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Who Can Use 1040ez

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Who Can Use 1040ez

Who can use 1040ez 2. Who can use 1040ez   Source of Income Table of Contents Introduction Topics - This chapter discusses: Resident Aliens Nonresident AliensInterest Income Dividends Guarantee of Indebtedness Personal Services Transportation Income Scholarships, Grants, Prizes, and Awards Pensions and Annuities Rents or Royalties Real Property Personal Property Community Income Introduction After you have determined your alien status, you must determine the source of your income. Who can use 1040ez This chapter will help you determine the source of different types of income you may receive during the tax year. Who can use 1040ez This chapter also discusses special rules for married individuals who are domiciled in a country with community property laws. Who can use 1040ez Topics - This chapter discusses: Income source rules, and Community income. Who can use 1040ez Resident Aliens A resident alien's income is generally subject to tax in the same manner as a U. Who can use 1040ez S. Who can use 1040ez citizen. Who can use 1040ez If you are a resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U. Who can use 1040ez S. Who can use 1040ez tax return. Who can use 1040ez You must report these amounts from sources within and outside the United States. Who can use 1040ez Nonresident Aliens A nonresident alien usually is subject to U. Who can use 1040ez S. Who can use 1040ez income tax only on U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez Under limited circumstances, certain foreign source income is subject to U. Who can use 1040ez S. Who can use 1040ez tax. Who can use 1040ez See Foreign Income in chapter 4. Who can use 1040ez The general rules for determining U. Who can use 1040ez S. Who can use 1040ez source income that apply to most nonresident aliens are shown in Table 2-1. Who can use 1040ez The following discussions cover the general rules as well as the exceptions to these rules. Who can use 1040ez Not all items of U. Who can use 1040ez S. Who can use 1040ez source income are taxable. Who can use 1040ez See chapter 3. Who can use 1040ez Interest Income Generally, U. Who can use 1040ez S. Who can use 1040ez source interest income includes the following items. Who can use 1040ez Interest on bonds, notes, or other interest-bearing obligations of U. Who can use 1040ez S. Who can use 1040ez residents or domestic corporations. Who can use 1040ez Interest paid by a domestic or foreign partnership or foreign corporation engaged in a U. Who can use 1040ez S. Who can use 1040ez trade or business at any time during the tax year. Who can use 1040ez Original issue discount. Who can use 1040ez Interest from a state, the District of Columbia, or the U. Who can use 1040ez S. Who can use 1040ez Government. Who can use 1040ez The place or manner of payment is immaterial in determining the source of the income. Who can use 1040ez A substitute interest payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as the interest on the transferred security. Who can use 1040ez Exceptions. Who can use 1040ez   U. Who can use 1040ez S. Who can use 1040ez source interest income does not include the following items. Who can use 1040ez Interest paid by a resident alien or a domestic corporation on obligations issued before August 10, 2010, if for the 3-year period ending with the close of the payer's tax year preceding the interest payment, at least 80% of the payer's total gross income: Is from sources outside the United States, and Is attributable to the active conduct of a trade or business by the individual or corporation in a foreign country or a U. Who can use 1040ez S. Who can use 1040ez possession. Who can use 1040ez However, the interest will be considered U. Who can use 1040ez S. Who can use 1040ez source interest income if either of the following apply. Who can use 1040ez The recipient of the interest is related to the resident alien or domestic corporation. Who can use 1040ez See section 954(d)(3) for the definition of related person. Who can use 1040ez The terms of the obligation are significantly modified after August 9, 2010. Who can use 1040ez Any extension of the term of the obligation is considered a significant modification. Who can use 1040ez Interest paid by a foreign branch of a domestic corporation or a domestic partnership on deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law if the interest paid or credited can be deducted by the association. Who can use 1040ez Interest on deposits with a foreign branch of a domestic corporation or domestic partnership, but only if the branch is in the commercial banking business. Who can use 1040ez Dividends In most cases, dividend income received from domestic corporations is U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez Dividend income from foreign corporations is usually foreign source income. Who can use 1040ez Exceptions to both of these rules are discussed below. Who can use 1040ez A substitute dividend payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as a distribution on the transferred security. Who can use 1040ez Dividend equivalent payments. Who can use 1040ez   U. Who can use 1040ez S. Who can use 1040ez source dividends also include all dividend equivalent payments. Who can use 1040ez Dividend equivalent payments include substitute dividends, payments made pursuant to a specified notional principal contract, and all similar payments that, directly or indirectly, are contingent on or determined by reference to, the payment of a dividend from U. Who can use 1040ez S. Who can use 1040ez sources. Who can use 1040ez    The Internal Revenue Service has issued final regulations that would affect the treatment of dividend equivalent payments and specified notional principal contracts. Who can use 1040ez You can view this regulation at www. Who can use 1040ez irs. Who can use 1040ez gov/irb/2013-52_IRB/ar08. Who can use 1040ez html. Who can use 1040ez First exception. Who can use 1040ez   Dividends received from a domestic corporation are not U. Who can use 1040ez S. Who can use 1040ez source income if the corporation elects to take the American Samoa economic development credit. Who can use 1040ez Second exception. Who can use 1040ez   Part of the dividends received from a foreign corporation is U. Who can use 1040ez S. Who can use 1040ez source income if 25% or more of its total gross income for the 3-year period ending with the close of its tax year preceding the declaration of dividends was effectively connected with a trade or business in the United States. Who can use 1040ez If the corporation was formed less than 3 years before the declaration, use its total gross income from the time it was formed. Who can use 1040ez Determine the part that is U. Who can use 1040ez S. Who can use 1040ez source income by multiplying the dividend by the following fraction. Who can use 1040ez   Foreign corporation's gross income connected with a U. Who can use 1040ez S. Who can use 1040ez trade or business for the 3-year period     Foreign corporation's gross income from all sources for that period   Guarantee of Indebtedness Certain amounts received directly or indirectly, for the provision of a guarantee of indebtedness issued after September 27, 2010, are U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez They must be paid by a noncorporate resident or U. Who can use 1040ez S. Who can use 1040ez corporation or by any foreign person if the amounts are effectively connected with the conduct of a U. Who can use 1040ez S. Who can use 1040ez trade or business. Who can use 1040ez For more information, see Internal Revenue Code sections 861(a)(9) and 862(a)(9). Who can use 1040ez Personal Services All wages and any other compensation for services performed in the United States are considered to be from sources in the United States. Who can use 1040ez The only exceptions to this rule are discussed in chapter 3 under Employees of foreign persons, organizations, or offices, and under Crew members. Who can use 1040ez If you are an employee and receive compensation for labor or personal services performed both inside and outside the United States, special rules apply in determining the source of the compensation. Who can use 1040ez Compensation (other than certain fringe benefits) is sourced on a time basis. Who can use 1040ez Certain fringe benefits (such as housing and education) are sourced on a geographical basis. Who can use 1040ez Or, you may be permitted to use an alternative basis to determine the source of compensation. Who can use 1040ez See Alternative Basis , later. Who can use 1040ez Multi-level marketing. Who can use 1040ez   Certain companies sell products through a multi-level marketing arrangement, such that an upper-tier distributor, who has sponsored a lower-tier distributor, is entitled to a payment from the company based on certain activities of that lower-tier distributor. Who can use 1040ez Generally, depending on the facts, payments from such multi-level marketing companies to independent (non-employee) distributors (upper-tier distributors) that are based on the sales or purchases of persons whom they have sponsored (lower-tier distributors) constitute income for the performance of personal services in recruiting, training, and supporting the lower-tier distributors. Who can use 1040ez The source of such income is generally based on where the services of the upper-tier distributor are performed, and may, depending on the facts, be considered multi-year compensation, with the source of income determined over the period to which such compensation is attributable. Who can use 1040ez Self-employed individuals. Who can use 1040ez   If you are self-employed, you determine the source of compensation for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. Who can use 1040ez In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. Who can use 1040ez Time Basis Use a time basis to figure your U. Who can use 1040ez S. Who can use 1040ez source compensation (other than the fringe benefits discussed later). Who can use 1040ez Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed services in the United States during the year     Total number of days you performed services during the year   You can use a unit of time less than a day in the above fraction, if appropriate. Who can use 1040ez The time period for which the compensation is made does not have to be a year. Who can use 1040ez Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. Who can use 1040ez Example 1. Who can use 1040ez Christina Brooks, a resident of the Netherlands, worked 240 days for a U. Who can use 1040ez S. Who can use 1040ez company during the tax year. Who can use 1040ez She received $80,000 in compensation. Who can use 1040ez None of it was for fringe benefits. Who can use 1040ez Christina performed services in the United States for 60 days and performed services in the Netherlands for 180 days. Who can use 1040ez Using the time basis for determining the source of compensation, $20,000 ($80,000 × 60/240) is her U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez Example 2. Who can use 1040ez Rob Waters, a resident of South Africa, is employed by a corporation. Who can use 1040ez His annual salary is $100,000. Who can use 1040ez None of it is for fringe benefits. Who can use 1040ez During the first quarter of the year he worked entirely within the United States. Who can use 1040ez On April 1, Rob was transferred to Singapore for the remainder of the year. Who can use 1040ez Rob is able to establish that the first quarter of the year and the last 3 quarters of the year are two separate, distinct, and continuous periods of time. Who can use 1040ez Accordingly, $25,000 of Rob's annual salary is attributable to the first quarter of the year (. Who can use 1040ez 25 × $100,000). Who can use 1040ez All of it is U. Who can use 1040ez S. Who can use 1040ez source income because he worked entirely within the United States during that quarter. Who can use 1040ez The remaining $75,000 is attributable to the last three quarters of the year. Who can use 1040ez During those quarters, he worked 150 days in Singapore and 30 days in the United States. Who can use 1040ez His periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time. Who can use 1040ez Of this $75,000, $12,500 ($75,000 × 30/180) is U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez Multi-year compensation. Who can use 1040ez   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. Who can use 1040ez Multi-year compensation is compensation that is included in your income in one tax year but that is attributable to a period that includes two or more tax years. Who can use 1040ez   You determine the period to which the compensation is attributable based on the facts and circumstances of your case. Who can use 1040ez For example, an amount of compensation that specifically relates to a period of time that includes several calendar years is attributable to the entire multi-year period. Who can use 1040ez   The amount of compensation treated as from U. Who can use 1040ez S. Who can use 1040ez sources is figured by multiplying the total multi-year compensation by a fraction. Who can use 1040ez The numerator of the fraction is the number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in the United States in connection with the project. Who can use 1040ez The denominator of the fraction is the total number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in connection with the project. Who can use 1040ez Geographical Basis Compensation you receive as an employee in the form of the following fringe benefits is sourced on a geographical basis. Who can use 1040ez Housing. Who can use 1040ez Education. Who can use 1040ez Local transportation. Who can use 1040ez Tax reimbursement. Who can use 1040ez Hazardous or hardship duty pay as defined in Regulations section 1. Who can use 1040ez 861-4(b)(2)(ii)(D)(5). Who can use 1040ez Moving expense reimbursement. Who can use 1040ez The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence. Who can use 1040ez Principal place of work. Who can use 1040ez   The above fringe benefits, except for tax reimbursement and hazardous or hardship duty pay, are sourced based on your principal place of work. Who can use 1040ez Your principal place of work is usually the place where you spend most of your working time. Who can use 1040ez This could be your office, plant, store, shop, or other location. Who can use 1040ez If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. Who can use 1040ez   If you have more than one job at any time, your main job location depends on the facts in each case. Who can use 1040ez The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. Who can use 1040ez Housing. Who can use 1040ez   The source of a housing fringe benefit is determined based on the location of your principal place of work. Who can use 1040ez A housing fringe benefit includes payments to you or on your behalf (and your family's if your family resides with you) only for the following. Who can use 1040ez Rent. Who can use 1040ez Utilities (except telephone charges). Who can use 1040ez Real and personal property insurance. Who can use 1040ez Occupancy taxes not deductible under section 164 or 216(a). Who can use 1040ez Nonrefundable fees for securing a leasehold. Who can use 1040ez Rental of furniture and accessories. Who can use 1040ez Household repairs. Who can use 1040ez Residential parking. Who can use 1040ez Fair rental value of housing provided in kind by your employer. Who can use 1040ez   A housing fringe benefit does not include: Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation), The cost of buying property, including principal payments on a mortgage, The cost of domestic labor (maids, gardeners, etc. Who can use 1040ez ), Pay television subscriptions, Improvements and other expenses that increase the value or appreciably prolong the life of property, Purchased furniture or accessories, Depreciation or amortization of property or improvements, The value of meals or lodging that you exclude from gross income, or The value of meals or lodging that you deduct as moving expenses. Who can use 1040ez Education. Who can use 1040ez   The source of an education fringe benefit for the education expenses of your dependents is determined based on the location of your principal place of work. Who can use 1040ez An education fringe benefit includes payments only for the following expenses for education at an elementary or secondary school. Who can use 1040ez Tuition, fees, academic tutoring, special needs services for a special needs student, books, supplies, and other equipment. Who can use 1040ez Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance. Who can use 1040ez Local transportation. Who can use 1040ez   The source of a local transportation fringe benefit is determined based on the location of your principal place of work. Who can use 1040ez Your local transportation fringe benefit is the amount that you receive as compensation for local transportation for you or your spouse or dependents at the location of your principal place of work. Who can use 1040ez The amount treated as a local transportation fringe benefit is limited to actual expenses incurred for local transportation and the fair rental value of any employer-provided vehicle used predominantly by you, your spouse, or your dependents for local transportation. Who can use 1040ez Actual expenses do not include the cost (including interest) of any vehicle purchased by you or on your behalf. Who can use 1040ez Tax reimbursement. Who can use 1040ez   The source of a tax reimbursement fringe benefit is determined based on the location of the jurisdiction that imposed the tax for which you are reimbursed. Who can use 1040ez Moving expense reimbursement. Who can use 1040ez   The source of a moving expense reimbursement is generally based on the location of your new principal place of work. Who can use 1040ez However, the source is determined based on the location of your former principal place of work if you provide sufficient evidence that such determination of source is more appropriate under the facts and circumstances of your case. Who can use 1040ez Sufficient evidence generally requires an agreement between you and your employer, or a written statement of company policy, which is reduced to writing before the move and which is entered into or established to induce you or other employees to move to another country. Who can use 1040ez The written statement or agreement must state that your employer will reimburse you for moving expenses that you incur to return to your former principal place of work regardless of whether you continue to work for your employer after returning to that location. Who can use 1040ez It may contain certain conditions upon which the right to reimbursement is determined as long as those conditions set forth standards that are definitely ascertainable and can only be fulfilled prior to, or through completion of, your return move to your former principal place of work. Who can use 1040ez Alternative Basis If you are an employee, you can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your compensation than the time or geographical basis. Who can use 1040ez If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your compensation. Who can use 1040ez Also, if your total compensation from all sources is $250,000 or more, check “Yes” to both questions on line K on page 5 of Form 1040NR, and attach a written statement to your tax return that sets forth all of the following. Who can use 1040ez Your name and social security number (written across the top of the statement). Who can use 1040ez The specific compensation income, or the specific fringe benefit, for which you are using the alternative basis. Who can use 1040ez For each item in (2), the alternative basis of allocation of source used. Who can use 1040ez For each item in (2), a computation showing how the alternative allocation was computed. Who can use 1040ez A comparison of the dollar amount of the U. Who can use 1040ez S. Who can use 1040ez compensation and foreign compensation sourced under both the alternative basis and the time or geographical basis discussed earlier. Who can use 1040ez Transportation Income Transportation income is income from the use of a vessel or aircraft or for the performance of services directly related to the use of any vessel or aircraft. Who can use 1040ez This is true whether the vessel or aircraft is owned, hired, or leased. Who can use 1040ez The term “vessel or aircraft” includes any container used in connection with a vessel or aircraft. Who can use 1040ez All income from transportation that begins and ends in the United States is treated as derived from sources in the United States. Who can use 1040ez If the transportation begins or ends in the United States, 50% of the transportation income is treated as derived from sources in the United States. Who can use 1040ez For transportation income from personal services, 50% of the income is U. Who can use 1040ez S. Who can use 1040ez source income if the transportation is between the United States and a U. Who can use 1040ez S. Who can use 1040ez possession. Who can use 1040ez For nonresident aliens, this only applies to income derived from, or in connection with, an aircraft. Who can use 1040ez For information on how U. Who can use 1040ez S. Who can use 1040ez source transportation income is taxed, see chapter 4. Who can use 1040ez Scholarships, Grants, Prizes, and Awards Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. Who can use 1040ez However, see Activities to be performed outside the United States , later. Who can use 1040ez For example, payments for research or study in the United States made by the United States, a noncorporate U. Who can use 1040ez S. Who can use 1040ez resident, or a domestic corporation, are from U. Who can use 1040ez S. Who can use 1040ez sources. Who can use 1040ez Similar payments from a foreign government or foreign corporation are foreign source payments even though the funds may be disbursed through a U. Who can use 1040ez S. Who can use 1040ez agent. Who can use 1040ez Payments made by an entity designated as a public international organization under the International Organizations Immunities Act are from foreign sources. Who can use 1040ez Activities to be performed outside the United States. Who can use 1040ez   Scholarships, fellowship grants, targeted grants, and achievement awards received by nonresident aliens for activities performed, or to be performed, outside the United States are not U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez    These rules do not apply to amounts paid as salary or other compensation for services. Who can use 1040ez See Personal Services, earlier, for the source rules that apply. Who can use 1040ez Pensions and Annuities If you receive a pension from a domestic trust for services performed both in and outside the United States, part of the pension payment is from U. Who can use 1040ez S. Who can use 1040ez sources. Who can use 1040ez That part is the amount attributable to earnings of the pension plan and the employer contributions made for services performed in the United States. Who can use 1040ez This applies whether the distribution is made under a qualified or nonqualified stock bonus, pension, profit-sharing, or annuity plan (whether or not funded). Who can use 1040ez If you performed services as an employee of the United States, you may receive a distribution from the U. Who can use 1040ez S. Who can use 1040ez Government under a plan, such as the Civil Service Retirement System, that is treated as a qualified pension plan. Who can use 1040ez Your U. Who can use 1040ez S. Who can use 1040ez source income is the otherwise taxable amount of the distribution that is attributable to your total U. Who can use 1040ez S. Who can use 1040ez Government basic pay other than tax-exempt pay for services performed outside the United States. Who can use 1040ez Rents or Royalties Your U. Who can use 1040ez S. Who can use 1040ez source income includes rent and royalty income received during the tax year from property located in the United States or from any interest in that property. Who can use 1040ez U. Who can use 1040ez S. Who can use 1040ez source income also includes rents or royalties for the use of, or for the privilege of using, in the United States, intangible property such as patents, copyrights, secret processes and formulas, goodwill, trademarks, franchises, and similar property. Who can use 1040ez Real Property Real property is land and buildings and generally anything built on, growing on, or attached to land. Who can use 1040ez Gross income from sources in the United States includes gains, profits, and income from the sale or other disposition of real property located in the United States. Who can use 1040ez Natural resources. Who can use 1040ez   The income from the sale of products of any farm, mine, oil or gas well, other natural deposit, or timber located in the United States and sold in a foreign country, or located in a foreign country and sold in the United States, is partly from sources in the United States. Who can use 1040ez For information on determining that part, see section 1. Who can use 1040ez 863-1(b) of the regulations. Who can use 1040ez Table 2-1. Who can use 1040ez Summary of Source Rules for Income of Nonresident Aliens Item of income Factor determining source Salaries, wages, other compensation Where services performed Business income:   Personal services Where services performed Sale of inventory—purchased Where sold Sale of inventory—produced Allocation Interest Residence of payer Dividends Whether a U. Who can use 1040ez S. Who can use 1040ez or foreign corporation* Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. Who can use 1040ez Where property is used Sale of real property Location of property Sale of personal property Seller's tax home (but see Personal Property , later, for exceptions) Pension distributions attributable to contributions Where services were performed that earned the pension Investment earnings on pension contributions Location of pension trust Sale of natural resources Allocation based on fair market value of product at export terminal. Who can use 1040ez For more information, see section 1. Who can use 1040ez 863-1(b) of the regulations. Who can use 1040ez *Exceptions include: a) Dividends paid by a U. Who can use 1040ez S. Who can use 1040ez corporation are foreign source if the corporation elects the  American Samoa economic development credit. Who can use 1040ez  b) Part of a dividend paid by a foreign corporation is U. Who can use 1040ez S. Who can use 1040ez source if at least 25% of the  corporation's gross income is effectively connected with a U. Who can use 1040ez S. Who can use 1040ez trade or business for the  3 tax years before the year in which the dividends are declared. Who can use 1040ez Personal Property Personal property is property, such as machinery, equipment, or furniture, that is not real property. Who can use 1040ez Gain or loss from the sale or exchange of personal property generally has its source in the United States if you have a tax home in the United States. Who can use 1040ez If you do not have a tax home in the United States, the gain or loss generally is considered to be from sources outside the United States. Who can use 1040ez Tax home. Who can use 1040ez   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Who can use 1040ez Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. Who can use 1040ez If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Who can use 1040ez If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Who can use 1040ez Inventory property. Who can use 1040ez   Inventory property is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. Who can use 1040ez Income from the sale of inventory that you purchased is sourced where the property is sold. Who can use 1040ez Generally, this is where title to the property passes to the buyer. Who can use 1040ez For example, income from the sale of inventory in the United States is U. Who can use 1040ez S. Who can use 1040ez source income, whether you purchased it in the United States or in a foreign country. Who can use 1040ez   Income from the sale of inventory property that you produced in the United States and sold outside the United States (or vice versa) is partly from sources in the United States and partly from sources outside the United States. Who can use 1040ez For information on making this allocation, see section 1. Who can use 1040ez 863-3 of the regulations. Who can use 1040ez   These rules apply even if your tax home is not in the United States. Who can use 1040ez Depreciable property. Who can use 1040ez   To determine the source of any gain from the sale of depreciable personal property, you must first figure the part of the gain that is not more than the total depreciation adjustments on the property. Who can use 1040ez You allocate this part of the gain to sources in the United States based on the ratio of U. Who can use 1040ez S. Who can use 1040ez depreciation adjustments to total depreciation adjustments. Who can use 1040ez The rest of this part of the gain is considered to be from sources outside the United States. Who can use 1040ez   For this purpose, “U. Who can use 1040ez S. Who can use 1040ez depreciation adjustments” are the depreciation adjustments to the basis of the property that are allowable in figuring taxable income from U. Who can use 1040ez S. Who can use 1040ez sources. Who can use 1040ez However, if the property is used predominantly in the United States during a tax year, all depreciation deductions allowable for that year are treated as U. Who can use 1040ez S. Who can use 1040ez depreciation adjustments. Who can use 1040ez But there are some exceptions for certain transportation, communications, and other property used internationally. Who can use 1040ez   Gain from the sale of depreciable property that is more than the total depreciation adjustments on the property is sourced as if the property were inventory property, as discussed above. Who can use 1040ez   A loss is sourced in the same way as the depreciation deductions were sourced. Who can use 1040ez However, if the property was used predominantly in the United States, the entire loss reduces U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez   The basis of property usually means the cost (money plus the fair market value of other property or services) of property you acquire. Who can use 1040ez Depreciation is an amount deducted to recover the cost or other basis of a trade or business asset. Who can use 1040ez The amount you can deduct depends on the property's cost, when you began using the property, how long it will take to recover your cost, and which depreciation method you use. Who can use 1040ez A depreciation deduction is any deduction for depreciation or amortization or any other allowable deduction that treats a capital expenditure as a deductible expense. Who can use 1040ez Intangible property. Who can use 1040ez   Intangible property includes patents, copyrights, secret processes or formulas, goodwill, trademarks, trade names, or other like property. Who can use 1040ez The gain from the sale of amortizable or depreciable intangible property, up to the previously allowable amortization or depreciation deductions, is sourced in the same way as the original deductions were sourced. Who can use 1040ez This is the same as the source rule for gain from the sale of depreciable property. Who can use 1040ez See Depreciable property , earlier, for details on how to apply this rule. Who can use 1040ez   Gain in excess of the amortization or depreciation deductions is sourced in the country where the property is used if the income from the sale is contingent on the productivity, use, or disposition of that property. Who can use 1040ez If the income is not contingent on the productivity, use, or disposition of the property, the income is sourced according to your tax home as discussed earlier. Who can use 1040ez If payments for goodwill do not depend on its productivity, use, or disposition, their source is the country in which the goodwill was generated. Who can use 1040ez Sales through offices or fixed places of business. Who can use 1040ez   Despite any of the earlier rules, if you do not have a tax home in the United States, but you maintain an office or other fixed place of business in the United States, treat the income from any sale of personal property (including inventory property) that is attributable to that office or place of business as U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez However, this rule does not apply to sales of inventory property for use, disposition, or consumption outside the United States if your office or other fixed place of business outside the United States materially participated in the sale. Who can use 1040ez   If you have a tax home in the United States but maintain an office or other fixed place of business outside the United States, income from sales of personal property, other than inventory, depreciable property, or intangibles, that is attributable to that foreign office or place of business may be treated as U. Who can use 1040ez S. Who can use 1040ez source income. Who can use 1040ez The income is treated as U. Who can use 1040ez S. Who can use 1040ez source income if an income tax of less than 10% of the income from the sale is paid to a foreign country. Who can use 1040ez This rule also applies to losses if the foreign country would have imposed an income tax of less than 10% had the sale resulted in a gain. Who can use 1040ez Community Income If you are married and you or your spouse is subject to the community property laws of a foreign country, a U. Who can use 1040ez S. Who can use 1040ez state, or a U. Who can use 1040ez S. Who can use 1040ez possession, you generally must follow those laws to determine the income of yourself and your spouse for U. Who can use 1040ez S. Who can use 1040ez tax purposes. Who can use 1040ez But you must disregard certain community property laws if: Both you and your spouse are nonresident aliens, or One of you is a nonresident alien and the other is a U. Who can use 1040ez S. Who can use 1040ez citizen or resident and you do not both choose to be treated as U. Who can use 1040ez S. Who can use 1040ez residents as explained in chapter 1. Who can use 1040ez In these cases, you and your spouse must report community income as explained later. Who can use 1040ez Earned income. Who can use 1040ez   Earned income of a spouse, other than trade or business income and a partner's distributive share of partnership income, is treated as the income of the spouse whose services produced the income. Who can use 1040ez That spouse must report all of it on his or her separate return. Who can use 1040ez Trade or business income. Who can use 1040ez   Trade or business income, other than a partner's distributive share of partnership income, is treated as the income of the spouse carrying on the trade or business. Who can use 1040ez That spouse must report all of it on his or her separate return. Who can use 1040ez Partnership income (or loss). Who can use 1040ez   A partner's distributive share of partnership income (or loss) is treated as the income (or loss) of the partner. Who can use 1040ez The partner must report all of it on his or her separate return. Who can use 1040ez Separate property income. Who can use 1040ez   Income derived from the separate property of one spouse (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that spouse. Who can use 1040ez That spouse must report all of it on his or her separate return. Who can use 1040ez Use the appropriate community property law to determine what is separate property. Who can use 1040ez Other community income. Who can use 1040ez   All other community income is treated as provided by the applicable community property laws. Who can use 1040ez Prev  Up  Next   Home   More Online Publications
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Understanding Your CP74 Notice

You are re-certified for EITC. You don't have to fill out Form 8862, Information To Claim Earned Income Credit After Disallowance, in the future. You'll receive your EIC refund within 6 weeks as long as you don't owe other tax or debts we're required to collect.


What you need to do

  • You don’t need to take further action.

You may want to

  • Keep a copy of this notice for your records

Answers to Common Questions

What if I don't receive my refund within 6 weeks?
Call us for assistance at the toll-free telephone number listed in the top right corner of your notice, if you haven't received your refund within 6 weeks.


Tips for next year

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

Page Last Reviewed or Updated: 06-Mar-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 Who Can Use 1040ez

Who can use 1040ez Publication 970 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionComparison table. Who can use 1040ez Ordering forms and publications. Who can use 1040ez Tax questions. Who can use 1040ez Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 970, such as legislation enacted after it was published, go to www. Who can use 1040ez irs. Who can use 1040ez gov/pub970. Who can use 1040ez What's New Lifetime learning credit. Who can use 1040ez  For 2013, the amount of your lifetime learning credit is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $53,000 and $63,000 ($107,000 and $127,000 if you file a joint return). Who can use 1040ez You cannot claim a credit if your MAGI is $63,000 or more ($127,000 or more if you file a joint return). Who can use 1040ez This is an increase from the 2012 limits of $52,000 and $62,000 ($104,000 and $124,000 if filing a joint return). Who can use 1040ez For more information, see chapter 3, Lifetime Learning Credit . Who can use 1040ez Business deduction for work-related education. Who can use 1040ez  For 2013, if you drive your car to and from school and qualify to deduct transportation expenses, the amount you can deduct for miles driven from January 1, 2013 through December 31, 2013 is 56. Who can use 1040ez 5 cents per mile. Who can use 1040ez See chapter 12, Business Deduction for Work-Related Education , for more information. Who can use 1040ez Reminders Form 1098-T, Tuition Statement. Who can use 1040ez  When figuring an education credit or the tuition and fees deduction, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses. Who can use 1040ez In most cases, the student should receive Form 1098-T from the eligible educational institution by January 31, 2014. Who can use 1040ez An institution my choose to report either payments received during calendar year 2013 (box 1), or amounts billed during the calendar year 2013 (box 2), for qualified education expenses. Who can use 1040ez However, the amounts in boxes 1 and 2 of Form 1098-T might be different than the amount you actually paid and are deemed to have paid. Who can use 1040ez In addition, the Form 1098-T should give you other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements, or refunds, and whether the student was enrolled at least half-time or was a graduate student. Who can use 1040ez The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number. Who can use 1040ez Hope Scholarship Credit. Who can use 1040ez  For 2013, the Hope Scholarship Credit is not available. Who can use 1040ez However, you may be able to claim an American opportunity or lifetime learning credit. Who can use 1040ez See chapter 2, American Opportunity Credit , and chapter 3, Lifetime Learning Credit , for more information. Who can use 1040ez Estimated tax payments. Who can use 1040ez  If you have taxable income from any of your education benefits and the payer does not withhold enough income tax, you may need to make estimated tax payments. Who can use 1040ez For more information, see Publication 505, Tax Withholding and Estimated Tax. Who can use 1040ez Photographs of missing children. Who can use 1040ez  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Who can use 1040ez Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Who can use 1040ez You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Who can use 1040ez Introduction This publication explains tax benefits that may be available to you if you are saving for or paying education costs for yourself or, in many cases, another student who is a member of your immediate family. Who can use 1040ez Most benefits apply only to higher education. Who can use 1040ez What is in this publication. Who can use 1040ez    Chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions , explains the tax treatment of various types of educational assistance, including scholarships, fellowships, and tuition reductions. Who can use 1040ez   Two tax credits for which you may be eligible are explained in chapter 2, American Opportunity Credit , and chapter 3, Lifetime Learning Credit . Who can use 1040ez These benefits, which reduce the amount of income tax you may have to pay, are: The American opportunity credit, and The lifetime learning credit. Who can use 1040ez    Ten other types of benefits are explained in chapters 4 through 12. Who can use 1040ez These benefits, which reduce the amount of income tax you may have to pay, are: Deduct student loan interest; Receive tax-free treatment of a canceled student loan; Receive tax-free student loan repayment assistance; Deduct tuition and fees for education; Establish and contribute to a Coverdell education savings account (ESA), which features tax-free earnings; Participate in a qualified tuition program (QTP), which features tax-free earnings; Take early distributions from any type of individual retirement arrangement (IRA) for education costs without paying the 10% additional tax on early distributions; Cash in savings bonds for education costs without having to pay tax on the interest; Receive tax-free educational benefits from your employer; and Take a business deduction for work-related education. Who can use 1040ez Note. Who can use 1040ez You generally cannot claim more than one of the benefits described in the list above for the same qualifying education expense. Who can use 1040ez Comparison table. Who can use 1040ez   Some of the features of these benefits are highlighted in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 , later, in this publication. Who can use 1040ez This general comparison table may guide you in determining which benefits you may be eligible for and which chapters you may want to read. Who can use 1040ez When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that gives you the lowest tax liability. Who can use 1040ez If you qualify, you may find that a combination of credit(s) and deduction(s) gives you the lowest tax. Who can use 1040ez Analyzing your tax withholding. Who can use 1040ez   After you estimate your education tax benefits for the year, you may be able to reduce the amount of your federal income tax withholding. Who can use 1040ez Also, you may want to recheck your withholding during the year if your personal or financial situation changes. Who can use 1040ez See Publication 919, How Do I Adjust My Tax Withholding, for more information. Who can use 1040ez Glossary. Who can use 1040ez   In this publication, wherever appropriate, we have tried to use the same or similar terminology when referring to the basic components of each education benefit. Who can use 1040ez Some of the terms used are: Qualified education expenses, Eligible educational institution, and Modified adjusted gross income. Who can use 1040ez   Even though the same term, such as qualified education expenses, is used to label a basic component of many of the education benefits, the same expenses are not necessarily allowed for each benefit. Who can use 1040ez For example, the cost of room and board is a qualified education expense for the qualified tuition program, but not for the education savings bond program. Who can use 1040ez   Many of the terms used in the publication are defined in the glossary near the end of the publication. Who can use 1040ez The glossary is not intended to be a substitute for reading the chapter on a particular education benefit, but it will give you an overview of how certain terms are used in discussing the different benefits. Who can use 1040ez Comments and suggestions. Who can use 1040ez   We welcome your comments about this publication and your suggestions for future editions. Who can use 1040ez   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Who can use 1040ez NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Who can use 1040ez Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Who can use 1040ez   You can send your comments from www. Who can use 1040ez irs. Who can use 1040ez gov/formspubs/. Who can use 1040ez Click on “More Information” and then on “Comment on Tax Forms and Publications”. Who can use 1040ez   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Who can use 1040ez Ordering forms and publications. Who can use 1040ez   Visit www. Who can use 1040ez irs. Who can use 1040ez gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Who can use 1040ez Internal Revenue Service 1201 N. Who can use 1040ez Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Who can use 1040ez   If you have a tax question, check the information available on IRS. Who can use 1040ez gov or call 1-800-829-1040. Who can use 1040ez We cannot answer tax questions sent to either of the above addresses. Who can use 1040ez Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 590 Individual Retirement Arrangements (IRAs) Form (and Instructions) 1040 U. Who can use 1040ez S. Who can use 1040ez Individual Income Tax Return 1040A U. Who can use 1040ez S. Who can use 1040ez Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Who can use 1040ez S. Who can use 1040ez Nonresident Alien Income Tax Return 1040NR-EZ U. Who can use 1040ez S. Who can use 1040ez Income Tax Return for Certain Nonresident Aliens With No Dependents 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 5329 Additional Taxes on Qualified Plans and Other Tax-Favored Accounts 8815 Exclusion of Interest From Series EE and I U. Who can use 1040ez S. Who can use 1040ez Savings Bonds Issued After 1989 8863 Education Credits 8917 Tuition and Fees Deduction Schedule A (Form 1040) Itemized Deductions  See chapter 13, How To Get Tax Help , for information about getting these publications and forms. Who can use 1040ez Prev  Up  Next   Home   More Online Publications