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2011 Irs Form 8863

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2011 Irs Form 8863

2011 irs form 8863 2. 2011 irs form 8863   Accounting Methods Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Accounting MethodsCash Method Accrual Method Farm Inventory Cash Versus Accrual Method Special Methods of Accounting Combination Method Changes in Methods of Accounting Introduction You must use an accounting method that clearly shows your income and expenses. 2011 irs form 8863 You must also figure your taxable income and file an income tax return for an annual accounting period called a tax year. 2011 irs form 8863 This chapter discusses accounting methods. 2011 irs form 8863 For information on accounting periods, see Publication 538, Accounting Periods and Methods, and the Instructions for Form 1128, Application To Adopt, Change, or Retain a Tax Year. 2011 irs form 8863 Topics - This chapter discusses: Cash method Accrual method Farm inventory Special methods of accounting Changes in methods of accounting Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 535 Business Expenses Form (and Instructions) 1128 Application To Adopt, Change, or Retain a Tax Year 3115 Application for Change in Accounting Method See chapter 16 for information about getting publications and forms. 2011 irs form 8863 Accounting Methods An accounting method is a set of rules used to determine when and how your income and expenses are reported on your tax return. 2011 irs form 8863 Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item. 2011 irs form 8863 A material item is one that affects the proper time for inclusion of income or allowance of a deduction. 2011 irs form 8863 An item considered material for financial statement purposes is generally also considered material for income tax purposes. 2011 irs form 8863 See Publication 538 for more information. 2011 irs form 8863 You generally choose an accounting method for your farm business when you file your first income tax return that includes a Schedule F (Form 1040), Profit or Loss From Farming. 2011 irs form 8863 If you later want to change your accounting method, you generally must get IRS approval. 2011 irs form 8863 How to obtain IRS approval is discussed later under Changes in Methods of Accounting . 2011 irs form 8863 Types of accounting methods. 2011 irs form 8863   Generally, you can use any of the following accounting methods. 2011 irs form 8863 Each method is discussed in detail below. 2011 irs form 8863 Cash method. 2011 irs form 8863 Accrual method. 2011 irs form 8863 Special methods of accounting for certain items of income and expenses. 2011 irs form 8863 Combination (hybrid) method using elements of two or more of the above. 2011 irs form 8863 Business and other items. 2011 irs form 8863   You can account for business and personal items using different accounting methods. 2011 irs form 8863 For example, you can figure your business income under an accrual method, even if you use the cash method to figure personal items. 2011 irs form 8863 Two or more businesses. 2011 irs form 8863   If you operate two or more separate and distinct businesses, you can use a different accounting method for each business. 2011 irs form 8863 Generally, no business is separate and distinct unless a complete and separate set of books and records is maintained for each business. 2011 irs form 8863 Cash Method Most farmers use the cash method because they find it easier to keep records using the cash method. 2011 irs form 8863 However, certain farm corporations and partnerships and all tax shelters must use an accrual method of accounting. 2011 irs form 8863 See Accrual Method Required , later. 2011 irs form 8863 Income Under the cash method, include in your gross income all items of income you actually or constructively received during the tax year. 2011 irs form 8863 Items of income include money received as well as property or services received. 2011 irs form 8863 If you receive property or services, you must include the fair market value (FMV) of the property or services in income. 2011 irs form 8863 See chapter 3 for information on how to report farm income on your income tax return. 2011 irs form 8863 Constructive receipt. 2011 irs form 8863   Income is constructively received when an amount is credited to your account or made available to you without restriction. 2011 irs form 8863 You do not need to have possession of the income for it to be treated as income for the tax year. 2011 irs form 8863 If you authorize someone to be your agent and receive income for you, you are considered to have received the income when your agent receives it. 2011 irs form 8863 Income is not constructively received if your receipt of the income is subject to substantial restrictions or limitations. 2011 irs form 8863 Direct payments and counter-cyclical payments. 2011 irs form 8863   If you received direct payments or counter-cyclical payments under Subtitle A or C of the Farm Security and Rural Investment Act of 2002, you will not be considered to have constructively received a payment merely because you had the option to receive it in the year before it is required to be paid. 2011 irs form 8863 Delaying receipt of income. 2011 irs form 8863   You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. 2011 irs form 8863 You must report the income in the year the money or property is received or made available to you without restriction. 2011 irs form 8863 Example. 2011 irs form 8863 Frances Jones, a farmer, was entitled to receive a $10,000 payment on a grain contract in December 2013. 2011 irs form 8863 She was told in December that her payment was available. 2011 irs form 8863 She requested not to be paid until January 2014. 2011 irs form 8863 However, she must still include this payment in her 2013 income because it was made available to her in 2013. 2011 irs form 8863 Debts paid by another person or canceled. 2011 irs form 8863   If your debts are paid by another person or are canceled by your creditors, you may have to report part or all of this debt relief as income. 2011 irs form 8863 If you receive income in this way, you constructively receive the income when the debt is canceled or paid. 2011 irs form 8863 See Cancellation of Debt in chapter 3. 2011 irs form 8863 Deferred payment contract. 2011 irs form 8863   If you sell an item under a deferred payment contract that calls for payment in a future year, there is no constructive receipt in the year of sale. 2011 irs form 8863 However, if the sales contract states that you have the right to the proceeds of the sale from the buyer at any time after delivery of the item, then you must include the sales price in income in the year of the sale, regardless of when you actually receive payment. 2011 irs form 8863 Example. 2011 irs form 8863 You are a farmer who uses the cash method and a calendar tax year. 2011 irs form 8863 You sell grain in December 2013 under a bona fide arm's-length contract that calls for payment in 2014. 2011 irs form 8863 You include the proceeds from the sale in your 2014 gross income since that is the year payment is received. 2011 irs form 8863 However, if the contract states that you have the right to the proceeds from the buyer at any time after the grain is delivered, you must include the sales price in your 2013 income, regardless of when you actually receive payment. 2011 irs form 8863 Repayment of income. 2011 irs form 8863   If you include an amount in income and in a later year you have to repay all or part of it, then you can usually deduct the repayment in the year repaid. 2011 irs form 8863 If the repayment is more than $3,000, a special rule applies. 2011 irs form 8863 For details, see Repayments in chapter 11 of Publication 535, Business Expenses. 2011 irs form 8863 Expenses Under the cash method, generally you deduct expenses in the tax year you pay them. 2011 irs form 8863 This includes business expenses for which you contest liability. 2011 irs form 8863 However, you may not be able to deduct an expense paid in advance or you may be required to capitalize certain costs, as explained under Uniform Capitalization Rules in chapter 6. 2011 irs form 8863 See chapter 4 for information on how to deduct farm business expenses on your income tax return. 2011 irs form 8863 Prepayment. 2011 irs form 8863   Generally, you cannot deduct expenses paid in advance. 2011 irs form 8863 This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. 2011 irs form 8863 Example. 2011 irs form 8863 On November 1, 2013, you signed and paid $3,600 for a 3-year (36-month) insurance contract for equipment. 2011 irs form 8863 In 2013, you are allowed to deduct only $200 (2/36 x $3,600) of the cost of the policy that is attributable to 2013. 2011 irs form 8863 In 2014, you'll be able to deduct $1,200 (12/36 x $3,600); in 2015, you'll be able to deduct $1,200 (12/36 x $3,600); and in 2016 you'll be able to deduct the remaining balance of $1,000. 2011 irs form 8863 An exception applies if the expense qualifies for the 12-month rule. 2011 irs form 8863 See Publication 538 for more information and examples. 2011 irs form 8863 See chapter 4 for special rules for prepaid farm supplies and prepaid livestock feed. 2011 irs form 8863 Accrual Method Under an accrual method of accounting, you generally report income in the year earned and deduct or capitalize expenses in the year incurred. 2011 irs form 8863 The purpose of an accrual method of accounting is to correctly match income and expenses. 2011 irs form 8863 Certain businesses engaged in farming must use an accrual method of accounting for its farm business and for sales and purchases of inventory items. 2011 irs form 8863 See Accrual Method Required and Farm Inventory , later. 2011 irs form 8863 Income Generally, you include an amount in income for the tax year in which all events that fix your right to receive the income have occurred, and you can determine the amount with reasonable accuracy. 2011 irs form 8863 Under this rule, include an amount in income on the earliest of the following dates. 2011 irs form 8863 When you receive payment. 2011 irs form 8863 When the income amount is due to you. 2011 irs form 8863 When you earn the income. 2011 irs form 8863 When title passes. 2011 irs form 8863 If you use an accrual method of accounting, complete Part III of Schedule F (Form 1040) to report your income. 2011 irs form 8863 Inventory. 2011 irs form 8863   If you keep an inventory, generally you must use an accrual method of accounting to determine your gross income. 2011 irs form 8863 An inventory is necessary to clearly show income when the production, purchase, or sale of merchandise is an income-producing factor. 2011 irs form 8863 See Publication 538 for more information. 2011 irs form 8863 Also see Farm Inventory , later, for more information on items that must be included in inventory by farmers and inventory valuation methods for farmers. 2011 irs form 8863 Expenses Under an accrual method of accounting, you generally deduct or capitalize a business expense when both of the following apply. 2011 irs form 8863 The all-events test has been met. 2011 irs form 8863 This test is met when: All events have occurred that fix the fact that you have a liability, and The amount of the liability can be determined with reasonable accuracy. 2011 irs form 8863 Economic performance has occurred. 2011 irs form 8863 Economic performance. 2011 irs form 8863   Generally, you cannot deduct or capitalize a business expense until economic performance occurs. 2011 irs form 8863 If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided or as the property is used. 2011 irs form 8863 If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. 2011 irs form 8863 Example. 2011 irs form 8863 Jane, who is a farmer, uses a calendar tax year and an accrual method of accounting. 2011 irs form 8863 She entered into a contract with ABC Farm Consulting in 2012. 2011 irs form 8863 The contract stated that Jane pay ABC Farm Consulting $2,000 in December 2012. 2011 irs form 8863 It further stipulates that ABC Farm Consulting will develop a plan for integrating her farm with a larger farm operation based in a neighboring state by March 1, 2013. 2011 irs form 8863 Jane paid ABC Farm Consulting $2,000 in December 2012. 2011 irs form 8863 Integration of operations according to the plan began in May 2013 and they completed the integration in December 2013. 2011 irs form 8863 Economic performance for Jane's liability in the contract occurs as the services are provided. 2011 irs form 8863 Jane incurs the $2,000 cost in 2013. 2011 irs form 8863 An exception to the economic performance rule allows certain recurring items to be treated as incurred during a tax year even though economic performance has not occurred. 2011 irs form 8863 For more information, see Economic Performance in Publication 538. 2011 irs form 8863 Special rule for related persons. 2011 irs form 8863   Business expenses and interest owed to a related person who uses the cash method of accounting are not deductible until you make the payment and the corresponding amount is includible in the related person's gross income. 2011 irs form 8863 Determine the relationship for this rule as of the end of the tax year for which the expense or interest would otherwise be deductible. 2011 irs form 8863 For more information, see Internal Revenue Code section 267. 2011 irs form 8863 Accrual Method Required Generally, the following businesses, if engaged in farming, must use an accrual method of accounting. 2011 irs form 8863 A corporation (other than a family corporation) that had gross receipts of more than $1,000,000 for any tax year beginning after 1975. 2011 irs form 8863 A family corporation that had gross receipts of more than $25,000,000 for any tax year beginning after 1985. 2011 irs form 8863 A partnership with a corporation as a partner, if that corporation meets the requirements of (1) or (2) above. 2011 irs form 8863 A tax shelter. 2011 irs form 8863 Note. 2011 irs form 8863 Items (1), (2), and (3) above do not apply to an S corporation or a business operating a nursery or sod farm, or the raising or harvesting of trees (other than fruit and nut trees). 2011 irs form 8863 Family corporation. 2011 irs form 8863   A family corporation is generally a corporation that meets one of the following ownership requirements. 2011 irs form 8863 Members of the same family own at least 50% of the total combined voting power of all classes of stock entitled to vote and at least 50% of the total shares of all other classes of stock of the corporation. 2011 irs form 8863 Members of two families have owned, directly or indirectly, since October 4, 1976, at least 65% of the total combined voting power of all classes of voting stock and at least 65% of the total shares of all other classes of the corporation's stock. 2011 irs form 8863 Members of three families have owned, directly or indirectly, since October 4, 1976, at least 50% of the total combined voting power of all classes of voting stock and at least 50% of the total shares of all other classes of the corporation's stock. 2011 irs form 8863 For more information on family corporations, see Internal Revenue Code section 447. 2011 irs form 8863 Tax shelter. 2011 irs form 8863   A tax shelter is a partnership, noncorporate enterprise, or S corporation that meets either of the following tests. 2011 irs form 8863 Its principal purpose is the avoidance or evasion of federal income tax. 2011 irs form 8863 It is a farming syndicate. 2011 irs form 8863 A farming syndicate is an entity that meets either of the following tests. 2011 irs form 8863 Interests in the activity have been offered for sale in an offering required to be registered with a federal or state agency with the authority to regulate the offering of securities for sale. 2011 irs form 8863 More than 35% of the losses during the tax year are allocable to limited partners or limited entrepreneurs. 2011 irs form 8863   A “limited partner” is one whose personal liability for partnership debts is limited to the money or other property the partner contributed or is required to contribute to the partnership. 2011 irs form 8863   A “limited entrepreneur” is one who has an interest in an enterprise other than as a limited partner and does not actively participate in the management of the enterprise. 2011 irs form 8863 Farm Inventory If you are required to keep an inventory, you should keep a complete record of your inventory as part of your farm records. 2011 irs form 8863 This record should show the actual count or measurement of the inventory. 2011 irs form 8863 It should also show all factors that enter into its valuation, including quality and weight, if applicable. 2011 irs form 8863 Hatchery business. 2011 irs form 8863   If you are in the hatchery business, and use an accrual method of accounting, you must include in inventory eggs in the process of incubation. 2011 irs form 8863 Products held for sale. 2011 irs form 8863   All harvested and purchased farm products held for sale or for feed or seed, such as grain, hay, silage, concentrates, cotton, tobacco, etc. 2011 irs form 8863 , must be included in inventory. 2011 irs form 8863 Supplies. 2011 irs form 8863   Supplies acquired for sale or that become a physical part of items held for sale must be included in inventory. 2011 irs form 8863 Deduct the cost of supplies in the year used or consumed in operations. 2011 irs form 8863 Do not include incidental supplies in inventory as these are deductible in the year of purchase. 2011 irs form 8863 Livestock. 2011 irs form 8863   Livestock held primarily for sale must be included in inventory. 2011 irs form 8863 Livestock held for draft, breeding, or dairy purposes can either be depreciated or included in inventory. 2011 irs form 8863 See also Unit-livestock-price method , later. 2011 irs form 8863 If you are in the business of breeding and raising chinchillas, mink, foxes, or other fur-bearing animals, these animals are livestock for inventory purposes. 2011 irs form 8863 Growing crops. 2011 irs form 8863   Generally, growing crops are not required to be included in inventory. 2011 irs form 8863 However, if the crop has a preproductive period of more than 2 years, you may have to capitalize (or include in inventory) costs associated with the crop. 2011 irs form 8863 See Uniform capitalization rules below. 2011 irs form 8863 Also see Uniform Capitalization Rules in  chapter 6. 2011 irs form 8863 Items to include in inventory. 2011 irs form 8863   Your inventory should include all items held for sale, or for use as feed, seed, etc. 2011 irs form 8863 , whether raised or purchased, that are unsold at the end of the year. 2011 irs form 8863 Uniform capitalization rules. 2011 irs form 8863   The following applies if you are required to use an accrual method of accounting. 2011 irs form 8863 The uniform capitalization rules apply to all costs of raising a plant, even if the preproductive period of raising a plant is 2 years or less. 2011 irs form 8863 The costs of animals are subject to the uniform capitalization rules. 2011 irs form 8863 Inventory valuation methods. 2011 irs form 8863   The following methods, described below, are those generally available for valuing inventory. 2011 irs form 8863 The method you use must conform to generally accepted accounting principles for similar businesses and must clearly reflect income. 2011 irs form 8863 Cost. 2011 irs form 8863 Lower of cost or market. 2011 irs form 8863 Farm-price method. 2011 irs form 8863 Unit-livestock-price method. 2011 irs form 8863 Cost and lower of cost or market methods. 2011 irs form 8863   See Publication 538 for information on these valuation methods. 2011 irs form 8863 If you value your livestock inventory at cost or the lower of cost or market, you do not need IRS approval to change to the unit-livestock-price method. 2011 irs form 8863 However, if you value your livestock inventory using the farm-price method, then you must obtain permission from the IRS to change to the unit-livestock-price method. 2011 irs form 8863 Farm-price method. 2011 irs form 8863   Under this method, each item, whether raised or purchased, is valued at its market price less the direct cost of disposition. 2011 irs form 8863 Market price is the current price at the nearest market in the quantities you usually sell. 2011 irs form 8863 Cost of disposition includes broker's commissions, freight, hauling to market, and other marketing costs. 2011 irs form 8863 If you use this method, you must use it for your entire inventory, except that livestock can be inventoried under the unit-livestock-price method. 2011 irs form 8863 Unit-livestock-price method. 2011 irs form 8863   This method recognizes the difficulty of establishing the exact costs of producing and raising each animal. 2011 irs form 8863 You group or classify livestock according to type and age and use a standard unit price for each animal within a class or group. 2011 irs form 8863 The unit price you assign should reasonably approximate the normal costs incurred in producing the animals in such classes. 2011 irs form 8863 Unit prices and classifications are subject to approval by the IRS on examination of your return. 2011 irs form 8863 You must annually reevaluate your unit livestock prices and adjust the prices upward or downward to reflect increases or decreases in the costs of raising livestock. 2011 irs form 8863 IRS approval is not required for these adjustments. 2011 irs form 8863 Any other changes in unit prices or classifications do require IRS approval. 2011 irs form 8863   If you use this method, include all raised livestock in inventory, regardless of whether they are held for sale or for draft, breeding, sport, or dairy purposes. 2011 irs form 8863 This method accounts only for the increase in cost of raising an animal to maturity. 2011 irs form 8863 It does not provide for any decrease in the animal's market value after it reaches maturity. 2011 irs form 8863 Also, if you raise cattle, you are not required to inventory hay you grow to feed your herd. 2011 irs form 8863   Do not include sold or lost animals in the year-end inventory. 2011 irs form 8863 If your records do not show which animals were sold or lost, treat the first animals acquired as sold or lost. 2011 irs form 8863 The animals on hand at the end of the year are considered those most recently acquired. 2011 irs form 8863   You must include in inventory all livestock purchased primarily for sale. 2011 irs form 8863 You can choose either to include in inventory or depreciate livestock purchased for draft, breeding, sport or dairy purposes. 2011 irs form 8863 However, you must be consistent from year to year, regardless of the method you have chosen. 2011 irs form 8863 You cannot change your method without obtaining approval from the IRS. 2011 irs form 8863   You must include in inventory animals purchased after maturity or capitalize them at their purchase price. 2011 irs form 8863 If the animals are not mature at purchase, increase the cost at the end of each tax year according to the established unit price. 2011 irs form 8863 However, in the year of purchase, do not increase the cost of any animal purchased during the last 6 months of the year. 2011 irs form 8863 This “no increase” rule does not apply to tax shelters which must make an adjustment for any animal purchased during the year. 2011 irs form 8863 It also does not apply to taxpayers that must make an adjustment to reasonably reflect the particular period in the year in which animals are purchased, if necessary to avoid significant distortions in income. 2011 irs form 8863 Uniform capitalization rules. 2011 irs form 8863   A farmer can determine costs required to be allocated under the uniform capitalization rules by using the farm-price or unit-livestock-price inventory method. 2011 irs form 8863 This applies to any plant or animal, even if the farmer does not hold or treat the plant or animal as inventory property. 2011 irs form 8863 Cash Versus Accrual Method The following examples compare the cash and accrual methods of accounting. 2011 irs form 8863 Example 1. 2011 irs form 8863 You are a farmer who uses an accrual method of accounting. 2011 irs form 8863 You keep your books on the calendar year basis. 2011 irs form 8863 You sell grain in December 2013 but you are not paid until January 2014. 2011 irs form 8863 Because the accrual method was used and 2013 was the tax year in which the grain was sold, you must both include the sales proceeds and deduct the costs incurred in producing the grain on your 2013 tax return. 2011 irs form 8863 Example 2. 2011 irs form 8863 Assume the same facts as in Example 1 except that you use the cash method and there was no constructive receipt of the sales proceeds in 2013. 2011 irs form 8863 Under this method, you include the sales proceeds in income for 2014, the year you receive payment. 2011 irs form 8863 Deduct the costs of producing the grain in the year you pay for them. 2011 irs form 8863 Special Methods of Accounting There are special methods of accounting for certain items of income and expense. 2011 irs form 8863 Crop method. 2011 irs form 8863   If you do not harvest and dispose of your crop in the same tax year that you plant it, you can, with IRS approval, use the crop method of accounting. 2011 irs form 8863 You cannot use the crop method for any tax return, including your first tax return, unless you receive approval from the IRS. 2011 irs form 8863 Under this method, you deduct the entire cost of producing the crop, including the expense of seed or young plants, in the year you realize income from the crop. 2011 irs form 8863    See chapter 4 for details on deducting the costs of operating a farm. 2011 irs form 8863 Also see Regulations section 1. 2011 irs form 8863 162-12. 2011 irs form 8863 Other special methods. 2011 irs form 8863   Other special methods of accounting apply to the following items. 2011 irs form 8863 Amortization, see chapter 7. 2011 irs form 8863 Casualties, see chapter 11. 2011 irs form 8863 Condemnations, see chapter 11. 2011 irs form 8863 Depletion, see chapter 7. 2011 irs form 8863 Depreciation, see chapter 7. 2011 irs form 8863 Farm business expenses, see chapter 4. 2011 irs form 8863 Farm income, see chapter 3. 2011 irs form 8863 Installment sales, see chapter 10. 2011 irs form 8863 Soil and water conservation expenses, see chapter 5. 2011 irs form 8863 Thefts, see chapter 11. 2011 irs form 8863 Combination Method Generally, you can use any combination of cash, accrual, and special methods of accounting if the combination clearly shows your income and expenses and you use it consistently. 2011 irs form 8863 However, the following restrictions apply. 2011 irs form 8863 If you use the cash method for figuring your income, you must use the cash method for reporting your expenses. 2011 irs form 8863 If you use an accrual method for reporting your expenses, you must use an accrual method for figuring your income. 2011 irs form 8863 Changes in Methods of Accounting A change in your method of accounting includes a change in: Your overall method, such as from the cash method to an accrual method, and Your treatment of any material item, such as a change in your method of valuing inventory (for example, a change from the farm-price method to the unit-livestock-price method, discussed earlier). 2011 irs form 8863 Generally, once you have set up your accounting method, you must receive approval from the IRS before you can change to another method of accounting. 2011 irs form 8863 You may also have to pay a fee. 2011 irs form 8863 To obtain approval, you must generally file Form 3115. 2011 irs form 8863 There are instances when you can obtain automatic consent to change certain methods of accounting. 2011 irs form 8863 See the List of Automatic Accounting Method Changes located in the Instructions for Form 3115. 2011 irs form 8863 For more information on changes in methods of accounting, see Form 3115 and the Instructions for Form 3115. 2011 irs form 8863 Also see Publication 538. 2011 irs form 8863 Prev  Up  Next   Home   More Online Publications
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The 2011 Irs Form 8863

2011 irs form 8863 Publication 901 - Main Content Table of Contents Application of Treaties Tax Exemptions Provided by TreatiesPersonal Services Income Professors, Teachers, and Researchers Students and Apprentices Wages and Pensions Paid by a Foreign Government Explanation of TablesTable 1 Table 2 Table 3 Application of Treaties The United States has income tax treaties with a number of foreign countries. 2011 irs form 8863 Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income taxes on certain items of income they receive from sources within the United States. 2011 irs form 8863 These reduced rates and exemptions vary among countries and specific items of income. 2011 irs form 8863 If there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR. 2011 irs form 8863 Also see Publication 519. 2011 irs form 8863 Many of the individual states of the United States tax the income of their residents. 2011 irs form 8863 Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income. 2011 irs form 8863 Tax treaties reduce the U. 2011 irs form 8863 S. 2011 irs form 8863 taxes of residents of foreign countries. 2011 irs form 8863 With certain exceptions, they do not reduce the U. 2011 irs form 8863 S. 2011 irs form 8863 taxes of U. 2011 irs form 8863 S. 2011 irs form 8863 citizens or residents. 2011 irs form 8863 U. 2011 irs form 8863 S. 2011 irs form 8863 citizens and residents are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 income tax on their worldwide income. 2011 irs form 8863 Treaty provisions generally are reciprocal (apply to both treaty countries); therefore, a U. 2011 irs form 8863 S. 2011 irs form 8863 citizen or resident who receives income from a treaty country may refer to the tables in this publication to see if a tax treaty might affect the tax to be paid to that foreign country. 2011 irs form 8863 Foreign taxing authorities sometimes require certification from the U. 2011 irs form 8863 S. 2011 irs form 8863 Government that an applicant filed an income tax return as a U. 2011 irs form 8863 S. 2011 irs form 8863 citizen or resident, as part of the proof of entitlement to the treaty benefits. 2011 irs form 8863 See Form 8802, Application for United States Residency Certification, to request a certification. 2011 irs form 8863 Disclosure of a treaty-based position that reduces your tax. 2011 irs form 8863   If you take the position that any U. 2011 irs form 8863 S. 2011 irs form 8863 tax is overruled or otherwise reduced by a U. 2011 irs form 8863 S. 2011 irs form 8863 treaty (a treaty-based position), you generally must disclose that position on Form 8833 and attach it to your return. 2011 irs form 8863 If you are not required to file a return because of your treaty-based position, you must file a return anyway to report your position. 2011 irs form 8863 The filing of Form 8833 does not apply to a reduced rate of withholding tax on noneffectively connected income, such as dividends, interest, rents or royalties, or to a reduced rate of tax on pay received for services performed as an employee, including pensions, annuities, and social security. 2011 irs form 8863 For more information, see Publication 519 and the Form 8833 instructions. 2011 irs form 8863   If you fail to file Form 8833, you may have to pay a $1,000 penalty. 2011 irs form 8863 Corporations are subject to a $10,000 penalty for each failure. 2011 irs form 8863 Tax Exemptions Provided by Treaties In addition to the tables in the back of this publication, this publication contains discussions of the exemptions from tax and certain other effects of the tax treaties on the following types of income. 2011 irs form 8863 Pay for certain personal services performed in the United States. 2011 irs form 8863 Pay of a professor, teacher, or researcher who teaches or performs research in the United States for a limited time. 2011 irs form 8863 Amounts received for maintenance and studies by a foreign student or apprentice who is here for study or experience. 2011 irs form 8863 Wages, salaries, and pensions paid by a foreign government. 2011 irs form 8863 Personal Services Income Pay for certain personal services performed in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if you are a resident of one of the countries discussed below, if you are in the United States for a limited number of days, and if you meet certain other conditions. 2011 irs form 8863 For this purpose, the word “day” means a day during any part of which you are physically present in the United States. 2011 irs form 8863 Terms defined. 2011 irs form 8863   Several terms appear in many of the discussions that follow. 2011 irs form 8863 The exact meanings of the terms are determined by the particular tax treaty under discussion; thus, the meanings vary among treaties. 2011 irs form 8863 The definitions that follow are, therefore, general definitions that may not give the exact meaning intended by a particular treaty. 2011 irs form 8863   The terms fixed base and permanent establishment generally mean a fixed place of business, such as a place of management, a branch, an office, a factory, a warehouse, or a mining site, through which an enterprise carries on its business. 2011 irs form 8863   The term borne by generally means having ultimate financial accounting responsibility for, or providing the monetary resources for, an expenditure or payment, even if another entity in another location actually made the expenditure or payment. 2011 irs form 8863 Australia Income that residents of Australia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Pay that residents of Australia receive for labor or personal services performed in the United States as employees (dependent personal services), including services as a director of a company, is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if: The residents are in the United States for no more than 183 days during the tax year, The pay is paid by, or on behalf of, an employer or company that is not a resident of the United States, and The pay is not deductible in determining the taxable income of the trade or business of the employer (or company) in the United States. 2011 irs form 8863 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Australia who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Austria Income that residents of Austria receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Austria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Austria who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Income received by a resident of Austria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 Bangladesh Income that residents of Bangladesh receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, or Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Bangladesh receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to pubic entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Bangladesh who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Regardless of these limits, income of Bangladesh entertainers is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if their visit to the United States is wholly or mainly supported by public funds of Bangladesh, its political subdivisions, or local authorities. 2011 irs form 8863 Income received from employment as a member of the regular complement of a ship or an aircraft operated by a Bangladesh enterprise in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 If the ship or aircraft is operated by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise, the income is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 If the resident of Bangladesh is a shareholder in a U. 2011 irs form 8863 S. 2011 irs form 8863 corporation, these exemptions do not apply to directors' fees received as a member of the board of directors of the U. 2011 irs form 8863 S. 2011 irs form 8863 corporation. 2011 irs form 8863 The amount received by the shareholder that is more than the amount paid to a director that is not a shareholder is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax at the rate of 15%. 2011 irs form 8863 Barbados Income that residents of Barbados receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 89 days during the tax year, Earn net income for independent services provided to U. 2011 irs form 8863 S. 2011 irs form 8863 residents that is not more than $5,000 (there is no dollar limit if the contractors are not U. 2011 irs form 8863 S. 2011 irs form 8863 residents), and Do not have a regular base available in the United States for performing the services. 2011 irs form 8863 If they have a regular base available in the United States but otherwise meet the conditions for exemption, they are taxed only on the income attributable to the regular base. 2011 irs form 8863 Income that residents of Barbados receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the residents meet four requirements. 2011 irs form 8863 They are in the United States for no more than 183 days during the calendar year. 2011 irs form 8863 The income earned in the calendar year in the United States is not more than $5,000. 2011 irs form 8863 Their income is paid by or for an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The income is not borne by a permanent establishment or regular base of the employer in the United States. 2011 irs form 8863 Income of a Barbadian resident from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 These exemptions do not apply to Barbadian resident public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $250 per day or $4,000 in the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 2011 irs form 8863 However, the exemptions do apply regardless of these limits on gross receipts if the entertainer's visit to the United States is substantially supported by Barbadian public funds or if the entertainer's services are provided to a nonprofit organization. 2011 irs form 8863 Belgium Income that residents of Belgium receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs form 8863 Income that residents of Belgium receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to directors' fees and similar payments received by a resident of Belgium for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Belgium who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Income received by a resident of Belgium for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 Bulgaria Income that residents of Bulgaria receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs form 8863 Under Article 5 (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 2011 irs form 8863 Income that residents of Bulgaria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to directors' fees and similar payments received by a resident of Bulgaria as a member of the board of directors of a U. 2011 irs form 8863 S. 2011 irs form 8863 company. 2011 irs form 8863 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Bulgaria who earn more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Income received by a resident of Bulgaria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 Canada Income that residents of Canada receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article VII (Business Profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs form 8863 Under Article V (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 2011 irs form 8863 Income that residents of Canada receive for personal services performed as employees (dependent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if it is not more than $10,000 for the year. 2011 irs form 8863 If the income is more than $10,000 for the year, it is exempt only if: The residents are present in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and The income is not paid by, or on behalf of, a U. 2011 irs form 8863 S. 2011 irs form 8863 resident, and is not borne by a permanent establishment in the United States. 2011 irs form 8863 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Canada who derive more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the calendar year are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 However, this article does not apply to athletes participating in team sports in leagues with regularly scheduled games in both Canada and the United States. 2011 irs form 8863 Pay received by a resident of Canada for employment regularly done in more than one country on a ship, aircraft, motor vehicle, or train operated by a Canadian resident is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 China, People's Republic of Income that residents of the People's Republic of China receive for personal services as independent contractors or self-employed individuals (independent personal services) that they perform during the tax year in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are present in the United States for no more than 183 days in the calendar year, and Do not have a fixed base regularly available in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 2011 irs form 8863 Pay received by residents of the People's Republic of China for services performed as employees (dependent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if: The residents are present in the United States for no more than 183 days in the calendar year, The pay is paid by or for an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident, and The pay is not borne by a permanent establishment or fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to directors' fees for service on the board of directors of a U. 2011 irs form 8863 S. 2011 irs form 8863 corporation. 2011 irs form 8863 These exemptions generally do not apply to income received as a public entertainer (such as a theater, motion picture, radio, or television artist, musician, or athlete). 2011 irs form 8863 However, income of athletes or public entertainers from China participating in a cultural exchange program agreed upon by the U. 2011 irs form 8863 S. 2011 irs form 8863 and Chinese governments is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Commonwealth of Independent States Income that residents of a C. 2011 irs form 8863 I. 2011 irs form 8863 S. 2011 irs form 8863 member receive for performing personal services in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if those residents are in the United States for no more than 183 days during the tax year. 2011 irs form 8863 Pay received by an employee who is a member of the regular complement of a ship or aircraft operated in international traffic by a C. 2011 irs form 8863 I. 2011 irs form 8863 S. 2011 irs form 8863 member or a resident of a C. 2011 irs form 8863 I. 2011 irs form 8863 S. 2011 irs form 8863 member is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Cyprus Income that residents of Cyprus receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are present in the United States for less than 183 days in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 2011 irs form 8863 Pay received by residents of Cyprus from services performed as employees (dependent personal services), including services as an officer of a corporation, is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if: The residents are in the United States for less than 183 days during the tax year, The pay is paid by or for an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident, and The pay is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 2011 irs form 8863 Pay received by a Cyprus resident for performing personal services as an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of Cyprus is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 These exemptions do not apply to Cyprus resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $500 per day or $5,000 for the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 2011 irs form 8863 Directors' fees received by residents of Cyprus for service on the board of directors of a U. 2011 irs form 8863 S. 2011 irs form 8863 corporation are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax to the extent of a reasonable fixed amount payable to all directors for each day of attendance at directors' meetings held in the United States. 2011 irs form 8863 Czech Republic Income that residents of the Czech Republic receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are present in the United States for no more than 183 days in any 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 irs form 8863 Income that residents of the Czech Republic receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following three requirements are met. 2011 irs form 8863 The resident is present in the United States for no more than 183 days in any 12-month period. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to income residents of the Czech Republic receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year. 2011 irs form 8863 Regardless of these limits, income of Czech entertainers and sportsmen is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if their visit to the United States is substantially supported by public funds of the Czech Republic, its political subdivisions, or local authorities, or the visit is made pursuant to a specific arrangement between the United States and the Czech Republic. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of the Czech Republic as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 Income from employment as a member of the regular complement of a ship or aircraft operated by a Czech enterprise in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 If the ship or aircraft is operated by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise, the income is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Denmark Income that residents of Denmark receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Denmark receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of Denmark as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, and athletes) from Denmark who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Income received by a resident of Denmark for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 Egypt Income that residents of Egypt receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they are in the United States for no more than 89 days during the tax year. 2011 irs form 8863 Income that residents of Egypt receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet four requirements. 2011 irs form 8863 They are in the United States for no more than 89 days during the tax year. 2011 irs form 8863 They are employees of a resident of, or a permanent establishment in, Egypt. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 Their income is subject to Egyptian tax. 2011 irs form 8863 This exemption does not apply to pay received by a resident of Egypt who is an employee and member of the regular complement of a ship or an aircraft operated in international traffic by a resident of the United States. 2011 irs form 8863 These exemptions do not apply to Egyptian resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes), who earn income for services as public entertainers if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 2011 irs form 8863 Estonia Income that residents of Estonia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Estonia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following requirements are met. 2011 irs form 8863 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of Estonia as a member of the board of directors or similar body of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a United States enterprise is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 These exemptions do not apply to income residents of Estonia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 irs form 8863 Regardless of these limits, income of Estonian entertainers or athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if their visit to the United States is wholly or mainly supported by public funds of Estonia, its political subdivisions, or local authorities. 2011 irs form 8863 Finland Income that residents of Finland receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Finland receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet three requirements. 2011 irs form 8863 They are in the United States for no more than 183 days during any 12-month period. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 Their income is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to pay received by a resident of Finland who is an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of the United States. 2011 irs form 8863 These exemptions do not apply to income residents of Finland receive as public entertainers or sportsmen if the gross income, including reimbursed expenses, is more than $20,000 for their personal activities in the United States during the calendar year. 2011 irs form 8863 France Income that residents of France receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of France receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet three requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 Income for services performed by a resident of France as an employee and member of the regular complement of a ship or an aircraft operated in international traffic is exempt from tax in the United States. 2011 irs form 8863 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, or musicians), or sportsmen from France who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Regardless of these limits, income of French entertainers or sportsmen is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if their visit is principally supported by public funds of France. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of France as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 Germany Income that residents of Germany receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs form 8863 Income that residents of Germany receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the residents meet three requirements. 2011 irs form 8863 They are in the United States for no more than 183 days during the calendar year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 The income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 Pay received by a resident of Germany for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 The exemption does not apply to directors' fees and other similar payments received by a resident of Germany for services performed in the United States as a member of the board of directors of a company resident in the United States. 2011 irs form 8863 Income residents of Germany receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax if their gross receipts, including reimbursed expenses, from their entertainment activities in the United States are more than $20,000 during the calendar year. 2011 irs form 8863 Income of German entertainers or athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if their visit to the United States is substantially supported by public funds of Germany, its political subdivisions, or local authorities. 2011 irs form 8863 Greece Income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they are in the United States for no more than 183 days during the tax year and the pay is not more than $10,000. 2011 irs form 8863 The pay, regardless of amount, is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if it is for labor or personal services performed as employees of, or under contract with, a resident of Greece or a Greek corporation or other entity of Greece, and if the residents are in the United States for no more than 183 days during the tax year. 2011 irs form 8863 Hungary Income that residents of Hungary receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available in the United States. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Hungary receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet three requirements. 2011 irs form 8863 They are in the United States for no more than 183 days during the tax year. 2011 irs form 8863 Their income is paid by or on behalf of an employer who is not a resident of the United States. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 Pay received by an employee who is a member of the regular complement of a ship or aircraft operated by a Hungarian enterprise in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 If the ship or aircraft is operated by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise, the pay is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Iceland Income that residents of Iceland receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 irs form 8863 Income that residents of Iceland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to directors' fees and similar payments received by a resident of Iceland as a member of the board of directors of a U. 2011 irs form 8863 S. 2011 irs form 8863 company. 2011 irs form 8863 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Iceland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Income received by a resident of Iceland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 India Income that residents of India receive for performing personal services in the United States during the tax year as independent contractors or self-employed individuals (independent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are present in the United States for no more than 89 days during the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 irs form 8863 Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet three requirements. 2011 irs form 8863 They are present in the United States for no more than 183 days during the tax year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States. 2011 irs form 8863 The exemption does not apply to pay received by a resident of India for services performed as an employee aboard a ship or aircraft operated in international traffic by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by an Indian resident as a member of the board of directors of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 These exemptions do not apply to income residents of India receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their net income is more than $1,500 during the tax year for their entertainment activities in the United States. 2011 irs form 8863 Regardless of this limit, the income of Indian entertainers and athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if their visit to the United States is wholly or substantially supported from the public funds of the Indian Government, its political subdivisions, or local authorities. 2011 irs form 8863 Indonesia Income that residents of Indonesia receive for performing personal services as individual contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are present in the United States for no more than 119 days during any consecutive 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Indonesia receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet three requirements. 2011 irs form 8863 They are present in the United States no more than 119 days during any consecutive 12-month period. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 The income is not borne or reimbursed by a permanent establishment the employer has in the United States. 2011 irs form 8863 Pay received by an individual for services performed as an employee aboard a ship or aircraft operated by an Indonesian resident in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the individual is a member of the regular complement of the ship or aircraft. 2011 irs form 8863 These exemptions do not apply to income residents of Indonesia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their gross receipts, including reimbursed expenses, are more than $2,000 during any consecutive 12-month period. 2011 irs form 8863 Regardless of these limits, income of Indonesian entertainers and athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if their visit to the United States is substantially supported or sponsored by the Indonesian Government and the Indonesian competent authority certifies that the entertainers or athletes qualify for this exemption. 2011 irs form 8863 Ireland Income that residents of Ireland receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Ireland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of Ireland as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 However, amounts received for attending meetings in Ireland are not subject to U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 Income received by a resident of Ireland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax. 2011 irs form 8863 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Ireland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Israel Income that residents of Israel receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they are in the United States for no more than 182 days during the tax year. 2011 irs form 8863 Income that residents of Israel receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet four requirements. 2011 irs form 8863 They are in the United States for no more than 182 days during the tax year. 2011 irs form 8863 They are employees of a resident of, or a permanent establishment in, Israel. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 Their income is subject to Israeli tax. 2011 irs form 8863 The exemption does not apply to pay received by an employee for labor or personal services performed as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 These exemptions do not apply to income that residents of Israel receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes), if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 2011 irs form 8863 Italy Income that residents of Italy receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Italy receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following requirements are met. 2011 irs form 8863 The residents are in the United States for no more than 183 days during the tax year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of Italy for services performed in the United States as a member of the board of directors of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Pay received for employment regularly exercised aboard a ship or aircraft operated by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 These exemptions do not apply to income residents of Italy receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) if they are present in the United States for more than 90 days during the tax year or their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year for their entertainment activities in the United States. 2011 irs form 8863 Jamaica Income that residents of Jamaica receive for the performance of personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 89 days during the tax year, Do not have a fixed base regularly available to them in the United States for performing their services, and Earn net income for those services that is not more than $5,000 during the tax year if the income is from a U. 2011 irs form 8863 S. 2011 irs form 8863 contractor. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed only on the income that is attributable to the fixed base. 2011 irs form 8863 There is no dollar limit for condition (3) if the contractor is from a country other than the United States. 2011 irs form 8863 Income that residents of Jamaica receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet four requirements. 2011 irs form 8863 They are in the United States for no more than 183 days during the tax year. 2011 irs form 8863 Their income is paid by or for an employer who is not a resident of the United States. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 Their net income received for the services is not more than $5,000 during the tax year. 2011 irs form 8863 Pay received from employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a Jamaican enterprise is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 If the ship or aircraft is operated by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise, the pay is subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 These exemptions do not apply to income that residents of Jamaica receive for performing services in the United States as entertainers, such as theater, motion picture, radio, or television artists, musicians, or athletes, if the gross receipts (excluding reimbursements for expenses) from the services are more than $400 a day or $5,000 for the tax year. 2011 irs form 8863 Directors' fees received by residents of Jamaica for services performed in the United States as members of boards of directors of U. 2011 irs form 8863 S. 2011 irs form 8863 corporations are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the fees (excluding reimbursed expenses) are not more than $400 per day for each day the directors are present in the United States to perform the services. 2011 irs form 8863 Japan Income that residents of Japan receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (business profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 2011 irs form 8863 Income that residents of Japan receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to directors' fees and similar payments received by a resident of Japan for services performed as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 The exemption does not apply to a resident of Japan who performs services as an employee aboard a ship or an aircraft operated in international traffic by a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Japan who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Kazakhstan Income that residents of Kazakhstan receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if: The residents are in the United States for no more than 183 days in any consecutive 12-month period, and The income is not attributable to a fixed base in the United States which is regularly available to the residents. 2011 irs form 8863 If the residents have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Kazakhstan receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following three requirements are met. 2011 irs form 8863 The resident is in the United States for no more than 183 days in any 12-month period. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 Income derived by a resident of Kazakhstan from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of Kazakhstan as a member of the board of directors or similar body of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Korea, South Income that residents of South Korea receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the residents: Are in the United States for no more than 182 days during the tax year, Earn income for those services that is not more than $3,000 during the tax year, and Do not maintain a fixed base in the United States for more than 182 days during the tax year. 2011 irs form 8863 If they maintain a fixed base in the United States for more than 182 days, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Korea receive for labor or personal services performed in the United States as employees (dependent personal services), including pay for services performed as an officer of a corporation, is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the residents meet four requirements. 2011 irs form 8863 They are in the United States for no more than 182 days during the tax year. 2011 irs form 8863 They are employees of a resident of Korea or of a permanent establishment maintained in Korea. 2011 irs form 8863 Their compensation is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 Their income for those services is not more than $3,000. 2011 irs form 8863 Pay received by employees who are members of the regular complement of a ship or aircraft operated by a resident of Korea in international traffic is exempt. 2011 irs form 8863 Latvia Income that residents of Latvia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Latvia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following requirements are met. 2011 irs form 8863 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise. 2011 irs form 8863 The exemptions do not apply to directors' fees and similar payments received by a resident of Latvia as a member of the board of directors or similar body of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The exemptions do not apply to income residents of Latvia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 irs form 8863 Regardless of these limits, income of Latvian entertainers or athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if their visit to the United States is wholly or mainly supported by public funds of Latvia, its political subdivisions, or local authorities. 2011 irs form 8863 Lithuania Income that residents of Lithuania receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Lithuania receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following requirements are met. 2011 irs form 8863 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise. 2011 irs form 8863 The exemptions do not apply to directors' fees and similar payments received by a resident of Lithuania as a member of the board of directors or similar body of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The exemptions do not apply to income residents of Lithuania receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 irs form 8863 Regardless of these limits, income of Lithuanian entertainers or athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if their visit to the United States is wholly or mainly supported by public funds of Lithuania, its political subdivisions, or local authorities. 2011 irs form 8863 Luxembourg Income that residents of Luxembourg receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 irs form 8863 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Luxembourg receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to pay received for employment exercised continuously or predominantly aboard a ship or aircraft operated in international traffic by a U. 2011 irs form 8863 S. 2011 irs form 8863 enterprise. 2011 irs form 8863 The exemptions do not apply to directors' fees and similar payments received by a resident of Luxembourg for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 The exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Luxembourg who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 irs form 8863 Malta Income that residents of Malta receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 irs form 8863 Under that provision, business profits are exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax unless the individual has a permanent establishment in the United States. 2011 irs form 8863 If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 2011 irs form 8863 Income that residents of Malta receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet the following requirements. 2011 irs form 8863 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 irs form 8863 Their income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 The exemption does not apply to directors' fees and similar payments received by a resident of Malta for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 irs form 8863 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Malta who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 irs form 8863 S. 2011 irs form 8863 tax. 2011 irs form 8863 Income received by a resident of Malta for employment aboard a ship or an aircraft operated in international traffic is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the individual is a member of the regular complement of the ship or aircraft. 2011 irs form 8863 Mexico Income that residents of Mexico receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 182 days in a 12-month period, and Do not have a fixed base that they regularly use for performing the services. 2011 irs form 8863 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 irs form 8863 Income that residents of Mexico receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if the following three requirements are met. 2011 irs form 8863 The resident is present in the United States for no more than 183 days in a 12-month period. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 irs form 8863 The income is not borne by a permanent establishment or fixed base that the employer has in the United States. 2011 irs form 8863 These exemptions do not apply to directors' fees and similar payments received by a resident of Mexico for services performed outside Mexico as a director or overseer of a company that is a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 These exemptions do not apply to income residents of Mexico receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if the income, including reimbursed expenses, is more than $3,000 during the tax year for their entertainment activities in the United States. 2011 irs form 8863 This includes income from activities performed in the United States relating to the entertainer or athlete's reputation, such as endorsements of commercial products. 2011 irs form 8863 Regardless of this limit, the income of Mexican entertainers and athletes is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 tax if their visit to the United States is substantially supported by public funds of Mexico, its political subdivisions, or local authorities. 2011 irs form 8863 Morocco Income that residents of Morocco receive for performing personal services as independent contractors or as self-employed persons (independent personal services) in the United States during the tax year is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents: Are in the United States for no more than 182 days during the tax year, Do not maintain a fixed base in the United States for more than 89 days during the tax year, and Earn total income for those services that is not more than $5,000. 2011 irs form 8863 If they have a fixed base in the United States for more than 89 days, they are taxed only on the income attributable to the fixed base. 2011 irs form 8863 Income that residents of Morocco receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the residents meet three requirements. 2011 irs form 8863 They are in the United States for less than 183 days during the tax year. 2011 irs form 8863 They are employees of a resident of Morocco or of a permanent establishment of a resident of a country other than Morocco if the permanent establishment is located in Morocco. 2011 irs form 8863 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 irs form 8863 Compensation received for services performed by a member of the board of directors of a corporation does not qualify for this exemption. 2011 irs form 8863 Income received by an individual for performing labor or personal services as an employee aboard a ship or an aircraft operated in international traffic by a Moroccan resident is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the individual is a member of the regular complement of the ship or aircraft. 2011 irs form 8863 These exemptions do not apply to income received for services performed in the United States by professional entertainers, including theater, film, radio, and television performers, musicians, and athletes, unless the services are performed by, or for the account of, a Moroccan nonprofit organization. 2011 irs form 8863 Netherlands Income that residents of the Netherlands receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the income is not attributable to a fixed base in the United States that is regularly available for performing the services. 2011 irs form 8863 Income that residents of the Netherlands receive for employment in the United States (dependent personal services) is exempt from U. 2011 irs form 8863 S. 2011 irs form 8863 income tax if the following three requirements are met. 2011 irs form 8863 The resident is in the United States for no more than 183 days during the tax year. 2011 irs form 8863 The income is paid by, or on behalf of, an employer who is not a U. 2011 irs form 8863 S. 2011 irs form 8863 resident. 2011 irs form 8863 The income is not borne by a permanent establishment or fixed base the employer has in the United States. 2011 irs form 8863 Income received by a Netherlands resident for employment as a member of the regular complement of a ship or