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Online 1040x

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Online 1040x

Online 1040x 8. Online 1040x   Paying Tax Through Withholding or Estimated Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Notification of Alien Status Withholding From CompensationWithholding on Wages Withholding on Pensions Withholding on Tip Income Independent Contractors Withholding From Other IncomeTax Withheld on Partnership Income Withholding on Scholarships and Fellowship Grants Income Entitled to Tax Treaty BenefitsStudents, teachers, and researchers. Online 1040x Tax Withheld on Real Property Sales Social Security and Medicare TaxesStudents and Exchange Visitors Agricultural Workers Self-Employment Tax International Social Security Agreements Estimated Tax Form 1040-ES (NR)Fiscal year. Online 1040x Introduction This chapter discusses how to pay your U. Online 1040x S. Online 1040x income tax as you earn or receive income during the year. Online 1040x In general, the federal income tax is a pay as you go tax. Online 1040x There are two ways to pay as you go. Online 1040x Withholding. Online 1040x If you are an employee, your employer probably withholds income tax from your pay. Online 1040x Tax may also be withheld from certain other income—including pensions, bonuses, commissions, and gambling winnings. Online 1040x In each case, the amount withheld is paid to the U. Online 1040x S. Online 1040x Treasury in your name. Online 1040x Estimated tax. Online 1040x If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Online 1040x People who are in business for themselves generally will have to pay their tax this way. Online 1040x You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. Online 1040x Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Online 1040x Topics - This chapter discusses: How to notify your employer of your alien status, Income subject to withholding of income tax, Exemptions from withholding, Social security and Medicare taxes, and Estimated tax rules. Online 1040x Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 901 U. Online 1040x S. Online 1040x Tax Treaties Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) W-8ECI Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States W-9 Request for Taxpayer Identification Number and Certification 1040-ES (NR) U. Online 1040x S. Online 1040x Estimated Tax for Nonresident Alien Individuals 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 8288-B Application for Withholding Certificate for Dispositions by Foreign Persons of U. Online 1040x S. Online 1040x Real Property Interests 13930 Application for Central Withholding Agreement See chapter 12 for information about getting these publications and forms. Online 1040x Notification of Alien Status You must let your employer know whether you are a resident or a nonresident alien so your employer can withhold the correct amount of tax from your wages. Online 1040x If you are a resident alien under the rules discussed in chapter 1, you must file Form W-9 or a similar statement with your employer. Online 1040x If you are a nonresident alien under those rules, you must furnish to your employer Form 8233 or Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that your compensation is subject to graduated withholding at the same rates as resident aliens or U. Online 1040x S. Online 1040x citizens. Online 1040x If you are a resident alien and you receive income other than wages (such as dividends and royalties) from sources within the United States, file Form W-9 or similar statement with the withholding agent (generally, the payer of the income) so the agent will not withhold tax on the income at the 30% (or lower treaty) rate. Online 1040x If you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at the 30% (or lower treaty) rate. Online 1040x However, if the income is effectively connected with a U. Online 1040x S. Online 1040x trade or business, file Form W-8ECI instead. Online 1040x Withholding From Compensation The following discussion generally applies only to nonresident aliens. Online 1040x Tax is withheld from resident aliens in the same manner as U. Online 1040x S. Online 1040x citizens. Online 1040x Wages and other compensation paid to a nonresident alien for services performed as an employee are usually subject to graduated withholding at the same rates as resident aliens and U. Online 1040x S. Online 1040x citizens. Online 1040x Therefore, your compensation, unless it is specifically excluded from the term “wages” by law, or is exempt from tax by treaty, is subject to graduated withholding. Online 1040x Withholding on Wages If you are an employee and you receive wages subject to graduated withholding, you will be required to fill out a Form W-4. Online 1040x Also fill out Form W-4 for a scholarship or fellowship grant to the extent it represents payment for past, present, or future services and for which you are not claiming a tax treaty withholding exemption on Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). Online 1040x These are services you are required to perform as an employee and as a condition of receiving the scholarship or fellowship (or tuition reduction). Online 1040x Nonresident aliens should fill out Form W-4 using the following instructions instead of the instructions on the Form W-4. Online 1040x This is because of the restrictions on a nonresident alien's filing status, the limited number of personal exemptions a nonresident alien is allowed, and because a nonresident alien cannot claim the standard deduction. Online 1040x Enter your social security number (SSN) on line 2. Online 1040x Do not enter an individual taxpayer identification number (ITIN). Online 1040x Check only “Single” marital status on line 3 (regardless of your actual marital status). Online 1040x Claim only one allowance on line 5, unless you are a resident of Canada, Mexico, or South Korea, or a U. Online 1040x S. Online 1040x national. Online 1040x Write “Nonresident Alien” or “NRA” on the dotted line on line 6. Online 1040x You can request additional withholding on line 6 at your option. Online 1040x Do not claim “Exempt” withholding status on line 7. Online 1040x A U. Online 1040x S. Online 1040x national is an individual who, although not a U. Online 1040x S. Online 1040x citizen, owes his or her allegiance to the United States. Online 1040x U. Online 1040x S. Online 1040x nationals include American Samoans, and Northern Mariana Islanders who chose to become U. Online 1040x S. Online 1040x nationals instead of U. Online 1040x S. Online 1040x citizens. Online 1040x See Withholding on Scholarships and Fellowship Grants later, for how to fill out Form W-4 if you receive a U. Online 1040x S. Online 1040x source scholarship or fellowship grant that is not a payment for services. Online 1040x Students and business apprentices from India. Online 1040x   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you may claim an additional withholding allowance for the standard deduction. Online 1040x You can claim an additional withholding allowance for your spouse only if your spouse will have no gross income for 2013 and cannot be claimed as a dependent on another U. Online 1040x S. Online 1040x taxpayer's 2013 return. Online 1040x You may also claim an additional withholding allowance for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Online 1040x S. Online 1040x citizens. Online 1040x Household employees. Online 1040x   If you work as a household employee, your employer does not have to withhold income tax. Online 1040x However, you may agree to voluntary income tax withholding by filing a Form W-4 with your employer. Online 1040x The agreement goes into effect when your employer accepts the agreement by beginning the withholding. Online 1040x You or your employer may end the agreement by letting the other know in writing. Online 1040x Agricultural workers. Online 1040x   If you are an agricultural worker on an H-2A visa, your employer does not have to withhold income tax. Online 1040x However, your employer will withhold income tax only if you and your employer agree to withhold. Online 1040x In that case, you must provide your employer with a properly completed Form W-4. Online 1040x You can find more information about not having tax withheld at www. Online 1040x irs. Online 1040x gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Online 1040x Wages Exempt From Withholding Wages that are exempt from U. Online 1040x S. Online 1040x income tax under an income tax treaty are generally exempt from withholding. Online 1040x For information on how to claim this exemption from withholding, see Income Entitled to Tax Treaty Benefits , later. Online 1040x Wages paid to aliens who are residents of American Samoa, Canada, Mexico, Puerto Rico, or the U. Online 1040x S. Online 1040x Virgin Islands may be exempt from withholding. Online 1040x The following paragraphs explain these exemptions. Online 1040x Residents of Canada or Mexico engaged in transportation-related employment. Online 1040x   Certain residents of Canada or Mexico who enter or leave the United States at frequent intervals are not subject to withholding on their wages. Online 1040x These persons either: Perform duties in transportation service between the United States and Canada or Mexico, or Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or crossing, the boundary between the United States and Canada or the boundary between the United States and Mexico. Online 1040x    This employment is subject to withholding of social security and Medicare taxes unless the services are performed for a railroad. Online 1040x   To qualify for the exemption from withholding during a tax year, a Canadian or Mexican resident must give the employer a statement in duplicate with name, address, and identification number, certifying that the resident: Is not a U. Online 1040x S. Online 1040x citizen or resident, Is a resident of Canada or Mexico, whichever applies, and Expects to perform duties previously described during the tax year in question. Online 1040x   The statement can be in any form, but it must be dated and signed by the employee and must include a written declaration that it is made under the penalties of perjury. Online 1040x Residents of American Samoa and Puerto Rico. Online 1040x   If you are a nonresident alien employee who is a resident of American Samoa or Puerto Rico, wages for services performed in American Samoa or Puerto Rico are generally not subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico. Online 1040x Residents of the U. Online 1040x S. Online 1040x Virgin Islands. Online 1040x   Nonresident aliens who are bona fide residents of the U. Online 1040x S Virgin Islands are not subject to withholding of U. Online 1040x S. Online 1040x tax on income earned while temporarily employed in the United States. Online 1040x This is because those persons pay their income tax to the U. Online 1040x S. Online 1040x Virgin Islands. Online 1040x To avoid having tax withheld on income earned in the United States, bona fide residents of the U. Online 1040x S. Online 1040x Virgin Islands should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U. Online 1040x S. Online 1040x Virgin Islands and expect to pay tax on all income to the U. Online 1040x S. Online 1040x Virgin Islands. Online 1040x Withholding on Pensions If you receive a pension as a result of personal services performed in the United States, the pension income is subject to the 30% (or lower treaty) rate of withholding. Online 1040x You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after December 31, 1986. Online 1040x You must fill out Form W-8BEN and give it to the withholding agent or payer before the income is paid or credited to you. Online 1040x Withholding on Tip Income Tips you receive during the year for services performed in the United States are subject to U. Online 1040x S. Online 1040x income tax. Online 1040x Include them in taxable income. Online 1040x In addition, tips received while working for one employer, amounting to $20 or more in a month, are subject to graduated withholding. Online 1040x Independent Contractors If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding. Online 1040x However, if you are engaged in a trade or business in the United States during the tax year, your compensation for personal services as an independent contractor (independent personal services) may be entirely or partly exempt from withholding if you reach an agreement with the Internal Revenue Service on the amount of withholding required. Online 1040x An agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for payments covered by the agreement after it is agreed to by all parties. Online 1040x You must agree to timely file an income tax return for the current tax year. Online 1040x Central withholding agreements. Online 1040x   If you are a nonresident alien entertainer or athlete performing or participating in athletic events in the United States, you may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. Online 1040x Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability. Online 1040x   File Form 13930 and the required attachments with the IRS to request a central withholding agreement. Online 1040x Either you or your authorized representative can file the form. Online 1040x It should be sent to the IRS at least 45 days before the tour begins or the event occurs. Online 1040x Exceptions will be considered on a case by case basis. Online 1040x   For more information on the CWA program, go to www. Online 1040x irs. Online 1040x gov/Individuals/International-Taxpayers/Central-Withholding-Agreements. Online 1040x Final payment exemption. Online 1040x   Your final payment of compensation during the tax year for independent personal services may be entirely or partly exempt from withholding. Online 1040x This exemption is available only once during your tax year and applies to a maximum of $5,000 of compensation. Online 1040x To obtain this exemption, you or your agent must give the following statements and information to the Commissioner or his delegate. Online 1040x A statement by each withholding agent from whom you have received gross income effectively connected with a trade or business in the United States during the tax year, showing the amount of income paid and the tax withheld. Online 1040x Each statement must be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Online 1040x A statement by the withholding agent from whom you expect to receive the final payment of compensation, showing the amount of the payment and the amount of tax that would be withheld if a final payment exemption were not granted. Online 1040x This statement must also be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Online 1040x A statement by you that you do not intend to receive any other income effectively connected with a trade or business in the United States during the current tax year. Online 1040x The amount of tax that has been withheld or paid under any other provision of the Internal Revenue Code or regulations for any income effectively connected with your trade or business in the United States during the current tax year. Online 1040x The amount of your outstanding tax liabilities, if any, including interest and penalties, from the current tax year or prior tax periods. Online 1040x Any provision of an income tax treaty under which a partial or complete exemption from withholding may be claimed, the country of your residence, and a statement of sufficient facts to justify an exemption under the treaty. Online 1040x A statement signed by you, and verified by a declaration that it is made under penalties of perjury, that all the information given is true and that to your knowledge no relevant information has been omitted. Online 1040x   If satisfied with the information, the IRS will determine the amount of your tentative income tax for the tax year on gross income effectively connected with your trade or business in the United States. Online 1040x Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or his delegate. Online 1040x   The Commissioner or his delegate will send you a letter, directed to the withholding agent, showing the amount of the final payment of compensation that is exempt from withholding and the amount that can be paid to you because of the exemption. Online 1040x You must give two copies of the letter to the withholding agent and must also attach a copy of the letter to your income tax return for the tax year for which the exemption is effective. Online 1040x Allowance for Personal Exemption Withholding on payments for independent personal services is generally based on the amount of your compensation payment minus the value of one exemption ($3,950 for 2014). Online 1040x To determine the income for independent personal services performed in the United States to which the 30% (or lower treaty) rate will apply, you are allowed one personal exemption if you are not a U. Online 1040x S. Online 1040x national and are not a resident of Canada, Mexico, or South Korea. Online 1040x For purposes of 30% withholding, the exemption is prorated at $10. Online 1040x 82 a day in 2014 for the period that labor or personal services are performed in the United States. Online 1040x To claim an exemption from withholding on the personal exemption amount, fill out the applicable parts of Form 8233 and give it to the withholding agent. Online 1040x Example. Online 1040x Eric Johannsen, who is a resident of Country X worked under a contract with a U. Online 1040x S. Online 1040x firm (not as an employee) in the United States for 100 days during 2014 before returning to his country. Online 1040x He earned $6,000 for the services performed (not considered wages) in the United States. Online 1040x Eric is married and has three dependent children. Online 1040x His wife is not employed and has no income subject to U. Online 1040x S. Online 1040x tax. Online 1040x The amount of the personal exemption to be allowed against the income for his personal services performed within the United States in 2014 is $1,082 (100 days × $10. Online 1040x 82), and withholding at 30% is applied against the balance. Online 1040x Thus, $1,475. Online 1040x 40 in tax is withheld from Eric's earnings (30% of $4,918 ($6,000 − $1,082). Online 1040x U. Online 1040x S. Online 1040x nationals or residents of Canada, Mexico, or South Korea. Online 1040x   If you are a nonresident alien who is a resident of Canada, Mexico, or South Korea, or who is a national of the United States, you are subject to the same 30% withholding on your compensation for independent personal services performed in the United States. Online 1040x However, if you are a U. Online 1040x S. Online 1040x national or a resident of Canada or Mexico, you are allowed the same personal exemptions as U. Online 1040x S. Online 1040x citizens. Online 1040x For the 30% (or lower treaty) rate withholding, you can take $10. Online 1040x 82 per day for each allowable exemption in 2014. Online 1040x If you are a resident of South Korea, you are allowed personal exemptions for yourself and for your spouse and children who live with you in the United States at any time during the tax year. Online 1040x However, the additional exemptions for your spouse and children must be further prorated as explained in chapter 5 under Exemptions . Online 1040x Students and business apprentices from India. Online 1040x   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are allowed an exemption for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Online 1040x S. Online 1040x taxpayer's 2014 return. Online 1040x You are also allowed an exemption for each dependent not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Online 1040x S. Online 1040x citizens. Online 1040x For the 30% (or lower treaty rate) withholding on compensation for independent personal services performed in the United States, you are allowed $10. Online 1040x 82 per day for each allowable exemption in 2014. Online 1040x Refund of Taxes Withheld in Error Multi-level marketing. Online 1040x   If you are a distributor for a multi-level marketing company who had taxes withheld in error, file a U. Online 1040x S. Online 1040x income tax return (Form 1040NR, Form 1040NR-EZ, or Form 1120-F) or, if a tax return has already been filed, a claim for refund (Form 1040X or amended Form 1120-F) to recover the amount withheld in error. Online 1040x You must also attach to the U. Online 1040x S. Online 1040x income tax return or claim for refund supporting information that includes, but is not limited to, the following items. Online 1040x A copy of your Form W-2, Form 1042-S, or Form 1099 to prove the amount of taxes withheld. Online 1040x A statement explaining why income reported on your Form W-2, Form 1042-S, or Form 1099 is not subject to U. Online 1040x S. Online 1040x taxation. Online 1040x A statement listing all the dates you entered and left the United States during the taxable year. Online 1040x If the compensation is multi-year compensation, the statement must list all the dates you entered and left the United States during each of the taxable years to which the compensation is attributable. Online 1040x A copy of any documents or records that show the number of days you actually were present in the United States during the years listed. Online 1040x A statement providing: (a) the number of days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection with recruiting, training, and supporting your lower-tier distributors; and (b) the total number of days (or unit of time less than a day, if appropriate) that personal services were performed globally in connection with recruiting, training, and supporting your lower-tier distributors. Online 1040x Any further relevant document or record supporting your claim that the taxes were withheld in error. Online 1040x Withholding From Other Income Other income subject to 30% withholding generally includes fixed or determinable income such as interest (other than portfolio interest), dividends, pensions and annuities, and gains from certain sales and exchanges, discussed in chapter 4. Online 1040x It also includes 85% of social security benefits paid to nonresident aliens. Online 1040x Refund of taxes withheld in error on social security benefits paid to resident aliens. Online 1040x   Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. Online 1040x For U. Online 1040x S. Online 1040x income tax purposes, green card holders continue to be resident aliens until their lawful permanent resident status under immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Online 1040x See Green Card Test in chapter 1. Online 1040x If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Online 1040x SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Online 1040x If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Online 1040x You must also attach the following to your Form 1040 or 1040A. Online 1040x A copy of Form SSA-1042S, Social Security Benefit Statement. Online 1040x A copy of the “green card. Online 1040x ” A signed declaration that includes the following statements: The SSA should not have withheld income tax from my social security benefits because I am a U. Online 1040x S. Online 1040x lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Online 1040x I am filing a U. Online 1040x S. Online 1040x income tax return for the tax year as a resident alien reporting all of my worldwide income. Online 1040x I have not claimed benefits for the tax year under an income tax treaty as the resident of a country other than the United States. Online 1040x Other income not subject to withholding of 30% (or lower treaty) rate. Online 1040x   The following income is not subject to withholding at the 30% (or lower treaty) rate if you file Form W-8ECI with the payer of the income. Online 1040x Income (other than compensation) that is effectively connected with your U. Online 1040x S. Online 1040x trade or business. Online 1040x Income from real property that you choose to treat as effectively connected with a U. Online 1040x S. Online 1040x trade or business. Online 1040x See Income From Real Property in chapter 4 for details about this choice. Online 1040x   Special rules for withholding on partnership income, scholarships, and fellowships are explained next. Online 1040x Tax Withheld on Partnership Income If you are a foreign partner in a U. Online 1040x S. Online 1040x or foreign partnership, the partnership will withhold tax on your share of effectively connected taxable income (ECTI) from the partnership. Online 1040x You may be able to reduce your ECTI subject to withholding by certain partner-level deductions. Online 1040x Generally, you must use Form 8804-C for this purpose. Online 1040x See the Instructions for Form 8804-C for more information. Online 1040x The withholding rate on your share of effectively connected income is generally the highest rate of tax specified under section 1 of the Code (39. Online 1040x 6% for 2014). Online 1040x However, the partnership may withhold at the highest rate that applies to a particular type of income allocable to you if you gave the partnership the appropriate documentation. Online 1040x Long-term capital gain is an example of a particular type of income to which the highest tax rate applies. Online 1040x Claim the tax withheld as a credit on your 2014 Form 1040NR. Online 1040x The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Online 1040x A partnership that is publicly traded will withhold tax on your actual distributions of effectively connected income. Online 1040x In this case the partnership will give you a statement on Form 1042-S, Foreign Person's U. Online 1040x S. Online 1040x Source Income Subject to Withholding. Online 1040x Withholding on Scholarships and Fellowship Grants There is no withholding on a qualified scholarship received by a candidate for a degree. Online 1040x See chapter 3. Online 1040x If you are a nonresident alien student or grantee with an “F,” “J,” “M,” or “Q” visa and you receive a U. Online 1040x S. Online 1040x source grant or scholarship that is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax at 14% (or lower treaty rate) of the taxable part of the grant or scholarship that is not a payment for services. Online 1040x However, if you are not a candidate for a degree and the grant does not meet certain requirements, tax will be withheld at the 30% (or lower treaty) rate. Online 1040x Any part of a scholarship or fellowship grant that is a payment for services is subject to graduated withholding as discussed earlier under Withholding on Wages. Online 1040x Alternate Withholding Procedure Your withholding agent may choose to use an alternate procedure by asking you to fill out Form W-4 and the Personal Allowances Worksheet (attached to Form W-4). Online 1040x Use the following instructions instead of the Form W-4 instructions to complete the worksheet. Online 1040x Line A. Online 1040x   Enter the total of the following amounts on line A. Online 1040x Personal exemption. Online 1040x   Include the prorated part of your allowable personal exemption. Online 1040x Figure the amount by multiplying the number of days you expect to be in the United States in 2014 by the daily exemption amount ($10. Online 1040x 82). Online 1040x Expenses. Online 1040x   Include expenses that will be deductible on your return. Online 1040x These include away-from-home expenses (meals, lodging, and transportation), certain state and local income taxes, charitable contributions, and casualty losses, discussed earlier under Itemized Deductions in chapter 5. Online 1040x They also include business expenses, moving expenses, and the IRA deduction discussed under Deductions in chapter 5. Online 1040x Nontaxable grant or scholarship. Online 1040x   Include the part of your grant or scholarship that is not taxable under U. Online 1040x S. Online 1040x law or under a tax treaty. Online 1040x Line B. Online 1040x   Enter -0- unless the following paragraph applies to you. Online 1040x   If you are a student who qualifies under Article 21(2) of the United States-India Income Tax Treaty, and you are not claiming deductions for away-from-home expenses or other itemized deductions (discussed earlier), enter the standard deduction on line B. Online 1040x The standard deduction amount for 2013 is $6,100. Online 1040x Lines C and D. Online 1040x   Enter -0- on both lines unless the following paragraphs apply to you. Online 1040x   If you are a resident of Canada, Mexico, South Korea, or a U. Online 1040x S. Online 1040x national, an additional daily exemption amount may be allowed for your spouse and each of your dependents. Online 1040x   If you are a resident of India who is eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you can claim an additional daily exemption amount for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Online 1040x S. Online 1040x taxpayer's 2014 return. Online 1040x You can also claim an additional amount for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Online 1040x S. Online 1040x citizens. Online 1040x   Enter any additional amount for your spouse on line C. Online 1040x Enter any additional amount for your dependents on line D. Online 1040x Lines E, F, and G. Online 1040x   No entries should be made on lines E, F, and G. Online 1040x Line H. Online 1040x   Add the amounts on lines A through D and enter the total on line H. Online 1040x Form W-4. Online 1040x   Complete lines 1 through 4 of Form W-4. Online 1040x Sign and date the form and give it with the Personal Allowances Worksheet to your withholding agent. Online 1040x   If you file a Form W-4 to reduce or eliminate the withholding on your scholarship or grant, you must file an annual U. Online 1040x S. Online 1040x income tax return to be allowed the exemptions and deductions you claimed on that form. Online 1040x If you are in the United States during more than one tax year, you must attach a statement to your yearly Form W-4 indicating that you have filed a U. Online 1040x S. Online 1040x income tax return for the previous year. Online 1040x If you have not been in the United States long enough to be required to file a return, you must attach a statement to your Form W-4 saying you will file a U. Online 1040x S. Online 1040x income tax return when required. Online 1040x After the withholding agent has accepted your Form W-4, tax will be withheld on your scholarship or grant at the graduated rates that apply to wages. Online 1040x The gross amount of the income is reduced by the amount on line H of the worksheet and the withholding tax is figured on the remainder. Online 1040x You will receive a Form 1042-S from the withholding agent (usually the payer of your grant) showing the gross amount of your taxable scholarship or fellowship grant less the withholding allowance amount, the tax rate, and the amount of tax withheld. Online 1040x Use this form to prepare your annual U. Online 1040x S. Online 1040x income tax return. Online 1040x Income Entitled to Tax Treaty Benefits If a tax treaty between the United States and your country provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payor of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. Online 1040x Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent. Online 1040x File Form W-8BEN for income that is not personal services income. Online 1040x File Form 8233 for personal services income as discussed next. Online 1040x Employees and independent contractors. Online 1040x   If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal service income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received. Online 1040x   Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. Online 1040x This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. Online 1040x In this case, you must file Form 1040NR (or Form 1040NR-EZ if you qualify) to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption. Online 1040x Students, teachers, and researchers. Online 1040x   Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. Online 1040x For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties. Online 1040x   If you received a scholarship or fellowship and personal services income from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income. Online 1040x Special events and promotions. Online 1040x   Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from rock music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. Online 1040x Form 13930 is used to request a reduction in withholding. Online 1040x Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. Online 1040x One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year. Online 1040x You will be required to pay U. Online 1040x S. Online 1040x tax, at the time of your departure from the United States, on any income for which you incorrectly claimed a treaty exemption. Online 1040x For more details on treaty provisions that apply to compensation, see Publication 901. Online 1040x Tax Withheld on Real Property Sales If you are a nonresident alien and you dispose of a U. Online 1040x S. Online 1040x real property interest, the transferee (buyer) of the property generally must withhold a tax equal to 10% of the amount realized on the disposition. Online 1040x A distribution by a qualified investment entity to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U. Online 1040x S. Online 1040x real property interest by the shareholder is subject to withholding at 35%. Online 1040x Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. Online 1040x These rules are covered in Publication 515. Online 1040x For information on the tax treatment of dispositions of U. Online 1040x S. Online 1040x real property interests, see Real Property Gain or Loss in chapter 4. Online 1040x If you are a partner in a domestic partnership, and the partnership disposes of a U. Online 1040x S. Online 1040x real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. Online 1040x Your share of the income and tax withheld will be reported to you on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U. Online 1040x S. Online 1040x Source Income Subject to Withholding (in the case of a publicly traded partnership). Online 1040x Withholding is not required in the following situations. Online 1040x The property is acquired by the buyer for use as a residence and the amount realized (sales price) is not more than $300,000. Online 1040x The property disposed of is an interest in a domestic corporation if any class of stock of the corporation is regularly traded on an established securities market. Online 1040x However, this exception does not apply to certain dispositions of substantial amounts of non-publicly traded interests in publicly traded corporations. Online 1040x The property disposed of is an interest in a U. Online 1040x S. Online 1040x corporation that is not regularly traded on an established market and you (the seller) give the buyer a copy of a statement issued by the corporation certifying that the interest is not a U. Online 1040x S. Online 1040x real property interest. Online 1040x You (the seller) give the buyer a certification stating, under penalties of perjury, that you are not a foreign person, and containing your name, U. Online 1040x S. Online 1040x taxpayer identification number, and home address. Online 1040x You can give the certification to a qualified substitute. Online 1040x The qualified substitute gives the buyer a statement, under penalties of perjury, that the certification is in the possession of the qualified substitute. Online 1040x For this purpose, a qualified substitute is (a) the person (including any attorney or title company) responsible for closing the transaction, other than your agent, and (b) the buyer's agent. Online 1040x The buyer receives a withholding certificate from the Internal Revenue Service. Online 1040x You give the buyer written notice that you are not required to recognize any gain or loss on the transfer because of a nonrecognition provision in the Internal Revenue Code or a provision in a U. Online 1040x S. Online 1040x tax treaty. Online 1040x The buyer must file a copy of the notice with the Ogden Service Center, P. Online 1040x O. Online 1040x Box 409101, Ogden, UT 84409. Online 1040x You must verify the notice as true and sign it under penalties of perjury. Online 1040x The notice must contain the following information. Online 1040x A statement that the notice is a notice of nonrecognition under regulation section 1. Online 1040x 1445-2(d)(2). Online 1040x Your name, taxpayer identification number, and home address. Online 1040x A statement that you are not required to recognize any gain or loss on the transfer. Online 1040x A brief description of the transfer. Online 1040x A brief summary of the law and facts supporting your claim that recognition of gain or loss is not required. Online 1040x You may not give the buyer a written notice for any of the following transfers: the sale of your main home on which you exclude gain, a like-kind exchange that does not qualify for nonrecognition treatment in its entirety, or a deferred like-kind exchange that has not been completed at the time the buyer must file Form 8288. Online 1040x Instead, a withholding certificate (described next) must be obtained. Online 1040x The amount you realize on the transfer of a U. Online 1040x S. Online 1040x real property interest is zero. Online 1040x The property is acquired by the United States, a U. Online 1040x S. Online 1040x state or possession, a political subdivision, or the District of Columbia. Online 1040x The distribution is from a domestically controlled qualified investment entity (QIE) and is treated as a distribution of a U. Online 1040x S. Online 1040x real property interest only because an interest in the entity was disposed of in an applicable wash sale transaction. Online 1040x For the definition of a QIE, see Qualified investment entities under Real Property Gain or Loss, earlier. Online 1040x See Wash sale under Real Property Gain or Loss in chapter 4. Online 1040x The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified substitute has actual knowledge, or receives notice from a seller's or buyer's agent (or substitute), that they are false. Online 1040x This also applies to the qualified substitute's statement under (4). Online 1040x Withholding certificates. Online 1040x   The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. Online 1040x Either you or the buyer can request a withholding certificate. Online 1040x   A withholding certificate can be issued due to any of the following. Online 1040x The IRS determines that reduced withholding is appropriate because either: The amount required to be withheld would be more than your maximum tax liability, or Withholding of the reduced amount would not jeopardize collection of the tax. Online 1040x All of your realized gain is exempt from U. Online 1040x S. Online 1040x tax. Online 1040x You or the buyer enters into an agreement for the payment of tax providing security for the tax liability. Online 1040x   Get Publication 515 and Form 8288-B for information on procedures to request a withholding certificate. Online 1040x Credit for tax withheld. Online 1040x   The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288, U. Online 1040x S. Online 1040x Withholding Tax Return for Dispositions by Foreign Persons of U. Online 1040x S. Online 1040x Real Property Interests. Online 1040x This form is filed with the IRS with copies A and B of Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. Online 1040x S. Online 1040x Real Property Interests. Online 1040x Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your taxpayer identification number (TIN). Online 1040x You must file Copy B with your tax return to take credit for the tax withheld. Online 1040x   A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. Online 1040x The IRS will send you a letter requesting the TIN and providing instructions for how to get a TIN. Online 1040x When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A. Online 1040x Social Security and Medicare Taxes If you work as an employee in the United States, you must pay social security and Medicare taxes in most cases. Online 1040x Your payments of these taxes contribute to your coverage under the U. Online 1040x S. Online 1040x social security system. Online 1040x Social security coverage provides retirement benefits, survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who meet certain eligibility requirements. Online 1040x In most cases, the first $113,700 of taxable wages received in 2013 for services performed in the United States is subject to social security tax. Online 1040x All taxable wages are subject to Medicare tax. Online 1040x Your employer deducts these taxes from each wage payment. Online 1040x Your employer must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. Online 1040x You can claim a credit for excess social security tax on your income tax return if you have more than one employer and the amount deducted from your combined wages for 2013 is more than $7,049. Online 1040x 40. Online 1040x Use the appropriate worksheet in chapter 3 of Publication 505, Tax Withholding and Estimated Tax, to figure your credit. Online 1040x If any one employer deducted more than $7,049. Online 1040x 40, you cannot claim a credit for that amount. Online 1040x Ask your employer to refund the excess. Online 1040x If your employer does not refund the excess, you can file a claim for refund using Form 843. Online 1040x In general, U. Online 1040x S. Online 1040x social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. Online 1040x In limited situations, these taxes apply to wages for services performed outside the United States. Online 1040x Your employer should be able to tell you if social security and Medicare taxes apply to your wages. Online 1040x You cannot make voluntary payments if no taxes are due. Online 1040x Additional Medicare Tax. Online 1040x   Beginning in 2013, in addition to the Medicare tax, a 0. Online 1040x 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $250,000 if married filing jointly, $125,000 if married filing separately, or $200,000 for any other filing status. Online 1040x   There are no special rules for nonresident aliens for purposes of Additional Medicare Tax. Online 1040x Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Online 1040x   Your employer is responsible for withholding the 0. Online 1040x 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in the calendar year. Online 1040x If you intend to file a joint return and you anticipate that you and your spouse's individual wages are not going to be more than $200,000 but your combined wages and self-employment income are going to be more than $250,000, you may want to request additional withholding on Form W-4 and/or make estimated tax payments. Online 1040x   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Online 1040x    See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Online 1040x For more information on Additional Medicare Tax, go to IRS. Online 1040x gov and enter “Additional Medicare Tax” in the search box. Online 1040x   Self-employed individuals may also be required to pay Additional Medicare Tax. Online 1040x See Self-Employment Tax , later. Online 1040x Students and Exchange Visitors Generally, services performed by you as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. Online 1040x This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. Online 1040x These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment. Online 1040x Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien as discussed in chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the same. Online 1040x Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security. Online 1040x Nonresident Alien Students If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. Online 1040x In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. Online 1040x Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien. Online 1040x Any student who is enrolled and regularly attending classes at a school may be exempt from social security and Medicare taxes on pay for services performed for that school. Online 1040x The U. Online 1040x S. Online 1040x Citizenship and Immigration Services (USCIS) permits on-campus work for students in “F-1” status if it does not displace a U. Online 1040x S. Online 1040x resident. Online 1040x On-campus work means work performed on the school's premises. Online 1040x On-campus work includes work performed at an off-campus location that is educationally affiliated with the school. Online 1040x On-campus work under the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study and is permitted by the USCIS. Online 1040x Social security and Medicare taxes are not withheld from pay for this work unless the student is considered a resident alien. Online 1040x If services performed by a nonresident alien student are not considered as performed to carry out the purpose for which the student was admitted to the United States, social security and Medicare taxes will be withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Online 1040x Exchange Visitors Exchange visitors are temporarily admitted to the United States under section 101(a)(15)(J) of the Immigration and Nationality Act. Online 1040x Social security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien. Online 1040x If services performed by an exchange visitor are not considered as performed to carry out the purpose for which the visitor was admitted to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Online 1040x Nonresident aliens temporarily admitted to the United States as participants in international cultural exchange programs under section 101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and Medicare taxes. Online 1040x The employer must be the petitioner through whom the alien obtained the “Q” visa. Online 1040x Social security and Medicare taxes are not withheld from pay for this work unless the alien is considered a resident alien. Online 1040x Refund of Taxes Withheld in Error If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Online 1040x If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Online 1040x Attach the following items to Form 843. Online 1040x A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld. Online 1040x A copy of your visa. Online 1040x Form I-94 (or other documentation showing your dates of arrival or departure). Online 1040x If you have an F-1 visa, documentation showing permission to work in the U. Online 1040x S. Online 1040x If you have a J-1 visa, documentation showing permission to work in the U. Online 1040x S. Online 1040x If you are engaged in optional practical training or employment due to severe economic necessity, documentation showing permission to work in the U. Online 1040x S. Online 1040x A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. Online 1040x If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer or on Form 8316 claiming your employer will not issue the refund. Online 1040x If you were exempt from social security and Medicare tax for only part of the year, pay statements showing the tax paid during the period you were exempt. Online 1040x File Form 843 (with attachments) with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0038. Online 1040x Do not use Form 843 to request a refund of Additional Medicare Tax. Online 1040x If Additional Medicare Tax was withheld from your pay in error, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959 with Form 1040 or 1040NR. Online 1040x If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040 or 1040NR, you must file Form 1040X, Amended U. Online 1040x S. Online 1040x Individual Income Tax Return, for the prior year in which the wages or compensation were originally received to recover the Additional Medicare Tax withheld in error. Online 1040x See the Instructions for Form 1040X. Online 1040x Agricultural Workers Agricultural workers temporarily admitted into the United States on H-2A visas are exempt from social security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. Online 1040x You can find more information about not having tax withheld at www. Online 1040x irs. Online 1040x gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Online 1040x Self-Employment Tax Self-employment tax is the social security and Medicare taxes for individuals who are self-employed. Online 1040x Nonresident aliens are not subject to self-employment tax unless an international social security agreement in effect determines that they are covered under the U. Online 1040x S. Online 1040x social security system. Online 1040x Residents of the U. Online 1040x S. Online 1040x Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are considered U. Online 1040x S. Online 1040x residents for this purpose and are subject to the self-employment tax. Online 1040x Resident aliens must pay self-employment tax under the same rules that apply to U. Online 1040x S. Online 1040x citizens. Online 1040x However, a resident alien employed by an international organization, a foreign government, or a wholly-owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States. Online 1040x Self-employment income you receive while you are a resident alien is subject to self-employment tax even if it was paid for services you performed as a nonresident alien. Online 1040x Example. Online 1040x Bill Jones is an author engaged in the business of writing books. Online 1040x Bill had several books published in a foreign country while he was a citizen and resident of that country. Online 1040x During 2013, Bill entered the United States as a resident alien. Online 1040x After becoming a U. Online 1040x S. Online 1040x resident, he continued to receive royalties from his foreign publisher. Online 1040x Bill reports his income and expenses on the cash basis (he reports income on his tax return when received and deducts expenses when paid). Online 1040x Bill's 2013 self-employment income includes the royalties received after he became a U. Online 1040x S. Online 1040x resident even though the books were published while he was a nonresident alien. Online 1040x This royalty income is subject to self-employment tax. Online 1040x Reporting self-employment tax. Online 1040x   Use Schedule SE (Form 1040) to report and figure your self-employment tax. Online 1040x Then enter the tax on Form 1040, line 56, or Form 1040NR, line 54. Online 1040x Attach Schedule SE to Form 1040 or Form 1040NR. Online 1040x Additional Medicare Tax. Online 1040x   Self-employed individuals must pay a 0. Online 1040x 9% Additional Medicare Tax on self-employment income that exceeds one of the following threshold amounts (based on your filing status): Married filing jointly — $250,000; Married filing separately — $125,000; Single, Head of household, or Qualifying widow(er) — $200,000. Online 1040x   If you have both wages and self-employment income, the threshold amount for applying the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. Online 1040x A self-employment loss should not be considered for purposes of this tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Online 1040x   See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Online 1040x For more information on Additional Medicare Tax, go to IRS. Online 1040x gov and enter “Additional Medicare Tax” in the search box. Online 1040x Deduction for employer-equivalent portion of self-employment tax. Online 1040x   If you must pay self-employment tax, you can deduct a portion of the self-employment tax paid in figuring your adjusted gross income. Online 1040x This deduction is figured on Schedule SE (Form 1040). Online 1040x Note. Online 1040x No portion of the Additional Medicare Tax is deductible for self-employment tax. Online 1040x More information. Online 1040x   Get Publication 334, Tax Guide for Small Business, for more information about self-employment tax. Online 1040x International Social Security Agreements The United States has entered into social security agreements with foreign countries to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries. Online 1040x These agreements are commonly referred to as totalization agreements. Online 1040x Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. Online 1040x The agreements generally make sure that social security taxes (including self-employment tax) are paid only to one country. Online 1040x Agreements are in effect with the following countries. Online 1040x Australia. Online 1040x Austria. Online 1040x Belgium. Online 1040x Canada. Online 1040x Chile. Online 1040x Czech Republic. Online 1040x Denmark. Online 1040x Finland. Online 1040x France. Online 1040x Germany. Online 1040x Greece. Online 1040x Ireland. Online 1040x Italy. Online 1040x Japan. Online 1040x Korea, South. Online 1040x Luxembourg. Online 1040x The Netherlands. Online 1040x Norway. Online 1040x Poland. Online 1040x Portugal. Online 1040x Spain. Online 1040x Sweden. Online 1040x Switzerland. Online 1040x The United Kingdom. Online 1040x Agreements with other countries are expected to enter into force in the future. Online 1040x Employees. Online 1040x   Generally, under these agreements, you are subject to social security taxes only in the country where you are working. Online 1040x However, if you are temporarily sent to work for the same employer in the United States and your pay would normally be subject to social security taxes in both countries, most agreements provide that you remain covered only by the social security system of the country from which you were sent. Online 1040x You can get more information on any agreement by contacting the U. Online 1040x S. Online 1040x Social Security Administration at the address given later. Online 1040x If you have access to the Internet, you can get more information at www. Online 1040x socialsecurity. Online 1040x gov/international. Online 1040x   To establish that your pay is subject only to foreign social security taxes and is exempt from U. Online 1040x S. Online 1040x social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage from the appropriate agency of the foreign country. Online 1040x This will usually be the same agency to which you or your employer pays your foreign social security taxes. Online 1040x The foreign agency will be able to tell you what information is needed for them to issue the certificate. Online 1040x Your employer should keep a copy of the certificate because it may be needed to show why you are exempt from U. Online 1040x S. Online 1040x social security taxes. Online 1040x Only wages paid on or after the effective date of the agreement can be exempt from U. Online 1040x S. Online 1040x social security taxes. Online 1040x    Some of the countries with which the United States has agreements will not issue certificates of coverage. Online 1040x In this case, either you or your employer should request a statement that your wages are not covered by the U. Online 1040x S. Online 1040x social security system. Online 1040x Request the statement from the following address. Online 1040x U. Online 1040x S. Online 1040x Social Security Administration Office of International Programs P. Online 1040x O. Online 1040x Box 17741 Baltimore, MD 21235-7741 Self-employed individuals. Online 1040x   Under most agreements, self-employed individuals are covered by the social security system of the country where they reside. Online 1040x However, under some agreements, you may be exempt from U. Online 1040x S. Online 1040x self-employment tax if you temporarily transfer your business activity to or from the United States. Online 1040x   If you believe that your self-employment income is subject only to U. Online 1040x S. Online 1040x self-employment tax and is exempt from foreign social security taxes, request a certificate of coverage from the U. Online 1040x S. Online 1040x Social Security Administration at the address given earlier. Online 1040x This certificate will establish your exemption from foreign social security taxes. Online 1040x   To establish that your self-employment income is subject only to foreign social security taxes and is exempt from U. Online 1040x S. Online 1040x self-employment tax, request a certificate of coverage from the appropriate agency of the foreign country. Online 1040x If the foreign country will not issue the certificate, you should request a statement that your income is not covered by the U. Online 1040x S. Online 1040x social security system. Online 1040x Request it from the U. Online 1040x S. Online 1040x Social Security Administration at the address given earlier. Online 1040x Attach a photocopy of either statement to Form 1040 each year you are exempt. Online 1040x Also print “Exempt, see attached statement” on the line for self-employment tax. Online 1040x Estimated Tax Form 1040-ES (NR) You may have income from which no U. Online 1040x S. Online 1040x income tax is withheld. Online 1040x Or the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. Online 1040x If so, you may have to pay estimated tax. Online 1040x Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax and you expect your withholding and certain refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 income tax return, or 100% of the tax shown on your 2013 income tax return (if your 2013 return covered all 12 months of the year). Online 1040x If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above if you are not a farmer or fisherman. Online 1040x Item (2) does not apply if you did not file a 2013 return. Online 1040x A nonresident alien should use Form 1040-ES (NR) to figure and pay estimated tax. Online 1040x If you pay by check, make it payable to the "United States Treasury. Online 1040x " How to estimate your tax for 2014. Online 1040x   If you filed a 2013 return on Form 1040NR or Form 1040NR-EZ and expect your income, number of exemptions, and total deductions for 2014 to be nearly the same, you should use your 2013 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR) instructions. Online 1040x If you did not file a return for 2013, or if your income, exemptions, deductions, or credits will be different for 2014, you must estimate these amounts. Online 1040x Figure your estimated tax liability using the Tax Rate Schedule in the 2014 Form 1040-ES (NR) instructions for your filing status. Online 1040x Note. Online 1040x If you expect to be a resident of Puerto Rico during the entire year, use Form 1040-ES or Formulario 1040-ES (PR). Online 1040x When to pay estimated tax. Online 1040x   Make your first estimated tax payment by the due date for filing the previous year's Form 1040NR or Form 1040NR-EZ. Online 1040x If you have wages subject to the same withholding rules that apply to U. Online 1040x S. Online 1040x citizens, you must file Form 1040NR or Form 1040NR-EZ and make your first estimated tax payment by April 15, 2014. Online 1040x If you do not have wages subject to withholding, file your income tax return and make your first estimated tax payment by June 16, 2014. Online 1040x   If your first estimated tax payment is due April 15, 2014, you can pay your estimated tax in full at that time or in four equal installments by the dates shown next. Online 1040x 1st installment April 15, 2014 2nd installment June 16, 2014 3rd installment Sept. Online 1040x 15, 2014 4th installment Jan. Online 1040x 15, 2015 If your first payment is not due until June 16, 2014, you can pay your estimated tax in full at that time or: ½ of your estimated tax by June 16, 2014, 1/4 of the tax by September 15, 2014, and 1/4 by January 15, 2015. Online 1040x    You do not have to make the payment due January 15, 2015, if you file your 2014 Form 1040NR or 1040NR-EZ by February 2, 2015, and pay the entire balance due with your return. Online 1040x Fiscal year. Online 1040x   If your return is not on a calendar year basis, your due dates are the 15th day of the 4th, 6th, and 9th months of your fiscal year, and the 1st month of the following fiscal year. Online 1040x If any date falls on a Saturday, Sunday, or legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday. Online 1040x Changes in income, deductions, or exemptions. Online 1040x   Even if you are not required to make an estimated tax payment in April or June, your circumstances may change so that you will have to make estimated tax payments later. Online 1040x This can happen if you receive additional income or if any of your deductions are reduced or eliminated. Online 1040x If so, see the instructions for Form 1040-ES (NR) and Publication 505 for information on figuring your estimated tax. Online 1040x Amended estimated tax. Online 1040x   If, after you have made estimated tax payments, you find your estimated tax is substantially increased or decreased because of a change in your income or exemptions, you should adjust your remaining estimated tax payments. Online 1040x To do this, see the instructions for Form 1040-ES (NR) and Publication 505. Online 1040x Penalty for failure to pay estimated income tax. Online 1040x   You will be subject to a penalty for underpayment of installments of estimated tax except in certain situations. Online 1040x These situations are explained on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Online 1040x Prev  Up  Next   Home   More Online Publications
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Understanding Your CP268 Notice

We made changes to your return because we believe there is a miscalculation on your return. You have a potential overpayment credit because of this miscalculation.


What you need to do

  • Read and review your notice carefully ― it will explain the change
  • Compare our changes to the information on your tax return
  • Call the toll-free number listed on your notice within 30 days to request a refund check or to apply the credit to other types of tax or tax periods
  • Correct your copy of your tax return for your records

You may want to...


Answers to Common Questions

  • What do I do if I find an uncredited or misapplied payment?
    Contact us at the toll-free number listed on your notice with your information. Our representative will discuss the issue with you and provide further instructions.

  • What choices do I have about what to do with my overpayment?
    You can have your overpayment credit refunded to you or you can have it applied to other taxes or tax periods.

  • When can I expect to receive my refund?
    You will receive it in four to six weeks if you respond to your notice within 30 days and if you owe no other taxes or debts we’re required to collect.

  • What can I do if I don't receive my refund in four to six weeks?
    Call us at the toll-free number listed on the top right corner of your notice.

  • What do I do if I need to make a correction to my account?
    Contact us at the toll-free number listed on your notice with your information. Our representative will discuss the issue with you and provide further instructions.

  • What do I need to do next year to get my refund through a direct deposit?
    Complete a Form 8050, Direct Deposit of Corporate Tax Refund and attach it to your return next year when you file your Form 1120, U.S. Corporation Income Tax Return, or your Form 1120S, U.S. Income Tax Return for an S Corporation.

  •  


  • Tips for next year

    Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions for which you may qualify. In many cases, you can file free. Learn more about how to file electronically here.


    Understanding your notice

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

    Notice CP268, Page 1

    Notice CP268, Page 2

    Notice CP268, Page 3

Page Last Reviewed or Updated: 30-Jan-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Online 1040x

Online 1040x 29. Online 1040x   Limit on Itemized Deductions Table of Contents Introduction Useful Items - You may want to see: Are You Subject to the Limit? Which Itemized Deductions Are Limited? Which Itemized Deductions Are Not Limited? How Do You Figure the Limit?Example. Online 1040x Introduction This chapter discusses the overall limit on itemized deductions on Schedule A (Form 1040). Online 1040x The following topics are included. Online 1040x Who is subject to the limit. Online 1040x Which itemized deductions are limited. Online 1040x How to figure the limit. Online 1040x Useful Items - You may want to see: Forms (and Instructions) Schedule A (Form 1040) Itemized Deductions Are You Subject to the Limit? You are subject to the limit on certain itemized deductions if your adjusted gross income (AGI) is more than $300,000 if married filing jointly or qualifying widow(er), $275,000 if head of household, $250,000 if single, or $150,000 if married filing separately. Online 1040x Your AGI is the amount on Form 1040, line 38. Online 1040x Which Itemized Deductions Are Limited? The following Schedule A (Form 1040) deductions are subject to the overall limit on itemized deductions. Online 1040x Taxes paid—line 9 Interest paid—lines 10, 11, 12, and 13 Gifts to charity—line 19 Job expenses and certain miscellaneous deductions—line 27 Other miscellaneous deductions—line 28, excluding gambling and casualty or theft losses. Online 1040x . Online 1040x Which Itemized Deductions Are Not Limited? The following Schedule A (Form 1040) deductions are not subject to the overall limit on itemized deductions. Online 1040x However, they are still subject to other applicable limits. Online 1040x Medical and dental expenses—line 4. Online 1040x Investment interest expense—line 14. Online 1040x Casualty and theft losses of personal use property—line 20. Online 1040x Casualty and theft losses of income-producing property—line 28. Online 1040x Gambling losses—line 28. Online 1040x How Do You Figure the Limit? If your itemized deductions are subject to the limit, the total of all your itemized deductions is reduced by the smaller of: 80% of your itemized deductions that are affected by the limit. Online 1040x See Which Itemized Deductions Are Limited , earlier, or 3% of the amount by which your AGI exceeds $300,000 if married filing jointly or qualifying widow(er), $275,000 if head of household, $250,000 if single, or $150,000 if married filing separately. Online 1040x Before you figure the overall limit on itemized deductions, you first must complete Schedule A (Form 1040), lines 1 through 28, including any related forms (such as Form 2106, Form 4684, etc. Online 1040x ). Online 1040x The overall limit on itemized deductions is figured after you have applied any other limit on the allowance of any itemized deduction. Online 1040x These other limits include charitable contribution limits (chapter 24), the limit on certain meal and entertainment expenses (chapter 26), and the 2%-of-adjusted-gross-income limit on certain miscellaneous deductions (chapter 28). Online 1040x Itemized Deductions Worksheet. Online 1040x   After you have completed Schedule A (Form 1040) through line 28, you can use the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040) to figure your limit. Online 1040x Enter the result on Schedule A (Form 1040), line 29. Online 1040x Keep the worksheet for your records. Online 1040x    You should compare the amount of your standard deduction to the amount of your itemized deductions after applying the limit. Online 1040x Use the greater amount when completing Form 1040, line 40. Online 1040x See chapter 20 for information on how to figure your standard deduction. Online 1040x Example. Online 1040x For tax year 2013 Bill and Terry Willow are filing a joint return on Form 1040. Online 1040x Their adjusted gross income on line 38 is $325,500. Online 1040x Their Schedule A itemized deductions are as follows: Taxes paid—line 9 $17,900 Interest paid—lines 10, 11, 12, and 13 45,000 Investment interest expense—line 14 41,000 Gifts to charity—line 19 21,000 Job expenses—line 27 17,240 Total $142,140 The Willows’ investment interest expense deduction ($41,000 from Schedule A (Form 1040), line 14) is not subject to the overall limit on itemized deductions. Online 1040x The Willows use the Itemized Deductions Worksheet in the Schedule A (Form 1040) instructions to figure their overall limit. Online 1040x Of their $142,140 total itemized deductions, the Willows can deduct only $141,375 ($142,140 - $765). Online 1040x They enter $141,375 on Schedule A (Form 1040), line 29. Online 1040x Prev  Up  Next   Home   More Online Publications