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Tax Slayer 2011

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Tax Slayer 2011

Tax slayer 2011 5. Tax slayer 2011   Figuring Your Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Identification NumberF-1 and M-1 visa holders. Tax slayer 2011 J-1 visa holders. Tax slayer 2011 Filing StatusResident Aliens Nonresident Aliens Reporting Your Income DeductionsResident Aliens Nonresident Aliens ExemptionsResident Aliens Nonresident Aliens Itemized DeductionsResident Aliens Nonresident Aliens Tax Credits and PaymentsResident Aliens Nonresident Aliens Bona Fide Residents of American Samoa or Puerto Rico Introduction After you have determined your alien status, the source of your income, and if and how that income is taxed in the United States, your next step is to figure your tax. Tax slayer 2011 The information in this chapter is not as comprehensive for resident aliens as it is for nonresident aliens. Tax slayer 2011 Resident aliens should get publications, forms, and instructions for U. Tax slayer 2011 S. Tax slayer 2011 citizens, because the information for filing returns for resident aliens is generally the same as for U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 If you are both a nonresident alien and a resident alien in the same tax year, see chapter 6 for a discussion of dual-status aliens. Tax slayer 2011 Topics - This chapter discusses: Identification numbers, Filing status, Deductions, Exemptions, Tax credits and payments, and Special rules for bona fide residents of American Samoa and Puerto Rico. Tax slayer 2011 Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 521 Moving Expenses 526 Charitable Contributions 535 Business Expenses 597 Information on the United States–Canada Income Tax Treaty Form (and Instructions) W-7 Application for IRS Individual Taxpayer Identification Number 1040 U. Tax slayer 2011 S. Tax slayer 2011 Individual Income Tax Return 1040NR U. Tax slayer 2011 S. Tax slayer 2011 Nonresident Alien Income Tax Return 1040NR-EZ U. Tax slayer 2011 S. Tax slayer 2011 Income Tax Return for Certain Nonresident Aliens With No Dependents 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 3903 Moving Expenses 4563 Exclusion of Income for Bona Fide Residents of American Samoa 8959 Additional Medicare Tax See chapter 12 for information about getting these publications and forms. Tax slayer 2011 Tax Year You must figure your income and file a tax return on the basis of an annual accounting period called a tax year. Tax slayer 2011 If you have not previously established a fiscal tax year, your tax year is the calendar year. Tax slayer 2011 A calendar year is 12 consecutive months ending on December 31. Tax slayer 2011 If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December or a 52–53 week year) and are considered to be a U. Tax slayer 2011 S. Tax slayer 2011 resident for any calendar year, you will be treated as a U. Tax slayer 2011 S. Tax slayer 2011 resident for any part of your fiscal year that falls within that calendar year. Tax slayer 2011 Identification Number A taxpayer identification number must be furnished on returns, statements, and other tax-related documents. Tax slayer 2011 For an individual, this is a social security number (SSN). Tax slayer 2011 If you do not have and are not eligible to get an SSN, you must apply for an individual taxpayer identification number (ITIN). Tax slayer 2011 An employer identification number (EIN) is required if you are engaged in a trade or business as a sole proprietor and have employees or a qualified retirement plan. Tax slayer 2011 You must furnish a taxpayer identification number if you are: An alien who has income effectively connected with the conduct of a U. Tax slayer 2011 S. Tax slayer 2011 trade or business at any time during the year, An alien who has a U. Tax slayer 2011 S. Tax slayer 2011 office or place of business at any time during the year, A nonresident alien spouse treated as a resident, as discussed in chapter 1, or Any other alien who files a tax return, an amended return, or a refund claim (but not information returns). Tax slayer 2011 Social security number (SSN). Tax slayer 2011   Generally, you can get an SSN if you have been lawfully admitted to the United States for permanent residence or under other immigration categories that authorize U. Tax slayer 2011 S. Tax slayer 2011 employment. Tax slayer 2011   To apply for this number, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration (SSA) office or call the SSA at 1-800-772-1213. Tax slayer 2011 You can also download Form SS-5 from the SSA's website at www. Tax slayer 2011 socialsecurity. Tax slayer 2011 gov/ssnumber/ss5. Tax slayer 2011 htm. Tax slayer 2011 You must visit an SSA office in person and submit your Form SS-5 along with original documentation showing your age, identity, immigration status, and authority to work in the United States. Tax slayer 2011 Generally, you will receive your card about 2 weeks after the SSA has all of the necessary information. Tax slayer 2011 F-1 and M-1 visa holders. Tax slayer 2011    If you are an F-1 or M-1 student, you must also show your Form I-20. Tax slayer 2011 For more information, see SSA Publication 05-10181, International Students and Social Security Numbers, available online at www. Tax slayer 2011 socialsecurity. Tax slayer 2011 gov/pubs/10181. Tax slayer 2011 html. Tax slayer 2011 J-1 visa holders. Tax slayer 2011   If you are a J-1 exchange visitor, you will also need to show your Form DS-2019. Tax slayer 2011 For more information, see SSA Publication 05-10107, Foreign Workers and Social Security Numbers, available online at www. Tax slayer 2011 socialsecurity. Tax slayer 2011 gov/pubs/10107. Tax slayer 2011 html. Tax slayer 2011 Individual taxpayer identification number (ITIN). Tax slayer 2011   If you do not have and are not eligible to get an SSN, you must apply for an ITIN. Tax slayer 2011 For details on how to do so, see Form W-7 and its instructions. Tax slayer 2011 Allow 6 to 10 weeks for the IRS to notify you of your ITIN. Tax slayer 2011 If you already have an ITIN, enter it wherever an SSN is required on your tax return. Tax slayer 2011   An ITIN is for tax use only. Tax slayer 2011 It does not entitle you to social security benefits or change your employment or immigration status under U. Tax slayer 2011 S. Tax slayer 2011 law. Tax slayer 2011   In addition to those aliens who are required to furnish a taxpayer identification number and are not eligible for an SSN, a Form W-7 must be filed for: Alien individuals who are claimed as dependents and are not eligible for an SSN, and Alien spouses who are claimed as exemptions and are not eligible for an SSN. Tax slayer 2011 Employer identification number (EIN). Tax slayer 2011   An individual may use an SSN (or ITIN) for individual taxes and an EIN for business taxes. Tax slayer 2011 To apply for an EIN, file Form SS-4, Application for Employer Identification Number, with the IRS. Tax slayer 2011 Filing Status The amount of your tax depends on your filing status. Tax slayer 2011 Your filing status is important in determining whether you can take certain deductions and credits. Tax slayer 2011 The rules for determining your filing status are different for resident aliens and nonresident aliens. Tax slayer 2011 Resident Aliens Resident aliens can use the same filing statuses available to U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 See your form instructions or Publication 501 for more information on filing status. Tax slayer 2011 Married filing jointly. Tax slayer 2011   Generally, you can file as married filing jointly only if both you and your spouse were resident aliens for the entire tax year, or if you make one of the choices discussed in chapter 1 to treat your spouse as a resident alien for the entire tax year. Tax slayer 2011 Qualifying widow(er). Tax slayer 2011   If your spouse died in 2011 or 2012, you did not remarry before the end of 2013, and you have a dependent child living with you, you may qualify to file as a qualifying widow(er) and use the joint return tax rates. Tax slayer 2011 This applies only if you could have filed a joint return with your spouse for the year your spouse died. Tax slayer 2011 Head of household. Tax slayer 2011   You can qualify as head of household if you are unmarried or considered unmarried on the last day of the year and you pay more than half the cost of keeping up a home for you and a qualifying person. Tax slayer 2011 You must be a resident alien for the entire tax year. Tax slayer 2011   You are considered unmarried for this purpose if your spouse was a nonresident alien at any time during the year and you do not make one of the choices discussed in chapter 1 to treat your spouse as a resident alien for the entire tax year. Tax slayer 2011 Note. Tax slayer 2011   Even if you are considered unmarried for head of household purposes because you are married to a nonresident alien, you may still be considered married for purposes of the earned income credit. Tax slayer 2011 In that case, you will not be entitled to the credit. Tax slayer 2011 See Publication 596 for more information. Tax slayer 2011 Nonresident Aliens If you are a nonresident alien filing Form 1040NR, you may be able to use one of the filing statuses discussed later. Tax slayer 2011 If you are filing Form 1040NR-EZ, you can only claim “Single nonresident alien” or “Married nonresident alien” as your filing status. Tax slayer 2011 Married nonresident alien. Tax slayer 2011   Married nonresident aliens who are not married to U. Tax slayer 2011 S. Tax slayer 2011 citizens or residents generally must use the Tax Table column or the Tax Computation Worksheet for married filing separate returns when determining the tax on income effectively connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 Exceptions. Tax slayer 2011   Married nonresident aliens normally cannot use the Tax Table column or the Tax Computation Worksheet for single individuals. Tax slayer 2011 However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a married resident of Canada, Mexico, South Korea, or are a married U. Tax slayer 2011 S. Tax slayer 2011 national. Tax slayer 2011 See the instructions for Form 1040NR or Form 1040NR-EZ to see if you qualify. Tax slayer 2011 U. Tax slayer 2011 S. Tax slayer 2011 national is defined later in this section under Qualifying widow(er) . Tax slayer 2011   A nonresident alien generally cannot file as married filing jointly. Tax slayer 2011 However, a nonresident alien who is married to a U. Tax slayer 2011 S. Tax slayer 2011 citizen or resident can choose to be treated as a resident and file a joint return on Form 1040, Form 1040A, or Form 1040EZ. Tax slayer 2011 For information on these choices, see chapter 1. Tax slayer 2011 If you do not make the choice to file jointly, file Form 1040NR or Form 1040NR-EZ and use the Tax Table column or the Tax Computation Worksheet for married individuals filing separately. Tax slayer 2011 Qualifying widow(er). Tax slayer 2011   You may be eligible to file as a qualifying widow(er) and use the joint return tax rates if all of the following conditions apply. Tax slayer 2011 You were a resident of Canada, Mexico, or South Korea, or a U. Tax slayer 2011 S. Tax slayer 2011 national (defined later). Tax slayer 2011 Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. Tax slayer 2011 You have a dependent child living with you. Tax slayer 2011 See the instructions for Form 1040NR for the rules for filing as a qualifying widow(er) with a dependent child. Tax slayer 2011   A U. Tax slayer 2011 S. Tax slayer 2011 national is an individual who, although not a U. Tax slayer 2011 S. Tax slayer 2011 citizen, owes his or her allegiance to the United States. Tax slayer 2011 U. Tax slayer 2011 S. Tax slayer 2011 nationals include American Samoans and Northern Mariana Islanders who chose to become U. Tax slayer 2011 S. Tax slayer 2011 nationals instead of U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 Head of household. Tax slayer 2011   You cannot file as head of household if you are a nonresident alien at any time during the tax year. Tax slayer 2011 However, if you are married, your spouse can qualify as a head of household if: Your spouse is a resident alien or U. Tax slayer 2011 S. Tax slayer 2011 citizen for the entire tax year, You do not choose to be treated as a resident alien, and Your spouse meets the other requirements for this filing status, as discussed earlier under Resident Aliens . Tax slayer 2011 Note. Tax slayer 2011   Even if your spouse is considered unmarried for head of household purposes because you are a nonresident alien, your spouse may still be considered married for purposes of the earned income credit. Tax slayer 2011 In that case, your spouse will not be entitled to the credit. Tax slayer 2011 See Publication 596 for more information. Tax slayer 2011 Estates and trusts. Tax slayer 2011   A nonresident alien estate or trust using Form 1040NR must use Tax Rate Schedule W in the Form 1040NR instructions when determining the tax on income effectively connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 Special rules for aliens from certain U. Tax slayer 2011 S. Tax slayer 2011 possessions. Tax slayer 2011   A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico for the entire tax year and who is temporarily working in the United States should read Bona Fide Residents of American Samoa or Puerto Rico, at the end of this chapter, for information about special rules. Tax slayer 2011 Reporting Your Income You must report each item of income that is taxable according to the rules in chapters 2, 3, and 4. Tax slayer 2011 For resident aliens, this includes income from sources both within and outside the United States. Tax slayer 2011 For nonresident aliens, this includes both income that is effectively connected with a trade or business in the United States (subject to graduated tax rates) and income from U. Tax slayer 2011 S. Tax slayer 2011 sources that is not effectively connected (subject to a flat 30% tax rate or lower tax treaty rate). Tax slayer 2011 Deductions Resident and nonresident aliens can claim similar deductions on their U. Tax slayer 2011 S. Tax slayer 2011 tax returns. Tax slayer 2011 However, nonresident aliens generally can claim only deductions related to income that is effectively connected with their U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 Resident Aliens You can claim the same deductions allowed to U. Tax slayer 2011 S. Tax slayer 2011 citizens if you are a resident alien for the entire tax year. Tax slayer 2011 While the discussion that follows contains some of the same general rules and guidelines that apply to you, it is specifically directed toward nonresident aliens. Tax slayer 2011 You should get Form 1040 and instructions for more information on how to claim your allowable deductions. Tax slayer 2011 Nonresident Aliens You can claim deductions to figure your effectively connected taxable income. Tax slayer 2011 You generally cannot claim deductions related to income that is not connected with your U. Tax slayer 2011 S. Tax slayer 2011 business activities. Tax slayer 2011 Except for personal exemptions, and certain itemized deductions, discussed later, you can claim deductions only to the extent they are connected with your effectively connected income. Tax slayer 2011 Ordinary and necessary business expenses. Tax slayer 2011   You can deduct all ordinary and necessary expenses in the operation of your U. Tax slayer 2011 S. Tax slayer 2011 trade or business to the extent they relate to income effectively connected with that trade or business. Tax slayer 2011 The deduction for travel expenses while in the United States is discussed under Itemized Deductions, later. Tax slayer 2011 For information about other business expenses, see Publication 535. Tax slayer 2011 Losses. Tax slayer 2011   You can deduct losses resulting from transactions that you entered into for profit and that you were not reimbursed for by insurance, etc. Tax slayer 2011 to the extent that they relate to income that is effectively connected with a trade or business in the United States. Tax slayer 2011 Educator expenses. Tax slayer 2011   If you were an eligible educator in 2013, you can deduct as an adjustment to income up to $250 in unreimbursed qualified expenses you paid or incurred during 2013 for books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment, and other equipment and materials used in the classroom. Tax slayer 2011 For more information, see your tax form instructions. Tax slayer 2011 Individual retirement arrangement (IRA). Tax slayer 2011   If you made contributions to a traditional IRA for 2013, you may be able to take an IRA deduction. Tax slayer 2011 But you must have taxable compensation effectively connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business to do so. Tax slayer 2011 A Form 5498 should be sent to you by May 31, 2014, that shows all contributions to your traditional IRA for 2013. Tax slayer 2011 If you were covered by a retirement plan (qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc. Tax slayer 2011 ) at work or through self-employment, your IRA deduction may be reduced or eliminated. Tax slayer 2011 But you can still make contributions to a traditional IRA even if you cannot deduct them. Tax slayer 2011 If you made nondeductible contributions to a traditional IRA for 2013, you must report them on Form 8606, Nondeductible IRAs. Tax slayer 2011   For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Tax slayer 2011 Moving expenses. Tax slayer 2011   If you are a nonresident alien temporarily in the United States earning taxable income for performing personal services, you can deduct moving expenses to the United States if you meet both of the following tests. Tax slayer 2011 You are a full-time employee for at least 39 weeks during the 12 months right after you move, or if you are self-employed, you work full time for at least 39 weeks during the first 12 months and 78 weeks during the first 24 months right after you move. Tax slayer 2011 Your new job location is at least 50 miles farther (by the shortest commonly traveled route) from your former home than your former job location was. Tax slayer 2011 If you had no former job location, the new job location must be at least 50 miles from your former home. Tax slayer 2011   You cannot deduct the moving expense you have when returning to your home abroad or moving to a foreign job site. Tax slayer 2011   Figure your deductible moving expenses to the United States on Form 3903, and deduct them on line 26 of Form 1040NR. Tax slayer 2011   For more information on the moving expense deduction, see Publication 521. Tax slayer 2011 Reimbursements. Tax slayer 2011   If your employer reimbursed you for allowable moving expenses under an accountable plan, your employer should have excluded these reimbursements from your income. Tax slayer 2011 You can only deduct allowable moving expenses that were not reimbursed by your employer or that were reimbursed but the reimbursement was included in your income. Tax slayer 2011 For more information, see Publication 521. Tax slayer 2011 Moving expense or travel expense. Tax slayer 2011   If you deduct moving expenses to the United States, you cannot also deduct travel expenses (discussed later under Itemized Deductions) while temporarily away from your tax home in a foreign country. Tax slayer 2011 Moving expenses are based on a change in your principal place of business while travel expenses are based on your temporary absence from your principal place of business. Tax slayer 2011 Self-employed SEP, SIMPLE, and qualified retirement plans. Tax slayer 2011   If you are self-employed, you may be able to deduct contributions to a SEP, SIMPLE, or qualified retirement plan that provides retirement benefits for yourself and your common-law employees, if any. Tax slayer 2011 To make deductible contributions for yourself, you must have net earnings from self-employment that are effectively connected with your U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011   Get Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans), for further information. Tax slayer 2011 Penalty on early withdrawal of savings. Tax slayer 2011   You must include in income all effectively connected interest income you receive or that is credited to your account during the year. Tax slayer 2011 Do not reduce it by any penalty you must pay on an early withdrawal from a time savings account. Tax slayer 2011 However, if the interest income is effectively connected with your U. Tax slayer 2011 S. Tax slayer 2011 trade or business during the year, you can deduct on line 30 of Form 1040NR the amount of the early withdrawal penalty that the banking institution charged. Tax slayer 2011 Student loan interest expense. Tax slayer 2011   If you paid interest on a student loan in 2013, you may be able to deduct up to $2,500 of the interest you paid. Tax slayer 2011 Generally, you can claim the deduction if all the following requirements are met. Tax slayer 2011 Your filing status is any filing status except married filing separately. Tax slayer 2011 Your modified adjusted gross income is less than $75,000. Tax slayer 2011 No one else is claiming an exemption for you on his or her 2013 tax return. Tax slayer 2011 You paid interest on a loan taken out only to pay tuition and other qualified higher education expenses for yourself, your spouse, someone who was your dependent when the loan was taken out, or someone you could have claimed as a dependent for the year the loan was taken out except that: The person filed a joint return, The person had gross income that was equal to or more than the exemption amount for that year ($3,900 for 2013), or You could be claimed as a dependent on someone else's return. Tax slayer 2011 The loan is not from a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan. Tax slayer 2011 The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out. Tax slayer 2011 The person for whom the expenses were paid or incurred was an eligible student. Tax slayer 2011 Use the worksheet in the Form 1040NR or Form 1040NR-EZ instructions to figure the deduction. Tax slayer 2011 For more information, see Publication 970, Tax Benefits for Education. Tax slayer 2011 Exemptions Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Tax slayer 2011 S. Tax slayer 2011 tax return. Tax slayer 2011 Resident Aliens You can claim personal exemptions and exemptions for dependents according to the dependency rules for U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 You can claim an exemption for your spouse on a separate return if your spouse had no gross income for U. Tax slayer 2011 S. Tax slayer 2011 tax purposes and was not the dependent of another taxpayer. Tax slayer 2011 You can claim this exemption even if your spouse has not been a resident alien for a full tax year or is an alien who has not come to the United States. Tax slayer 2011 You can claim an exemption for each person who qualifies as a dependent according to the rules for U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 The dependent must be a citizen or national (defined earlier) of the United States or be a resident of the United States, Canada, or Mexico for some part of the calendar year in which your tax year begins. Tax slayer 2011 Get Publication 501 for more information. Tax slayer 2011 Your spouse and each dependent for whom you claim an exemption must have either an SSN or an ITIN. Tax slayer 2011 See Identification Number, earlier. Tax slayer 2011 Nonresident Aliens Generally, if you are a nonresident alien engaged in a trade or business in the United States, you can claim only one personal exemption ($3,900 for 2013). Tax slayer 2011 You may be able to claim an exemption for a spouse and a dependent if you are described in any of the following discussions. Tax slayer 2011 Your spouse and each dependent for whom you claim an exemption must have either an SSN or an ITIN. Tax slayer 2011 See Identification Number, earlier. Tax slayer 2011 Residents of Mexico or Canada or U. Tax slayer 2011 S. Tax slayer 2011 nationals. Tax slayer 2011   If you are a resident of Mexico or Canada or a national of the United States (defined earlier), you can also claim a personal exemption for your spouse if your spouse had no gross income for U. Tax slayer 2011 S. Tax slayer 2011 tax purposes and cannot be claimed as the dependent on another U. Tax slayer 2011 S. Tax slayer 2011 taxpayer's return. Tax slayer 2011 In addition, you can claim exemptions for your dependents who meet certain tests. Tax slayer 2011 Residents of Mexico, Canada, or nationals of the United States must use the same rules as U. Tax slayer 2011 S. Tax slayer 2011 citizens to determine who is a dependent and for which dependents exemptions can be claimed. Tax slayer 2011 See Publication 501 for these rules. Tax slayer 2011 For purposes of these rules, dependents who are U. Tax slayer 2011 S. Tax slayer 2011 nationals meet the citizenship test discussed in Publication 501. Tax slayer 2011 Residents of South Korea. Tax slayer 2011   Nonresident aliens who are residents of South Korea may be able to claim exemptions for a spouse and children. Tax slayer 2011 The income tax treaty with South Korea imposes two additional requirements on South Korean residents: The spouse and all children claimed must live with the alien in the United States at some time during the tax year, and The additional deduction for the exemptions must be prorated based on the ratio of the alien's U. Tax slayer 2011 S. Tax slayer 2011 source gross income effectively connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business for the tax year to the alien's entire income from all sources during the tax year. Tax slayer 2011 Example. Tax slayer 2011 Mr. Tax slayer 2011 Park, a nonresident alien who is a resident of South Korea, lives temporarily in the United States with his wife and two children. Tax slayer 2011 During the tax year he receives U. Tax slayer 2011 S. Tax slayer 2011 compensation of $18,000. Tax slayer 2011 He also receives $6,000 of income from sources outside the United States that is not effectively connected with his U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 Thus, his total income for the year is $24,000. Tax slayer 2011 Mr. Tax slayer 2011 Park meets all requirements for claiming exemptions for his spouse and two children. Tax slayer 2011 The additional deduction for 2013 is $8,775 figured as follows: $18,000 $24,000 × $11,700* = $8,775               *3 × $3,900 = $11,700   Students and business apprentices from India. Tax slayer 2011   Students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty may be able to claim exemptions for their spouse and dependents. Tax slayer 2011   You can claim an exemption for your spouse if he or she had no gross income during the year and cannot be claimed as a dependent on another U. Tax slayer 2011 S. Tax slayer 2011 taxpayer's return. Tax slayer 2011   You can claim exemptions 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. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 See Publication 501 for these rules. Tax slayer 2011   List your spouse and dependents on line 7c of Form 1040NR. Tax slayer 2011 Enter the total on the appropriate line to the right of line 7c. Tax slayer 2011 Itemized Deductions Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Tax slayer 2011 However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 Resident Aliens You can claim the same itemized deductions as U. Tax slayer 2011 S. Tax slayer 2011 citizens, using Schedule A of Form 1040. Tax slayer 2011 These deductions include certain medical and dental expenses, state and local income taxes, real estate taxes, interest you paid on a home mortgage, charitable contributions, casualty and theft losses, and miscellaneous deductions. Tax slayer 2011 If you do not itemize your deductions, you can claim the standard deduction for your particular filing status. Tax slayer 2011 For further information, see Form 1040 and instructions. Tax slayer 2011 Nonresident Aliens You can deduct certain itemized deductions if you receive income effectively connected with your U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 These deductions include state and local income taxes, charitable contributions to U. Tax slayer 2011 S. Tax slayer 2011 organizations, casualty and theft losses, and miscellaneous deductions. Tax slayer 2011 Use Schedule A of Form 1040NR to claim itemized deductions. Tax slayer 2011 If you are filing Form 1040NR-EZ, you can only claim a deduction for state or local income taxes. Tax slayer 2011 If you are claiming any other itemized deduction, you must file Form 1040NR. Tax slayer 2011 Standard deduction. Tax slayer 2011   Nonresident aliens cannot claim the standard deduction. Tax slayer 2011 However, see Students and business apprentices from India , next. Tax slayer 2011 Students and business apprentices from India. Tax slayer 2011   A special rule applies to students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty. Tax slayer 2011 You can claim the standard deduction provided you do not claim itemized deductions. Tax slayer 2011   Use Worksheet 5-1 to figure your standard deduction. Tax slayer 2011 If you are married and your spouse files a return and itemizes deductions, you cannot take the standard deduction. Tax slayer 2011 State and local income taxes. Tax slayer 2011   You can deduct state and local income taxes you paid on income that is effectively connected with a trade or business in the United States. Tax slayer 2011 If you received a refund or rebate in 2013 of taxes you paid in an earlier year, do not reduce your deduction by that amount. Tax slayer 2011 Instead, you must include the refund or rebate in income if you deducted the taxes in the earlier year and the deduction reduced your tax. Tax slayer 2011 See Recoveries in Publication 525 for details on how to figure the amount to include in income. Tax slayer 2011 Charitable contributions. Tax slayer 2011   You can deduct your charitable contributions or gifts to qualified organizations subject to certain limits. Tax slayer 2011 Qualified organizations include organizations that are religious, charitable, educational, scientific, or literary in nature, or that work to prevent cruelty to children or animals. Tax slayer 2011 Certain organizations that promote national or international amateur sports competition are also qualified organizations. Tax slayer 2011 Foreign organizations. Tax slayer 2011   Contributions made directly to a foreign organization are not deductible. Tax slayer 2011 However, you can deduct contributions to a U. Tax slayer 2011 S. Tax slayer 2011 organization that transfers funds to a charitable foreign organization if the U. Tax slayer 2011 S. Tax slayer 2011 organization controls the use of the funds or if the foreign organization is only an administrative arm of the U. Tax slayer 2011 S. Tax slayer 2011 organization. Tax slayer 2011   For more information about organizations that qualify to receive charitable contributions, see Publication 526, Charitable Contributions. Tax slayer 2011 Worksheet 5-1. Tax slayer 2011 2013 Standard Deduction Worksheet for Students and Business Apprentices From India Caution. Tax slayer 2011 If you are married filing a separate return and your spouse itemizes deductions, do not complete this worksheet. Tax slayer 2011 You cannot take the standard deduction even if you were born before January 2, 1949, or are blind. Tax slayer 2011 1 Enter the amount shown below for your filing status. Tax slayer 2011           Single or married filing separately—$6,100 Qualifying widow(er)—$12,200 1. Tax slayer 2011           2 Can you be claimed as a dependent on someone else's U. Tax slayer 2011 S. Tax slayer 2011 income tax return?  No. Tax slayer 2011 Enter the amount from line 1 on line 4. Tax slayer 2011 Skip line 3 and go to line 5. Tax slayer 2011   Yes. Tax slayer 2011 Go to line 3. Tax slayer 2011         3 Is your earned income* more than $650?           Yes. Tax slayer 2011 Add $350 to your earned income. Tax slayer 2011 Enter the total. Tax slayer 2011           No. Tax slayer 2011 Enter $1,000 3. Tax slayer 2011       4 Enter the smaller of line 1 or line 3 4. Tax slayer 2011   5 If born before January 2, 1949, OR blind, enter $1,200 ($1,500 if single). Tax slayer 2011 If born before January 2, 1949, AND blind, enter $2,400 ($3,000 if single). Tax slayer 2011 Otherwise, enter -0- 5. Tax slayer 2011   6 Add lines 4 and 5. Tax slayer 2011 Enter the total here and on Form 1040NR, line 38 (or Form 1040NR-EZ, line 11). Tax slayer 2011 Print “Standard Deduction Allowed Under U. Tax slayer 2011 S. Tax slayer 2011 –India Income Tax Treaty” in the space to the left of these lines. Tax slayer 2011 This is your standard deduction for 2013. Tax slayer 2011 6. Tax slayer 2011   *Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Tax slayer 2011 It also includes any amount received as a scholarship that you must include in your income. Tax slayer 2011 Generally, your earned income is the total of the amount(s) you reported on Form 1040NR, lines 8,12,13, and 19, minus amounts on lines 27 and 31 (or Form 1040NR-EZ, lines 3 and 5, minus any amount on line 8). Tax slayer 2011 Contributions from which you benefit. Tax slayer 2011   If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Tax slayer 2011   If you pay more than the fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. Tax slayer 2011 For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Tax slayer 2011 Cash contributions. Tax slayer 2011   You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written record from the charity. Tax slayer 2011 The written record must include the name of the charity, date of the contribution, and the amount of the contribution. Tax slayer 2011   You may deduct a cash contribution of $250 or more only if you have a written statement from the charitable organization showing: The amount of any money contributed, Whether the organization gave you any goods or services in return for your contribution, and A description and estimate of the value of any goods or services described in (2). Tax slayer 2011 If you received only intangible religious benefits, the organization must state this, but it does not have to describe or value the benefit. Tax slayer 2011 Noncash contributions. Tax slayer 2011   For contributions not made in cash, the records you must keep depend on the amount of your deduction. Tax slayer 2011 See Publication 526 for details. Tax slayer 2011 For example, if you make a noncash contribution and the amount of your deduction is more than $500, you must complete and attach to your tax return Form 8283, Noncash Charitable Contributions. Tax slayer 2011 If you deduct more than $500 for a contribution of a motor vehicle, boat, or airplane, you must also attach a statement from the charitable organization to your return. Tax slayer 2011 If your total deduction is over $5,000, you also may have to get appraisals of the values of the property. Tax slayer 2011 If the donated property is valued at more than $5,000, you must obtain a qualified appraisal. Tax slayer 2011 You generally must attach to your tax return an appraisal of any property if your deduction for the property is more than $500,000. Tax slayer 2011 See Form 8283 and its instructions for details. Tax slayer 2011 Contributions of appreciated property. Tax slayer 2011   If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Tax slayer 2011 However, if you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Tax slayer 2011 Your basis in the property is generally what you paid for it. Tax slayer 2011 If you need more information about basis, get Publication 551, Basis of Assets. Tax slayer 2011   Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. Tax slayer 2011 For information about these rules, see Publication 526. Tax slayer 2011 Limit. Tax slayer 2011   The amount you can deduct in a tax year is limited in the same way it is for a citizen or resident of the United States. Tax slayer 2011 For a discussion of limits on charitable contributions and other information, get Publication 526. Tax slayer 2011 Casualty and theft losses. Tax slayer 2011   You can deduct your loss from fire, storm, shipwreck, or other casualty, or theft of property even though your property is not connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 The property can be personal use property or income-producing property not connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business. Tax slayer 2011 The property must be located in the United States at the time of the casualty or theft. Tax slayer 2011 You can deduct theft losses only in the year in which you discover the loss. Tax slayer 2011   The amount of the loss is the fair market value of the property immediately before the casualty or theft less its fair market value immediately after the casualty or theft (but not more than its cost or adjusted basis) less any insurance or other reimbursement. Tax slayer 2011 The fair market value of property immediately after a theft is considered zero, because you no longer have the property. Tax slayer 2011   If your property is covered by insurance, you should file a timely insurance claim for reimbursement. Tax slayer 2011 If you do not, you cannot deduct this loss as a casualty or theft loss. Tax slayer 2011   Figure your deductible casualty and theft losses on Form 4684, Casualties and Thefts. Tax slayer 2011 Losses from personal use property. Tax slayer 2011    You cannot deduct the first $100 of each casualty or theft loss to property held for personal use. Tax slayer 2011 You can deduct only the total of these losses for the year (reduced by the $100 limit) that is more than 10% of your adjusted gross income (line 37, Form 1040NR) for the year. Tax slayer 2011 Losses from income-producing property. Tax slayer 2011   These losses are not subject to the limitations that apply to personal use property. Tax slayer 2011 Use Section B of Form 4684 to figure your deduction for these losses. Tax slayer 2011 Job expenses and other miscellaneous deductions. Tax slayer 2011   You can deduct job expenses, such as allowable unreimbursed travel expenses (discussed next), and other miscellaneous deductions. Tax slayer 2011 Generally, the allowable deductions must be related to effectively connected income. Tax slayer 2011 Deductible expenses include: Union dues, Safety equipment and small tools needed for your job, Dues to professional organizations, Subscriptions to professional journals, Tax return preparation fees, and Casualty and theft losses of property used in performing services as an employee (employee property). Tax slayer 2011   Most miscellaneous itemized deductions are deductible only if they are more than 2% of your adjusted gross income (line 37, Form 1040NR). Tax slayer 2011 For more information on miscellaneous deductions, see the instructions for Form 1040NR. Tax slayer 2011 Travel expenses. Tax slayer 2011   You may be able to deduct your ordinary and necessary travel expenses while you are temporarily performing personal services in the United States. Tax slayer 2011 Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. Tax slayer 2011 You must be able to show you were present in the United States on an activity that required your temporary absence from your regular place of work. Tax slayer 2011   For example, if you have established a “tax home” through regular employment in a foreign country, and intend to return to similar employment in the same country at the end of your temporary stay in the United States, you can deduct reasonable travel expenses you paid. Tax slayer 2011 You cannot deduct travel expenses for other members of your family or party. Tax slayer 2011 Deductible travel expenses. Tax slayer 2011   If you qualify, you can deduct your expenses for: Transportation—airfare, local transportation, including train, bus, etc. Tax slayer 2011 , Lodging—rent paid, utilities (do not include telephone), hotel or motel room expenses, and Meal expenses—actual expenses allowed if you keep records of the amounts, or, if you do not wish to keep detailed records, you are generally allowed a standard meal allowance amount depending on the date and area of your travel. Tax slayer 2011 You generally can deduct only 50% of unreimbursed meal expenses. Tax slayer 2011 The standard meal allowance rates for high-cost areas are available at www. Tax slayer 2011 gsa. Tax slayer 2011 gov/perdiem. Tax slayer 2011 The rates for other areas are in Publication 463. Tax slayer 2011   Use Form 2106 or 2106-EZ to figure your allowable expenses that you claim on line 7 of Schedule A (Form 1040NR). Tax slayer 2011 Expenses allocable to U. Tax slayer 2011 S. Tax slayer 2011 tax-exempt income. Tax slayer 2011   You cannot deduct an expense, or part of an expense, that is allocable to U. Tax slayer 2011 S. Tax slayer 2011 tax-exempt income, including income exempt by tax treaty. Tax slayer 2011 Example. Tax slayer 2011 Irina Oak, a citizen of Poland, resided in the United States for part of the year to acquire business experience from a U. Tax slayer 2011 S. Tax slayer 2011 company. Tax slayer 2011 During her stay in the United States, she received a salary of $8,000 from her Polish employer. Tax slayer 2011 She received no other U. Tax slayer 2011 S. Tax slayer 2011 source income. Tax slayer 2011 She spent $3,000 on travel expenses, of which $1,000 were for meals. Tax slayer 2011 None of these expenses were reimbursed. Tax slayer 2011 Under the tax treaty with Poland, $5,000 of her salary is exempt from U. Tax slayer 2011 S. Tax slayer 2011 income tax. Tax slayer 2011 In filling out Form 2106-EZ, she must reduce her deductible meal expenses by half ($500). Tax slayer 2011 She must reduce the remaining $2,500 of travel expenses by 62. Tax slayer 2011 5% ($1,563) because 62. Tax slayer 2011 5% ($5,000 ÷ $8,000) of her salary is exempt from tax. Tax slayer 2011 She enters the remaining total of $937 on line 7 of Schedule A (Form 1040NR). Tax slayer 2011 She completes the remaining lines according to the instructions for Schedule A. Tax slayer 2011 More information. Tax slayer 2011   For more information about deductible expenses, reimbursements, and recordkeeping, get Publication 463. Tax slayer 2011 Tax Credits and Payments This discussion covers tax credits and payments for resident aliens, followed by a discussion of the credits and payments for nonresident aliens. Tax slayer 2011 Resident Aliens Resident aliens generally claim tax credits and report tax payments, including withholding, using the same rules that apply to U. Tax slayer 2011 S. Tax slayer 2011 citizens. Tax slayer 2011 The following items are some of the credits you may be able to claim. Tax slayer 2011 Foreign tax credit. Tax slayer 2011   You can claim a credit, subject to certain limits, for income tax you paid or accrued to a foreign country on foreign source income. Tax slayer 2011 You cannot claim a credit for taxes paid or accrued on excluded foreign earned income. Tax slayer 2011 To claim a credit for income taxes paid or accrued to a foreign country, you generally will file Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), with your Form 1040. Tax slayer 2011   For more information, get Publication 514, Foreign Tax Credit for Individuals. Tax slayer 2011 Child and dependent care credit. Tax slayer 2011   You may be able to take this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse, so that you can work or look for work. Tax slayer 2011 Generally, you must be able to claim an exemption for your dependent. Tax slayer 2011   For more information, get Publication 503, Child and Dependent Care Expenses, and Form 2441, Child and Dependent Care Expenses. Tax slayer 2011 Credit for the elderly or the disabled. Tax slayer 2011   You may qualify for this credit if you are 65 or older or if you retired on permanent and total disability. Tax slayer 2011 For more information on this credit, get Publication 524, Credit for the Elderly or the Disabled, and Schedule R (Form 1040A or 1040). Tax slayer 2011 Education credits. Tax slayer 2011   You may qualify for these credits if you paid qualified education expenses for yourself, your spouse, or your dependent. Tax slayer 2011 There are two education credits: the American Opportunity Credit and the lifetime learning credit. Tax slayer 2011 You cannot claim these credits if you are married filing separately. Tax slayer 2011 Use Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to figure the credit. Tax slayer 2011 For more information, see Publication 970. Tax slayer 2011 Retirement savings contributions credit. Tax slayer 2011   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Tax slayer 2011 You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than: $59,000, if your filing status is married filing jointly, $44,250, if your filing status is head of household, or $29,500, if your filing status is single, married filing separately, or qualifying widow(er). Tax slayer 2011 Use Form 8880, Credit for Qualified Retirement Savings Contributions, to figure the credit. Tax slayer 2011 For more information, see Publication 590. Tax slayer 2011 Child tax credit. Tax slayer 2011   You may be able to take this credit if you have a qualifying child. Tax slayer 2011   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Tax slayer 2011 Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Tax slayer 2011 Is a U. Tax slayer 2011 S. Tax slayer 2011 citizen, a U. Tax slayer 2011 S. Tax slayer 2011 national, or a resident alien. Tax slayer 2011 Did not provide over half of his or her own support for 2013. Tax slayer 2011 Lived with you more than half of 2013. Tax slayer 2011 Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Tax slayer 2011 Is claimed as a dependent on your return. Tax slayer 2011 An adopted child is always treated as your own child. Tax slayer 2011 An adopted child includes a child lawfully placed with you for legal adoption. Tax slayer 2011   See your form instructions for additional details. Tax slayer 2011 Adoption credit. Tax slayer 2011   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Tax slayer 2011 This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Tax slayer 2011 To claim the adoption credit, file Form 8839, Qualified Adoption Expenses, with your Form 1040. Tax slayer 2011 Earned income credit. Tax slayer 2011   You may qualify for an earned income credit of up to $3,250 if a child lived with you in the United States and your earned income and adjusted gross income were each less than $37,870 ($43,210 if married filing jointly). Tax slayer 2011 If two children lived with you in the United States and your earned income and adjusted gross income were each less than $43,038 ($48,378 if married filing jointly), your credit could be as much as $5,372. Tax slayer 2011 If three or more children lived with you in the United States and your earned income and adjusted gross income were each less than $46,227 ($51,567 if married filing jointly), your credit could be as much as $6,044. Tax slayer 2011 If you do not have a qualifying child and your earned income and adjusted gross income were each less than $14,340 ($19,680 if married filing jointly), your credit could be as much as $487. Tax slayer 2011 You cannot claim the earned income credit if your filing status is married filing separately. Tax slayer 2011    You and your spouse (if filing a joint return) and any qualifying child must have valid SSNs to claim this credit. Tax slayer 2011 You cannot claim the credit using an ITIN. Tax slayer 2011 If a social security card has a legend that says Not Valid for Employment and the number was issued so that you (or your spouse or your qualifying child) could receive a federally funded benefit, you cannot claim the earned income credit. Tax slayer 2011 An example of a federally funded benefit is Medicaid. Tax slayer 2011 If a card has this legend and the individual's immigration status has changed so that the individual is now a U. Tax slayer 2011 S. Tax slayer 2011 citizen or lawful permanent resident, ask the SSA to issue a new social security card without the legend. Tax slayer 2011 Other information. Tax slayer 2011   There are other eligibility rules that are not discussed here. Tax slayer 2011 For more information, get Publication 596, Earned Income Credit. Tax slayer 2011 Nonresident Aliens You can claim some of the same credits that resident aliens can claim. Tax slayer 2011 You can also report certain taxes you paid, are considered to have paid, or that were withheld from your income. Tax slayer 2011 Credits Credits are allowed only if you receive effectively connected income. Tax slayer 2011 You may be able to claim some of the following credits. Tax slayer 2011 Foreign tax credit. Tax slayer 2011   If you receive foreign source income that is effectively connected with a trade or business in the United States, you can claim a credit for any income taxes paid or accrued to any foreign country or U. Tax slayer 2011 S. Tax slayer 2011 possession on that income. Tax slayer 2011   If you do not have foreign source income effectively connected with a U. Tax slayer 2011 S. Tax slayer 2011 trade or business, you cannot claim credits against your U. Tax slayer 2011 S. Tax slayer 2011 tax for taxes paid or accrued to a foreign country or U. Tax slayer 2011 S. Tax slayer 2011 possession. Tax slayer 2011   You cannot take any credit for taxes imposed by a foreign country or U. Tax slayer 2011 S. Tax slayer 2011 possession on your U. Tax slayer 2011 S. Tax slayer 2011 source income if those taxes were imposed only because you are a citizen or resident of the foreign country or possession. Tax slayer 2011   If you claim a foreign tax credit, you generally will have to attach to your return a Form 1116. Tax slayer 2011 See Publication 514 for more information. Tax slayer 2011 Child and dependent care credit. Tax slayer 2011   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse, so that you can work or look for work. Tax slayer 2011 Generally, you must be able to claim an exemption for your dependent. Tax slayer 2011   Married nonresident aliens can claim the credit only if they choose to file a joint return with a U. Tax slayer 2011 S. Tax slayer 2011 citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Joint Return Test in Publication 503). Tax slayer 2011   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income from the United States for that tax year. Tax slayer 2011 Earned income generally means wages, salaries, and professional fees for personal services performed. Tax slayer 2011   For more information, get Publication 503. Tax slayer 2011 Education credits. Tax slayer 2011   If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Tax slayer 2011 However, if you are married and choose to file a joint return with a U. Tax slayer 2011 S. Tax slayer 2011 citizen or resident spouse as discussed in chapter 1, you may be eligible for these credits. Tax slayer 2011 Retirement savings contributions credit. Tax slayer 2011   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Tax slayer 2011 You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. Tax slayer 2011 Use Form 8880 to figure the credit. Tax slayer 2011 For more information, see Publication 590. Tax slayer 2011 Child tax credit. Tax slayer 2011   You may be able to take this credit if you have a qualifying child. Tax slayer 2011   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Tax slayer 2011 Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Tax slayer 2011 Is a U. Tax slayer 2011 S. Tax slayer 2011 citizen, a U. Tax slayer 2011 S. Tax slayer 2011 national, or a resident alien. Tax slayer 2011 Did not provide over half of his or her own support for 2013. Tax slayer 2011 Lived with you more than half of 2013. Tax slayer 2011 Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Tax slayer 2011 Is claimed as a dependent on your return. Tax slayer 2011 An adopted child is always treated as your own child. Tax slayer 2011 An adopted child includes a child lawfully placed with you for legal adoption. Tax slayer 2011   See your form instructions for additional details. Tax slayer 2011 Adoption credit. Tax slayer 2011   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Tax slayer 2011 This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Tax slayer 2011 To claim the adoption credit, file Form 8839 with your Form 1040NR. Tax slayer 2011   Married nonresident aliens can claim the credit only if they choose to file a joint return with a U. Tax slayer 2011 S. Tax slayer 2011 citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). Tax slayer 2011 Credit for prior year minimum tax. Tax slayer 2011   If you paid alternative minimum tax in a prior year, get Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts, to see if you qualify for this credit. Tax slayer 2011 Earned income credit. Tax slayer 2011   If you are a nonresident alien for any part of the tax year, you generally cannot get the earned income credit. Tax slayer 2011 However, if you are married and choose to file a joint return with a U. Tax slayer 2011 S. Tax slayer 2011 citizen or resident spouse as discussed in chapter 1, you may be eligible for the credit. Tax slayer 2011    You, your spouse, and any qualifying child must have valid SSNs to claim this credit. Tax slayer 2011 You cannot claim the credit using an ITIN. Tax slayer 2011 If a social security card has a legend that says Not Valid for Employment and the number was issued so that you (or your spouse or your qualifying child) could receive a federally funded benefit, you cannot claim the earned income credit. Tax slayer 2011 An example of a federally funded benefit is Medicaid. Tax slayer 2011 If a card has this legend and the individual's immigration status has changed so that the individual is now a U. Tax slayer 2011 S. Tax slayer 2011 citizen or lawful permanent resident, ask the SSA to issue a new social security card without the legend. Tax slayer 2011   See Publication 596 for more information on the credit. Tax slayer 2011 Tax Withheld You can claim the tax withheld during the year as a payment against your U. Tax slayer 2011 S. Tax slayer 2011 tax. Tax slayer 2011 You claim it on line 61 of Form 1040NR or on line 18 of Form 1040NR-EZ. Tax slayer 2011 The tax withheld reduces any tax you owe with Form 1040NR or Form 1040NR-EZ. Tax slayer 2011 Withholding from wages. Tax slayer 2011   Any federal income tax withheld from your wages during the tax year while you were a nonresident alien is allowed as a payment against your U. Tax slayer 2011 S. Tax slayer 2011 income tax liability for the same year. Tax slayer 2011 You can claim the income tax withheld whether or not you were engaged in a trade or business in the United States during the year, and whether or not the wages (or any other income) were connected with a trade or business in the United States. Tax slayer 2011 Excess social security tax withheld. Tax slayer 2011   If you have two or more employers, you may be able to claim a credit against your U. Tax slayer 2011 S. Tax slayer 2011 income tax liability for social security tax withheld in excess of the maximum required. Tax slayer 2011 See Social Security and Medicare Taxes in chapter 8 for more information. Tax slayer 2011 Additional Medicare Tax. Tax slayer 2011   Your employer is responsible for withholding the 0. Tax slayer 2011 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2013. Tax slayer 2011 If you do not owe Additional Medicare Tax, 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. Tax slayer 2011 Tax paid on undistributed long-term capital gains. Tax slayer 2011   If you are a shareholder in a mutual fund (or other regulated investment company) or real estate investment trust, you can claim a credit for your share of any taxes paid by the company on its undistributed long-term capital gains. Tax slayer 2011 You will receive information on Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, which you must attach to your return. Tax slayer 2011 Tax withheld at the source. Tax slayer 2011   You can claim as a payment any tax withheld at the source on investment and other fixed or determinable annual or periodic income paid to you. Tax slayer 2011 Fixed or determinable income includes interest, dividend, rental, and royalty income that you do not claim to be effectively connected income. Tax slayer 2011 Wage or salary payments can be fixed or determinable income to you, but usually are subject to withholding as discussed above. Tax slayer 2011 Taxes on fixed or determinable income are withheld at a 30% rate or at a lower treaty rate. Tax slayer 2011 Tax withheld on partnership income. Tax slayer 2011   If you are a foreign partner in a partnership, the partnership will withhold tax on your share of effectively connected taxable income from the partnership. Tax slayer 2011 The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Tax slayer 2011 A partnership that is publicly traded may withhold on your actual distributions of effectively connected income. Tax slayer 2011 In this case, the partnership will give you a statement on Form 1042-S. Tax slayer 2011 Claim the tax withheld as a payment on line 61b or 61d of Form 1040NR, as appropriate. Tax slayer 2011 Claiming tax withheld on your return. Tax slayer 2011   When you fill out your tax return, take extra care to enter the correct amount of any tax withheld shown on your information documents. Tax slayer 2011 The following table lists some of the more common information documents and shows where to find the amount of tax withheld. Tax slayer 2011 Form number Location  of tax  withheld RRB-1042S Box 12 SSA-1042S Box 9 W-2 Box 2 W-2c Box 2 1042-S Box 9 8805 Line 10 8288-A Box 2 Bona Fide Residents of American Samoa or Puerto Rico If you are a nonresident alien who is a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you generally are taxed the same as resident aliens. Tax slayer 2011 You should file Form 1040 and report all income from sources both in and outside the United States. Tax slayer 2011 However, you can exclude the income discussed in the following paragraphs. Tax slayer 2011 For tax purposes other than reporting income, however, you will be treated as a nonresident alien. Tax slayer 2011 For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Tax slayer 2011 There are also limits on what deductions and credits are allowed. Tax slayer 2011 See Nonresident Aliens under Deductions , Itemized Deductions , and Tax Credits and Payments in this chapter. Tax slayer 2011 Residents of Puerto Rico. Tax slayer 2011   If you are a bona fide resident of Puerto Rico for the entire year, you can exclude from gross income all income from sources in Puerto Rico (other than amounts for services performed as an employee of the United States or any of its agencies). Tax slayer 2011   If you report income on a calendar year basis and you do not have wages subject to withholding, file your return and pay your tax by June 15. Tax slayer 2011 You must also make your first payment of estimated tax by June 15. Tax slayer 2011 You cannot file a joint income tax return or make joint payments of estimated tax. Tax slayer 2011 However, if you are married to a U. Tax slayer 2011 S. Tax slayer 2011 citizen or resident, see Nonresident Spouse Treated as a Resident in chapter 1. Tax slayer 2011   If you earn wages subject to withholding, your U. Tax slayer 2011 S. Tax slayer 2011 income tax return is due by April 15. Tax slayer 2011 Your first payment of estimated tax is also due by April 15. Tax slayer 2011 For information on withholding and estimated tax, see chapter 8 . Tax slayer 2011 Residents of American Samoa. Tax slayer 2011   If you are a bona fide resident of American Samoa for the entire year, you can exclude from gross income all income from sources in American Samoa (other than amounts for services performed as an employee of the U. Tax slayer 2011 S. Tax slayer 2011 government or any of its agencies). Tax slayer 2011 An employee of the American Samoan government is not considered an employee of the U. Tax slayer 2011 S. Tax slayer 2011 government or any of its agencies for purposes of the exclusion. Tax slayer 2011 For more information about this exclusion, get Form 4563 and Publication 570, Tax Guide for Individuals With Income From U. Tax slayer 2011 S. Tax slayer 2011 Possessions. Tax slayer 2011 Prev  Up  Next   Home   More Online Publications
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Saint Lawrence Seaway Development Corporation

Working in concert with its Canadian counterpart, the Saint Lawrence Seaway Development Corporation works to operate and maintain a safe, reliable, efficient waterway between the Great Lakes and the Atlantic Ocean.

Contact the Agency or Department

Website: Saint Lawrence Seaway Development Corporation

Address: 1200 New Jersey Ave SE
Suite W32-300

Washington, DC 20590

Phone Number: (202) 366-0091(315) 764-3200 (Operations)

Toll-free: (800) 785-2779

The Tax Slayer 2011

Tax slayer 2011 3. Tax slayer 2011   Reporting Rental Income, Expenses, and Losses Table of Contents Which Forms To UseSchedule E (Form 1040) Schedule C (Form 1040), Profit or Loss From Business Qualified Joint Venture Limits on Rental LossesAt-Risk Rules Passive Activity Limits Casualties and Thefts Example Figuring the net income or loss for a residential rental activity may involve more than just listing the income and deductions on Schedule E (Form 1040). Tax slayer 2011 There are activities which do not qualify to use Schedule E, such as when the activity is not engaged in to make a profit or when you provide substantial services in conjunction with the property. Tax slayer 2011 There are also the limitations which may need to be applied if you have a net loss on Schedule E. Tax slayer 2011 There are two: (1) the limitation based on the amount of investment you have at risk in your rental activity, and (2) the special limits imposed on passive activities. Tax slayer 2011 You may also have a gain or loss related to your rental property from a casualty or theft. Tax slayer 2011 This is considered separately from the income and expense information you report on Schedule E. Tax slayer 2011 Which Forms To Use The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Tax slayer 2011 However, do not use that schedule to report a not-for-profit activity. Tax slayer 2011 See Not Rented for Profit , in chapter 4. Tax slayer 2011 There are also other rental situations in which forms other than Schedule E would be used. Tax slayer 2011 Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Tax slayer 2011 , you normally report your rental income and expenses on Schedule E, Part I. Tax slayer 2011 List your total income, expenses, and depreciation for each rental property. Tax slayer 2011 Be sure to enter the number of fair rental and personal use days on line 2. Tax slayer 2011 If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Tax slayer 2011 Complete lines 1 and 2 for each property. Tax slayer 2011 However, fill in lines 23a through 26 on only one Schedule E. Tax slayer 2011 On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Tax slayer 2011 To find out if you need to attach Form 4562, see Form 4562 , later. Tax slayer 2011 If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Tax slayer 2011 Form 6198, At-Risk Limitations. Tax slayer 2011 See At-Risk Rules , later. Tax slayer 2011 Also see Publication 925. Tax slayer 2011 Form 8582, Passive Activity Loss Limitations. Tax slayer 2011 See Passive Activity Limits , later. Tax slayer 2011 Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Tax slayer 2011 If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Tax slayer 2011 Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Tax slayer 2011 Form 4562. Tax slayer 2011   You must complete and attach Form 4562 for rental activities only if you are claiming: Depreciation, including the special depreciation allowance, on property placed in service during 2013; Depreciation on listed property (such as a car), regardless of when it was placed in service; or Any other car expenses, including the standard mileage rate or lease expenses. Tax slayer 2011 Otherwise, figure your depreciation on your own worksheet. Tax slayer 2011 You do not have to attach these computations to your return, but you should keep them in your records for future reference. Tax slayer 2011   See Publication 946 for information on preparing Form 4562. Tax slayer 2011 Schedule C (Form 1040), Profit or Loss From Business Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer. Tax slayer 2011 Providing substantial services. Tax slayer 2011   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Tax slayer 2011 Use Form 1065, U. Tax slayer 2011 S. Tax slayer 2011 Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Tax slayer 2011 Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Tax slayer 2011 For information, see Publication 334, Tax Guide for Small Business. Tax slayer 2011 Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Tax slayer 2011 For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5. Tax slayer 2011 Qualified Joint Venture If you and your spouse each materially participate (see Material participation under Passive Activity Limits, later) as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Tax slayer 2011 This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Tax slayer 2011 If you make this election, you must report rental real estate income on Schedule E (or Schedule C if you provide substantial services). Tax slayer 2011 You will not be required to file Form 1065 for any year the election is in effect. Tax slayer 2011 Rental real estate income generally is not included in net earnings from self-employment subject to self-employment tax and generally is subject to the passive activity limits. Tax slayer 2011 If you and your spouse filed a Form 1065 for the year prior to the election, the partnership terminates at the end of the tax year immediately preceding the year the election takes effect. Tax slayer 2011 For more information on qualified joint ventures, go to IRS. Tax slayer 2011 gov and enter “qualified joint venture” in the search box. Tax slayer 2011 Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Tax slayer 2011 You must consider these rules in the order shown below. Tax slayer 2011 Both are discussed in this section. Tax slayer 2011 At-risk rules. Tax slayer 2011 These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Tax slayer 2011 This applies only if the real property was placed in service after 1986. Tax slayer 2011 Passive activity limits. Tax slayer 2011 Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Tax slayer 2011 However, there are exceptions. Tax slayer 2011 At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Tax slayer 2011 Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Tax slayer 2011 In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Tax slayer 2011 You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Tax slayer 2011 Any loss that is disallowed because of the at-risk limits is treated as a deduction from the same activity in the next tax year. Tax slayer 2011 See Publication 925 for a discussion of the at-risk rules. Tax slayer 2011 Form 6198. Tax slayer 2011   If you are subject to the at-risk rules, file Form 6198, At-Risk Limitations, with your tax return. Tax slayer 2011 Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Tax slayer 2011 For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Tax slayer 2011 For a discussion of activities that are not considered rental activities, see Rental Activities in Publication 925. Tax slayer 2011 Deductions or losses from passive activities are limited. Tax slayer 2011 You generally cannot offset income, other than passive income, with losses from passive activities. Tax slayer 2011 Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Tax slayer 2011 Any excess loss or credit is carried forward to the next tax year. Tax slayer 2011 Exceptions to the rules for figuring passive activity limits for personal use of a dwelling unit and for rental real estate with active participation are discussed later. Tax slayer 2011 For a detailed discussion of these rules, see Publication 925. Tax slayer 2011 Real estate professionals. Tax slayer 2011   If you are a real estate professional, complete line 43 of Schedule E. Tax slayer 2011      You qualify as a real estate professional for the tax year if you meet both of the following requirements. Tax slayer 2011 More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. Tax slayer 2011 You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate. Tax slayer 2011 If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. Tax slayer 2011 For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity. Tax slayer 2011   Do not count personal services you perform as an employee in real property trades or businesses unless you are a 5% owner of your employer. Tax slayer 2011 You are a 5% owner if you own (or are considered to own) more than 5% of your employer's outstanding stock, or capital or profits interest. Tax slayer 2011   Do not count your spouse's personal services to determine whether you met the requirements listed earlier to qualify as a real estate professional. Tax slayer 2011 However, you can count your spouse's participation in an activity in determining if you materially participated. Tax slayer 2011 Real property trades or businesses. Tax slayer 2011   A real property trade or business is a trade or business that does any of the following with real property. Tax slayer 2011 Develops or redevelops it. Tax slayer 2011 Constructs or reconstructs it. Tax slayer 2011 Acquires it. Tax slayer 2011 Converts it. Tax slayer 2011 Rents or leases it. Tax slayer 2011 Operates or manages it. Tax slayer 2011 Brokers it. Tax slayer 2011 Choice to treat all interests as one activity. Tax slayer 2011   If you were a real estate professional and had more than one rental real estate interest during the year, you can choose to treat all the interests as one activity. Tax slayer 2011 You can make this choice for any year that you qualify as a real estate professional. Tax slayer 2011 If you forgo making the choice for one year, you can still make it for a later year. Tax slayer 2011   If you make the choice, it is binding for the tax year you make it and for any later year that you are a real estate professional. Tax slayer 2011 This is true even if you are not a real estate professional in any intervening year. Tax slayer 2011 (For that year, the exception for real estate professionals will not apply in determining whether your activity is subject to the passive activity rules. Tax slayer 2011 )   See the Instructions for Schedule E for information about making this choice. Tax slayer 2011 Material participation. Tax slayer 2011   Generally, you materially participated in an activity for the tax year if you were involved in its operations on a regular, continuous, and substantial basis during the year. Tax slayer 2011 For details, see Publication 925 or the Instructions for Schedule C. Tax slayer 2011 Participating spouse. Tax slayer 2011   If you are married, determine whether you materially participated in an activity by also counting any participation in the activity by your spouse during the year. Tax slayer 2011 Do this even if your spouse owns no interest in the activity or files a separate return for the year. Tax slayer 2011 Form 8582. Tax slayer 2011    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Tax slayer 2011 See Form 8582 not required , later in this chapter, to determine if you must complete Form 8582. Tax slayer 2011   If you are required to complete Form 8582 and are also subject to the at-risk rules, include the amount from Form 6198, line 21 (deductible loss) in column (b) of Form 8582, Worksheet 1 or 3, as required. Tax slayer 2011 Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Tax slayer 2011 Instead, follow the rules explained in chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Tax slayer 2011 Exception for Rental Real Estate With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Tax slayer 2011 This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Tax slayer 2011 Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Tax slayer 2011 Example. Tax slayer 2011 Jane is single and has $40,000 in wages, $2,000 of passive income from a limited partnership, and $3,500 of passive loss from a rental real estate activity in which she actively participated. Tax slayer 2011 $2,000 of Jane's $3,500 loss offsets her passive income. Tax slayer 2011 The remaining $1,500 loss can be deducted from her $40,000 wages. Tax slayer 2011 The special allowance is not available if you were married, lived with your spouse at any time during the year, and are filing a separate return. Tax slayer 2011 Active participation. Tax slayer 2011   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Tax slayer 2011 Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions. Tax slayer 2011 Example. Tax slayer 2011 Mike is single and had the following income and losses during the tax year:   Salary $42,300     Dividends 300     Interest 1,400     Rental loss (4,000)   The rental loss was from the rental of a house Mike owned. Tax slayer 2011 Mike had advertised and rented the house to the current tenant himself. Tax slayer 2011 He also collected the rents, which usually came by mail. Tax slayer 2011 All repairs were either made or contracted out by Mike. Tax slayer 2011 Although the rental loss is from a passive activity, because Mike actively participated in the rental property management he can use the entire $4,000 loss to offset his other income. Tax slayer 2011 Maximum special allowance. Tax slayer 2011   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Tax slayer 2011   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Tax slayer 2011 If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Tax slayer 2011   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Tax slayer 2011 Modified adjusted gross income (MAGI). Tax slayer 2011   This is your adjusted gross income from Form 1040, U. Tax slayer 2011 S. Tax slayer 2011 Individual Income Tax Return, line 38, or Form 1040NR, U. Tax slayer 2011 S. Tax slayer 2011 Nonresident Alien Income Tax Return, line 37, figured without taking into account: The taxable amount of social security or equivalent tier 1 railroad retirement benefits, The deductible contributions to traditional individual retirement accounts (IRAs) and section 501(c)(18) pension plans, The exclusion from income of interest from Series EE and I U. Tax slayer 2011 S. Tax slayer 2011 savings bonds used to pay higher educational expenses, The exclusion of amounts received under an employer's adoption assistance program, Any passive activity income or loss included on Form 8582, Any rental real estate loss allowed to real estate professionals, Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the Instructions for Form 8582), The deduction allowed for one-half of self-employment tax, The deduction allowed for interest paid on student loans, The deduction for qualified tuition and related fees, and The domestic production activities deduction (see the Instructions for Form 8903). Tax slayer 2011 Form 8582 not required. Tax slayer 2011   Do not complete Form 8582 if you meet all of the following conditions. Tax slayer 2011 Your only passive activities were rental real estate activities in which you actively participated. Tax slayer 2011 Your overall net loss from these activities is $25,000 or less ($12,500 or less if married filing separately and you lived apart from your spouse all year). Tax slayer 2011 If married filing separately, you lived apart from your spouse all year. Tax slayer 2011 You have no prior year unallowed losses from these (or any other passive) activities. Tax slayer 2011 You have no current or prior year unallowed credits from passive activities. Tax slayer 2011 Your MAGI is $100,000 or less ($50,000 or less if married filing separately and you lived apart from your spouse all year). Tax slayer 2011 You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust. Tax slayer 2011   If you meet all of the conditions listed above, your rental real estate activities are not limited by the passive activity rules and you do not have to complete Form 8582. Tax slayer 2011 On lines 23a through 23e of your Schedule E, enter the applicable amounts. Tax slayer 2011 Casualties and Thefts As a result of a casualty or theft, you may have a loss related to your rental property. Tax slayer 2011 You may be able to deduct the loss on your income tax return. Tax slayer 2011 Casualty. Tax slayer 2011   This is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Tax slayer 2011 Such events include a storm, fire, or earthquake. Tax slayer 2011 Theft. Tax slayer 2011   This is defined as the unlawful taking and removing of your money or property with the intent to deprive you of it. Tax slayer 2011 Gain from casualty or theft. Tax slayer 2011   It is also possible to have a gain from a casualty or theft if you receive money, including insurance, that is more than your adjusted basis in the property. Tax slayer 2011 Generally, you must report this gain. Tax slayer 2011 However, under certain circumstances, you may defer paying tax by choosing to postpone reporting the gain. Tax slayer 2011 To do this, you generally must buy replacement property within 2 years after the close of the first tax year in which any part of your gain is realized. Tax slayer 2011 In certain circumstances, the replacement period can be greater than 2 years; see Replacement Period in Publication 547 for more information. Tax slayer 2011 The cost of the replacement property must be equal to or more than the net insurance or other payment you received. Tax slayer 2011 More information. Tax slayer 2011   For information on business and nonbusiness casualty and theft losses, see Publication 547. Tax slayer 2011 How to report. Tax slayer 2011    If you had a casualty or theft that involved property used in your rental activity, figure the net gain or loss in Section B of Form 4684, Casualties and Thefts. Tax slayer 2011 Follow the Instructions for Form 4684 for where to carry your net gain or loss. Tax slayer 2011 Example In February 2008, Marie Pfister bought a rental house for $135,000 (house $120,000 and land $15,000) and immediately began renting it out. Tax slayer 2011 In 2013, she rented it all 12 months for a monthly rental fee of $1,125. Tax slayer 2011 In addition to her rental income of $13,500 (12 x $1,125), Marie had the following expenses. Tax slayer 2011 Mortgage interest $8,000 Fire insurance (1-year policy) 250 Miscellaneous repairs 400 Real estate taxes imposed and paid 500 Maintenance 200 Marie depreciates the residential rental property under MACRS GDS. Tax slayer 2011 This means using the straight line method over a recovery period of 27. Tax slayer 2011 5 years. Tax slayer 2011 She uses Table 2-2d to find her depreciation percentage. Tax slayer 2011 Because she placed the property in service in February 2008, she continues to use that row of Table 2-2d. Tax slayer 2011 For year 6, the rate is 3. Tax slayer 2011 636%. Tax slayer 2011 Marie figures her net rental income or loss for the house as follows: Total rental income received  ($1,125 × 12) $13,500 Minus: Expenses     Mortgage interest $8,000   Fire insurance 250   Miscellaneous repairs 400   Real estate taxes 500   Maintenance 200   Total expenses 9,350 Balance $4,150 Minus: Depreciation ($120,000 x 3. Tax slayer 2011 636%) 4,363 Net rental (loss) for house ($213)       Marie had a net loss for the year. Tax slayer 2011 Because she actively participated in her passive rental real estate activity and her loss was less than $25,000, she can deduct the loss on her return. Tax slayer 2011 Marie also meets all of the requirements for not having to file Form 8582. Tax slayer 2011 She uses Schedule E, Part I, to report her rental income and expenses. Tax slayer 2011 She enters her income, expenses, and depreciation for the house in the column for Property A and enters her loss on line 22. Tax slayer 2011 Form 4562 is not required. Tax slayer 2011 Prev  Up  Next   Home   More Online Publications