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1040nr Ez E File

1040nr ez e file Publication 555 - Main Content Table of Contents Domicile Community or Separate Property and Income Identifying Income, Deductions, and CreditsIncome Exemptions Deductions Credits, Taxes, and Payments Community Property Laws DisregardedRequesting relief. 1040nr ez e file Equitable relief. 1040nr ez e file Earned income. 1040nr ez e file Trade or business income. 1040nr ez e file Partnership income or loss. 1040nr ez e file Separate property income. 1040nr ez e file Social security benefits. 1040nr ez e file Other income. 1040nr ez e file End of the Community Preparing a Federal Income Tax ReturnJoint Return Versus Separate Returns Separate Return Preparation How To Get Tax HelpLow Income Taxpayer Clinics Domicile Whether you have community property and community income depends on the state where you are domiciled. 1040nr ez e file If you and your spouse (or your registered domestic partner) have different domiciles, check the laws of each to see whether you have community property or community income. 1040nr ez e file You have only one domicile even if you have more than one home. 1040nr ez e file Your domicile is a permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. 1040nr ez e file The question of your domicile is mainly a matter of your intention as indicated by your actions. 1040nr ez e file You must be able to show that you intend a given place or state to be your permanent home. 1040nr ez e file If you move into or out of a community property state during the year, you may or may not have community income. 1040nr ez e file Factors considered in determining domicile include: Where you pay state income tax, Where you vote, Location of property you own, Your citizenship, Length of residence, and Business and social ties to the community. 1040nr ez e file Amount of time spent. 1040nr ez e file    The amount of time spent in one place does not always explain the difference between home and domicile. 1040nr ez e file A temporary home or residence may continue for months or years while a domicile may be established the first moment you occupy the property. 1040nr ez e file Your intent is the determining factor in proving where you have your domicile. 1040nr ez e file    Note. 1040nr ez e file When this publication refers to where you live, it means your domicile. 1040nr ez e file Community or Separate Property and Income If you file a federal tax return separately from your spouse, you must report half of all community income and all of your separate income. 1040nr ez e file Likewise, a registered domestic partner must report half of all community income and all of his or her separate income on his or her federal tax return. 1040nr ez e file You each must attach your Form 8958 to your Form 1040 showing how you figured the amount you are reporting on your return. 1040nr ez e file Generally, the laws of the state in which you are domiciled govern whether you have community property and community income or separate property and separate income for federal tax purposes. 1040nr ez e file The following is a summary of the general rules. 1040nr ez e file These rules are also shown in Table 1. 1040nr ez e file Community property. 1040nr ez e file    Generally, community property is property: That you, your spouse (or your registered domestic partner), or both acquire during your marriage (or registered domestic partnership) while you and your spouse (or your registered domestic partner) are domiciled in a community property state. 1040nr ez e file That you and your spouse (or your registered domestic partner) agreed to convert from separate to community property. 1040nr ez e file That cannot be identified as separate property. 1040nr ez e file Community income. 1040nr ez e file    Generally, community income is income from: Community property. 1040nr ez e file Salaries, wages, and other pay received for the services performed by you, your spouse (or your registered domestic partner), or both during your marriage (or registered domestic partnership) while domiciled in a community property state. 1040nr ez e file Real estate that is treated as community property under the laws of the state where the property is located. 1040nr ez e file Note Separate property. 1040nr ez e file    Generally, separate property is: Property that you or your spouse (or your registered domestic partner) owned separately before your marriage (or registered domestic partnership). 1040nr ez e file Money earned while domiciled in a noncommunity property state. 1040nr ez e file Property that you or your spouse (or your registered domestic partner) received separately as a gift or inheritance during your marriage (or registered domestic partnership). 1040nr ez e file Property that you or your spouse (or your registered domestic partner) bought with separate funds, or acquired in exchange for separate property, during your marriage (or registered domestic partnership). 1040nr ez e file Property that you and your spouse (or your registered domestic partner) converted from community property to separate property through an agreement valid under state law. 1040nr ez e file The part of property bought with separate funds, if part was bought with community funds and part with separate funds. 1040nr ez e file Separate income. 1040nr ez e file    Generally, income from separate property is the separate income of the spouse (or the registered domestic partner) who owns the property. 1040nr ez e file    In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. 1040nr ez e file Table 1. 1040nr ez e file General Rules — Property and Income: Community or Separate? Community property is property: That you, your spouse (or your registered domestic partner), or both acquire during your marriage (or registered domestic partnership) while you and your spouse (or your registered domestic partner) are domiciled in a community property state. 1040nr ez e file (Includes the part of property bought with community property funds if part was bought with community funds and part with separate funds. 1040nr ez e file ) That you and your spouse (or your registered domestic partner) agreed to convert from separate to community property. 1040nr ez e file That cannot be identified as separate property. 1040nr ez e file Separate property is: Property that you or your spouse (or your registered domestic partner) owned separately before your marriage (or registered domestic partnership). 1040nr ez e file Money earned while domiciled in a noncommunity property state. 1040nr ez e file Property either of you received as a gift or inherited separately during your marriage (or registered domestic partnership). 1040nr ez e file Property bought with separate funds, or exchanged for separate property, during your marriage (or registered domestic partnership). 1040nr ez e file Property that you and your spouse (or your registered domestic partner) agreed to convert from community to separate property through an agreement valid under state law. 1040nr ez e file The part of property bought with separate funds, if part was bought with community funds and part with separate funds. 1040nr ez e file Community income 1,2,3 is income from: Community property. 1040nr ez e file Salaries, wages, or pay for services of you, your spouse (or your registered domestic partner), or both during your marriage (or registered domestic partnership) while domiciled in a community property state. 1040nr ez e file Real estate that is treated as community property under the laws of the state where the property is located. 1040nr ez e file Separate income 1,2 is income from: Separate property which belongs to the spouse (or registered domestic partner) who owns the property. 1040nr ez e file 1In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. 1040nr ez e file 2Check your state law if you are separated but do not meet the conditions discussed in Spouses living apart all year , later. 1040nr ez e file In some states, the income you earn after you are separated and before a divorce decree is issued continues to be community income. 1040nr ez e file In other states, it is separate income. 1040nr ez e file 3Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations. 1040nr ez e file See Community Property Laws Disregarded , later. 1040nr ez e file Identifying Income, Deductions, and Credits If you file separate returns, you and your spouse (or your registered domestic partner) each must attach your Form 8958 to your Form 1040 to identify your community and separate income, deductions, credits, and other return amounts according to the laws of your state. 1040nr ez e file Under special rules, income that can otherwise be characterized as community income may not be treated as community income for federal income tax purposes in certain situations. 1040nr ez e file See Community Property Laws Disregarded, later. 1040nr ez e file Check your state law if you are separated but do not meet the conditions discussed in Spouses living apart all year, later. 1040nr ez e file In some states, the income you earn after you are separated and before a divorce decree is issued continues to be community income. 1040nr ez e file In other states, it is separate income. 1040nr ez e file Income The following is a discussion of the general effect of community property laws on the federal income tax treatment of certain items of income. 1040nr ez e file Wages, earnings, and profits. 1040nr ez e file    A spouse's (or your registered domestic partner's) wages, earnings, and net profits from a sole proprietorship are community income and must be evenly split. 1040nr ez e file Dividends, interest, and rents. 1040nr ez e file    Dividends, interest, and rents from community property are community income and must be evenly split. 1040nr ez e file Dividends, interest, and rents from separate property are characterized in accordance with the discussion under Income from separate property , later. 1040nr ez e file Example. 1040nr ez e file If you and your spouse (or your registered domestic partner) buy a bond that is considered community property under your state laws, half the bond interest belongs to you and half belongs to your spouse. 1040nr ez e file You each must show the bond interest and the split of that interest on your Form 8958, and report half the interest on your Form 1040. 1040nr ez e file Attach your Form 8958 to your Form 1040. 1040nr ez e file Alimony received. 1040nr ez e file    Alimony or separate maintenance payments made prior to divorce are taxable to the payee spouse only to the extent they exceed 50% (his or her share) of the reportable community income. 1040nr ez e file This is so because the payee spouse is already required to report half of the community income. 1040nr ez e file See also Alimony paid , later. 1040nr ez e file Gains and losses. 1040nr ez e file    Gains and losses are classified as separate or community depending on how the property is held. 1040nr ez e file For example, a loss on separate property, such as stock held separately, is a separate loss. 1040nr ez e file On the other hand, a loss on community property, such as a casualty loss to your home held as community property, is a community loss. 1040nr ez e file See Publication 544, Sales and Other Dispositions of Assets, for information on gains and losses. 1040nr ez e file See Publication 547, Casualties, Disasters, and Thefts, for information on losses due to a casualty or theft. 1040nr ez e file Withdrawals from individual retirement arrangements (IRAs) and Coverdell Education Savings Accounts (ESAs). 1040nr ez e file    There are several kinds of individual retirement arrangements (IRAs). 1040nr ez e file They are traditional IRAs (including SEP-IRAs), SIMPLE IRAs, and Roth IRAs. 1040nr ez e file IRAs and ESAs by law are deemed to be separate property. 1040nr ez e file Therefore, taxable IRA and ESA distributions are separate property, even if the funds in the account would otherwise be community property. 1040nr ez e file These distributions are wholly taxable to the spouse (or registered domestic partner) whose name is on the account. 1040nr ez e file That spouse (or registered domestic partner) is also liable for any penalties and additional taxes on the distributions. 1040nr ez e file Pensions. 1040nr ez e file    Generally, distributions from pensions will be characterized as community or separate income depending on the respective periods of participation in the pension while married (or during the registered domestic partnership) and domiciled in a community property state or in a noncommunity property state during the total period of participation in the pension. 1040nr ez e file See the example under Civil service retirement , later. 1040nr ez e file These rules may vary between states. 1040nr ez e file Check your state law. 1040nr ez e file Lump-sum distributions. 1040nr ez e file    If you were born before January 2, 1936, and receive a lump-sum distribution from a qualified retirement plan, you may be able to choose an optional method of figuring the tax on the distribution. 1040nr ez e file For the 10-year tax option, you must disregard community property laws. 1040nr ez e file For more information, see Publication 575, Pension and Annuity Income, and Form 4972, Tax on Lump-Sum Distributions. 1040nr ez e file Civil service retirement. 1040nr ez e file    For income tax purposes, community property laws apply to annuities payable under the Civil Service Retirement Act (CSRS) or Federal Employee Retirement System (FERS). 1040nr ez e file   Whether a civil service annuity is separate or community income depends on your marital status (or your status as a registered domestic partner) and domicile of the employee when the services were performed for which the annuity is paid. 1040nr ez e file Even if you now live in a noncommunity property state and you receive a civil service annuity, it may be community income if it is based on services you performed while married (or during the registered domestic partnership) and domiciled in a community property state. 1040nr ez e file   If a civil service annuity is a mixture of community income and separate income, it must be divided between the two kinds of income. 1040nr ez e file The division is based on the employee's domicile and marital status (or registered domestic partnership) in community and noncommunity property states during his or her periods of service. 1040nr ez e file Example. 1040nr ez e file Henry Wright retired this year after 30 years of civil service. 1040nr ez e file He and his wife were domiciled in a community property state during the past 15 years. 1040nr ez e file Since half the service was performed while the Wrights were married and domiciled in a community property state, half the civil service retirement pay is considered to be community income. 1040nr ez e file If Mr. 1040nr ez e file Wright receives $1,000 a month in retirement pay, $500 is considered community income—half ($250) is his income and half ($250) is his wife's. 1040nr ez e file Military retirement pay. 1040nr ez e file    State community property laws apply to military retirement pay. 1040nr ez e file Generally, the pay is either separate or community income based on the marital status and domicile of the couple while the member of the Armed Forces was in active military service. 1040nr ez e file For example, military retirement pay for services performed during marriage and domicile in a community property state is community income. 1040nr ez e file   Active military pay earned while married and domiciled in a community property state is also community income. 1040nr ez e file This income is considered to be received half by the member of the Armed Forces and half by the spouse. 1040nr ez e file Partnership income. 1040nr ez e file    If an interest is held in a partnership, and income from the partnership is attributable to the efforts of either spouse (or registered domestic partner), the partnership income is community property. 1040nr ez e file If it is merely a passive investment in a separate property partnership, the partnership income will be characterized in accordance with the discussion under Income from separate property , later. 1040nr ez e file Tax-exempt income. 1040nr ez e file    For spouses, community income exempt from federal tax generally keeps its exempt status for both spouses. 1040nr ez e file For example, under certain circumstances, income earned outside the United States is tax exempt. 1040nr ez e file If you earned income and met the conditions that made it exempt, the income is also exempt for your spouse even though he or she may not have met the conditions. 1040nr ez e file Registered domestic partners should consult the particular exclusion provision to see if the exempt status applies to both. 1040nr ez e file Income from separate property. 1040nr ez e file    In some states, income from separate property is separate income. 1040nr ez e file These states include Arizona, California, Nevada, New Mexico, and Washington. 1040nr ez e file Other states characterize income from separate property as community income. 1040nr ez e file These states include Idaho, Louisiana, Texas, and Wisconsin. 1040nr ez e file Exemptions When you file separate returns, you must claim your own exemption amount for that year. 1040nr ez e file (See your tax return instructions. 1040nr ez e file ) You cannot divide the amount allowed as an exemption for a dependent between you and your spouse (or your registered domestic partner). 1040nr ez e file When community funds provide support for more than one person, each of whom otherwise qualifies as a dependent, you and your spouse (or your registered domestic partner) may divide the number of dependency exemptions as explained in the following example. 1040nr ez e file Example. 1040nr ez e file Ron and Diane White have three dependent children and live in Nevada. 1040nr ez e file If Ron and Diane file separately, only Ron can claim his own exemption, and only Diane can claim her own exemption. 1040nr ez e file Ron and Diane can agree that one of them will claim the exemption for one, two, or all of their children and the other will claim any remaining exemptions. 1040nr ez e file They cannot each claim half of the total exemption amount for their three children. 1040nr ez e file Deductions If you file separate returns, your deductions generally depend on whether the expenses involve community or separate income. 1040nr ez e file Business and investment expenses. 1040nr ez e file    If you file separate returns, expenses incurred to earn or produce community business or investment income are generally divided equally between you and your spouse (or your registered domestic partner). 1040nr ez e file Each of you is entitled to deduct one-half of the expenses on your separate returns. 1040nr ez e file Expenses incurred by a spouse (or registered domestic partner) to produce separate business or investment income is deductible by the spouse (or the registered domestic partner) who earns the corresponding separate business or investment income. 1040nr ez e file    Other limits may also apply to business and investment expenses. 1040nr ez e file For more information, see Publication 535, Business Expenses, and Publication 550, Investment Income and Expenses. 1040nr ez e file Alimony paid. 1040nr ez e file    Payments that may otherwise qualify as alimony are not deductible by the payer if they are the recipient spouse's part of community income. 1040nr ez e file They are deductible as alimony only to the extent they are more than that spouse's part of community income. 1040nr ez e file Example. 1040nr ez e file You live in a community property state. 1040nr ez e file You are separated but the special rules explained later under Spouses living apart all year do not apply. 1040nr ez e file Under a written agreement, you pay your spouse $12,000 of your $20,000 total yearly community income. 1040nr ez e file Your spouse receives no other community income. 1040nr ez e file Under your state law, earnings of a spouse living separately and apart from the other spouse continue as community property. 1040nr ez e file On your separate returns, each of you must report $10,000 of the total community income. 1040nr ez e file In addition, your spouse must report $2,000 as alimony received. 1040nr ez e file You can deduct $2,000 as alimony paid. 1040nr ez e file IRA deduction. 1040nr ez e file    Deductions for IRA contributions cannot be split between spouses (or registered domestic partners). 1040nr ez e file The deduction for each spouse (or each registered domestic partner) is figured separately and without regard to community property laws. 1040nr ez e file Personal expenses. 1040nr ez e file   Expenses that are paid out of separate funds, such as medical expenses, are deductible by the spouse who pays them. 1040nr ez e file If these expenses are paid from community funds, divide the deduction equally between you and your spouse. 1040nr ez e file Credits, Taxes, and Payments The following is a discussion of the general effect of community property laws on the treatment of certain credits, taxes, and payments on your separate return. 1040nr ez e file Child tax credit. 1040nr ez e file    You may be entitled to a child tax credit for each of your qualifying children. 1040nr ez e file You must provide the name and identification number (usually the social security number) of each qualifying child on your return. 1040nr ez e file See your tax return instructions for the maximum amount of the credit you can claim for each qualifying child. 1040nr ez e file Limit on credit. 1040nr ez e file    The credit is limited if your modified adjusted gross income (modified AGI) is above a certain amount. 1040nr ez e file The amount at which the limitation (phaseout) begins depends on your filing status. 1040nr ez e file Generally, your credit is limited to your tax liability unless you have three or more qualifying children. 1040nr ez e file See your tax return instructions for more information. 1040nr ez e file Self-employment tax. 1040nr ez e file    For the effect of community property laws on the income tax treatment of income from a sole proprietorship and partnerships, see Wages, earnings, and profits and Partnership income , earlier. 1040nr ez e file The following rules only apply to persons married for federal tax purposes. 1040nr ez e file Registered domestic partners report community income for self-employment tax purposes the same way they do for income tax purposes. 1040nr ez e file Sole proprietorship. 1040nr ez e file    With regard to net income from a trade or business (other than a partnership) that is community income, self-employment tax is imposed on the spouse carrying on the trade or business. 1040nr ez e file Partnerships. 1040nr ez e file    All of the distributive share of a married partner's income or loss from a partnership trade or business is attributable to the partner for computing any self-employment tax, even if a portion of the partner's distributive share of income or loss is community income or loss that is otherwise attributable to the partner's spouse for income tax purposes. 1040nr ez e file If both spouses are partners, any self-employment tax is allocated based on their distributive shares. 1040nr ez e file Federal income tax withheld. 1040nr ez e file    Report the credit for federal income tax withheld on community wages in the same manner as your wages. 1040nr ez e file If you and your spouse file separate returns on which each of you reports half the community wages, each of you is entitled to credit for half the income tax withheld on those wages. 1040nr ez e file Likewise, each registered domestic partner is entitled to credit for half the income tax withheld on those wages. 1040nr ez e file Estimated tax payments. 1040nr ez e file    In determining whether you must pay estimated tax, apply the estimated tax rules to your estimated income. 1040nr ez e file These rules are explained in Publication 505. 1040nr ez e file   If you think you may owe estimated tax and want to pay the tax separately (registered domestic partners must pay the tax separately), determine whether you must pay it by taking into account: Half the community income and deductions, All of your separate income and deductions, and Your own exemption and any exemptions for dependents that you may claim. 1040nr ez e file   Whether you and your spouse pay estimated tax jointly or separately will not affect your choice of filing joint or separate income tax returns. 1040nr ez e file   If you and your spouse paid estimated tax jointly but file separate income tax returns, either of you can claim all of the estimated tax paid, or you may divide it between you in any way that you agree upon. 1040nr ez e file   If you cannot agree on how to divide it, the estimated tax you can claim equals the total estimated tax paid times the tax shown on your separate return, divided by the total of the tax shown on your return and your spouse's return. 1040nr ez e file   If you paid your estimated taxes separately, you get credit for only the estimated taxes you paid. 1040nr ez e file Earned income credit. 1040nr ez e file    You may be entitled to an earned income credit (EIC). 1040nr ez e file You cannot claim this credit if your filing status is married filing separately. 1040nr ez e file   If you are married, but qualify to file as head of household under rules for married taxpayers living apart (see Publication 501, Exemptions, Standard Deduction, and Filing Information), and live in a state that has community property laws, your earned income for the EIC does not include any amount earned by your spouse that is treated as belonging to you under community property laws. 1040nr ez e file That amount is not earned income for the EIC, even though you must include it in your gross income on your income tax return. 1040nr ez e file Your earned income includes the entire amount you earned, even if part of it is treated as belonging to your spouse under your state's community property laws. 1040nr ez e file The same rule applies to registered domestic partners. 1040nr ez e file    This rule does not apply when determining your adjusted gross income (AGI) for the EIC. 1040nr ez e file Your AGI includes that part of both your and your spouse's (or your registered domestic partner's) wages that you are required to include in gross income shown on your tax return. 1040nr ez e file   For more information about the EIC, see Publication 596, Earned Income Credit (EIC). 1040nr ez e file Overpayments. 1040nr ez e file    The amount of an overpayment on a joint return is allocated under the community property laws of the state in which you are domiciled. 1040nr ez e file If, under the laws of your state, community property is subject to premarital or other separate debts of either spouse, the full joint overpayment may be used to offset the obligation. 1040nr ez e file If, under the laws of your state, community property is not subject to premarital or other separate debts of either spouse, only the portion of the joint overpayment allocated to the spouse liable for the obligation can be used to offset that liability. 1040nr ez e file The portion allocated to the other spouse can be refunded. 1040nr ez e file Community Property Laws Disregarded The following discussions are situations where special rules apply to community property and community income for spouses. 1040nr ez e file These rules do not apply to registered domestic partners. 1040nr ez e file Certain community income not treated as community income by one spouse. 1040nr ez e file    Community property laws may not apply to an item of community income that you received but did not treat as community income. 1040nr ez e file You are responsible for reporting all of that income item if: You treat the item as if only you are entitled to the income, and You do not notify your spouse of the nature and amount of the income by the due date for filing the return (including extensions). 1040nr ez e file Relief from liability arising from community property law. 1040nr ez e file    You are not responsible for the tax relating to an item of community income if all the following conditions are met. 1040nr ez e file You did not file a joint return for the tax year. 1040nr ez e file You did not include an item of community income in gross income. 1040nr ez e file The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. 1040nr ez e file Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. 1040nr ez e file Your spouse's (or former spouse's) distributive share of partnership income. 1040nr ez e file Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). 1040nr ez e file Use the appropriate community property law to determine what is separate property. 1040nr ez e file Any other income that belongs to your spouse (or former spouse) under community property law. 1040nr ez e file You establish that you did not know of, and had no reason to know of, that community income. 1040nr ez e file Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. 1040nr ez e file Requesting relief. 1040nr ez e file    For information on how and when to request relief from liabilities arising from community property laws, see Community Property Laws in Publication 971, Innocent Spouse Relief. 1040nr ez e file Equitable relief. 1040nr ez e file    If you do not qualify for the relief discussed earlier under Relief from liability arising from community property law and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief. 1040nr ez e file To request equitable relief, you must file Form 8857, Request for Innocent Spouse Relief. 1040nr ez e file Also see Publication 971. 1040nr ez e file Spousal agreements. 1040nr ez e file    In some states a married couple may enter into an agreement that affects the status of property or income as community or separate property. 1040nr ez e file Check your state law to determine how it affects you. 1040nr ez e file Nonresident alien spouse. 1040nr ez e file    If you are a U. 1040nr ez e file S. 1040nr ez e file citizen or resident alien and you choose to treat your nonresident alien spouse as a U. 1040nr ez e file S. 1040nr ez e file resident for tax purposes and you are domiciled in a community property state or country, use the community property rules. 1040nr ez e file You must file a joint return for the year you make the choice. 1040nr ez e file You can file separate returns in later years. 1040nr ez e file For details on making this choice, see Publication 519, U. 1040nr ez e file S. 1040nr ez e file Tax Guide for Aliens. 1040nr ez e file   If you are a U. 1040nr ez e file S. 1040nr ez e file citizen or resident alien and do not choose to treat your nonresident alien spouse as a U. 1040nr ez e file S. 1040nr ez e file resident for tax purposes, treat your community income as explained next under Spouses living apart all year. 1040nr ez e file However, you do not have to meet the four conditions discussed there. 1040nr ez e file Spouses living apart all year. 1040nr ez e file    If you are married at any time during the calendar year, special rules apply for reporting certain community income. 1040nr ez e file You must meet all the following conditions for these special rules to apply. 1040nr ez e file You and your spouse lived apart all year. 1040nr ez e file You and your spouse did not file a joint return for a tax year beginning or ending in the calendar year. 1040nr ez e file You and/or your spouse had earned income for the calendar year that is community income. 1040nr ez e file You and your spouse have not transferred, directly or indirectly, any of the earned income in condition (3) above between yourselves before the end of the year. 1040nr ez e file Do not take into account transfers satisfying child support obligations or transfers of very small amounts or value. 1040nr ez e file If all these conditions are met, you and your spouse must report your community income as discussed next. 1040nr ez e file See also Certain community income not treated as community income by one spouse , earlier. 1040nr ez e file Earned income. 1040nr ez e file    Treat earned income that is not trade or business or partnership income as the income of the spouse who performed the services to earn the income. 1040nr ez e file Earned income is wages, salaries, professional fees, and other pay for personal services. 1040nr ez e file   Earned income does not include amounts paid by a corporation that are a distribution of earnings and profits rather than a reasonable allowance for personal services rendered. 1040nr ez e file Trade or business income. 1040nr ez e file    Treat income and related deductions from a trade or business that is not a partnership as those of the spouse carrying on the trade or business. 1040nr ez e file Partnership income or loss. 1040nr ez e file    Treat income or loss from a trade or business carried on by a partnership as the income or loss of the spouse who is the partner. 1040nr ez e file Separate property income. 1040nr ez e file    Treat income from the separate property of one spouse as the income of that spouse. 1040nr ez e file Social security benefits. 1040nr ez e file    Treat social security and equivalent railroad retirement benefits as the income of the spouse who receives the benefits. 1040nr ez e file Other income. 1040nr ez e file    Treat all other community income, such as dividends, interest, rents, royalties, or gains, as provided under your state's community property law. 1040nr ez e file Example. 1040nr ez e file George and Sharon were married throughout the year but did not live together at any time during the year. 1040nr ez e file Both domiciles were in a community property state. 1040nr ez e file They did not file a joint return or transfer any of their earned income between themselves. 1040nr ez e file During the year their incomes were as follows:   George Sharon Wages $20,000 $22,000 Consulting business 5,000   Partnership   10,000 Dividends from separate property 1,000 2,000 Interest from community property 500 500 Total $26,500 $34,500 Under the community property law of their state, all the income is considered community income. 1040nr ez e file (Some states treat income from separate property as separate income—check your state law. 1040nr ez e file ) Sharon did not take part in George's consulting business. 1040nr ez e file Ordinarily, on their separate returns they would each report $30,500, half the total community income of $61,000 ($26,500 + $34,500). 1040nr ez e file But because they meet the four conditions listed earlier under Spouses living apart all year , they must disregard community property law in reporting all their income (except the interest income) from community property. 1040nr ez e file They each report on their returns only their own earnings and other income, and their share of the interest income from community property. 1040nr ez e file George reports $26,500 and Sharon reports $34,500. 1040nr ez e file Other separated spouses. 1040nr ez e file    If you and your spouse are separated but do not meet the four conditions discussed earlier under Spouses living apart all year , you must treat your income according to the laws of your state. 1040nr ez e file In some states, income earned after separation but before a decree of divorce continues to be community income. 1040nr ez e file In other states, it is separate income. 1040nr ez e file End of the Community The marital community may end in several ways. 1040nr ez e file When the marital community ends, the community assets (money and property) are divided between the spouses. 1040nr ez e file Similarly, a registered domestic partnership may end in several ways and the community assets must be divided between the registered domestic partners. 1040nr ez e file Death of spouse. 1040nr ez e file    If you own community property and your spouse dies, the total fair market value (FMV) of the community property, including the part that belongs to you, generally becomes the basis of the entire property. 1040nr ez e file For this rule to apply, at least half the value of the community property interest must be includible in your spouse's gross estate, whether or not the estate must file a return (this rule does not apply to registered domestic partners). 1040nr ez e file Example. 1040nr ez e file Bob and Ann owned community property that had a basis of $80,000. 1040nr ez e file When Bob died, his and Ann's community property had an FMV of $100,000. 1040nr ez e file One-half of the FMV of their community interest was includible in Bob's estate. 1040nr ez e file The basis of Ann's half of the property is $50,000 after Bob died (half of the $100,000 FMV). 1040nr ez e file The basis of the other half to Bob's heirs is also $50,000. 1040nr ez e file   For more information about the basis of assets, see Publication 551, Basis of Assets. 1040nr ez e file    The above basis rule does not apply if your spouse died in 2010 and the spouse's executor elected out of the estate tax, in which case section 1022 will apply. 1040nr ez e file See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for additional information. 1040nr ez e file Divorce or separation. 1040nr ez e file    If spouses divorce or separate, the (equal or unequal) division of community property in connection with the divorce or property settlement does not result in a gain or loss. 1040nr ez e file For registered domestic partners, an unequal division of community property in a property settlement may result in a gain or loss. 1040nr ez e file For information on the tax consequences of the division of property under a property settlement or divorce decree, see Publication 504. 1040nr ez e file   Each spouse (or each registered domestic partner) is taxed on half the community income for the part of the year before the community ends. 1040nr ez e file However, see Spouses living apart all year , earlier. 1040nr ez e file Any income received after the community ends is separate income. 1040nr ez e file This separate income is taxable only to the spouse (or the registered domestic partner) to whom it belongs. 1040nr ez e file   An absolute decree of divorce or annulment ends the marital community in all community property states. 1040nr ez e file A decree of annulment, even though it holds that no valid marriage ever existed, usually does not nullify community property rights arising during the “marriage. 1040nr ez e file ” However, you should check your state law for exceptions. 1040nr ez e file   A decree of legal separation or of separate maintenance may or may not end the marital community. 1040nr ez e file The court issuing the decree may terminate the marital community and divide the property between the spouses. 1040nr ez e file   A separation agreement may divide the community property between you and your spouse. 1040nr ez e file It may provide that this property, along with future earnings and property acquired, will be separate property. 1040nr ez e file This agreement may end the community. 1040nr ez e file   In some states, the marital community ends when the spouses permanently separate, even if there is no formal agreement. 1040nr ez e file Check your state law. 1040nr ez e file   If you are a registered domestic partner, you should check your state law to determine when the community ends. 1040nr ez e file Preparing a Federal Income Tax Return The following discussion does not apply to spouses who meet the conditions under Spouses living apart all year , discussed earlier. 1040nr ez e file Those spouses must report their community income as explained in that discussion. 1040nr ez e file Joint Return Versus Separate Returns Ordinarily, filing a joint return will give you a greater tax advantage than filing a separate return. 1040nr ez e file But in some cases, your combined income tax on separate returns may be less than it would be on a joint return. 1040nr ez e file This discussion concerning joint versus separate returns does not apply to registered domestic partners. 1040nr ez e file The following rules apply if your filing status is married filing separately. 1040nr ez e file You should itemize deductions if your spouse itemizes deductions, because you cannot claim the standard deduction. 1040nr ez e file You cannot take the credit for child and dependent care expenses in most instances. 1040nr ez e file You cannot take the earned income credit. 1040nr ez e file You cannot exclude any interest income from qualified U. 1040nr ez e file S. 1040nr ez e file savings bonds that you used for higher education expenses. 1040nr ez e file You cannot take the credit for the elderly or the disabled unless you lived apart from your spouse all year. 1040nr ez e file You may have to include in income more of any social security benefits (including any equivalent railroad retirement benefits) you received during the year than you would on a joint return. 1040nr ez e file You cannot deduct interest paid on a qualified student loan. 1040nr ez e file You cannot take the education credits. 1040nr ez e file You may have a smaller child tax credit than you would on a joint return. 1040nr ez e file You cannot take the exclusion or credit for adoption expenses in most instances. 1040nr ez e file Figure your tax both on a joint return and on separate returns under the community property laws of your state. 1040nr ez e file You can then compare the tax figured under both methods and use the one that results in less tax. 1040nr ez e file Separate Return Preparation If you file separate returns, you and your spouse must each report half of your combined community income and deductions in addition to your separate income and deductions. 1040nr ez e file Each of you must complete and attach Form 8958 to your Form 1040 showing how you figured the amount you are reporting on your return. 1040nr ez e file On the appropriate lines of your separate Form 1040, list only your share of the income and deductions on the appropriate lines of your separate tax returns (wages, interest, dividends, etc. 1040nr ez e file ). 1040nr ez e file The same reporting rule applies to registered domestic partners. 1040nr ez e file For a discussion of the effect of community property laws on certain items of income, deductions, credits, and other return amounts, see Identifying Income, Deductions, and Credits , earlier. 1040nr ez e file Attach your Form 8958 to your separate return showing how you figured the income, deductions, and federal income tax withheld that each of you reported. 1040nr ez e file Form 8958 is used for married spouses in community property states who choose to file married filing separately. 1040nr ez e file Form 8958 is also used for registered domestic partners who are domiciled in Nevada, Washington, or California. 1040nr ez e file A registered domestic partner in Nevada, Washington, or California must follow state community property laws and report half the combined community income of the individual and his or her registered domestic partner. 1040nr ez e file Extension of time to file. 1040nr ez e file    An extension of time for filing your separate return does not extend the time for filing your spouse's (or your registered domestic partner's) separate return. 1040nr ez e file If you and your spouse file a joint return, you cannot file separate returns after the due date for filing either separate return has passed. 1040nr ez e file How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 1040nr ez e file Free help with your tax return. 1040nr ez e file    You can get free help preparing your return nationwide from IRS-certified volunteers. 1040nr ez e file The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 1040nr ez e file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1040nr ez e file Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040nr ez e file In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 1040nr ez e file To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 1040nr ez e file gov, download the IRS2Go app, or call 1-800-906-9887. 1040nr ez e file   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040nr ez e file To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040nr ez e file aarp. 1040nr ez e file org/money/taxaide or call 1-888-227-7669. 1040nr ez e file For more information on these programs, go to IRS. 1040nr ez e file gov and enter “VITA” in the search box. 1040nr ez e file Internet. 1040nr ez e file    IRS. 1040nr ez e file gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 1040nr ez e file Download the free IRS2Go app from the iTunes app store or from Google Play. 1040nr ez e file Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1040nr ez e file Check the status of your 2013 refund with the Where's My Refund? application on IRS. 1040nr ez e file gov or download the IRS2Go app and select the Refund Status option. 1040nr ez e file The IRS issues more than 9 out of 10 refunds in less than 21 days. 1040nr ez e file Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 1040nr ez e file You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040nr ez e file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1040nr ez e file Use the Interactive Tax Assistant (ITA) to research your tax questions. 1040nr ez e file No need to wait on the phone or stand in line. 1040nr ez e file The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 1040nr ez e file When you reach the response screen, you can print the entire interview and the final response for your records. 1040nr ez e file New subject areas are added on a regular basis. 1040nr ez e file  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 1040nr ez e file gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 1040nr ez e file You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 1040nr ez e file The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 1040nr ez e file When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 1040nr ez e file Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 1040nr ez e file You can also ask the IRS to mail a return or an account transcript to you. 1040nr ez e file Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 1040nr ez e file gov or by calling 1-800-908-9946. 1040nr ez e file Tax return and tax account transcripts are generally available for the current year and the past three years. 1040nr ez e file Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 1040nr ez e file Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 1040nr ez e file If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 1040nr ez e file Check the status of your amended return using Where's My Amended Return? Go to IRS. 1040nr ez e file gov and enter Where's My Amended Return? in the search box. 1040nr ez e file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1040nr ez e file It can take up to 3 weeks from the date you mailed it to show up in our system. 1040nr ez e file Make a payment using one of several safe and convenient electronic payment options available on IRS. 1040nr ez e file gov. 1040nr ez e file Select the Payment tab on the front page of IRS. 1040nr ez e file gov for more information. 1040nr ez e file Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 1040nr ez e file Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1040nr ez e file gov. 1040nr ez e file Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1040nr ez e file Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1040nr ez e file gov. 1040nr ez e file Request an Electronic Filing PIN by going to IRS. 1040nr ez e file gov and entering Electronic Filing PIN in the search box. 1040nr ez e file Download forms, instructions and publications, including accessible versions for people with disabilities. 1040nr ez e file Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 1040nr ez e file gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 1040nr ez e file An employee can answer questions about your tax account or help you set up a payment plan. 1040nr ez e file Before you visit, check the Office Locator on IRS. 1040nr ez e file gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 1040nr ez e file If you have a special need, such as a disability, you can request an appointment. 1040nr ez e file Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040nr ez e file Apply for an Employer Identification Number (EIN). 1040nr ez e file Go to IRS. 1040nr ez e file gov and enter Apply for an EIN in the search box. 1040nr ez e file Read the Internal Revenue Code, regulations, or other official guidance. 1040nr ez e file Read Internal Revenue Bulletins. 1040nr ez e file Sign up to receive local and national tax news and more by email. 1040nr ez e file Just click on “subscriptions” above the search box on IRS. 1040nr ez e file gov and choose from a variety of options. 1040nr ez e file    Phone. 1040nr ez e file You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040nr ez e file Download the free IRS2Go app from the iTunes app store or from Google Play. 1040nr ez e file Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 1040nr ez e file gov, or download the IRS2Go app. 1040nr ez e file Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040nr ez e file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1040nr ez e file Most VITA and TCE sites offer free electronic filing. 1040nr ez e file Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1040nr ez e file Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1040nr ez e file Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. 1040nr ez e file If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 1040nr ez e file The IRS issues more than 9 out of 10 refunds in less than 21 days. 1040nr ez e file Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1040nr ez e file Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. 1040nr ez e file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1040nr ez e file Note, the above information is for our automated hotline. 1040nr ez e file Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. 1040nr ez e file Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 1040nr ez e file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1040nr ez e file It can take up to 3 weeks from the date you mailed it to show up in our system. 1040nr ez e file Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). 1040nr ez e file You should receive your order within 10 business days. 1040nr ez e file Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. 1040nr ez e file If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. 1040nr ez e file Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1040nr ez e file The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1040nr ez e file These individuals can also contact the IRS through relay services such as the Federal Relay Service. 1040nr ez e file    Walk-in. 1040nr ez e file You can find a selection of forms, publications and services — in-person. 1040nr ez e file Products. 1040nr ez e file You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040nr ez e file Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1040nr ez e file Services. 1040nr ez e file You can walk in to your local TAC for face-to-face tax help. 1040nr ez e file An employee can answer questions about your tax account or help you set up a payment plan. 1040nr ez e file Before visiting, use the Office Locator tool on IRS. 1040nr ez e file gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. 1040nr ez e file    Mail. 1040nr ez e file You can send your order for forms, instructions, and publications to the address below. 1040nr ez e file You should receive a response within 10 business days after your request is received. 1040nr ez e file Internal Revenue Service 1201 N. 1040nr ez e file Mitsubishi Motorway Bloomington, IL 61705-6613   The Taxpayer Advocate Service Is Here to Help You. 1040nr ez e file The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040nr ez e file Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1040nr ez e file   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. 1040nr ez e file We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 1040nr ez e file You face (or your business is facing) an immediate threat of adverse action. 1040nr ez e file You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1040nr ez e file   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 1040nr ez e file Here's why we can help: TAS is an independent organization within the IRS. 1040nr ez e file Our advocates know how to work with the IRS. 1040nr ez e file Our services are free and tailored to meet your needs. 1040nr ez e file We have offices in every state, the District of Columbia, and Puerto Rico. 1040nr ez e file   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 1040nr ez e file irs. 1040nr ez e file gov/advocate, or call us toll-free at 1-877-777-4778. 1040nr ez e file   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1040nr ez e file If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1040nr ez e file irs. 1040nr ez e file gov/sams. 1040nr ez e file Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. 1040nr ez e file Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1040nr ez e file Visit www. 1040nr ez e file irs. 1040nr ez e file gov/litc or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1040nr ez e file Prev  Up  Next   Home   More Online Publications
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The 1040nr Ez E File

1040nr ez e file Publication 597 - Main Content Table of Contents Application of Treaty Personal Services Pensions, Annuities, Social Security, and AlimonyRoth IRAs. 1040nr ez e file Tax-deferred plans. 1040nr ez e file Investment Income From Canadian Sources Other Income Charitable ContributionsQualified charities. 1040nr ez e file Income Tax Credits Competent Authority Assistance How To Get Tax HelpText of Treaty U. 1040nr ez e file S. 1040nr ez e file Taxation Canadian Taxation Application of Treaty The benefits of the income tax treaty are generally provided on the basis of residence for income tax purposes. 1040nr ez e file That is, a person who is recognized as a resident of the United States who has income from Canada, will often pay less income tax to Canada on that income than if no treaty was in effect. 1040nr ez e file Article IV provides definitions of residents of Canada and the United States, and provides specific criteria for applying the treaty in cases where a taxpayer is considered by both countries to be a resident. 1040nr ez e file Saving clause. 1040nr ez e file   In most instances, a treaty does not affect the right of a country to tax its own residents (including those who are U. 1040nr ez e file S. 1040nr ez e file citizens) or of the United States to tax its residents or citizens (including U. 1040nr ez e file S. 1040nr ez e file citizens who are residents of the foreign country). 1040nr ez e file This provision is known as the “saving clause. 1040nr ez e file ”   For example, an individual who is a U. 1040nr ez e file S. 1040nr ez e file citizen and a resident of Canada may have dividend income from a U. 1040nr ez e file S. 1040nr ez e file corporation. 1040nr ez e file The treaty provides a maximum rate of 15% on dividends received by a resident of Canada from sources in the United States. 1040nr ez e file Even though a resident of Canada, the individual is a U. 1040nr ez e file S. 1040nr ez e file citizen and the saving clause overrides the treaty article that limits the U. 1040nr ez e file S. 1040nr ez e file tax to 15%. 1040nr ez e file    Exceptions to the saving clause can be found in Article XXIX, paragraph 3. 1040nr ez e file Treaty-based position. 1040nr ez e file   If you take the position that any U. 1040nr ez e file S. 1040nr ez e file tax is overruled or otherwise reduced by a U. 1040nr ez e file S. 1040nr ez e file treaty (a treaty-based position), you generally must disclose that position on Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), and attach it to your return. 1040nr ez e file Personal Services A U. 1040nr ez e file S. 1040nr ez e file citizen or resident who is temporarily present in Canada during the tax year is exempt from Canadian income taxes on pay for services performed, or remittances received from the United States, if the citizen or resident qualifies under one of the treaty exemption provisions set out below. 1040nr ez e file Income from employment (Article XV). 1040nr ez e file   Income U. 1040nr ez e file S. 1040nr ez e file residents receive for the performance of dependent personal services in Canada (except as public entertainers) is exempt from Canadian tax if it is not more than $10,000 in Canadian currency for the year. 1040nr ez e file If it is more than $10,000 for the year, it is exempt only if: The residents are present in Canada for no more than 183 days in any 12-month period beginning or ending in the year concerned, and The income is not paid by, or on behalf of, a Canadian resident and is not borne by a permanent establishment in Canada. 1040nr ez e file    Whether there is a permanent establishment in Canada is determined by the rules set forth in Article V. 1040nr ez e file Example. 1040nr ez e file You are a U. 1040nr ez e file S. 1040nr ez e file resident employed under an 8-month contract with a Canadian firm to install equipment in their Montreal plant. 1040nr ez e file During the calendar year you were physically present in Canada for 179 days and were paid $16,500 (Canadian) for your services. 1040nr ez e file Although you were in Canada for not more than 183 days during the year, your income is not exempt from Canadian income tax because it was paid by a Canadian resident and was more than $10,000 (Canadian) for the year. 1040nr ez e file Pay received by a U. 1040nr ez e file S. 1040nr ez e file resident for work regularly done in more than one country as an employee on a ship, aircraft, motor vehicle, or train operated by a U. 1040nr ez e file S. 1040nr ez e file resident is exempt from Canadian tax. 1040nr ez e file Income from self-employment (Article VII). 1040nr ez e file   Income from services performed (other than those performed as an employee) are taxed in Canada if they are attributable to a permanent establishment in Canada. 1040nr ez e file This income is treated as business profits, and deductions similar to those allowed under U. 1040nr ez e file S. 1040nr ez e file law are allowable. 1040nr ez e file   If you carry on (or have carried on) business in both Canada and the United States, the business profits are attributable to each country based on the profits that the permanent establishment might be expected to make if it were a distinct and separate person engaged in the same or similar activities. 1040nr ez e file The business profits attributable to the permanent establishment include only those profits derived from assets used, risks assumed, and activities performed by the permanent establishment. 1040nr ez e file   You may be considered to have a permanent establishment if you meet certain conditions. 1040nr ez e file For more information, see Article V (Permanent Establishment) and Article VII (Business Profits). 1040nr ez e file Public entertainers (Article XVI). 1040nr ez e file   The provisions under income from employment or income from self-employment do not apply to public entertainers (such as theater, motion picture, radio, or television artistes, musicians, or athletes) from the United States who receive more than $15,000 in gross receipts in Canadian currency, including reimbursed expenses, from their entertainment activities in Canada during the calendar year. 1040nr ez e file However, this provision for public entertainers does not apply (and the other provisions will apply) to athletes participating in team sports in leagues with regularly scheduled games in both the United States and Canada. 1040nr ez e file Compensation paid by the U. 1040nr ez e file S. 1040nr ez e file Government (Article XIX). 1040nr ez e file   Wages, salaries, and similar income (other than pensions) paid to a U. 1040nr ez e file S. 1040nr ez e file citizen by the United States or any of its agencies, instrumentalities, or political subdivisions for discharging governmental functions are exempt from Canadian income tax. 1040nr ez e file   The exemption does not apply to pay for services performed in connection with any trade or business carried on for profit by the United States, or any of its agencies, instrumentalities, or political subdivisions. 1040nr ez e file Students and apprentices (Article XX). 1040nr ez e file   A full-time student, apprentice, or business trainee who is in Canada to study or acquire business experience is exempt from Canadian income tax on remittances received from any source outside Canada for maintenance, education, or training. 1040nr ez e file The recipient must be or must have been a U. 1040nr ez e file S. 1040nr ez e file resident immediately before visiting Canada. 1040nr ez e file   An apprentice or business trainee can claim this exemption only for a period of one year from the date the individual first arrived in Canada for the purpose of training. 1040nr ez e file Pensions, Annuities, Social Security, and Alimony Under Article XVIII, pensions and annuities from Canadian sources paid to U. 1040nr ez e file S. 1040nr ez e file residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity). 1040nr ez e file Canadian pensions and annuities paid to U. 1040nr ez e file S. 1040nr ez e file residents may be taxed by the United States, but the amount of any pension included in income for U. 1040nr ez e file S. 1040nr ez e file tax purposes may not be more than the amount that would be included in income in Canada if the recipient were a Canadian resident. 1040nr ez e file Pensions. 1040nr ez e file   A pension includes any payment under a pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances, and payments under a sickness, accident, or disability plan. 1040nr ez e file It includes pensions paid by private employers and the government for services rendered. 1040nr ez e file   Pensions also include payments from individual retirement arrangements (IRAs) in the United States, registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) in Canada. 1040nr ez e file   Pensions do not include social security benefits. 1040nr ez e file Roth IRAs. 1040nr ez e file   A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U. 1040nr ez e file S. 1040nr ez e file tax if paid to a U. 1040nr ez e file S. 1040nr ez e file resident. 1040nr ez e file In addition, you may elect to defer any tax in Canada on income accrued within the Roth IRA but not distributed by the Roth IRA. 1040nr ez e file However, you cannot defer tax on any accruals due to contributions made after you become a Canadian resident. 1040nr ez e file Tax-deferred plans. 1040nr ez e file   Generally, income that accrues in a Canadian RRSP or RRIF is subject to U. 1040nr ez e file S. 1040nr ez e file tax, even if it is not distributed. 1040nr ez e file However, a U. 1040nr ez e file S. 1040nr ez e file citizen or resident can elect to defer U. 1040nr ez e file S. 1040nr ez e file tax on income from the plan until the income is distributed. 1040nr ez e file Form 8891 is used to make the election. 1040nr ez e file Annuities. 1040nr ez e file    An annuity is a stated sum payable periodically at stated times, during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). 1040nr ez e file Annuities do not include: Non-periodic payments, or An annuity the cost of which was deductible for tax purposes. 1040nr ez e file Special rules. 1040nr ez e file    Special rules apply to pensions and annuities with respect to: Short-term assignments, Cross-border commuters, and Individuals who participate in a Canadian qualifying plan. 1040nr ez e file Generally, distributions in such cases are deemed to be earned in the country in which the plan is established, without regard to where the services were rendered. 1040nr ez e file Social security benefits. 1040nr ez e file   U. 1040nr ez e file S. 1040nr ez e file social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax. 1040nr ez e file Alimony. 1040nr ez e file   Alimony and similar amounts (including child support payments) from Canadian sources paid to U. 1040nr ez e file S. 1040nr ez e file residents are exempt from Canadian tax. 1040nr ez e file For purposes of U. 1040nr ez e file S. 1040nr ez e file tax, these amounts are excluded from income to the same extent they would be excluded from income in Canada if the recipient was a Canadian resident. 1040nr ez e file Investment Income From Canadian Sources The treaty provides beneficial treatment for certain items of Canadian source income that result from an investment of capital. 1040nr ez e file Dividends (Article X). 1040nr ez e file   For Canadian source dividends received by U. 1040nr ez e file S. 1040nr ez e file residents, the Canadian income tax generally may not be more than 15%. 1040nr ez e file   A 5% rate applies to intercorporate dividends paid from a subsidiary to a parent corporation owning at least 10% of the subsidiary's voting stock. 1040nr ez e file However, a 10% rate applies if the payer of the dividend is a nonresident-owned Canadian investment corporation. 1040nr ez e file   These rates do not apply if the owner of the dividends carries on, or has carried on, a business in Canada through a permanent establishment and the holding on which the income is paid is effectively connected with that permanent establishment. 1040nr ez e file Interest (Article XI). 1040nr ez e file   Generally, Canadian source interest received by U. 1040nr ez e file S. 1040nr ez e file residents is exempt from Canadian income tax. 1040nr ez e file   The exemption does not apply if the owner of the interest carries on, or has carried on, a business in Canada through a permanent establishment and the debt on which the income is paid is effectively connected with that permanent establishment. 1040nr ez e file Gains from the sale of property (Article XIII). 1040nr ez e file   Generally, gains from the sale of personal property by a U. 1040nr ez e file S. 1040nr ez e file resident having no permanent establishment in Canada are exempt from Canadian income tax. 1040nr ez e file However, the exemption from Canadian tax does not apply to gains realized by U. 1040nr ez e file S. 1040nr ez e file residents on Canadian real property, and on personal property belonging to a permanent establishment in Canada. 1040nr ez e file   If the property subject to Canadian tax is a capital asset and was owned by the U. 1040nr ez e file S. 1040nr ez e file resident on September 26, 1980, not as part of the business property of a permanent establishment in Canada, generally the taxable gain is limited to the appreciation after 1984. 1040nr ez e file Royalties (Article XII). 1040nr ez e file   The following are exempt from Canadian tax: Copyright royalties and other like payments for the production or reproduction of any literary, dramatic, musical, or artistic work (other than payments for motion pictures and works on film, videotape, or other means of reproduction for use in connection with television, which may be taxed at 10%), Payments for the use of, or the right to use, computer software, Payments for the use of, or the right to use, any patent or any information concerning industrial, commercial, or scientific experience (but not within a rental or franchise agreement), and Payments for broadcasting as agreed to in an exchange of notes between the countries. 1040nr ez e file   This rate or exemption does not apply if the owner of the royalties carries on, or has carried on, a business in Canada through a permanent establishment and the right or property on which the income is paid is effectively connected with that permanent establishment. 1040nr ez e file   This exemption (or lower rate) does not apply to royalties to explore for or to exploit mineral deposits, timber, and other natural resources. 1040nr ez e file Other Income Generally, Canadian source income that is not specifically mentioned in the treaty, may be taxed by Canada. 1040nr ez e file Gambling losses. 1040nr ez e file   Canadian residents may deduct gambling losses in the U. 1040nr ez e file S. 1040nr ez e file against gambling winnings in the U. 1040nr ez e file S. 1040nr ez e file in the same manner as a U. 1040nr ez e file S. 1040nr ez e file resident. 1040nr ez e file Charitable Contributions United States income tax return. 1040nr ez e file   Under Article XXI, you may deduct contributions to certain qualified Canadian charitable organizations on your United States income tax return. 1040nr ez e file Besides being subject to the overall limits applicable to all your charitable contributions under U. 1040nr ez e file S. 1040nr ez e file tax law, your charitable contributions to Canadian organizations (other than contributions to a college or university at which you or a member of your family is or was enrolled) are subject to the U. 1040nr ez e file S. 1040nr ez e file percentage limits on charitable contributions, applied to your Canadian source income. 1040nr ez e file If your return does not include gross income from Canadian sources, charitable contributions to Canadian organizations are generally not deductible. 1040nr ez e file Example. 1040nr ez e file You are a U. 1040nr ez e file S. 1040nr ez e file citizen living in Canada. 1040nr ez e file You have both U. 1040nr ez e file S. 1040nr ez e file and Canadian source income. 1040nr ez e file During your tax year, you contribute to Canadian organizations that would qualify as charitable organizations under U. 1040nr ez e file S. 1040nr ez e file tax law if they were U. 1040nr ez e file S. 1040nr ez e file organizations. 1040nr ez e file To figure the maximum amount of the contribution to Canadian organizations that you can deduct on your U. 1040nr ez e file S. 1040nr ez e file income tax return, multiply your adjusted gross income from Canadian sources by the percentage limit that applies to contributions under U. 1040nr ez e file S. 1040nr ez e file income tax law. 1040nr ez e file Then include this amount on your return along with all your domestic charitable contributions, subject to the appropriate percentage limit required for contributions under U. 1040nr ez e file S. 1040nr ez e file income tax law. 1040nr ez e file The appropriate percentage limit for U. 1040nr ez e file S. 1040nr ez e file tax purposes is applied to your total adjusted gross income from all sources. 1040nr ez e file Qualified charities. 1040nr ez e file   These Canadian organizations must meet the qualifications that a U. 1040nr ez e file S. 1040nr ez e file charitable organization must meet under U. 1040nr ez e file S. 1040nr ez e file tax law. 1040nr ez e file Usually an organization will notify you if it qualifies. 1040nr ez e file For further information on charitable contributions and the U. 1040nr ez e file S. 1040nr ez e file percentage limits, see Publication 526, Charitable Contributions. 1040nr ez e file Canadian income tax return. 1040nr ez e file   Under certain conditions, contributions to qualified U. 1040nr ez e file S. 1040nr ez e file charitable organizations may also be claimed on your Canadian income tax return if you are a Canadian resident. 1040nr ez e file Income Tax Credits The treaty contains a credit provision (Article XXIV) for the elimination of double taxation. 1040nr ez e file In general, the United States and Canada both allow a credit against their income tax for the income tax paid to the other country on income from sources in that other country. 1040nr ez e file For detailed discussions of the U. 1040nr ez e file S. 1040nr ez e file income tax treatment of tax paid to foreign countries, see Publication 514, Foreign Tax Credit for Individuals. 1040nr ez e file See paragraphs (4) and (5) of Article XXIV for certain provisions that affect the computation of the credit allowed by the United States for Canadian income taxes paid by U. 1040nr ez e file S. 1040nr ez e file citizens residing in Canada. 1040nr ez e file Competent Authority Assistance Under Article XXVI, a U. 1040nr ez e file S. 1040nr ez e file citizen or resident may request assistance from the U. 1040nr ez e file S. 1040nr ez e file competent authority when the actions of Canada, the United States, or both, potentially result in double taxation or taxation contrary to the treaty. 1040nr ez e file The U. 1040nr ez e file S. 1040nr ez e file competent authority may then consult with the Canadian competent authority to determine if the double taxation or denial of treaty benefits in question can be avoided. 1040nr ez e file If the competent authorities are not able to reach agreement in a case, binding arbitration proceedings may apply. 1040nr ez e file It is important that your request for competent authority assistance be made as soon as you have been notified by either Canada or the United States of proposed adjustments that would result in denial of treaty benefits or in double taxation. 1040nr ez e file This is so that implementation of any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. 1040nr ez e file For information that you should include with your request for competent authority assistance, see Revenue Procedure 2006-54, 2006-49 IRB 1035, available at www. 1040nr ez e file irs. 1040nr ez e file gov/irb/2006-49_IRB/ar13. 1040nr ez e file html. 1040nr ez e file The request should be addressed to:  Deputy Commissioner (International) Large Business and International Division Attn: Office of Tax Treaty  Internal Revenue Service 1111 Constitution Ave. 1040nr ez e file , NW Routing: MA3-322A Washington, D. 1040nr ez e file C. 1040nr ez e file 20024 In addition to a timely request for assistance, you should take the following measures: File a timely protective claim for credit or refund of U. 1040nr ez e file S. 1040nr ez e file taxes on Form 1040X, Form 1120X, or amended Form 1041, whichever is appropriate. 1040nr ez e file This will, among other things, give you the benefit of a foreign tax credit in case you do not qualify for the treaty benefit in question. 1040nr ez e file For figuring this credit, attach either Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), or Form 1118, Foreign Tax Credit — Corporations, as appropriate. 1040nr ez e file Attach your protective claim to your request for competent authority assistance. 1040nr ez e file Take appropriate action under Canadian procedures to avoid the lapse or termination of your right of appeal under Canadian income tax law. 1040nr ez e file How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS and the Canada Revenue Agency in several ways. 1040nr ez e file Text of Treaty You can get the text of the U. 1040nr ez e file S. 1040nr ez e file —Canada income tax treaty from: Superintendent of Documents U. 1040nr ez e file S. 1040nr ez e file Government Printing Office P. 1040nr ez e file O. 1040nr ez e file Box 371954 Pittsburgh, PA 15250-7954 The treaty can also be found on the Internet at IRS. 1040nr ez e file gov. 1040nr ez e file U. 1040nr ez e file S. 1040nr ez e file Taxation During the filing season, the IRS conducts a taxpayer assistance program in Canada. 1040nr ez e file To find out if IRS personnel will be in your area, you should contact the consular office at the nearest U. 1040nr ez e file S. 1040nr ez e file Embassy or consulate. 1040nr ez e file Mail. 1040nr ez e file For answers to technical or account questions, you can write to:   Internal Revenue Service International Section Philadelphia, PA 19255-0525 Phone. 1040nr ez e file You can call the IRS for help at (267) 941-1000 (not a toll-free call). 1040nr ez e file Canadian Taxation You can get information on Canadian taxation from the Canada Revenue Agency. 1040nr ez e file The International Tax Services Office can be contacted on 1-800-267-5177 (from anywhere in Canada and the U. 1040nr ez e file S. 1040nr ez e file ) or on the Internet at www. 1040nr ez e file cra-arc. 1040nr ez e file gc. 1040nr ez e file ca. 1040nr ez e file Prev  Up  Next   Home   More Online Publications