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Free Sites For Filing State Income Taxes

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Free Sites For Filing State Income Taxes

Free sites for filing state income taxes Publication 929 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics This image is too large to be displayed in the current screen. Free sites for filing state income taxes Please click the link to view the image. Free sites for filing state income taxes Form 1040A, page 1, for Joshua A. Free sites for filing state income taxes Blake This image is too large to be displayed in the current screen. Free sites for filing state income taxes Please click the link to view the image. Free sites for filing state income taxes Form 1040A, page 2, for Joshua A. Free sites for filing state income taxes Blake This image is too large to be displayed in the current screen. Free sites for filing state income taxes Please click the link to view the image. Free sites for filing state income taxes Form 8615 for Joshua A. Free sites for filing state income taxes Blake Filled-in Qualified Dividends and Capital Gain Tax Worksheet #1 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. Free sites for filing state income taxes Enter the amount from Form 1040A, line 27 1. Free sites for filing state income taxes 48,800*       2. Free sites for filing state income taxes Enter the amount from Form 1040A, line 9b 2. Free sites for filing state income taxes 300*           3. Free sites for filing state income taxes Enter the amount from Form 1040A, line 10 3. Free sites for filing state income taxes 200*           4. Free sites for filing state income taxes Add lines 2 and 3 4. Free sites for filing state income taxes 500       5. Free sites for filing state income taxes Subtract line 4 from line 1. Free sites for filing state income taxes If zero or less, enter -0- 5. Free sites for filing state income taxes 48,300       6. Free sites for filing state income taxes Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying widow(er),   or 6. Free sites for filing state income taxes 48,800*         $48,600 if head of household. Free sites for filing state income taxes                   7. Free sites for filing state income taxes Enter the smaller of line 5 or line 6 7. Free sites for filing state income taxes 48,300       8. Free sites for filing state income taxes Subtract line 7 from line 6. Free sites for filing state income taxes This amount is taxed at 0% 8. Free sites for filing state income taxes   500       9. Free sites for filing state income taxes Enter the smaller of line 1 or line 4 9. Free sites for filing state income taxes 500       10. Free sites for filing state income taxes Enter the amount from line 8 10. Free sites for filing state income taxes   500       11. Free sites for filing state income taxes Subtract line 10 from line 9 11. Free sites for filing state income taxes  -0-       12. Free sites for filing state income taxes Multiply line 11 by 15% (. Free sites for filing state income taxes 15) 12. Free sites for filing state income taxes -0-   13. Free sites for filing state income taxes Use the Tax Table to figure the tax on the amount on line 5. Free sites for filing state income taxes Enter the tax here 13. Free sites for filing state income taxes 6,356   14. Free sites for filing state income taxes Add lines 12 and 13 14. Free sites for filing state income taxes 6,356   15. Free sites for filing state income taxes Use the Tax Table to figure the tax on the amount on line 1. Free sites for filing state income taxes Enter the tax here 15. Free sites for filing state income taxes 6,431   16. Free sites for filing state income taxes Tax on all taxable income. Free sites for filing state income taxes Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. Free sites for filing state income taxes 6,356       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 9 tax in the Form 8615 instructions. Free sites for filing state income taxes Filled-in Qualified Dividends and Capital Gain Tax Worksheet #2 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. Free sites for filing state income taxes Enter the amount from Form 1040A, line 27 1. Free sites for filing state income taxes 1,650*       2. Free sites for filing state income taxes Enter the amount from Form 1040A, line 9b 2. Free sites for filing state income taxes 750*           3. Free sites for filing state income taxes Enter the amount from Form 1040A, line 10 3. Free sites for filing state income taxes 500*           4. Free sites for filing state income taxes Add lines 2 and 3 4. Free sites for filing state income taxes 1,250       5. Free sites for filing state income taxes Subtract line 4 from line 1. Free sites for filing state income taxes If zero or less, enter -0- 5. Free sites for filing state income taxes  400       6. Free sites for filing state income taxes Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. Free sites for filing state income taxes 1,650*         $48,600 if head of household. Free sites for filing state income taxes                   7. Free sites for filing state income taxes Enter the smaller of line 5 or line 6 7. Free sites for filing state income taxes   400       8. Free sites for filing state income taxes Subtract line 7 from line 6. Free sites for filing state income taxes This amount is taxed at 0% 8. Free sites for filing state income taxes 1,250       9. Free sites for filing state income taxes Enter the smaller of line 1 or line 4 9. Free sites for filing state income taxes 1,250       10. Free sites for filing state income taxes Enter the amount from line 8 10. Free sites for filing state income taxes 1,250       11. Free sites for filing state income taxes Subtract line 10 from line 9 11. Free sites for filing state income taxes -0-       12. Free sites for filing state income taxes Multiply line 11 by 15% (. Free sites for filing state income taxes 15) 12. Free sites for filing state income taxes -0-   13. Free sites for filing state income taxes Use the Tax Table to figure the tax on the amount on line 5. Free sites for filing state income taxes Enter the tax here 13. Free sites for filing state income taxes 41*   14. Free sites for filing state income taxes Add lines 12 and 13 14. Free sites for filing state income taxes 41   15. Free sites for filing state income taxes Use the Tax Table to figure the tax on the amount on line 1. Free sites for filing state income taxes Enter the tax here 15. Free sites for filing state income taxes 166*   16. Free sites for filing state income taxes Tax on all taxable income. Free sites for filing state income taxes Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. Free sites for filing state income taxes 41       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 15 tax in the Form 8615 instructions. Free sites for filing state income taxes Filled-in Qualified Dividends and Capital Gain Tax Worksheet #3 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. Free sites for filing state income taxes Enter the amount from Form 1040A, line 27 1. Free sites for filing state income taxes 2,450       2. Free sites for filing state income taxes Enter the amount from Form 1040A, line 9b 2. Free sites for filing state income taxes 1,050           3. Free sites for filing state income taxes Enter the amount from Form 1040A, line 10 3. Free sites for filing state income taxes 700           4. Free sites for filing state income taxes Add lines 2 and 3 4. Free sites for filing state income taxes 1,750       5. Free sites for filing state income taxes Subtract line 4 from line 1. Free sites for filing state income taxes If zero or less, enter -0- 5. Free sites for filing state income taxes    700       6. Free sites for filing state income taxes Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. Free sites for filing state income taxes 2,450         $48,600 if head of household. Free sites for filing state income taxes                   7. Free sites for filing state income taxes Enter the smaller of line 5 or line 6 7. Free sites for filing state income taxes  700       8. Free sites for filing state income taxes Subtract line 7 from line 6. Free sites for filing state income taxes This amount is taxed at 0% 8. Free sites for filing state income taxes 1,750       9. Free sites for filing state income taxes Enter the smaller of line 1 or line 4 9. Free sites for filing state income taxes 1,750       10. Free sites for filing state income taxes Enter the amount from line 8 10. Free sites for filing state income taxes 1,750       11. Free sites for filing state income taxes Subtract line 10 from line 9 11. Free sites for filing state income taxes -0-       12. Free sites for filing state income taxes Multiply line 11 by 15% (. Free sites for filing state income taxes 15) 12. Free sites for filing state income taxes -0-   13. Free sites for filing state income taxes Use the Tax Table to figure the tax on the amount on line 5. Free sites for filing state income taxes Enter the tax here 13. Free sites for filing state income taxes  71   14. Free sites for filing state income taxes Add lines 12 and 13 14. Free sites for filing state income taxes  71   15. Free sites for filing state income taxes Use the Tax Table to figure the tax on the amount on line 1. Free sites for filing state income taxes Enter the tax here 15. Free sites for filing state income taxes 246   16. Free sites for filing state income taxes Tax on all taxable income. Free sites for filing state income taxes Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. Free sites for filing state income taxes  71         How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Free sites for filing state income taxes Free help with your tax return. Free sites for filing state income taxes   You can get free help preparing your return nationwide from IRS-certified volunteers. Free sites for filing state income taxes The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Free sites for filing state income taxes The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free sites for filing state income taxes Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free sites for filing state income taxes In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Free sites for filing state income taxes To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Free sites for filing state income taxes gov, download the IRS2Go app, or call 1-800-906-9887. Free sites for filing state income taxes   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free sites for filing state income taxes To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free sites for filing state income taxes aarp. Free sites for filing state income taxes org/money/taxaide or call 1-888-227-7669. Free sites for filing state income taxes For more information on these programs, go to IRS. Free sites for filing state income taxes gov and enter “VITA” in the search box. Free sites for filing state income taxes Internet. Free sites for filing state income taxes    IRS. Free sites for filing state income taxes gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Free sites for filing state income taxes Download the free IRS2Go app from the iTunes app store or from Google Play. Free sites for filing state income taxes Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free sites for filing state income taxes Check the status of your 2013 refund with the Where's My Refund? application on IRS. Free sites for filing state income taxes gov or download the IRS2Go app and select the Refund Status option. Free sites for filing state income taxes The IRS issues more than 9 out of 10 refunds in less than 21 days. Free sites for filing state income taxes Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Free sites for filing state income taxes You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free sites for filing state income taxes The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free sites for filing state income taxes Use the Interactive Tax Assistant (ITA) to research your tax questions. Free sites for filing state income taxes No need to wait on the phone or stand in line. Free sites for filing state income taxes The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Free sites for filing state income taxes When you reach the response screen, you can print the entire interview and the final response for your records. Free sites for filing state income taxes New subject areas are added on a regular basis. Free sites for filing state income taxes  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Free sites for filing state income taxes gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Free sites for filing state income taxes You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Free sites for filing state income taxes The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Free sites for filing state income taxes When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Free sites for filing state income taxes Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Free sites for filing state income taxes You can also ask the IRS to mail a return or an account transcript to you. Free sites for filing state income taxes Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Free sites for filing state income taxes gov or by calling 1-800-908-9946. Free sites for filing state income taxes Tax return and tax account transcripts are generally available for the current year and the past three years. Free sites for filing state income taxes Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Free sites for filing state income taxes Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Free sites for filing state income taxes If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Free sites for filing state income taxes Check the status of your amended return using Where's My Amended Return? Go to IRS. Free sites for filing state income taxes gov and enter Where's My Amended Return? in the search box. Free sites for filing state income taxes You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free sites for filing state income taxes It can take up to 3 weeks from the date you mailed it to show up in our system. Free sites for filing state income taxes Make a payment using one of several safe and convenient electronic payment options available on IRS. Free sites for filing state income taxes gov. Free sites for filing state income taxes Select the Payment tab on the front page of IRS. Free sites for filing state income taxes gov for more information. Free sites for filing state income taxes Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Free sites for filing state income taxes Figure your income tax withholding with the IRS Withholding Calculator on IRS. Free sites for filing state income taxes gov. Free sites for filing state income taxes Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Free sites for filing state income taxes Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Free sites for filing state income taxes gov. Free sites for filing state income taxes Request an Electronic Filing PIN by going to IRS. Free sites for filing state income taxes gov and entering Electronic Filing PIN in the search box. Free sites for filing state income taxes Download forms, instructions and publications, including accessible versions for people with disabilities. Free sites for filing state income taxes Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Free sites for filing state income taxes gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Free sites for filing state income taxes An employee can answer questions about your tax account or help you set up a payment plan. Free sites for filing state income taxes Before you visit, check the Office Locator on IRS. Free sites for filing state income taxes gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Free sites for filing state income taxes If you have a special need, such as a disability, you can request an appointment. Free sites for filing state income taxes Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free sites for filing state income taxes Apply for an Employer Identification Number (EIN). Free sites for filing state income taxes Go to IRS. Free sites for filing state income taxes gov and enter Apply for an EIN in the search box. Free sites for filing state income taxes Read the Internal Revenue Code, regulations, or other official guidance. Free sites for filing state income taxes Read Internal Revenue Bulletins. Free sites for filing state income taxes Sign up to receive local and national tax news and more by email. Free sites for filing state income taxes Just click on “subscriptions” above the search box on IRS. Free sites for filing state income taxes gov and choose from a variety of options. Free sites for filing state income taxes    Phone. Free sites for filing state income taxes You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free sites for filing state income taxes Download the free IRS2Go app from the iTunes app store or from Google Play. Free sites for filing state income taxes Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Free sites for filing state income taxes gov, or download the IRS2Go app. Free sites for filing state income taxes Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free sites for filing state income taxes The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free sites for filing state income taxes Most VITA and TCE sites offer free electronic filing. Free sites for filing state income taxes Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free sites for filing state income taxes Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free sites for filing state income taxes Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Free sites for filing state income taxes If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free sites for filing state income taxes The IRS issues more than 9 out of 10 refunds in less than 21 days. Free sites for filing state income taxes Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free sites for filing state income taxes Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Free sites for filing state income taxes The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free sites for filing state income taxes Note, the above information is for our automated hotline. Free sites for filing state income taxes Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Free sites for filing state income taxes Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free sites for filing state income taxes You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free sites for filing state income taxes It can take up to 3 weeks from the date you mailed it to show up in our system. Free sites for filing state income taxes Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Free sites for filing state income taxes You should receive your order within 10 business days. Free sites for filing state income taxes Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Free sites for filing state income taxes If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Free sites for filing state income taxes Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free sites for filing state income taxes The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free sites for filing state income taxes These individuals can also contact the IRS through relay services such as the Federal Relay Service. Free sites for filing state income taxes    Walk-in. Free sites for filing state income taxes You can find a selection of forms, publications and services — in-person. Free sites for filing state income taxes Products. Free sites for filing state income taxes You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free sites for filing state income taxes Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free sites for filing state income taxes Services. Free sites for filing state income taxes You can walk in to your local TAC for face-to-face tax help. Free sites for filing state income taxes An employee can answer questions about your tax account or help you set up a payment plan. Free sites for filing state income taxes Before visiting, use the Office Locator tool on IRS. Free sites for filing state income taxes gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Free sites for filing state income taxes    Mail. Free sites for filing state income taxes You can send your order for forms, instructions, and publications to the address below. Free sites for filing state income taxes You should receive a response within 10 business days after your request is received. Free sites for filing state income taxes Internal Revenue Service 1201 N. Free sites for filing state income taxes Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Free sites for filing state income taxes The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free sites for filing state income taxes Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free sites for filing state income taxes   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Free sites for filing state income taxes We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free sites for filing state income taxes You face (or your business is facing) an immediate threat of adverse action. Free sites for filing state income taxes You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free sites for filing state income taxes   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free sites for filing state income taxes Here's why we can help: TAS is an independent organization within the IRS. Free sites for filing state income taxes Our advocates know how to work with the IRS. Free sites for filing state income taxes Our services are free and tailored to meet your needs. Free sites for filing state income taxes We have offices in every state, the District of Columbia, and Puerto Rico. Free sites for filing state income taxes   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Free sites for filing state income taxes   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free sites for filing state income taxes If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Free sites for filing state income taxes Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Free sites for filing state income taxes Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free sites for filing state income taxes Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free sites for filing state income taxes Prev  Up  Next   Home   More Online Publications
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The Free Sites For Filing State Income Taxes

Free sites for filing state income taxes 4. Free sites for filing state income taxes   How Income of Aliens Is Taxed Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident Aliens Nonresident AliensTrade or Business in the United States Effectively Connected Income The 30% Tax Income From Real Property Transportation Tax Interrupted Period of Residence Expatriation TaxExpatriation Before June 4, 2004 Expatriation After June 3, 2004, and Before June 17, 2008 Expatriation After June 16, 2008 Introduction Resident and nonresident aliens are taxed in different ways. Free sites for filing state income taxes Resident aliens are generally taxed in the same way as U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens. Free sites for filing state income taxes Nonresident aliens are taxed based on the source of their income and whether or not their income is effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes The following discussions will help you determine if income you receive during the tax year is effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business and how it is taxed. Free sites for filing state income taxes Topics - This chapter discusses: Income that is effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes Income that is not effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes Interrupted period of residence. Free sites for filing state income taxes Expatriation tax. Free sites for filing state income taxes Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 1212 List of Original Issue Discount Instruments Form (and Instructions) 6251 Alternative Minimum Tax—Individuals Schedule D (Form 1040) Capital Gains and Losses See chapter 12 for information about getting these publications and forms. Free sites for filing state income taxes Resident Aliens Resident aliens are generally taxed in the same way as U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens. Free sites for filing state income taxes This means that their worldwide income is subject to U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax and must be reported on their U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax return. Free sites for filing state income taxes Income of resident aliens is subject to the graduated tax rates that apply to U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens. Free sites for filing state income taxes Resident aliens use the Tax Table or Tax Computation Worksheets located in the Form 1040 instructions, which apply to U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens. Free sites for filing state income taxes Nonresident Aliens A nonresident alien's income that is subject to U. Free sites for filing state income taxes S. Free sites for filing state income taxes income tax must be divided into two categories: Income that is effectively connected with a trade or business in the United States, and Income that is not effectively connected with a trade or business in the United States (discussed under The 30% Tax, later). Free sites for filing state income taxes The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. Free sites for filing state income taxes These are the same rates that apply to U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens and residents. Free sites for filing state income taxes Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate. Free sites for filing state income taxes If you were formerly a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen or resident alien, these rules may not apply. Free sites for filing state income taxes See Expatriation Tax, later, in this chapter. Free sites for filing state income taxes Trade or Business in the United States Generally, you must be engaged in a trade or business during the tax year to be able to treat income received in that year as effectively connected with that trade or business. Free sites for filing state income taxes Whether you are engaged in a trade or business in the United States depends on the nature of your activities. Free sites for filing state income taxes The discussions that follow will help you determine whether you are engaged in a trade or business in the United States. Free sites for filing state income taxes Personal Services If you perform personal services in the United States at any time during the tax year, you usually are considered engaged in a trade or business in the United States. Free sites for filing state income taxes Certain compensation paid to a nonresident alien by a foreign employer is not included in gross income. Free sites for filing state income taxes For more information, see Services Performed for Foreign Employer in chapter 3. Free sites for filing state income taxes Other Trade or Business Activities Other examples of being engaged in a trade or business in the United States follow. Free sites for filing state income taxes Students and trainees. Free sites for filing state income taxes   You are considered engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant under an “F,” “J,” “M,” or “Q” visa. Free sites for filing state income taxes A nonresident alien temporarily present in the United States under a “J” visa includes a nonresident alien individual admitted to the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. Free sites for filing state income taxes The taxable part of any scholarship or fellowship grant that is U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income is treated as effectively connected with a trade or business in the United States. Free sites for filing state income taxes Business operations. Free sites for filing state income taxes   If you own and operate a business in the United States selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the United States. Free sites for filing state income taxes Partnerships. Free sites for filing state income taxes   If you are a member of a partnership that at any time during the tax year is engaged in a trade or business in the United States, you are considered to be engaged in a trade or business in the United States. Free sites for filing state income taxes Beneficiary of an estate or trust. Free sites for filing state income taxes   If you are the beneficiary of an estate or trust that is engaged in a trade or business in the United States, you are treated as being engaged in the same trade or business. Free sites for filing state income taxes Trading in stocks, securities, and commodities. Free sites for filing state income taxes   If your only U. Free sites for filing state income taxes S. Free sites for filing state income taxes business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident broker or other agent, you are not engaged in a trade or business in the United States. Free sites for filing state income taxes   For transactions in stocks or securities, this applies to any nonresident alien, including a dealer or broker in stocks and securities. Free sites for filing state income taxes   For transactions in commodities, this applies to commodities that are usually traded on an organized commodity exchange and to transactions that are usually carried out at such an exchange. Free sites for filing state income taxes   This discussion does not apply if you have a U. Free sites for filing state income taxes S. Free sites for filing state income taxes office or other fixed place of business at any time during the tax year through which, or by the direction of which, you carry out your transactions in stocks, securities, or commodities. Free sites for filing state income taxes Trading for a nonresident alien's own account. Free sites for filing state income taxes   You are not engaged in a trade or business in the United States if trading for your own account in stocks, securities, or commodities is your only U. Free sites for filing state income taxes S. Free sites for filing state income taxes business activity. Free sites for filing state income taxes This applies even if the trading takes place while you are present in the United States or is done by your employee or your broker or other agent. Free sites for filing state income taxes   This does not apply to trading for your own account if you are a dealer in stocks, securities, or commodities. Free sites for filing state income taxes This does not necessarily mean, however, that as a dealer you are considered to be engaged in a trade or business in the United States. Free sites for filing state income taxes Determine that based on the facts and circumstances in each case or under the rules given above in Trading in stocks, securities, and commodities . Free sites for filing state income taxes Effectively Connected Income If you are engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business, all income, gain, or loss for the tax year that you get from sources within the United States (other than certain investment income) is treated as effectively connected income. Free sites for filing state income taxes This applies whether or not there is any connection between the income and the trade or business being carried on in the United States during the tax year. Free sites for filing state income taxes Two tests, described next under Investment Income, determine whether certain items of investment income (such as interest, dividends, and royalties) are treated as effectively connected with that business. Free sites for filing state income taxes In limited circumstances, some kinds of foreign source income may be treated as effectively connected with a trade or business in the United States. Free sites for filing state income taxes For a discussion of these rules, see Foreign Income , later. Free sites for filing state income taxes Investment Income Investment income from U. Free sites for filing state income taxes S. Free sites for filing state income taxes sources that may or may not be treated as effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business generally falls into the following three categories. Free sites for filing state income taxes Fixed or determinable income (interest, dividends, rents, royalties, premiums, annuities, etc. Free sites for filing state income taxes ). Free sites for filing state income taxes Gains (some of which are considered capital gains) from the sale or exchange of the following types of property. Free sites for filing state income taxes Timber, coal, or domestic iron ore with a retained economic interest. Free sites for filing state income taxes Patents, copyrights, and similar property on which you receive contingent payments after October 4, 1966. Free sites for filing state income taxes Patents transferred before October 5, 1966. Free sites for filing state income taxes Original issue discount obligations. Free sites for filing state income taxes Capital gains (and losses). Free sites for filing state income taxes Use the two tests, described next, to determine whether an item of U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income falling in one of the three categories above and received during the tax year is effectively connected with your U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes If the tests indicate that the item of income is effectively connected, you must include it with your other effectively connected income. Free sites for filing state income taxes If the item of income is not effectively connected, include it with all other income discussed under The 30% Tax later, in this chapter. Free sites for filing state income taxes Asset-use test. Free sites for filing state income taxes   This test usually applies to income that is not directly produced by trade or business activities. Free sites for filing state income taxes Under this test, if an item of income is from assets (property) used in, or held for use in, the trade or business in the United States, it is considered effectively connected. Free sites for filing state income taxes   An asset is used in, or held for use in, the trade or business in the United States if the asset is: Held for the principal purpose of promoting the conduct of a trade or business in the United States, Acquired and held in the ordinary course of the trade or business conducted in the United States (for example, an account receivable or note receivable arising from that trade or business), or Otherwise held to meet the present needs of the trade or business in the United States and not its anticipated future needs. Free sites for filing state income taxes Generally, stock of a corporation is not treated as an asset used in, or held for use in, a trade or business in the United States. Free sites for filing state income taxes Business-activities test. Free sites for filing state income taxes   This test usually applies when income, gain, or loss comes directly from the active conduct of the trade or business. Free sites for filing state income taxes The business-activities test is most important when: Dividends or interest are received by a dealer in stocks or securities, Royalties are received in the trade or business of licensing patents or similar property, or Service fees are earned by a servicing business. Free sites for filing state income taxes Under this test, if the conduct of the U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business was a material factor in producing the income, the income is considered effectively connected. Free sites for filing state income taxes Personal Service Income You usually are engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business when you perform personal services in the United States. Free sites for filing state income taxes Personal service income you receive in a tax year in which you are engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business is effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes Income received in a year other than the year you performed the services is also effectively connected if it would have been effectively connected if received in the year you performed the services. Free sites for filing state income taxes Personal service income includes wages, salaries, commissions, fees, per diem allowances, and employee allowances and bonuses. Free sites for filing state income taxes The income may be paid to you in the form of cash, services, or property. Free sites for filing state income taxes If you are engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business only because you perform personal services in the United States during the tax year, income and gains from assets, and gains and losses from the sale or exchange of capital assets are generally not effectively connected with your trade or business. Free sites for filing state income taxes However, if there is a direct economic relationship between your holding of the asset and your trade or business of performing personal services, the income, gain, or loss is effectively connected. Free sites for filing state income taxes Pensions. Free sites for filing state income taxes   If you were a nonresident alien engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business after 1986 because you performed personal services in the United States, and you later receive a pension or retirement pay attributable to these services, such payments are effectively connected income in each year you receive them. Free sites for filing state income taxes This is true whether or not you are engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business in the year you receive the retirement pay. Free sites for filing state income taxes Transportation Income Transportation income (defined in chapter 2) is effectively connected if you meet both of the following conditions. Free sites for filing state income taxes You had a fixed place of business in the United States involved in earning the income. Free sites for filing state income taxes At least 90% of your U. Free sites for filing state income taxes S. Free sites for filing state income taxes source transportation income is attributable to regularly scheduled transportation. Free sites for filing state income taxes “Fixed place of business” generally means a place, site, structure, or other similar facility through which you engage in a trade or business. Free sites for filing state income taxes “Regularly scheduled transportation” means that a ship or aircraft follows a published schedule with repeated sailings or flights at regular intervals between the same points for voyages or flights that begin or end in the United States. Free sites for filing state income taxes This definition applies to both scheduled and chartered air transportation. Free sites for filing state income taxes If you do not meet the two conditions above, the income is not effectively connected and is taxed at a 4% rate. Free sites for filing state income taxes See Transportation Tax, later, in this chapter. Free sites for filing state income taxes Business Profits and Losses and Sales Transactions All profits or losses from U. Free sites for filing state income taxes S. Free sites for filing state income taxes sources that are from the operation of a business in the United States are effectively connected with a trade or business in the United States. Free sites for filing state income taxes For example, profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income. Free sites for filing state income taxes A share of U. Free sites for filing state income taxes S. Free sites for filing state income taxes source profits or losses of a partnership that is engaged in a trade or business in the United States is also effectively connected with a trade or business in the United States. Free sites for filing state income taxes Real Property Gain or Loss Gains and losses from the sale or exchange of U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interests (whether or not they are capital assets) are taxed as if you are engaged in a trade or business in the United States. Free sites for filing state income taxes You must treat the gain or loss as effectively connected with that trade or business. Free sites for filing state income taxes U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest. Free sites for filing state income taxes   This is any interest in real property located in the United States or the U. Free sites for filing state income taxes S. Free sites for filing state income taxes Virgin Islands or any interest (other than as a creditor) in a domestic corporation that is a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property holding corporation. Free sites for filing state income taxes Real property includes the following. Free sites for filing state income taxes Land and unsevered natural products of the land, such as growing crops and timber, and mines, wells, and other natural deposits. Free sites for filing state income taxes Improvements on land, including buildings, other permanent structures, and their structural components. Free sites for filing state income taxes Personal property associated with the use of real property, such as equipment used in farming, mining, forestry, or construction or property used in lodging facilities or rented office space, unless the personal property is: Disposed of more than one year before or after the disposition of the real property, or Separately sold to persons unrelated either to the seller or to the buyer of the real property. Free sites for filing state income taxes U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property holding corporation. Free sites for filing state income taxes   A corporation is a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property holding corporation if the fair market value of the corporation's U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interests are at least 50% of the total fair market value of: The corporation's U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interests, plus The corporation's interests in real property located outside the United States, plus The corporation's other assets that are used in, or held for use in, a trade or business. Free sites for filing state income taxes   Gain or loss on the sale of the stock in any domestic corporation is taxed as if you are engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business unless you establish that the corporation is not a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property holding corporation. Free sites for filing state income taxes   A U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest does not include a class of stock of a corporation that is regularly traded on an established securities market, unless you hold more than 5% of the fair market value of that class of stock. Free sites for filing state income taxes An interest in a foreign corporation owning U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property generally is not a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest unless the corporation chooses to be treated as a domestic corporation. Free sites for filing state income taxes Qualified investment entities. Free sites for filing state income taxes   Special rules apply to qualified investment entities (QIEs). Free sites for filing state income taxes A QIE is any real estate investment trust (REIT) or any regulated investment company (RIC) that is a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property holding corporation. Free sites for filing state income taxes    Generally, any distribution from a QIE to a shareholder that is attributable to gain from the sale or exchange of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest is treated as a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property gain by the shareholder receiving the distribution. Free sites for filing state income taxes A distribution by a QIE on stock regularly traded on an established securities market in the United States is not treated as gain from the sale or exchange of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest if you did not own more than 5% of that stock at any time during the 1-year period ending on the date of the distribution. Free sites for filing state income taxes A distribution that you do not treat as gain from the sale or exchange of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest is included in your gross income as a regular dividend. Free sites for filing state income taxes Note. Free sites for filing state income taxes Beginning January 1, 2014 (unless extended by legislation), a RIC that is a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property holding corporation will only be treated as a QIE for certain distributions from the RIC that are directly or indirectly attributable to distributions received by the RIC from a REIT. Free sites for filing state income taxes Domestically controlled QIE. Free sites for filing state income taxes   The sale of an interest in a domestically controlled QIE is not the sale of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest. Free sites for filing state income taxes The entity is domestically controlled if at all times during the testing period less than 50% in value of its stock was held, directly or indirectly, by foreign persons. Free sites for filing state income taxes The testing period is the shorter of (a) the 5-year period ending on the date of disposition, or (b) the period during which the entity was in existence. Free sites for filing state income taxes Wash sale. Free sites for filing state income taxes    If you dispose of an interest in a domestically controlled QIE in an applicable wash sale transaction, special rules apply. Free sites for filing state income taxes An applicable wash sale transaction is one in which you: Dispose of an interest in the domestically controlled QIE during the 30-day period before the ex-dividend date of a distribution that you would (but for the disposition) have treated as gain from the sale or exchange of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest, and Acquire, or enter into a contract or option to acquire, a substantially identical interest in that entity during the 61-day period that began on the first day of the 30-day period. Free sites for filing state income taxes If this occurs, you are treated as having gain from the sale or exchange of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest in an amount equal to the distribution made after June 15, 2006, that would have been treated as such gain. Free sites for filing state income taxes This also applies to any substitute dividend payment. Free sites for filing state income taxes   A transaction is not treated as an applicable wash sale transaction if: You actually receive the distribution from the domestically controlled QIE related to the interest disposed of, or acquired, in the transaction, or You dispose of any class of stock in a QIE that is regularly traded on an established securities market in the United States but only if you did not own more than 5% of that class of stock at any time during the 1-year period ending on the date of the distribution. Free sites for filing state income taxes Alternative minimum tax. Free sites for filing state income taxes   There may be a minimum tax on your net gain from the disposition of U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interests. Free sites for filing state income taxes Figure the amount of this tax, if any, on Form 6251. Free sites for filing state income taxes Withholding of tax. Free sites for filing state income taxes   If you dispose of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest, the buyer may have to withhold tax. Free sites for filing state income taxes See the discussion of Tax Withheld on Real Property Sales in chapter 8. Free sites for filing state income taxes Foreign Income You must treat three kinds of foreign source income as effectively connected with a trade or business in the United States if: You have an office or other fixed place of business in the United States to which the income can be attributed, That office or place of business is a material factor in producing the income, and The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. Free sites for filing state income taxes An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. Free sites for filing state income taxes The three kinds of foreign source income are listed below. Free sites for filing state income taxes Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the United States or from any interest in such property. Free sites for filing state income taxes Included are rents or royalties for the use, or for the privilege of using, outside the United States, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the United States. Free sites for filing state income taxes Dividends, interest, or amounts received for the provision of a guarantee of indebtedness issued after September 27, 2010, from the active conduct of a banking, financing, or similar business in the United States. Free sites for filing state income taxes A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Free sites for filing state income taxes Income, gain, or loss from the sale outside the United States, through the U. Free sites for filing state income taxes S. Free sites for filing state income taxes office or other fixed place of business, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. Free sites for filing state income taxes Item (3) will not apply if you sold the property for use, consumption, or disposition outside the United States and an office or other fixed place of business in a foreign country was a material factor in the sale. Free sites for filing state income taxes Any foreign source income that is equivalent to any item of income described above is treated as effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes For example, foreign source interest and dividend equivalents are treated as U. Free sites for filing state income taxes S. Free sites for filing state income taxes effectively connected income if the income is derived by a foreign person in the active conduct of a banking, financing, or similar business within the United States. Free sites for filing state income taxes Tax on Effectively Connected Income Income you receive during the tax year that is effectively connected with your trade or business in the United States is, after allowable deductions, taxed at the rates that apply to U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens and residents. Free sites for filing state income taxes Generally, you can receive effectively connected income only if you are a nonresident alien engaged in trade or business in the United States during the tax year. Free sites for filing state income taxes However, income you receive from the sale or exchange of property, the performance of services, or any other transaction in another tax year is treated as effectively connected in that year if it would have been effectively connected in the year the transaction took place or you performed the services. Free sites for filing state income taxes Example. Free sites for filing state income taxes Ted Richards, a nonresident alien, entered the United States in August 2012, to perform personal services in the U. Free sites for filing state income taxes S. Free sites for filing state income taxes office of his overseas employer. Free sites for filing state income taxes He worked in the U. Free sites for filing state income taxes S. Free sites for filing state income taxes office until December 25, 2012, but did not leave this country until January 11, 2013. Free sites for filing state income taxes On January 8, 2013, he received his final paycheck for services performed in the United States during 2012. Free sites for filing state income taxes All of Ted's income during his stay here is U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income. Free sites for filing state income taxes During 2012, Ted was engaged in the trade or business of performing personal services in the United States. Free sites for filing state income taxes Therefore, all amounts paid to him in 2012 for services performed in the United States during 2012 are effectively connected with that trade or business during 2012. Free sites for filing state income taxes The salary payment Ted received in January 2013 is U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income to him in 2013. Free sites for filing state income taxes It is effectively connected with a trade or business in the United States because he was engaged in a trade or business in the United States during 2012 when he performed the services that earned the income. Free sites for filing state income taxes Real property income. Free sites for filing state income taxes   You may be able to choose to treat all income from real property as effectively connected. Free sites for filing state income taxes See Income From Real Property , later, in this chapter. Free sites for filing state income taxes The 30% Tax Tax at a 30% (or lower treaty) rate applies to certain items of income or gains from U. Free sites for filing state income taxes S. Free sites for filing state income taxes sources but only if the items are not effectively connected with your U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes Fixed or Determinable Income The 30% (or lower treaty) rate applies to the gross amount of U. Free sites for filing state income taxes S. Free sites for filing state income taxes source fixed or determinable annual or periodic gains, profits, or income. Free sites for filing state income taxes Income is fixed when it is paid in amounts known ahead of time. Free sites for filing state income taxes Income is determinable whenever there is a basis for figuring the amount to be paid. Free sites for filing state income taxes Income can be periodic if it is paid from time to time. Free sites for filing state income taxes It does not have to be paid annually or at regular intervals. Free sites for filing state income taxes Income can be determinable or periodic even if the length of time during which the payments are made is increased or decreased. Free sites for filing state income taxes Items specifically included as fixed or determinable income are interest (other than original issue discount), dividends, dividend equivalent payments (defined in chapter 2), rents, premiums, annuities, salaries, wages, and other compensation. Free sites for filing state income taxes A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Free sites for filing state income taxes Other items of income, such as royalties, also may be subject to the 30% tax. Free sites for filing state income taxes Some fixed or determinable income may be exempt from U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax. Free sites for filing state income taxes See chapter 3 if you are not sure whether the income is taxable. Free sites for filing state income taxes Original issue discount (OID). Free sites for filing state income taxes   If you sold, exchanged, or received a payment on a bond or other debt instrument that was issued at a discount after March 31, 1972, all or part of the original issue discount (OID) (other than portfolio interest) may be subject to the 30% tax. Free sites for filing state income taxes The amount of OID is the difference between the stated redemption price at maturity and the issue price of the debt instrument. Free sites for filing state income taxes The 30% tax applies in the following circumstances. Free sites for filing state income taxes You received a payment on a debt instrument. Free sites for filing state income taxes In this case, the amount of OID subject to tax is the OID that accrued while you held the debt instrument minus the OID previously taken into account. Free sites for filing state income taxes But the tax on the OID cannot be more than the payment minus the tax on the interest payment on the debt instrument. Free sites for filing state income taxes You sold or exchanged the debt instrument. Free sites for filing state income taxes The amount of OID subject to tax is the OID that accrued while you held the debt instrument minus the amount already taxed in (1) above. Free sites for filing state income taxes   Report on your return the amount of OID shown on Form 1042-S, Foreign Person's U. Free sites for filing state income taxes S. Free sites for filing state income taxes Source Income Subject to Withholding, if you bought the debt instrument at original issue. Free sites for filing state income taxes However, you must recompute your proper share of OID shown on Form 1042-S if any of the following apply. Free sites for filing state income taxes You bought the debt instrument at a premium or paid an acquisition premium. Free sites for filing state income taxes The debt instrument is a stripped bond or a stripped coupon (including zero coupon instruments backed by U. Free sites for filing state income taxes S. Free sites for filing state income taxes Treasury securities). Free sites for filing state income taxes The debt instrument is a contingent payment or inflation-indexed debt instrument. Free sites for filing state income taxes For the definition of premium and acquisition premium and instructions on how to recompute OID, get Publication 1212. Free sites for filing state income taxes   If you held a bond or other debt instrument that was issued at a discount before April 1, 1972, contact the IRS for further information. Free sites for filing state income taxes See chapter 12. Free sites for filing state income taxes Gambling Winnings In general, nonresident aliens are subject to the 30% tax on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business and is not exempted by treaty. Free sites for filing state income taxes However, no tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States. Free sites for filing state income taxes Nonresident aliens are taxed at graduated rates on net gambling income won in the United States that is effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes Social Security Benefits A nonresident alien must include 85% of any U. Free sites for filing state income taxes S. Free sites for filing state income taxes social security benefit (and the social security equivalent part of a tier 1 railroad retirement benefit) in U. Free sites for filing state income taxes S. Free sites for filing state income taxes source fixed or determinable annual or periodic income. Free sites for filing state income taxes Social security benefits include monthly retirement, survivor, and disability benefits. Free sites for filing state income taxes This income is exempt under some tax treaties. Free sites for filing state income taxes See Table 1 in Publication 901, U. Free sites for filing state income taxes S. Free sites for filing state income taxes Tax Treaties, for a list of tax treaties that exempt U. Free sites for filing state income taxes S. Free sites for filing state income taxes social security benefits from U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax. Free sites for filing state income taxes Sales or Exchanges of Capital Assets These rules apply only to those capital gains and losses from sources in the United States that are not effectively connected with a trade or business in the United States. Free sites for filing state income taxes They apply even if you are engaged in a trade or business in the United States. Free sites for filing state income taxes These rules do not apply to the sale or exchange of a U. Free sites for filing state income taxes S. Free sites for filing state income taxes real property interest or to the sale of any property that is effectively connected with a trade or business in the United States. Free sites for filing state income taxes See Real Property Gain or Loss , earlier, under Effectively Connected Income. Free sites for filing state income taxes A capital asset is everything you own except: Inventory. Free sites for filing state income taxes Business accounts or notes receivable. Free sites for filing state income taxes Depreciable property used in a trade or business. Free sites for filing state income taxes Real property used in a trade or business. Free sites for filing state income taxes Supplies regularly used in a trade or business. Free sites for filing state income taxes Certain copyrights, literary or musical or artistic compositions, letters or memoranda, or similar property. Free sites for filing state income taxes Certain U. Free sites for filing state income taxes S. Free sites for filing state income taxes government publications. Free sites for filing state income taxes Certain commodities derivative financial instruments held by a commodities derivatives dealer. Free sites for filing state income taxes Hedging transactions. Free sites for filing state income taxes A capital gain is a gain on the sale or exchange of a capital asset. Free sites for filing state income taxes A capital loss is a loss on the sale or exchange of a capital asset. Free sites for filing state income taxes If the sale is in foreign currency, for the purpose of determining gain, the cost and selling price of the property should be expressed in U. Free sites for filing state income taxes S. Free sites for filing state income taxes currency at the rate of exchange prevailing as of the date of the purchase and date of the sale, respectively. Free sites for filing state income taxes You may want to read Publication 544. Free sites for filing state income taxes However, use Publication 544 only to determine what is a sale or exchange of a capital asset, or what is treated as such. Free sites for filing state income taxes Specific tax treatment that applies to U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens or residents generally does not apply to you. Free sites for filing state income taxes The following gains are subject to the 30% (or lower treaty) rate without regard to the 183-day rule, discussed later. Free sites for filing state income taxes Gains on the disposal of timber, coal, or domestic iron ore with a retained economic interest. Free sites for filing state income taxes Gains on contingent payments received from the sale or exchange of patents, copyrights, and similar property after October 4, 1966. Free sites for filing state income taxes Gains on certain transfers of all substantial rights to, or an undivided interest in, patents if the transfers were made before October 5, 1966. Free sites for filing state income taxes Gains on the sale or exchange of original issue discount obligations. Free sites for filing state income taxes Gains in (1) are not subject to the 30% (or lower treaty) rate if you choose to treat the gains as effectively connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes See Income From Real Property , later. Free sites for filing state income taxes 183-day rule. Free sites for filing state income taxes   If you were in the United States for 183 days or more during the tax year, your net gain from sales or exchanges of capital assets is taxed at a 30% (or lower treaty) rate. Free sites for filing state income taxes For purposes of the 30% (or lower treaty) rate, net gain is the excess of your capital gains from U. Free sites for filing state income taxes S. Free sites for filing state income taxes sources over your capital losses from U. Free sites for filing state income taxes S. Free sites for filing state income taxes sources. Free sites for filing state income taxes This rule applies even if any of the transactions occurred while you were not in the United States. Free sites for filing state income taxes   To determine your net gain, consider the amount of your gains and losses that would be recognized and taken into account only if, and to the extent that, they would be recognized and taken into account if you were in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business during the year and the gains and losses were effectively connected with that trade or business during the tax year. Free sites for filing state income taxes   In arriving at your net gain, do not take the following into consideration. Free sites for filing state income taxes The four types of gains listed earlier. Free sites for filing state income taxes The deduction for a capital loss carryover. Free sites for filing state income taxes Capital losses in excess of capital gains. Free sites for filing state income taxes Exclusion for gain from the sale or exchange of qualified small business stock (section 1202 exclusion). Free sites for filing state income taxes Losses from the sale or exchange of property held for personal use. Free sites for filing state income taxes However, losses resulting from casualties or thefts may be deductible on Schedule A (Form 1040NR). Free sites for filing state income taxes See Itemized Deductions in chapter 5. Free sites for filing state income taxes   If you are not engaged in a trade or business in the United States and have not established a tax year for a prior period, your tax year will be the calendar year for purposes of the 183-day rule. Free sites for filing state income taxes Also, you must file your tax return on a calendar-year basis. Free sites for filing state income taxes   If you were in the United States for less than 183 days during the tax year, capital gains (other than gains listed earlier) are tax exempt unless they are effectively connected with a trade or business in the United States during your tax year. Free sites for filing state income taxes Reporting. Free sites for filing state income taxes   Report your gains and losses from the sales or exchanges of capital assets that are not effectively connected with a trade or business in the United States on page 4 of Form 1040NR. Free sites for filing state income taxes Report gains and losses from sales or exchanges of capital assets (including real property) that are effectively connected with a trade or business in the United States on a separate Schedule D (Form 1040), Form 4797, or both. Free sites for filing state income taxes Attach them to Form 1040NR. Free sites for filing state income taxes Income From Real Property If you have income from real property located in the United States that you own or have an interest in and hold for the production of income, you can choose to treat all income from that property as income effectively connected with a trade or business in the United States. Free sites for filing state income taxes The choice applies to all income from real property located in the United States and held for the production of income and to all income from any interest in such property. Free sites for filing state income taxes This includes income from rents, royalties from mines, oil or gas wells, or other natural resources. Free sites for filing state income taxes It also includes gains from the sale or exchange of timber, coal, or domestic iron ore with a retained economic interest. Free sites for filing state income taxes You can make this choice only for real property income that is not otherwise effectively connected with your U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes If you make the choice, you can claim deductions attributable to the real property income and only your net income from real property is taxed. Free sites for filing state income taxes This choice does not treat a nonresident alien, who is not otherwise engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business, as being engaged in a trade or business in the United States during the year. Free sites for filing state income taxes Example. Free sites for filing state income taxes You are a nonresident alien and are not engaged in a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes You own a single-family house in the United States that you rent out. Free sites for filing state income taxes Your rental income for the year is $10,000. Free sites for filing state income taxes This is your only U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income. Free sites for filing state income taxes As discussed earlier under The 30% Tax, the rental income is subject to a tax at a 30% (or lower treaty) rate. Free sites for filing state income taxes You received a Form 1042-S showing that your tenants properly withheld this tax from the rental income. Free sites for filing state income taxes You do not have to file a U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax return (Form 1040NR) because your U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax liability is satisfied by the withholding of tax. Free sites for filing state income taxes If you make the choice discussed earlier, you can offset the $10,000 income by certain rental expenses. Free sites for filing state income taxes (See Publication 527, Residential Rental Property, for information on rental expenses. Free sites for filing state income taxes ) Any resulting net income is taxed at graduated rates. Free sites for filing state income taxes If you make this choice, report the rental income and expenses on Schedule E (Form 1040) and attach the schedule to Form 1040NR. Free sites for filing state income taxes For the first year you make the choice, also attach the statement discussed next. Free sites for filing state income taxes Making the choice. Free sites for filing state income taxes   Make the initial choice by attaching a statement to your return, or amended return, for the year of the choice. Free sites for filing state income taxes Include the following in your statement. Free sites for filing state income taxes That you are making the choice. Free sites for filing state income taxes Whether the choice is under Internal Revenue Code section 871(d) (explained earlier) or a tax treaty. Free sites for filing state income taxes A complete list of all your real property, or any interest in real property, located in the United States. Free sites for filing state income taxes Give the legal identification of U. Free sites for filing state income taxes S. Free sites for filing state income taxes timber, coal, or iron ore in which you have an interest. Free sites for filing state income taxes The extent of your ownership in the property. Free sites for filing state income taxes The location of the property. Free sites for filing state income taxes A description of any major improvements to the property. Free sites for filing state income taxes The dates you owned the property. Free sites for filing state income taxes Your income from the property. Free sites for filing state income taxes Details of any previous choices and revocations of the real property income choice. Free sites for filing state income taxes   This choice stays in effect for all later tax years unless you revoke it. Free sites for filing state income taxes Revoking the choice. Free sites for filing state income taxes   You can revoke the choice without IRS approval by filing Form 1040X, Amended U. Free sites for filing state income taxes S. Free sites for filing state income taxes Individual Income Tax Return, for the year you made the choice and for later tax years. Free sites for filing state income taxes You must file Form 1040X within 3 years from the date your return was filed or 2 years from the time the tax was paid, whichever is later. Free sites for filing state income taxes If this time period has expired for the year of choice, you cannot revoke the choice for that year. Free sites for filing state income taxes However, you may revoke the choice for later tax years only if you have IRS approval. Free sites for filing state income taxes For information on how to get IRS approval, see Regulation section 1. Free sites for filing state income taxes 871-10(d)(2). Free sites for filing state income taxes Transportation Tax A 4% tax rate applies to transportation income that is not effectively connected because it does not meet the two conditions listed earlier under Transportation Income . Free sites for filing state income taxes If you receive transportation income subject to the 4% tax, you should figure the tax and show it on line 57 of Form 1040NR. Free sites for filing state income taxes Attach a statement to your return that includes the following information (if applicable). Free sites for filing state income taxes Your name, taxpayer identification number, and tax year. Free sites for filing state income taxes A description of the types of services performed (whether on or off board). Free sites for filing state income taxes Names of vessels or registration numbers of aircraft on which you performed the services. Free sites for filing state income taxes Amount of U. Free sites for filing state income taxes S. Free sites for filing state income taxes source transportation income derived from each type of service for each vessel or aircraft for the calendar year. Free sites for filing state income taxes Total amount of U. Free sites for filing state income taxes S. Free sites for filing state income taxes source transportation income derived from all types of services for the calendar year. Free sites for filing state income taxes This 4% tax applies to your U. Free sites for filing state income taxes S. Free sites for filing state income taxes source gross transportation income. Free sites for filing state income taxes This only includes transportation income that is treated as derived from sources in the United States if the transportation begins or ends in the United States. Free sites for filing state income taxes For transportation income from personal services, the transportation must be between the United States and a U. Free sites for filing state income taxes S. Free sites for filing state income taxes possession. Free sites for filing state income taxes For personal services of a nonresident alien, this only applies to income derived from, or in connection with, an aircraft. Free sites for filing state income taxes Interrupted Period of Residence You are subject to tax under a special rule if you interrupt your period of U. Free sites for filing state income taxes S. Free sites for filing state income taxes residence with a period of nonresidence. Free sites for filing state income taxes The special rule applies if you meet all of the following conditions. Free sites for filing state income taxes You were a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident for a period that includes at least 3 consecutive calendar years. Free sites for filing state income taxes You were a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident for at least 183 days in each of those years. Free sites for filing state income taxes You ceased to be treated as a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident. Free sites for filing state income taxes You then again became a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident before the end of the third calendar year after the end of the period described in (1) above. Free sites for filing state income taxes Under this special rule, you are subject to tax on your U. Free sites for filing state income taxes S. Free sites for filing state income taxes source gross income and gains on a net basis at the graduated rates applicable to individuals (with allowable deductions) for the period you were a nonresident alien, unless you would be subject to a higher tax under the 30% tax (discussed earlier) on income not connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes For information on how to figure the special tax, see How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) under Expatriation Tax , below. Free sites for filing state income taxes Example. Free sites for filing state income taxes John Willow, a citizen of New Zealand, entered the United States on April 1, 2008, as a lawful permanent resident. Free sites for filing state income taxes On August 1, 2010, John ceased to be a lawful permanent resident and returned to New Zealand. Free sites for filing state income taxes During his period of residence, he was present in the United States for at least 183 days in each of three consecutive years (2008, 2009, and 2010). Free sites for filing state income taxes He returned to the United States on October 5, 2013, as a lawful permanent resident. Free sites for filing state income taxes He became a resident before the close of the third calendar year (2013) beginning after the end of his first period of residence (August 1, 2010). Free sites for filing state income taxes Therefore, he is subject to tax under the special rule for the period of nonresidence (August 2, 2010, through October 4, 2013) if it is more than the tax that would normally apply to him as a nonresident alien. Free sites for filing state income taxes Reporting requirements. Free sites for filing state income taxes   If you are subject to this tax for any year in the period you were a nonresident alien, you must file Form 1040NR for that year. Free sites for filing state income taxes The return is due by the due date (including extensions) for filing your U. Free sites for filing state income taxes S. Free sites for filing state income taxes income tax return for the year that you again become a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident. Free sites for filing state income taxes If you already filed returns for that period, you must file amended returns. Free sites for filing state income taxes You must attach a statement to your return that identifies the source of all of your U. Free sites for filing state income taxes S. Free sites for filing state income taxes and foreign gross income and the items of income subject to this special rule. Free sites for filing state income taxes Expatriation Tax The expatriation tax provisions apply to U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizens who have renounced their citizenship and long-term residents who have ended their residency. Free sites for filing state income taxes The rules that apply are based on the dates of expatriation, which are described in the following sections. Free sites for filing state income taxes Expatriation Before June 4, 2004. Free sites for filing state income taxes Expatriation After June 3, 2004, and Before June 17, 2008. Free sites for filing state income taxes Expatriation After June 16, 2008. Free sites for filing state income taxes Long-term resident defined. Free sites for filing state income taxes   You are a long-term resident if you were a lawful permanent resident of the United States in at least 8 of the last 15 tax years ending with the year your residency ends. Free sites for filing state income taxes In determining if you meet the 8-year requirement, do not count any year that you are treated as a resident of a foreign country under a tax treaty and do not waive treaty benefits. Free sites for filing state income taxes Expatriation Before June 4, 2004 If you expatriated before June 4, 2004, the expatriation rules apply if one of the principal purposes of the action is the avoidance of U. Free sites for filing state income taxes S. Free sites for filing state income taxes taxes. Free sites for filing state income taxes Unless you received a ruling from the IRS that you did not expatriate to avoid U. Free sites for filing state income taxes S. Free sites for filing state income taxes taxes, you are presumed to have tax avoidance as a principal purpose if: Your average annual net income tax for the last 5 tax years ending before the date of your action to relinquish your citizenship or terminate your residency was more than $100,000, or Your net worth on the date of your action was $500,000 or more. Free sites for filing state income taxes The amounts above are adjusted for inflation if your expatriation action is after 1997 (see Table 4-1). Free sites for filing state income taxes Table 4-1. Free sites for filing state income taxes Inflation-Adjusted Amounts for Expatriation Actions Before June 4, 2004 IF you expatriated during . Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes   THEN the rules outlined on this page apply if . Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes     Your 5-year average annual net income tax was more than . Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes OR Your net worth equaled or exceeded . Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes 1999   110,000   552,000 2000   112,000   562,000 2001   116,000   580,000 2002   120,000   599,000 2003   122,000   608,000 2004 (before June 4)*   124,000   622,000 *If you expatriated after June 3, 2004, see Expatriation After June 3, 2004, and Before June 17, 2008 or Expatriation After June 16, 2008. Free sites for filing state income taxes Reporting requirements. Free sites for filing state income taxes   If you lost your U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizenship, you should have filed Form 8854 with a consular office or a federal court at the time of loss of citizenship. Free sites for filing state income taxes If you ended your long-term residency, you should have filed Form 8854 with the Internal Revenue Service when you filed your dual-status tax return for the year your residency ended. Free sites for filing state income taxes   Your U. Free sites for filing state income taxes S. Free sites for filing state income taxes residency is considered to have ended when you ceased to be a lawful permanent resident or you began to be treated as a resident of another country under a tax treaty and do not waive treaty benefits. Free sites for filing state income taxes Penalties. Free sites for filing state income taxes   If you failed to file Form 8854, you may have to pay a penalty equal to the greater of 5% of the expatriation tax or $1,000. Free sites for filing state income taxes The penalty will be assessed for each year of the 10-year period beginning on the date of expatriation during which your failure to file continues. Free sites for filing state income taxes The penalty will not be imposed if you can show that the failure is due to reasonable cause and not willful neglect. Free sites for filing state income taxes Expatriation tax. Free sites for filing state income taxes   The expatriation tax applies to the 10-year period following the date of expatriation or termination of residency. Free sites for filing state income taxes It is figured in the same way as for those expatriating after June 3, 2004, and before June 17, 2008. Free sites for filing state income taxes See How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) in the next section. Free sites for filing state income taxes Expatriation After June 3, 2004, and Before June 17, 2008 If you expatriated after June 3, 2004, and before June 17, 2008, the expatriation rules apply to you if any of the following statements apply. Free sites for filing state income taxes Your average annual net income tax for the 5 tax years ending before the date of expatriation or termination of residency is more than: $124,000 if you expatriated or terminated residency in 2004. Free sites for filing state income taxes $127,000 if you expatriated or terminated residency in 2005. Free sites for filing state income taxes $131,000 if you expatriated or terminated residency in 2006. Free sites for filing state income taxes $136,000 if you expatriated or terminated residency in 2007. Free sites for filing state income taxes $139,000 if you expatriated or terminated residency in 2008. Free sites for filing state income taxes Your net worth is $2 million or more on the date of your expatriation or termination of residency. Free sites for filing state income taxes You fail to certify on Form 8854 that you have complied with all U. Free sites for filing state income taxes S. Free sites for filing state income taxes federal tax obligations for the 5 tax years preceding the date of your expatriation or termination of residency. Free sites for filing state income taxes Exception for dual-citizens and certain minors. Free sites for filing state income taxes   Certain dual-citizens and certain minors (defined next) are not subject to the expatriation tax even if they meet (1) or (2) earlier. Free sites for filing state income taxes However, they still must provide the certification required in (3). Free sites for filing state income taxes Certain dual-citizens. Free sites for filing state income taxes   You may qualify for the exception described above if all of the following apply. Free sites for filing state income taxes You became at birth a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen and a citizen of another country and you continue to be a citizen of that other country. Free sites for filing state income taxes You were never a resident alien of the United States (as defined in chapter 1). Free sites for filing state income taxes You never held a U. Free sites for filing state income taxes S. Free sites for filing state income taxes passport. Free sites for filing state income taxes You were present in the United States for no more than 30 days during any calendar year that is 1 of the 10 calendar years preceding your loss of U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizenship. Free sites for filing state income taxes Certain minors. Free sites for filing state income taxes   You may qualify for the exception described above if you meet all of the following requirements. Free sites for filing state income taxes You became a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen at birth. Free sites for filing state income taxes Neither of your parents was a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen at the time of your birth. Free sites for filing state income taxes You expatriated before you were 18½. Free sites for filing state income taxes You were present in the United States for not more than 30 days during any calendar year that is 1 of the 10 calendar years preceding your expatriation. Free sites for filing state income taxes Tax consequences of presence in the United States. Free sites for filing state income taxes   The following rules apply if you do not meet the exception above for dual-citizens and certain minors and the expatriation rules would otherwise apply to you. Free sites for filing state income taxes   The expatriation tax does not apply to any tax year during the 10-year period if you are physically present in the United States for more than 30 days during the calendar year ending in that year. Free sites for filing state income taxes Instead, you are treated as a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen or resident and taxed on your worldwide income for that tax year. Free sites for filing state income taxes You must file Form 1040, 1040A, or 1040EZ and figure your tax as prescribed in the instructions for those forms. Free sites for filing state income taxes   When counting the number of days of presence during a calendar year, count any day you were physically present in the United States at any time during the day. Free sites for filing state income taxes However, do not count any days (up to a limit of 30 days) on which you performed personal services in the United States for an employer who is not related to you if either of the following apply. Free sites for filing state income taxes You have ties with other countries. Free sites for filing state income taxes You have ties with other countries if: You became (within a reasonable period after your expatriation or termination of residency) a citizen or resident of the country in which you, your spouse, or either of your parents were born, and You became fully liable for income tax in that country. Free sites for filing state income taxes You were physically present in the United States for 30 days or less during each year in the 10-year period ending on the date of expatriation or termination of residency. Free sites for filing state income taxes Do not count any day you were an exempt individual or were unable to leave the United States because of a medical condition that arose while you were in the United States. Free sites for filing state income taxes See Exempt individual and Medical condition in chapter 1 under Substantial Presence Test, but disregard the information about Form 8843. Free sites for filing state income taxes Related employer. Free sites for filing state income taxes   If your employer in the United States is any of the following, then your employer is related to you. Free sites for filing state income taxes You must count any days you performed services in the United States for that employer as days of presence in the United States. Free sites for filing state income taxes Members of your family. Free sites for filing state income taxes This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. Free sites for filing state income taxes ), and lineal descendants (children, grandchildren, etc. Free sites for filing state income taxes ). Free sites for filing state income taxes A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. Free sites for filing state income taxes A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. Free sites for filing state income taxes (See Publication 550, chapter 4, Constructive ownership of stock, for how to determine whether you directly or indirectly own outstanding stock. Free sites for filing state income taxes ) A tax-exempt charitable or educational organization that is directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. Free sites for filing state income taxes Date of tax expatriation. Free sites for filing state income taxes   For purposes of U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax rules, the date of your expatriation or termination of residency is the later of the dates on which you perform the following actions. Free sites for filing state income taxes You notify either the Department of State or the Department of Homeland Security (whichever is appropriate) of your expatriating act or termination of residency. Free sites for filing state income taxes You file Form 8854 in accordance with the form instructions. Free sites for filing state income taxes Annual return. Free sites for filing state income taxes   If the expatriation tax applies to you, you must file Form 8854 each year during the 10-year period following the date of expatriation. Free sites for filing state income taxes You must file this form even if you owe no U. Free sites for filing state income taxes S. Free sites for filing state income taxes tax. Free sites for filing state income taxes Penalty. Free sites for filing state income taxes   If you fail to file Form 8854 for any tax year, fail to include all information required to be shown on the form, or include incorrect information, you may have to pay a penalty of $10,000. Free sites for filing state income taxes You will not have to pay a penalty if you show that the failure is due to reasonable cause and not to willful neglect. Free sites for filing state income taxes How To Figure the Expatriation Tax (If You Expatriated Before June 17, 2008) If the expatriation tax applies to you, you are generally subject to tax on your U. Free sites for filing state income taxes S. Free sites for filing state income taxes source gross income and gains on a net basis at the graduated rates applicable to individuals (with allowable deductions) unless you would be subject to a higher tax under the 30% tax (discussed earlier) on income not connected with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes trade or business. Free sites for filing state income taxes For this purpose, U. Free sites for filing state income taxes S. Free sites for filing state income taxes source gross income (defined in chapter 2) includes gains from the sale or exchange of: Property (other than stock or debt obligations) located in the United States, Stock issued by a U. Free sites for filing state income taxes S. Free sites for filing state income taxes domestic corporation, and Debt obligations of U. Free sites for filing state income taxes S. Free sites for filing state income taxes persons or of the United States, a state or political subdivision thereof, or the District of Columbia. Free sites for filing state income taxes U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income also includes any income or gain derived from stock in certain controlled foreign corporations if you owned, or were considered to own, at any time during the 2-year period ending on the date of expatriation, more than 50% of: The total combined voting power of all classes of that corporation's stock, or The total value of the stock. Free sites for filing state income taxes The income or gain is considered U. Free sites for filing state income taxes S. Free sites for filing state income taxes source income only to the extent of your share of earnings and profits earned or accumulated before the date of expatriation and during the periods you met the ownership requirements discussed above. Free sites for filing state income taxes Any exchange of property is treated as a sale of the property at its fair market value on the date of the exchange and any gain is treated as U. Free sites for filing state income taxes S. Free sites for filing state income taxes source gross income in the tax year of the exchange unless you enter into a gain recognition agreement under Notice 97-19. Free sites for filing state income taxes Other information. Free sites for filing state income taxes   For more information on the expatriation tax provisions, including exceptions to the tax and special U. Free sites for filing state income taxes S. Free sites for filing state income taxes source rules, see section 877 of the Internal Revenue Code. Free sites for filing state income taxes Expatriation Tax Return If you expatriated or terminated your U. Free sites for filing state income taxes S. Free sites for filing state income taxes residency, or you are subject to the expatriation tax, you must file Form 8854, Initial and Annual Expatriation Statement. Free sites for filing state income taxes Attach it to Form 1040NR if you are required to file that form. Free sites for filing state income taxes If you are present in the United States following your expatriation and are subject to tax as a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen or resident, file Form 8854 with Form 1040. Free sites for filing state income taxes Expatriation After June 16, 2008 If you expatriated after June 16, 2008, the expatriation rules apply to you if you meet any of the following conditions. Free sites for filing state income taxes Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than: $139,000 if you expatriated or terminated residency in 2008. Free sites for filing state income taxes $145,000 if you expatriated or terminated residency in 2009 or 2010. Free sites for filing state income taxes $147,000 if you expatriated or terminated residency in 2011. Free sites for filing state income taxes $151,000 if you expatriated or terminated residency in 2012. Free sites for filing state income taxes $155,000 if you expatriated or terminated residency in 2013. Free sites for filing state income taxes Your net worth is $2 million or more on the date of your expatriation or termination of residency. Free sites for filing state income taxes You fail to certify on Form 8854 that you have complied with all U. Free sites for filing state income taxes S. Free sites for filing state income taxes federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency. Free sites for filing state income taxes Exception for dual-citizens and certain minors. Free sites for filing state income taxes   Certain dual-citizens and certain minors (defined next) are not subject to the expatriation tax even if they meet (1) or (2) above. Free sites for filing state income taxes However, they still must provide the certification required in (3) above. Free sites for filing state income taxes Certain dual-citizens. Free sites for filing state income taxes   You may qualify for the exception described above if both of the following apply. Free sites for filing state income taxes You became at birth a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country. Free sites for filing state income taxes You have been a resident of the United States for not more than 10 years during the 15-year tax period ending with the tax year during which the expatriation occurs. Free sites for filing state income taxes For the purpose of determining U. Free sites for filing state income taxes S. Free sites for filing state income taxes residency, use the substantial presence test described in chapter 1. Free sites for filing state income taxes Certain minors. Free sites for filing state income taxes   You may qualify for the exception described earlier if you meet both of the following requirements. Free sites for filing state income taxes You expatriated before you were 18½. Free sites for filing state income taxes You have been a resident of the United States for not more than 10 tax years before the expatriation occurs. Free sites for filing state income taxes For the purpose of determining U. Free sites for filing state income taxes S. Free sites for filing state income taxes residency, use the substantial presence test described in chapter 1. Free sites for filing state income taxes Expatriation date. Free sites for filing state income taxes   Your expatriation date is the date you relinquish U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizenship (in the case of a former citizen) or terminate your long-term residency (in the case of a former U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident). Free sites for filing state income taxes Former U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen. Free sites for filing state income taxes   You are considered to have relinquished your U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizenship on the earliest of the following dates. Free sites for filing state income taxes The date you renounced U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizenship before a diplomatic or consular officer of the United States (provided that the voluntary renouncement was later confirmed by the issuance of a certificate of loss of nationality). Free sites for filing state income taxes The date you furnished to the State Department a signed statement of voluntary relinquishment of U. Free sites for filing state income taxes S. Free sites for filing state income taxes nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a certificate of loss of nationality). Free sites for filing state income taxes The date the State Department issued a certificate of loss of nationality. Free sites for filing state income taxes The date that a U. Free sites for filing state income taxes S. Free sites for filing state income taxes court canceled your certificate of naturalization. Free sites for filing state income taxes Former long-term resident. Free sites for filing state income taxes   You are considered to have terminated your long-term residency on the earliest of the following dates. Free sites for filing state income taxes The date you voluntarily relinquished your lawful permanent resident status by filing Department of Homeland Security Form I-407 with a U. Free sites for filing state income taxes S. Free sites for filing state income taxes consular or immigration officer, and the Department of Homeland Security determined that you have, in fact, abandoned your lawful permanent resident status. Free sites for filing state income taxes The date you became subject to a final administrative order for your removal from the United States under the Immigration and Nationality Act and you actually left the United States as a result of that order. Free sites for filing state income taxes If you were a dual resident of the United States and a country with which the United States has an income tax treaty, the date you began to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident of the treaty country and notify the IRS of that treatment on Forms 8833 and 8854. Free sites for filing state income taxes See Effect of Tax Treaties in chapter 1 for more information about dual residents. Free sites for filing state income taxes How To Figure the Expatriation Tax (If You Expatriate After June 16, 2008) In the year you expatriate, you are subject to income tax on the net unrealized gain (or loss) in your property as if the property had been sold for its fair market value on the day before your expatriation date (“mark-to-market tax”). Free sites for filing state income taxes This applies to most types of property interests you held on the date of relinquishment of citizenship or termination of residency. Free sites for filing state income taxes But see Exceptions , later. Free sites for filing state income taxes Gains arising from deemed sales must be taken into account for the tax year of the deemed sale without regard to other U. Free sites for filing state income taxes S. Free sites for filing state income taxes internal revenue laws. Free sites for filing state income taxes Losses from deemed sales must be taken into account to the extent otherwise provided under U. Free sites for filing state income taxes S. Free sites for filing state income taxes internal revenue laws. Free sites for filing state income taxes However, Internal Revenue Code section 1091 (relating to the disallowance of losses on wash sales of stock and securities) does not apply. Free sites for filing state income taxes The net gain that you otherwise must include in your income is reduced (but not below zero) by: $600,000 if you expatriated or terminated residency before January 1, 2009. Free sites for filing state income taxes $626,000 if you expatriated or terminated residency in 2009. Free sites for filing state income taxes $627,000 if you expatriated or terminated residency in 2010. Free sites for filing state income taxes $636,000 if you expatriated or terminated residency in 2011. Free sites for filing state income taxes $651,000 if you expatriated or terminated residency in 2012. Free sites for filing state income taxes $668,000 if you expatriated or terminated residency in 2013. Free sites for filing state income taxes Exceptions. Free sites for filing state income taxes   The mark-to-market tax does not apply to the following. Free sites for filing state income taxes Eligible deferred compensation items. Free sites for filing state income taxes Ineligible deferred compensation items. Free sites for filing state income taxes Interests in nongrantor trusts. Free sites for filing state income taxes Specified tax deferred accounts. Free sites for filing state income taxes Instead, items (1) and (3) may be subject to withholding at source. Free sites for filing state income taxes In the case of item (2), you are treated as receiving the present value of your accrued benefit as of the day before the expatriation date. Free sites for filing state income taxes In the case of item (4), you are treated as receiving a distribution of your entire interest in the account on the day before your expatriation date. Free sites for filing state income taxes See paragraphs (d), (e), and (f) of section 877A for more information. Free sites for filing state income taxes Expatriation Tax Return If you expatriated or terminated your U. Free sites for filing state income taxes S. Free sites for filing state income taxes residency, or you are subject to the expatriation rules (as discussed earlier in the first paragraph under Expatriation After June 16, 2008), you must file Form 8854. Free sites for filing state income taxes Attach it to Form 1040 or Form 1040NR if you are required to file either of those forms. Free sites for filing state income taxes Deferral of payment of mark-to-market tax. Free sites for filing state income taxes   You can make an irrevocable election to defer payment of the mark-to-market tax imposed on the deemed sale of property. Free sites for filing state income taxes If you make this election, the following rules apply. Free sites for filing state income taxes You can make the election on a property-by-property basis. Free sites for filing state income taxes The deferred tax attributable to a particular property is due on the return for the tax year in which you dispose of the property. Free sites for filing state income taxes Interest is charged for the period the tax is deferred. Free sites for filing state income taxes The due date for the payment of the deferred tax cannot be extended beyond the earlier of the following dates. Free sites for filing state income taxes The due date of the return required for the year of death. Free sites for filing state income taxes The time that the security provided for the property fails to be adequate. Free sites for filing state income taxes See item (6) below. Free sites for filing state income taxes You make the election on Form 8854. Free sites for filing state income taxes You must provide adequate security (such as a bond). Free sites for filing state income taxes You must make an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of the mark-to-market tax. Free sites for filing state income taxes   For more information about the deferral of payment, see the Instructions for Form 8854. Free sites for filing state income taxes Prev  Up  Next   Home   More Online Publications