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Www irs1040ez com Publication 600 - Main Contents Table of Contents Actual Expenses Optional Sales Tax Tables Instructions for the State and Local General Sales Tax Deduction WorksheetWhat if you lived in more than one state? What if you lived in more than one locality? What if your local general sales tax rate changed during 2006? What if you lived in more than one locality in the same state during 2006? Actual Expenses Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2006 if the tax rate was the same as the general sales tax rate. Www irs1040ez com However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Www irs1040ez com If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Www irs1040ez com Motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Www irs1040ez com Also include any state and local general sales taxes paid for a leased motor vehicle. Www irs1040ez com Do not include sales taxes paid on items used in your trade or business. Www irs1040ez com To deduct your actual expenses, enter the amount on Schedule A, line 5, and enter “ST” on the dotted line to the left of the line 5 entry space. Www irs1040ez com You must keep your actual receipts showing general sales taxes paid to use this method. Www irs1040ez com Refund of general sales taxes. Www irs1040ez com   If you received a refund of state or local general sales taxes in 2006 for amounts paid in 2006, reduce your actual 2006 state and local general sales taxes by this amount. Www irs1040ez com If you received a refund of state or local general sales taxes in 2006 for prior year purchases, do not reduce your 2006 state and local general sales taxes by this amount. Www irs1040ez com But if you deducted your actual state and local general sales taxes in the earlier year and the deduction reduced your tax, you may have to include the refund in income on Form 1040, line 21. Www irs1040ez com See Recoveries in Pub. Www irs1040ez com 525 for details. Www irs1040ez com Optional Sales Tax Tables Instead of using your actual expenses, you can use the tables on pages 5 through 7 to figure your state and local general sales tax deduction. Www irs1040ez com You may also be able to add the state and local general sales taxes paid on certain specified items. Www irs1040ez com To figure your state and local general sales tax deduction using the tables, complete the worksheet below. Www irs1040ez com If your filing status is married filing separately, both you and your spouse elect to deduct sales taxes, and your spouse elects to use the optional sales tax tables, you also must use the tables to figure your state and local general sales tax deduction. Www irs1040ez com State and Local General Sales Tax Deduction Worksheet (See the instructions that begin on page 3. Www irs1040ez com ) Before you begin: See the instructions for line 1 on page 3 if: You lived in more than one state during 2006, or You had any nontaxable income in 2006. Www irs1040ez com   1. Www irs1040ez com Enter your state general sales taxes from the applicable table on page 5 or 6 (see page 3 of the instructions) 1. Www irs1040ez com $     Next. Www irs1040ez com If, for all of 2006, you lived only in Connecticut, the District of Columbia, Hawaii, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Rhode Island, Virginia, or West Virginia, skip lines 2 through 5, enter -0- on line 6, and go to line 7. Www irs1040ez com Otherwise, go to line 2       2. Www irs1040ez com Did you live in Alaska, Arizona, Arkansas (Texarkana only), California (Los Angeles County only), Colorado, Georgia, Illinois, Louisiana, New York State, or North Carolina in 2006?         No. Www irs1040ez com Enter -0-                   Yes. Www irs1040ez com Enter your local general sales taxes from the applicable table on page 7 (see page 3 of the instructions)     2. Www irs1040ez com $       3. Www irs1040ez com Did your locality impose a local general sales tax in 2006? Residents of California, Nevada, and Texarkana, Arkansas, see page 3 of the instructions             No. Www irs1040ez com Skip lines 3 through 5, enter -0- on line 6, and go to line 7             Yes. Www irs1040ez com Enter your local general sales tax rate, but omit the percentage sign. Www irs1040ez com For example, if your local general sales tax rate was 2. Www irs1040ez com 5%, enter 2. Www irs1040ez com 5. Www irs1040ez com If your local general sales tax rate changed or you lived in more than one locality in the same state during 2006, see page 3 of the instructions. Www irs1040ez com (If you do not know your local general sales tax rate, contact your local government. Www irs1040ez com ) 3. Www irs1040ez com . Www irs1040ez com       4. Www irs1040ez com Did you enter -0- on line 2 above?             No. Www irs1040ez com Skip lines 4 and 5 and go to line 6             Yes. Www irs1040ez com Enter your state general sales tax rate (shown in the table heading for your state), but omit the percentage sign. Www irs1040ez com For example, if your state general sales tax rate is 6%, enter 6. Www irs1040ez com 0 4. Www irs1040ez com . Www irs1040ez com       5. Www irs1040ez com Divide line 3 by line 4. Www irs1040ez com Enter the result as a decimal (rounded to at least three places) 5. Www irs1040ez com . Www irs1040ez com       6. Www irs1040ez com Did you enter -0- on line 2 above?             No. Www irs1040ez com Multiply line 2 by line 3   6. Www irs1040ez com $     Yes. Www irs1040ez com Multiply line 1 by line 5. Www irs1040ez com If you lived in more than one locality in the same state during 2006, see page 4 of the instructions           7. Www irs1040ez com Enter your state and local general sales taxes paid on specified items, if any (see page 4 of the instructions) 7. Www irs1040ez com $   8. Www irs1040ez com Deduction for general sales taxes. Www irs1040ez com Add lines 1, 6, and 7. Www irs1040ez com Enter the result here and the total from all your state and local general sales tax deduction worksheets, if you completed more than one, on Schedule A, line 5. Www irs1040ez com Be sure to enter “ST” on the dotted line to the left of the entry space 8. Www irs1040ez com $     Instructions for the State and Local General Sales Tax Deduction Worksheet Line 1. Www irs1040ez com    If you lived in the same state for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional state sales tax table for your state on page 5 or 6. Www irs1040ez com Read down the “At least-But less than” columns for your state and find the line that includes your 2006 income. Www irs1040ez com If married filing separately, do not include your spouse's income. Www irs1040ez com Your 2006 income is the amount shown on your Form 1040, line 38, plus any nontaxable items, such as the following. Www irs1040ez com Tax-exempt interest. Www irs1040ez com Veterans' benefits. Www irs1040ez com Nontaxable combat pay. Www irs1040ez com Workers' compensation. Www irs1040ez com Nontaxable part of social security and railroad retirement benefits. Www irs1040ez com Nontaxable part of IRA, pension, or annuity distributions. Www irs1040ez com Do not include rollovers. Www irs1040ez com Public assistance payments. Www irs1040ez com The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. Www irs1040ez com Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. Www irs1040ez com What if you lived in more than one state?    If you lived in more than one state during 2006, look up the table amount for each state using the above rules. Www irs1040ez com If there is no table for your state, the table amount is considered to be zero. Www irs1040ez com Multiply the table amount for each state you lived in by a fraction. Www irs1040ez com The numerator of the fraction is the number of days you lived in the state during 2006 and the denominator is the total number of days in the year (365). Www irs1040ez com Enter the total of the prorated table amounts for each state on line 1. Www irs1040ez com However, if you also lived in a locality during 2006 that imposed a local general sales tax, do not enter the total on line 1. Www irs1040ez com Instead, complete a separate worksheet for each state you lived in and enter the prorated amount for that state on line 1. Www irs1040ez com Example. Www irs1040ez com You lived in State A from January 1 through August 31, 2006 (243 days), and in State B from September 1 through December 31, 2006 (122 days). Www irs1040ez com The table amount for State A is $500. Www irs1040ez com The table amount for State B is $400. Www irs1040ez com You would figure your state general sales tax as follows. Www irs1040ez com State A: $500 x 243/365 = $333   State B: $400 x 122/365 = 134   Total = $467   If none of the localities in which you lived during 2006 imposed a local general sales tax, enter $467 on line 1 of your worksheet. Www irs1040ez com Otherwise, complete a separate worksheet for State A and State B. Www irs1040ez com Enter $333 on line 1 of the State A worksheet and $134 on line 1 of the State B worksheet. Www irs1040ez com Line 2. Www irs1040ez com   If you checked the “No” box, enter -0- on line 2, and go to line 3. Www irs1040ez com If you checked the “Yes” box and lived in the same locality for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional local sales tax table for your locality on page 7. Www irs1040ez com Read down the “At least-But less than” columns for your locality and find the line that includes your 2006 income. Www irs1040ez com See the line 1 instructions on this page to figure your 2006 income. Www irs1040ez com The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. Www irs1040ez com Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. Www irs1040ez com What if you lived in more than one locality?   If you lived in more than one locality during 2006, look up the table amount for each locality using the above rules. Www irs1040ez com If there is no table for your locality, the table amount is considered to be zero. Www irs1040ez com Multiply the table amount for each locality you lived in by a fraction. Www irs1040ez com The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). Www irs1040ez com If you lived in more than one locality in the same state and the local general sales tax rate was the same for each locality, enter the total of the prorated table amounts for each locality in that state on line 2. Www irs1040ez com Otherwise, complete a separate worksheet for lines 2 through 6 for each locality and enter each prorated table amount on line 2 of the applicable worksheet. Www irs1040ez com Example. Www irs1040ez com You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). Www irs1040ez com The table amount for Locality 1 is $100. Www irs1040ez com The table amount for Locality 2 is $150. Www irs1040ez com You would figure the amount to enter on line 2 as follows. Www irs1040ez com Note that this amount may not equal your local sales tax deduction, which is figured on line 6 of the worksheet. Www irs1040ez com Locality 1: $100 x 243/365 = $67   Locality 2: $150 x 122/365 = 50   Total = $117   Line 3. Www irs1040ez com   If you lived in California, check the “No” box if your combined state and local general sales tax rate is 7. Www irs1040ez com 25%. Www irs1040ez com Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 7. Www irs1040ez com 25%. Www irs1040ez com   If you lived in Nevada, check the “No” box if your combined state and local general sales tax rate is 6. Www irs1040ez com 5%. Www irs1040ez com Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 6. Www irs1040ez com 5%. Www irs1040ez com   If you lived in Texarkana, Arkansas, check the “Yes” box and enter “4. Www irs1040ez com 0” on line 3. Www irs1040ez com Your local general sales tax rate of 4. Www irs1040ez com 0% includes the additional 1. Www irs1040ez com 0% Arkansas state sales tax rate for Texarkana and the 1. Www irs1040ez com 5% sales tax rate for Miller County. Www irs1040ez com What if your local general sales tax rate changed during 2006?    If you checked the “Yes” box and your local general sales tax rate changed during 2006, figure the rate to enter on line 3 as follows. Www irs1040ez com Multiply each tax rate for the period it was in effect by a fraction. Www irs1040ez com The numerator of the fraction is the number of days the rate was in effect during 2006 and the denominator is the total number of days in the year (365). Www irs1040ez com Enter the total of the prorated tax rates on line 3. Www irs1040ez com Example. Www irs1040ez com Locality 1 imposed a 1% local general sales tax from January 1 through September 30, 2006 (273 days). Www irs1040ez com The rate increased to 1. Www irs1040ez com 75% for the period from October 1 through December 31, 2006 (92 days). Www irs1040ez com You would enter “1. Www irs1040ez com 189” on line 3, figured as follows. Www irs1040ez com January 1 - September 30: 1. Www irs1040ez com 00 x 273/365 = 0. Www irs1040ez com 748   October 1 - December 31: 1. Www irs1040ez com 75 x 92/365 = 0. Www irs1040ez com 441   Total = 1. Www irs1040ez com 189   What if you lived in more than one locality in the same state during 2006?    Complete a separate worksheet for lines 2 through 6 for each locality in your state if you lived in more than one locality in the same state during 2006 and either of the following applies. Www irs1040ez com Each locality did not have the same local general sales tax rate. Www irs1040ez com You lived in Texarkana, AR, or Los Angeles County, CA. Www irs1040ez com   To figure the amount to enter on line 3 of the worksheet for each locality in which you lived (except a locality for which you used the table on page 7 to figure your local general sales tax deduction), multiply the local general sales tax rate by a fraction. Www irs1040ez com The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). Www irs1040ez com Example. Www irs1040ez com You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). Www irs1040ez com The local general sales tax rate for Locality 1 is 1%. Www irs1040ez com The rate for Locality 2 is 1. Www irs1040ez com 75%. Www irs1040ez com You would enter “0. Www irs1040ez com 666” on line 3 for the Locality 1 worksheet and “0. Www irs1040ez com 585” for the Locality 2 worksheet, figured as follows. Www irs1040ez com Locality 1: 1. Www irs1040ez com 00 x 243/365 = 0. Www irs1040ez com 666   Locality 2: 1. Www irs1040ez com 75 x 122/365 = 0. Www irs1040ez com 585   Line 6. Www irs1040ez com   If you lived in more than one locality in the same state during 2006, you should have completed line 1 only on the first worksheet for that state and separate worksheets for lines 2 through 6 for any other locality within that state in which you lived during 2006. Www irs1040ez com If you checked the “Yes” box on line 6 of any of those worksheets, multiply line 5 of that worksheet by the amount that you entered on line 1 for that state on the first worksheet. Www irs1040ez com Line 7. Www irs1040ez com    Enter on line 7 any state and local general sales taxes paid on the following specified items. Www irs1040ez com If you are completing more than one worksheet, include the total for line 7 on only one of the worksheets. Www irs1040ez com A motor vehicle (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle). Www irs1040ez com Also include any state and local general sales taxes paid for a leased motor vehicle. Www irs1040ez com If the state sales tax rate on these items is higher than the general sales tax rate, only include the amount of tax you would have paid at the general sales tax rate. Www irs1040ez com An aircraft or boat, if the tax rate was the same as the general sales tax rate. Www irs1040ez com A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies. Www irs1040ez com Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation. Www irs1040ez com You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly. Www irs1040ez com Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. Www irs1040ez com The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. Www irs1040ez com In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly. Www irs1040ez com   Do not include sales taxes paid on items used in your trade or business. Www irs1040ez com If you received a refund of state or local general sales taxes in 2006, see Refund of general sales taxes on page 1. Www irs1040ez com Prev  Up  Next   Home   More Online Publications
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ARRA and HIRE Act Bond Guidance

IRS Invites Public to Comment on TEDB Allocation Process and Also Announces a 3-Month Extension to Issue Unexpired TEDB Allocations
The IRS seeks public comment on the reallocation of available amounts of volume cap for Tribal Economic Development Bonds in order to facilitate issuance by Indian tribal governments. Additionally, Indian tribal governments with unexpired volume cap allocations may request a three-month optional extension.

The American Recovery and Reinvestment Act of 2009: Information Center
Update on the new economic stimulus legislation.

IRS Releases Guidance on ARRA Bond Provisions
The latest guidance, forms and information on bond provisions enacted by the American Recovery & Reinvestment Act of 2009.

IRS Announces Tribal Economic Development Bonds Allocations
The IRS has announced the allocation, in two tranches, of $2 billion of volume cap to tribal governments under the new TEDBs program.

IRS Releases Guidance on HIRE Bond Provisions
The Service announced that Notice 2010-35 has been released. The Notice provides guidance for the new Federal refundable tax credit subsidy option (direct pay subsidy option) allowed by the enactment of the Hiring Incentives to Restore Employment Act (HIRE Act) on March 18, 2010. The Notice is also intended to quickly enable issuers to begin issuing these bonds for qualified purposes.

The Service Announces the Release of New and Revised Tax Exempt Bond Forms
The IRS announced that new Form 8038-TC and revised Forms 8038-CP, 8038, and 8038-G have been issued.

Application of the Treasury Offset Program to Payments to Issuers of Direct Pay Bonds
Information on the application of the Treasury Offset Program (TOPS) as it relates to subsidy payments made to issuers of direct pay bonds.

Tax Exempt Bonds Compliance Check Questionnaire on Direct Pay Bonds (February 2010)
The Tax Exempt Bonds office of the Tax Exempt and Government Entities division of the IRS conducted a compliance check questionnaire to evaluate the issuance and record retention policies, procedures and practices of issuers of direct pay build America bonds.

TIGTA Audit Report Finds BABs Payment Processing is Timely and Accurate
TIGTA finds initial build America bond subsidy payments were processed accurately and timely.

TIGTA Finds that Compliance Check Questionnaires by TEB were Appropriate
The compliance check questionnaires issued by the TEB office were appropriate for identifying indications of a high risk of potential noncompliance for BABs and were not examinations.

Page Last Reviewed or Updated: 26-Mar-2014

The Www Irs1040ez Com

Www irs1040ez com 9. Www irs1040ez com   Tax Treaty Benefits Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Treaty Income Some Typical Tax Treaty BenefitsPersonal Services Teachers, Professors, and Researchers Employees of Foreign Governments Students, Apprentices, and Trainees Capital Gains Resident Aliens Reporting Treaty Benefits Claimed Introduction A nonresident alien (and certain resident aliens) from a country with which the United States has an income tax treaty may qualify for certain benefits. Www irs1040ez com Most treaties require that the nonresident alien be a resident of the treaty country to qualify. Www irs1040ez com However, some treaties require that the nonresident alien be a national or a citizen of the treaty country. Www irs1040ez com See Table 9-1 for a list of tax treaty countries. Www irs1040ez com You can generally arrange to have withholding tax reduced or eliminated on wages and other income that are eligible for tax treaty benefits. Www irs1040ez com See Income Entitled to Tax Treaty Benefits in chapter 8. Www irs1040ez com Topics - This chapter discusses: Typical tax treaty benefits, How to obtain copies of tax treaties, and How to claim tax treaty benefits on your tax return. Www irs1040ez com Useful Items - You may want to see: Publication 901 U. Www irs1040ez com S. Www irs1040ez com Tax Treaties Form (and Instructions) 1040NR U. Www irs1040ez com S. Www irs1040ez com Nonresident Alien Income Tax Return 1040NR-EZ U. Www irs1040ez com S. Www irs1040ez com Income Tax Return for Certain Nonresident Aliens With No Dependents 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) See chapter 12 for information about getting these publications and forms. Www irs1040ez com Treaty Income A nonresident alien's treaty income is the gross income on which the tax is limited by a tax treaty. Www irs1040ez com Treaty income includes, for example, dividends from sources in the United States that are subject to tax at a tax treaty rate not to exceed 15%. Www irs1040ez com Nontreaty income is the gross income of a nonresident alien on which the tax is not limited by a tax treaty. Www irs1040ez com Figure the tax on treaty income on each separate item of income at the reduced rate that applies to that item under the treaty. Www irs1040ez com To determine tax on nontreaty income, figure the tax at either the flat 30% rate or the graduated rate, depending upon whether or not the income is effectively connected with your trade or business in the United States. Www irs1040ez com Your tax liability is the sum of the tax on treaty income plus the tax on nontreaty income, but cannot be more than the tax liability figured as if the tax treaty had not come into effect. Www irs1040ez com Example. Www irs1040ez com Arthur Banks is a nonresident alien who is single and a resident of a foreign country that has a tax treaty with the United States. Www irs1040ez com He received gross income of $25,850 during the tax year from sources within the United States, consisting of the following items: Dividends on which the tax is limited to a 15% rate by the tax treaty $1,400 Compensation for personal services on which the tax is not limited by the tax treaty 24,450 Total gross income $25,850 Arthur was engaged in business in the United States during the tax year. Www irs1040ez com His dividends are not effectively connected with that business. Www irs1040ez com He has no deductions other than his own personal exemption. Www irs1040ez com His tax liability, figured as though the tax treaty had not come into effect, is $3,060 determined as follows: Total compensation $24,450 Less: Personal exemption 3,900 Taxable income $20,550 Tax determined by graduated rate (Tax Table column for single taxpayers) $2,640 Plus: Tax on gross dividends ($1,400 × 30%) 420 Tax determined as though treaty had not come into effect $3,060 Arthur's tax liability, figured by taking into account the reduced rate on dividend income as provided by the tax treaty, is $2,850 determined as follows: Tax determined by graduated rate (same as figured above) $2,640 Plus: Tax on gross dividends ($1,400 × 15%) 210 Tax on compensation and dividends $2,850 His tax liability, therefore, is limited to $2,850, the tax liability figured using the tax treaty rate on the dividends. Www irs1040ez com Some Typical Tax Treaty Benefits The following paragraphs briefly explain the exemptions that are available under tax treaties for personal services income, remittances, scholarships, fellowships, and capital gain income. Www irs1040ez com The conditions for claiming the exemptions vary under each tax treaty. Www irs1040ez com For more information about the conditions under a particular tax treaty, see Publication 901. Www irs1040ez com Or, you may download the complete text of most U. Www irs1040ez com S. Www irs1040ez com tax treaties at IRS. Www irs1040ez com gov. Www irs1040ez com Technical explanations for many of those treaties are also available at that site. Www irs1040ez com Tax treaty benefits also cover income such as dividends, interest, rentals, royalties, pensions, and annuities. Www irs1040ez com These types of income may be exempt from U. Www irs1040ez com S. Www irs1040ez com tax or may be subject to a reduced rate of tax. Www irs1040ez com For more information, see Publication 901 or the applicable tax treaty. Www irs1040ez com Personal Services Nonresident aliens from treaty countries who are in the United States for a short stay and also meet certain other requirements may be exempt from tax on their compensation received for personal services performed in the United States. Www irs1040ez com Many tax treaties require that the nonresident alien claiming this exemption be present in the United States for a total of not more than 183 days during the tax year. Www irs1040ez com Other tax treaties specify different periods of maximum presence in the United States, such as 180 days or 90 days. Www irs1040ez com Spending part of a day in the United States counts as a day of presence. Www irs1040ez com Tax treaties may also require that: The compensation cannot be more than a specific amount (frequently $3,000), and The individual have a foreign employer; that is, an individual, corporation, or entity of a foreign country. Www irs1040ez com Note. Www irs1040ez com Under most treaties, income received as an employee (generally designated as dependent personal services) and income received as a self-employed person (generally designated as independent personal services or business income) are treated differently. Www irs1040ez com Teachers, Professors, and Researchers Under many income tax treaties, nonresident alien teachers or professors who temporarily visit the United States for the primary purpose of teaching at a university or other accredited educational institution are not subject to U. Www irs1040ez com S. Www irs1040ez com income tax on compensation received for teaching for the first 2 or 3 years after their arrival in the United States. Www irs1040ez com Many treaties also provide an exemption for engaging in research. Www irs1040ez com Generally, the teacher or professor must be in the United States primarily to teach, lecture, instruct, or engage in research. Www irs1040ez com A substantial part of that person's time must be devoted to those duties. Www irs1040ez com The normal duties of a teacher or professor include not only formal classroom work involving regularly scheduled lectures, demonstrations, or other student-participation activities, but also the less formal method of presenting ideas in seminars or other informal groups and in joint efforts in the laboratory. Www irs1040ez com If you entered the United States as a nonresident alien, but are now a resident alien, the treaty exemption may still apply. Www irs1040ez com See Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens later under Resident Aliens. Www irs1040ez com Employees of Foreign Governments All treaties have provisions for the exemption of income earned by certain employees of foreign governments. Www irs1040ez com However, a difference exists among treaties as to who qualifies for this benefit. Www irs1040ez com Under many treaties, aliens admitted to the United States for permanent residence do not qualify. Www irs1040ez com Under most treaties, aliens who are not nationals or subjects of the foreign country do not qualify. Www irs1040ez com Employees of foreign governments should read the pertinent treaty carefully to determine whether they qualify for benefits. Www irs1040ez com Chapter 10 of this publication also has information for employees of foreign governments. Www irs1040ez com Students, Apprentices, and Trainees Under some income tax treaties, students, apprentices, and trainees are exempt from tax on remittances received from abroad for study and maintenance. Www irs1040ez com Also, under some treaties, scholarship and fellowship grants, and a limited amount of compensation received by students, apprentices, and trainees may be exempt from tax. Www irs1040ez com If you entered the United States as a nonresident alien, but are now a resident alien, the treaty exemption may still apply. Www irs1040ez com See Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens , later, under Resident Aliens. Www irs1040ez com Capital Gains Most treaties provide for the exemption of gains from the sale or exchange of personal property. Www irs1040ez com Generally, gains from the sale or exchange of real property located in the United States are taxable. Www irs1040ez com Resident Aliens Resident aliens may qualify for tax treaty benefits in the situations discussed below. Www irs1040ez com U. Www irs1040ez com S. Www irs1040ez com Residency Under Tax Treaty “Tie-Breaker” Rule In certain circumstances, individuals who are treated as residents of the United States under an income tax treaty (after application of the so-called “tie-breaker” rule) will be entitled to treaty benefits. Www irs1040ez com (The “tie-breaker” rule is explained in chapter 1 under Effect of Tax Treaties. Www irs1040ez com ) If this applies to you, you generally will not need to file a Form 8833 for the income for which treaty benefits are claimed. Www irs1040ez com This is because the income will typically be of a category for which disclosure on a Form 8833 is waived. Www irs1040ez com See Reporting Treaty Benefits Claimed . Www irs1040ez com In most cases, you also will not need to report the income on your Form 1040 because the income will be exempt from U. Www irs1040ez com S. Www irs1040ez com tax under the treaty. Www irs1040ez com However, if the income has been reported as taxable income on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 (for example, line 7 in the case of wages or salaries). Www irs1040ez com Enter the amount for which treaty benefits are claimed in parentheses on Form 1040, line 21. Www irs1040ez com Next to the amount write “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption. Www irs1040ez com On Form 1040, subtract this amount from your income to arrive at total income on Form 1040, line 22. Www irs1040ez com Also follow the above procedure for income that is subject to a reduced rate of tax, instead of an exemption, under the treaty. Www irs1040ez com Attach a statement to Form 1040 showing a computation of the tax at the reduced rate, the name of the treaty country, and the treaty article that provides for the reduced tax rate. Www irs1040ez com Include this tax on Form 1040, line 61. Www irs1040ez com On the dotted line next to line 61, write “Tax from attached statement” and the amount of the tax. Www irs1040ez com Example. Www irs1040ez com Jacques Dubois, who is a resident of the United States under Article 4 of the U. Www irs1040ez com S. Www irs1040ez com -France income tax treaty, receives French social security benefits. Www irs1040ez com Under Article 18(1) of the treaty, French social security benefits are not taxable by the United States. Www irs1040ez com Mr. Www irs1040ez com Dubois is not required to file a Form 8833 for his French social security benefits or report the benefits on Form 1040. Www irs1040ez com Special Rule for Canadian and German Social Security Benefits Under income tax treaties with Canada and Germany, if a U. Www irs1040ez com S. Www irs1040ez com resident receives social security benefits from Canada or Germany, those benefits are treated for U. Www irs1040ez com S. Www irs1040ez com income tax purposes as if they were received under the social security legislation of the United States. Www irs1040ez com If you receive social security benefits from Canada or Germany, include them on line 1 of your Social Security Benefits Worksheet for purposes of determining the taxable amount to be reported on Form 1040, line 20b or Form 1040A, line 14b. Www irs1040ez com You are not required to file a Form 8833 for those benefits. Www irs1040ez com Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens Generally, you must be a nonresident alien student, apprentice, trainee, teacher, professor, or researcher in order to claim a tax treaty exemption for remittances from abroad for study and maintenance in the United States, for scholarship, fellowship, and research grants, and for wages or other personal service compensation. Www irs1040ez com Once you become a resident alien, you generally can no longer claim a tax treaty exemption for this income. Www irs1040ez com However, if you entered the United States as a nonresident alien, but you are now a resident alien for U. Www irs1040ez com S. Www irs1040ez com tax purposes, the treaty exemption will continue to apply if the tax treaty's saving clause (explained later) provides an exception for it and you otherwise meet the requirements for the treaty exemption (including any time limit, explained later). Www irs1040ez com This is true even if you are a nonresident alien electing to file a joint return as explained in chapter 1. Www irs1040ez com Some exceptions to the saving clause apply to all resident aliens (for example, under the U. Www irs1040ez com S. Www irs1040ez com -People's Republic of China treaty); others apply only to resident aliens who are not lawful permanent residents of the United States (green card holders). Www irs1040ez com If you qualify under an exception to the treaty's saving clause, you can avoid income tax withholding by giving the payor a Form W-9 with the statement required by the Form W-9 instructions. Www irs1040ez com Saving clause. Www irs1040ez com   Most tax treaties have a saving clause. Www irs1040ez com A saving clause preserves or “saves” the right of each country to tax its own residents as if no tax treaty were in effect. Www irs1040ez com Thus, once you become a resident alien of the United States, you generally lose any tax treaty benefits that relate to your income. Www irs1040ez com However, many tax treaties have exceptions to the saving clause, which may allow you to continue to claim certain treaty benefits when you become a resident alien. Www irs1040ez com Read the treaty to find out if it has a saving clause and an exception to it. Www irs1040ez com Time limit for claiming treaty exemptions. Www irs1040ez com   Many treaties limit the number of years you can claim a treaty exemption. Www irs1040ez com For students, apprentices, and trainees, the limit is usually 4–5 years; for teachers, professors, and researchers, the limit is usually 2–3 years. Www irs1040ez com Once you reach this limit, you can no longer claim the treaty exemption. Www irs1040ez com See the treaty or Publication 901 for the time limits that apply. Www irs1040ez com How to report income on your tax return. Www irs1040ez com   In most cases, you also will not need to report the income on your Form 1040 because the income will be exempt from U. Www irs1040ez com S. Www irs1040ez com tax under the treaty. Www irs1040ez com However, if the income has been reported as taxable income on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 (for example, line 7 in the case of wages, salaries, scholarships, or fellowships). Www irs1040ez com Enter the amount for which treaty benefits are claimed in parentheses on Form 1040, line 21. Www irs1040ez com Next to the amount write “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption. Www irs1040ez com On Form 1040, subtract this amount from your income to arrive at total income on Form 1040, line 22. Www irs1040ez com Example. Www irs1040ez com Mr. Www irs1040ez com Yu, a citizen of the People's Republic of China, entered the United States as a nonresident alien student on January 1, 2009. Www irs1040ez com He remained a nonresident alien through 2013 and was able to exclude his scholarship from U. Www irs1040ez com S. Www irs1040ez com tax in those years under Article 20 of the U. Www irs1040ez com S. Www irs1040ez com -People's Republic of China income tax treaty. Www irs1040ez com On January 1, 2014, he became a resident alien under the substantial presence test because his stay in the United States exceeded 5 years. Www irs1040ez com Even though Mr. Www irs1040ez com Yu is now a resident alien, the provisions of Article 20 still apply because of the exception to the saving clause in paragraph 2 of the Protocol to the U. Www irs1040ez com S. Www irs1040ez com -People's Republic of China treaty dated April 30, 1984. Www irs1040ez com Mr. Www irs1040ez com Yu should submit Form W-9 and the required statement to the payor. Www irs1040ez com Reporting Treaty Benefits Claimed If you claim treaty benefits that override or modify any provision of the Internal Revenue Code, and by claiming these benefits your tax is, or might be, reduced, you must attach a fully completed Form 8833 to your tax return. Www irs1040ez com See below, for the situations where you are not required to file Form 8833. Www irs1040ez com You must file a U. Www irs1040ez com S. Www irs1040ez com tax return and Form 8833 if you claim the following treaty benefits. Www irs1040ez com You claim a reduction or modification in the taxation of gain or loss from the disposition of a U. Www irs1040ez com S. Www irs1040ez com real property interest based on a treaty. Www irs1040ez com You claim a credit for a specific foreign tax for which foreign tax credit would not be allowed by the Internal Revenue Code. Www irs1040ez com You receive payments or income items totaling more than $100,000 and you determine your country of residence under a treaty and not under the rules for residency discussed in chapter 1. Www irs1040ez com These are the more common situations for which Form 8833 is required. Www irs1040ez com Exceptions. Www irs1040ez com   You do not have to file Form 8833 for any of the following situations. Www irs1040ez com You claim a reduced rate of withholding tax under a treaty on interest, dividends, rent, royalties, or other fixed or determinable annual or periodic income ordinarily subject to the 30% rate. Www irs1040ez com You claim a treaty reduces or modifies the taxation of income from dependent personal services, pensions, annuities, social security and other public pensions, or income of artists, athletes, students, trainees, or teachers. Www irs1040ez com This includes taxable scholarship and fellowship grants. Www irs1040ez com You claim a reduction or modification of taxation of income under an International Social Security Agreement or a Diplomatic or Consular Agreement. Www irs1040ez com You are a partner in a partnership or a beneficiary of an estate or trust and the partnership, estate, or trust reports the required information on its return. Www irs1040ez com The payments or items of income that are otherwise required to be disclosed total no more than $10,000. Www irs1040ez com You are claiming treaty benefits for amounts that are: Reported to you on Form 1042-S and Received by you: As a related party from a reporting corporation within the meaning of Internal Revenue Code section 6038A (relating to information returns on Form 5472 filed by U. Www irs1040ez com S. Www irs1040ez com corporations that are 25-percent owned by a foreign person), or As a beneficial owner that is a direct account holder of a U. Www irs1040ez com S. Www irs1040ez com financial institution or qualified intermediary, or a direct partner, beneficiary, or owner of a withholding foreign partnership or trust, from that U. Www irs1040ez com S. Www irs1040ez com financial institution, qualified intermediary, or withholding foreign partnership or trust. Www irs1040ez com The exception described in (6) above does not apply to any amounts for which a treaty-based return disclosure is specifically required by the Form 8833 instructions. Www irs1040ez com Penalty for failure to provide required information on Form 8833. Www irs1040ez com   If you are required to report the treaty benefits but do not, you may be subject to a penalty of $1,000 for each failure. Www irs1040ez com Additional information. Www irs1040ez com   For additional information, see section 301. Www irs1040ez com 6114-1(c) of the Income Tax Regulations. Www irs1040ez com Table 9-1. Www irs1040ez com Table of Tax Treaties (Updated through December 31, 2013) Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. Www irs1040ez com D. Www irs1040ez com ) Australia TIAS 10773 Dec. Www irs1040ez com 1, 1983 1986-2 C. Www irs1040ez com B. Www irs1040ez com 220 1986-2 C. Www irs1040ez com B. Www irs1040ez com 246 Protocol TIAS Jan. Www irs1040ez com 1, 2004     Austria TIAS Jan. Www irs1040ez com 1, 1999     Bangladesh TIAS Jan. Www irs1040ez com 1, 2007     Barbados TIAS 11090 Jan. Www irs1040ez com 1, 1984 1991-2 C. Www irs1040ez com B. Www irs1040ez com 436 1991-2 C. Www irs1040ez com B. Www irs1040ez com 466 Protocol TIAS Jan. Www irs1040ez com 1, 1994     Protocol TIAS Jan. Www irs1040ez com 1, 2005     Belgium TIAS Jan. Www irs1040ez com 1, 2008     Bulgaria TIAS Jan. Www irs1040ez com 1, 2009     Canada2 TIAS 11087 Jan. Www irs1040ez com 1, 1985 1986-2 C. Www irs1040ez com B. Www irs1040ez com 258 1987-2 C. Www irs1040ez com B. Www irs1040ez com 298 Protocol TIAS Jan. Www irs1040ez com 1, 1996     Protocol TIAS Dec. Www irs1040ez com 16, 1997     Protocol TIAS Jan. Www irs1040ez com 1, 2009     China, People's Republic of TIAS 12065 Jan. Www irs1040ez com 1, 1987 1988-1 C. Www irs1040ez com B. Www irs1040ez com 414 1988-1 C. Www irs1040ez com B. Www irs1040ez com 447 Commonwealth of Independent States3 TIAS 8225 Jan. Www irs1040ez com 1, 1976 1976-2 C. Www irs1040ez com B. Www irs1040ez com 463 1976-2 C. Www irs1040ez com B. Www irs1040ez com 475 Cyprus TIAS 10965 Jan. Www irs1040ez com 1, 1986 1989-2 C. Www irs1040ez com B. Www irs1040ez com 280 1989-2 C. Www irs1040ez com B. Www irs1040ez com 314 Czech Republic TIAS Jan. Www irs1040ez com 1, 1993     Denmark TIAS Jan. Www irs1040ez com 1, 2001     Protocol TIAS Jan. Www irs1040ez com 1, 2008     Egypt TIAS 10149 Jan. Www irs1040ez com 1, 1982 1982-1 C. Www irs1040ez com B. Www irs1040ez com 219 1982-1 C. Www irs1040ez com B. Www irs1040ez com 243 Estonia TIAS Jan. Www irs1040ez com 1, 2000     Finland TIAS 12101 Jan. Www irs1040ez com 1, 1991     Protocol TIAS Jan. Www irs1040ez com 1, 2008     France TIAS Jan. Www irs1040ez com 1, 1996     Protocol TIAS Jan. Www irs1040ez com 1, 2007     Protocol TIAS Jan. Www irs1040ez com 1, 2010     Germany TIAS Jan. Www irs1040ez com 1, 1990     Protocol TIAS Jan. Www irs1040ez com 1, 2008     Greece TIAS 2902 Jan. Www irs1040ez com 1, 1953 1958-2 C. Www irs1040ez com B. Www irs1040ez com 1054 T. Www irs1040ez com D. Www irs1040ez com 6109, 1954-2 C. Www irs1040ez com B. Www irs1040ez com 638 Hungary TIAS 9560 Jan. Www irs1040ez com 1, 1980 1980-1 C. Www irs1040ez com B. Www irs1040ez com 333 1980-1 C. Www irs1040ez com B. Www irs1040ez com 354 Iceland TIAS Jan. Www irs1040ez com 1, 2009     India TIAS Jan. Www irs1040ez com 1, 1991     Indonesia TIAS 11593 Jan. Www irs1040ez com 1, 1990     Ireland TIAS Jan. Www irs1040ez com 1, 1998     Israel TIAS Jan. Www irs1040ez com 1, 1995     Italy TIAS Jan. Www irs1040ez com 1, 2010     Jamaica TIAS 10207 Jan. Www irs1040ez com 1, 1982 1982-1 C. Www irs1040ez com B. Www irs1040ez com 257 1982-1 C. Www irs1040ez com B. Www irs1040ez com 291 Japan TIAS Jan. Www irs1040ez com 1, 2005     Kazakhstan TIAS Jan. Www irs1040ez com 1, 1996     Korea, South TIAS 9506 Jan. Www irs1040ez com 1, 1980 1979-2 C. Www irs1040ez com B. Www irs1040ez com 435 1979-2 C. Www irs1040ez com B. Www irs1040ez com 458 Latvia TIAS Jan. Www irs1040ez com 1, 2000     Lithuania TIAS Jan. Www irs1040ez com 1, 2000     Luxembourg TIAS Jan. Www irs1040ez com 1, 2001     Malta TIAS Jan. Www irs1040ez com 1, 2011     Mexico TIAS Jan. Www irs1040ez com 1, 1994 1994-2 C. Www irs1040ez com B. Www irs1040ez com 424 1994-2 C. Www irs1040ez com B. Www irs1040ez com 489 Protocol TIAS Oct. Www irs1040ez com 26, 1995     Protocol TIAS Jan. Www irs1040ez com 1, 2004     Morocco TIAS 10195 Jan. Www irs1040ez com 1, 1981 1982-2 C. Www irs1040ez com B. Www irs1040ez com 405 1982-2 C. Www irs1040ez com B. Www irs1040ez com 427 Netherlands TIAS Jan. Www irs1040ez com 1, 1994     Protocol TIAS Jan. Www irs1040ez com 1, 2005     New Zealand TIAS 10772 Nov. Www irs1040ez com 2, 1983 1990-2 C. Www irs1040ez com B. Www irs1040ez com 274 1990-2 C. Www irs1040ez com B. Www irs1040ez com 303 Protocol TIAS Jan. Www irs1040ez com 1, 2011     Norway TIAS 7474 Jan. Www irs1040ez com 1, 1971 1973-1 C. Www irs1040ez com B. Www irs1040ez com 669 1973-1 C. Www irs1040ez com B. Www irs1040ez com 693 Protocol TIAS 10205 Jan. Www irs1040ez com 1, 1982 1982-2 C. Www irs1040ez com B. Www irs1040ez com 440 1982-2 C. Www irs1040ez com B. Www irs1040ez com 454 Pakistan TIAS 4232 Jan. Www irs1040ez com 1, 1959 1960-2 C. Www irs1040ez com B. Www irs1040ez com 646 T. Www irs1040ez com D. Www irs1040ez com 6431, 1960-1 C. Www irs1040ez com B. Www irs1040ez com 755 Philippines TIAS 10417 Jan. Www irs1040ez com 1, 1983 1984-2 C. Www irs1040ez com B. Www irs1040ez com 384 1984-2 C. Www irs1040ez com B. Www irs1040ez com 412 Poland TIAS 8486 Jan. Www irs1040ez com 1, 1974 1977-1 C. Www irs1040ez com B. Www irs1040ez com 416 1977-1 C. Www irs1040ez com B. Www irs1040ez com 427 Portugal TIAS Jan. Www irs1040ez com 1, 1996     Romania TIAS 8228 Jan. Www irs1040ez com 1, 1974 1976-2 C. Www irs1040ez com B. Www irs1040ez com 492 1976-2 C. Www irs1040ez com B. Www irs1040ez com 504 Russia TIAS Jan. Www irs1040ez com 1, 1994     Slovak Republic TIAS Jan. Www irs1040ez com 1, 1993     Slovenia TIAS Jan. Www irs1040ez com 1, 2002     South Africa TIAS Jan. Www irs1040ez com 1, 1998     Spain TIAS Jan. Www irs1040ez com 1, 1991     Sri Lanka TIAS Jan. Www irs1040ez com 1, 2004     Sweden TIAS Jan. Www irs1040ez com 1, 1996     Protocol TIAS Jan. Www irs1040ez com 1, 2007     Switzerland TIAS Jan. Www irs1040ez com 1, 1998     Thailand TIAS Jan. Www irs1040ez com 1, 1998     Trinidad and Tobago TIAS 7047 Jan. Www irs1040ez com 1, 1970 1971-2 C. Www irs1040ez com B. Www irs1040ez com 479   Tunisia TIAS Jan. Www irs1040ez com 1, 1990     Turkey TIAS Jan. Www irs1040ez com 1, 1998     Ukraine TIAS Jan. Www irs1040ez com 1, 2001     United Kingdom TIAS Jan. Www irs1040ez com 1, 2004     Venezuela TIAS Jan. Www irs1040ez com 1, 2000     1(TIAS) Treaties and Other International Act Series 2Information on the treaty can be found in Publication 597, Information on the United States-Canada Income Tax Treaty. Www irs1040ez com 3The U. Www irs1040ez com S. Www irs1040ez com -U. Www irs1040ez com S. Www irs1040ez com S. Www irs1040ez com R. Www irs1040ez com income tax treaty applies to the countries of Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. Www irs1040ez com Prev  Up  Next   Home   More Online Publications