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1040ez File Online

1040ez file online 27. 1040ez file online   Tax Benefits for Work-Related Education Table of Contents What's New Introduction Useful Items - You may want to see: Qualifying Work-Related EducationEducation Required by Employer or by Law Education To Maintain or Improve Skills Education To Meet Minimum Requirements Education That Qualifies You for a New Trade or Business What Expenses Can Be DeductedUnclaimed reimbursement. 1040ez file online Transportation Expenses Travel Expenses No Double Benefit Allowed Reimbursements Deducting Business ExpensesSelf-Employed Persons Employees Performing Artists and Fee-Basis Officials Impairment-Related Work Expenses Recordkeeping What's New Standard mileage rate. 1040ez file online  Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2013, through December 31, 2013, is 56½ cents per mile. 1040ez file online For more information, see Transportation Expenses under What Expenses Can Be Deducted. 1040ez file online Introduction This chapter discusses work-related education expenses that you may be able to deduct as business expenses. 1040ez file online To claim such a deduction, you must: Itemize your deductions on Schedule A (Form 1040) if you are an employee, File Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040) if you are self-employed, and Have expenses for education that meet the requirements discussed under Qualifying Work-Related Education . 1040ez file online If you are an employee and can itemize your deductions, you may be able to claim a deduction for the expenses you pay for your work-related education. 1040ez file online Your deduction will be the amount by which your qualifying work-related education expenses plus other job and certain miscellaneous expenses (except for impairment-related work expenses of disabled individuals) is greater than 2% of your adjusted gross income. 1040ez file online See chapter 28. 1040ez file online If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. 1040ez file online Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity and lifetime learning credits (see chapter 35). 1040ez file online You may qualify for these other benefits even if you do not meet the requirements listed earlier. 1040ez file online Also, keep in mind that your work-related education expenses may qualify you to claim more than one tax benefit. 1040ez file online Generally, you may claim any number of benefits as long as you use different expenses to figure each one. 1040ez file online When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that give you the lowest tax liability. 1040ez file online Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 970 Tax Benefits for Education Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Schedule A (Form 1040) Itemized Deductions Qualifying Work-Related Education You can deduct the costs of qualifying work-related education as business expenses. 1040ez file online This is education that meets at least one of the following two tests. 1040ez file online The education is required by your employer or the law to keep your present salary, status, or job. 1040ez file online The required education must serve a bona fide business purpose of your employer. 1040ez file online The education maintains or improves skills needed in your present work. 1040ez file online However, even if the education meets one or both of the above tests, it is not qualifying work-related education if it: Is needed to meet the minimum educational requirements of your present trade or business, or Is part of a program of study that will qualify you for a new trade or business. 1040ez file online You can deduct the costs of qualifying work-related education as a business expense even if the education could lead to a degree. 1040ez file online Use Figure 27-A, later, as a quick check to see if your education qualifies. 1040ez file online Education Required by Employer or by Law Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. 1040ez file online This additional education is qualifying work-related education if all three of the following requirements are met. 1040ez file online It is required for you to keep your present salary, status, or job, The requirement serves a bona fide business purpose of your employer, and The education is not part of a program that will qualify you for a new trade or business. 1040ez file online When you get more education than your employer or the law requires, the additional education can be qualifying work-related education only if it maintains or improves skills required in your present work. 1040ez file online See Education To Maintain or Improve Skills , later. 1040ez file online Example. 1040ez file online You are a teacher who has satisfied the minimum requirements for teaching. 1040ez file online Your employer requires you to take an additional college course each year to keep your teaching job. 1040ez file online If the courses will not qualify you for a new trade or business, they are qualifying work-related education even if you eventually receive a master's degree and an increase in salary because of this extra education. 1040ez file online Education To Maintain or Improve Skills If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills needed in your present work. 1040ez file online This could include refresher courses, courses on current developments, and academic or vocational courses. 1040ez file online Example. 1040ez file online You repair televisions, radios, and stereo systems for XYZ Store. 1040ez file online To keep up with the latest changes, you take special courses in radio and stereo service. 1040ez file online These courses maintain and improve skills required in your work. 1040ez file online Maintaining skills vs. 1040ez file online qualifying for new job. 1040ez file online   Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or business. 1040ez file online Education during temporary absence. 1040ez file online   If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. 1040ez file online Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. 1040ez file online Example. 1040ez file online You quit your biology research job to become a full-time biology graduate student for one year. 1040ez file online If you return to work in biology research after completing the courses, the education is related to your present work even if you do not go back to work with the same employer. 1040ez file online Education during indefinite absence. 1040ez file online   If you stop work for more than a year, your absence from your job is considered indefinite. 1040ez file online Education during an indefinite absence, even if it maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. 1040ez file online Therefore, it is not qualifying work-related education. 1040ez file online Education To Meet Minimum Requirements Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. 1040ez file online The minimum educational requirements are determined by: Laws and regulations, Standards of your profession, trade, or business, and Your employer. 1040ez file online Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational requirements. 1040ez file online This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be qualifying education. 1040ez file online You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work. 1040ez file online Example 1. 1040ez file online You are a full-time engineering student. 1040ez file online Although you have not received your degree or certification, you work part-time as an engineer for a firm that will employ you as a full-time engineer after you finish college. 1040ez file online Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. 1040ez file online The education is not qualifying work-related education. 1040ez file online Example 2. 1040ez file online You are an accountant and you have met the minimum educational requirements of your employer. 1040ez file online Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. 1040ez file online These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired. 1040ez file online Requirements for Teachers States or school districts usually set the minimum educational requirements for teachers. 1040ez file online The requirement is the college degree or the minimum number of college hours usually required of a person hired for that position. 1040ez file online If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. 1040ez file online The determination of whether you are a faculty member of an educational institution must be made on the basis of the particular practices of the institution. 1040ez file online You generally will be considered a faculty member when one or more of the following occurs. 1040ez file online You have tenure. 1040ez file online Your years of service count toward obtaining tenure. 1040ez file online You have a vote in faculty decisions. 1040ez file online Your school makes contributions for you to a retirement plan other than social security or a similar program. 1040ez file online Example 1. 1040ez file online The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. 1040ez file online In addition, to keep the job a teacher must complete a fifth year of training within 10 years from the date of hire. 1040ez file online If the employing school certifies to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. 1040ez file online However, to keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years. 1040ez file online Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state. 1040ez file online If you have all the required education except the fifth year, you have met the minimum educational requirements. 1040ez file online The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business. 1040ez file online Figure 27-A Does Your Work-Related Education Qualify? Please click here for the text description of the image. 1040ez file online Figure 27-A. 1040ez file online Does Your Work-Related Education Qualify?" Example 2. 1040ez file online Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. 1040ez file online The additional four education courses can be qualifying work-related education. 1040ez file online Although you do not have all the required courses, you have already met the minimum educational requirements. 1040ez file online Example 3. 1040ez file online Assume the same facts as in Example 1 except that you are hired with only 3 years of college. 1040ez file online The courses you take that lead to a bachelor's degree (including those in education) are not qualifying work-related education. 1040ez file online They are needed to meet the minimum educational requirements for employment as a teacher. 1040ez file online Example 4. 1040ez file online You have a bachelor's degree and you work as a temporary instructor at a university. 1040ez file online At the same time, you take graduate courses toward an advanced degree. 1040ez file online The rules of the university state that you can become a faculty member only if you get a graduate degree. 1040ez file online Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. 1040ez file online You have not met the minimum educational requirements to qualify you as a faculty member. 1040ez file online The graduate courses are not qualifying work-related education. 1040ez file online Certification in a new state. 1040ez file online   Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. 1040ez file online This is true even if you must get additional education to be certified in another state. 1040ez file online Any additional education you need is qualifying work-related education. 1040ez file online You have already met the minimum requirements for teaching. 1040ez file online Teaching in another state is not a new trade or business. 1040ez file online Example. 1040ez file online You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. 1040ez file online You move to State B and are promptly hired as a teacher. 1040ez file online You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. 1040ez file online These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A. 1040ez file online Education That Qualifies You for a New Trade or Business Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. 1040ez file online This is true even if you do not plan to enter that trade or business. 1040ez file online If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business. 1040ez file online Example 1. 1040ez file online You are an accountant. 1040ez file online Your employer requires you to get a law degree at your own expense. 1040ez file online You register at a law school for the regular curriculum that leads to a law degree. 1040ez file online Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for a new trade or business. 1040ez file online Example 2. 1040ez file online You are a general practitioner of medicine. 1040ez file online You take a 2-week course to review developments in several specialized fields of medicine. 1040ez file online The course does not qualify you for a new profession. 1040ez file online It is qualifying work-related education because it maintains or improves skills required in your present profession. 1040ez file online Example 3. 1040ez file online While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. 1040ez file online The program will lead to qualifying you to practice psychoanalysis. 1040ez file online The psychoanalytic training does not qualify you for a new profession. 1040ez file online It is qualifying work-related education because it maintains or improves skills required in your present profession. 1040ez file online Bar or CPA Review Course Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying work-related education. 1040ez file online They are part of a program of study that can qualify you for a new profession. 1040ez file online Teaching and Related Duties All teaching and related duties are considered the same general kind of work. 1040ez file online A change in duties in any of the following ways is not considered a change to a new business. 1040ez file online Elementary school teacher to secondary school teacher. 1040ez file online Teacher of one subject, such as biology, to teacher of another subject, such as art. 1040ez file online Classroom teacher to guidance counselor. 1040ez file online Classroom teacher to school administrator. 1040ez file online What Expenses Can Be Deducted If your education meets the requirements described earlier under Qualifying Work-Related Education , you can generally deduct your education expenses as business expenses. 1040ez file online If you are not self-employed, you can deduct business expenses only if you itemize your deductions. 1040ez file online You cannot deduct expenses related to tax-exempt and excluded income. 1040ez file online Deductible expenses. 1040ez file online   The following education expenses can be deducted. 1040ez file online Tuition, books, supplies, lab fees, and similar items. 1040ez file online Certain transportation and travel costs. 1040ez file online Other education expenses, such as costs of research and typing when writing a paper as part of an educational program. 1040ez file online Nondeductible expenses. 1040ez file online   You cannot deduct personal or capital expenses. 1040ez file online For example, you cannot deduct the dollar value of vacation time or annual leave you take to attend classes. 1040ez file online This amount is a personal expense. 1040ez file online Unclaimed reimbursement. 1040ez file online   If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to that unclaimed reimbursement. 1040ez file online Example. 1040ez file online Your employer agrees to pay your education expenses if you file a voucher showing your expenses. 1040ez file online You do not file a voucher, and you do not get reimbursed. 1040ez file online Because you did not file a voucher, you cannot deduct the expenses on your tax return. 1040ez file online Transportation Expenses If your education qualifies, you can deduct local transportation costs of going directly from work to school. 1040ez file online If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. 1040ez file online Temporary basis. 1040ez file online   You go to school on a temporary basis if either of the following situations applies to you. 1040ez file online Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less. 1040ez file online Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. 1040ez file online Your attendance is temporary up to the date you determine it will last more than 1 year. 1040ez file online Note. 1040ez file online If you are in either situation (1) or (2), your attendance is not temporary if facts and circumstances indicate otherwise. 1040ez file online Attendance not on a temporary basis. 1040ez file online   You do not go to school on a temporary basis if either of the following situations apply to you. 1040ez file online Your attendance at school is realistically expected to last more than 1 year. 1040ez file online It does not matter how long you actually attend. 1040ez file online Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. 1040ez file online Your attendance is not temporary after the date you determine it will last more than 1 year. 1040ez file online Deductible Transportation Expenses If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation between your home and school. 1040ez file online This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days. 1040ez file online Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. 1040ez file online Transportation expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight. 1040ez file online Example 1. 1040ez file online You regularly work in a nearby town, and go directly from work to home. 1040ez file online You also attend school every work night for 3 months to take a course that improves your job skills. 1040ez file online Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in going between home and school. 1040ez file online This is true regardless of the distance traveled. 1040ez file online Example 2. 1040ez file online Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. 1040ez file online You can deduct your transportation expenses from your regular work site to school and then home. 1040ez file online Example 3. 1040ez file online Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. 1040ez file online Since you are attending school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school. 1040ez file online Example 4. 1040ez file online Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. 1040ez file online Since your attendance in school is not considered temporary, you cannot deduct your transportation expenses in going between home and school. 1040ez file online If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. 1040ez file online If you go from work to home to school and return home, your transportation expenses cannot be more than if you had gone directly from work to school. 1040ez file online Using your car. 1040ez file online   If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. 1040ez file online The standard mileage rate for miles driven from January 1, 2013, through December 31, 2013 is 56½ cents per mile. 1040ez file online Whichever method you use, you can also deduct parking fees and tolls. 1040ez file online See chapter 26 for information on deducting your actual expenses of using a car. 1040ez file online Travel Expenses You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education. 1040ez file online Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. 1040ez file online For more information, see chapter 26. 1040ez file online You cannot deduct expenses for personal activities, such as sightseeing, visiting, or entertaining. 1040ez file online Mainly personal travel. 1040ez file online   If your travel away from home is mainly personal, you cannot deduct all of your expenses for travel, meals, and lodging. 1040ez file online You can deduct only your expenses for lodging and 50% of your expenses for meals during the time you attend the qualified educational activities. 1040ez file online   Whether a trip's purpose is mainly personal or educational depends upon the facts and circumstances. 1040ez file online An important factor is the comparison of time spent on personal activities with time spent on educational activities. 1040ez file online If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location. 1040ez file online Example 1. 1040ez file online John works in Newark, New Jersey. 1040ez file online He traveled to Chicago to take a deductible 1-week course at the request of his employer. 1040ez file online His main reason for going to Chicago was to take the course. 1040ez file online While there, he took a sight-seeing trip, entertained some friends, and took a side trip to Pleasantville for a day. 1040ez file online Since the trip was mainly for business, John can deduct his round-trip airfare to Chicago. 1040ez file online He cannot deduct his transportation expenses of going to Pleasantville. 1040ez file online He can deduct only the meals (subject to the 50% limit) and lodging connected with his educational activities. 1040ez file online Example 2. 1040ez file online Sue works in Boston. 1040ez file online She went to a university in Michigan to take a course for work. 1040ez file online The course is qualifying work-related education. 1040ez file online She took one course, which is one-fourth of a full course load of study. 1040ez file online She spent the rest of the time on personal activities. 1040ez file online Her reasons for taking the course in Michigan were all personal. 1040ez file online Sue's trip is mainly personal because three-fourths of her time is considered personal time. 1040ez file online She cannot deduct the cost of her round-trip train ticket to Michigan. 1040ez file online She can deduct one-fourth of the meals (subject to the 50% limit) and lodging costs for the time she attended the university. 1040ez file online Example 3. 1040ez file online Dave works in Nashville and recently traveled to California to take a 2-week seminar. 1040ez file online The seminar is qualifying work-related education. 1040ez file online While there, he spent an extra 8 weeks on personal activities. 1040ez file online The facts, including the extra 8-week stay, show that his main purpose was to take a vacation. 1040ez file online Dave cannot deduct his round-trip airfare or his meals and lodging for the 8 weeks. 1040ez file online He can deduct only his expenses for meals (subject to the 50% limit) and lodging for the 2 weeks he attended the seminar. 1040ez file online Cruises and conventions. 1040ez file online   Certain cruises and conventions offer seminars or courses as part of their itinerary. 1040ez file online Even if the seminars or courses are work-related, your deduction for travel may be limited. 1040ez file online This applies to: Travel by ocean liner, cruise ship, or other form of luxury water transportation, and Conventions outside the North American area. 1040ez file online   For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Publication 463. 1040ez file online 50% limit on meals. 1040ez file online   You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. 1040ez file online You cannot have been reimbursed for the meals. 1040ez file online   Employees must use Form 2106 or Form 2106-EZ to apply the 50% limit. 1040ez file online Travel as Education You cannot deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business. 1040ez file online Example. 1040ez file online You are a French language teacher. 1040ez file online While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. 1040ez file online You chose your itinerary and most of your activities to improve your French language skills. 1040ez file online You cannot deduct your travel expenses as education expenses. 1040ez file online This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities. 1040ez file online No Double Benefit Allowed You cannot do either of the following. 1040ez file online Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law, for example, the tuition and fees deduction (see chapter 35). 1040ez file online Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. 1040ez file online See Adjustments to Qualifying Work-Related Education Expenses , next. 1040ez file online Adjustments to Qualifying Work-Related Education Expenses If you pay qualifying work-related education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. 1040ez file online You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance. 1040ez file online For more information, see chapter 12 of Publication 970. 1040ez file online Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see chapter 1 of Publication 970), The tax-free part of Pell grants (see chapter 1 of Publication 970), The tax-free part of employer-provided educational assistance (see chapter 11 of Publication 970), Veterans' educational assistance (see chapter 1 of Publication 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received for education assistance. 1040ez file online Amounts that do not reduce qualifying work-related education expenses. 1040ez file online   Do not reduce the qualifying work-related education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 1040ez file online   Also, do not reduce the qualifying work-related education expenses by any scholarship or fellowship reported as income on the student's return or any scholarship which, by its terms, cannot be applied to qualifying work-related education expenses. 1040ez file online Reimbursements How you treat reimbursements depends on the arrangement you have with your employer. 1040ez file online There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. 1040ez file online You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2. 1040ez file online For information on how to treat reimbursements under both accountable and nonaccountable plans, see Reimbursements in chapter 26. 1040ez file online Deducting Business Expenses Self-employed persons and employees report business expenses differently. 1040ez file online The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense. 1040ez file online Self-Employed Persons If you are self-employed, report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally Schedule C, C-EZ, or F). 1040ez file online If your educational expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. 1040ez file online See the instructions for the form you file for information on how to complete it. 1040ez file online Employees If you are an employee, you can deduct the cost of qualifying work-related education only if you: Did not receive (and were not entitled to receive) any reimbursement from your employer, Were reimbursed under a nonaccountable plan (amount is included in box 1 of Form W-2), or Received reimbursement under an accountable plan, but the amount received was less than your expenses for which you claimed reimbursement. 1040ez file online If either (1) or (2) applies, you can deduct the total qualifying cost. 1040ez file online If (3) applies, you can deduct only the qualifying costs that were more than your reimbursement. 1040ez file online In order to deduct the cost of your qualifying work-related education as a business expense, include the amount with your deduction for any other employee business expenses on Schedule A (Form 1040), line 21. 1040ez file online (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. 1040ez file online ) This deduction (except for impairment-related work expenses of disabled individuals) is subject to the 2%-of-adjusted-gross-income limit that applies to most miscellaneous itemized deductions. 1040ez file online See chapter 28. 1040ez file online Form 2106 or 2106-EZ. 1040ez file online   To figure your deduction for employee business expenses, including qualifying work-related education, you generally must complete Form 2106 or Form 2106-EZ. 1040ez file online Form not required. 1040ez file online   Do not complete either Form 2106 or Form 2106-EZ if: If amounts included in box 1 of your Form W-2, are not considered reimbursements, and You are not claiming travel, transportation, meal, or entertainment expenses. 1040ez file online   If you meet both of these requirements, enter the expenses directly on Schedule A (Form 1040), line 21. 1040ez file online (Special rules for expenses of certain performing artists and fee-basis officials and for impairment-related work expenses are explained later. 1040ez file online ) Using Form 2106-EZ. 1040ez file online   This form is shorter and easier to use than Form 2106. 1040ez file online Generally, you can use this form if: All reimbursements, if any, are included in box 1 of your Form W-2, and You are using the standard mileage rate if you are claiming vehicle expenses. 1040ez file online   If you do not meet both of these requirements, use Form 2106. 1040ez file online Performing Artists and Fee-Basis Officials If you are a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income rather than as an itemized deduction. 1040ez file online Include the cost of your qualifying work-related education with any other employee business expenses on Form 1040, line 24. 1040ez file online You do not have to itemize your deductions on Schedule A (Form 1040), and, therefore, the deduction is not subject to the 2%-of-adjusted-gross-income limit. 1040ez file online You must complete Form 2106 or 2106-EZ to figure your deduction, even if you meet the requirements described earlier under Form not required . 1040ez file online For more information on qualified performing artists, see chapter 6 of Publication 463. 1040ez file online Impairment-Related Work Expenses If you are disabled and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 28. 1040ez file online They are not subject to the 2%-of-adjusted-gross-income limit. 1040ez file online To deduct these expenses, you must complete Form 2106 or 2106-EZ even if you meet the requirements described earlier under Form not required . 1040ez file online For more information on impairment-related work expenses, see chapter 6 of Publication 463. 1040ez file online Recordkeeping You must keep records as proof of any deduction claimed on your tax return. 1040ez file online Generally, you should keep your records for 3 years from the date of filing the tax return and claiming the deduction. 1040ez file online For specific information about keeping records of business expenses, see Recordkeeping in chapter 26. 1040ez file online Prev  Up  Next   Home   More Online Publications
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The 1040ez File Online

1040ez file online 8. 1040ez file online   Paying Tax Through Withholding or Estimated Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Notification of Alien Status Withholding From CompensationWithholding on Wages Withholding on Pensions Withholding on Tip Income Independent Contractors Withholding From Other IncomeTax Withheld on Partnership Income Withholding on Scholarships and Fellowship Grants Income Entitled to Tax Treaty BenefitsStudents, teachers, and researchers. 1040ez file online Tax Withheld on Real Property Sales Social Security and Medicare TaxesStudents and Exchange Visitors Agricultural Workers Self-Employment Tax International Social Security Agreements Estimated Tax Form 1040-ES (NR)Fiscal year. 1040ez file online Introduction This chapter discusses how to pay your U. 1040ez file online S. 1040ez file online income tax as you earn or receive income during the year. 1040ez file online In general, the federal income tax is a pay as you go tax. 1040ez file online There are two ways to pay as you go. 1040ez file online Withholding. 1040ez file online If you are an employee, your employer probably withholds income tax from your pay. 1040ez file online Tax may also be withheld from certain other income—including pensions, bonuses, commissions, and gambling winnings. 1040ez file online In each case, the amount withheld is paid to the U. 1040ez file online S. 1040ez file online Treasury in your name. 1040ez file online Estimated tax. 1040ez file online If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. 1040ez file online People who are in business for themselves generally will have to pay their tax this way. 1040ez file online You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. 1040ez file online Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. 1040ez file online Topics - This chapter discusses: How to notify your employer of your alien status, Income subject to withholding of income tax, Exemptions from withholding, Social security and Medicare taxes, and Estimated tax rules. 1040ez file online Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 901 U. 1040ez file online S. 1040ez file online Tax Treaties Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) W-8ECI Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States W-9 Request for Taxpayer Identification Number and Certification 1040-ES (NR) U. 1040ez file online S. 1040ez file online Estimated Tax for Nonresident Alien Individuals 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 8288-B Application for Withholding Certificate for Dispositions by Foreign Persons of U. 1040ez file online S. 1040ez file online Real Property Interests 13930 Application for Central Withholding Agreement See chapter 12 for information about getting these publications and forms. 1040ez file online Notification of Alien Status You must let your employer know whether you are a resident or a nonresident alien so your employer can withhold the correct amount of tax from your wages. 1040ez file online If you are a resident alien under the rules discussed in chapter 1, you must file Form W-9 or a similar statement with your employer. 1040ez file online If you are a nonresident alien under those rules, you must furnish to your employer Form 8233 or Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that your compensation is subject to graduated withholding at the same rates as resident aliens or U. 1040ez file online S. 1040ez file online citizens. 1040ez file online If you are a resident alien and you receive income other than wages (such as dividends and royalties) from sources within the United States, file Form W-9 or similar statement with the withholding agent (generally, the payer of the income) so the agent will not withhold tax on the income at the 30% (or lower treaty) rate. 1040ez file online If you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at the 30% (or lower treaty) rate. 1040ez file online However, if the income is effectively connected with a U. 1040ez file online S. 1040ez file online trade or business, file Form W-8ECI instead. 1040ez file online Withholding From Compensation The following discussion generally applies only to nonresident aliens. 1040ez file online Tax is withheld from resident aliens in the same manner as U. 1040ez file online S. 1040ez file online citizens. 1040ez file online Wages and other compensation paid to a nonresident alien for services performed as an employee are usually subject to graduated withholding at the same rates as resident aliens and U. 1040ez file online S. 1040ez file online citizens. 1040ez file online Therefore, your compensation, unless it is specifically excluded from the term “wages” by law, or is exempt from tax by treaty, is subject to graduated withholding. 1040ez file online Withholding on Wages If you are an employee and you receive wages subject to graduated withholding, you will be required to fill out a Form W-4. 1040ez file online Also fill out Form W-4 for a scholarship or fellowship grant to the extent it represents payment for past, present, or future services and for which you are not claiming a tax treaty withholding exemption on Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). 1040ez file online These are services you are required to perform as an employee and as a condition of receiving the scholarship or fellowship (or tuition reduction). 1040ez file online Nonresident aliens should fill out Form W-4 using the following instructions instead of the instructions on the Form W-4. 1040ez file online This is because of the restrictions on a nonresident alien's filing status, the limited number of personal exemptions a nonresident alien is allowed, and because a nonresident alien cannot claim the standard deduction. 1040ez file online Enter your social security number (SSN) on line 2. 1040ez file online Do not enter an individual taxpayer identification number (ITIN). 1040ez file online Check only “Single” marital status on line 3 (regardless of your actual marital status). 1040ez file online Claim only one allowance on line 5, unless you are a resident of Canada, Mexico, or South Korea, or a U. 1040ez file online S. 1040ez file online national. 1040ez file online Write “Nonresident Alien” or “NRA” on the dotted line on line 6. 1040ez file online You can request additional withholding on line 6 at your option. 1040ez file online Do not claim “Exempt” withholding status on line 7. 1040ez file online A U. 1040ez file online S. 1040ez file online national is an individual who, although not a U. 1040ez file online S. 1040ez file online citizen, owes his or her allegiance to the United States. 1040ez file online U. 1040ez file online S. 1040ez file online nationals include American Samoans, and Northern Mariana Islanders who chose to become U. 1040ez file online S. 1040ez file online nationals instead of U. 1040ez file online S. 1040ez file online citizens. 1040ez file online See Withholding on Scholarships and Fellowship Grants later, for how to fill out Form W-4 if you receive a U. 1040ez file online S. 1040ez file online source scholarship or fellowship grant that is not a payment for services. 1040ez file online Students and business apprentices from India. 1040ez file online   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you may claim an additional withholding allowance for the standard deduction. 1040ez file online You can claim an additional withholding allowance for your spouse only if your spouse will have no gross income for 2013 and cannot be claimed as a dependent on another U. 1040ez file online S. 1040ez file online taxpayer's 2013 return. 1040ez file online You may also claim an additional withholding allowance for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. 1040ez file online S. 1040ez file online citizens. 1040ez file online Household employees. 1040ez file online   If you work as a household employee, your employer does not have to withhold income tax. 1040ez file online However, you may agree to voluntary income tax withholding by filing a Form W-4 with your employer. 1040ez file online The agreement goes into effect when your employer accepts the agreement by beginning the withholding. 1040ez file online You or your employer may end the agreement by letting the other know in writing. 1040ez file online Agricultural workers. 1040ez file online   If you are an agricultural worker on an H-2A visa, your employer does not have to withhold income tax. 1040ez file online However, your employer will withhold income tax only if you and your employer agree to withhold. 1040ez file online In that case, you must provide your employer with a properly completed Form W-4. 1040ez file online You can find more information about not having tax withheld at www. 1040ez file online irs. 1040ez file online gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. 1040ez file online Wages Exempt From Withholding Wages that are exempt from U. 1040ez file online S. 1040ez file online income tax under an income tax treaty are generally exempt from withholding. 1040ez file online For information on how to claim this exemption from withholding, see Income Entitled to Tax Treaty Benefits , later. 1040ez file online Wages paid to aliens who are residents of American Samoa, Canada, Mexico, Puerto Rico, or the U. 1040ez file online S. 1040ez file online Virgin Islands may be exempt from withholding. 1040ez file online The following paragraphs explain these exemptions. 1040ez file online Residents of Canada or Mexico engaged in transportation-related employment. 1040ez file online   Certain residents of Canada or Mexico who enter or leave the United States at frequent intervals are not subject to withholding on their wages. 1040ez file online These persons either: Perform duties in transportation service between the United States and Canada or Mexico, or Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or crossing, the boundary between the United States and Canada or the boundary between the United States and Mexico. 1040ez file online    This employment is subject to withholding of social security and Medicare taxes unless the services are performed for a railroad. 1040ez file online   To qualify for the exemption from withholding during a tax year, a Canadian or Mexican resident must give the employer a statement in duplicate with name, address, and identification number, certifying that the resident: Is not a U. 1040ez file online S. 1040ez file online citizen or resident, Is a resident of Canada or Mexico, whichever applies, and Expects to perform duties previously described during the tax year in question. 1040ez file online   The statement can be in any form, but it must be dated and signed by the employee and must include a written declaration that it is made under the penalties of perjury. 1040ez file online Residents of American Samoa and Puerto Rico. 1040ez file online   If you are a nonresident alien employee who is a resident of American Samoa or Puerto Rico, wages for services performed in American Samoa or Puerto Rico are generally not subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico. 1040ez file online Residents of the U. 1040ez file online S. 1040ez file online Virgin Islands. 1040ez file online   Nonresident aliens who are bona fide residents of the U. 1040ez file online S Virgin Islands are not subject to withholding of U. 1040ez file online S. 1040ez file online tax on income earned while temporarily employed in the United States. 1040ez file online This is because those persons pay their income tax to the U. 1040ez file online S. 1040ez file online Virgin Islands. 1040ez file online To avoid having tax withheld on income earned in the United States, bona fide residents of the U. 1040ez file online S. 1040ez file online Virgin Islands should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U. 1040ez file online S. 1040ez file online Virgin Islands and expect to pay tax on all income to the U. 1040ez file online S. 1040ez file online Virgin Islands. 1040ez file online Withholding on Pensions If you receive a pension as a result of personal services performed in the United States, the pension income is subject to the 30% (or lower treaty) rate of withholding. 1040ez file online You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after December 31, 1986. 1040ez file online You must fill out Form W-8BEN and give it to the withholding agent or payer before the income is paid or credited to you. 1040ez file online Withholding on Tip Income Tips you receive during the year for services performed in the United States are subject to U. 1040ez file online S. 1040ez file online income tax. 1040ez file online Include them in taxable income. 1040ez file online In addition, tips received while working for one employer, amounting to $20 or more in a month, are subject to graduated withholding. 1040ez file online Independent Contractors If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding. 1040ez file online However, if you are engaged in a trade or business in the United States during the tax year, your compensation for personal services as an independent contractor (independent personal services) may be entirely or partly exempt from withholding if you reach an agreement with the Internal Revenue Service on the amount of withholding required. 1040ez file online An agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for payments covered by the agreement after it is agreed to by all parties. 1040ez file online You must agree to timely file an income tax return for the current tax year. 1040ez file online Central withholding agreements. 1040ez file online   If you are a nonresident alien entertainer or athlete performing or participating in athletic events in the United States, you may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. 1040ez file online Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability. 1040ez file online   File Form 13930 and the required attachments with the IRS to request a central withholding agreement. 1040ez file online Either you or your authorized representative can file the form. 1040ez file online It should be sent to the IRS at least 45 days before the tour begins or the event occurs. 1040ez file online Exceptions will be considered on a case by case basis. 1040ez file online   For more information on the CWA program, go to www. 1040ez file online irs. 1040ez file online gov/Individuals/International-Taxpayers/Central-Withholding-Agreements. 1040ez file online Final payment exemption. 1040ez file online   Your final payment of compensation during the tax year for independent personal services may be entirely or partly exempt from withholding. 1040ez file online This exemption is available only once during your tax year and applies to a maximum of $5,000 of compensation. 1040ez file online To obtain this exemption, you or your agent must give the following statements and information to the Commissioner or his delegate. 1040ez file online A statement by each withholding agent from whom you have received gross income effectively connected with a trade or business in the United States during the tax year, showing the amount of income paid and the tax withheld. 1040ez file online Each statement must be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. 1040ez file online A statement by the withholding agent from whom you expect to receive the final payment of compensation, showing the amount of the payment and the amount of tax that would be withheld if a final payment exemption were not granted. 1040ez file online This statement must also be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. 1040ez file online A statement by you that you do not intend to receive any other income effectively connected with a trade or business in the United States during the current tax year. 1040ez file online The amount of tax that has been withheld or paid under any other provision of the Internal Revenue Code or regulations for any income effectively connected with your trade or business in the United States during the current tax year. 1040ez file online The amount of your outstanding tax liabilities, if any, including interest and penalties, from the current tax year or prior tax periods. 1040ez file online Any provision of an income tax treaty under which a partial or complete exemption from withholding may be claimed, the country of your residence, and a statement of sufficient facts to justify an exemption under the treaty. 1040ez file online A statement signed by you, and verified by a declaration that it is made under penalties of perjury, that all the information given is true and that to your knowledge no relevant information has been omitted. 1040ez file online   If satisfied with the information, the IRS will determine the amount of your tentative income tax for the tax year on gross income effectively connected with your trade or business in the United States. 1040ez file online Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or his delegate. 1040ez file online   The Commissioner or his delegate will send you a letter, directed to the withholding agent, showing the amount of the final payment of compensation that is exempt from withholding and the amount that can be paid to you because of the exemption. 1040ez file online You must give two copies of the letter to the withholding agent and must also attach a copy of the letter to your income tax return for the tax year for which the exemption is effective. 1040ez file online Allowance for Personal Exemption Withholding on payments for independent personal services is generally based on the amount of your compensation payment minus the value of one exemption ($3,950 for 2014). 1040ez file online To determine the income for independent personal services performed in the United States to which the 30% (or lower treaty) rate will apply, you are allowed one personal exemption if you are not a U. 1040ez file online S. 1040ez file online national and are not a resident of Canada, Mexico, or South Korea. 1040ez file online For purposes of 30% withholding, the exemption is prorated at $10. 1040ez file online 82 a day in 2014 for the period that labor or personal services are performed in the United States. 1040ez file online To claim an exemption from withholding on the personal exemption amount, fill out the applicable parts of Form 8233 and give it to the withholding agent. 1040ez file online Example. 1040ez file online Eric Johannsen, who is a resident of Country X worked under a contract with a U. 1040ez file online S. 1040ez file online firm (not as an employee) in the United States for 100 days during 2014 before returning to his country. 1040ez file online He earned $6,000 for the services performed (not considered wages) in the United States. 1040ez file online Eric is married and has three dependent children. 1040ez file online His wife is not employed and has no income subject to U. 1040ez file online S. 1040ez file online tax. 1040ez file online The amount of the personal exemption to be allowed against the income for his personal services performed within the United States in 2014 is $1,082 (100 days × $10. 1040ez file online 82), and withholding at 30% is applied against the balance. 1040ez file online Thus, $1,475. 1040ez file online 40 in tax is withheld from Eric's earnings (30% of $4,918 ($6,000 − $1,082). 1040ez file online U. 1040ez file online S. 1040ez file online nationals or residents of Canada, Mexico, or South Korea. 1040ez file online   If you are a nonresident alien who is a resident of Canada, Mexico, or South Korea, or who is a national of the United States, you are subject to the same 30% withholding on your compensation for independent personal services performed in the United States. 1040ez file online However, if you are a U. 1040ez file online S. 1040ez file online national or a resident of Canada or Mexico, you are allowed the same personal exemptions as U. 1040ez file online S. 1040ez file online citizens. 1040ez file online For the 30% (or lower treaty) rate withholding, you can take $10. 1040ez file online 82 per day for each allowable exemption in 2014. 1040ez file online If you are a resident of South Korea, you are allowed personal exemptions for yourself and for your spouse and children who live with you in the United States at any time during the tax year. 1040ez file online However, the additional exemptions for your spouse and children must be further prorated as explained in chapter 5 under Exemptions . 1040ez file online Students and business apprentices from India. 1040ez file online   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are allowed an exemption for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. 1040ez file online S. 1040ez file online taxpayer's 2014 return. 1040ez file online You are also allowed an exemption for each dependent not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. 1040ez file online S. 1040ez file online citizens. 1040ez file online For the 30% (or lower treaty rate) withholding on compensation for independent personal services performed in the United States, you are allowed $10. 1040ez file online 82 per day for each allowable exemption in 2014. 1040ez file online Refund of Taxes Withheld in Error Multi-level marketing. 1040ez file online   If you are a distributor for a multi-level marketing company who had taxes withheld in error, file a U. 1040ez file online S. 1040ez file online income tax return (Form 1040NR, Form 1040NR-EZ, or Form 1120-F) or, if a tax return has already been filed, a claim for refund (Form 1040X or amended Form 1120-F) to recover the amount withheld in error. 1040ez file online You must also attach to the U. 1040ez file online S. 1040ez file online income tax return or claim for refund supporting information that includes, but is not limited to, the following items. 1040ez file online A copy of your Form W-2, Form 1042-S, or Form 1099 to prove the amount of taxes withheld. 1040ez file online A statement explaining why income reported on your Form W-2, Form 1042-S, or Form 1099 is not subject to U. 1040ez file online S. 1040ez file online taxation. 1040ez file online A statement listing all the dates you entered and left the United States during the taxable year. 1040ez file online If the compensation is multi-year compensation, the statement must list all the dates you entered and left the United States during each of the taxable years to which the compensation is attributable. 1040ez file online A copy of any documents or records that show the number of days you actually were present in the United States during the years listed. 1040ez file online A statement providing: (a) the number of days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection with recruiting, training, and supporting your lower-tier distributors; and (b) the total number of days (or unit of time less than a day, if appropriate) that personal services were performed globally in connection with recruiting, training, and supporting your lower-tier distributors. 1040ez file online Any further relevant document or record supporting your claim that the taxes were withheld in error. 1040ez file online Withholding From Other Income Other income subject to 30% withholding generally includes fixed or determinable income such as interest (other than portfolio interest), dividends, pensions and annuities, and gains from certain sales and exchanges, discussed in chapter 4. 1040ez file online It also includes 85% of social security benefits paid to nonresident aliens. 1040ez file online Refund of taxes withheld in error on social security benefits paid to resident aliens. 1040ez file online   Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. 1040ez file online For U. 1040ez file online S. 1040ez file online income tax purposes, green card holders continue to be resident aliens until their lawful permanent resident status under immigration laws is either taken away or is administratively or judicially determined to have been abandoned. 1040ez file online See Green Card Test in chapter 1. 1040ez file online If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. 1040ez file online SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. 1040ez file online If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. 1040ez file online You must also attach the following to your Form 1040 or 1040A. 1040ez file online A copy of Form SSA-1042S, Social Security Benefit Statement. 1040ez file online A copy of the “green card. 1040ez file online ” A signed declaration that includes the following statements: The SSA should not have withheld income tax from my social security benefits because I am a U. 1040ez file online S. 1040ez file online lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. 1040ez file online I am filing a U. 1040ez file online S. 1040ez file online income tax return for the tax year as a resident alien reporting all of my worldwide income. 1040ez file online I have not claimed benefits for the tax year under an income tax treaty as the resident of a country other than the United States. 1040ez file online Other income not subject to withholding of 30% (or lower treaty) rate. 1040ez file online   The following income is not subject to withholding at the 30% (or lower treaty) rate if you file Form W-8ECI with the payer of the income. 1040ez file online Income (other than compensation) that is effectively connected with your U. 1040ez file online S. 1040ez file online trade or business. 1040ez file online Income from real property that you choose to treat as effectively connected with a U. 1040ez file online S. 1040ez file online trade or business. 1040ez file online See Income From Real Property in chapter 4 for details about this choice. 1040ez file online   Special rules for withholding on partnership income, scholarships, and fellowships are explained next. 1040ez file online Tax Withheld on Partnership Income If you are a foreign partner in a U. 1040ez file online S. 1040ez file online or foreign partnership, the partnership will withhold tax on your share of effectively connected taxable income (ECTI) from the partnership. 1040ez file online You may be able to reduce your ECTI subject to withholding by certain partner-level deductions. 1040ez file online Generally, you must use Form 8804-C for this purpose. 1040ez file online See the Instructions for Form 8804-C for more information. 1040ez file online The withholding rate on your share of effectively connected income is generally the highest rate of tax specified under section 1 of the Code (39. 1040ez file online 6% for 2014). 1040ez file online However, the partnership may withhold at the highest rate that applies to a particular type of income allocable to you if you gave the partnership the appropriate documentation. 1040ez file online Long-term capital gain is an example of a particular type of income to which the highest tax rate applies. 1040ez file online Claim the tax withheld as a credit on your 2014 Form 1040NR. 1040ez file online The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. 1040ez file online A partnership that is publicly traded will withhold tax on your actual distributions of effectively connected income. 1040ez file online In this case the partnership will give you a statement on Form 1042-S, Foreign Person's U. 1040ez file online S. 1040ez file online Source Income Subject to Withholding. 1040ez file online Withholding on Scholarships and Fellowship Grants There is no withholding on a qualified scholarship received by a candidate for a degree. 1040ez file online See chapter 3. 1040ez file online If you are a nonresident alien student or grantee with an “F,” “J,” “M,” or “Q” visa and you receive a U. 1040ez file online S. 1040ez file online source grant or scholarship that is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax at 14% (or lower treaty rate) of the taxable part of the grant or scholarship that is not a payment for services. 1040ez file online However, if you are not a candidate for a degree and the grant does not meet certain requirements, tax will be withheld at the 30% (or lower treaty) rate. 1040ez file online Any part of a scholarship or fellowship grant that is a payment for services is subject to graduated withholding as discussed earlier under Withholding on Wages. 1040ez file online Alternate Withholding Procedure Your withholding agent may choose to use an alternate procedure by asking you to fill out Form W-4 and the Personal Allowances Worksheet (attached to Form W-4). 1040ez file online Use the following instructions instead of the Form W-4 instructions to complete the worksheet. 1040ez file online Line A. 1040ez file online   Enter the total of the following amounts on line A. 1040ez file online Personal exemption. 1040ez file online   Include the prorated part of your allowable personal exemption. 1040ez file online Figure the amount by multiplying the number of days you expect to be in the United States in 2014 by the daily exemption amount ($10. 1040ez file online 82). 1040ez file online Expenses. 1040ez file online   Include expenses that will be deductible on your return. 1040ez file online These include away-from-home expenses (meals, lodging, and transportation), certain state and local income taxes, charitable contributions, and casualty losses, discussed earlier under Itemized Deductions in chapter 5. 1040ez file online They also include business expenses, moving expenses, and the IRA deduction discussed under Deductions in chapter 5. 1040ez file online Nontaxable grant or scholarship. 1040ez file online   Include the part of your grant or scholarship that is not taxable under U. 1040ez file online S. 1040ez file online law or under a tax treaty. 1040ez file online Line B. 1040ez file online   Enter -0- unless the following paragraph applies to you. 1040ez file online   If you are a student who qualifies under Article 21(2) of the United States-India Income Tax Treaty, and you are not claiming deductions for away-from-home expenses or other itemized deductions (discussed earlier), enter the standard deduction on line B. 1040ez file online The standard deduction amount for 2013 is $6,100. 1040ez file online Lines C and D. 1040ez file online   Enter -0- on both lines unless the following paragraphs apply to you. 1040ez file online   If you are a resident of Canada, Mexico, South Korea, or a U. 1040ez file online S. 1040ez file online national, an additional daily exemption amount may be allowed for your spouse and each of your dependents. 1040ez file online   If you are a resident of India who is eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you can claim an additional daily exemption amount for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. 1040ez file online S. 1040ez file online taxpayer's 2014 return. 1040ez file online You can also claim an additional amount for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. 1040ez file online S. 1040ez file online citizens. 1040ez file online   Enter any additional amount for your spouse on line C. 1040ez file online Enter any additional amount for your dependents on line D. 1040ez file online Lines E, F, and G. 1040ez file online   No entries should be made on lines E, F, and G. 1040ez file online Line H. 1040ez file online   Add the amounts on lines A through D and enter the total on line H. 1040ez file online Form W-4. 1040ez file online   Complete lines 1 through 4 of Form W-4. 1040ez file online Sign and date the form and give it with the Personal Allowances Worksheet to your withholding agent. 1040ez file online   If you file a Form W-4 to reduce or eliminate the withholding on your scholarship or grant, you must file an annual U. 1040ez file online S. 1040ez file online income tax return to be allowed the exemptions and deductions you claimed on that form. 1040ez file online If you are in the United States during more than one tax year, you must attach a statement to your yearly Form W-4 indicating that you have filed a U. 1040ez file online S. 1040ez file online income tax return for the previous year. 1040ez file online If you have not been in the United States long enough to be required to file a return, you must attach a statement to your Form W-4 saying you will file a U. 1040ez file online S. 1040ez file online income tax return when required. 1040ez file online After the withholding agent has accepted your Form W-4, tax will be withheld on your scholarship or grant at the graduated rates that apply to wages. 1040ez file online The gross amount of the income is reduced by the amount on line H of the worksheet and the withholding tax is figured on the remainder. 1040ez file online You will receive a Form 1042-S from the withholding agent (usually the payer of your grant) showing the gross amount of your taxable scholarship or fellowship grant less the withholding allowance amount, the tax rate, and the amount of tax withheld. 1040ez file online Use this form to prepare your annual U. 1040ez file online S. 1040ez file online income tax return. 1040ez file online Income Entitled to Tax Treaty Benefits If a tax treaty between the United States and your country provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payor of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. 1040ez file online Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent. 1040ez file online File Form W-8BEN for income that is not personal services income. 1040ez file online File Form 8233 for personal services income as discussed next. 1040ez file online Employees and independent contractors. 1040ez file online   If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal service income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received. 1040ez file online   Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. 1040ez file online This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. 1040ez file online In this case, you must file Form 1040NR (or Form 1040NR-EZ if you qualify) to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption. 1040ez file online Students, teachers, and researchers. 1040ez file online   Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. 1040ez file online For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties. 1040ez file online   If you received a scholarship or fellowship and personal services income from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income. 1040ez file online Special events and promotions. 1040ez file online   Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from rock music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. 1040ez file online Form 13930 is used to request a reduction in withholding. 1040ez file online Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. 1040ez file online One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year. 1040ez file online You will be required to pay U. 1040ez file online S. 1040ez file online tax, at the time of your departure from the United States, on any income for which you incorrectly claimed a treaty exemption. 1040ez file online For more details on treaty provisions that apply to compensation, see Publication 901. 1040ez file online Tax Withheld on Real Property Sales If you are a nonresident alien and you dispose of a U. 1040ez file online S. 1040ez file online real property interest, the transferee (buyer) of the property generally must withhold a tax equal to 10% of the amount realized on the disposition. 1040ez file online A distribution by a qualified investment entity to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U. 1040ez file online S. 1040ez file online real property interest by the shareholder is subject to withholding at 35%. 1040ez file online Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. 1040ez file online These rules are covered in Publication 515. 1040ez file online For information on the tax treatment of dispositions of U. 1040ez file online S. 1040ez file online real property interests, see Real Property Gain or Loss in chapter 4. 1040ez file online If you are a partner in a domestic partnership, and the partnership disposes of a U. 1040ez file online S. 1040ez file online real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. 1040ez file online Your share of the income and tax withheld will be reported to you on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U. 1040ez file online S. 1040ez file online Source Income Subject to Withholding (in the case of a publicly traded partnership). 1040ez file online Withholding is not required in the following situations. 1040ez file online The property is acquired by the buyer for use as a residence and the amount realized (sales price) is not more than $300,000. 1040ez file online The property disposed of is an interest in a domestic corporation if any class of stock of the corporation is regularly traded on an established securities market. 1040ez file online However, this exception does not apply to certain dispositions of substantial amounts of non-publicly traded interests in publicly traded corporations. 1040ez file online The property disposed of is an interest in a U. 1040ez file online S. 1040ez file online corporation that is not regularly traded on an established market and you (the seller) give the buyer a copy of a statement issued by the corporation certifying that the interest is not a U. 1040ez file online S. 1040ez file online real property interest. 1040ez file online You (the seller) give the buyer a certification stating, under penalties of perjury, that you are not a foreign person, and containing your name, U. 1040ez file online S. 1040ez file online taxpayer identification number, and home address. 1040ez file online You can give the certification to a qualified substitute. 1040ez file online The qualified substitute gives the buyer a statement, under penalties of perjury, that the certification is in the possession of the qualified substitute. 1040ez file online For this purpose, a qualified substitute is (a) the person (including any attorney or title company) responsible for closing the transaction, other than your agent, and (b) the buyer's agent. 1040ez file online The buyer receives a withholding certificate from the Internal Revenue Service. 1040ez file online You give the buyer written notice that you are not required to recognize any gain or loss on the transfer because of a nonrecognition provision in the Internal Revenue Code or a provision in a U. 1040ez file online S. 1040ez file online tax treaty. 1040ez file online The buyer must file a copy of the notice with the Ogden Service Center, P. 1040ez file online O. 1040ez file online Box 409101, Ogden, UT 84409. 1040ez file online You must verify the notice as true and sign it under penalties of perjury. 1040ez file online The notice must contain the following information. 1040ez file online A statement that the notice is a notice of nonrecognition under regulation section 1. 1040ez file online 1445-2(d)(2). 1040ez file online Your name, taxpayer identification number, and home address. 1040ez file online A statement that you are not required to recognize any gain or loss on the transfer. 1040ez file online A brief description of the transfer. 1040ez file online A brief summary of the law and facts supporting your claim that recognition of gain or loss is not required. 1040ez file online You may not give the buyer a written notice for any of the following transfers: the sale of your main home on which you exclude gain, a like-kind exchange that does not qualify for nonrecognition treatment in its entirety, or a deferred like-kind exchange that has not been completed at the time the buyer must file Form 8288. 1040ez file online Instead, a withholding certificate (described next) must be obtained. 1040ez file online The amount you realize on the transfer of a U. 1040ez file online S. 1040ez file online real property interest is zero. 1040ez file online The property is acquired by the United States, a U. 1040ez file online S. 1040ez file online state or possession, a political subdivision, or the District of Columbia. 1040ez file online The distribution is from a domestically controlled qualified investment entity (QIE) and is treated as a distribution of a U. 1040ez file online S. 1040ez file online real property interest only because an interest in the entity was disposed of in an applicable wash sale transaction. 1040ez file online For the definition of a QIE, see Qualified investment entities under Real Property Gain or Loss, earlier. 1040ez file online See Wash sale under Real Property Gain or Loss in chapter 4. 1040ez file online The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified substitute has actual knowledge, or receives notice from a seller's or buyer's agent (or substitute), that they are false. 1040ez file online This also applies to the qualified substitute's statement under (4). 1040ez file online Withholding certificates. 1040ez file online   The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. 1040ez file online Either you or the buyer can request a withholding certificate. 1040ez file online   A withholding certificate can be issued due to any of the following. 1040ez file online The IRS determines that reduced withholding is appropriate because either: The amount required to be withheld would be more than your maximum tax liability, or Withholding of the reduced amount would not jeopardize collection of the tax. 1040ez file online All of your realized gain is exempt from U. 1040ez file online S. 1040ez file online tax. 1040ez file online You or the buyer enters into an agreement for the payment of tax providing security for the tax liability. 1040ez file online   Get Publication 515 and Form 8288-B for information on procedures to request a withholding certificate. 1040ez file online Credit for tax withheld. 1040ez file online   The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288, U. 1040ez file online S. 1040ez file online Withholding Tax Return for Dispositions by Foreign Persons of U. 1040ez file online S. 1040ez file online Real Property Interests. 1040ez file online This form is filed with the IRS with copies A and B of Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. 1040ez file online S. 1040ez file online Real Property Interests. 1040ez file online Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your taxpayer identification number (TIN). 1040ez file online You must file Copy B with your tax return to take credit for the tax withheld. 1040ez file online   A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. 1040ez file online The IRS will send you a letter requesting the TIN and providing instructions for how to get a TIN. 1040ez file online When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A. 1040ez file online Social Security and Medicare Taxes If you work as an employee in the United States, you must pay social security and Medicare taxes in most cases. 1040ez file online Your payments of these taxes contribute to your coverage under the U. 1040ez file online S. 1040ez file online social security system. 1040ez file online Social security coverage provides retirement benefits, survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who meet certain eligibility requirements. 1040ez file online In most cases, the first $113,700 of taxable wages received in 2013 for services performed in the United States is subject to social security tax. 1040ez file online All taxable wages are subject to Medicare tax. 1040ez file online Your employer deducts these taxes from each wage payment. 1040ez file online Your employer must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. 1040ez file online You can claim a credit for excess social security tax on your income tax return if you have more than one employer and the amount deducted from your combined wages for 2013 is more than $7,049. 1040ez file online 40. 1040ez file online Use the appropriate worksheet in chapter 3 of Publication 505, Tax Withholding and Estimated Tax, to figure your credit. 1040ez file online If any one employer deducted more than $7,049. 1040ez file online 40, you cannot claim a credit for that amount. 1040ez file online Ask your employer to refund the excess. 1040ez file online If your employer does not refund the excess, you can file a claim for refund using Form 843. 1040ez file online In general, U. 1040ez file online S. 1040ez file online social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. 1040ez file online In limited situations, these taxes apply to wages for services performed outside the United States. 1040ez file online Your employer should be able to tell you if social security and Medicare taxes apply to your wages. 1040ez file online You cannot make voluntary payments if no taxes are due. 1040ez file online Additional Medicare Tax. 1040ez file online   Beginning in 2013, in addition to the Medicare tax, a 0. 1040ez file online 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $250,000 if married filing jointly, $125,000 if married filing separately, or $200,000 for any other filing status. 1040ez file online   There are no special rules for nonresident aliens for purposes of Additional Medicare Tax. 1040ez file online Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. 1040ez file online   Your employer is responsible for withholding the 0. 1040ez file online 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in the calendar year. 1040ez file online If you intend to file a joint return and you anticipate that you and your spouse's individual wages are not going to be more than $200,000 but your combined wages and self-employment income are going to be more than $250,000, you may want to request additional withholding on Form W-4 and/or make estimated tax payments. 1040ez file online   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). 1040ez file online    See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. 1040ez file online For more information on Additional Medicare Tax, go to IRS. 1040ez file online gov and enter “Additional Medicare Tax” in the search box. 1040ez file online   Self-employed individuals may also be required to pay Additional Medicare Tax. 1040ez file online See Self-Employment Tax , later. 1040ez file online Students and Exchange Visitors Generally, services performed by you as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. 1040ez file online This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. 1040ez file online These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment. 1040ez file online Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien as discussed in chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the same. 1040ez file online Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security. 1040ez file online Nonresident Alien Students If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. 1040ez file online In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. 1040ez file online Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien. 1040ez file online Any student who is enrolled and regularly attending classes at a school may be exempt from social security and Medicare taxes on pay for services performed for that school. 1040ez file online The U. 1040ez file online S. 1040ez file online Citizenship and Immigration Services (USCIS) permits on-campus work for students in “F-1” status if it does not displace a U. 1040ez file online S. 1040ez file online resident. 1040ez file online On-campus work means work performed on the school's premises. 1040ez file online On-campus work includes work performed at an off-campus location that is educationally affiliated with the school. 1040ez file online On-campus work under the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study and is permitted by the USCIS. 1040ez file online Social security and Medicare taxes are not withheld from pay for this work unless the student is considered a resident alien. 1040ez file online If services performed by a nonresident alien student are not considered as performed to carry out the purpose for which the student was admitted to the United States, social security and Medicare taxes will be withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. 1040ez file online Exchange Visitors Exchange visitors are temporarily admitted to the United States under section 101(a)(15)(J) of the Immigration and Nationality Act. 1040ez file online Social security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien. 1040ez file online If services performed by an exchange visitor are not considered as performed to carry out the purpose for which the visitor was admitted to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. 1040ez file online Nonresident aliens temporarily admitted to the United States as participants in international cultural exchange programs under section 101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and Medicare taxes. 1040ez file online The employer must be the petitioner through whom the alien obtained the “Q” visa. 1040ez file online Social security and Medicare taxes are not withheld from pay for this work unless the alien is considered a resident alien. 1040ez file online Refund of Taxes Withheld in Error If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. 1040ez file online If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. 1040ez file online Attach the following items to Form 843. 1040ez file online A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld. 1040ez file online A copy of your visa. 1040ez file online Form I-94 (or other documentation showing your dates of arrival or departure). 1040ez file online If you have an F-1 visa, documentation showing permission to work in the U. 1040ez file online S. 1040ez file online If you have a J-1 visa, documentation showing permission to work in the U. 1040ez file online S. 1040ez file online If you are engaged in optional practical training or employment due to severe economic necessity, documentation showing permission to work in the U. 1040ez file online S. 1040ez file online A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. 1040ez file online If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer or on Form 8316 claiming your employer will not issue the refund. 1040ez file online If you were exempt from social security and Medicare tax for only part of the year, pay statements showing the tax paid during the period you were exempt. 1040ez file online File Form 843 (with attachments) with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0038. 1040ez file online Do not use Form 843 to request a refund of Additional Medicare Tax. 1040ez file online If Additional Medicare Tax was withheld from your pay in error, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959 with Form 1040 or 1040NR. 1040ez file online If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040 or 1040NR, you must file Form 1040X, Amended U. 1040ez file online S. 1040ez file online Individual Income Tax Return, for the prior year in which the wages or compensation were originally received to recover the Additional Medicare Tax withheld in error. 1040ez file online See the Instructions for Form 1040X. 1040ez file online Agricultural Workers Agricultural workers temporarily admitted into the United States on H-2A visas are exempt from social security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. 1040ez file online You can find more information about not having tax withheld at www. 1040ez file online irs. 1040ez file online gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. 1040ez file online Self-Employment Tax Self-employment tax is the social security and Medicare taxes for individuals who are self-employed. 1040ez file online Nonresident aliens are not subject to self-employment tax unless an international social security agreement in effect determines that they are covered under the U. 1040ez file online S. 1040ez file online social security system. 1040ez file online Residents of the U. 1040ez file online S. 1040ez file online Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are considered U. 1040ez file online S. 1040ez file online residents for this purpose and are subject to the self-employment tax. 1040ez file online Resident aliens must pay self-employment tax under the same rules that apply to U. 1040ez file online S. 1040ez file online citizens. 1040ez file online However, a resident alien employed by an international organization, a foreign government, or a wholly-owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States. 1040ez file online Self-employment income you receive while you are a resident alien is subject to self-employment tax even if it was paid for services you performed as a nonresident alien. 1040ez file online Example. 1040ez file online Bill Jones is an author engaged in the business of writing books. 1040ez file online Bill had several books published in a foreign country while he was a citizen and resident of that country. 1040ez file online During 2013, Bill entered the United States as a resident alien. 1040ez file online After becoming a U. 1040ez file online S. 1040ez file online resident, he continued to receive royalties from his foreign publisher. 1040ez file online Bill reports his income and expenses on the cash basis (he reports income on his tax return when received and deducts expenses when paid). 1040ez file online Bill's 2013 self-employment income includes the royalties received after he became a U. 1040ez file online S. 1040ez file online resident even though the books were published while he was a nonresident alien. 1040ez file online This royalty income is subject to self-employment tax. 1040ez file online Reporting self-employment tax. 1040ez file online   Use Schedule SE (Form 1040) to report and figure your self-employment tax. 1040ez file online Then enter the tax on Form 1040, line 56, or Form 1040NR, line 54. 1040ez file online Attach Schedule SE to Form 1040 or Form 1040NR. 1040ez file online Additional Medicare Tax. 1040ez file online   Self-employed individuals must pay a 0. 1040ez file online 9% Additional Medicare Tax on self-employment income that exceeds one of the following threshold amounts (based on your filing status): Married filing jointly — $250,000; Married filing separately — $125,000; Single, Head of household, or Qualifying widow(er) — $200,000. 1040ez file online   If you have both wages and self-employment income, the threshold amount for applying the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. 1040ez file online A self-employment loss should not be considered for purposes of this tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). 1040ez file online   See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. 1040ez file online For more information on Additional Medicare Tax, go to IRS. 1040ez file online gov and enter “Additional Medicare Tax” in the search box. 1040ez file online Deduction for employer-equivalent portion of self-employment tax. 1040ez file online   If you must pay self-employment tax, you can deduct a portion of the self-employment tax paid in figuring your adjusted gross income. 1040ez file online This deduction is figured on Schedule SE (Form 1040). 1040ez file online Note. 1040ez file online No portion of the Additional Medicare Tax is deductible for self-employment tax. 1040ez file online More information. 1040ez file online   Get Publication 334, Tax Guide for Small Business, for more information about self-employment tax. 1040ez file online International Social Security Agreements The United States has entered into social security agreements with foreign countries to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries. 1040ez file online These agreements are commonly referred to as totalization agreements. 1040ez file online Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. 1040ez file online The agreements generally make sure that social security taxes (including self-employment tax) are paid only to one country. 1040ez file online Agreements are in effect with the following countries. 1040ez file online Australia. 1040ez file online Austria. 1040ez file online Belgium. 1040ez file online Canada. 1040ez file online Chile. 1040ez file online Czech Republic. 1040ez file online Denmark. 1040ez file online Finland. 1040ez file online France. 1040ez file online Germany. 1040ez file online Greece. 1040ez file online Ireland. 1040ez file online Italy. 1040ez file online Japan. 1040ez file online Korea, South. 1040ez file online Luxembourg. 1040ez file online The Netherlands. 1040ez file online Norway. 1040ez file online Poland. 1040ez file online Portugal. 1040ez file online Spain. 1040ez file online Sweden. 1040ez file online Switzerland. 1040ez file online The United Kingdom. 1040ez file online Agreements with other countries are expected to enter into force in the future. 1040ez file online Employees. 1040ez file online   Generally, under these agreements, you are subject to social security taxes only in the country where you are working. 1040ez file online However, if you are temporarily sent to work for the same employer in the United States and your pay would normally be subject to social security taxes in both countries, most agreements provide that you remain covered only by the social security system of the country from which you were sent. 1040ez file online You can get more information on any agreement by contacting the U. 1040ez file online S. 1040ez file online Social Security Administration at the address given later. 1040ez file online If you have access to the Internet, you can get more information at www. 1040ez file online socialsecurity. 1040ez file online gov/international. 1040ez file online   To establish that your pay is subject only to foreign social security taxes and is exempt from U. 1040ez file online S. 1040ez file online social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage from the appropriate agency of the foreign country. 1040ez file online This will usually be the same agency to which you or your employer pays your foreign social security taxes. 1040ez file online The foreign agency will be able to tell you what information is needed for them to issue the certificate. 1040ez file online Your employer should keep a copy of the certificate because it may be needed to show why you are exempt from U. 1040ez file online S. 1040ez file online social security taxes. 1040ez file online Only wages paid on or after the effective date of the agreement can be exempt from U. 1040ez file online S. 1040ez file online social security taxes. 1040ez file online    Some of the countries with which the United States has agreements will not issue certificates of coverage. 1040ez file online In this case, either you or your employer should request a statement that your wages are not covered by the U. 1040ez file online S. 1040ez file online social security system. 1040ez file online Request the statement from the following address. 1040ez file online U. 1040ez file online S. 1040ez file online Social Security Administration Office of International Programs P. 1040ez file online O. 1040ez file online Box 17741 Baltimore, MD 21235-7741 Self-employed individuals. 1040ez file online   Under most agreements, self-employed individuals are covered by the social security system of the country where they reside. 1040ez file online However, under some agreements, you may be exempt from U. 1040ez file online S. 1040ez file online self-employment tax if you temporarily transfer your business activity to or from the United States. 1040ez file online   If you believe that your self-employment income is subject only to U. 1040ez file online S. 1040ez file online self-employment tax and is exempt from foreign social security taxes, request a certificate of coverage from the U. 1040ez file online S. 1040ez file online Social Security Administration at the address given earlier. 1040ez file online This certificate will establish your exemption from foreign social security taxes. 1040ez file online   To establish that your self-employment income is subject only to foreign social security taxes and is exempt from U. 1040ez file online S. 1040ez file online self-employment tax, request a certificate of coverage from the appropriate agency of the foreign country. 1040ez file online If the foreign country will not issue the certificate, you should request a statement that your income is not covered by the U. 1040ez file online S. 1040ez file online social security system. 1040ez file online Request it from the U. 1040ez file online S. 1040ez file online Social Security Administration at the address given earlier. 1040ez file online Attach a photocopy of either statement to Form 1040 each year you are exempt. 1040ez file online Also print “Exempt, see attached statement” on the line for self-employment tax. 1040ez file online Estimated Tax Form 1040-ES (NR) You may have income from which no U. 1040ez file online S. 1040ez file online income tax is withheld. 1040ez file online Or the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. 1040ez file online If so, you may have to pay estimated tax. 1040ez file online Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax and you expect your withholding and certain refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 income tax return, or 100% of the tax shown on your 2013 income tax return (if your 2013 return covered all 12 months of the year). 1040ez file online If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above if you are not a farmer or fisherman. 1040ez file online Item (2) does not apply if you did not file a 2013 return. 1040ez file online A nonresident alien should use Form 1040-ES (NR) to figure and pay estimated tax. 1040ez file online If you pay by check, make it payable to the "United States Treasury. 1040ez file online " How to estimate your tax for 2014. 1040ez file online   If you filed a 2013 return on Form 1040NR or Form 1040NR-EZ and expect your income, number of exemptions, and total deductions for 2014 to be nearly the same, you should use your 2013 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR) instructions. 1040ez file online If you did not file a return for 2013, or if your income, exemptions, deductions, or credits will be different for 2014, you must estimate these amounts. 1040ez file online Figure your estimated tax liability using the Tax Rate Schedule in the 2014 Form 1040-ES (NR) instructions for your filing status. 1040ez file online Note. 1040ez file online If you expect to be a resident of Puerto Rico during the entire year, use Form 1040-ES or Formulario 1040-ES (PR). 1040ez file online When to pay estimated tax. 1040ez file online   Make your first estimated tax payment by the due date for filing the previous year's Form 1040NR or Form 1040NR-EZ. 1040ez file online If you have wages subject to the same withholding rules that apply to U. 1040ez file online S. 1040ez file online citizens, you must file Form 1040NR or Form 1040NR-EZ and make your first estimated tax payment by April 15, 2014. 1040ez file online If you do not have wages subject to withholding, file your income tax return and make your first estimated tax payment by June 16, 2014. 1040ez file online   If your first estimated tax payment is due April 15, 2014, you can pay your estimated tax in full at that time or in four equal installments by the dates shown next. 1040ez file online 1st installment April 15, 2014 2nd installment June 16, 2014 3rd installment Sept. 1040ez file online 15, 2014 4th installment Jan. 1040ez file online 15, 2015 If your first payment is not due until June 16, 2014, you can pay your estimated tax in full at that time or: ½ of your estimated tax by June 16, 2014, 1/4 of the tax by September 15, 2014, and 1/4 by January 15, 2015. 1040ez file online    You do not have to make the payment due January 15, 2015, if you file your 2014 Form 1040NR or 1040NR-EZ by February 2, 2015, and pay the entire balance due with your return. 1040ez file online Fiscal year. 1040ez file online   If your return is not on a calendar year basis, your due dates are the 15th day of the 4th, 6th, and 9th months of your fiscal year, and the 1st month of the following fiscal year. 1040ez file online If any date falls on a Saturday, Sunday, or legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday. 1040ez file online Changes in income, deductions, or exemptions. 1040ez file online   Even if you are not required to make an estimated tax payment in April or June, your circumstances may change so that you will have to make estimated tax payments later. 1040ez file online This can happen if you receive additional income or if any of your deductions are reduced or eliminated. 1040ez file online If so, see the instructions for Form 1040-ES (NR) and Publication 505 for information on figuring your estimated tax. 1040ez file online Amended estimated tax. 1040ez file online   If, after you have made estimated tax payments, you find your estimated tax is substantially increased or decreased because of a change in your income or exemptions, you should adjust your remaining estimated tax payments. 1040ez file online To do this, see the instructions for Form 1040-ES (NR) and Publication 505. 1040ez file online Penalty for failure to pay estimated income tax. 1040ez file online   You will be subject to a penalty for underpayment of installments of estimated tax except in certain situations. 1040ez file online These situations are explained on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. 1040ez file online Prev  Up  Next   Home   More Online Publications