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Amend 1040

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Amend 1040

Amend 1040 Publication 971 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Amend 1040 Questions & AnswersThis section answers questions commonly asked by taxpayers about innocent spouse relief. Amend 1040 . Amend 1040 What is joint and several liability? . Amend 1040 How can I get relief from joint and several liability? . Amend 1040 What are the rules for innocent spouse relief? . Amend 1040 What are erroneous items? . Amend 1040 What is an understated tax? . Amend 1040 Will I qualify for innocent spouse relief in any situation where there is an understated tax? . Amend 1040 What are the rules for separation of liability relief? . Amend 1040 Why would a request for separation of liability relief be denied? . Amend 1040 What are the rules for equitable relief? . Amend 1040 How do state community property laws affect my ability to qualify for relief? . Amend 1040 How do I request relief? . Amend 1040 When should I file Form 8857? . Amend 1040 Where should I file Form 8857? . Amend 1040 I am currently undergoing an examination of my return. Amend 1040 How do I request innocent spouse relief? . Amend 1040 What if the IRS has given me notice that it will levy my account for the tax liability and I decide to request relief? . Amend 1040 What is injured spouse relief? . Amend 1040 What is joint and several liability? When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. Amend 1040 This is called joint and several liability. Amend 1040 Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due, even if the additional tax is due to the income, deductions, or credits of your spouse or former spouse. Amend 1040 You remain jointly and severally liable for taxes, and the IRS still can collect from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax. Amend 1040 There are three types of relief for filers of joint returns: “innocent spouse relief,” “separation of liability relief,” and “equitable relief. Amend 1040 ” Each type has different requirements. Amend 1040 They are explained separately below. Amend 1040 To qualify for innocent spouse relief, you must meet all of the following conditions. Amend 1040 You must have filed a joint return which has an understated tax. Amend 1040 The understated tax must be due to erroneous items of your spouse (or former spouse). Amend 1040 You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax. Amend 1040 Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax. Amend 1040 You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Amend 1040 You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Amend 1040 For example, you reported total tax on your 2008 return of $2,500. Amend 1040 IRS determined in an audit of your 2008 return that the total tax should be $3,000. Amend 1040 You have a $500 understated tax. Amend 1040 No. Amend 1040 There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Amend 1040 For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Amend 1040 You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Amend 1040 Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 How can I get relief from joint and several liability? There are three types of relief for filers of joint returns: “innocent spouse relief,” “separation of liability relief,” and “equitable relief. Amend 1040 ” Each type has different requirements. Amend 1040 They are explained separately below. Amend 1040 To qualify for innocent spouse relief, you must meet all of the following conditions. Amend 1040 You must have filed a joint return which has an understated tax. Amend 1040 The understated tax must be due to erroneous items of your spouse (or former spouse). Amend 1040 You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax. Amend 1040 Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax. Amend 1040 You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Amend 1040 You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Amend 1040 For example, you reported total tax on your 2008 return of $2,500. Amend 1040 IRS determined in an audit of your 2008 return that the total tax should be $3,000. Amend 1040 You have a $500 understated tax. Amend 1040 No. Amend 1040 There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Amend 1040 For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Amend 1040 You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Amend 1040 Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 What are the rules for innocent spouse relief? To qualify for innocent spouse relief, you must meet all of the following conditions. Amend 1040 You must have filed a joint return which has an understated tax. Amend 1040 The understated tax must be due to erroneous items of your spouse (or former spouse). Amend 1040 You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax. Amend 1040 Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax. Amend 1040 You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Amend 1040 You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Amend 1040 For example, you reported total tax on your 2008 return of $2,500. Amend 1040 IRS determined in an audit of your 2008 return that the total tax should be $3,000. Amend 1040 You have a $500 understated tax. Amend 1040 No. Amend 1040 There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Amend 1040 For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Amend 1040 You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Amend 1040 Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 What are “erroneous items”? Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Amend 1040 You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Amend 1040 For example, you reported total tax on your 2008 return of $2,500. Amend 1040 IRS determined in an audit of your 2008 return that the total tax should be $3,000. Amend 1040 You have a $500 understated tax. Amend 1040 No. Amend 1040 There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Amend 1040 For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Amend 1040 You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Amend 1040 Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 What is an “understated tax”? You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Amend 1040 For example, you reported total tax on your 2008 return of $2,500. Amend 1040 IRS determined in an audit of your 2008 return that the total tax should be $3,000. Amend 1040 You have a $500 understated tax. Amend 1040 No. Amend 1040 There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Amend 1040 For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Amend 1040 You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Amend 1040 Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 Will I qualify for innocent spouse relief in any situation where there is an understated tax? No. Amend 1040 There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Amend 1040 For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Amend 1040 You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Amend 1040 Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 What are the rules for separation of liability relief? Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Amend 1040 The understated tax allocated to you is generally the amount you are responsible for. Amend 1040 To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Amend 1040 You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Amend 1040 (Under this rule, you are no longer married if you are widowed. Amend 1040 ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Amend 1040 In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Amend 1040 Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 Why would a request for separation of liability relief be denied? Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Amend 1040 The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Amend 1040 The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Amend 1040 Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Amend 1040 Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 What are the rules for equitable relief? Equitable relief is only available if you meet all of the following conditions. Amend 1040 You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Amend 1040 You have an understated tax or underpaid tax. Amend 1040 See Note later. Amend 1040 You did not pay the tax. Amend 1040 However, see Refunds , earlier, for exceptions. Amend 1040 The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Amend 1040 You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Amend 1040 Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Amend 1040 You did not file or fail to file your return with the intent to commit fraud. Amend 1040 The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Amend 1040 For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Amend 1040 You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Amend 1040 Note. Amend 1040 Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Amend 1040 (An underpaid tax is tax that is properly shown on the return, but has not been paid. Amend 1040 ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or resume collecting from you. Amend 1040 The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Amend 1040 See Publication 594 for more information. Amend 1040 Injured spouse relief is different from innocent spouse relief. Amend 1040 When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Amend 1040 The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Amend 1040 You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Amend 1040 You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Amend 1040 You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Amend 1040 Note. Amend 1040 If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Amend 1040 . Amend 1040 How do state community property laws affect my ability to qualify for relief? Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Amend 1040 Generally, community property laws require you to allocate community income and expenses equally between both spouses. Amend 1040 However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Amend 1040      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Amend 1040 You must file an additional Form 8857 if you are requesting relief for more than three years. Amend 1040 If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Amend 1040 If you are requesting equitable relief, see Exception for equitable relief. Amend 1040 under How To Request Relief, earlier, for when to file Form 8857. Amend 1040 If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Amend 1040 Use the address or fax number shown in the Instructions for Form 8857. Amend 1040 File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Amend 1040 Do not file it with the employee assigned to examine your return. Amend 1040 Generally, the IRS has 10 years to collect an amount you owe. Amend 1040 This is the collection statute of limitations. Amend 1040 By law, the IRS is not allowed to collect from you after the 10-year period ends. Amend 1040 If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Amend 1040 But interest and penalties continue to accrue. Amend 1040 Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Amend 1040 This includes the time the Tax Court is considering your request. Amend 1040 After your case is resolved, the IRS can begin or
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Robo de Identidad y su Record Tributario

El IRS trabajará con víctimas del robo de identidad
El Servicio de Impuestos Internos, (Internal Revenue Service, IRS) no inicia comunicación con el contribuyente a través de correo electrónico. Antes de que sea robada su identidad, proteja su información.

¡Proteja su información personal! El IRS no inicia comunicación con los contribuyentes a través de correo electrónico
Phishing se le llama a la práctica de “pescar información” y de atrapar victimas. Los estafadores utilizan esta práctica para enviar mensajes, engañar a las victimas y robar la identidad de las victimas.

Cómo enviar el encabezado de un correo electrónico de phishing
Phishing, se le llama a la práctica de enviar correo electrónico no solicitado, el cual falsamente dice provenir de un negocio legítimo, cuyo fin es engañar al usuario para que revele información privada y así robar la identidad del usuario.

Protéjase a usted mismo y reporte emails dudosos o estafas de phishing
Phishing, es el acto de enviar un email fraudulento con la intención de engañar al usuario para que éste divulgue información privada, la cual sería usada para robarle la identidad.
 

Page Last Reviewed or Updated: 12-Dec-2013

The Amend 1040

Amend 1040 2. Amend 1040   Source of Income Table of Contents Introduction Topics - This chapter discusses: Resident Aliens Nonresident AliensInterest Income Dividends Guarantee of Indebtedness Personal Services Transportation Income Scholarships, Grants, Prizes, and Awards Pensions and Annuities Rents or Royalties Real Property Personal Property Community Income Introduction After you have determined your alien status, you must determine the source of your income. Amend 1040 This chapter will help you determine the source of different types of income you may receive during the tax year. Amend 1040 This chapter also discusses special rules for married individuals who are domiciled in a country with community property laws. Amend 1040 Topics - This chapter discusses: Income source rules, and Community income. Amend 1040 Resident Aliens A resident alien's income is generally subject to tax in the same manner as a U. Amend 1040 S. Amend 1040 citizen. Amend 1040 If you are a resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U. Amend 1040 S. Amend 1040 tax return. Amend 1040 You must report these amounts from sources within and outside the United States. Amend 1040 Nonresident Aliens A nonresident alien usually is subject to U. Amend 1040 S. Amend 1040 income tax only on U. Amend 1040 S. Amend 1040 source income. Amend 1040 Under limited circumstances, certain foreign source income is subject to U. Amend 1040 S. Amend 1040 tax. Amend 1040 See Foreign Income in chapter 4. Amend 1040 The general rules for determining U. Amend 1040 S. Amend 1040 source income that apply to most nonresident aliens are shown in Table 2-1. Amend 1040 The following discussions cover the general rules as well as the exceptions to these rules. Amend 1040 Not all items of U. Amend 1040 S. Amend 1040 source income are taxable. Amend 1040 See chapter 3. Amend 1040 Interest Income Generally, U. Amend 1040 S. Amend 1040 source interest income includes the following items. Amend 1040 Interest on bonds, notes, or other interest-bearing obligations of U. Amend 1040 S. Amend 1040 residents or domestic corporations. Amend 1040 Interest paid by a domestic or foreign partnership or foreign corporation engaged in a U. Amend 1040 S. Amend 1040 trade or business at any time during the tax year. Amend 1040 Original issue discount. Amend 1040 Interest from a state, the District of Columbia, or the U. Amend 1040 S. Amend 1040 Government. Amend 1040 The place or manner of payment is immaterial in determining the source of the income. Amend 1040 A substitute interest payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as the interest on the transferred security. Amend 1040 Exceptions. Amend 1040   U. Amend 1040 S. Amend 1040 source interest income does not include the following items. Amend 1040 Interest paid by a resident alien or a domestic corporation on obligations issued before August 10, 2010, if for the 3-year period ending with the close of the payer's tax year preceding the interest payment, at least 80% of the payer's total gross income: Is from sources outside the United States, and Is attributable to the active conduct of a trade or business by the individual or corporation in a foreign country or a U. Amend 1040 S. Amend 1040 possession. Amend 1040 However, the interest will be considered U. Amend 1040 S. Amend 1040 source interest income if either of the following apply. Amend 1040 The recipient of the interest is related to the resident alien or domestic corporation. Amend 1040 See section 954(d)(3) for the definition of related person. Amend 1040 The terms of the obligation are significantly modified after August 9, 2010. Amend 1040 Any extension of the term of the obligation is considered a significant modification. Amend 1040 Interest paid by a foreign branch of a domestic corporation or a domestic partnership on deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law if the interest paid or credited can be deducted by the association. Amend 1040 Interest on deposits with a foreign branch of a domestic corporation or domestic partnership, but only if the branch is in the commercial banking business. Amend 1040 Dividends In most cases, dividend income received from domestic corporations is U. Amend 1040 S. Amend 1040 source income. Amend 1040 Dividend income from foreign corporations is usually foreign source income. Amend 1040 Exceptions to both of these rules are discussed below. Amend 1040 A substitute dividend payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as a distribution on the transferred security. Amend 1040 Dividend equivalent payments. Amend 1040   U. Amend 1040 S. Amend 1040 source dividends also include all dividend equivalent payments. Amend 1040 Dividend equivalent payments include substitute dividends, payments made pursuant to a specified notional principal contract, and all similar payments that, directly or indirectly, are contingent on or determined by reference to, the payment of a dividend from U. Amend 1040 S. Amend 1040 sources. Amend 1040    The Internal Revenue Service has issued final regulations that would affect the treatment of dividend equivalent payments and specified notional principal contracts. Amend 1040 You can view this regulation at www. Amend 1040 irs. Amend 1040 gov/irb/2013-52_IRB/ar08. Amend 1040 html. Amend 1040 First exception. Amend 1040   Dividends received from a domestic corporation are not U. Amend 1040 S. Amend 1040 source income if the corporation elects to take the American Samoa economic development credit. Amend 1040 Second exception. Amend 1040   Part of the dividends received from a foreign corporation is U. Amend 1040 S. Amend 1040 source income if 25% or more of its total gross income for the 3-year period ending with the close of its tax year preceding the declaration of dividends was effectively connected with a trade or business in the United States. Amend 1040 If the corporation was formed less than 3 years before the declaration, use its total gross income from the time it was formed. Amend 1040 Determine the part that is U. Amend 1040 S. Amend 1040 source income by multiplying the dividend by the following fraction. Amend 1040   Foreign corporation's gross income connected with a U. Amend 1040 S. Amend 1040 trade or business for the 3-year period     Foreign corporation's gross income from all sources for that period   Guarantee of Indebtedness Certain amounts received directly or indirectly, for the provision of a guarantee of indebtedness issued after September 27, 2010, are U. Amend 1040 S. Amend 1040 source income. Amend 1040 They must be paid by a noncorporate resident or U. Amend 1040 S. Amend 1040 corporation or by any foreign person if the amounts are effectively connected with the conduct of a U. Amend 1040 S. Amend 1040 trade or business. Amend 1040 For more information, see Internal Revenue Code sections 861(a)(9) and 862(a)(9). Amend 1040 Personal Services All wages and any other compensation for services performed in the United States are considered to be from sources in the United States. Amend 1040 The only exceptions to this rule are discussed in chapter 3 under Employees of foreign persons, organizations, or offices, and under Crew members. Amend 1040 If you are an employee and receive compensation for labor or personal services performed both inside and outside the United States, special rules apply in determining the source of the compensation. Amend 1040 Compensation (other than certain fringe benefits) is sourced on a time basis. Amend 1040 Certain fringe benefits (such as housing and education) are sourced on a geographical basis. Amend 1040 Or, you may be permitted to use an alternative basis to determine the source of compensation. Amend 1040 See Alternative Basis , later. Amend 1040 Multi-level marketing. Amend 1040   Certain companies sell products through a multi-level marketing arrangement, such that an upper-tier distributor, who has sponsored a lower-tier distributor, is entitled to a payment from the company based on certain activities of that lower-tier distributor. Amend 1040 Generally, depending on the facts, payments from such multi-level marketing companies to independent (non-employee) distributors (upper-tier distributors) that are based on the sales or purchases of persons whom they have sponsored (lower-tier distributors) constitute income for the performance of personal services in recruiting, training, and supporting the lower-tier distributors. Amend 1040 The source of such income is generally based on where the services of the upper-tier distributor are performed, and may, depending on the facts, be considered multi-year compensation, with the source of income determined over the period to which such compensation is attributable. Amend 1040 Self-employed individuals. Amend 1040   If you are self-employed, you determine the source of compensation for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. Amend 1040 In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. Amend 1040 Time Basis Use a time basis to figure your U. Amend 1040 S. Amend 1040 source compensation (other than the fringe benefits discussed later). Amend 1040 Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed services in the United States during the year     Total number of days you performed services during the year   You can use a unit of time less than a day in the above fraction, if appropriate. Amend 1040 The time period for which the compensation is made does not have to be a year. Amend 1040 Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. Amend 1040 Example 1. Amend 1040 Christina Brooks, a resident of the Netherlands, worked 240 days for a U. Amend 1040 S. Amend 1040 company during the tax year. Amend 1040 She received $80,000 in compensation. Amend 1040 None of it was for fringe benefits. Amend 1040 Christina performed services in the United States for 60 days and performed services in the Netherlands for 180 days. Amend 1040 Using the time basis for determining the source of compensation, $20,000 ($80,000 × 60/240) is her U. Amend 1040 S. Amend 1040 source income. Amend 1040 Example 2. Amend 1040 Rob Waters, a resident of South Africa, is employed by a corporation. Amend 1040 His annual salary is $100,000. Amend 1040 None of it is for fringe benefits. Amend 1040 During the first quarter of the year he worked entirely within the United States. Amend 1040 On April 1, Rob was transferred to Singapore for the remainder of the year. Amend 1040 Rob is able to establish that the first quarter of the year and the last 3 quarters of the year are two separate, distinct, and continuous periods of time. Amend 1040 Accordingly, $25,000 of Rob's annual salary is attributable to the first quarter of the year (. Amend 1040 25 × $100,000). Amend 1040 All of it is U. Amend 1040 S. Amend 1040 source income because he worked entirely within the United States during that quarter. Amend 1040 The remaining $75,000 is attributable to the last three quarters of the year. Amend 1040 During those quarters, he worked 150 days in Singapore and 30 days in the United States. Amend 1040 His periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time. Amend 1040 Of this $75,000, $12,500 ($75,000 × 30/180) is U. Amend 1040 S. Amend 1040 source income. Amend 1040 Multi-year compensation. Amend 1040   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. Amend 1040 Multi-year compensation is compensation that is included in your income in one tax year but that is attributable to a period that includes two or more tax years. Amend 1040   You determine the period to which the compensation is attributable based on the facts and circumstances of your case. Amend 1040 For example, an amount of compensation that specifically relates to a period of time that includes several calendar years is attributable to the entire multi-year period. Amend 1040   The amount of compensation treated as from U. Amend 1040 S. Amend 1040 sources is figured by multiplying the total multi-year compensation by a fraction. Amend 1040 The numerator of the fraction is the number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in the United States in connection with the project. Amend 1040 The denominator of the fraction is the total number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in connection with the project. Amend 1040 Geographical Basis Compensation you receive as an employee in the form of the following fringe benefits is sourced on a geographical basis. Amend 1040 Housing. Amend 1040 Education. Amend 1040 Local transportation. Amend 1040 Tax reimbursement. Amend 1040 Hazardous or hardship duty pay as defined in Regulations section 1. Amend 1040 861-4(b)(2)(ii)(D)(5). Amend 1040 Moving expense reimbursement. Amend 1040 The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence. Amend 1040 Principal place of work. Amend 1040   The above fringe benefits, except for tax reimbursement and hazardous or hardship duty pay, are sourced based on your principal place of work. Amend 1040 Your principal place of work is usually the place where you spend most of your working time. Amend 1040 This could be your office, plant, store, shop, or other location. Amend 1040 If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. Amend 1040   If you have more than one job at any time, your main job location depends on the facts in each case. Amend 1040 The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. Amend 1040 Housing. Amend 1040   The source of a housing fringe benefit is determined based on the location of your principal place of work. Amend 1040 A housing fringe benefit includes payments to you or on your behalf (and your family's if your family resides with you) only for the following. Amend 1040 Rent. Amend 1040 Utilities (except telephone charges). Amend 1040 Real and personal property insurance. Amend 1040 Occupancy taxes not deductible under section 164 or 216(a). Amend 1040 Nonrefundable fees for securing a leasehold. Amend 1040 Rental of furniture and accessories. Amend 1040 Household repairs. Amend 1040 Residential parking. Amend 1040 Fair rental value of housing provided in kind by your employer. Amend 1040   A housing fringe benefit does not include: Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation), The cost of buying property, including principal payments on a mortgage, The cost of domestic labor (maids, gardeners, etc. Amend 1040 ), Pay television subscriptions, Improvements and other expenses that increase the value or appreciably prolong the life of property, Purchased furniture or accessories, Depreciation or amortization of property or improvements, The value of meals or lodging that you exclude from gross income, or The value of meals or lodging that you deduct as moving expenses. Amend 1040 Education. Amend 1040   The source of an education fringe benefit for the education expenses of your dependents is determined based on the location of your principal place of work. Amend 1040 An education fringe benefit includes payments only for the following expenses for education at an elementary or secondary school. Amend 1040 Tuition, fees, academic tutoring, special needs services for a special needs student, books, supplies, and other equipment. Amend 1040 Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance. Amend 1040 Local transportation. Amend 1040   The source of a local transportation fringe benefit is determined based on the location of your principal place of work. Amend 1040 Your local transportation fringe benefit is the amount that you receive as compensation for local transportation for you or your spouse or dependents at the location of your principal place of work. Amend 1040 The amount treated as a local transportation fringe benefit is limited to actual expenses incurred for local transportation and the fair rental value of any employer-provided vehicle used predominantly by you, your spouse, or your dependents for local transportation. Amend 1040 Actual expenses do not include the cost (including interest) of any vehicle purchased by you or on your behalf. Amend 1040 Tax reimbursement. Amend 1040   The source of a tax reimbursement fringe benefit is determined based on the location of the jurisdiction that imposed the tax for which you are reimbursed. Amend 1040 Moving expense reimbursement. Amend 1040   The source of a moving expense reimbursement is generally based on the location of your new principal place of work. Amend 1040 However, the source is determined based on the location of your former principal place of work if you provide sufficient evidence that such determination of source is more appropriate under the facts and circumstances of your case. Amend 1040 Sufficient evidence generally requires an agreement between you and your employer, or a written statement of company policy, which is reduced to writing before the move and which is entered into or established to induce you or other employees to move to another country. Amend 1040 The written statement or agreement must state that your employer will reimburse you for moving expenses that you incur to return to your former principal place of work regardless of whether you continue to work for your employer after returning to that location. Amend 1040 It may contain certain conditions upon which the right to reimbursement is determined as long as those conditions set forth standards that are definitely ascertainable and can only be fulfilled prior to, or through completion of, your return move to your former principal place of work. Amend 1040 Alternative Basis If you are an employee, you can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your compensation than the time or geographical basis. Amend 1040 If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your compensation. Amend 1040 Also, if your total compensation from all sources is $250,000 or more, check “Yes” to both questions on line K on page 5 of Form 1040NR, and attach a written statement to your tax return that sets forth all of the following. Amend 1040 Your name and social security number (written across the top of the statement). Amend 1040 The specific compensation income, or the specific fringe benefit, for which you are using the alternative basis. Amend 1040 For each item in (2), the alternative basis of allocation of source used. Amend 1040 For each item in (2), a computation showing how the alternative allocation was computed. Amend 1040 A comparison of the dollar amount of the U. Amend 1040 S. Amend 1040 compensation and foreign compensation sourced under both the alternative basis and the time or geographical basis discussed earlier. Amend 1040 Transportation Income Transportation income is income from the use of a vessel or aircraft or for the performance of services directly related to the use of any vessel or aircraft. Amend 1040 This is true whether the vessel or aircraft is owned, hired, or leased. Amend 1040 The term “vessel or aircraft” includes any container used in connection with a vessel or aircraft. Amend 1040 All income from transportation that begins and ends in the United States is treated as derived from sources in the United States. Amend 1040 If the transportation begins or ends in the United States, 50% of the transportation income is treated as derived from sources in the United States. Amend 1040 For transportation income from personal services, 50% of the income is U. Amend 1040 S. Amend 1040 source income if the transportation is between the United States and a U. Amend 1040 S. Amend 1040 possession. Amend 1040 For nonresident aliens, this only applies to income derived from, or in connection with, an aircraft. Amend 1040 For information on how U. Amend 1040 S. Amend 1040 source transportation income is taxed, see chapter 4. Amend 1040 Scholarships, Grants, Prizes, and Awards Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. Amend 1040 However, see Activities to be performed outside the United States , later. Amend 1040 For example, payments for research or study in the United States made by the United States, a noncorporate U. Amend 1040 S. Amend 1040 resident, or a domestic corporation, are from U. Amend 1040 S. Amend 1040 sources. Amend 1040 Similar payments from a foreign government or foreign corporation are foreign source payments even though the funds may be disbursed through a U. Amend 1040 S. Amend 1040 agent. Amend 1040 Payments made by an entity designated as a public international organization under the International Organizations Immunities Act are from foreign sources. Amend 1040 Activities to be performed outside the United States. Amend 1040   Scholarships, fellowship grants, targeted grants, and achievement awards received by nonresident aliens for activities performed, or to be performed, outside the United States are not U. Amend 1040 S. Amend 1040 source income. Amend 1040    These rules do not apply to amounts paid as salary or other compensation for services. Amend 1040 See Personal Services, earlier, for the source rules that apply. Amend 1040 Pensions and Annuities If you receive a pension from a domestic trust for services performed both in and outside the United States, part of the pension payment is from U. Amend 1040 S. Amend 1040 sources. Amend 1040 That part is the amount attributable to earnings of the pension plan and the employer contributions made for services performed in the United States. Amend 1040 This applies whether the distribution is made under a qualified or nonqualified stock bonus, pension, profit-sharing, or annuity plan (whether or not funded). Amend 1040 If you performed services as an employee of the United States, you may receive a distribution from the U. Amend 1040 S. Amend 1040 Government under a plan, such as the Civil Service Retirement System, that is treated as a qualified pension plan. Amend 1040 Your U. Amend 1040 S. Amend 1040 source income is the otherwise taxable amount of the distribution that is attributable to your total U. Amend 1040 S. Amend 1040 Government basic pay other than tax-exempt pay for services performed outside the United States. Amend 1040 Rents or Royalties Your U. Amend 1040 S. Amend 1040 source income includes rent and royalty income received during the tax year from property located in the United States or from any interest in that property. Amend 1040 U. Amend 1040 S. Amend 1040 source income also includes rents or royalties for the use of, or for the privilege of using, in the United States, intangible property such as patents, copyrights, secret processes and formulas, goodwill, trademarks, franchises, and similar property. Amend 1040 Real Property Real property is land and buildings and generally anything built on, growing on, or attached to land. Amend 1040 Gross income from sources in the United States includes gains, profits, and income from the sale or other disposition of real property located in the United States. Amend 1040 Natural resources. Amend 1040   The income from the sale of products of any farm, mine, oil or gas well, other natural deposit, or timber located in the United States and sold in a foreign country, or located in a foreign country and sold in the United States, is partly from sources in the United States. Amend 1040 For information on determining that part, see section 1. Amend 1040 863-1(b) of the regulations. Amend 1040 Table 2-1. Amend 1040 Summary of Source Rules for Income of Nonresident Aliens Item of income Factor determining source Salaries, wages, other compensation Where services performed Business income:   Personal services Where services performed Sale of inventory—purchased Where sold Sale of inventory—produced Allocation Interest Residence of payer Dividends Whether a U. Amend 1040 S. Amend 1040 or foreign corporation* Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. Amend 1040 Where property is used Sale of real property Location of property Sale of personal property Seller's tax home (but see Personal Property , later, for exceptions) Pension distributions attributable to contributions Where services were performed that earned the pension Investment earnings on pension contributions Location of pension trust Sale of natural resources Allocation based on fair market value of product at export terminal. Amend 1040 For more information, see section 1. Amend 1040 863-1(b) of the regulations. Amend 1040 *Exceptions include: a) Dividends paid by a U. Amend 1040 S. Amend 1040 corporation are foreign source if the corporation elects the  American Samoa economic development credit. Amend 1040  b) Part of a dividend paid by a foreign corporation is U. Amend 1040 S. Amend 1040 source if at least 25% of the  corporation's gross income is effectively connected with a U. Amend 1040 S. Amend 1040 trade or business for the  3 tax years before the year in which the dividends are declared. Amend 1040 Personal Property Personal property is property, such as machinery, equipment, or furniture, that is not real property. Amend 1040 Gain or loss from the sale or exchange of personal property generally has its source in the United States if you have a tax home in the United States. Amend 1040 If you do not have a tax home in the United States, the gain or loss generally is considered to be from sources outside the United States. Amend 1040 Tax home. Amend 1040   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Amend 1040 Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. Amend 1040 If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Amend 1040 If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Amend 1040 Inventory property. Amend 1040   Inventory property is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. Amend 1040 Income from the sale of inventory that you purchased is sourced where the property is sold. Amend 1040 Generally, this is where title to the property passes to the buyer. Amend 1040 For example, income from the sale of inventory in the United States is U. Amend 1040 S. Amend 1040 source income, whether you purchased it in the United States or in a foreign country. Amend 1040   Income from the sale of inventory property that you produced in the United States and sold outside the United States (or vice versa) is partly from sources in the United States and partly from sources outside the United States. Amend 1040 For information on making this allocation, see section 1. Amend 1040 863-3 of the regulations. Amend 1040   These rules apply even if your tax home is not in the United States. Amend 1040 Depreciable property. Amend 1040   To determine the source of any gain from the sale of depreciable personal property, you must first figure the part of the gain that is not more than the total depreciation adjustments on the property. Amend 1040 You allocate this part of the gain to sources in the United States based on the ratio of U. Amend 1040 S. Amend 1040 depreciation adjustments to total depreciation adjustments. Amend 1040 The rest of this part of the gain is considered to be from sources outside the United States. Amend 1040   For this purpose, “U. Amend 1040 S. Amend 1040 depreciation adjustments” are the depreciation adjustments to the basis of the property that are allowable in figuring taxable income from U. Amend 1040 S. Amend 1040 sources. Amend 1040 However, if the property is used predominantly in the United States during a tax year, all depreciation deductions allowable for that year are treated as U. Amend 1040 S. Amend 1040 depreciation adjustments. Amend 1040 But there are some exceptions for certain transportation, communications, and other property used internationally. Amend 1040   Gain from the sale of depreciable property that is more than the total depreciation adjustments on the property is sourced as if the property were inventory property, as discussed above. Amend 1040   A loss is sourced in the same way as the depreciation deductions were sourced. Amend 1040 However, if the property was used predominantly in the United States, the entire loss reduces U. Amend 1040 S. Amend 1040 source income. Amend 1040   The basis of property usually means the cost (money plus the fair market value of other property or services) of property you acquire. Amend 1040 Depreciation is an amount deducted to recover the cost or other basis of a trade or business asset. Amend 1040 The amount you can deduct depends on the property's cost, when you began using the property, how long it will take to recover your cost, and which depreciation method you use. Amend 1040 A depreciation deduction is any deduction for depreciation or amortization or any other allowable deduction that treats a capital expenditure as a deductible expense. Amend 1040 Intangible property. Amend 1040   Intangible property includes patents, copyrights, secret processes or formulas, goodwill, trademarks, trade names, or other like property. Amend 1040 The gain from the sale of amortizable or depreciable intangible property, up to the previously allowable amortization or depreciation deductions, is sourced in the same way as the original deductions were sourced. Amend 1040 This is the same as the source rule for gain from the sale of depreciable property. Amend 1040 See Depreciable property , earlier, for details on how to apply this rule. Amend 1040   Gain in excess of the amortization or depreciation deductions is sourced in the country where the property is used if the income from the sale is contingent on the productivity, use, or disposition of that property. Amend 1040 If the income is not contingent on the productivity, use, or disposition of the property, the income is sourced according to your tax home as discussed earlier. Amend 1040 If payments for goodwill do not depend on its productivity, use, or disposition, their source is the country in which the goodwill was generated. Amend 1040 Sales through offices or fixed places of business. Amend 1040   Despite any of the earlier rules, if you do not have a tax home in the United States, but you maintain an office or other fixed place of business in the United States, treat the income from any sale of personal property (including inventory property) that is attributable to that office or place of business as U. Amend 1040 S. Amend 1040 source income. Amend 1040 However, this rule does not apply to sales of inventory property for use, disposition, or consumption outside the United States if your office or other fixed place of business outside the United States materially participated in the sale. Amend 1040   If you have a tax home in the United States but maintain an office or other fixed place of business outside the United States, income from sales of personal property, other than inventory, depreciable property, or intangibles, that is attributable to that foreign office or place of business may be treated as U. Amend 1040 S. Amend 1040 source income. Amend 1040 The income is treated as U. Amend 1040 S. Amend 1040 source income if an income tax of less than 10% of the income from the sale is paid to a foreign country. Amend 1040 This rule also applies to losses if the foreign country would have imposed an income tax of less than 10% had the sale resulted in a gain. Amend 1040 Community Income If you are married and you or your spouse is subject to the community property laws of a foreign country, a U. Amend 1040 S. Amend 1040 state, or a U. Amend 1040 S. Amend 1040 possession, you generally must follow those laws to determine the income of yourself and your spouse for U. Amend 1040 S. Amend 1040 tax purposes. Amend 1040 But you must disregard certain community property laws if: Both you and your spouse are nonresident aliens, or One of you is a nonresident alien and the other is a U. Amend 1040 S. Amend 1040 citizen or resident and you do not both choose to be treated as U. Amend 1040 S. Amend 1040 residents as explained in chapter 1. Amend 1040 In these cases, you and your spouse must report community income as explained later. Amend 1040 Earned income. Amend 1040   Earned income of a spouse, other than trade or business income and a partner's distributive share of partnership income, is treated as the income of the spouse whose services produced the income. Amend 1040 That spouse must report all of it on his or her separate return. Amend 1040 Trade or business income. Amend 1040   Trade or business income, other than a partner's distributive share of partnership income, is treated as the income of the spouse carrying on the trade or business. Amend 1040 That spouse must report all of it on his or her separate return. Amend 1040 Partnership income (or loss). Amend 1040   A partner's distributive share of partnership income (or loss) is treated as the income (or loss) of the partner. Amend 1040 The partner must report all of it on his or her separate return. Amend 1040 Separate property income. Amend 1040   Income derived from the separate property of one spouse (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that spouse. Amend 1040 That spouse must report all of it on his or her separate return. Amend 1040 Use the appropriate community property law to determine what is separate property. Amend 1040 Other community income. Amend 1040   All other community income is treated as provided by the applicable community property laws. Amend 1040 Prev  Up  Next   Home   More Online Publications