File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Https Www Freefilefillableforms Org

How To File An Amended Tax Return For 20131040 2012 Tax FormTax Forms Online 2012Free Tax FilingIrs Forms 1040nr1040 Nr Software10 40 Ez Form 2012Self Employed Tax CalculatorFree State Tax Filing OnlyHow To File An Extension For 2011 Taxes FreeDo State Taxes Online FreeIrs Tax Filing OnlineAmend 2010 ReturnHow Can I File My 2011 Taxes Online For FreeHr Tax CutFree 2011 Taxes1040x 2010 FormH&r Block Military Free FileFree State File Tax ReturnFree Online Tax Filing 2012Irs Gov Form 1040xIrs Instructions 1040Irs E File 2012Tax Extension For UnemployedFile 2007 Taxes Online FreeCt 1040xWhere To Get State Tax FormsHow To Do State Tax ReturnIrs 2012 Tax Forms 1040ez InstructionsH And R Block Free EfileHow To File A Amended Tax ReturnWww Irs Gov 1040x InstructionsHow To File 1040x1040ez Instructions 2012Free Ez FormFiling My 2012 TaxesFree State Tax Program1040ez Online FormFile 2012 State Taxes FreeFile 2011 Taxes Online For Free

Https Www Freefilefillableforms Org

Https www freefilefillableforms org 4. Https www freefilefillableforms org   Foreign Earned Income and Housing: Exclusion – Deduction Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Who Qualifies for the Exclusions and the Deduction? RequirementsTax Home in Foreign Country Bona Fide Residence Test Physical Presence Test Waiver of Time Requirements U. Https www freefilefillableforms org S. Https www freefilefillableforms org Travel Restrictions Foreign Earned Income Foreign Earned Income ExclusionLimit on Excludable Amount Choosing the Exclusion Foreign Housing Exclusion and DeductionHousing Amount Foreign Housing Exclusion Foreign Housing Deduction Married Couples Form 2555 and Form 2555-EZForm 2555-EZ Form 2555 Topics - This chapter discusses: Who qualifies for the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, The requirements that must be met to claim either exclusion or the deduction, How to figure the foreign earned income exclusion, and How to figure the foreign housing exclusion and the foreign housing deduction. Https www freefilefillableforms org Useful Items - You may want to see: Publication 519 U. Https www freefilefillableforms org S. Https www freefilefillableforms org Tax Guide for Aliens 570 Tax Guide for Individuals With Income from U. Https www freefilefillableforms org S. Https www freefilefillableforms org Possessions 596 Earned Income Credit (EIC) Form (and Instructions) 1040X Amended U. Https www freefilefillableforms org S. Https www freefilefillableforms org Individual Income Tax Return 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion See chapter 7 for information about getting these publications and forms. Https www freefilefillableforms org Who Qualifies for the Exclusions and the Deduction? If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction. Https www freefilefillableforms org If you are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. Https www freefilefillableforms org However, you may qualify to exclude from income up to $97,600 of your foreign earnings. Https www freefilefillableforms org In addition, you can exclude or deduct certain foreign housing amounts. Https www freefilefillableforms org See Foreign Earned Income Exclusion and Foreign Housing Exclusion and Deduction, later. Https www freefilefillableforms org You also may be entitled to exclude from income the value of meals and lodging provided to you by your employer. Https www freefilefillableforms org See Exclusion of Meals and Lodging, later. Https www freefilefillableforms org Requirements To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must meet all three of the following requirements. Https www freefilefillableforms org Your tax home must be in a foreign country. Https www freefilefillableforms org You must have foreign earned income. Https www freefilefillableforms org You must be one of the following. Https www freefilefillableforms org A U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Https www freefilefillableforms org A U. Https www freefilefillableforms org S. Https www freefilefillableforms org resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Https www freefilefillableforms org A U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen or a U. Https www freefilefillableforms org S. Https www freefilefillableforms org resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. Https www freefilefillableforms org See Publication 519 to find out if you are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org resident alien for tax purposes and whether you keep that alien status when you temporarily work abroad. Https www freefilefillableforms org If you are a nonresident alien married to a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen or resident alien, and both you and your spouse choose to treat you as a resident alien, you are a resident alien for tax purposes. Https www freefilefillableforms org For information on making the choice, see the discussion in chapter 1 under Nonresident Alien Spouse Treated as a Resident . Https www freefilefillableforms org Waiver of minimum time requirements. Https www freefilefillableforms org   The minimum time requirements for bona fide residence and physical presence can be waived if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Https www freefilefillableforms org This is fully explained under Waiver of Time Requirements , later. Https www freefilefillableforms org   See Figure 4-A and information in this chapter to determine if you are eligible to claim either exclusion or the deduction. Https www freefilefillableforms org Tax Home in Foreign Country To qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, your tax home must be in a foreign country throughout your period of bona fide residence or physical presence abroad. Https www freefilefillableforms org Bona fide residence and physical presence are explained later. Https www freefilefillableforms org Tax Home 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. Https www freefilefillableforms org Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Https www freefilefillableforms org Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. Https www freefilefillableforms org If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live. Https www freefilefillableforms org If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work. Https www freefilefillableforms org You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. Https www freefilefillableforms org However, your abode is not necessarily in the United States while you are temporarily in the United States. Https www freefilefillableforms org Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. Https www freefilefillableforms org “Abode” has been variously defined as one's home, habitation, residence, domicile, or place of dwelling. Https www freefilefillableforms org It does not mean your principal place of business. Https www freefilefillableforms org “Abode” has a domestic rather than a vocational meaning and does not mean the same as “tax home. Https www freefilefillableforms org ” The location of your abode often will depend on where you maintain your economic, family, and personal ties. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You are employed on an offshore oil rig in the territorial waters of a foreign country and work a 28-day on/28-day off schedule. Https www freefilefillableforms org You return to your family residence in the United States during your off periods. Https www freefilefillableforms org You are considered to have an abode in the United States and do not satisfy the tax home test in the foreign country. Https www freefilefillableforms org You cannot claim either of the exclusions or the housing deduction. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org For several years, you were a marketing executive with a producer of machine tools in Toledo, Ohio. Https www freefilefillableforms org In November of last year, your employer transferred you to London, England, for a minimum of 18 months to set up a sales operation for Europe. Https www freefilefillableforms org Before you left, you distributed business cards showing your business and home addresses in London. Https www freefilefillableforms org You kept ownership of your home in Toledo but rented it to another family. Https www freefilefillableforms org You placed your car in storage. Https www freefilefillableforms org In November of last year, you moved your spouse, children, furniture, and family pets to a home your employer rented for you in London. Https www freefilefillableforms org Shortly after moving, you leased a car and you and your spouse got British driving licenses. Https www freefilefillableforms org Your entire family got library cards for the local public library. Https www freefilefillableforms org You and your spouse opened bank accounts with a London bank and secured consumer credit. Https www freefilefillableforms org You joined a local business league and both you and your spouse became active in the neighborhood civic association and worked with a local charity. Https www freefilefillableforms org Your abode is in London for the time you live there. Https www freefilefillableforms org You satisfy the tax home test in the foreign country. Https www freefilefillableforms org Please click here for the text description of the image. Https www freefilefillableforms org Figure 4–A Can I Claim the Exclusion or Deduction? Temporary or Indefinite Assignment The location of your tax home often depends on whether your assignment is temporary or indefinite. Https www freefilefillableforms org If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away-from-home expenses (for travel, meals, and lodging), but you would not qualify for the foreign earned income exclusion. Https www freefilefillableforms org If your new work assignment is for an indefinite period, your new place of employment becomes your tax home and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. Https www freefilefillableforms org If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. Https www freefilefillableforms org If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. Https www freefilefillableforms org If you expect it to last for more than 1 year, it is indefinite. Https www freefilefillableforms org If you expect it to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. Https www freefilefillableforms org Once your expectation changes, it is indefinite. Https www freefilefillableforms org Foreign Country To meet the bona fide residence test or the physical presence test, you must live in or be present in a foreign country. Https www freefilefillableforms org A foreign country includes any territory under the sovereignty of a government other than that of the United States. Https www freefilefillableforms org The term “foreign country” includes the country's airspace and territorial waters, but not international waters and the airspace above them. Https www freefilefillableforms org It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. Https www freefilefillableforms org The term “foreign country” does not include Antarctica or U. Https www freefilefillableforms org S. Https www freefilefillableforms org possessions such as Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Virgin Islands, and Johnston Island. Https www freefilefillableforms org For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, the terms “foreign,” “abroad,” and “overseas” refer to areas outside the United States and those areas listed or described in the previous sentence. Https www freefilefillableforms org American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands Residence or presence in a U. Https www freefilefillableforms org S. Https www freefilefillableforms org possession does not qualify you for the foreign earned income exclusion. Https www freefilefillableforms org You may, however, qualify for an exclusion of your possession income on your U. Https www freefilefillableforms org S. Https www freefilefillableforms org return. Https www freefilefillableforms org American Samoa. Https www freefilefillableforms org   There is a possession exclusion available to individuals who are bona fide residents of American Samoa for the entire tax year. Https www freefilefillableforms org Gross income from sources within American Samoa may be eligible for this exclusion. Https www freefilefillableforms org Income that is effectively connected with the conduct of a trade or business within American Samoa also may be eligible for this exclusion. Https www freefilefillableforms org Use Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, to figure the exclusion. Https www freefilefillableforms org Guam and the Commonwealth of the Northern Mariana Islands. Https www freefilefillableforms org   An exclusion will be available to residents of Guam and the Commonwealth of the Northern Mariana Islands if, and when, new implementation agreements take effect between the United States and those possessions. Https www freefilefillableforms org   For more information, see Publication 570. Https www freefilefillableforms org Puerto Rico and U. Https www freefilefillableforms org S. Https www freefilefillableforms org Virgin Islands Residents of Puerto Rico and the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Virgin Islands cannot claim the foreign earned income exclusion or the foreign housing exclusion. Https www freefilefillableforms org Puerto Rico. Https www freefilefillableforms org   Generally, if you are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen who is a bona fide resident of Puerto Rico for the entire tax year, you are not subject to U. Https www freefilefillableforms org S. Https www freefilefillableforms org tax on income from Puerto Rican sources. Https www freefilefillableforms org This does not include amounts paid for services performed as an employee of the United States. Https www freefilefillableforms org However, you are subject to U. Https www freefilefillableforms org S. Https www freefilefillableforms org tax on your income from sources outside Puerto Rico. Https www freefilefillableforms org In figuring your U. Https www freefilefillableforms org S. Https www freefilefillableforms org tax, you cannot deduct expenses allocable to income not subject to tax. Https www freefilefillableforms org Bona Fide Residence Test You meet the bona fide residence test if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Https www freefilefillableforms org You can use the bona fide residence test to qualify for the exclusions and the deduction only if you are either: A U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen, or A U. Https www freefilefillableforms org S. Https www freefilefillableforms org resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect. Https www freefilefillableforms org You do not automatically acquire bona fide resident status merely by living in a foreign country or countries for 1 year. Https www freefilefillableforms org If you go to a foreign country to work on a particular job for a specified period of time, you ordinarily will not be regarded as a bona fide resident of that country even though you work there for 1 tax year or longer. Https www freefilefillableforms org The length of your stay and the nature of your job are only two of the factors to be considered in determining whether you meet the bona fide residence test. Https www freefilefillableforms org Bona fide residence. Https www freefilefillableforms org   To meet the bona fide residence test, you must have established a bona fide residence in a foreign country. Https www freefilefillableforms org   Your bona fide residence is not necessarily the same as your domicile. Https www freefilefillableforms org Your domicile is your permanent home, the place to which you always return or intend to return. Https www freefilefillableforms org Example. Https www freefilefillableforms org You could have your domicile in Cleveland, Ohio, and a bona fide residence in Edinburgh, Scotland, if you intend to return eventually to Cleveland. Https www freefilefillableforms org The fact that you go to Scotland does not automatically make Scotland your bona fide residence. Https www freefilefillableforms org If you go there as a tourist, or on a short business trip, and return to the United States, you have not established bona fide residence in Scotland. Https www freefilefillableforms org But if you go to Scotland to work for an indefinite or extended period and you set up permanent quarters there for yourself and your family, you probably have established a bona fide residence in a foreign country, even though you intend to return eventually to the United States. Https www freefilefillableforms org You are clearly not a resident of Scotland in the first instance. Https www freefilefillableforms org However, in the second, you are a resident because your stay in Scotland appears to be permanent. Https www freefilefillableforms org If your residency is not as clearly defined as either of these illustrations, it may be more difficult to decide whether you have established a bona fide residence. Https www freefilefillableforms org Determination. Https www freefilefillableforms org   Questions of bona fide residence are determined according to each individual case, taking into account factors such as your intention, the purpose of your trip, and the nature and length of your stay abroad. Https www freefilefillableforms org   To meet the bona fide residence test, you must show the Internal Revenue Service (IRS) that you have been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. Https www freefilefillableforms org The IRS decides whether you are a bona fide resident of a foreign country largely on the basis of facts you report on Form 2555. Https www freefilefillableforms org IRS cannot make this determination until you file Form 2555. Https www freefilefillableforms org Statement to foreign authorities. Https www freefilefillableforms org   You are not considered a bona fide resident of a foreign country if you make a statement to the authorities of that country that you are not a resident of that country, and the authorities: Hold that you are not subject to their income tax laws as a resident, or Have not made a final decision on your status. Https www freefilefillableforms org Special agreements and treaties. Https www freefilefillableforms org   An income tax exemption provided in a treaty or other international agreement will not in itself prevent you from being a bona fide resident of a foreign country. Https www freefilefillableforms org Whether a treaty prevents you from becoming a bona fide resident of a foreign country is determined under all provisions of the treaty, including specific provisions relating to residence or privileges and immunities. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen employed in the United Kingdom by a U. Https www freefilefillableforms org S. Https www freefilefillableforms org employer under contract with the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Armed Forces. Https www freefilefillableforms org You are not subject to the North Atlantic Treaty Status of Forces Agreement. Https www freefilefillableforms org You may be a bona fide resident of the United Kingdom. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen in the United Kingdom who qualifies as an “employee” of an armed service or as a member of a “civilian component” under the North Atlantic Treaty Status of Forces Agreement. Https www freefilefillableforms org You are not a bona fide resident of the United Kingdom. Https www freefilefillableforms org Example 3. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen employed in Japan by a U. Https www freefilefillableforms org S. Https www freefilefillableforms org employer under contract with the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Armed Forces. Https www freefilefillableforms org You are subject to the agreement of the Treaty of Mutual Cooperation and Security between the United States and Japan. Https www freefilefillableforms org Being subject to the agreement does not make you a bona fide resident of Japan. Https www freefilefillableforms org Example 4. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen employed as an “official” by the United Nations in Switzerland. Https www freefilefillableforms org You are exempt from Swiss taxation on the salary or wages paid to you by the United Nations. Https www freefilefillableforms org This does not prevent you from being a bona fide resident of Switzerland. Https www freefilefillableforms org Effect of voting by absentee ballot. Https www freefilefillableforms org   If you are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen living abroad, you can vote by absentee ballot in any election held in the United States without risking your status as a bona fide resident of a foreign country. Https www freefilefillableforms org   However, if you give information to the local election officials about the nature and length of your stay abroad that does not match the information you give for the bona fide residence test, the information given in connection with absentee voting will be considered in determining your status, but will not necessarily be conclusive. Https www freefilefillableforms org Uninterrupted period including entire tax year. Https www freefilefillableforms org   To meet the bona fide residence test, you must reside in a foreign country or countries for an uninterrupted period that includes an entire tax year. Https www freefilefillableforms org An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar year basis. Https www freefilefillableforms org   During the period of bona fide residence in a foreign country, you can leave the country for brief or temporary trips back to the United States or elsewhere for vacation or business. Https www freefilefillableforms org To keep your status as a bona fide resident of a foreign country, you must have a clear intention of returning from such trips, without unreasonable delay, to your foreign residence or to a new bona fide residence in another foreign country. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You arrived with your family in Lisbon, Portugal, on November 1, 2011. Https www freefilefillableforms org Your assignment is indefinite, and you intend to live there with your family until your company sends you to a new post. Https www freefilefillableforms org You immediately established residence there. Https www freefilefillableforms org You spent April of 2012 at a business conference in the United States. Https www freefilefillableforms org Your family stayed in Lisbon. Https www freefilefillableforms org Immediately following the conference, you returned to Lisbon and continued living there. Https www freefilefillableforms org On January 1, 2013, you completed an uninterrupted period of residence for a full tax year (2012), and you meet the bona fide residence test. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org Assume the same facts as in Example 1, except that you transferred back to the United States on December 13, 2012. Https www freefilefillableforms org You would not meet the bona fide residence test because your bona fide residence in the foreign country, although it lasted more than a year, did not include a full tax year. Https www freefilefillableforms org You may, however, qualify for the foreign earned income exclusion or the housing exclusion or deduction under the physical presence test (discussed later). Https www freefilefillableforms org Bona fide resident for part of a year. Https www freefilefillableforms org   Once you have established bona fide residence in a foreign country for an uninterrupted period that includes an entire tax year, you are a bona fide resident of that country for the period starting with the date you actually began the residence and ending with the date you abandon the foreign residence. Https www freefilefillableforms org Your period of bona fide residence can include an entire tax year plus parts of 2 other tax years. Https www freefilefillableforms org Example. Https www freefilefillableforms org You were a bona fide resident of Singapore from March 1, 2011, through September 14, 2013. Https www freefilefillableforms org On September 15, 2013, you returned to the United States. Https www freefilefillableforms org Since you were a bona fide resident of a foreign country for all of 2012, you were also a bona fide resident of a foreign country from March 1, 2011, through the end of 2011 and from January 1, 2013, through September 14, 2013. Https www freefilefillableforms org Reassignment. Https www freefilefillableforms org   If you are assigned from one foreign post to another, you may or may not have a break in foreign residence between your assignments, depending on the circumstances. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You were a resident of Pakistan from October 1, 2012, through November 30, 2013. Https www freefilefillableforms org On December 1, 2013, you and your family returned to the United States to wait for an assignment to another foreign country. Https www freefilefillableforms org Your household goods also were returned to the United States. Https www freefilefillableforms org Your foreign residence ended on November 30, 2013, and did not begin again until after you were assigned to another foreign country and physically entered that country. Https www freefilefillableforms org Since you were not a bona fide resident of a foreign country for the entire tax year of 2012 or 2013 you do not meet the bona fide residence test in either year. Https www freefilefillableforms org You may, however, qualify for the foreign earned income exclusion or the housing exclusion or deduction under the physical presence test, discussed later. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org Assume the same facts as in Example 1, except that upon completion of your assignment in Pakistan you were given a new assignment to Turkey. Https www freefilefillableforms org On December 1, 2013, you and your family returned to the United States for a month's vacation. Https www freefilefillableforms org On January 2, 2014, you arrived in Turkey for your new assignment. Https www freefilefillableforms org Because you did not interrupt your bona fide residence abroad, you meet the bona fide residence test. Https www freefilefillableforms org Physical Presence Test You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. Https www freefilefillableforms org The 330 days do not have to be consecutive. Https www freefilefillableforms org Any U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen or resident alien can use the physical presence test to qualify for the exclusions and the deduction. Https www freefilefillableforms org The physical presence test is based only on how long you stay in a foreign country or countries. Https www freefilefillableforms org This test does not depend on the kind of residence you establish, your intentions about returning, or the nature and purpose of your stay abroad. Https www freefilefillableforms org 330 full days. Https www freefilefillableforms org   Generally, to meet the physical presence test, you must be physically present in a foreign country or countries for at least 330 full days during a 12-month period. Https www freefilefillableforms org You can count days you spent abroad for any reason. Https www freefilefillableforms org You do not have to be in a foreign country only for employment purposes. Https www freefilefillableforms org You can be on vacation. Https www freefilefillableforms org   You do not meet the physical presence test if illness, family problems, a vacation, or your employer's orders cause you to be present for less than the required amount of time. Https www freefilefillableforms org Exception. Https www freefilefillableforms org   You can be physically present in a foreign country or countries for less than 330 full days and still meet the physical presence test if you are required to leave a country because of war or civil unrest. Https www freefilefillableforms org See Waiver of Time Requirements, later. Https www freefilefillableforms org Full day. Https www freefilefillableforms org   A full day is a period of 24 consecutive hours, beginning at midnight. Https www freefilefillableforms org Travel. Https www freefilefillableforms org    When you leave the United States to go directly to a foreign country or when you return directly to the United States from a foreign country, the time you spend on or over international waters does not count toward the 330-day total. Https www freefilefillableforms org Example. Https www freefilefillableforms org You leave the United States for France by air on June 10. Https www freefilefillableforms org You arrive in France at 9:00 a. Https www freefilefillableforms org m. Https www freefilefillableforms org on June 11. Https www freefilefillableforms org Your first full day of physical presence in France is June 12. Https www freefilefillableforms org Passing over foreign country. Https www freefilefillableforms org   If, in traveling from the United States to a foreign country, you pass over a foreign country before midnight of the day you leave, the first day you can count toward the 330-day total is the day following the day you leave the United States. Https www freefilefillableforms org Example. Https www freefilefillableforms org You leave the United States by air at 9:30 a. Https www freefilefillableforms org m. Https www freefilefillableforms org on June 10 to travel to Kenya. Https www freefilefillableforms org You pass over western Africa at 11:00 p. Https www freefilefillableforms org m. Https www freefilefillableforms org on June 10 and arrive in Kenya at 12:30 a. Https www freefilefillableforms org m. Https www freefilefillableforms org on June 11. Https www freefilefillableforms org Your first full day in a foreign country is June 11. Https www freefilefillableforms org Change of location. Https www freefilefillableforms org   You can move about from one place to another in a foreign country or to another foreign country without losing full days. Https www freefilefillableforms org If any part of your travel is not within any foreign country and takes less than 24 hours, you are considered to be in a foreign country during that part of travel. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You leave Ireland by air at 11:00 p. Https www freefilefillableforms org m. Https www freefilefillableforms org on July 6 and arrive in Sweden at 5:00 a. Https www freefilefillableforms org m. Https www freefilefillableforms org on July 7. Https www freefilefillableforms org Your trip takes less than 24 hours and you lose no full days. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org You leave Norway by ship at 10:00 p. Https www freefilefillableforms org m. Https www freefilefillableforms org on July 6 and arrive in Portugal at 6:00 a. Https www freefilefillableforms org m. Https www freefilefillableforms org on July 8. Https www freefilefillableforms org Since your travel is not within a foreign country or countries and the trip takes more than 24 hours, you lose as full days July 6, 7, and 8. Https www freefilefillableforms org If you remain in Portugal, your next full day in a foreign country is July 9. Https www freefilefillableforms org In United States while in transit. Https www freefilefillableforms org   If you are in transit between two points outside the United States and are physically present in the United States for less than 24 hours, you are not treated as present in the United States during the transit. Https www freefilefillableforms org You are treated as traveling over areas not within any foreign country. Https www freefilefillableforms org    Please click here for the text description of the image. Https www freefilefillableforms org Figure 4-B How to figure the 12-month period. Https www freefilefillableforms org   There are four rules you should know when figuring the 12-month period. Https www freefilefillableforms org Your 12-month period can begin with any day of the month. Https www freefilefillableforms org It ends the day before the same calendar day, 12 months later. Https www freefilefillableforms org Your 12-month period must be made up of consecutive months. Https www freefilefillableforms org Any 12-month period can be used if the 330 days in a foreign country fall within that period. Https www freefilefillableforms org You do not have to begin your 12-month period with your first full day in a foreign country or end it with the day you leave. Https www freefilefillableforms org You can choose the 12-month period that gives you the greatest exclusion. Https www freefilefillableforms org In determining whether the 12-month period falls within a longer stay in the foreign country, 12-month periods can overlap one another. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You are a construction worker who works on and off in a foreign country over a 20-month period. Https www freefilefillableforms org You might pick up the 330 full days in a 12-month period only during the middle months of the time you work in the foreign country because the first few and last few months of the 20-month period are broken up by long visits to the United States. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org You work in New Zealand for a 20-month period from January 1, 2012, through August 31, 2013, except that you spend 28 days in February 2012 and 28 days in February 2013 on vacation in the United States. Https www freefilefillableforms org You are present in New Zealand for at least 330 full days during each of the following two 12-month periods: January 1, 2012 – December 31, 2012 and September 1, 2012 – August 31, 2013. Https www freefilefillableforms org By overlapping the 12-month periods in this way, you meet the physical presence test for the whole 20-month period. Https www freefilefillableforms org See Figure 4-B, on the previous page. Https www freefilefillableforms org Waiver of Time Requirements Both the bona fide residence test and the physical presence test contain minimum time requirements. Https www freefilefillableforms org The minimum time requirements can be waived, however, if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Https www freefilefillableforms org You must be able to show that you reasonably could have expected to meet the minimum time requirements if not for the adverse conditions. Https www freefilefillableforms org To qualify for the waiver, you must actually have your tax home in the foreign country and be a bona fide resident of, or be physically present in, the foreign country on or before the beginning date of the waiver. Https www freefilefillableforms org Early in 2014, the IRS will publish in the Internal Revenue Bulletin a list of the only countries that qualify for the waiver for 2013 and the effective dates. Https www freefilefillableforms org If you left one of the countries on or after the date listed for each country, you can meet the bona fide residence test or physical presence test for 2013 without meeting the minimum time requirement. Https www freefilefillableforms org However, in figuring your exclusion, the number of your qualifying days of bona fide residence or physical presence includes only days of actual residence or presence within the country. Https www freefilefillableforms org U. Https www freefilefillableforms org S. Https www freefilefillableforms org Travel Restrictions If you are present in a foreign country in violation of U. Https www freefilefillableforms org S. Https www freefilefillableforms org law, you will not be treated as a bona fide resident of a foreign country or as physically present in a foreign country while you are in violation of the law. Https www freefilefillableforms org Income that you earn from sources within such a country for services performed during a period of violation does not qualify as foreign earned income. Https www freefilefillableforms org Your housing expenses within that country (or outside that country for housing your spouse or dependents) while you are in violation of the law cannot be included in figuring your foreign housing amount. Https www freefilefillableforms org For 2013, the only country to which travel restrictions applied was Cuba. Https www freefilefillableforms org The restrictions applied for the entire year. Https www freefilefillableforms org However, individuals working at the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Naval Base at Guantanamo Bay in Cuba are not in violation of U. Https www freefilefillableforms org S. Https www freefilefillableforms org law. Https www freefilefillableforms org Personal service income earned by individuals at the base is eligible for the foreign earned income exclusion provided the other requirements are met. Https www freefilefillableforms org Foreign Earned Income To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income. Https www freefilefillableforms org Foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements. Https www freefilefillableforms org Your tax home is in a foreign country. Https www freefilefillableforms org You meet either the bona fide residence test or the physical presence test. Https www freefilefillableforms org To determine whether your tax home is in a foreign country, see Tax Home in Foreign Country, earlier. Https www freefilefillableforms org To determine whether you meet either the bona fide residence test or the physical presence test, see Bona Fide Residence Test and Physical Presence Test, earlier. Https www freefilefillableforms org Foreign earned income does not include the following amounts. Https www freefilefillableforms org The value of meals and lodging that you exclude from your income because the meals and lodging were furnished for the convenience of your employer. Https www freefilefillableforms org Pension or annuity payments you receive, including social security benefits (see Pensions and annuities, later). Https www freefilefillableforms org Pay you receive as an employee of the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government. Https www freefilefillableforms org (See U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government Employees, later. Https www freefilefillableforms org ) Amounts you include in your income because of your employer's contributions to a nonexempt employee trust or to a nonqualified annuity contract. Https www freefilefillableforms org Any unallowable moving expense deduction that you choose to recapture as explained under Moving Expense Attributable to Foreign Earnings in 2 Years in chapter 5. Https www freefilefillableforms org Payments you receive after the end of the tax year following the tax year in which you performed the services that earned the income. Https www freefilefillableforms org Earned income. Https www freefilefillableforms org   This is pay for personal services performed, such as wages, salaries, or professional fees. Https www freefilefillableforms org The list that follows classifies many types of income into three categories. Https www freefilefillableforms org The column headed Variable Income lists income that may fall into either the earned income category, the unearned income category, or partly into both. Https www freefilefillableforms org For more information on earned and unearned income, see Earned and Unearned Income, later. Https www freefilefillableforms org Earned Income Unearned Income Variable Income Salaries and wages Dividends Business profits Commissions Interest Royalties Bonuses Capital gains Rents Professional fees Gambling winnings Scholarships and fellowships Tips Alimony     Social security benefits     Pensions     Annuities     In addition to the types of earned income listed, certain noncash income and allowances or reimbursements are considered earned income. Https www freefilefillableforms org Noncash income. Https www freefilefillableforms org   The fair market value of property or facilities provided to you by your employer in the form of lodging, meals, or use of a car is earned income. Https www freefilefillableforms org Allowances or reimbursements. Https www freefilefillableforms org   Earned income includes allowances or reimbursements you receive, such as the following amounts. Https www freefilefillableforms org    Cost-of-living allowances. Https www freefilefillableforms org Overseas differential. Https www freefilefillableforms org Family allowance. Https www freefilefillableforms org Reimbursement for education or education allowance. Https www freefilefillableforms org Home leave allowance. Https www freefilefillableforms org Quarters allowance. Https www freefilefillableforms org Reimbursement for moving or moving allowance (unless excluded from income as discussed later in Reimbursement of employee expenses under Earned and Unearned Income). Https www freefilefillableforms org Source of Earned Income The source of your earned income is the place where you perform the services for which you received the income. Https www freefilefillableforms org Foreign earned income is income you receive for working in a foreign country. Https www freefilefillableforms org Where or how you are paid has no effect on the source of the income. Https www freefilefillableforms org For example, income you receive for work done in Austria is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is located in New York City. Https www freefilefillableforms org Example. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen, a bona fide resident of Canada, and working as a mining engineer. Https www freefilefillableforms org Your salary is $76,800 per year. Https www freefilefillableforms org You also receive a $6,000 cost-of-living allowance, and a $6,000 education allowance. Https www freefilefillableforms org Your employment contract did not indicate that you were entitled to these allowances only while outside the United States. Https www freefilefillableforms org Your total income is $88,800. Https www freefilefillableforms org You work a 5-day week, Monday through Friday. Https www freefilefillableforms org After subtracting your vacation, you have a total of 240 workdays in the year. Https www freefilefillableforms org You worked in the United States during the year for 6 weeks (30 workdays). Https www freefilefillableforms org The following shows how to figure the part of your income that is for work done in Canada during the year. Https www freefilefillableforms org   Number of days worked in Canada during the year (210) × Total income ($88,800) = $77,700     Number of days of work during the year for which payment was made (240)   Your foreign source earned income is $77,700. Https www freefilefillableforms org Earned and Unearned Income Earned income was defined earlier as pay for personal services performed. Https www freefilefillableforms org Some types of income are not easily identified as earned or unearned income. Https www freefilefillableforms org Some of these types of income are further explained here. Https www freefilefillableforms org Income from a sole proprietorship or partnership. Https www freefilefillableforms org   Income from a business in which capital investment is an important part of producing the income may be unearned income. Https www freefilefillableforms org If you are a sole proprietor or partner and your personal services are also an important part of producing the income, the part of the income that represents the value of your personal services will be treated as earned income. Https www freefilefillableforms org Capital a factor. Https www freefilefillableforms org   If capital investment is an important part of producing income, no more than 30% of your share of the net profits of the business is earned income. Https www freefilefillableforms org   If you have no net profits, the part of your gross profit that represents a reasonable allowance for personal services actually performed is considered earned income. Https www freefilefillableforms org Because you do not have a net profit, the 30% limit does not apply. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen and meet the bona fide residence test. Https www freefilefillableforms org You invest in a partnership based in Cameroon that is engaged solely in selling merchandise outside the United States. Https www freefilefillableforms org You perform no services for the partnership. Https www freefilefillableforms org At the end of the tax year, your share of the net profits is $80,000. Https www freefilefillableforms org The entire $80,000 is unearned income. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org Assume that in Example 1 you spend time operating the business. Https www freefilefillableforms org Your share of the net profits is $80,000; 30% of your share of the profits is $24,000. Https www freefilefillableforms org If the value of your services for the year is $15,000, your earned income is limited to the value of your services, $15,000. Https www freefilefillableforms org Capital not a factor. Https www freefilefillableforms org   If capital is not an income-producing factor and personal services produce the business income, the 30% rule does not apply. Https www freefilefillableforms org The entire amount of business income is earned income. Https www freefilefillableforms org Example. Https www freefilefillableforms org You and Lou Green are management consultants and operate as equal partners in performing services outside the United States. Https www freefilefillableforms org Because capital is not an income- producing factor, all the income from the partnership is considered earned income. Https www freefilefillableforms org Income from a corporation. Https www freefilefillableforms org   The salary you receive from a corporation is earned income only if it represents a reasonable allowance as compensation for work you do for the corporation. Https www freefilefillableforms org Any amount over what is considered a reasonable salary is unearned income. Https www freefilefillableforms org Example 1. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen and an officer and stockholder of a corporation in Honduras. Https www freefilefillableforms org You perform no work or service of any kind for the corporation. Https www freefilefillableforms org During the tax year you receive a $10,000 “salary” from the corporation. Https www freefilefillableforms org The $10,000 clearly is not for personal services and is unearned income. Https www freefilefillableforms org Example 2. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen and work full time as secretary-treasurer of your corporation. Https www freefilefillableforms org During the tax year you receive $100,000 as salary from the corporation. Https www freefilefillableforms org If $80,000 is a reasonable allowance as pay for the work you did, then $80,000 is earned income. Https www freefilefillableforms org Stock options. Https www freefilefillableforms org   You may have earned income if you disposed of stock that you got by exercising a stock option granted to you under an employee stock purchase plan. Https www freefilefillableforms org   If your gain on the disposition of stock you got by exercising an option is treated as capital gain, your gain is unearned income. Https www freefilefillableforms org   However, if you disposed of the stock less than 2 years after you were granted the option or less than 1 year after you got the stock, part of the gain on the disposition may be earned income. Https www freefilefillableforms org It is considered received in the year you disposed of the stock and earned in the year you performed the services for which you were granted the option. Https www freefilefillableforms org Any part of the earned income that is due to work you did outside the United States is foreign earned income. Https www freefilefillableforms org   See Publication 525, Taxable and Nontaxable Income, for a discussion of the treatment of stock options. Https www freefilefillableforms org Pensions and annuities. Https www freefilefillableforms org    For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, amounts received as pensions or annuities are unearned income. Https www freefilefillableforms org Royalties. Https www freefilefillableforms org   Royalties from the leasing of oil and mineral lands and patents generally are a form of rent or dividends and are unearned income. Https www freefilefillableforms org   Royalties received by a writer are earned income if they are received: For the transfer of property rights of the writer in the writer's product, or Under a contract to write a book or series of articles. Https www freefilefillableforms org Rental income. Https www freefilefillableforms org   Generally, rental income is unearned income. Https www freefilefillableforms org If you perform personal services in connection with the production of rent, up to 30% of your net rental income can be considered earned income. Https www freefilefillableforms org Example. Https www freefilefillableforms org Larry Smith, a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen living in Australia, owns and operates a rooming house in Sydney. Https www freefilefillableforms org If he is operating the rooming house as a business that requires capital and personal services, he can consider up to 30% of net rental income as earned income. Https www freefilefillableforms org On the other hand, if he just owns the rooming house and performs no personal services connected with its operation, except perhaps making minor repairs and collecting rents, none of his net income from the house is considered earned income. Https www freefilefillableforms org It is all unearned income. Https www freefilefillableforms org Professional fees. Https www freefilefillableforms org   If you are engaged in a professional occupation (such as a doctor or lawyer), all fees received in the performance of these services are earned income. Https www freefilefillableforms org Income of an artist. Https www freefilefillableforms org   Income you receive from the sale of paintings you created is earned income. Https www freefilefillableforms org Scholarships and fellowships. Https www freefilefillableforms org   Any portion of a scholarship or fellowship grant that is paid to you for teaching, research or other services is considered earned income if you must include it in your gross income. Https www freefilefillableforms org If the payer of the grant is required to provide you with a Form W-2, Wage and Tax Statement, these amounts will be listed as wages. Https www freefilefillableforms org    Certain scholarship and fellowship income may be exempt under other provisions. Https www freefilefillableforms org See Publication 970, Tax Benefits for Education, chapter 1. Https www freefilefillableforms org Use of employer's property or facilities. Https www freefilefillableforms org   If you receive fringe benefits in the form of the right to use your employer's property or facilities, the fair market value of that right is earned income. Https www freefilefillableforms org Fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being required to buy or sell, and both having reasonable knowledge of all the necessary facts. Https www freefilefillableforms org Example. Https www freefilefillableforms org You are privately employed and live in Japan all year. Https www freefilefillableforms org You are paid a salary of $6,000 a month. Https www freefilefillableforms org You live rent-free in a house provided by your employer that has a fair rental value of $3,000 a month. Https www freefilefillableforms org The house is not provided for your employer's convenience. Https www freefilefillableforms org You report on the calendar-year, cash basis. Https www freefilefillableforms org You received $72,000 salary from foreign sources plus $36,000 fair rental value of the house, or a total of $108,000 of earned income. Https www freefilefillableforms org Reimbursement of employee expenses. Https www freefilefillableforms org   If you are reimbursed under an accountable plan (defined below) for expenses you incur on your employer's behalf and you have adequately accounted to your employer for the expenses, do not include the reimbursement for those expenses in your earned income. Https www freefilefillableforms org   The expenses for which you are reimbursed are not considered allocable (related) to your earned income. Https www freefilefillableforms org If expenses and reimbursement are equal, there is nothing to allocate to excluded income. Https www freefilefillableforms org If expenses are more than the reimbursement, the unreimbursed expenses are considered to have been incurred in producing earned income and must be divided between your excluded and included income in determining the amount of unreimbursed expenses you can deduct. Https www freefilefillableforms org (See chapter 5. Https www freefilefillableforms org ) If the reimbursement is more than the expenses, no expenses remain to be divided between excluded and included income and the excess reimbursement must be included in earned income. Https www freefilefillableforms org   These rules do not apply to the following individuals. Https www freefilefillableforms org Straight-commission salespersons. Https www freefilefillableforms org Employees who have arrangements with their employers under which taxes are not withheld on a percentage of the commissions because the employers consider that percentage to be attributable to the employees' expenses. Https www freefilefillableforms org Accountable plan. Https www freefilefillableforms org   An accountable plan is a reimbursement or allowance arrangement that includes all three of the following rules. Https www freefilefillableforms org The expenses covered under the plan must have a business connection. Https www freefilefillableforms org The employee must adequately account to the employer for these expenses within a reasonable period of time. Https www freefilefillableforms org The employee must return any excess reimbursement or allowance within a reasonable period of time. Https www freefilefillableforms org Reimbursement of moving expenses. Https www freefilefillableforms org   Reimbursement of moving expenses may be earned income. Https www freefilefillableforms org You must include as earned income: Any reimbursements of, or payments for, nondeductible moving expenses, Reimbursements that are more than your deductible expenses and that you do not return to your employer, Any reimbursements made (or treated as made) under a nonaccountable plan (any plan that does not meet the rules listed above for an accountable plan), even if they are for deductible expenses, and Any reimbursement of moving expenses you deducted in an earlier year. Https www freefilefillableforms org This section discusses reimbursements that must be included in earned income. Https www freefilefillableforms org Publication 521, Moving Expenses, discusses additional rules that apply to moving expense deductions and reimbursements. Https www freefilefillableforms org   The rules for determining when the reimbursement is considered earned or where the reimbursement is considered earned may differ somewhat from the general rules previously discussed. Https www freefilefillableforms org   Although you receive the reimbursement in one tax year, it may be considered earned for services performed, or to be performed, in another tax year. Https www freefilefillableforms org You must report the reimbursement as income on your return in the year you receive it, even if it is considered earned during a different year. Https www freefilefillableforms org Move from U. Https www freefilefillableforms org S. Https www freefilefillableforms org to foreign country. Https www freefilefillableforms org   If you move from the United States to a foreign country, your moving expense reimbursement is generally considered pay for future services to be performed at the new location. Https www freefilefillableforms org The reimbursement is considered earned solely in the year of the move if you qualify for the exclusion for a period that includes at least 120 days during that tax year. Https www freefilefillableforms org   If you are neither a bona fide resident of nor physically present in a foreign country or countries for a period that includes 120 days during the year of the move, a portion of the reimbursement is considered earned in the year of the move and a portion is considered earned in the year following the year of the move. Https www freefilefillableforms org To figure the amount earned in the year of the move, multiply the reimbursement by a fraction. Https www freefilefillableforms org The numerator (top number) is the number of days in your qualifying period that fall within the year of the move, and the denominator (bottom number) is the total number of days in the year of the move. Https www freefilefillableforms org   The difference between the total reimbursement and the amount considered earned in the year of the move is the amount considered earned in the year following the year of the move. Https www freefilefillableforms org The part earned in each year is figured as shown in the following example. Https www freefilefillableforms org Example. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen working in the United States. Https www freefilefillableforms org You were told in October 2012 that you were being transferred to a foreign country. Https www freefilefillableforms org You arrived in the foreign country on December 15, 2012, and you are a bona fide resident for the remainder of 2012 and all of 2013. Https www freefilefillableforms org Your employer reimbursed you $2,000 in January 2013 for the part of the moving expense that you were not allowed to deduct. Https www freefilefillableforms org Because you did not qualify for the exclusion under the bona fide residence test for at least 120 days in 2012 (the year of the move), the reimbursement is considered pay for services performed in the foreign country for both 2012 and 2013. Https www freefilefillableforms org You figure the part of the reimbursement for services performed in the foreign country in 2012 by multiplying the total reimbursement by a fraction. Https www freefilefillableforms org The fraction is the number of days during which you were a bona fide resident in 2012 (the year of the move) divided by 366. Https www freefilefillableforms org The remaining part of the reimbursement is for services performed in the foreign country in 2013. Https www freefilefillableforms org This computation is used only to determine when the reimbursement is considered earned. Https www freefilefillableforms org You would include the amount of the reimbursement in income in 2013, the year you received it. Https www freefilefillableforms org Move between foreign countries. Https www freefilefillableforms org   If you move between foreign countries, any moving expense reimbursement that you must include in income will be considered earned in the year of the move if you qualify for the foreign earned income exclusion for a period that includes at least 120 days in the year of the move. Https www freefilefillableforms org Move to U. Https www freefilefillableforms org S. Https www freefilefillableforms org   If you move to the United States, the moving expense reimbursement that you must include in income is generally considered to be U. Https www freefilefillableforms org S. Https www freefilefillableforms org source income. Https www freefilefillableforms org   However, if under either an agreement between you and your employer or a statement of company policy that is reduced to writing before your move to the foreign country, your employer will reimburse you for your move back to the United States regardless of whether you continue to work for the employer, the includible reimbursement is considered compensation for past services performed in the foreign country. Https www freefilefillableforms org The includible reimbursement is considered earned in the year of the move if you qualify for the foreign earned income exclusion for a period that includes at least 120 days during that year. Https www freefilefillableforms org Otherwise, you treat the includible reimbursement as received for services performed in the foreign country in the year of the move and the year immediately before the year of the move. Https www freefilefillableforms org   See the discussion under Move from U. Https www freefilefillableforms org S. Https www freefilefillableforms org to foreign country , earlier, to figure the amount of the includible reimbursement considered earned in the year of the move. Https www freefilefillableforms org The amount earned in the year before the year of the move is the difference between the total includible reimbursement and the amount earned in the year of the move. Https www freefilefillableforms org Example. Https www freefilefillableforms org You are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org citizen employed in a foreign country. Https www freefilefillableforms org You retired from employment with your employer on March 31, 2013, and returned to the United States after having been a bona fide resident of the foreign country for several years. Https www freefilefillableforms org A written agreement with your employer entered into before you went abroad provided that you would be reimbursed for your move back to the United States. Https www freefilefillableforms org In April 2013, your former employer reimbursed you $4,000 for the part of the cost of your move back to the United States that you were not allowed to deduct. Https www freefilefillableforms org Because you were not a bona fide resident of a foreign country or countries for a period that included at least 120 days in 2013 (the year of the move), the includible reimbursement is considered pay for services performed in the foreign country for both 2013 and 2012. Https www freefilefillableforms org You figure the part of the moving expense reimbursement for services performed in the foreign country for 2013 by multiplying the total includible reimbursement by a fraction. Https www freefilefillableforms org The fraction is the number of days of foreign residence during the year (90) divided by the number of days in the year (365). Https www freefilefillableforms org The remaining part of the includible reimbursement is for services performed in the foreign country in 2012. Https www freefilefillableforms org You report the amount of the includible reimbursement in 2013, the year you received it. Https www freefilefillableforms org    In this example, if you met the physical presence test for a period that included at least 120 days in 2013, the moving expense reimbursement would be considered earned entirely in the year of the move. Https www freefilefillableforms org Storage expense reimbursements. Https www freefilefillableforms org   If you are reimbursed for storage expenses, the reimbursement is for services you perform during the period of time for which the storage expenses are incurred. Https www freefilefillableforms org U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government Employees For purposes of the foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction, foreign earned income does not include any amounts paid by the United States or any of its agencies to its employees. Https www freefilefillableforms org This includes amounts paid from both appropriated and nonappropriated funds. Https www freefilefillableforms org The following organizations (and other organizations similarly organized and operated under United States Army, Navy, or Air Force regulations) are integral parts of the Armed Forces, agencies, or instrumentalities of the United States. Https www freefilefillableforms org United States Armed Forces exchanges. Https www freefilefillableforms org Commissioned and noncommissioned officers' messes. Https www freefilefillableforms org Armed Forces motion picture services. Https www freefilefillableforms org Kindergartens on foreign Armed Forces installations. Https www freefilefillableforms org Amounts paid by the United States or its agencies to persons who are not their employees may qualify for exclusion or deduction. Https www freefilefillableforms org If you are a U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government employee paid by a U. Https www freefilefillableforms org S. Https www freefilefillableforms org agency that assigned you to a foreign government to perform specific services for which the agency is reimbursed by the foreign government, your pay is from the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government and does not qualify for exclusion or deduction. Https www freefilefillableforms org If you have questions about whether you are an employee or an independent contractor, get Publication 15-A, Employer's Supplemental Tax Guide. Https www freefilefillableforms org American Institute in Taiwan. Https www freefilefillableforms org   Amounts paid by the American Institute in Taiwan are not foreign earned income for purposes of the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction. Https www freefilefillableforms org If you are an employee of the American Institute in Taiwan, allowances you receive are exempt from U. Https www freefilefillableforms org S. Https www freefilefillableforms org tax up to the amount that equals tax-exempt allowances received by civilian employees of the U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government. Https www freefilefillableforms org Allowances. Https www freefilefillableforms org   Cost-of-living and foreign-area allowances paid under certain acts of Congress to U. Https www freefilefillableforms org S. Https www freefilefillableforms org civilian officers and employees stationed in Alaska and Hawaii or elsewhere outside the 48 contiguous states and the District of Columbia can be excluded from gross income. Https www freefilefillableforms org Post differentials are wages that must be included in gross income, regardless of the act of Congress under which they are paid. Https www freefilefillableforms org More information. Https www freefilefillableforms org   Publication 516, U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government Civilian Employees Stationed Abroad, has more information for U. Https www freefilefillableforms org S. Https www freefilefillableforms org Government employees abroad. Https www freefilefillableforms org Exclusion of Meals and Lodging You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met. Https www freefilefillableforms org The meals are furnished: On the business premises of your employer, and For the convenience of your employer. Https www freefilefillableforms org The lodging is furnished: On the business premises of your employer, For the convenience of your employer, and As a condition of your employment. Https www freefilefillableforms org If these conditions are met, do not include the value of the meals or lodging in your income, even if a law or your employment contract says that they are provided as compensation. Https www freefilefillableforms org Amounts you do not include in income because of these rules are not foreign earned income. Https www freefilefillableforms org If you receive a Form W-2, excludable amounts should not be included in the total reported in box 1 as wages. Https www freefilefillableforms org Family. Https www freefilefillableforms org   Your family, for this purpose, includes only your spouse and your dependents. Https www freefilefillableforms org Lodging. Https www freefilefillableforms org   The value of lodging includes the cost of heat, electricity, gas, water, sewer service, and similar items needed to make the lodging fit to live in. Https www freefilefillableforms org Business premises of employer. Https www freefilefillableforms org   Generally, the business premises of your employer is wherever you work. Https www freefilefillableforms org For example, if you work as a housekeeper, meals and lodging provided in your employer's home are provided on the business premises of your employer. Https www freefilefillableforms org Similarly, meals provided to cowhands while herding cattle on land leased or owned by their employer are considered provided on the premises of their employer. Https www freefilefillableforms org Convenience of employer. Https www freefilefillableforms org   Whether meals or lodging are provided for your employer's convenience must be determined from all the facts and circumstances. Https www freefilefillableforms org Meals furnished at no charge are considered provided for your employer's convenience if there is a good business reason for providing them, other than to give you more pay. Https www freefilefillableforms org   On the other hand, if your employer provides meals to you or your family as a means of giving you more pay, and there is no other business reason for providing them, their value is extra income to you because they are not furnished for the convenience of your employer. Https www freefilefillableforms org Condition of employment. Https www freefilefillableforms org   Lodging is provided as a condition of employment if you must accept the lodging to properly carry out the duties of your job. Https www freefilefillableforms org You must accept lodging to properly carry out your duties if, for example, you must be available for duty at all times or you could not perform your duties if the lodging was not furnished. Https www freefilefillableforms org Foreign camps. Https www freefilefillableforms org   If the lodging is in a camp located in a foreign country, the camp is considered part of your employer's business premises. Https www freefilefillableforms org The camp must be: Provided for your employer's convenience because the place where you work is in a remote area where satisfactory housing is not available to you on the open market within a reasonable commuting distance, Located as close as reasonably possible in the area where you work, and Provided in a common area or enclave that is not available to the general public for lodging or accommodations and that normally houses at least ten employees. Https www freefilefillableforms org Foreign Earned Income Exclusion If your tax home is in a foreign country and you meet the bona fide residence test or the physical presence test, you can choose to exclude from your income a limited amount of your foreign earned income. Https www freefilefillableforms org Foreign earned income was defined earlier in this chapter. Https www freefilefillableforms org You also can choose to exclude from your income a foreign housing amount. Https www freefilefillableforms org This is explained later under Foreign Housing Exclusion. Https www freefilefillableforms org If you choose to exclude a foreign housing amount, you must figure the foreign housing exclusion before you figure the foreign earned income exclusion. Https www freefilefillableforms org Your foreign earned income exclusion is limited to your foreign earned income minus your foreign housing exclusion. Https www freefilefillableforms org If you choose to exclude foreign earned income, you cannot deduct, exclude, or claim a credit for any item that can be allocated to or charged against the excluded amounts. Https www freefilefillableforms org This includes any expenses, losses, and other normally deductible items allocable to the excluded income. Https www freefilefillableforms org For more information about deductions and credits, see chapter 5 . Https www freefilefillableforms org Limit on Excludable Amount You may be able to exclude up to $97,600 of your foreign earned income in 2013. Https www freefilefillableforms org You cannot exclude more than the smaller of: $97,600, or Your foreign earned income (discussed earlier) for the tax year minus your foreign housing exclusion (discussed later). Https www freefilefillableforms org If both you and your spouse work abroad and each of you meets either the bona fide residence test or the physical presence test, you can each choose the foreign earned income exclusion. Https www freefilefillableforms org You do not both need to meet the same test. Https www freefilefillableforms org Together, you and your spouse can exclude as much as $195,200. Https www freefilefillableforms org Paid in year following work. Https www freefilefillableforms org   Generally, you are considered to have earned income in the year in which you do the work for which you receive the income, even if you work in one year but are not paid until the following year. Https www freefilefillableforms org If you report your income on a cash basis, you report the income on your return for the year you receive it. Https www freefilefillableforms org If you work one year, but are not paid for that work until the next year, the amount you can exclude in the year you are paid is the amount you could have excluded in the year you did the work if you had been paid in that year. Https www freefilefillableforms org For an exception to this general rule, see Year-end payroll period, later. Https www freefilefillableforms org Example. Https www freefilefillableforms org You were a bona fide resident of Brazil for all of 2012 and 2013. Https www freefilefillableforms org You report your income on the cash basis. Https www freefilefillableforms org In 2012, you were paid $84,200 for work you did in Brazil during that year. Https www freefilefillableforms org You excluded all of the $84,200 from your income in 2012. Https www freefilefillableforms org In 2013, you were paid $117,300 for your work in Brazil. Https www freefilefillableforms org $18,800 was for work you did in 2012 and $98,500 was for work you did in 2013. Https www freefilefillableforms org You can exclude $10,900 of the $18,800 from your income in 2013. Https www freefilefillableforms org This is the $95,100 maximum exclusion in 2012 minus the $84,200 actually excluded that year. Https www freefilefillableforms org You must include the remaining $7,900 in income in 2013 because you could not have excluded that income in 2012 if you had received it that year. Https www freefilefillableforms org You can exclude $97,600 of the $98,500 you were paid for work you did in 2013 from your 2013 income. Https www freefilefillableforms org Your total foreign earned income exclusion for 2013 is $108,500 ($10,900 for work you did in 2012 and $97,600 for work you did in 2013). Https www freefilefillableforms org You would include in your 2013 income $8,800 ($7,900 for the work you did in 2012 and $900 for the work you did in 2013). Https www freefilefillableforms org Year-end payroll period. Https www freefilefillableforms org   There is an exception to the general rule that income is considered earned in the year you do the work for which you receive the income. Https www freefilefillableforms org If you are a cash-basis taxpayer, any salary or wage payment you receive after the end of the year in which you do the work for which you receive the pay is considered earned entirely in the year you receive it if all four of the following apply. Https www freefilefillableforms org The period for which the payment is made is a normal payroll period of your employer that regularly applies to you. Https www freefilefillableforms org The payroll period includes the last day of your tax year (December 31 if you figure your taxes on a calendar-year basis). Https www freefilefillableforms org The payroll period is not longer than 16 days. Https www freefilefillableforms org The payday comes at the same time in relation to the payroll period that it would normally come and it comes before the end of the next payroll period. Https www freefilefillableforms org Example. Https www freefilefillableforms org You are paid twice a month. Https www freefilefillableforms org For the normal payroll period that begins on the first of the month and ends on the fifteenth of the month, you are paid on the sixteenth day of the month. Https www freefilefillableforms org For the normal payroll period that begins on the sixteenth of the month and ends on the last day of the month, you are paid on the first day of the following month. Https www freefilefillableforms org Because all of the above conditions are met, the pay you received on January 1, 2013, is considered earned in 2013. Https www freefilefillableforms org Income earned over more than 1 year. Https www freefilefillableforms org   Regardless of when you actually receive income, you must apply it to the year in which you earned it in figuring your excludable amount for that year. Https www freefilefillableforms org For example, a bonus may be based on work you did over several years. Https www freefilefillableforms org You determine the amount of the bonus that is considered earned in a particular year in two steps. Https www freefilefillableforms org Divide the bonus by the number of calendar months in the period when you did the work that resulted in the bonus. Https www freefilefillableforms org Multiply the result of (1) by the number of months you did the work during the year. Https www freefilefillableforms org This is the amount that is subject to the exclusion limit for that tax year. Https www freefilefillableforms org Income received more than 1 year after it was earned. Https www freefilefillableforms org   You cannot exclude income you receive after the end of the year following the year you do the work to earn it. Https www freefilefillableforms org Example. Https www freefilefillableforms org   You were a bona fide resident of Sweden for 2011, 2012, and 2013. Https www freefilefillableforms org You report your income on the cash basis. Https www freefilefillableforms org In 2011, you were paid $69,000 for work you did in Sweden that year and in 2012 you were paid $74,000 for that year's work in Sweden. Https www freefilefillableforms org You excluded all the income on your 2011 and 2012 returns. Https www freefilefillableforms org   In 2013, you were paid $92,000; $82,000 for your work in Sweden during 2013, and $10,000 for work you did in Sweden in 2011. Https www freefilefillableforms org You cannot exclude any of the $10,000 for work done in 2011 because you received it after the end of the year following the year in which you earned it. Https www freefilefillableforms org You must include the $10,000 in income. Https www freefilefillableforms org You can exclude all of the $82,000 received for work you did in 2013. Https www freefilefillableforms org Community income. Https www freefilefillableforms org   The maximum exclusion applies separately to the earnings of spouses. Https www freefilefillableforms org Ignore any community property laws when you figure your limit on the foreign earned income exclusion. Https www freefilefillableforms org Part-year exclusion. Https www freefilefillableforms org   If the period for which you qualify for the foreign earned income exclusion includes only part of the year, you must adjust the maximum limit based on the number of qualifying days in the year. Https www freefilefillableforms org The number of qualifying days is the number of days in the year within the period on which you both: Have your tax home in a foreign country, and Meet either the bona fide residence test or the physical presence test. Https www freefilefillableforms org   For this purpose, you can count as qualifying days all days within a period of 12 consecutive months once you are physically present and have your tax home in a foreign country for 330 full days. Https www freefilefillableforms org To figure your maximum exclusion, multiply the maximum excludable amount for the year by the number of your qualifying days in the year, and then divide the result by the number of days in the year. Https www freefilefillableforms org Example. Https www freefilefillableforms org You report your income on the calendar-year basis and you qualified for the foreign earned income exclusion under the bona fide residence test for 75 days in 2013. Https www freefilefillableforms org You can exclude a maximum of 75/365 of $97,600, or $20,055, of your foreign earned income for 2013. Https www freefilefillableforms org If you qualify under the bona fide residence test for all of 2014, you can exclude your foreign earned income up to the 2014 limit. Https www freefilefillableforms org Physical presence test. Https www freefilefillableforms org   Under the physical presence test, a 12-month period can be any period of 12 consecutive months that includes 330 full days. Https www freefilefillableforms org If you qualify for the foreign earned income exclusion under the physical presence test for part of a year, it is important to carefully choose the 12-month period that will allow the maximum exclusion for that year. Https www freefilefillableforms org Example. Https www freefilefillableforms org You are physically present and have your tax home in a foreign country for a 16-month period from June 1, 2012, through September 30, 2013, except for 16 days in December 2012 when you were on vacation in the United States. Https www freefilefillableforms org You figure the maximum exclusion for 2012 as follows. Https www freefilefillableforms org Beginning with June 1, 2012, count forward 330 full days. Https www freefilefillableforms org Do not count the 16 days you spent in the United States. Https www freefilefillableforms org The 330th day, May 12, 2013, is the last day of a 12-month period. Https www freefilefillableforms org Count backward 12 months from May 11, 2013, to find the first day of this 12-month period, May 12, 2012. Https www freefilefillableforms org This 12-month period runs from May 12, 2012, through May 11, 2013. Https www freefilefillableforms org Count the total days during 2012 that fall within this 12-month period. Https www freefilefillableforms org This is 234 days (May 12, 2012 – December 31, 2012). Https www freefilefillableforms org Multiply $95,100 (the maximum exclusion for 2012) by the fraction 234/366 to find your maximum exclusion for 2012 ($60,802). Https www freefilefillableforms org You figure the maximum exclusion for 2013 in the opposite manner. Https www freefilefillableforms org Beginning with your last full day, September 30, 2013, count backward 330 full days. Https www freefilefillableforms org Do not count the 16 days you spent in the United States. Https www freefilefillableforms org That day, October 20, 2012, is the first day of a 12-month period. Https www freefilefillableforms org Count forward 12 months from October 20, 2012, to find the last day of this 12-month period, October 19, 2013. Https www freefilefillableforms org This 12-month period runs from October 20, 2012, through October 19, 2013. Https www freefilefillableforms org Count the total days during 2013 that fall within this 12-month period. Https www freefilefillableforms org This is 292 days (January 1, 2013 – October 19, 2013). Https www freefilefillableforms org Multiply $97,600, the maximum limit, by the fraction 292/365 to find your maximum exclusion for 2013 ($78,080). Https www freefilefillableforms org Choosing the Exclusion The foreign earned income exclusion is voluntary. Https www freefilefillableforms org You can choose the exclusion by completing the appropriate parts of Form 2555. Https www freefilefillableforms org When You Can Choose the Exclusion Your initial choice of the exclusion on Form 2555 or Form 2555-EZ generally must be made with one of the following returns. Https www freefilefillableforms org A return filed by the due date (including any extensions). Https www freefilefillableforms org A return amending a timely-filed return. Https www freefilefillableforms org Amended returns generally must be filed by the later of 3 years after the filing date of the original return or 2 years after the tax is paid. Https www freefilefillableforms org A return filed within 1 year from the original due date of the return (determined without regard to any extensions). Https www freefilefillableforms org Filing after the above periods. Https www freefilefillableforms org   You can choose the exclusion on a return filed after the periods described above if you owe no federal income tax after taking into account the exclusion. Https www freefilefillableforms org If you owe federal income tax after taking into account the exclusion, you can choose the exclusion on a return filed after the periods described earlier if you file before the IRS discovers that you failed to choose the exclusion. Https www freefilefillableforms org Whether or not you owe federal income tax after taking the exclusion into account, if you file your return after the periods described earlier, you must type or legibly print at the top of the first page of the Form 1040 “Filed pursuant to section 1. Https www freefilefillableforms org 911-7(a)(2)(i)(D). Https www freefilefillableforms org ” If you owe federal income tax after taking into account the foreign earned income exclusion and the IRS discovered that you failed to choose the exclusion, you may still be able to choose the exclusion. Https www freefilefillableforms org You must request a private letter ruling under Income Tax Regulation 301. Https www freefilefillableforms org 9100-3 and Revenue Procedure 2013-1, 2013-1 I. Https www freefilefillableforms org R. Https www freefilefillableforms org B. Https www freefilefillableforms org 1, available at www. Https www freefilefillableforms org irs. Https www freefilefillableforms org gov/irb/2013-01_IRB/ar06. Https www freefilefillableforms org html. Https www freefilefillableforms org Effect of Choosing the Exclusion Once you choose to exclude your foreign earned income, that choice remains in effect for that year and all later years unless you revoke it. Https www freefilefillableforms org Foreign tax credit or deduction. Https www freefilefillableforms org  
Español

Index of State and Local Consumer Agencies

The Https Www Freefilefillableforms Org

Https www freefilefillableforms org Publication 584-B - Introductory Material Table of Contents What's New Introduction What's New The IRS has created a page on IRS. Https www freefilefillableforms org gov for information about Publication 584-B, at www. Https www freefilefillableforms org irs. Https www freefilefillableforms org gov/pub584b. Https www freefilefillableforms org Information about any future developments affecting Publication 584-B (such as legislation enacted after we released it) will be posted on that page. Https www freefilefillableforms org Introduction This workbook is designed to help you figure your loss on business and income-producing property in the event of a disaster, casualty, or theft. Https www freefilefillableforms org It contains schedules to help you figure the loss to your office furniture and fixtures, information systems, motor vehicles, office supplies, buildings, and equipment. Https www freefilefillableforms org These schedules, however, are for your information only. Https www freefilefillableforms org You must complete Form 4684, Casualties and Thefts, to report your loss. Https www freefilefillableforms org Prev  Up  Next   Home   More Online Publications