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

When shopping for a home mortgage make sure you obtain all the relevant information:

  • Research current interest rates. Check the real estate section of your local newspaper, use the Internet, or call at least six lenders for information.
  • Check the rates for 30-year, 20-year and 15-year mortgages. You may be able to save thousands of dollars in interest charges by getting the shortest-term mortgage you can afford.
  • Ask for details on the same loan amount, loan term, and type of loan from multiple lenders so that you can compare the information. Be sure to get the Annual Percentage Rate (APR), which takes into account not only the interest rate but also points, broker fees, and other credit charges expressed as a yearly rate.
  • Ask whether the rate is fixed or adjustable. The interest rate on adjustable rate mortgage loans (ARMs) can vary a great deal over the lifetime of the mortgage. An increase of several percentage points might raise payments by hundreds of dollars per month.
  • If a loan has an adjustable rate, ask when and how the rate and loan payment could change.
  • Find out how much down payment is required. Some lenders require 20% of the home's purchase price as a down payment. But many lenders now offer loans that require less. In these cases, you may be required to purchase private mortgage insurance (PMI) to protect the lender if you fall behind on payments.
  • If PMI is required, ask what the total cost of the insurance will be. How much will the monthly mortgage payment be when the PMI premium is added and how long you will be required to carry PMI?
  • Ask if you can pay off the loan early and if there is a penalty for doing so.

There is a long list of sources for mortgages loans: mortgage banks, mortgage brokers, banks, thrifts and credit unions, home builders, real estate agencies and Internet lenders.

Tips for Working with Lenders

  • Get recommendations: Ask friends and family members for suggestions, especially if they've recently obtained a loan.
  • Check credentials: Mortgage bankers are regulated by either your state's department of banking or division of real estate. Check with the one appropriate to your state to see if a lender is in good professional standing. Mortgage brokers may be state regulated or not. If not, check with the local chapter of the National Association of Mortgage Brokers or the Better Business Bureau to see if their record is clean.
  • Do your homework: Learn about typical mortgages and ask questions when something looks amiss; a broker may be trying to pad closing costs or other fees at your expense.
  • Take care online: There are plenty of attractive deals online, but first make sure you're dealing with a reliable broker or lender.

If you're working with a broker, the National Consumer Law Center recommends you demand to know how much the broker is making from the lender as well as from any fees you might be paying. It's best to get this information upfront and in writing. Avoid a broker who is double-dipping-getting a fat premium from the lender, as well as fees from you.

The Real Estate Settlement Procedures Act (RESPA) requires lenders to give you information on all closing costs and escrow account practices. Any business relationships between the lender and closing service providers or other parties to the transaction must also be disclosed. Many of the fees are negotiable. More information is available from the Federal Trade Commission, the Federal Reserve Board, and the Department of Housing and Urban Development.

For more information on home buying and mortgages, visit Fannie Mae's website or call 202-752-7000.

The File 1040nr Ez Online

File 1040nr ez online Publication 971 - Introductory Material Table of Contents What's New IntroductionOrdering forms and publications. File 1040nr ez online Questions about innocent spouse relief. File 1040nr ez online Useful Items - You may want to see: What's New Expanded filing deadline for equitable relief. File 1040nr ez online  The period of time in which you may request equitable relief has been expanded. File 1040nr ez online See How To Request Relief later. File 1040nr ez online More information. File 1040nr ez online   For more information about the latest developments on Publication 971, go to www. File 1040nr ez online irs. File 1040nr ez online gov/pub971. File 1040nr ez online Introduction When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. File 1040nr ez online This is called joint and several liability. File 1040nr ez online Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due, even if the additional tax is due to income, deductions, or credits of your spouse or former spouse. File 1040nr ez online You remain jointly and severally liable for the taxes, and the IRS still can collect from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax. File 1040nr ez online In some cases, a spouse (or former spouse) will be relieved of the tax, interest, and penalties on a joint tax return. File 1040nr ez online Three types of relief are available to married persons who filed joint returns. File 1040nr ez online Innocent spouse relief. File 1040nr ez online Separation of liability relief. File 1040nr ez online Equitable relief. File 1040nr ez online Married persons who did not file joint returns, but who live in community property states, may also qualify for relief. File 1040nr ez online See Community Property Laws , later. File 1040nr ez online This publication explains these types of relief, who may qualify for them, and how to get them. File 1040nr ez online You can also use the Innocent Spouse Tax Relief Eligibility Explorer at IRS. File 1040nr ez online gov by entering “Innocent Spouse” in the search box. File 1040nr ez online What this publication does not cover. File 1040nr ez online   This publication does not discuss injured spouse relief. File 1040nr ez online You are an injured spouse if your share of the overpayment shown on your joint return was, or is expected to be, applied (offset) against your spouse's legally enforceable past-due federal taxes, state income taxes, state unemployment compensation debts, child or spousal support payments, or a federal nontax debt, such as a student loan. File 1040nr ez online If you are an injured spouse, you may be entitled to receive a refund of your share of the overpayment. File 1040nr ez online For more information, see Form 8379, Injured Spouse Allocation. File 1040nr ez online Comments and suggestions. File 1040nr ez online   We welcome your comments about this publication and your suggestions for future editions. File 1040nr ez online   You can write to us at the following address:  Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. File 1040nr ez online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File 1040nr ez online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File 1040nr ez online   You can email us at taxforms@irs. File 1040nr ez online gov. File 1040nr ez online Please put “Publications Comment” on the subject line. File 1040nr ez online You can also send us comments from www. File 1040nr ez online irs. File 1040nr ez online gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. File 1040nr ez online ”   Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products. File 1040nr ez online Ordering forms and publications. File 1040nr ez online   Visit www. File 1040nr ez online irs. File 1040nr ez online gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. File 1040nr ez online  Internal Revenue Service 1201 N. File 1040nr ez online Mitsubishi Motorway Bloomington, IL 61705-6613 Questions about innocent spouse relief. File 1040nr ez online The IRS can help you with your request for innocent spouse relief. File 1040nr ez online If you are working with an IRS employee, you can ask that employee, or you can call 866-897-4270. File 1040nr ez online Useful Items - You may want to see: Publications 504 Divorced or Separated Individuals 555 Community Property 556 Examination of Returns, Appeal Rights, and Claims for Refund 594 The IRS Collection Process Forms (and Instructions) 8857 Request for Innocent Spouse Relief Prev  Up  Next   Home   More Online Publications