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Irs Form 1040nr

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Irs Form 1040nr

Irs form 1040nr 5. Irs form 1040nr   Wages, Salaries, and Other Earnings Table of Contents Reminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. Irs form 1040nr Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits Reminder Foreign income. Irs form 1040nr   If you are a U. Irs form 1040nr S. Irs form 1040nr citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. Irs form 1040nr S. Irs form 1040nr law. Irs form 1040nr This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. Irs form 1040nr This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Irs form 1040nr If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Irs form 1040nr For details, see Publication 54, Tax Guide for U. Irs form 1040nr S. Irs form 1040nr Citizens and Resident Aliens Abroad. Irs form 1040nr Introduction This chapter discusses compensation received for services as an employee, such as wages, salaries, and fringe benefits. Irs form 1040nr The following topics are included. Irs form 1040nr Bonuses and awards. Irs form 1040nr Special rules for certain employees. Irs form 1040nr Sickness and injury benefits. Irs form 1040nr The chapter explains what income is included in the employee's gross income and what is not included. Irs form 1040nr Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income Employee Compensation This section discusses various types of employee compensation including fringe benefits, retirement plan contributions, stock options, and restricted property. Irs form 1040nr Form W-2. Irs form 1040nr    If you are an employee, you should receive Form W-2 from your employer showing the pay you received for your services. Irs form 1040nr Include your pay on line 7 of Form 1040 or Form 1040A, or on line 1 of Form 1040EZ, even if you do not receive a Form W-2. Irs form 1040nr   If you performed services, other than as an independent contractor, and your employer did not withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040. Irs form 1040nr These wages must be included on line 7 of Form 1040. Irs form 1040nr See Form 8919 for more information. Irs form 1040nr Childcare providers. Irs form 1040nr    If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. Irs form 1040nr If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Irs form 1040nr You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it. Irs form 1040nr Babysitting. Irs form 1040nr   If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. Irs form 1040nr Miscellaneous Compensation This section discusses different types of employee compensation. Irs form 1040nr Advance commissions and other earnings. Irs form 1040nr   If you receive advance commissions or other amounts for services to be performed in the future and you are a cash-method taxpayer, you must include these amounts in your income in the year you receive them. Irs form 1040nr    If you repay unearned commissions or other amounts in the same year you receive them, reduce the amount included in your income by the repayment. Irs form 1040nr If you repay them in a later tax year, you can deduct the repayment as an itemized deduction on your Schedule A (Form 1040), or you may be able to take a credit for that year. Irs form 1040nr See Repayments in chapter 12. Irs form 1040nr Allowances and reimbursements. Irs form 1040nr    If you receive travel, transportation, or other business expense allowances or reimbursements from your employer, see Publication 463. Irs form 1040nr If you are reimbursed for moving expenses, see Publication 521, Moving Expenses. Irs form 1040nr Back pay awards. Irs form 1040nr    Include in income amounts you are awarded in a settlement or judgment for back pay. Irs form 1040nr These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums. Irs form 1040nr They should be reported to you by your employer on Form W-2. Irs form 1040nr Bonuses and awards. Irs form 1040nr   Bonuses or awards you receive for outstanding work are included in your income and should be shown on your Form W-2. Irs form 1040nr These include prizes such as vacation trips for meeting sales goals. Irs form 1040nr If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income. Irs form 1040nr However, if your employer merely promises to pay you a bonus or award at some future time, it is not taxable until you receive it or it is made available to you. Irs form 1040nr Employee achievement award. Irs form 1040nr   If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. Irs form 1040nr However, the amount you can exclude is limited to your employer's cost and cannot be more than $1,600 ($400 for awards that are not qualified plan awards) for all such awards you receive during the year. Irs form 1040nr Your employer can tell you whether your award is a qualified plan award. Irs form 1040nr Your employer must make the award as part of a meaningful presentation, under conditions and circumstances that do not create a significant likelihood of it being disguised pay. Irs form 1040nr   However, the exclusion does not apply to the following awards: A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years. Irs form 1040nr A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year. Irs form 1040nr Example. Irs form 1040nr Ben Green received three employee achievement awards during the year: a nonqualified plan award of a watch valued at $250, and two qualified plan awards of a stereo valued at $1,000 and a set of golf clubs valued at $500. Irs form 1040nr Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income. Irs form 1040nr However, because the $1,750 total value of the awards is more than $1,600, Ben must include $150 ($1,750 – $1,600) in his income. Irs form 1040nr Differential wage payments. Irs form 1040nr   This is any payment made to you by an employer for any period during which you are, for a period of more than 30 days, an active duty member of the uniformed services and represents all or a portion of the wages you would have received from the employer during that period. Irs form 1040nr These payments are treated as wages and are subject to income tax withholding, but not FICA or FUTA taxes. Irs form 1040nr The payments are reported as wages on Form W-2. Irs form 1040nr Government cost-of-living allowances. Irs form 1040nr   Most payments received by U. Irs form 1040nr S. Irs form 1040nr Government civilian employees for working abroad are taxable. Irs form 1040nr However, certain cost-of-living allowances are tax free. Irs form 1040nr Publication 516, U. Irs form 1040nr S. Irs form 1040nr Government Civilian Employees Stationed Abroad, explains the tax treatment of allowances, differentials, and other special pay you receive for employment abroad. Irs form 1040nr Nonqualified deferred compensation plans. Irs form 1040nr   Your employer will report to you the total amount of deferrals for the year under a nonqualified deferred compensation plan. Irs form 1040nr This amount is shown on Form W-2, box 12, using code Y. Irs form 1040nr This amount is not included in your income. Irs form 1040nr   However, if at any time during the tax year, the plan fails to meet certain requirements, or is not operated under those requirements, all amounts deferred under the plan for the tax year and all preceding tax years are included in your income for the current year. Irs form 1040nr This amount is included in your wages shown on Form W-2, box 1. Irs form 1040nr It is also shown on Form W-2, box 12, using code Z. Irs form 1040nr Note received for services. Irs form 1040nr    If your employer gives you a secured note as payment for your services, you must include the fair market value (usually the discount value) of the note in your income for the year you receive it. Irs form 1040nr When you later receive payments on the note, a proportionate part of each payment is the recovery of the fair market value that you previously included in your income. Irs form 1040nr Do not include that part again in your income. Irs form 1040nr Include the rest of the payment in your income in the year of payment. Irs form 1040nr   If your employer gives you a nonnegotiable unsecured note as payment for your services, payments on the note that are credited toward the principal amount of the note are compensation income when you receive them. Irs form 1040nr Severance pay. Irs form 1040nr   You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. Irs form 1040nr Accrued leave payment. Irs form 1040nr    If you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign, this amount will be included as wages on your Form W-2. Irs form 1040nr   If you resign from one agency and are reemployed by another agency, you may have to repay part of your lump-sum annual leave payment to the second agency. Irs form 1040nr You can reduce gross wages by the amount you repaid in the same tax year in which you received it. Irs form 1040nr Attach to your tax return a copy of the receipt or statement given to you by the agency you repaid to explain the difference between the wages on the return and the wages on your Forms W-2. Irs form 1040nr Outplacement services. Irs form 1040nr   If you choose to accept a reduced amount of severance pay so that you can receive outplacement services (such as training in résumé writing and interview techniques), you must include the unreduced amount of the severance pay in income. Irs form 1040nr    However, you can deduct the value of these outplacement services (up to the difference between the severance pay included in income and the amount actually received) as a miscellaneous deduction (subject to the 2%-of-adjusted-gross-income (AGI) limit) on Schedule A (Form 1040). Irs form 1040nr Sick pay. Irs form 1040nr   Pay you receive from your employer while you are sick or injured is part of your salary or wages. Irs form 1040nr In addition, you must include in your income sick pay benefits received from any of the following payers: A welfare fund. Irs form 1040nr A state sickness or disability fund. Irs form 1040nr An association of employers or employees. Irs form 1040nr An insurance company, if your employer paid for the plan. Irs form 1040nr However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy are not taxable. Irs form 1040nr For more information, see Publication 525. Irs form 1040nr Social security and Medicare taxes paid by employer. Irs form 1040nr   If you and your employer have an agreement that your employer pays your social security and Medicare taxes without deducting them from your gross wages, you must report the amount of tax paid for you as taxable wages on your tax return. Irs form 1040nr The payment also is treated as wages for figuring your social security and Medicare taxes and your social security and Medicare benefits. Irs form 1040nr However, these payments are not treated as social security and Medicare wages if you are a household worker or a farm worker. Irs form 1040nr Stock appreciation rights. Irs form 1040nr   Do not include a stock appreciation right granted by your employer in income until you exercise (use) the right. Irs form 1040nr When you use the right, you are entitled to a cash payment equal to the fair market value of the corporation's stock on the date of use minus the fair market value on the date the right was granted. Irs form 1040nr You include the cash payment in your income in the year you use the right. Irs form 1040nr Fringe Benefits Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law. Irs form 1040nr Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules. Irs form 1040nr Accounting period. Irs form 1040nr   You must use the same accounting period your employer uses to report your taxable noncash fringe benefits. Irs form 1040nr Your employer has the option to report taxable noncash fringe benefits by using either of the following rules. Irs form 1040nr The general rule: benefits are reported for a full calendar year (January 1–December 31). Irs form 1040nr The special accounting period rule: benefits provided during the last 2 months of the calendar year (or any shorter period) are treated as paid during the following calendar year. Irs form 1040nr For example, each year your employer reports the value of benefits provided during the last 2 months of the prior year and the first 10 months of the current year. Irs form 1040nr  Your employer does not have to use the same accounting period for each fringe benefit, but must use the same period for all employees who receive a particular benefit. Irs form 1040nr   You must use the same accounting period that you use to report the benefit to claim an employee business deduction (for use of a car, for example). Irs form 1040nr Form W-2. Irs form 1040nr   Your employer must include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if applicable, in boxes 3 and 5 as social security and Medicare wages. Irs form 1040nr Although not required, your employer may include the total value of fringe benefits in box 14 (or on a separate statement). Irs form 1040nr However, if your employer provided you with a vehicle and included 100% of its annual lease value in your income, the employer must separately report this value to you in box 14 (or on a separate statement). Irs form 1040nr Accident or Health Plan In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income. Irs form 1040nr Benefits you receive from the plan may be taxable, as explained later under Sickness and Injury Benefits . Irs form 1040nr For information on the items covered in this section, other than Long-term care coverage, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Irs form 1040nr Long-term care coverage. Irs form 1040nr    Contributions by your employer to provide coverage for long-term care services generally are not included in your income. Irs form 1040nr However, contributions made through a flexible spending or similar arrangement (such as a cafeteria plan) must be included in your income. Irs form 1040nr This amount will be reported as wages in box 1 of your Form W-2. Irs form 1040nr   Contributions you make to the plan are discussed in Publication 502, Medical and Dental Expenses. Irs form 1040nr Archer MSA contributions. Irs form 1040nr    Contributions by your employer to your Archer MSA generally are not included in your income. Irs form 1040nr Their total will be reported in box 12 of Form W-2 with code R. Irs form 1040nr You must report this amount on Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Irs form 1040nr File the form with your return. Irs form 1040nr Health flexible spending arrangement (health FSA). Irs form 1040nr   If your employer provides a health FSA that qualifies as an accident or health plan, the amount of your salary reduction, and reimbursements of your medical care expenses, in most cases, are not included in your income. Irs form 1040nr Note. Irs form 1040nr Health FSAs are subject to a $2,500 limit on salary reduction contributions for plan years beginning after 2012. Irs form 1040nr The $2,500 limit is subject to an inflation adjustment for plan years beginning after 2013. Irs form 1040nr For more information, see Notice 2012-40, 2012-26 I. Irs form 1040nr R. Irs form 1040nr B. Irs form 1040nr 1046, available at www. Irs form 1040nr irs. Irs form 1040nr gov/irb/2012-26 IRB/ar09. Irs form 1040nr html. Irs form 1040nr Health reimbursement arrangement (HRA). Irs form 1040nr   If your employer provides an HRA that qualifies as an accident or health plan, coverage and reimbursements of your medical care expenses generally are not included in your income. Irs form 1040nr Health savings accounts (HSA). Irs form 1040nr   If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA. Irs form 1040nr Contributions, other than employer contributions, are deductible on your return whether or not you itemize deductions. Irs form 1040nr Contributions made by your employer are not included in your income. Irs form 1040nr Distributions from your HSA that are used to pay qualified medical expenses are not included in your income. Irs form 1040nr Distributions not used for qualified medical expenses are included in your income. Irs form 1040nr See Publication 969 for the requirements of an HSA. Irs form 1040nr   Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Irs form 1040nr The contributions are treated as a distribution of money and are not included in the partner's gross income. Irs form 1040nr Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are includible in the partner's gross income. Irs form 1040nr In both situations, the partner can deduct the contribution made to the partner's HSA. Irs form 1040nr   Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are includible in the shareholder-employee's gross income. Irs form 1040nr The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Irs form 1040nr Qualified HSA funding distribution. Irs form 1040nr   You can make a one-time distribution from your individual retirement account (IRA) to an HSA and you generally will not include any of the distribution in your income. Irs form 1040nr See Publication 590 for the requirements for these qualified HSA funding distributions. Irs form 1040nr Failure to maintain eligibility. Irs form 1040nr   If your HSA received qualified HSA distributions from a health FSA or HRA (discussed earlier) or a qualified HSA funding distribution, you must be an eligible individual for HSA purposes for the period beginning with the month in which the qualified distribution was made and ending on the last day of the 12th month following that month. Irs form 1040nr If you fail to be an eligible individual during this period, other than because of death or disability, you must include the distribution in your income for the tax year in which you become ineligible. Irs form 1040nr This income is also subject to an additional 10% tax. Irs form 1040nr Adoption Assistance You may be able to exclude from your income amounts paid or expenses incurred by your employer for qualified adoption expenses in connection with your adoption of an eligible child. Irs form 1040nr See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. Irs form 1040nr Adoption benefits are reported by your employer in box 12 of Form W-2 with code T. Irs form 1040nr They also are included as social security and Medicare wages in boxes 3 and 5. Irs form 1040nr However, they are not included as wages in box 1. Irs form 1040nr To determine the taxable and nontaxable amounts, you must complete Part III of Form 8839. Irs form 1040nr File the form with your return. Irs form 1040nr De Minimis (Minimal) Benefits If your employer provides you with a product or service and the cost of it is so small that it would be unreasonable for the employer to account for it, the value is not included in your income. Irs form 1040nr In most cases, the value of benefits such as discounts at company cafeterias, cab fares home when working overtime, and company picnics are not included in your income. Irs form 1040nr Holiday gifts. Irs form 1040nr   If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. Irs form 1040nr However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved. Irs form 1040nr Educational Assistance You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. Irs form 1040nr For more information, see Publication 970, Tax Benefits for Education. Irs form 1040nr Group-Term Life Insurance In most cases, the cost of up to $50,000 of group-term life insurance coverage provided to you by your employer (or former employer) is not included in your income. Irs form 1040nr However, you must include in income the cost of employer-provided insurance that is more than the cost of $50,000 of coverage reduced by any amount you pay toward the purchase of the insurance. Irs form 1040nr For exceptions, see Entire cost excluded , and Entire cost taxed , later. Irs form 1040nr If your employer provided more than $50,000 of coverage, the amount included in your income is reported as part of your wages in box 1 of your Form W-2. Irs form 1040nr Also, it is shown separately in box 12 with code C. Irs form 1040nr Group-term life insurance. Irs form 1040nr   This insurance is term life insurance protection (insurance for a fixed period of time) that: Provides a general death benefit, Is provided to a group of employees, Is provided under a policy carried by the employer, and Provides an amount of insurance to each employee based on a formula that prevents individual selection. Irs form 1040nr Permanent benefits. Irs form 1040nr   If your group-term life insurance policy includes permanent benefits, such as a paid-up or cash surrender value, you must include in your income, as wages, the cost of the permanent benefits minus the amount you pay for them. Irs form 1040nr Your employer should be able to tell you the amount to include in your income. Irs form 1040nr Accidental death benefits. Irs form 1040nr   Insurance that provides accidental or other death benefits but does not provide general death benefits (travel insurance, for example) is not group-term life insurance. Irs form 1040nr Former employer. Irs form 1040nr   If your former employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in box 1 of Form W-2. Irs form 1040nr Also, it is shown separately in box 12 with code C. Irs form 1040nr Box 12 also will show the amount of uncollected social security and Medicare taxes on the excess coverage, with codes M and N. Irs form 1040nr You must pay these taxes with your income tax return. Irs form 1040nr Include them on line 60, Form 1040, and follow the instructions for line 60. Irs form 1040nr For more information, see the Instructions for Form 1040. Irs form 1040nr Two or more employers. Irs form 1040nr   Your exclusion for employer-provided group-term life insurance coverage cannot exceed the cost of $50,000 of coverage, whether the insurance is provided by a single employer or multiple employers. Irs form 1040nr If two or more employers provide insurance coverage that totals more than $50,000, the amounts reported as wages on your Forms W-2 will not be correct. Irs form 1040nr You must figure how much to include in your income. Irs form 1040nr Reduce the amount you figure by any amount reported with code C in box 12 of your Forms W-2, add the result to the wages reported in box 1, and report the total on your return. Irs form 1040nr Figuring the taxable cost. Irs form 1040nr   Use the following worksheet to figure the amount to include in your income. Irs form 1040nr     Worksheet 5-1. Irs form 1040nr Figuring the Cost of Group-Term Life Insurance To Include in Income 1. Irs form 1040nr Enter the total amount of your insurance coverage from your employer(s) 1. Irs form 1040nr   2. Irs form 1040nr Limit on exclusion for employer-provided group-term life insurance coverage 2. Irs form 1040nr 50,000 3. Irs form 1040nr Subtract line 2 from line 1 3. Irs form 1040nr   4. Irs form 1040nr Divide line 3 by $1,000. Irs form 1040nr Figure to the nearest tenth 4. Irs form 1040nr   5. Irs form 1040nr Go to Table 5-1. Irs form 1040nr Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Irs form 1040nr   6. Irs form 1040nr Multiply line 4 by line 5 6. Irs form 1040nr   7. Irs form 1040nr Enter the number of full months of coverage at this cost. Irs form 1040nr 7. Irs form 1040nr   8. Irs form 1040nr Multiply line 6 by line 7 8. Irs form 1040nr   9. Irs form 1040nr Enter the premiums you paid per month 9. Irs form 1040nr       10. Irs form 1040nr Enter the number of months you paid the premiums 10. Irs form 1040nr       11. Irs form 1040nr Multiply line 9 by line 10. Irs form 1040nr 11. Irs form 1040nr   12. Irs form 1040nr Subtract line 11 from line 8. Irs form 1040nr Include this amount in your income as wages 12. Irs form 1040nr      Table 5-1. Irs form 1040nr Cost of $1,000 of Group-Term Life Insurance for One Month Age Cost Under 25 $. Irs form 1040nr 05 25 through 29 . Irs form 1040nr 06 30 through 34 . Irs form 1040nr 08 35 through 39 . Irs form 1040nr 09 40 through 44 . Irs form 1040nr 10 45 through 49 . Irs form 1040nr 15 50 through 54 . Irs form 1040nr 23 55 through 59 . Irs form 1040nr 43 60 through 64 . Irs form 1040nr 66 65 through 69 1. Irs form 1040nr 27 70 and older 2. Irs form 1040nr 06 Example. Irs form 1040nr You are 51 years old and work for employers A and B. Irs form 1040nr Both employers provide group-term life insurance coverage for you for the entire year. Irs form 1040nr Your coverage is $35,000 with employer A and $45,000 with employer B. Irs form 1040nr You pay premiums of $4. Irs form 1040nr 15 a month under the employer B group plan. Irs form 1040nr You figure the amount to include in your income as shown in Worksheet 5-1. Irs form 1040nr Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated, later. Irs form 1040nr Worksheet 5-1. Irs form 1040nr Figuring the Cost of Group-Term Life Insurance to Include in Income—Illustrated 1. Irs form 1040nr Enter the total amount of your insurance coverage from your employer(s) 1. Irs form 1040nr 80,000 2. Irs form 1040nr Limit on exclusion for employer-provided group-term life insurance coverage 2. Irs form 1040nr 50,000 3. Irs form 1040nr Subtract line 2 from line 1 3. Irs form 1040nr 30,000 4. Irs form 1040nr Divide line 3 by $1,000. Irs form 1040nr Figure to the nearest tenth 4. Irs form 1040nr 30. Irs form 1040nr 0 5. Irs form 1040nr Go to Table 5-1. Irs form 1040nr Using your age on the last day of the tax year, find your age group in the left column, and enter the cost from the column on the right for your age group 5. Irs form 1040nr . Irs form 1040nr 23 6. Irs form 1040nr Multiply line 4 by line 5 6. Irs form 1040nr 6. Irs form 1040nr 90 7. Irs form 1040nr Enter the number of full months of coverage at this cost. Irs form 1040nr 7. Irs form 1040nr 12 8. Irs form 1040nr Multiply line 6 by line 7 8. Irs form 1040nr 82. Irs form 1040nr 80 9. Irs form 1040nr Enter the premiums you paid per month 9. Irs form 1040nr 4. Irs form 1040nr 15     10. Irs form 1040nr Enter the number of months you paid the premiums 10. Irs form 1040nr 12     11. Irs form 1040nr Multiply line 9 by line 10. Irs form 1040nr 11. Irs form 1040nr 49. Irs form 1040nr 80 12. Irs form 1040nr Subtract line 11 from line 8. Irs form 1040nr Include this amount in your income as wages 12. Irs form 1040nr 33. Irs form 1040nr 00 Entire cost excluded. Irs form 1040nr   You are not taxed on the cost of group-term life insurance if any of the following circumstances apply. Irs form 1040nr You are permanently and totally disabled and have ended your employment. Irs form 1040nr Your employer is the beneficiary of the policy for the entire period the insurance is in force during the tax year. Irs form 1040nr A charitable organization (defined in chapter 24) to which contributions are deductible is the only beneficiary of the policy for the entire period the insurance is in force during the tax year. Irs form 1040nr (You are not entitled to a deduction for a charitable contribution for naming a charitable organization as the beneficiary of your policy. Irs form 1040nr ) The plan existed on January 1, 1984, and You retired before January 2, 1984, and were covered by the plan when you retired, or You reached age 55 before January 2, 1984, and were employed by the employer or its predecessor in 1983. Irs form 1040nr Entire cost taxed. Irs form 1040nr   You are taxed on the entire cost of group-term life insurance if either of the following circumstances apply: The insurance is provided by your employer through a qualified employees' trust, such as a pension trust or a qualified annuity plan. Irs form 1040nr You are a key employee and your employer's plan discriminates in favor of key employees. Irs form 1040nr Retirement Planning Services If your employer has a qualified retirement plan, qualified retirement planning services provided to you (and your spouse) by your employer are not included in your income. Irs form 1040nr Qualified services include retirement planning advice, information about your employer's retirement plan, and information about how the plan may fit into your overall individual retirement income plan. Irs form 1040nr You cannot exclude the value of any tax preparation, accounting, legal, or brokerage services provided by your employer. Irs form 1040nr Transportation If your employer provides you with a qualified transportation fringe benefit, it can be excluded from your income, up to certain limits. Irs form 1040nr A qualified transportation fringe benefit is: Transportation in a commuter highway vehicle (such as a van) between your home and work place, A transit pass, Qualified parking, or Qualified bicycle commuting reimbursement. Irs form 1040nr Cash reimbursement by your employer for these expenses under a bona fide reimbursement arrangement is also excludable. Irs form 1040nr However, cash reimbursement for a transit pass is excludable only if a voucher or similar item that can be exchanged only for a transit pass is not readily available for direct distribution to you. Irs form 1040nr Exclusion limit. Irs form 1040nr   The exclusion for commuter vehicle transportation and transit pass fringe benefits cannot be more than $245 a month. Irs form 1040nr   The exclusion for the qualified parking fringe benefit cannot be more than $245 a month. Irs form 1040nr   The exclusion for qualified bicycle commuting in a calendar year is $20 multiplied by the number of qualified bicycle commuting months that year. Irs form 1040nr   If the benefits have a value that is more than these limits, the excess must be included in your income. Irs form 1040nr You are not entitled to these exclusions if the reimbursements are made under a compensation reduction agreement. Irs form 1040nr Commuter highway vehicle. Irs form 1040nr   This is a highway vehicle that seats at least six adults (not including the driver). Irs form 1040nr At least 80% of the vehicle's mileage must reasonably be expected to be: For transporting employees between their homes and work place, and On trips during which employees occupy at least half of the vehicle's adult seating capacity (not including the driver). Irs form 1040nr Transit pass. Irs form 1040nr   This is any pass, token, farecard, voucher, or similar item entitling a person to ride mass transit (whether public or private) free or at a reduced rate or to ride in a commuter highway vehicle operated by a person in the business of transporting persons for compensation. Irs form 1040nr Qualified parking. Irs form 1040nr   This is parking provided to an employee at or near the employer's place of business. Irs form 1040nr It also includes parking provided on or near a location from which the employee commutes to work by mass transit, in a commuter highway vehicle, or by carpool. Irs form 1040nr It does not include parking at or near the employee's home. Irs form 1040nr Qualified bicycle commuting. Irs form 1040nr   This is reimbursement based on the number of qualified bicycle commuting months for the year. Irs form 1040nr A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your home and place of employment and you do not receive any of the other qualified transportation fringe benefits. Irs form 1040nr The reimbursement can be for expenses you incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage. Irs form 1040nr Retirement Plan Contributions Your employer's contributions to a qualified retirement plan for you are not included in income at the time contributed. Irs form 1040nr (Your employer can tell you whether your retirement plan is qualified. Irs form 1040nr ) However, the cost of life insurance coverage included in the plan may have to be included. Irs form 1040nr See Group-Term Life Insurance , earlier, under Fringe Benefits. Irs form 1040nr If your employer pays into a nonqualified plan for you, you generally must include the contributions in your income as wages for the tax year in which the contributions are made. Irs form 1040nr However, if your interest in the plan is not transferable or is subject to a substantial risk of forfeiture (you have a good chance of losing it) at the time of the contribution, you do not have to include the value of your interest in your income until it is transferable or is no longer subject to a substantial risk of forfeiture. Irs form 1040nr For information on distributions from retirement plans, see Publication 575, Pension and Annuity Income (or Publication 721, Tax Guide to U. Irs form 1040nr S. Irs form 1040nr Civil Service Retirement Benefits, if you are a federal employee or retiree). Irs form 1040nr Elective deferrals. Irs form 1040nr   If you are covered by certain kinds of retirement plans, you can choose to have part of your compensation contributed by your employer to a retirement fund, rather than have it paid to you. Irs form 1040nr The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. Irs form 1040nr An elective deferral, other than a designated Roth contribution (discussed later), is not included in wages subject to income tax at the time contributed. Irs form 1040nr However, it is included in wages subject to social security and Medicare taxes. Irs form 1040nr   Elective deferrals include elective contributions to the following retirement plans. Irs form 1040nr Cash or deferred arrangements (section 401(k) plans). Irs form 1040nr The Thrift Savings Plan for federal employees. Irs form 1040nr Salary reduction simplified employee pension plans (SARSEP). Irs form 1040nr Savings incentive match plans for employees (SIMPLE plans). Irs form 1040nr Tax-sheltered annuity plans (403(b) plans). Irs form 1040nr Section 501(c)(18)(D) plans. Irs form 1040nr Section 457 plans. Irs form 1040nr Qualified automatic contribution arrangements. Irs form 1040nr   Under a qualified automatic contribution arrangement, your employer can treat you as having elected to have a part of your compensation contributed to a section 401(k) plan. Irs form 1040nr You are to receive written notice of your rights and obligations under the qualified automatic contribution arrangement. Irs form 1040nr The notice must explain: Your rights to elect not to have elective contributions made, or to have contributions made at a different percentage, and How contributions made will be invested in the absence of any investment decision by you. Irs form 1040nr   You must be given a reasonable period of time after receipt of the notice and before the first elective contribution is made to make an election with respect to the contributions. Irs form 1040nr Overall limit on deferrals. Irs form 1040nr   For 2013, in most cases, you should not have deferred more than a total of $17,500 of contributions to the plans listed in (1) through (3) and (5) above. Irs form 1040nr The limit for SIMPLE plans is $12,000. Irs form 1040nr The limit for section 501(c)(18)(D) plans is the lesser of $7,000 or 25% of your compensation. Irs form 1040nr The limit for section 457 plans is the lesser of your includible compensation or $17,500. Irs form 1040nr Amounts deferred under specific plan limits are part of the overall limit on deferrals. Irs form 1040nr Designated Roth contributions. Irs form 1040nr   Employers with section 401(k) and section 403(b) plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective deferrals to the plan designated as after-tax Roth contributions. Irs form 1040nr Designated Roth contributions are treated as elective deferrals, except that they are included in income. Irs form 1040nr Excess deferrals. Irs form 1040nr   Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. Irs form 1040nr However, you are responsible for monitoring the total you defer to ensure that the deferrals are not more than the overall limit. Irs form 1040nr   If you set aside more than the limit, the excess generally must be included in your income for that year, unless you have an excess deferral of a designated Roth contribution. Irs form 1040nr See Publication 525 for a discussion of the tax treatment of excess deferrals. Irs form 1040nr Catch-up contributions. Irs form 1040nr   You may be allowed catch-up contributions (additional elective deferral) if you are age 50 or older by the end of your tax year. Irs form 1040nr Stock Options If you receive a nonstatutory option to buy or sell stock or other property as payment for your services, you usually will have income when you receive the option, when you exercise the option (use it to buy or sell the stock or other property), or when you sell or otherwise dispose of the option. Irs form 1040nr However, if your option is a statutory stock option, you will not have any income until you sell or exchange your stock. Irs form 1040nr Your employer can tell you which kind of option you hold. Irs form 1040nr For more information, see Publication 525. Irs form 1040nr Restricted Property In most cases, if you receive property for your services, you must include its fair market value in your income in the year you receive the property. Irs form 1040nr However, if you receive stock or other property that has certain restrictions that affect its value, you do not include the value of the property in your income until it has substantially vested. Irs form 1040nr (You can choose to include the value of the property in your income in the year it is transferred to you. Irs form 1040nr ) For more information, see Restricted Property in Publication 525. Irs form 1040nr Dividends received on restricted stock. Irs form 1040nr   Dividends you receive on restricted stock are treated as compensation and not as dividend income. Irs form 1040nr Your employer should include these payments on your Form W-2. Irs form 1040nr Stock you chose to include in income. Irs form 1040nr   Dividends you receive on restricted stock you chose to include in your income in the year transferred are treated the same as any other dividends. Irs form 1040nr Report them on your return as dividends. Irs form 1040nr For a discussion of dividends, see chapter 8. Irs form 1040nr    For information on how to treat dividends reported on both your Form W-2 and Form 1099-DIV, see Dividends received on restricted stock in Publication 525. Irs form 1040nr Special Rules for Certain Employees This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers. Irs form 1040nr Clergy Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. Irs form 1040nr , in addition to your salary. Irs form 1040nr If the offering is made to the religious institution, it is not taxable to you. Irs form 1040nr If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. Irs form 1040nr However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. Irs form 1040nr See chapter 24. Irs form 1040nr Pension. Irs form 1040nr    A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. Irs form 1040nr It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Irs form 1040nr Housing. Irs form 1040nr    Special rules for housing apply to members of the clergy. Irs form 1040nr Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. Irs form 1040nr However, the exclusion cannot be more than the reasonable pay for your service. Irs form 1040nr If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. Irs form 1040nr The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. Irs form 1040nr However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. Irs form 1040nr For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Irs form 1040nr Members of Religious Orders If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order. Irs form 1040nr Services performed for the order. Irs form 1040nr   If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order. Irs form 1040nr   If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. Irs form 1040nr Any wages you earn as an agent of an order that you turn over to the order are not included in your income. Irs form 1040nr Example. Irs form 1040nr You are a member of a church order and have taken a vow of poverty. Irs form 1040nr You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. Irs form 1040nr You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. Irs form 1040nr However, you remain under the general direction and control of the order. Irs form 1040nr You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income. Irs form 1040nr Services performed outside the order. Irs form 1040nr   If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: They are the kind of services that are ordinarily the duties of members of the order. Irs form 1040nr They are part of the duties that you must exercise for, or on behalf of, the religious order as its agent. Irs form 1040nr If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. Irs form 1040nr Amounts you receive for these services are included in your income, even if you have taken a vow of poverty. Irs form 1040nr Example. Irs form 1040nr Mark Brown is a member of a religious order and has taken a vow of poverty. Irs form 1040nr He renounces all claims to his earnings and turns over his earnings to the order. Irs form 1040nr Mark is a schoolteacher. Irs form 1040nr He was instructed by the superiors of the order to get a job with a private tax-exempt school. Irs form 1040nr Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order. Irs form 1040nr Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. Irs form 1040nr The wages Mark earns working for the school are included in his income. Irs form 1040nr Foreign Employer Special rules apply if you work for a foreign employer. Irs form 1040nr U. Irs form 1040nr S. Irs form 1040nr citizen. Irs form 1040nr   If you are a U. Irs form 1040nr S. Irs form 1040nr citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income. Irs form 1040nr Social security and Medicare taxes. Irs form 1040nr   You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. Irs form 1040nr However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. Irs form 1040nr This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government. Irs form 1040nr Employees of international organizations or foreign governments. Irs form 1040nr   Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). Irs form 1040nr   Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true. Irs form 1040nr You are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States). Irs form 1040nr Your work is like the work done by employees of the United States in foreign countries. Irs form 1040nr The foreign government gives an equal exemption to employees of the United States in its country. Irs form 1040nr Waiver of alien status. Irs form 1040nr   If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. Irs form 1040nr See Foreign Employer in Publication 525. Irs form 1040nr Employment abroad. Irs form 1040nr   For information on the tax treatment of income earned abroad, see Publication 54. Irs form 1040nr Military Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. Irs form 1040nr Allowances generally are not taxed. Irs form 1040nr For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide. Irs form 1040nr Differential wage payments. Irs form 1040nr   Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. Irs form 1040nr These wages are subject to income tax withholding and are reported on a Form W-2. Irs form 1040nr See the discussion under Miscellaneous Compensation , earlier. Irs form 1040nr Military retirement pay. Irs form 1040nr   If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Irs form 1040nr Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan. Irs form 1040nr   For more detailed discussion of survivor annuities, see chapter 10. Irs form 1040nr Disability. Irs form 1040nr   If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later. Irs form 1040nr Veterans' benefits. Irs form 1040nr   Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). Irs form 1040nr The following amounts paid to veterans or their families are not taxable. Irs form 1040nr Education, training, and subsistence allowances. Irs form 1040nr Disability compensation and pension payments for disabilities paid either to veterans or their families. Irs form 1040nr Grants for homes designed for wheelchair living. Irs form 1040nr Grants for motor vehicles for veterans who lost their sight or the use of their limbs. Irs form 1040nr Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death. Irs form 1040nr Interest on insurance dividends you leave on deposit with the VA. Irs form 1040nr Benefits under a dependent-care assistance program. Irs form 1040nr The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001. Irs form 1040nr Payments made under the compensated work therapy program. Irs form 1040nr Any bonus payment by a state or political subdivision because of service in a combat zone. Irs form 1040nr Volunteers The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions. Irs form 1040nr Peace Corps. Irs form 1040nr   Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax. Irs form 1040nr Taxable allowances. Irs form 1040nr   The following allowances must be included in your income and reported as wages: Allowances paid to your spouse and minor children while you are a volunteer leader training in the United States. Irs form 1040nr Living allowances designated by the Director of the Peace Corps as basic compensation. Irs form 1040nr These are allowances for personal items such as domestic help, laundry and clothing maintenance, entertainment and recreation, transportation, and other miscellaneous expenses. Irs form 1040nr Leave allowances. Irs form 1040nr Readjustment allowances or termination payments. Irs form 1040nr These are considered received by you when credited to your account. Irs form 1040nr Example. Irs form 1040nr Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. Irs form 1040nr Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account. Irs form 1040nr Volunteers in Service to America (VISTA). Irs form 1040nr   If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages. Irs form 1040nr National Senior Services Corps programs. Irs form 1040nr   Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs. Irs form 1040nr Retired Senior Volunteer Program (RSVP). Irs form 1040nr Foster Grandparent Program. Irs form 1040nr Senior Companion Program. Irs form 1040nr Service Corps of Retired Executives (SCORE). Irs form 1040nr   If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income. Irs form 1040nr Volunteer tax counseling. Irs form 1040nr   Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE). Irs form 1040nr   You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. Irs form 1040nr See chapter 24. Irs form 1040nr Sickness and Injury Benefits This section discusses sickness and injury benefits including disability pensions, long-term care insurance contracts, workers' compensation, and other benefits. Irs form 1040nr In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employer. Irs form 1040nr If both you and your employer pay for the plan, only the amount you receive that is due to your employer's payments is reported as income. Irs form 1040nr However, certain payments may not be taxable to you. Irs form 1040nr Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension. Irs form 1040nr In addition to disability pensions and annuities, you may be receiving other payments for sickness and injury. Irs form 1040nr Do not report as income any amounts paid to reimburse you for medical expenses you incurred after the plan was established. Irs form 1040nr Cost paid by you. Irs form 1040nr   If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive from the plan for personal injury or sickness as income on your tax return. Irs form 1040nr If your plan reimbursed you for medical expenses you deducted in an earlier year, you may have to include some, or all, of the reimbursement in your income. Irs form 1040nr See Reimbursement in a later year in chapter 21. Irs form 1040nr Cafeteria plans. Irs form 1040nr   In most cases, if you are covered by an accident or health insurance plan through a cafeteria plan, and the amount of the insurance premiums was not included in your income, you are not considered to have paid the premiums and you must include any benefits you receive in your income. Irs form 1040nr If the amount of the premiums was included in your income, you are considered to have paid the premiums, and any benefits you receive are not taxable. Irs form 1040nr Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. Irs form 1040nr You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A, until you reach minimum retirement age. Irs form 1040nr Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled. Irs form 1040nr You may be entitled to a tax credit if you were permanently and totally disabled when you retired. Irs form 1040nr For information on this credit and the definition of permanent and total disability, see chapter 33. Irs form 1040nr Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Irs form 1040nr Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Irs form 1040nr The rules for reporting pensions are explained in How To Report in chapter 10. Irs form 1040nr For information on disability payments from a governmental program provided as a substitute for unemployment compensation, see chapter 12. Irs form 1040nr Retirement and profit-sharing plans. Irs form 1040nr   If you receive payments from a retirement or profit-sharing plan that does not provide for disability retirement, do not treat the payments as a disability pension. Irs form 1040nr The payments must be reported as a pension or annuity. Irs form 1040nr For more information on pensions, see chapter 10. Irs form 1040nr Accrued leave payment. Irs form 1040nr   If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. Irs form 1040nr The payment is not a disability payment. Irs form 1040nr Include it in your income in the tax year you receive it. Irs form 1040nr Military and Government Disability Pensions Certain military and government disability pensions are not taxable. Irs form 1040nr Service-connected disability. Irs form 1040nr   You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services. Irs form 1040nr The armed forces of any country. Irs form 1040nr The National Oceanic and Atmospheric Administration. Irs form 1040nr The Public Health Service. Irs form 1040nr The Foreign Service. Irs form 1040nr Conditions for exclusion. Irs form 1040nr   Do not include the disability payments in your income if any of the following conditions apply. Irs form 1040nr You were entitled to receive a disability payment before September 25, 1975. Irs form 1040nr You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975. Irs form 1040nr You receive the disability payments for a combat-related injury. Irs form 1040nr This is a personal injury or sickness that Results directly from armed conflict, Takes place while you are engaged in extra-hazardous service, Takes place under conditions simulating war, including training exercises such as maneuvers, or Is caused by an instrumentality of war. Irs form 1040nr You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. Irs form 1040nr Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA. Irs form 1040nr Pension based on years of service. Irs form 1040nr   If you receive a disability pension based on years of service, in most cases you must include it in your income. Irs form 1040nr However, if the pension qualifies for the exclusion for a service-connected disability (discussed earlier), do not include in income the part of your pension that you would have received if the pension had been based on a percentage of disability. Irs form 1040nr You must include the rest of your pension in your income. Irs form 1040nr Retroactive VA determination. Irs form 1040nr   If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive. Irs form 1040nr You can claim a refund of any tax paid on the excludable amount (subject to the statute of limitations) by filing an amended return on Form 1040X for each previous year during the retroactive period. Irs form 1040nr You must include with each Form 1040X a copy of the official VA Determination letter granting the retroactive benefit. Irs form 1040nr The letter must show the amount withheld and the effective date of the benefit. Irs form 1040nr   If you receive a lump-sum disability severance payment and are later awarded VA disability benefits, exclude 100% of the severance benefit from your income. Irs form 1040nr However, you must include in your income any lump-sum readjustment or other nondisability severance payment you received on release from active duty, even if you are later given a retroactive disability rating by the VA. Irs form 1040nr Special statute of limitations. Irs form 1040nr   In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. Irs form 1040nr However, if you receive a retroactive service-connected disability rating determination, the statute of limitations is extended by a 1-year period beginning on the date of the determination. Irs form 1040nr This 1-year extended period applies to claims for credit or refund filed after June 17, 2008, and does not apply to any tax year that began more than 5 years before the date of the determination. Irs form 1040nr Example. Irs form 1040nr You retired in 2007 and receive a pension based on your years of service. Irs form 1040nr On August 1, 2013, you receive a determination of service-connected disability retroactive to 2007. Irs form 1040nr Generally, you could claim a refund for the taxes paid on your pension for 2010, 2011, and 2012. Irs form 1040nr However, under the special limitation period, you can also file a claim for 2009 as long as you file the claim by August 1, 2014. Irs form 1040nr You cannot file a claim for 2007 and 2008 because those tax years began more than 5 years before the determination. Irs form 1040nr Terrorist attack or military action. Irs form 1040nr   Do not include in your income disability payments you receive for injuries resulting directly from a terrorist or military action. Irs form 1040nr Long-Term Care Insurance Contracts Long-term care insurance contracts in most cases are treated as accident and health insurance contracts. Irs form 1040nr Amounts you receive from them (other than policyholder dividends or premium refunds) in most cases are excludable from income as amounts received for personal injury or sickness. Irs form 1040nr To claim an exclusion for payments made on a per diem or other periodic basis under a long-term care insurance contract, you must file Form 8853 with your return. Irs form 1040nr A long-term care insurance contract is an insurance contract that only provides coverage for qualified long-term care services. Irs form 1040nr The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits, and In most cases, not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. Irs form 1040nr Qualified long-term care services. Irs form 1040nr   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services, and Required by a chronically ill individual and provided pursuant to a plan of care as prescribed by a licensed health care practitioner. Irs form 1040nr Chronically ill individual. Irs form 1040nr   A chronically ill individual is one who has been certified by a licensed health care practitioner within the previous 12 months as one of the following: An individual who, for at least 90 days, is unable to perform at least two activities of daily living without substantial assistance due to loss of functional capacity. Irs form 1040nr Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Irs form 1040nr An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Irs form 1040nr Limit on exclusion. Irs form 1040nr   You generally can exclude from gross income up to $320 a day for 2013. Irs form 1040nr See Limit on exclusion, under Long-Term Care Insurance Contracts, under Sickness and Injury Benefits in Publication 525 for more information. Irs form 1040nr Workers' Compensation Amounts you receive as workers' compensation for an occupational sickness or injury are fully exempt from tax if they are paid under a workers' compensation act or a statute in the nature of a workers' compensation act. Irs form 1040nr The exemption also applies to your survivors. Irs form 1040nr The exemption, however, does not apply to retirement plan benefits you receive based on your age, length of service, or prior contributions to the plan, even if you retired because of an occupational sickness or injury. Irs form 1040nr If part of your workers' compensation reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Irs form 1040nr For more information, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Irs form 1040nr Return to work. Irs form 1040nr    If you return to work after qualifying for workers' compensation, salary payments you receive for performing light duties are taxable as wages. Irs form 1040nr Other Sickness and Injury Benefits In addition to disability pensions and annuities, you may receive other payments for sickness or injury. Irs form 1040nr Railroad sick pay. Irs form 1040nr    Payments you receive as sick pay under the Railroad Unemployment Insurance Act are taxable and you must include them in your income. Irs form 1040nr However, do not include them in your income if they are for an on-the-job injury. Irs form 1040nr   If you received income because of a disability, see Disability Pensions , earlier. Irs form 1040nr Federal Employees' Compensation Act (FECA). Irs form 1040nr   Payments received under this Act for personal injury or sickness, including payments to beneficiaries in case of death, are not taxable. Irs form 1040nr However, you are taxed on amounts you receive under this Act as continuation of pay for up to 45 days while a claim is being decided. Irs form 1040nr Report this income on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040-EZ. Irs form 1040nr Also, pay for sick leave while a claim is being processed is taxable and must be included in your income as wages. Irs form 1040nr    If part of the payments you receive under FECA reduces your social security or equivalent railroad retirement benefits received, that part is considered social security (or equivalent railroad retirement) benefits and may be taxable. Irs form 1040nr For a discussion of the taxability of these benefits, see Social security and equivalent railroad retirement benefits under Other Income, in Publication 525. Irs form 1040nr    You can deduct the amount you spend to buy back sick leave for an earlier year to be eligible for nontaxable FECA benefits for that period. Irs form 1040nr It is a miscellaneous deduction subject to the 2%-of-AGI limit on Schedule A (Form 1040). Irs form 1040nr If you buy back sick leave in the same year you used it, the amount reduces your taxable sick leave pay. Irs form 1040nr Do not deduct it separately. Irs form 1040nr Other compensation. Irs form 1040nr   Many other amounts you receive as compensation for sickness or injury are not taxable. Irs form 1040nr These include the following amounts. Irs form 1040nr Compensatory damages you receive for physical injury or physical sickness, whether paid in a lump sum or in periodic payments. Irs form 1040nr Benefits you receive under an accident or health insurance policy on which either you paid the premiums or your employer paid the premiums but you had to include them in your income. Irs form 1040nr Disability benefits you receive for loss of income or earning capacity as a result of injuries under a no-fault car insurance policy. Irs form 1040nr Compensation you receive for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement. Irs form 1040nr This compensation must be based only on the injury and not on the period of your absence from work. Irs form 1040nr These benefits are not taxable even if your employer pays for the accident and health plan that provides these benefits. Irs form 1040nr Reimbursement for medical care. Irs form 1040nr    A reimbursement for medical care is generally not taxable. Irs form 1040nr However, it may reduce your medical expense deduction. Irs form 1040nr For more information, see chapter 21. Irs form 1040nr Prev  Up  Next   Home   More Online Publications
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Fiscal Year 2013 Enforcement and Service Results

The Fiscal Year 2013 Enforcement and Service Results tables provide details about IRS audit, collection and taxpayer service. Fiscal Year 2013 began on Oct. 1, 2012, and ended on Sept. 30, 2013.

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Page Last Reviewed or Updated: 08-Jan-2014

The Irs Form 1040nr

Irs form 1040nr Part One -   The Income Tax Return The four chapters in this part provide basic information on the tax system. Irs form 1040nr They take you through the first steps of filling out a tax return—such as deciding what your filing status is, how many exemptions you can take, and what form to file. Irs form 1040nr They also discuss recordkeeping requirements, IRS e-file (electronic filing), certain penalties, and the two methods used to pay tax during the year: withholding and estimated tax. Irs form 1040nr Table of Contents 1. Irs form 1040nr   Filing InformationWhat's New Reminders Introduction Do I Have To File a Return?Individuals—In General Dependents Certain Children Under Age 19 or Full-Time Students Self-Employed Persons Aliens Who Should File Which Form Should I Use?Form 1040EZ Form 1040A Form 1040 Does My Return Have To Be on Paper?IRS e-file When Do I Have To File?Private delivery services. Irs form 1040nr Extensions of Time To File How Do I Prepare My Return?When Do I Report My Income and Expenses? Social Security Number (SSN) Presidential Election Campaign Fund Computations Attachments Third Party Designee Signatures Paid Preparer Refunds Amount You Owe Gift To Reduce Debt Held by the Public Name and Address Where Do I File? What Happens After I File?What Records Should I Keep? Why Keep Records? Kinds of Records to Keep Basic Records How Long to Keep Records Refund Information Interest on Refunds Change of Address What If I Made a Mistake?Amended Returns and Claims for Refund Penalties Identity Theft 2. Irs form 1040nr   Filing StatusWhat's New Introduction Useful Items - You may want to see: Marital StatusDivorced persons. Irs form 1040nr Divorce and remarriage. Irs form 1040nr Annulled marriages. Irs form 1040nr Head of household or qualifying widow(er) with dependent child. Irs form 1040nr Considered married. Irs form 1040nr Same-sex marriage. Irs form 1040nr Spouse died during the year. Irs form 1040nr Married persons living apart. Irs form 1040nr Single Married Filing JointlyFiling a Joint Return Married Filing SeparatelySpecial Rules Head of HouseholdConsidered Unmarried Keeping Up a Home Qualifying Person Qualifying Widow(er) With Dependent Child 3. Irs form 1040nr   Personal Exemptions and DependentsWhat's New Introduction Useful Items - You may want to see: ExemptionsPersonal Exemptions Exemptions for Dependents Qualifying Child Qualifying Relative Phaseout of Exemptions Social Security Numbers for DependentsBorn and died in 2013. Irs form 1040nr Taxpayer identification numbers for aliens. Irs form 1040nr Taxpayer identification numbers for adoptees. Irs form 1040nr 4. Irs form 1040nr   Tax Withholding and Estimated TaxWhat's New for 2014 Reminders Introduction Useful Items - You may want to see: Tax Withholding for 2014Salaries and Wages Tips Taxable Fringe Benefits Sick Pay Pensions and Annuities Gambling Winnings Unemployment Compensation Federal Payments Backup Withholding Estimated Tax for 2014Who Does Not Have To Pay Estimated Tax Who Must Pay Estimated Tax How To Figure Estimated Tax When To Pay Estimated Tax How To Figure Each Payment How To Pay Estimated Tax Credit for Withholding and Estimated Tax for 2013Withholding Estimated Tax Underpayment Penalty for 2013 Prev  Up  Next   Home   More Online Publications