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2011 Taxact

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2011 Taxact

2011 taxact 4. 2011 taxact   Filing U. 2011 taxact S. 2011 taxact Tax Returns Table of Contents Who Must FileFiling Requirement if Possession Income Is Excluded When To FileExtension of Time To File Where To File Special Rules for Completing Your U. 2011 taxact S. 2011 taxact Tax ReturnU. 2011 taxact S. 2011 taxact Armed Forces. 2011 taxact Deductions if Possession Income Is Excluded Foreign Tax Credit if Possession Income Is Excluded Self-Employment Tax Additional Medicare Tax Net Investment Income Tax Paying Your TaxesEstimated Tax Double TaxationCompetent Authority Assistance The information in chapter 3 will tell you if a U. 2011 taxact S. 2011 taxact income tax return is required for your situation. 2011 taxact If a U. 2011 taxact S. 2011 taxact return is required, your next step is to see if you meet the filing requirements. 2011 taxact If you do meet the filing requirements, the information presented in this chapter will help you understand the special procedures involved. 2011 taxact This chapter discusses: Filing requirements, When to file your return, Where to send your return, How to adjust your deductions and credits if you are excluding income from American Samoa or Puerto Rico, How to make estimated tax payments and pay self-employment tax, and How to request assistance in resolving instances of double taxation. 2011 taxact Who Must File If you are not required to file a possession tax return that includes your worldwide income, you must generally file a U. 2011 taxact S. 2011 taxact income tax return if your gross income is at least the amount shown in Table 4-1, later, for your filing status and age. 2011 taxact If you were a bona fide resident of American Samoa or Puerto Rico and are able to exclude your possession income from your U. 2011 taxact S. 2011 taxact tax return, your filing requirement may be less than the amount in Table 4-1. 2011 taxact For details, see the information under Filing Requirement if Possession Income Is Excluded , later. 2011 taxact Some individuals (such as those who can be claimed as a dependent on another person's return or who owe certain taxes, such as self-employment tax) must file a tax return even though the gross income is less than the amount shown in Table 4-1 for their filing status and age. 2011 taxact For more information, see the Form 1040 instructions. 2011 taxact Filing Requirement if Possession Income Is Excluded If you were a bona fide resident of American Samoa or Puerto Rico and qualify to exclude possession income on your U. 2011 taxact S. 2011 taxact tax return, you must determine your adjusted filing requirement. 2011 taxact Generally, your filing requirement is based on the total of your (and your spouse's if filing a joint return) personal exemption(s) plus your standard deduction. 2011 taxact Personal exemption. 2011 taxact   When figuring your filing requirement, your personal exemption is allowed in full. 2011 taxact Do not reduce it for this purpose. 2011 taxact Do not include exemptions for your dependents. 2011 taxact Allowable standard deduction. 2011 taxact   Unless your filing status is married filing separately, the minimum income level at which you must file a return is based, in part, on the standard deduction for your filing status and age. 2011 taxact Because the standard deduction applies to all types of income, it must be divided between your excluded income and income from other sources. 2011 taxact Multiply the regular standard deduction for your filing status and age (this is zero if you are married filing a separate return; all others, see Form 1040 instructions) by the following fraction:      Gross income subject to U. 2011 taxact S. 2011 taxact income tax     Gross income from all sources (including excluded possession income)   Example. 2011 taxact Barbara Spruce, a U. 2011 taxact S. 2011 taxact citizen, is single, under 65, and a bona fide resident of American Samoa. 2011 taxact During 2013, she received $20,000 of income from American Samoa sources (qualifies for exclusion) and $8,000 of income from sources outside the possession (subject to U. 2011 taxact S. 2011 taxact income tax). 2011 taxact Her allowable standard deduction for 2013 is figured as follows:   $8,000 $28,000 × $6,100 (regular standard deduction) = $1,743   Adjusted filing requirement. 2011 taxact   Figure your adjusted filing requirement by adding the amount of your allowable standard deduction to the amount of your personal exemption. 2011 taxact You must file a U. 2011 taxact S. 2011 taxact income tax return if your gross income is at least the amount shown on line 3 of the following worksheet. 2011 taxact    1. 2011 taxact Enter the allowable standard deduction you figured earlier under Allowable standard deduction . 2011 taxact If your filing status is married filing separately, enter -0-   2. 2011 taxact Personal exemption. 2011 taxact If your filing status is married filing jointly, enter $7,800; if someone can claim you as a dependent, enter -0-; otherwise, enter $3,900   3. 2011 taxact Add lines 1 and 2. 2011 taxact You must file a U. 2011 taxact S. 2011 taxact income tax return if your gross income from sources outside the relevant possession is at least this amount   Table 4-1. 2011 taxact 2013 Filing Requirements Chart for Most Taxpayers IF your filing status is. 2011 taxact . 2011 taxact . 2011 taxact AND at the end of 2013 you were*. 2011 taxact . 2011 taxact . 2011 taxact THEN file a return if your gross income** was at least. 2011 taxact . 2011 taxact . 2011 taxact single under 65 $10,000 65 or older $11,500 married filing jointly*** under 65 (both spouses) $20,000 65 or older (one spouse) $21,200 65 or older (both spouses) $22,400 married filing separately any age $3,900 head of household under 65 $12,850 65 or older $14,350 qualifying widow(er)  with dependent child under 65 $16,100 65 or older $17,300 * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. 2011 taxact ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you can exclude part or all of it). 2011 taxact Do not include social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2013, or (b) one-half of your social security benefits plus your other gross income is more than $25,000 ($32,000 if married filing jointly). 2011 taxact If (a) or (b) applies, see the instructions for Form 1040 or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must include in gross income. 2011 taxact *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900 you must file a return regardless of your age. 2011 taxact Example 1. 2011 taxact James and Joan Thompson, one over 65, are U. 2011 taxact S. 2011 taxact citizens and bona fide residents of Puerto Rico during the entire tax year. 2011 taxact They file a joint income tax return. 2011 taxact During 2013, they received $35,000 of income from Puerto Rico sources (qualifies for exclusion) and $6,000 of income from sources outside Puerto Rico (subject to U. 2011 taxact S. 2011 taxact income tax). 2011 taxact Their allowable standard deduction for 2013 is figured as follows:   $6,000 $41,000 × $13,400 ( standard deduction for 65 or older (one spouse) ) = $1,961   The Thompsons do not have to file a U. 2011 taxact S. 2011 taxact income tax return because their gross income subject to U. 2011 taxact S. 2011 taxact tax ($6,000) is less than their allowable standard deduction plus their personal exemptions ($1,961+ $7,800= $9,761). 2011 taxact Example 2. 2011 taxact Barbara Spruce (see Example under Allowable standard deduction, earlier), however, must file a U. 2011 taxact S. 2011 taxact income tax return because her gross income subject to U. 2011 taxact S. 2011 taxact tax ($8,000) is more than her allowable standard deduction plus her personal exemption ($1,743 + $3,900 = $5,643). 2011 taxact If you must file a U. 2011 taxact S. 2011 taxact income tax return, you may be able to file a paperless return using IRS e-file. 2011 taxact See your form instructions or visit our website at IRS. 2011 taxact gov. 2011 taxact When To File If you file on a calendar year basis, the due date for filing your U. 2011 taxact S. 2011 taxact income tax return is April 15 following the end of your tax year. 2011 taxact If you use a fiscal year (a year ending on the last day of a month other than December), the due date is the 15th day of the 4th month after the end of your fiscal year. 2011 taxact If any due date falls on a Saturday, Sunday, or legal holiday, your tax return is due on the next business day. 2011 taxact For your 2013 tax return, the due date is April 15, 2014. 2011 taxact If you mail your federal tax return, it is considered timely if it bears an official postmark dated on or before the due date, including any extensions. 2011 taxact If you use a private delivery service designated by the IRS, generally the postmark date is the date the private delivery service records in its database or marks on the mailing label. 2011 taxact See your form instructions for a list of designated private delivery services. 2011 taxact Extension of Time To File You can get an extension of time to file your U. 2011 taxact S. 2011 taxact income tax return. 2011 taxact Special rules apply for those living outside the United States. 2011 taxact Automatic 6-Month Extension If you cannot file your 2013 return by the due date, you can get an automatic 6-month extension of time to file. 2011 taxact Example. 2011 taxact If your return must be filed by April 15, 2014, you will have until October 15, 2014, to file. 2011 taxact Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. 2011 taxact If you do not pay the amount due by the regular due date (generally April 15), you will owe interest on any unpaid tax from the original due date to the date you pay the tax. 2011 taxact You may also be charged penalties (see the Instructions for Form 4868). 2011 taxact How to get the automatic extension. 2011 taxact   You can get the automatic 6-month extension if you do one of the following by the due date for filing your return. 2011 taxact E-file Form 4868 using your personal computer or a tax professional. 2011 taxact E-file and pay by credit or debit card. 2011 taxact Your payment must be at least $1. 2011 taxact You may pay by phone or over the Internet. 2011 taxact Do not file Form 4868. 2011 taxact File a paper Form 4868. 2011 taxact If you are a fiscal year taxpayer, you must file a paper Form 4868. 2011 taxact See Form 4868 for information on getting an extension using these options. 2011 taxact When to file. 2011 taxact   You must request the automatic extension by the due date for your return. 2011 taxact You can file your return any time before the 6-month extension period ends. 2011 taxact When you file your return. 2011 taxact   Enter any payment you made related to the extension of time to file on Form 1040, line 68. 2011 taxact If you file Form 1040A, U. 2011 taxact S. 2011 taxact Individual Income Tax Return, or Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, include that payment in your total payments on Form 1040A, line 41, or Form 1040EZ, line 9. 2011 taxact Also enter “Form 4868” and the amount paid in the space to the left of the entry space for line 41 or line 9. 2011 taxact You cannot ask the Internal Revenue Service to figure your tax if you use the extension of time to file. 2011 taxact Individuals Outside the United States and Puerto Rico You are allowed an automatic 2-month extension (until June 16, 2014, if you use the calendar year) to file your 2013 return and pay any federal income tax due if: You are a U. 2011 taxact S. 2011 taxact citizen or resident, and On the due date of your return: You are living outside of the United States and Puerto Rico, and your main place of business or post of duty is outside the United States and Puerto Rico, or You are in military or naval service on duty outside the United States and Puerto Rico. 2011 taxact However, if you pay the tax due after the regular due date (generally April 15), interest will be charged from April 15 until the date the tax is paid. 2011 taxact If you serve in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. 2011 taxact For more information, see Publication 3, Armed Forces' Tax Guide. 2011 taxact Married taxpayers. 2011 taxact   If you file a joint return, only one spouse has to qualify for this automatic extension. 2011 taxact However, if you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies. 2011 taxact How to get the extension. 2011 taxact   To use this special automatic extension, you must attach a statement to your return explaining what situation qualified you for the extension. 2011 taxact (See the situations listed under (2), earlier. 2011 taxact ) Extension beyond 2 months. 2011 taxact   If you cannot file your 2013 return within the automatic 2-month extension period, you can get an additional 4-month extension, for a total of 6 months. 2011 taxact File Form 4868 by the end of the automatic extension period (June 16, 2014 for calendar year taxpayers). 2011 taxact Be sure to check the box on Form 4868, line 8, if appropriate. 2011 taxact   In addition to this 6-month extension, taxpayers who are out of the country (as defined under (2) earlier) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). 2011 taxact   To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. 2011 taxact Send the letter by the extended due date (October 15 for calendar year taxpayers) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   You will not receive any notification from the IRS unless your request is denied for being untimely. 2011 taxact Where To File Use the addresses listed below if you have to file Form 1040 with the United States and you are excluding possession income from American Samoa or Puerto Rico. 2011 taxact If you are not including a check or a money order, send your U. 2011 taxact S. 2011 taxact tax return and all attachments to:   Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. 2011 taxact S. 2011 taxact tax return and all attachments to:  Internal Revenue Service P. 2011 taxact O. 2011 taxact Box 1303 Charlotte, NC 28201-1303 USA Also send your U. 2011 taxact S. 2011 taxact return to these addresses if you are attaching Form 5074 or Form 8689. 2011 taxact If you are not in either of the above categories, send your return to the address shown in the Form 1040 instructions for the possession or state in which you reside. 2011 taxact Special Rules for Completing Your U. 2011 taxact S. 2011 taxact Tax Return If you are not excluding possession income from your U. 2011 taxact S. 2011 taxact tax return, follow the instructions for the specific forms you file. 2011 taxact However, you may not qualify to claim the earned income credit (EIC). 2011 taxact Earned income credit. 2011 taxact   Even if you maintain a household in one of the possessions discussed in this publication that is your main home and the home of your qualifying child, you cannot claim the earned income credit on your U. 2011 taxact S. 2011 taxact tax return. 2011 taxact This credit is available only if you maintain the household in the United States or you are serving on extended active duty in the U. 2011 taxact S. 2011 taxact Armed Forces. 2011 taxact U. 2011 taxact S. 2011 taxact Armed Forces. 2011 taxact   U. 2011 taxact S. 2011 taxact military personnel stationed outside the United States on extended active duty are considered to live in the United States during that duty period for purposes of the EIC. 2011 taxact Extended active duty means you are called or ordered to duty for an indefinite period or for a period of more than 90 days. 2011 taxact Once you begin serving your extended active duty, you are still considered to have been on extended active duty even if you do not serve more than 90 days. 2011 taxact Income from American Samoa or Puerto Rico excluded. 2011 taxact   You will not be allowed to take deductions and credits that apply to the excluded income. 2011 taxact The additional information you need follows. 2011 taxact Deductions if Possession Income Is Excluded Deductions that specifically apply to your excluded possession income, such as employee business expenses, are not allowable on your U. 2011 taxact S. 2011 taxact income tax return. 2011 taxact Deductions that do not specifically apply to any particular type of income must be divided between your excluded income from sources in the relevant possession and income from all other sources to find the part that you can deduct on your U. 2011 taxact S. 2011 taxact tax return. 2011 taxact Examples of such deductions are alimony payments, the standard deduction, and certain itemized deductions (such as medical expenses, charitable contributions, real estate taxes, and mortgage interest on your home). 2011 taxact Figuring the deduction. 2011 taxact   To find the part of a deduction that is allowable, multiply the deduction by the following fraction. 2011 taxact   Gross income subject to U. 2011 taxact S. 2011 taxact income tax     Gross income from all sources (including excluded possession income)   Adjustments to Income Your adjusted gross income equals your gross income minus certain deductions (adjustments). 2011 taxact Moving expense deduction. 2011 taxact   Generally, expenses of a move to a possession are directly attributable to wages, salaries, and other earned income from that possession. 2011 taxact Likewise, the expenses of a move back to the United States are generally attributable to U. 2011 taxact S. 2011 taxact earned income. 2011 taxact   If you are claiming expenses for a move to a relevant possession, how and where you will deduct the expenses depends on your status as a bona fide resident and if any of your possession income is excluded on your U. 2011 taxact S. 2011 taxact tax return. 2011 taxact For more information, see Moving expense deduction in chapter 3 under the name of the relevant possession. 2011 taxact   If you are claiming expenses for a move from a U. 2011 taxact S. 2011 taxact possession to the United States, use Form 3903 to figure your deductible expenses and enter the amount on Form 1040, line 26. 2011 taxact For purposes of deducting moving expenses, the possessions are considered part of the United States. 2011 taxact See Publication 521, Moving Expenses, for information about what expenses are deductible. 2011 taxact Self-employment tax deduction. 2011 taxact   Generally, if you are reporting self-employment income on your U. 2011 taxact S. 2011 taxact return, you can include the deductible part of your self-employment tax on Form 1040, line 27. 2011 taxact This is an income tax deduction only; it is not a deduction in figuring net earnings from self-employment (for self-employment tax). 2011 taxact   However, if you are a bona fide resident of American Samoa or Puerto Rico and you exclude all of your self-employment income from gross income, you cannot take the deduction on Form 1040, line 27, because the deduction is related to excluded income. 2011 taxact   If only part of your self-employment income is excluded, the part of the deduction that is based on the nonexcluded income is allowed. 2011 taxact This would happen if, for instance, you have two businesses and only the income from one of them is excludable. 2011 taxact   For purposes of the deduction only, figure the self-employment tax on the nonexcluded income by multiplying your total self-employment tax (from Schedule SE (Form 1040)), Self-Employment Tax) by the following fraction. 2011 taxact   Self-employment income subject to U. 2011 taxact S. 2011 taxact income tax     Total self-employment income (including excluded possession income)   The result is your self-employment tax on nonexcluded income. 2011 taxact Include the deductible part of this amount on Form 1040, line 27. 2011 taxact Individual retirement arrangement (IRA) deduction. 2011 taxact   Do not take excluded income into account when figuring your deductible IRA contribution. 2011 taxact Standard Deduction The standard deduction is composed of the regular standard deduction amount and the additional standard deduction for taxpayers who are blind or age 65 or over. 2011 taxact To find the amount you can claim on Form 1040, line 40, first figure your full standard deduction according to the Instructions for Form 1040. 2011 taxact Then multiply your full standard deduction by the following fraction. 2011 taxact   Gross income subject to U. 2011 taxact S. 2011 taxact income tax     Gross income from all sources (including excluded possession income)   In the space above line 40, enter “Standard deduction modified due to income excluded under section 931 (if American Samoa) or section 933 (if Puerto Rico). 2011 taxact ” This calculation may not be the same as the one you used to determine if you need to file a U. 2011 taxact S. 2011 taxact tax return. 2011 taxact Itemized Deductions Most itemized deductions do not apply to a particular type of income. 2011 taxact However, itemized deductions can be divided into three categories. 2011 taxact Those that apply specifically to excluded income, such as employee business expenses, are not deductible. 2011 taxact Those that apply specifically to income subject to U. 2011 taxact S. 2011 taxact income tax, which might also be employee business expenses, are fully allowable under the Instructions for Schedule A (Form 1040), Itemized Deductions. 2011 taxact Those that do not apply to specific income must be allocated between your gross income subject to U. 2011 taxact S. 2011 taxact income tax and your total gross income from all sources. 2011 taxact The example given later shows how to figure the deductible part of each type of expense that is not related to specific income. 2011 taxact Example. 2011 taxact In 2013, you and your spouse are both under 65 and U. 2011 taxact S. 2011 taxact citizens who are bona fide residents of Puerto Rico during the entire tax year. 2011 taxact You file a joint income tax return. 2011 taxact During 2013, you earned $20,000 from Puerto Rican sources (excluded from U. 2011 taxact S. 2011 taxact gross income) and your spouse earned $60,000 from the U. 2011 taxact S. 2011 taxact Government. 2011 taxact You have $16,000 of itemized deductions that do not apply to any specific type of income. 2011 taxact These are medical expenses of $4,000, real estate taxes of $5,000, home mortgage interest of $6,000, and charitable contributions of $1,000 (cash contributions). 2011 taxact You determine the amount of each deduction that you can claim on your Schedule A (Form 1040), Itemized Deductions, by multiplying the deduction by the fraction shown under Figuring the deduction , earlier under Deductions if Possession Income is Excluded. 2011 taxact   Medical Expenses   $60,000$80,000 × $4,000 = $3,000  (enter on line 1  of Schedule A)     Real Estate Taxes   $60,000$80,000 × $5,000 = $3,750  (enter on line 6  of Schedule A)     Home Mortgage Interest   $60,000$80,000 × $6,000 = $4,500  (enter on line 10 or 11 of  Schedule A)     Charitable Contributions (cash contributions)   $60,000$80,000 × $1,000 = $750  (enter on line 16 of Schedule A)   Enter on Schedule A (Form 1040) only the allowable portion of each deduction. 2011 taxact Overall limitation on itemized deductions. 2011 taxact   If your adjusted gross income (discussed earlier) is over $300,000 if married filing jointly or qualifying widow(er); $275,000 if head of household; $250,000 if single; or $150,000 if married filing separately; see the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040), to figure your itemized deductions. 2011 taxact Personal Exemptions Personal exemptions are allowed in full even if excluding possession income. 2011 taxact However, depending upon your adjusted gross income and filing status, the amount you can deduct may be reduced. 2011 taxact See the Deduction for Exemptions Worksheet—Line 42 in the instructions for Form 1040. 2011 taxact Foreign Tax Credit if Possession Income Is Excluded If you must report American Samoa or Puerto Rico source income on your U. 2011 taxact S. 2011 taxact tax return, you can claim a foreign tax credit for income taxes paid to the possession on that income. 2011 taxact However, you cannot claim a foreign tax credit for taxes paid on possession income that is excluded on your U. 2011 taxact S. 2011 taxact tax return. 2011 taxact The foreign tax credit is generally figured on Form 1116. 2011 taxact If you have income, such as U. 2011 taxact S. 2011 taxact Government wages, that is not excludable, and you also have possession source income that is excludable, you must figure the credit by reducing your foreign taxes paid or accrued by the taxes based on the excluded income. 2011 taxact You make this reduction for each separate income category. 2011 taxact To find the amount of this reduction, use the following formula for each income category. 2011 taxact Excluded income from possession sources less deductible expenses based on that income x Tax paid or accrued to the possession = Reduction in foreign taxes Total income subject to possession tax less deductible expenses based on that income Enter the amount of the reduction on Form 1116, line 12. 2011 taxact For more information on the foreign tax credit, see Publication 514. 2011 taxact Example. 2011 taxact Jason and Lynn Reddy are U. 2011 taxact S. 2011 taxact citizens who were bona fide residents of Puerto Rico during all of 2013. 2011 taxact They file a joint tax return. 2011 taxact The following table shows their excludable and taxable income for U. 2011 taxact S. 2011 taxact federal income tax purposes. 2011 taxact   Taxable   Excludable Jason's wages from  U. 2011 taxact S. 2011 taxact Government $25,000     Lynn's wages from Puerto Rico  corp. 2011 taxact     $15,000 Dividend from Puerto Rico corp. 2011 taxact doing business in Puerto Rico     200 Dividend from U. 2011 taxact S. 2011 taxact  corp. 2011 taxact doing business  in U. 2011 taxact S. 2011 taxact * 1,000     Totals $26,000   $15,200 * Income from sources outside Puerto Rico is taxable. 2011 taxact   Jason and Lynn must file 2013 income tax returns with both Puerto Rico and the United States. 2011 taxact They have gross income of $26,000 for U. 2011 taxact S. 2011 taxact tax purposes. 2011 taxact They paid taxes to Puerto Rico of $4,000 ($3,980 on their wages and $20 on the dividend from the Puerto Rico corporation). 2011 taxact They figure their foreign tax credit on two Forms 1116, which they must attach to their U. 2011 taxact S. 2011 taxact return. 2011 taxact They fill out one Form 1116 for wages and one Form 1116 for the dividend. 2011 taxact Jason and Lynn figure the Puerto Rico taxes on excluded income as follows. 2011 taxact   Wages: ($15,000 ÷ $40,000) × $3,980 = $1,493   Dividend: ($200 ÷ $200) × $20 = $20 They enter $1,493 on Form 1116, line 12, for wages and $20 on the second Form 1116, line 12, for the dividend. 2011 taxact Self-Employment Tax Self-employment tax includes both social security and Medicare taxes for individuals who are self-employed. 2011 taxact A U. 2011 taxact S. 2011 taxact citizen or resident alien who is self-employed must pay self-employment tax on net self-employment earnings of $400 or more. 2011 taxact This rule applies whether or not the earnings are excludable from gross income (or whether or not a U. 2011 taxact S. 2011 taxact income tax return must otherwise be filed). 2011 taxact Bona fide residents of the possessions discussed in this publication are considered U. 2011 taxact S. 2011 taxact residents for this purpose and are subject to the self-employment tax. 2011 taxact Forms to file. 2011 taxact   If you have net self-employment income and are subject to self-employment tax, file one of the following with the United States. 2011 taxact If you are required to file Form 1040 with the United States, complete Schedule SE (Form 1040) and attach it to your Form 1040. 2011 taxact If you are not required to file Form 1040 with the United States and you are a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, file Form 1040-SS. 2011 taxact If you are a resident of Puerto Rico, you can file the Spanish-language Form 1040-PR instead. 2011 taxact Do not file forms 1040-SS or 1040-PR with Form 1040. 2011 taxact If you are required to pay Additional Medicare Tax (discussed later) on your self-employment income, attach Form 8959, Additional Medicare Tax to Form 1040, Form 1040-SS, or Form 1040-PR, as applicable. 2011 taxact Chapter 11 Bankruptcy cases. 2011 taxact   While you are a debtor in a chapter 11 bankruptcy case, your net profit or loss from self-employment will be included on the income tax return (Form 1041, U. 2011 taxact S. 2011 taxact Income Tax Return for Estates and Trusts) of the bankruptcy estate. 2011 taxact However, you—not the bankruptcy estate—are responsible for paying self-employment tax on your net earnings from self-employment. 2011 taxact   Use Schedule SE (Form 1040), Form 1040-SS, or Form 1040-PR, as determined above, to figure your correct amount of self-employment tax. 2011 taxact   For other reporting requirements, see Chapter 11 Bankruptcy Cases in the Instructions for Form 1040. 2011 taxact Additional Medicare Tax Beginning in 2013, a 0. 2011 taxact 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). 2011 taxact Medicare wages and self-employment income are combined to determine if income exceeds the threshold. 2011 taxact A self-employment loss should not be considered for purposes of this tax. 2011 taxact RRTA compensation should be separately compared to the threshold. 2011 taxact Your employer is responsible for withholding the 0. 2011 taxact 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000. 2011 taxact You should consider this withholding, if applicable, in determining whether you need to make estimated tax payments. 2011 taxact There are no special rules for U. 2011 taxact S. 2011 taxact citizens and nonresident aliens living abroad for purposes of this provision. 2011 taxact Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. 2011 taxact For more information, see Form 8959, Additional Medicare Tax, and its instructions or visit www. 2011 taxact irs. 2011 taxact gov and enter the following words in the search box: Additional Medicare Tax. 2011 taxact You cannot include the Additional Medicare Tax as a deductible part of your self-employment tax. 2011 taxact Net Investment Income Tax Beginning in 2013, the Net Investment Income Tax (NIIT) imposes a 3. 2011 taxact 8% tax on the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. 2011 taxact Bona fide residents of Puerto Rico and American Samoa who may have a federal income tax return filing obligation may be liable for the NIIT if the taxpayer’s modified adjusted gross income from non-territory sources exceeds a specified threshold amount. 2011 taxact The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. 2011 taxact Bona fide residents must take into account any additional tax liability associated with the NIIT when calculating your estimated tax payments. 2011 taxact Forms to file. 2011 taxact   If you are a bona fide resident of American Samoa and Puerto Rico and you are required to pay the NIIT, you must file Form 1040 with the United States and attach Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts. 2011 taxact For more information, see Form 8960 and its instructions. 2011 taxact Paying Your Taxes You may find that not all of your income tax has been paid through withholding by either the United States or the possession. 2011 taxact This is often true if you have income that is not subject to withholding, such as self-employment, interest, or rental income. 2011 taxact In this situation, you may need to make estimated tax payments. 2011 taxact Estimated Tax If your estimated income tax obligation is to the United States, use the worksheet in the Form 1040-ES package to figure your estimated tax, including self-employment tax. 2011 taxact Include the Additional Medicare Tax and Net Investment Income Tax if applicable. 2011 taxact If you are paying by check or money order, use the payment vouchers in the Form 1040-ES package. 2011 taxact Or, you can make your payments electronically and not have to file any paper forms. 2011 taxact See the Form 1040-ES instructions for information on making payments. 2011 taxact Double Taxation Mutual agreement procedures exist to settle issues where there is inconsistent tax treatment between the IRS and the taxing authorities of the following possessions. 2011 taxact American Samoa. 2011 taxact The Commonwealth of Puerto Rico. 2011 taxact The Commonwealth of the Northern Mariana Islands. 2011 taxact Guam. 2011 taxact The U. 2011 taxact S. 2011 taxact Virgin Islands. 2011 taxact These issues usually involve allocations of income, deductions, credits, or allowances between related persons; determinations of residency; and determinations of the source of income and related expenses. 2011 taxact Competent Authority Assistance The tax coordination agreements between the United States and the possession tax departments contain provisions allowing the competent authorities of the United States and the relevant possession to resolve, by mutual agreement, inconsistent tax treatment by the two jurisdictions. 2011 taxact How to make your request. 2011 taxact   Your request for competent authority assistance must include all the information listed in Revenue Procedure 2006-23, 2006-20 I. 2011 taxact R. 2011 taxact B. 2011 taxact 900 available at www. 2011 taxact irs. 2011 taxact gov/pub/irs-irbs/irb06-49. 2011 taxact pdf. 2011 taxact    Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. 2011 taxact S. 2011 taxact competent authority assistance under tax treaties. 2011 taxact As noted, an update to Revenue Procedure 2006-23 will be published in the future. 2011 taxact   Your request must be in the form of a letter addressed to the Deputy Commissioner (International) LB&I. 2011 taxact It must contain a statement that competent authority assistance is requested under the mutual agreement procedure with the possession. 2011 taxact You (or a person having authority to sign your federal return) must sign and date the request. 2011 taxact    Send your written request for U. 2011 taxact S. 2011 taxact assistance under this procedure to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, N. 2011 taxact W. 2011 taxact  Routing: M4-365 Washington, DC 20224 (Attention: TAIT) Nonresident aliens generally must present their initial request for assistance to the relevant possession tax agency. 2011 taxact Credit or Refund In addition to the tax assistance request, if you seek a credit or refund of any overpayment of U. 2011 taxact S. 2011 taxact tax paid on the income in question, you should file a claim on Form 1040X, Amended U. 2011 taxact S. 2011 taxact Individual Income Tax Return. 2011 taxact Indicate on the form that a request for assistance under the mutual agreement procedure with the possession has been filed. 2011 taxact Attach a copy of the request to the form. 2011 taxact Also, you should take whatever steps must be taken under the possession tax code to prevent the expiration of the statutory period for filing a claim for credit or refund of a possession tax. 2011 taxact See Revenue Procedure 2006-54 (or its successor), section 9, for complete information. 2011 taxact Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Severe Storms, Tornadoes, Straight-line Winds and Flooding in Kentucky

Updated 3/13/2012 to include Grayson, Larue, Ohio, Russell and Trimble counties.
Updated 3/12/2012 to include Magoffin and Wolfe counties.
Updated 3/9/2012 to include Bath, Campbell, Carroll, Grant, Martin, Montgomery and Rowan counties.

KY-2012-08, March 7, 2012

DETROIT — Victims of the severe storms, tornadoes, straight-line winds and flooding that started on Feb. 29, 2012 in parts of Kentucky may qualify for tax relief from the Internal Revenue Service.

The President has declared Bath, Campbell, Carroll, Grant, Grayson, Johnson, Kenton, Larue, Laurel, Lawrence, Magoffin, Martin, Menifee, Montgomery, Morgan, Ohio, Pendleton, Rowan, Russell, Trimble and Wolfe counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Feb. 29, and on or before May 31, have been postponed to May 31, 2012. This includes the April 17 deadline for filing 2011 individual income tax returns, making income tax payments and making 2011 contributions to an individual retirement account (IRA).  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Feb. 29, and on or before March 15, as long as the deposits are made by March 15, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until May 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Feb. 29 and on or before May 31.

The IRS also gives affected taxpayers until May 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Feb. 29 and on or before May 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Feb. 29 and on or before March 15 provided the taxpayer makes these deposits by March 15.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Kentucky, Severe Storms, Tornadoes, Straight-line Winds, and Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Page Last Reviewed or Updated: 30-Jan-2014

The 2011 Taxact

2011 taxact Index A Adjusted gross income (AGI) Income limits for, Income Limits Age Age 65, Age 65. 2011 taxact Mandatory retirement age, Payments that are not disability income. 2011 taxact Assistance (see Tax help) C Citizenship requirement, U. 2011 taxact S. 2011 taxact Citizen or Resident Alien Credit figured by IRS, Credit Figured for You Credit figured for you, Credit Figured for You D Disability benefits Nontaxable by law, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Disability income, Disability income. 2011 taxact Disability, permanent and total disability, Qualified Individual, Permanent and total disability. 2011 taxact E Eligibility for credit, Are You Eligible for the Credit? Employer's accident or health plans or pension plans Disability income from, Disability income. 2011 taxact Excess adjusted gross income, Step 3. 2011 taxact Determine Excess Adjusted Gross Income F Figuring the credit yourself, Figuring the Credit Yourself Determine excess AGI, Step 3. 2011 taxact Determine Excess Adjusted Gross Income Determine initial amount, Step 1. 2011 taxact Determine Initial Amount Determine the credit, Step 5. 2011 taxact Determine Your Credit Determine the total of steps 2 and 3, Step 4. 2011 taxact Determine the Total of Steps 2 and 3 Total certain nontaxable pensions and benefits, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Foreign military service Pension, annuity, or disability benefit from, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Foreign Service Pension, annuity, or disability benefit from, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Form RRB-1099 Payments by Railroad Retirement Board, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Form SSA-1099 Social security benefit statement, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Free tax services, Free help with your tax return. 2011 taxact H Head of household, Head of household. 2011 taxact Help (see Tax help) I Income limits, Income Limits Initial amounts for persons under age 65, Initial amounts for persons under age 65. 2011 taxact J Joint returns, Married Persons L Limit on credit, Limit on credit. 2011 taxact Lump-sum payments Accrued annual leave, Payments that are not disability income. 2011 taxact Death benefits paid to surviving spouse or child, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits M Mandatory retirement age, Payments that are not disability income. 2011 taxact Married taxpayers, Married Persons Mentally incompetent persons Sheltered employment for, Sheltered employment. 2011 taxact Missing children Photographs of, Reminders N National Oceanic and Atmospheric Administration Pension, annuity, or disability benefit from, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Nonresident aliens, Exceptions. 2011 taxact Nontaxable payments, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits O Out of work, Substantial gainful activity. 2011 taxact P Pension or annuity payments Nontaxable by law, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Permanent and total disability, Qualified Individual, Permanent and total disability. 2011 taxact Physician certification, Permanent and total disability. 2011 taxact , Physician's statement. 2011 taxact Public Health Service Pension, annuity, or disability benefit from, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Publications (see Tax help) Q Qualified individual, Qualified Individual Age 65 or older, Qualified Individual Under age 65 and retired on permanent and total disability, Qualified Individual, Under Age 65 R Residence requirement, U. 2011 taxact S. 2011 taxact Citizen or Resident Alien S Schedule R, Credit Figured for You, Figuring the Credit Yourself, , Examples Sheltered employment, Sheltered employment. 2011 taxact Social security payments, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Substantial gainful activity, Substantial gainful activity. 2011 taxact T Tables and figures Figure A, Qualified individual determination, Substantial gainful activity. 2011 taxact Table 1, Income limits, Substantial gainful activity. 2011 taxact , Table 1. 2011 taxact Income Limits Table 2, Initial amounts, Table 2. 2011 taxact Initial Amounts Tax help, How To Get Tax Help TTY/TDD information, How To Get Tax Help U U. 2011 taxact S. 2011 taxact citizens and resident aliens, U. 2011 taxact S. 2011 taxact Citizen or Resident Alien V VA Form 21-0172 Certification of permanent and total disability, Veterans. 2011 taxact Veterans Certification by VA of permanent and total disability, Veterans. 2011 taxact Exclusion of nontaxable pension or annuity payment or disability benefits, Step 2. 2011 taxact Total Certain Nontaxable Pensions and Benefits Prev  Up     Home   More Online Publications