efile 1040nr ez 540nr short Kindergartens on foreign Armed Forces installations. Efile 1040nr ez 540nr short Amounts paid by the United States or its agencies to persons who are not their employees may qualify for exclusion or deduction. Efile 1040nr ez 540nr short If you are a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government employee paid by a U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short agency that assigned you to a foreign government to perform specific services for which the agency is reimbursed by the foreign government, your pay is from the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government and does not qualify for exclusion or deduction. Efile 1040nr ez 540nr short If you have questions about whether you are an employee or an independent contractor, get Publication 15-A, Employer's Supplemental Tax Guide. Efile 1040nr ez 540nr short American Institute in Taiwan. Efile 1040nr ez 540nr short   Amounts paid by the American Institute in Taiwan are not foreign earned income for purposes of the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction. Efile 1040nr ez 540nr short If you are an employee of the American Institute in Taiwan, allowances you receive are exempt from U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short tax up to the amount that equals tax-exempt allowances received by civilian employees of the U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government. Efile 1040nr ez 540nr short Allowances. Efile 1040nr ez 540nr short   Cost-of-living and foreign-area allowances paid under certain acts of Congress to U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short civilian officers and employees stationed in Alaska and Hawaii or elsewhere outside the 48 contiguous states and the District of Columbia can be excluded from gross income. Efile 1040nr ez 540nr short Post differentials are wages that must be included in gross income, regardless of the act of Congress under which they are paid. Efile 1040nr ez 540nr short More information. Efile 1040nr ez 540nr short   Publication 516, U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government Civilian Employees Stationed Abroad, has more information for U. Efile 1040nr ez 540nr short S. Efile 1040nr ez 540nr short Government employees abroad. Efile 1040nr ez 540nr short Exclusion of Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. Efile 1040nr ez 540nr short The meals are furnished: On the business premises of your employer, and For the convenience of your employer. Efile 1040nr ez 540nr short The lodging is furnished: On the business premises of your employer, For the convenience of your employer, and As a condition of your employment. Efile 1040nr ez 540nr short If these conditions are met, do not include the value of the meals or lodging in your income, even if a law or your employment contract says that they are provided as compensation. Efile 1040nr ez 540nr short Amounts you do not include in income because of these rules are not foreign earned income. Efile 1040nr ez 540nr short If you receive a Form W-2, excludable amounts should not be included in the total reported in box 1 as wages. Efile 1040nr ez 540nr short Family. Efile 1040nr ez 540nr short   Your family, for this purpose, includes only your spouse and your dependents. Efile 1040nr ez 540nr short Lodging. Efile 1040nr ez 540nr short   The value of lodging includes the cost of heat, electricity, gas, water, sewer service, and similar items needed to make the lodging fit to live in. Efile 1040nr ez 540nr short Business premises of employer. Efile 1040nr ez 540nr short   Generally, the business premises of your employer is wherever you work. Efile 1040nr ez 540nr short For example, if you work as a housekeeper, meals and lodging provided in your employer's home are provided on the business premises of your employer. Efile 1040nr ez 540nr short Similarly, meals provided to cowhands while herding cattle on land leased or owned by their employer are considered provided on the premises of their employer. Efile 1040nr ez 540nr short Convenience of employer. Efile 1040nr ez 540nr short   Whether meals or lodging are provided for your employer's convenience must be determined from all the facts and circumstances. Efile 1040nr ez 540nr short Meals furnished at no charge are considered provided for your employer's convenience if there is a good business reason for providing them, other than to give you more pay. Efile 1040nr ez 540nr short   On the other hand, if your employer provides meals to you or your family as a means of giving you more pay, and there is no other business reason for providing them, their value is extra income to you because they are not furnished for the convenience of your employer. Efile 1040nr ez 540nr short Condition of employment. Efile 1040nr ez 540nr short   Lodging is provided as a condition of employment if you must accept the lodging to properly carry out the duties of your job. Efile 1040nr ez 540nr short You must accept lodging to properly carry out your duties if, for example, you must be available for duty at all times or you could not perform your duties if the lodging was not furnished. Efile 1040nr ez 540nr short Foreign camps. Efile 1040nr ez 540nr short   If the lodging is in a camp located in a foreign country, the camp is considered part of your employer's business premises. Efile 1040nr ez 540nr short The camp must be: Provided for your employer's convenience because the place where you work is in a remote area where satisfactory housing is not available to you on the open market within a reasonable commuting distance, Located as close as reasonably possible in the area where you work, and Provided in a common area or enclave that is not available to the general public for lodging or accommodations and that normally houses at least ten employees. Efile 1040nr ez 540nr short Foreign Earned Income Exclusion If your tax home is in a foreign country and you meet the bona fide residence test or the physical presence test, you can choose to exclude from your income a limited amount of your foreign earned income. Efile 1040nr ez 540nr short Foreign earned income was defined earlier in this chapter. Efile 1040nr ez 540nr short You also can choose to exclude from your income a foreign housing amount. Efile 1040nr ez 540nr short This is explained later under Foreign Housing Exclusion. Efile 1040nr ez 540nr short If you choose to exclude a foreign housing amount, you must figure the foreign housing exclusion before you figure the foreign earned income exclusion. Efile 1040nr ez 540nr short Your foreign earned income exclusion is limited to your foreign earned income minus your foreign housing exclusion. Efile 1040nr ez 540nr short If you choose to exclude foreign earned income, you cannot deduct, exclude, or claim a credit for any item that can be allocated to or charged against the excluded amounts. Efile 1040nr ez 540nr short This includes any expenses, losses, and other normally deductible items allocable to the excluded income. Efile 1040nr ez 540nr short For more information about deductions and credits, see chapter 5 . Efile 1040nr ez 540nr short Limit on Excludable Amount You may be able to exclude up to $97,600 of your foreign earned income in 2013. Efile 1040nr ez 540nr short You cannot exclude more than the smaller of: $97,600, or Your foreign earned income (discussed earlier) for the tax year minus your foreign housing exclusion (discussed later). Efile 1040nr ez 540nr short If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion. Efile 1040nr ez 540nr short You do not both need to meet the same test. Efile 1040nr ez 540nr short Together, you and your spouse can exclude as much as $195,200. Efile 1040nr ez 540nr short Paid in year following work. Efile 1040nr ez 540nr short   Generally, you are considered to have earned income in the year in which you do the work for which you receive the income, even if you work in one year but are not paid until the following year. Efile 1040nr ez 540nr short If you report your income on a cash basis, you report the income on your return for the year you receive it. Efile 1040nr ez 540nr short If you work one year, but are not paid for that work until the next year, the amount you can exclude in the year you are paid is the amount you could have excluded in the year you did the work if you had been paid in that year. Efile 1040nr ez 540nr short For an exception to this general rule, see Year-end payroll period, later. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You were a bona fide resident of Brazil for all of 2012 and 2013. Efile 1040nr ez 540nr short You report your income on the cash basis. Efile 1040nr ez 540nr short In 2012, you were paid $84,200 for work you did in Brazil during that year. Efile 1040nr ez 540nr short You excluded all of the $84,200 from your income in 2012. Efile 1040nr ez 540nr short In 2013, you were paid $117,300 for your work in Brazil. Efile 1040nr ez 540nr short $18,800 was for work you did in 2012 and $98,500 was for work you did in 2013. Efile 1040nr ez 540nr short You can exclude $10,900 of the $18,800 from your income in 2013. Efile 1040nr ez 540nr short This is the $95,100 maximum exclusion in 2012 minus the $84,200 actually excluded that year. Efile 1040nr ez 540nr short You must include the remaining $7,900 in income in 2013 because you could not have excluded that income in 2012 if you had received it that year. Efile 1040nr ez 540nr short You can exclude $97,600 of the $98,500 you were paid for work you did in 2013 from your 2013 income. Efile 1040nr ez 540nr short Your total foreign earned income exclusion for 2013 is $108,500 ($10,900 for work you did in 2012 and $97,600 for work you did in 2013). Efile 1040nr ez 540nr short You would include in your 2013 income $8,800 ($7,900 for the work you did in 2012 and $900 for the work you did in 2013). Efile 1040nr ez 540nr short Year-end payroll period. Efile 1040nr ez 540nr short   There is an exception to the general rule that income is considered earned in the year you do the work for which you receive the income. Efile 1040nr ez 540nr short If you are a cash-basis taxpayer, any salary or wage payment you receive after the end of the year in which you do the work for which you receive the pay is considered earned entirely in the year you receive it if all four of the following apply. Efile 1040nr ez 540nr short The period for which the payment is made is a normal payroll period of your employer that regularly applies to you. Efile 1040nr ez 540nr short The payroll period includes the last day of your tax year (December 31 if you figure your taxes on a calendar-year basis). Efile 1040nr ez 540nr short The payroll period is not longer than 16 days. Efile 1040nr ez 540nr short The payday comes at the same time in relation to the payroll period that it would normally come and it comes before the end of the next payroll period. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You are paid twice a month. Efile 1040nr ez 540nr short For the normal payroll period that begins on the first of the month and ends on the fifteenth of the month, you are paid on the sixteenth day of the month. Efile 1040nr ez 540nr short For the normal payroll period that begins on the sixteenth of the month and ends on the last day of the month, you are paid on the first day of the following month. Efile 1040nr ez 540nr short Because all of the above conditions are met, the pay you received on January 1, 2013, is considered earned in 2013. Efile 1040nr ez 540nr short Income earned over more than 1 year. Efile 1040nr ez 540nr short   Regardless of when you actually receive income, you must apply it to the year in which you earned it in figuring your excludable amount for that year. Efile 1040nr ez 540nr short For example, a bonus may be based on work you did over several years. Efile 1040nr ez 540nr short You determine the amount of the bonus that is considered earned in a particular year in two steps. Efile 1040nr ez 540nr short Divide the bonus by the number of calendar months in the period when you did the work that resulted in the bonus. Efile 1040nr ez 540nr short Multiply the result of (1) by the number of months you did the work during the year. Efile 1040nr ez 540nr short This is the amount that is subject to the exclusion limit for that tax year. Efile 1040nr ez 540nr short Income received more than 1 year after it was earned. Efile 1040nr ez 540nr short   You cannot exclude income you receive after the end of the year following the year you do the work to earn it. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short   You were a bona fide resident of Sweden for 2011, 2012, and 2013. Efile 1040nr ez 540nr short You report your income on the cash basis. Efile 1040nr ez 540nr short In 2011, you were paid $69,000 for work you did in Sweden that year and in 2012 you were paid $74,000 for that year's work in Sweden. Efile 1040nr ez 540nr short You excluded all the income on your 2011 and 2012 returns. Efile 1040nr ez 540nr short   In 2013, you were paid $92,000; $82,000 for your work in Sweden during 2013, and $10,000 for work you did in Sweden in 2011. Efile 1040nr ez 540nr short You cannot exclude any of the $10,000 for work done in 2011 because you received it after the end of the year following the year in which you earned it. Efile 1040nr ez 540nr short You must include the $10,000 in income. Efile 1040nr ez 540nr short You can exclude all of the $82,000 received for work you did in 2013. Efile 1040nr ez 540nr short Community income. Efile 1040nr ez 540nr short   The maximum exclusion applies separately to the earnings of spouses. Efile 1040nr ez 540nr short Ignore any community property laws when you figure your limit on the foreign earned income exclusion. Efile 1040nr ez 540nr short Part-year exclusion. Efile 1040nr ez 540nr short   If the period for which you qualify for the foreign earned income exclusion includes only part of the year, you must adjust the maximum limit based on the number of qualifying days in the year. Efile 1040nr ez 540nr short The number of qualifying days is the number of days in the year within the period on which you both: Have your tax home in a foreign country, and Meet either the bona fide residence test or the physical presence test. Efile 1040nr ez 540nr short   For this purpose, you can count as qualifying days all days within a period of 12 consecutive months once you are physically present and have your tax home in a foreign country for 330 full days. Efile 1040nr ez 540nr short To figure your maximum exclusion, multiply the maximum excludable amount for the year by the number of your qualifying days in the year, and then divide the result by the number of days in the year. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You report your income on the calendar-year basis and you qualified for the foreign earned income exclusion under the bona fide residence test for 75 days in 2013. Efile 1040nr ez 540nr short You can exclude a maximum of 75/365 of $97,600, or $20,055, of your foreign earned income for 2013. Efile 1040nr ez 540nr short If you qualify under the bona fide residence test for all of 2014, you can exclude your foreign earned income up to the 2014 limit. Efile 1040nr ez 540nr short Physical presence test. Efile 1040nr ez 540nr short   Under the physical presence test, a 12-month period can be any period of 12 consecutive months that includes 330 full days. Efile 1040nr ez 540nr short If you qualify for the foreign earned income exclusion under the physical presence test for part of a year, it is important to carefully choose the 12-month period that will allow the maximum exclusion for that year. Efile 1040nr ez 540nr short Example. Efile 1040nr ez 540nr short You are physically present and have your tax home in a foreign country for a 16-month period from June 1, 2012, through September 30, 2013, except for 16 days in December 2012 when you were on vacation in the United States. Efile 1040nr ez 540nr short You figure the maximum exclusion for 2012 as follows. Efile 1040nr ez 540nr short Beginning with June 1, 2012, count forward 330 full days. Efile 1040nr ez 540nr short Do not count the 16 days you spent in the United States. Efile 1040nr ez 540nr short The 330th day, May 12, 2013, is the last day of a 12-month period. Efile 1040nr ez 540nr short Count backward 12 months from May 11, 2013, to find the first day of this 12-month period, May 12, 2012. Efile 1040nr ez 540nr short This 12-month period runs from May 12, 2012, through May 11, 2013. Efile 1040nr ez 540nr short Count the total days during 2012 that fall within this 12-month period. Efile 1040nr ez 540nr short This is 234 days (May 12, 2012 – December 31, 2012). Efile 1040nr ez 540nr short Multiply $95,100 (the maximum exclusion for 2012) by the fraction 234/366 to find your maximum exclusion for 2012 ($60,802). Efile 1040nr ez 540nr short You figure the maximum exclusion for 2013 in the opposite manner. Efile 1040nr ez 540nr short Beginning with your last full day, September 30, 2013, count backward 330 full days. Efile 1040nr ez 540nr short Do not count the 16 days you spent in the United States. Efile 1040nr ez 540nr short That day, October 20, 2012, is the first day of a 12-month period. Efile 1040nr ez 540nr short Count forward 12 months from October 20, 2012, to find the last day of this 12-month period, October 19, 2013. Efile 1040nr ez 540nr short This 12-month period runs from October 20, 2012, through October 19, 2013. Efile 1040nr ez 540nr short Count the total days during 2013 that fall within this 12-month period. Efile 1040nr ez 540nr short This is 292 days (January 1, 2013 – October 19, 2013). Efile 1040nr ez 540nr short Multiply $97,600, the maximum limit, by the fraction 292/365 to find your maximum exclusion for 2013 ($78,080). Efile 1040nr ez 540nr short Choosing the Exclusion The foreign earned income exclusion is voluntary. Efile 1040nr ez 540nr short You can choose the exclusion by completing the appropriate parts of Form 2555. Efile 1040nr ez 540nr short When You Can Choose the Exclusion Your initial choice of the exclusion on Form 2555 or Form 2555-EZ generally must be made with one of the following returns. Efile 1040nr ez 540nr short A return filed by the due date (including any extensions). Efile 1040nr ez 540nr short A return amending a timely-filed return. Efile 1040nr ez 540nr short Amended returns generally must be filed by the later of 3 years after the filing date of the original return or 2 years after the tax is paid. Efile 1040nr ez 540nr short A return filed within 1 year from the original due date of the return (determined without regard to any extensions). Efile 1040nr ez 540nr short Filing after the above periods. Efile 1040nr ez 540nr short   You can choose the exclusion on a return filed after the periods described above if you owe no federal income tax after taking into account the exclusion. Efile 1040nr ez 540nr short If you owe federal income tax after taking into account the exclusion, you can choose the exclusion on a return filed after the periods described earlier if you file before the IRS discovers that you failed to choose the exclusion. Efile 1040nr ez 540nr short Whether or not you owe federal income tax after taking the exclusion into account, if you file your return after the periods described earlier, you must type or legibly print at the top of the first page of the Form 1040 “Filed pursuant to section 1. Efile 1040nr ez 540nr short 911-7(a)(2)(i)(D). Efile 1040nr ez 540nr short ” If you owe federal income tax after taking into account the foreign earned income exclusion and the IRS discovered that you failed to choose the exclusion, you may still be able to choose the exclusion. Efile 1040nr ez 540nr short You must request a private letter ruling under Income Tax Regulation 301. Efile 1040nr ez 540nr short 9100-3 and Revenue Procedure 2013-1, 2013-1 I. Efile 1040nr ez 540nr short R. Efile 1040nr ez 540nr short B. Efile 1040nr ez 540nr short 1, available at www. Efile 1040nr ez 540nr short irs. Efile 1040nr ez 540nr short gov/irb/2013-01_IRB/ar06. Efile 1040nr ez 540nr short html. Efile 1040nr ez 540nr short Effect of Choosing the Exclusion Once you choose to exclude your foreign earned income, that choice remains in effect for that year and all later years unless you revoke it. Efile 1040nr ez 540nr short Foreign tax credit or deduction. Efile 1040nr ez 540nr short