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Freetaxusa 2006

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Freetaxusa 2006

Freetaxusa 2006 1. Freetaxusa 2006   403(b) Plan Basics Table of Contents What Is a 403(b) Plan? What Are the Benefits of Contributing to a 403(b) Plan?Excluded. Freetaxusa 2006 Deducted. Freetaxusa 2006 Who Can Participate in a 403(b) Plan?Ministers. Freetaxusa 2006 Who Can Set Up a 403(b) Account? How Can Contributions Be Made to My 403(b) Account? Do I Report Contributions on My Tax Return? How Much Can Be Contributed to My 403(b) Account? This chapter introduces you to 403(b) plans and accounts. Freetaxusa 2006 Specifically, the chapter answers the following questions. Freetaxusa 2006 What is a 403(b) plan? What are the benefits of contributing to a 403(b) plan? Who can participate in a 403(b) plan? Who can set up a 403(b) account? How can contributions be made to my 403(b) account? Do I report contributions on my tax return? How much can be contributed to my 403(b) account? What Is a 403(b) Plan? A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. Freetaxusa 2006 Individual accounts in a 403(b) plan can be any of the following types. Freetaxusa 2006 An annuity contract, which is a contract provided through an insurance company, A custodial account, which is an account invested in mutual funds, or A retirement income account set up for church employees. Freetaxusa 2006 Generally, retirement income accounts can invest in either annuities or mutual funds. Freetaxusa 2006 We use the term “403(b) account” to refer to any one of these funding arrangements throughout this publication, unless otherwise specified. Freetaxusa 2006 What Are the Benefits of Contributing to a 403(b) Plan?  There are three benefits to contributing to a 403(b) plan. Freetaxusa 2006 The first benefit is that you do not pay income tax on allowable contributions until you begin making withdrawals from the plan, usually after you retire. Freetaxusa 2006 Allowable contributions to a 403(b) plan are either excluded or deducted from your income. Freetaxusa 2006 However, if your contributions are made to a Roth contribution program, this benefit does not apply. Freetaxusa 2006 Instead, you pay income tax on the contributions to the plan but distributions from the plan (if certain requirements are met) are tax free. Freetaxusa 2006 Note. Freetaxusa 2006 Generally, employees must pay social security and Medicare tax on their contributions to a 403(b) plan, including those made under a salary reduction agreement. Freetaxusa 2006 See chapter 4, Limit on Elective Deferrals , for more information. Freetaxusa 2006 The second benefit is that earnings and gains on amounts in your 403(b) account are not taxed until you withdraw them. Freetaxusa 2006 Earnings and gains on amounts in a Roth contribution program are not taxed if your withdrawals are qualified distributions. Freetaxusa 2006 Otherwise, they are taxed when you withdraw them. Freetaxusa 2006 The third benefit is that you may be eligible to take a credit for elective deferrals contributed to your 403(b) account. Freetaxusa 2006 See chapter 10, Retirement Savings Contributions Credit (Saver's Credit) . Freetaxusa 2006 Excluded. Freetaxusa 2006   If an amount is excluded from your income, it is not included in your total wages on your Form W-2. Freetaxusa 2006 This means that you do not report the excluded amount on your tax return. Freetaxusa 2006 Deducted. Freetaxusa 2006   If an amount is deducted from your income, it is included with your other wages on your Form W-2. Freetaxusa 2006 You report this amount on your tax return, but you are allowed to subtract it when figuring the amount of income on which you must pay tax. Freetaxusa 2006 Who Can Participate in a 403(b) Plan? Any eligible employee can participate in a 403(b) plan. Freetaxusa 2006 Eligible employees. Freetaxusa 2006   The following employees are eligible to participate in a 403(b) plan. Freetaxusa 2006 Employees of tax-exempt organizations established under section 501(c)(3). Freetaxusa 2006 These organizations are usually referred to as section 501(c)(3) organizations or simply 501(c)(3) organizations. Freetaxusa 2006 Employees of public school systems who are involved in the day-to-day operations of a school. Freetaxusa 2006 Employees of cooperative hospital service organizations. Freetaxusa 2006 Civilian faculty and staff of the Uniformed Services University of the Health Sciences. Freetaxusa 2006 Employees of public school systems organized by Indian tribal governments. Freetaxusa 2006 Certain ministers (explained next). Freetaxusa 2006 Ministers. Freetaxusa 2006   The following ministers are eligible employees for whom a 403(b) account can be established. Freetaxusa 2006 Ministers employed by section 501(c)(3) organizations. Freetaxusa 2006 Self-employed ministers. Freetaxusa 2006 A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer. Freetaxusa 2006 Ministers (chaplains) who meet both of the following requirements. Freetaxusa 2006 They are employed by organizations that are not section 501(c)(3) organizations. Freetaxusa 2006 They function as ministers in their day-to-day professional responsibilities with their employers. Freetaxusa 2006   Throughout this publication, the term chaplain will be used to mean ministers described in the third category in the list above. Freetaxusa 2006 Example. Freetaxusa 2006 A minister employed as a chaplain by a state-run prison and a chaplain in the United States Armed Forces are eligible employees because their employers are not section 501(c)(3) organizations and they are employed as ministers. Freetaxusa 2006 Who Can Set Up a 403(b) Account? You cannot set up your own 403(b) account. Freetaxusa 2006 Only employers can set up 403(b) accounts. Freetaxusa 2006 A self-employed minister cannot set up a 403(b) account for his or her benefit. Freetaxusa 2006 If you are a self-employed minister, only the organization (denomination) with which you are associated can set up an account for your benefit. Freetaxusa 2006 How Can Contributions Be Made to My 403(b) Account? Generally, only your employer can make contributions to your 403(b) account. Freetaxusa 2006 However, some plans will allow you to make after-tax contributions (defined below). Freetaxusa 2006 The following types of contributions can be made to 403(b) accounts. Freetaxusa 2006 Elective deferrals . Freetaxusa 2006 These are contributions made under a salary reduction agreement. Freetaxusa 2006 This agreement allows your employer to withhold money from your paycheck to be contributed directly into a 403(b) account for your benefit. Freetaxusa 2006 Except for Roth contributions, you do not pay income tax on these contributions until you withdraw them from the account. Freetaxusa 2006 If your contributions are Roth contributions, you pay taxes on your contributions but any qualified distributions from your Roth account are tax free. Freetaxusa 2006 Nonelective contributions . Freetaxusa 2006 These are employer contributions that are not made under a salary reduction agreement. Freetaxusa 2006 Nonelective contributions include matching contributions, discretionary contributions, and mandatory contributions from your employer. Freetaxusa 2006 You do not pay income tax on these contributions until you withdraw them from the account. Freetaxusa 2006 After-tax contributions . Freetaxusa 2006 These are contributions (that are not Roth contributions) you make with funds that you must include in income on your tax return. Freetaxusa 2006 A salary payment on which income tax has been withheld is a source of these contributions. Freetaxusa 2006 If your plan allows you to make after-tax contributions, they are not excluded from income and you cannot deduct them on your tax return. Freetaxusa 2006 A combination of any of the three contribution types listed above. Freetaxusa 2006 Self-employed minister. Freetaxusa 2006   If you are a self-employed minister, you are considered both an employee and an employer, and you can contribute to a retirement income account for your own benefit. Freetaxusa 2006 Do I Report Contributions on My Tax Return? Generally, you do not report contributions to your 403(b) account (except Roth contributions) on your tax return. Freetaxusa 2006 Your employer will report contributions on your 2013 Form W-2. Freetaxusa 2006 Elective deferrals will be shown in box 12 and the Retirement plan box will be checked in box 13. Freetaxusa 2006 If you are a self-employed minister or chaplain, see the discussions next. Freetaxusa 2006 Self-employed ministers. Freetaxusa 2006   If you are a self-employed minister, you must report the total contributions as a deduction on your tax return. Freetaxusa 2006 Deduct your contributions on line 28 of the 2013 Form 1040. Freetaxusa 2006 Chaplains. Freetaxusa 2006   If you are a chaplain and your employer does not exclude contributions made to your 403(b) account from your earned income, you may be able to take a deduction for those contributions on your tax return. Freetaxusa 2006    However, if your employer has agreed to exclude the contributions from your earned income, you will not be allowed a deduction on your tax return. Freetaxusa 2006   If you can take a deduction, include your contributions on line 36 of the 2013 Form 1040. Freetaxusa 2006 Enter the amount of your deduction and write “403(b)” on the dotted line next to line 36. Freetaxusa 2006 How Much Can Be Contributed to My 403(b) Account? There are limits on the amount of contributions that can be made to your 403(b) account each year. Freetaxusa 2006 If contributions made to your 403(b) account are more than these contribution limits, penalties may apply. Freetaxusa 2006 Chapters 2 through 6 provide information on how to determine the amount that can be contributed to your 403(b) account. Freetaxusa 2006 Worksheets are provided in Chapter 9 to help you determine the maximum amount that can be contributed to your 403(b) account each year. Freetaxusa 2006 Chapter 7, Excess Contributions , describes how to prevent excess contributions and how to get an excess contribution corrected. Freetaxusa 2006 Prev  Up  Next   Home   More Online Publications
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Freetaxusa 2006 7. Freetaxusa 2006   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. Freetaxusa 2006 Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. Freetaxusa 2006 Useful Items - You may want to see: Forms (and Instructions) 1040 U. Freetaxusa 2006 S. Freetaxusa 2006 Individual Income Tax Return 1040A U. Freetaxusa 2006 S. Freetaxusa 2006 Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Freetaxusa 2006 S. Freetaxusa 2006 Nonresident Alien Income Tax Return 1040NR-EZ U. Freetaxusa 2006 S. Freetaxusa 2006 Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. Freetaxusa 2006 What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. Freetaxusa 2006 Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. Freetaxusa 2006 The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). Freetaxusa 2006 Under U. Freetaxusa 2006 S. Freetaxusa 2006 immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. Freetaxusa 2006 Extensions of time to file. Freetaxusa 2006   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. Freetaxusa 2006 You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). Freetaxusa 2006 Use Form 4868 to get the extension to October 15. Freetaxusa 2006 In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Freetaxusa 2006 To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Freetaxusa 2006 Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Freetaxusa 2006   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. Freetaxusa 2006 S. Freetaxusa 2006 citizens and resident aliens abroad who expect to qualify for special tax treatment). Freetaxusa 2006    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. Freetaxusa 2006 You may be able to file your return electronically. Freetaxusa 2006 See IRS e-file in your form instructions. Freetaxusa 2006 Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. Freetaxusa 2006 If you are any of the following, you must file a return. Freetaxusa 2006 A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. Freetaxusa 2006 (But see Exceptions , later. Freetaxusa 2006 ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. Freetaxusa 2006 S. Freetaxusa 2006 sources, or Your income is exempt from income tax. Freetaxusa 2006 A nonresident alien individual not engaged in a trade or business in the United States with U. Freetaxusa 2006 S. Freetaxusa 2006 income on which the tax liability was not satisfied by the withholding of tax at the source. Freetaxusa 2006 A representative or agent responsible for filing the return of an individual described in (1) or (2). Freetaxusa 2006 A fiduciary for a nonresident alien estate or trust. Freetaxusa 2006 You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. Freetaxusa 2006 For example, if you have no U. Freetaxusa 2006 S. Freetaxusa 2006 business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. Freetaxusa 2006 For information on what is timely, see When to file for deductions and credits under When To File, later. Freetaxusa 2006 Exceptions. Freetaxusa 2006   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. Freetaxusa 2006 Your only U. Freetaxusa 2006 S. Freetaxusa 2006 trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. Freetaxusa 2006 You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. Freetaxusa 2006 Even if you have left the United States and filed a Form 1040-C, U. Freetaxusa 2006 S. Freetaxusa 2006 Departing Alien Income Tax Return, on departure, you still must file an annual U. Freetaxusa 2006 S. Freetaxusa 2006 income tax return. Freetaxusa 2006 If you are married and both you and your spouse are required to file, you must each file a separate return. Freetaxusa 2006 Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. Freetaxusa 2006 You do not claim any dependents. Freetaxusa 2006 You cannot be claimed as a dependent on someone else's U. Freetaxusa 2006 S. Freetaxusa 2006 tax return. Freetaxusa 2006 If you were married, you do not claim an exemption for your spouse. Freetaxusa 2006 Your taxable income is less than $100,000. Freetaxusa 2006 The only itemized deduction you can claim is for state and local income taxes. Freetaxusa 2006 Note. Freetaxusa 2006 Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. Freetaxusa 2006 See chapter 5. Freetaxusa 2006 Your only U. Freetaxusa 2006 S. Freetaxusa 2006 source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. Freetaxusa 2006 (If you had taxable interest or dividend income, you cannot use this form. Freetaxusa 2006 ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. Freetaxusa 2006 You are not claiming any tax credits. Freetaxusa 2006 This is not an “expatriation return. Freetaxusa 2006 ” See Expatriation Tax in chapter 4. Freetaxusa 2006 The only taxes you owe are: The income tax from the Tax Table. Freetaxusa 2006 The social security and Medicare tax from Form 4137 or Form 8919. Freetaxusa 2006 You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. Freetaxusa 2006 You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. Freetaxusa 2006 If you do not meet all of the above conditions, you must file Form 1040NR. Freetaxusa 2006 When To File If you are an employee and you receive wages subject to U. Freetaxusa 2006 S. Freetaxusa 2006 income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. Freetaxusa 2006 For the 2013 calendar year, file your return by April 15, 2014. Freetaxusa 2006 If you are not an employee who receives wages subject to U. Freetaxusa 2006 S. Freetaxusa 2006 income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Freetaxusa 2006 For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. Freetaxusa 2006 ) Extensions of time to file. Freetaxusa 2006   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. Freetaxusa 2006 For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). Freetaxusa 2006 You must file the extension by the regular due date of your return. Freetaxusa 2006   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). Freetaxusa 2006 To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Freetaxusa 2006 Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Freetaxusa 2006 When to file for deductions and credits. Freetaxusa 2006   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. Freetaxusa 2006 For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. Freetaxusa 2006 However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. Freetaxusa 2006 The allowance of the following credits is not affected by this time requirement. Freetaxusa 2006 Credit for withheld taxes. Freetaxusa 2006 Credit for excise tax on certain uses of gasoline and special fuels. Freetaxusa 2006 Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. Freetaxusa 2006 Protective return. Freetaxusa 2006   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. Freetaxusa 2006 S. Freetaxusa 2006 trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. Freetaxusa 2006 By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. Freetaxusa 2006 You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. Freetaxusa 2006   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. Freetaxusa 2006 To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. Freetaxusa 2006   You can follow the same procedure if you believe you have no U. Freetaxusa 2006 S. Freetaxusa 2006 tax liability because of a U. Freetaxusa 2006 S. Freetaxusa 2006 tax treaty. Freetaxusa 2006 Be sure to also complete item L on page 5 of Form 1040NR. Freetaxusa 2006 Waiver of filing deadline. Freetaxusa 2006   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. Freetaxusa 2006 S. Freetaxusa 2006 income tax return (including a protective return) and you cooperate with the IRS in determining your U. Freetaxusa 2006 S. Freetaxusa 2006 income tax liability for the tax year for which you did not file a return. Freetaxusa 2006 Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. Freetaxusa 2006  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Freetaxusa 2006 O. Freetaxusa 2006 Box 1303 Charlotte, NC 28201-1303 Aliens from the U. Freetaxusa 2006 S. Freetaxusa 2006 Virgin Islands. Freetaxusa 2006    If you are a bona fide resident of the U. Freetaxusa 2006 S. Freetaxusa 2006 Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. Freetaxusa 2006 S. Freetaxusa 2006 Virgin Islands and file your income tax returns at the following address. Freetaxusa 2006 Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. Freetaxusa 2006 Thomas, VI 00802   Report all income from U. Freetaxusa 2006 S. Freetaxusa 2006 sources, as well as income from other sources, on your return. Freetaxusa 2006 For information on filing U. Freetaxusa 2006 S. Freetaxusa 2006 Virgin Islands returns, contact the U. Freetaxusa 2006 S. Freetaxusa 2006 Virgin Islands Bureau of Internal Revenue. Freetaxusa 2006   Chapter 8 discusses withholding from U. Freetaxusa 2006 S. Freetaxusa 2006 wages of U. Freetaxusa 2006 S. Freetaxusa 2006 Virgin Islanders. Freetaxusa 2006 Aliens from Guam or the Commonwealth of the Northern Mariana Islands. Freetaxusa 2006   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. Freetaxusa 2006 Report all income, including income from U. Freetaxusa 2006 S. Freetaxusa 2006 sources, on your return. Freetaxusa 2006 It is not necessary to file a separate U. Freetaxusa 2006 S. Freetaxusa 2006 income tax return. Freetaxusa 2006    Bona fide residents of Guam should file their Guam returns at the following address. Freetaxusa 2006   Department of Revenue and Taxation Government of Guam P. Freetaxusa 2006 O. Freetaxusa 2006 Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. Freetaxusa 2006   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Freetaxusa 2006 O. Freetaxusa 2006 Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. Freetaxusa 2006 570, Tax Guide for Individuals With Income From U. Freetaxusa 2006 S. Freetaxusa 2006 Possessions, for information on where to file your return. Freetaxusa 2006 Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. Freetaxusa 2006 S. Freetaxusa 2006 Individual Income Tax Return. Freetaxusa 2006 Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. Freetaxusa 2006 If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. Freetaxusa 2006 ) to Form 1040X. Freetaxusa 2006 Print “Amended” across the top. Freetaxusa 2006 Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. Freetaxusa 2006 A return filed before the final due date is considered to have been filed on the due date. Freetaxusa 2006 Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. Freetaxusa 2006 FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. Freetaxusa 2006 The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. Freetaxusa 2006 The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. Freetaxusa 2006 However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. Freetaxusa 2006 A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. Freetaxusa 2006 Filing requirements. Freetaxusa 2006   FinCEN Form 105 filing requirements follow. Freetaxusa 2006 Recipients. Freetaxusa 2006   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. Freetaxusa 2006 Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. Freetaxusa 2006   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. Freetaxusa 2006 Travelers. Freetaxusa 2006   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. Freetaxusa 2006 Penalties. Freetaxusa 2006   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. Freetaxusa 2006 Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. Freetaxusa 2006 More information. Freetaxusa 2006   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. Freetaxusa 2006 Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. Freetaxusa 2006 A resident alien of the United States for any part of the tax year. Freetaxusa 2006 A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. Freetaxusa 2006 S. Freetaxusa 2006 income tax treaty. Freetaxusa 2006 See Effect of Tax Treaties in chapter 1. Freetaxusa 2006 A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. Freetaxusa 2006 See chapter 1 for information about this election. Freetaxusa 2006 A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. Freetaxusa 2006 See Publication 570, Tax Guide for Individuals With Income From U. Freetaxusa 2006 S. Freetaxusa 2006 Possessions, for a definition of bona fide resident. Freetaxusa 2006 You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). Freetaxusa 2006 The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. Freetaxusa 2006 Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. Freetaxusa 2006 S. Freetaxusa 2006 person. Freetaxusa 2006 You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. Freetaxusa 2006 More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. Freetaxusa 2006 Penalties The law provides penalties for failure to file returns or pay taxes as required. Freetaxusa 2006 Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. Freetaxusa 2006 You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. Freetaxusa 2006 If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. Freetaxusa 2006 Filing late. Freetaxusa 2006   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. Freetaxusa 2006 The penalty is based on the tax not paid by the due date (without regard to extensions). Freetaxusa 2006 The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. Freetaxusa 2006 Fraud. Freetaxusa 2006   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. Freetaxusa 2006 Return over 60 days late. Freetaxusa 2006   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Freetaxusa 2006 Exception. Freetaxusa 2006   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. Freetaxusa 2006 Paying tax late. Freetaxusa 2006   You will have to pay a failure-to-pay penalty of ½ of 1% (. Freetaxusa 2006 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. Freetaxusa 2006 This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. Freetaxusa 2006   The monthly rate of the failure-to-pay penalty is half the usual rate (. Freetaxusa 2006 25% instead of . Freetaxusa 2006 50%) if an installment agreement is in effect for that month. Freetaxusa 2006 You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. Freetaxusa 2006   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. Freetaxusa 2006 If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. Freetaxusa 2006   This penalty cannot be more than 25% of your unpaid tax. Freetaxusa 2006 You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. Freetaxusa 2006 Combined penalties. Freetaxusa 2006   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. Freetaxusa 2006 However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Freetaxusa 2006 Accuracy-related penalty. Freetaxusa 2006   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. Freetaxusa 2006 The penalty is equal to 20% of the underpayment. Freetaxusa 2006 The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. Freetaxusa 2006 The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. Freetaxusa 2006 Negligence or disregard. Freetaxusa 2006   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. Freetaxusa 2006 Negligence also includes failure to keep adequate books and records. Freetaxusa 2006 You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. Freetaxusa 2006   The term “disregard” includes any careless, reckless, or intentional disregard. Freetaxusa 2006 Adequate disclosure. Freetaxusa 2006   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. Freetaxusa 2006 See Disclosure statement , later. Freetaxusa 2006   This exception will not apply to an item that is attributable to a tax shelter. Freetaxusa 2006 In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. Freetaxusa 2006 Substantial understatement of income tax. Freetaxusa 2006   You understate your tax if the tax shown on your return is less than the correct tax. Freetaxusa 2006 The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. Freetaxusa 2006 However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. Freetaxusa 2006   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. Freetaxusa 2006 However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. Freetaxusa 2006 Substantial authority. Freetaxusa 2006   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. Freetaxusa 2006 Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. Freetaxusa 2006 Disclosure statement. Freetaxusa 2006   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. Freetaxusa 2006 You must also have a reasonable basis for treating the item the way you did. Freetaxusa 2006   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. Freetaxusa 2006   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. Freetaxusa 2006 Transaction lacking economic substance. Freetaxusa 2006   For more information on economic substance, see section 7701(o). Freetaxusa 2006 Foreign financial asset. Freetaxusa 2006   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. Freetaxusa 2006 Reasonable cause. Freetaxusa 2006   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. Freetaxusa 2006 You must also show that you acted in good faith. Freetaxusa 2006 This does not apply to a transaction that lacks economic substance. Freetaxusa 2006 Filing erroneous claim for refund or credit. Freetaxusa 2006   You may have to pay a penalty if you file an erroneous claim for refund or credit. Freetaxusa 2006 The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. Freetaxusa 2006 However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. Freetaxusa 2006 The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. Freetaxusa 2006 Frivolous tax submission. Freetaxusa 2006   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. Freetaxusa 2006 A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. Freetaxusa 2006 For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. Freetaxusa 2006 irs. Freetaxusa 2006 gov/irb/2010-17_irb/ar13. Freetaxusa 2006 html. Freetaxusa 2006   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. Freetaxusa 2006 This includes altering or striking out the preprinted language above the space provided for your signature. Freetaxusa 2006   This penalty is added to any other penalty provided by law. Freetaxusa 2006 Fraud. Freetaxusa 2006   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. Freetaxusa 2006 Failure to supply taxpayer identification number. Freetaxusa 2006   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. Freetaxusa 2006 You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. Freetaxusa 2006   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. Freetaxusa 2006 The number must be shown on the Form 1099-INT or other statement the bank sends you. Freetaxusa 2006 If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. Freetaxusa 2006 (You also may be subject to “backup” withholding of income tax. Freetaxusa 2006 )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. Freetaxusa 2006 Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. Freetaxusa 2006 Prev  Up  Next   Home   More Online Publications