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I Need To File My 2012 Federal Taxes

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I Need To File My 2012 Federal Taxes

I need to file my 2012 federal taxes 7. I need to file my 2012 federal taxes   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. I need to file my 2012 federal taxes Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. I need to file my 2012 federal taxes Useful Items - You may want to see: Forms (and Instructions) 1040 U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Individual Income Tax Return 1040A U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Nonresident Alien Income Tax Return 1040NR-EZ U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. I need to file my 2012 federal taxes What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. I need to file my 2012 federal taxes Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. I need to file my 2012 federal taxes The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). I need to file my 2012 federal taxes Under U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. I need to file my 2012 federal taxes Extensions of time to file. I need to file my 2012 federal taxes   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. I need to file my 2012 federal taxes You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). I need to file my 2012 federal taxes Use Form 4868 to get the extension to October 15. I need to file my 2012 federal taxes In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). I need to file my 2012 federal taxes To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. I need to file my 2012 federal taxes Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. I need to file my 2012 federal taxes   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizens and resident aliens abroad who expect to qualify for special tax treatment). I need to file my 2012 federal taxes    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. I need to file my 2012 federal taxes You may be able to file your return electronically. I need to file my 2012 federal taxes See IRS e-file in your form instructions. I need to file my 2012 federal taxes Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. I need to file my 2012 federal taxes If you are any of the following, you must file a return. I need to file my 2012 federal taxes A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. I need to file my 2012 federal taxes (But see Exceptions , later. I need to file my 2012 federal taxes ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes sources, or Your income is exempt from income tax. I need to file my 2012 federal taxes A nonresident alien individual not engaged in a trade or business in the United States with U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income on which the tax liability was not satisfied by the withholding of tax at the source. I need to file my 2012 federal taxes A representative or agent responsible for filing the return of an individual described in (1) or (2). I need to file my 2012 federal taxes A fiduciary for a nonresident alien estate or trust. I need to file my 2012 federal taxes You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. I need to file my 2012 federal taxes For example, if you have no U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. I need to file my 2012 federal taxes For information on what is timely, see When to file for deductions and credits under When To File, later. I need to file my 2012 federal taxes Exceptions. I need to file my 2012 federal taxes   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. I need to file my 2012 federal taxes Your only U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. I need to file my 2012 federal taxes You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. I need to file my 2012 federal taxes Even if you have left the United States and filed a Form 1040-C, U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Departing Alien Income Tax Return, on departure, you still must file an annual U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax return. I need to file my 2012 federal taxes If you are married and both you and your spouse are required to file, you must each file a separate return. I need to file my 2012 federal taxes Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. I need to file my 2012 federal taxes You do not claim any dependents. I need to file my 2012 federal taxes You cannot be claimed as a dependent on someone else's U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax return. I need to file my 2012 federal taxes If you were married, you do not claim an exemption for your spouse. I need to file my 2012 federal taxes Your taxable income is less than $100,000. I need to file my 2012 federal taxes The only itemized deduction you can claim is for state and local income taxes. I need to file my 2012 federal taxes Note. I need to file my 2012 federal taxes Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. I need to file my 2012 federal taxes See chapter 5. I need to file my 2012 federal taxes Your only U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. I need to file my 2012 federal taxes (If you had taxable interest or dividend income, you cannot use this form. I need to file my 2012 federal taxes ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. I need to file my 2012 federal taxes You are not claiming any tax credits. I need to file my 2012 federal taxes This is not an “expatriation return. I need to file my 2012 federal taxes ” See Expatriation Tax in chapter 4. I need to file my 2012 federal taxes The only taxes you owe are: The income tax from the Tax Table. I need to file my 2012 federal taxes The social security and Medicare tax from Form 4137 or Form 8919. I need to file my 2012 federal taxes You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. I need to file my 2012 federal taxes You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. I need to file my 2012 federal taxes If you do not meet all of the above conditions, you must file Form 1040NR. I need to file my 2012 federal taxes When To File If you are an employee and you receive wages subject to U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. I need to file my 2012 federal taxes For the 2013 calendar year, file your return by April 15, 2014. I need to file my 2012 federal taxes If you are not an employee who receives wages subject to U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. I need to file my 2012 federal taxes For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. I need to file my 2012 federal taxes ) Extensions of time to file. I need to file my 2012 federal taxes   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. I need to file my 2012 federal taxes For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). I need to file my 2012 federal taxes You must file the extension by the regular due date of your return. I need to file my 2012 federal taxes   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). I need to file my 2012 federal taxes To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. I need to file my 2012 federal taxes Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. I need to file my 2012 federal taxes When to file for deductions and credits. I need to file my 2012 federal taxes   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. I need to file my 2012 federal taxes For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. I need to file my 2012 federal taxes However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. I need to file my 2012 federal taxes The allowance of the following credits is not affected by this time requirement. I need to file my 2012 federal taxes Credit for withheld taxes. I need to file my 2012 federal taxes Credit for excise tax on certain uses of gasoline and special fuels. I need to file my 2012 federal taxes Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. I need to file my 2012 federal taxes Protective return. I need to file my 2012 federal taxes   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. I need to file my 2012 federal taxes By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. I need to file my 2012 federal taxes You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. I need to file my 2012 federal taxes   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. I need to file my 2012 federal taxes To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. I need to file my 2012 federal taxes   You can follow the same procedure if you believe you have no U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability because of a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax treaty. I need to file my 2012 federal taxes Be sure to also complete item L on page 5 of Form 1040NR. I need to file my 2012 federal taxes Waiver of filing deadline. I need to file my 2012 federal taxes   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax return (including a protective return) and you cooperate with the IRS in determining your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax liability for the tax year for which you did not file a return. I need to file my 2012 federal taxes Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. I need to file my 2012 federal taxes  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. I need to file my 2012 federal taxes O. I need to file my 2012 federal taxes Box 1303 Charlotte, NC 28201-1303 Aliens from the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Virgin Islands. I need to file my 2012 federal taxes    If you are a bona fide resident of the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Virgin Islands and file your income tax returns at the following address. I need to file my 2012 federal taxes Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. I need to file my 2012 federal taxes Thomas, VI 00802   Report all income from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes sources, as well as income from other sources, on your return. I need to file my 2012 federal taxes For information on filing U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Virgin Islands returns, contact the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Virgin Islands Bureau of Internal Revenue. I need to file my 2012 federal taxes   Chapter 8 discusses withholding from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes wages of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Virgin Islanders. I need to file my 2012 federal taxes Aliens from Guam or the Commonwealth of the Northern Mariana Islands. I need to file my 2012 federal taxes   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. I need to file my 2012 federal taxes Report all income, including income from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes sources, on your return. I need to file my 2012 federal taxes It is not necessary to file a separate U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax return. I need to file my 2012 federal taxes    Bona fide residents of Guam should file their Guam returns at the following address. I need to file my 2012 federal taxes   Department of Revenue and Taxation Government of Guam P. I need to file my 2012 federal taxes O. I need to file my 2012 federal taxes Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. I need to file my 2012 federal taxes   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. I need to file my 2012 federal taxes O. I need to file my 2012 federal taxes Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. I need to file my 2012 federal taxes 570, Tax Guide for Individuals With Income From U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Possessions, for information on where to file your return. I need to file my 2012 federal taxes Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Individual Income Tax Return. I need to file my 2012 federal taxes Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. I need to file my 2012 federal taxes If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. I need to file my 2012 federal taxes ) to Form 1040X. I need to file my 2012 federal taxes Print “Amended” across the top. I need to file my 2012 federal taxes Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. I need to file my 2012 federal taxes A return filed before the final due date is considered to have been filed on the due date. I need to file my 2012 federal taxes Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. I need to file my 2012 federal taxes FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. I need to file my 2012 federal taxes The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. I need to file my 2012 federal taxes The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. I need to file my 2012 federal taxes However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. I need to file my 2012 federal taxes A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. I need to file my 2012 federal taxes Filing requirements. I need to file my 2012 federal taxes   FinCEN Form 105 filing requirements follow. I need to file my 2012 federal taxes Recipients. I need to file my 2012 federal taxes   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. I need to file my 2012 federal taxes Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. I need to file my 2012 federal taxes   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. I need to file my 2012 federal taxes Travelers. I need to file my 2012 federal taxes   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. I need to file my 2012 federal taxes Penalties. I need to file my 2012 federal taxes   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. I need to file my 2012 federal taxes Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. I need to file my 2012 federal taxes More information. I need to file my 2012 federal taxes   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. I need to file my 2012 federal taxes Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. I need to file my 2012 federal taxes A resident alien of the United States for any part of the tax year. I need to file my 2012 federal taxes A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax treaty. I need to file my 2012 federal taxes See Effect of Tax Treaties in chapter 1. I need to file my 2012 federal taxes A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. I need to file my 2012 federal taxes See chapter 1 for information about this election. I need to file my 2012 federal taxes A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. I need to file my 2012 federal taxes See Publication 570, Tax Guide for Individuals With Income From U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Possessions, for a definition of bona fide resident. I need to file my 2012 federal taxes You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). I need to file my 2012 federal taxes The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. I need to file my 2012 federal taxes Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes person. I need to file my 2012 federal taxes You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. I need to file my 2012 federal taxes More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. I need to file my 2012 federal taxes Penalties The law provides penalties for failure to file returns or pay taxes as required. I need to file my 2012 federal taxes Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. I need to file my 2012 federal taxes You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. I need to file my 2012 federal taxes If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. I need to file my 2012 federal taxes Filing late. I need to file my 2012 federal taxes   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. I need to file my 2012 federal taxes The penalty is based on the tax not paid by the due date (without regard to extensions). I need to file my 2012 federal taxes The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. I need to file my 2012 federal taxes Fraud. I need to file my 2012 federal taxes   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. I need to file my 2012 federal taxes Return over 60 days late. I need to file my 2012 federal taxes   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. I need to file my 2012 federal taxes Exception. I need to file my 2012 federal taxes   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. I need to file my 2012 federal taxes Paying tax late. I need to file my 2012 federal taxes   You will have to pay a failure-to-pay penalty of ½ of 1% (. I need to file my 2012 federal taxes 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. I need to file my 2012 federal taxes This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. I need to file my 2012 federal taxes   The monthly rate of the failure-to-pay penalty is half the usual rate (. I need to file my 2012 federal taxes 25% instead of . I need to file my 2012 federal taxes 50%) if an installment agreement is in effect for that month. I need to file my 2012 federal taxes You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. I need to file my 2012 federal taxes   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. I need to file my 2012 federal taxes If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. I need to file my 2012 federal taxes   This penalty cannot be more than 25% of your unpaid tax. I need to file my 2012 federal taxes You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. I need to file my 2012 federal taxes Combined penalties. I need to file my 2012 federal taxes   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. I need to file my 2012 federal taxes However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. I need to file my 2012 federal taxes Accuracy-related penalty. I need to file my 2012 federal taxes   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. I need to file my 2012 federal taxes The penalty is equal to 20% of the underpayment. I need to file my 2012 federal taxes The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. I need to file my 2012 federal taxes The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. I need to file my 2012 federal taxes Negligence or disregard. I need to file my 2012 federal taxes   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. I need to file my 2012 federal taxes Negligence also includes failure to keep adequate books and records. I need to file my 2012 federal taxes You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. I need to file my 2012 federal taxes   The term “disregard” includes any careless, reckless, or intentional disregard. I need to file my 2012 federal taxes Adequate disclosure. I need to file my 2012 federal taxes   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. I need to file my 2012 federal taxes See Disclosure statement , later. I need to file my 2012 federal taxes   This exception will not apply to an item that is attributable to a tax shelter. I need to file my 2012 federal taxes In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. I need to file my 2012 federal taxes Substantial understatement of income tax. I need to file my 2012 federal taxes   You understate your tax if the tax shown on your return is less than the correct tax. I need to file my 2012 federal taxes The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. I need to file my 2012 federal taxes However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. I need to file my 2012 federal taxes   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. I need to file my 2012 federal taxes However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. I need to file my 2012 federal taxes Substantial authority. I need to file my 2012 federal taxes   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. I need to file my 2012 federal taxes Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. I need to file my 2012 federal taxes Disclosure statement. I need to file my 2012 federal taxes   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. I need to file my 2012 federal taxes You must also have a reasonable basis for treating the item the way you did. I need to file my 2012 federal taxes   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. I need to file my 2012 federal taxes   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. I need to file my 2012 federal taxes Transaction lacking economic substance. I need to file my 2012 federal taxes   For more information on economic substance, see section 7701(o). I need to file my 2012 federal taxes Foreign financial asset. I need to file my 2012 federal taxes   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. I need to file my 2012 federal taxes Reasonable cause. I need to file my 2012 federal taxes   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. I need to file my 2012 federal taxes You must also show that you acted in good faith. I need to file my 2012 federal taxes This does not apply to a transaction that lacks economic substance. I need to file my 2012 federal taxes Filing erroneous claim for refund or credit. I need to file my 2012 federal taxes   You may have to pay a penalty if you file an erroneous claim for refund or credit. I need to file my 2012 federal taxes The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. I need to file my 2012 federal taxes However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. I need to file my 2012 federal taxes The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. I need to file my 2012 federal taxes Frivolous tax submission. I need to file my 2012 federal taxes   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. I need to file my 2012 federal taxes A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. I need to file my 2012 federal taxes For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. I need to file my 2012 federal taxes irs. I need to file my 2012 federal taxes gov/irb/2010-17_irb/ar13. I need to file my 2012 federal taxes html. I need to file my 2012 federal taxes   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. I need to file my 2012 federal taxes This includes altering or striking out the preprinted language above the space provided for your signature. I need to file my 2012 federal taxes   This penalty is added to any other penalty provided by law. I need to file my 2012 federal taxes Fraud. I need to file my 2012 federal taxes   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. I need to file my 2012 federal taxes Failure to supply taxpayer identification number. I need to file my 2012 federal taxes   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. I need to file my 2012 federal taxes You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. I need to file my 2012 federal taxes   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. I need to file my 2012 federal taxes The number must be shown on the Form 1099-INT or other statement the bank sends you. I need to file my 2012 federal taxes If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. I need to file my 2012 federal taxes (You also may be subject to “backup” withholding of income tax. I need to file my 2012 federal taxes )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. I need to file my 2012 federal taxes Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. 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The I Need To File My 2012 Federal Taxes

I need to file my 2012 federal taxes Publication 514 - Main Content Table of Contents Choosing To Take Credit or DeductionChoice Applies to All Qualified Foreign Taxes Making or Changing Your Choice Why Choose the Credit?Credit for Taxes Paid or Accrued Foreign Currency and Exchange Rates Foreign Tax Redetermination Who Can Take the Credit?U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Citizens Resident Aliens Nonresident Aliens What Foreign Taxes Qualify for the Credit?Tax Must Be Imposed on You You Must Have Paid or Accrued the Tax Tax Must Be the Legal and Actual Foreign Tax Liability Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) Foreign Taxes for Which You Cannot Take a CreditTaxes on Excluded Income Taxes for Which You Can Only Take an Itemized Deduction Taxes on Foreign Mineral Income Taxes From International Boycott Operations Taxes on Combined Foreign Oil and Gas Income Taxes of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Persons Controlling Foreign Corporations and Partnerships Taxes Related to a Foreign Tax Credit Splitting Event How To Figure the CreditLimit on the Credit Separate Limit Income Allocation of Foreign Taxes Foreign Taxes From a Partnership or an S Corporation Figuring the Limit Qualified Dividends Capital Gains and Losses Allocation of Foreign and U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Losses Tax Treaties Carryback and CarryoverTime Limit on Tax Assessment Claim for Refund Taxes All Credited or All Deducted Married Couples How To Claim the CreditForm 1116 Records To Keep Simple Example — Filled-In Form 1116Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Comprehensive Example — Filled-In Form 1116Foreign earned income. I need to file my 2012 federal taxes Employee business expenses. I need to file my 2012 federal taxes Forms 1116 Computation of Taxable Income Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Unused Foreign Taxes How To Get Tax HelpLow Income Taxpayer Clinics Choosing To Take Credit or Deduction You can choose whether to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. I need to file my 2012 federal taxes You can change your choice for each year's taxes. I need to file my 2012 federal taxes To choose the foreign tax credit, in most cases you must complete Form 1116 and attach it to your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax return. I need to file my 2012 federal taxes However, you may qualify for the exception that allows you to claim the foreign tax credit without using Form 1116. I need to file my 2012 federal taxes See How To Figure the Credit , later. I need to file my 2012 federal taxes To choose to claim the taxes as an itemized deduction, use Schedule A (Form 1040), Itemized Deductions. I need to file my 2012 federal taxes Figure your tax both ways—claiming the credit and claiming the deduction. I need to file my 2012 federal taxes Then fill out your return the way that benefits you more. I need to file my 2012 federal taxes See Why Choose the Credit, later. I need to file my 2012 federal taxes Choice Applies to All Qualified Foreign Taxes As a general rule, you must choose to take either a credit or a deduction for all qualified foreign taxes. I need to file my 2012 federal taxes If you choose to take a credit for qualified foreign taxes, you must take the credit for all of them. I need to file my 2012 federal taxes You cannot deduct any of them. I need to file my 2012 federal taxes Conversely, if you choose to deduct qualified foreign taxes, you must deduct all of them. I need to file my 2012 federal taxes You cannot take a credit for any of them. I need to file my 2012 federal taxes See What Foreign Taxes Qualify for the Credit , later, for the meaning of qualified foreign taxes. I need to file my 2012 federal taxes There are exceptions to this general rule, which are described next. I need to file my 2012 federal taxes Exceptions for foreign taxes not allowed as a credit. I need to file my 2012 federal taxes   Even if you claim a credit for other foreign taxes, you can deduct any foreign tax that is not allowed as a credit if: You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act, You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time, You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time, You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property, You participated in or cooperated with an international boycott, You paid taxes in connection with the purchase or sale of oil or gas, or You paid or accrued taxes on income or gain in connection with a covered asset acquisition. I need to file my 2012 federal taxes Covered asset acquisitions include certain acquisitions that result in a stepped-up basis for U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax purposes. I need to file my 2012 federal taxes For more information, see Internal Revenue Code section 901(m). I need to file my 2012 federal taxes The IRS intends to issue guidance that will explain this provision in greater detail. I need to file my 2012 federal taxes   For more information on these items, see Taxes for Which You Can Only Take an Itemized Deduction , later, under Foreign Taxes for Which You Cannot Take a Credit. I need to file my 2012 federal taxes Foreign taxes that are not income taxes. I need to file my 2012 federal taxes   In most cases, only foreign income taxes qualify for the foreign tax credit. I need to file my 2012 federal taxes Other taxes, such as foreign real and personal property taxes, do not qualify. I need to file my 2012 federal taxes But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. I need to file my 2012 federal taxes   In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. I need to file my 2012 federal taxes However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040). I need to file my 2012 federal taxes Carrybacks and carryovers. I need to file my 2012 federal taxes   There is a limit on the credit you can claim in a tax year. I need to file my 2012 federal taxes If your qualified foreign taxes exceed the credit limit, you may be able to carry over or carry back the excess to another tax year. I need to file my 2012 federal taxes If you deduct qualified foreign taxes in a tax year, you cannot use a carryback or carryover in that year. I need to file my 2012 federal taxes That is because you cannot take both a deduction and a credit for qualified foreign taxes in the same tax year. I need to file my 2012 federal taxes   For more information on the limit, see How To Figure the Credit , later. I need to file my 2012 federal taxes For more information on carrybacks and carryovers, see Carryback and Carryover , later. I need to file my 2012 federal taxes Making or Changing Your Choice You can make or change your choice to claim a deduction or credit at any time during the period within 10 years from the regular due date for filing the return (without regard to any extension of time to file) for the tax year in which the taxes were actually paid or accrued. I need to file my 2012 federal taxes You make or change your choice on your tax return (or on an amended return) for the year your choice is to be effective. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You paid foreign taxes for the last 13 years and chose to deduct them on your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax returns. I need to file my 2012 federal taxes You were timely in both filing your returns and paying your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability. I need to file my 2012 federal taxes In February 2013, you file an amended return for tax year 2002 choosing to take a credit for your 2002 foreign taxes because you now realize that the credit is more advantageous than the deduction for that year. I need to file my 2012 federal taxes Because the regular due date of your 2002 return was April 15, 2003, this choice is timely (within 10 years). I need to file my 2012 federal taxes Because there is a limit on the credit for your 2002 foreign tax, you have unused 2002 foreign taxes. I need to file my 2012 federal taxes Ordinarily, you first carry back unused foreign taxes arising in 2002 to, and claim them as a credit in, the 2 preceding tax years. I need to file my 2012 federal taxes If you are unable to claim all of them in those 2 years, you carry them forward to the 10 years following the year in which they arose. I need to file my 2012 federal taxes Because you originally chose to deduct your foreign taxes and the 10-year period for changing the choice for 2000 and 2001 has passed, you cannot change your choice and carry the unused 2002 foreign taxes back to tax years 2000 and 2001. I need to file my 2012 federal taxes Because the 10-year periods for changing the choice have not passed for your 2003 through 2012 income tax returns, you can still choose to claim the credit for those years and carry forward any unused 2002 foreign taxes. I need to file my 2012 federal taxes However, you must reduce the unused 2002 foreign taxes that you carry forward by the amount that would have been allowed as a carryback if you had timely carried back the foreign tax to tax years 2000 and 2001. I need to file my 2012 federal taxes You cannot take a credit or a deduction for foreign taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. I need to file my 2012 federal taxes See Foreign Earned Income and Housing Exclusions under Foreign Taxes for Which You Cannot Take a Credit, later. I need to file my 2012 federal taxes Why Choose the Credit? The foreign tax credit is intended to relieve you of a double tax burden when your foreign source income is taxed by both the United States and the foreign country. I need to file my 2012 federal taxes In most cases, if the foreign tax rate is higher than the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes rate, there will be no U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax on the foreign income. I need to file my 2012 federal taxes If the foreign tax rate is lower than the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes rate, U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax on the foreign income will be limited to the difference between the rates. I need to file my 2012 federal taxes The foreign tax credit can only reduce U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes taxes on foreign source income; it cannot reduce U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes taxes on U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes source income. I need to file my 2012 federal taxes Although no one rule covers all situations, in most cases it is better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction. I need to file my 2012 federal taxes This is because: A credit reduces your actual U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax on a dollar-for-dollar basis, while a deduction reduces only your income subject to tax, You can choose to take the foreign tax credit even if you do not itemize your deductions. I need to file my 2012 federal taxes You then are allowed the standard deduction in addition to the credit, and If you choose to take the foreign tax credit, and the taxes paid or accrued exceed the credit limit for the tax year, you may be able to carry over or carry back the excess to another tax year. I need to file my 2012 federal taxes (See Limit on credit under How To Figure the Credit, later. I need to file my 2012 federal taxes ) Example 1. I need to file my 2012 federal taxes For 2013, you and your spouse have adjusted gross income of $80,300, including $20,000 of dividend income from foreign sources. I need to file my 2012 federal taxes None of the dividends are qualified dividends. I need to file my 2012 federal taxes You file a joint return and can claim two $3,900 exemptions. I need to file my 2012 federal taxes You had to pay $2,000 in foreign income taxes on the dividend income. I need to file my 2012 federal taxes If you take the foreign taxes as an itemized deduction, your total itemized deductions are $15,000. I need to file my 2012 federal taxes Your taxable income then is $57,500 and your tax is $7,736. I need to file my 2012 federal taxes If you take the credit instead, your itemized deductions are only $13,000. I need to file my 2012 federal taxes Your taxable income then is $59,500 and your tax before the credit is $8,036. I need to file my 2012 federal taxes After the credit, however, your tax is only $6,036. I need to file my 2012 federal taxes Therefore, your tax is $1,700 lower ($7,736 − $6,036) by taking the credit. I need to file my 2012 federal taxes Example 2. I need to file my 2012 federal taxes In 2013, you receive investment income of $5,000 from a foreign country, which imposes a tax of $1,500 on that income. I need to file my 2012 federal taxes You report on your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes return this income as well as $56,000 of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes source wages and an allowable $49,000 partnership loss from a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes partnership. I need to file my 2012 federal taxes Your share of the partnership's gross income is $25,000 and your share of its expenses is $74,000. I need to file my 2012 federal taxes You are single, entitled to one $3,900 exemption, and have other itemized deductions of $6,850. I need to file my 2012 federal taxes If you deduct the foreign tax on your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes return, your taxable income is a negative $250 ($5,000 + $56,000 − $49,000 − $1,500 − $6,850 − $3,900) and your tax is $0. I need to file my 2012 federal taxes If you take the credit instead, your taxable income is $1,250 ($5,000 + $56,000 − $49,000 − $3,900 − $6,850) and your tax before the credit is $126. I need to file my 2012 federal taxes You can take a credit of only $113 because of limits discussed later. I need to file my 2012 federal taxes Your tax after the credit is $13 ($126 − $113), which is $13 more than if you deduct the foreign tax. I need to file my 2012 federal taxes If you choose the credit, you will have unused foreign taxes of $1,387 ($1,500 − $113). I need to file my 2012 federal taxes When deciding whether to take the credit or the deduction this year, you will need to consider whether you can benefit from a carryback or carryover of that unused foreign tax. I need to file my 2012 federal taxes Credit for Taxes Paid or Accrued You can claim the credit for a qualified foreign tax in the tax year in which you pay it or accrue it, depending on your method of accounting. I need to file my 2012 federal taxes “Tax year” refers to the tax year for which your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes return is filed, not the tax year for which your foreign return is filed. I need to file my 2012 federal taxes Accrual method of accounting. I need to file my 2012 federal taxes   If you use an accrual method of accounting, you can claim the credit only in the year in which you accrue the tax. I need to file my 2012 federal taxes You are using an accrual method of accounting if you report income when you earn it, rather than when you receive it, and you deduct your expenses when you incur them, rather than when you pay them. I need to file my 2012 federal taxes   In most cases, foreign taxes accrue when all the events have taken place that fix the amount of the tax and your liability to pay it. I need to file my 2012 federal taxes Generally, this occurs on the last day of the tax year for which your foreign return is filed. I need to file my 2012 federal taxes Contesting your foreign tax liability. I need to file my 2012 federal taxes   If you are contesting your foreign tax liability, you cannot accrue it and take a credit until the amount of foreign tax due is finally determined. I need to file my 2012 federal taxes However, if you choose to pay the tax liability you are contesting, you can take a credit for the amount you pay before a final determination of foreign tax liability is made. I need to file my 2012 federal taxes Once your liability is determined, the foreign tax credit is allowable for the year to which the foreign tax relates. I need to file my 2012 federal taxes If the amount of foreign taxes taken as a credit differs from the final foreign tax liability, you may have to adjust the credit, as discussed later under Foreign Tax Redetermination . I need to file my 2012 federal taxes You may have to post a bond. I need to file my 2012 federal taxes   If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. I need to file my 2012 federal taxes   The IRS can request this bond at any time without regard to the Time Limit on Tax Assessment discussed later under Carryback and Carryover. I need to file my 2012 federal taxes Cash method of accounting. I need to file my 2012 federal taxes   If you use the cash method of accounting, you can choose to take the credit either in the year you pay the tax or in the year you accrue it. I need to file my 2012 federal taxes You are using the cash method of accounting if you report income in the year you actually or constructively receive it, and deduct expenses in the year you pay them. I need to file my 2012 federal taxes Choosing to take credit in the year taxes accrue. I need to file my 2012 federal taxes   Even if you use the cash method of accounting, you can choose to take a credit for foreign taxes in the year they accrue. I need to file my 2012 federal taxes You make the choice by checking the box in Part II of Form 1116. I need to file my 2012 federal taxes Once you make that choice, you must follow it in all later years and take a credit for foreign taxes in the year they accrue. I need to file my 2012 federal taxes   In addition, the choice to take the credit when foreign taxes accrue applies to all foreign taxes qualifying for the credit. I need to file my 2012 federal taxes You cannot take a credit for some foreign taxes when paid and take a credit for others when accrued. I need to file my 2012 federal taxes   If you make the choice to take the credit when foreign taxes accrue and pay them in a later year, you cannot claim a deduction for any part of the previously accrued taxes. I need to file my 2012 federal taxes Credit based on taxes paid in earlier year. I need to file my 2012 federal taxes   If, in earlier years, you took the credit based on taxes paid, and this year you choose to take the credit based on taxes accrued, you may be able to take the credit this year for taxes from more than one year. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes Last year you took the credit based on taxes paid. I need to file my 2012 federal taxes This year you chose to take the credit based on taxes accrued. I need to file my 2012 federal taxes During the year you paid foreign income taxes owed for last year. I need to file my 2012 federal taxes You also accrued foreign income taxes for this year that you did not pay by the end of the year. I need to file my 2012 federal taxes You can base the credit on your return for this year on both last year's taxes that you paid and this year's taxes that you accrued. I need to file my 2012 federal taxes Foreign Currency and Exchange Rates U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax is imposed on income expressed in U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollars, while in most cases the foreign tax is imposed on income expressed in foreign currency. I need to file my 2012 federal taxes Therefore, fluctuations in the value of the foreign currency relative to the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar may affect the foreign tax credit. I need to file my 2012 federal taxes Translating foreign currency into U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollars. I need to file my 2012 federal taxes   If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollars. I need to file my 2012 federal taxes How and when you do this depends on your functional currency. I need to file my 2012 federal taxes In most cases, your functional currency is the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar unless you are required to use the currency of a foreign country. I need to file my 2012 federal taxes   You must make all federal income tax determinations in your functional currency. I need to file my 2012 federal taxes The U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar is the functional currency for all taxpayers except some qualified business units. I need to file my 2012 federal taxes A qualified business unit is a separate and clearly identified unit of a trade or business that maintains separate books and records. I need to file my 2012 federal taxes Unless you are self-employed, your functional currency is the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar. I need to file my 2012 federal taxes   Even if you are self-employed and have a qualified business unit, your functional currency is the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar if any of the following apply. I need to file my 2012 federal taxes You conduct the business primarily in dollars. I need to file my 2012 federal taxes The principal place of business is located in the United States. I need to file my 2012 federal taxes You choose to or are required to use the dollar as your functional currency. I need to file my 2012 federal taxes The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. I need to file my 2012 federal taxes   If your functional currency is the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar, you must immediately translate into dollars all items of income, expense, etc. I need to file my 2012 federal taxes , that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. I need to file my 2012 federal taxes If there is more than one exchange rate, use the one that most properly reflects your income. I need to file my 2012 federal taxes In most cases, you can get exchange rates from banks and U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Embassies. I need to file my 2012 federal taxes   If your functional currency is not the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar, make all income tax determinations in your functional currency. I need to file my 2012 federal taxes At the end of the year, translate the results, such as income or loss, into U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollars to report on your income tax return. I need to file my 2012 federal taxes    For more information, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Rate of exchange for foreign taxes paid. I need to file my 2012 federal taxes   Use the rate of exchange in effect on the date you paid the foreign taxes to the foreign country unless you meet the exception discussed next. I need to file my 2012 federal taxes If your tax was withheld in foreign currency, use the rate of exchange in effect for the date on which the tax was withheld. I need to file my 2012 federal taxes If you make foreign estimated tax payments, you use the rate of exchange in effect for the date on which you made the estimated tax payment. I need to file my 2012 federal taxes   The exchange rate rules discussed here apply even if the foreign taxes are paid or accrued with respect to a foreign tax credit splitting event (discussed later). I need to file my 2012 federal taxes Exception. I need to file my 2012 federal taxes   If you claim the credit for foreign taxes on an accrual basis, in most cases you must use the average exchange rate for the tax year to which the taxes relate. I need to file my 2012 federal taxes This rule applies to accrued taxes relating to tax years beginning after 1997 and only under the following conditions. I need to file my 2012 federal taxes The foreign taxes are paid on or after the first day of the tax year to which they relate. I need to file my 2012 federal taxes The foreign taxes are paid not later than 2 years after the close of the tax year to which they relate. I need to file my 2012 federal taxes The foreign tax liability is not denominated in an inflationary currency (defined in the Form 1116 instructions). I need to file my 2012 federal taxes (This condition applies to taxes paid or accrued in tax years beginning after November 6, 2007. I need to file my 2012 federal taxes )   For all other foreign taxes, you should use the exchange rate in effect on the date you paid them. I need to file my 2012 federal taxes Election to use exchange rate on date paid. I need to file my 2012 federal taxes   If you have accrued foreign taxes that you are otherwise required to convert using the average exchange rate, you may elect to use the exchange rate in effect on the date the foreign taxes are paid if the taxes are denominated in a nonfunctional foreign currency. I need to file my 2012 federal taxes If any of the accrued taxes are unpaid, you must translate them into U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollars using the exchange rate on the last day of the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax year to which those taxes relate. I need to file my 2012 federal taxes You may make the election for all nonfunctional currency foreign income taxes or only those nonfunctional currency foreign income taxes that are attributable to qualified business units with a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar functional currency. I need to file my 2012 federal taxes Once made, the election applies to the tax year for which made and all subsequent tax years unless revoked with the consent of the IRS. I need to file my 2012 federal taxes The election is available for tax years beginning after 2004. I need to file my 2012 federal taxes It must be made by the due date (including extensions) for filing the tax return for the first tax year to which the election applies. I need to file my 2012 federal taxes Make the election by attaching a statement to the applicable tax return. I need to file my 2012 federal taxes The statement must identify whether the election is made for all foreign taxes or only for foreign taxes attributable to qualified business units with a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollar functional currency. I need to file my 2012 federal taxes Foreign Tax Redetermination A foreign tax redetermination is any change in your foreign tax liability that may affect your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes foreign tax credit claimed. I need to file my 2012 federal taxes The year in which to claim the credit remains the year to which the foreign taxes paid or accrued relate, even if the change in foreign tax liability occurs in a later year. I need to file my 2012 federal taxes If a foreign tax redetermination occurs, a redetermination of your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability is required if any of the following conditions apply. I need to file my 2012 federal taxes The accrued taxes when paid differ from the amounts claimed as a credit. I need to file my 2012 federal taxes The accrued taxes you claimed as a credit in one tax year are not paid within 2 years after the end of that tax year. I need to file my 2012 federal taxes If this applies to you, you must reduce the credit previously claimed by the amount of the unpaid taxes. I need to file my 2012 federal taxes You will not be allowed a credit for the unpaid taxes until you pay them. I need to file my 2012 federal taxes When you pay the accrued taxes, a new foreign tax redetermination occurs and you must translate the taxes into U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes dollars using the exchange rate as of the date they were paid. I need to file my 2012 federal taxes The foreign tax credit is allowed for the year to which the foreign tax relates. I need to file my 2012 federal taxes See Rate of exchange for foreign taxes paid , earlier, under Foreign Currency and Exchange Rates. I need to file my 2012 federal taxes The foreign taxes you paid are refunded in whole or in part. I need to file my 2012 federal taxes For taxes taken into account when accrued but translated into dollars on the date of payment, the dollar value of the accrued tax differs from the dollar value of the tax paid because of fluctuations in the exchange rate between the date of accrual and the date of payment. I need to file my 2012 federal taxes However, no redetermination is required if the change in foreign tax liability for each foreign country is solely attributable to exchange rate fluctuations and is less than the smaller of: $10,000, or 2% of the total dollar amount of the foreign tax initially accrued for that foreign country for the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax year. I need to file my 2012 federal taxes In this case, you must adjust your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax in the tax year in which the accrued foreign taxes are paid. I need to file my 2012 federal taxes Notice to the Internal Revenue Service (IRS) of Redetermination You are required to notify the IRS about a foreign tax credit redetermination that affects your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability for each tax year affected by the redetermination. I need to file my 2012 federal taxes In most cases, you must file Form 1040X, Amended U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Individual Income Tax Return, with a revised Form 1116 and a statement that contains information sufficient for the IRS to redetermine your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability for the year or years affected. I need to file my 2012 federal taxes See Contents of statement , later. I need to file my 2012 federal taxes You are not required to attach Form 1116 for a tax year affected by a redetermination if: The amount of your creditable taxes paid or accrued during the tax year is not more than $300 ($600 if married filing a joint return) as a result of the foreign tax redetermination, and You meet the requirements listed under Exemption from foreign tax credit limit under How To Figure the Credit, later. I need to file my 2012 federal taxes There are other exceptions to this requirement. I need to file my 2012 federal taxes They are discussed later under Due date of notification to IRS . I need to file my 2012 federal taxes Contents of statement. I need to file my 2012 federal taxes   The statement must include all of the following. I need to file my 2012 federal taxes Your name, address, and taxpayer identification number. I need to file my 2012 federal taxes The tax year or years that are affected by the foreign tax redetermination. I need to file my 2012 federal taxes The date or dates the foreign taxes were accrued, if applicable. I need to file my 2012 federal taxes The date or dates the foreign taxes were paid. I need to file my 2012 federal taxes The amount of foreign taxes paid or accrued on each date (in foreign currency) and the exchange rate used to translate each amount. I need to file my 2012 federal taxes Information sufficient to determine any interest due from or owing to you, including the amount of any interest paid to you by the foreign government and the dates received. I need to file my 2012 federal taxes   In the case of any foreign taxes that were not paid before the date two years after the close of the tax year to which those taxes relate, you must provide the amount of those taxes in foreign currency and the exchange rate that was used to translate that amount when originally claimed as a credit. I need to file my 2012 federal taxes   If any foreign tax was refunded in whole or in part, you must provide the date and amount (in foreign currency) of each refund, the exchange rate that was used to translate each amount when originally claimed as a credit, and the exchange rate for the date the refund was received (for purposes of computing foreign currency gain or loss under Internal Revenue Code section 988). I need to file my 2012 federal taxes Due date of notification to IRS. I need to file my 2012 federal taxes   If you pay less foreign tax than you originally claimed a credit for, in most cases you must file a notification by the due date (with extensions) of your original return for your tax year in which the foreign tax redetermination occurred. I need to file my 2012 federal taxes There is no limit on the time the IRS has to redetermine and assess the correct U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax due. I need to file my 2012 federal taxes If you pay more foreign tax than you originally claimed a credit for, you have 10 years to file a claim for refund of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes taxes. I need to file my 2012 federal taxes See Time Limit on Refund Claims , later. I need to file my 2012 federal taxes   Exceptions to this due date are explained in the next two paragraphs. I need to file my 2012 federal taxes Multiple redeterminations of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability for same tax year. I need to file my 2012 federal taxes   Where more than one foreign tax redetermination requires a redetermination of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability for the same tax year and those redeterminations occur in the same tax year or within two consecutive tax years, you can file for that tax year one notification (Form 1040X with a Form 1116 and the required statement) that reflects all those tax redeterminations. I need to file my 2012 federal taxes If you choose to file one notification, the due date for that notification is the due date of the original return (with extensions) for the year in which the first foreign tax redetermination that reduced your foreign tax liability occurred. I need to file my 2012 federal taxes However, foreign tax redeterminations with respect to the tax year for which a redetermination of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability is required may occur after the due date for providing that notification. I need to file my 2012 federal taxes In this situation, you may have to file more than one Form 1040X for that tax year. I need to file my 2012 federal taxes Additional U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax due eliminated by foreign tax credit carryback or carryover. I need to file my 2012 federal taxes   If a foreign tax redetermination requires a redetermination of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability that would otherwise result in an additional amount of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax due, but the additional tax is eliminated by a carryback or carryover of an unused foreign tax, you do not have to amend your tax return for the year affected by the redetermination. I need to file my 2012 federal taxes Instead, you can notify the IRS by attaching a statement to the original return for the tax year in which the foreign tax redetermination occurred. I need to file my 2012 federal taxes You must file the statement by the due date (with extensions) of that return. I need to file my 2012 federal taxes The statement must show the amount of the unused foreign taxes paid or accrued and a detailed schedule showing the computation of the carryback or carryover (including the amounts carried back or over to the year for which a redetermination on U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability is required). I need to file my 2012 federal taxes Failure-to-notify penalty. I need to file my 2012 federal taxes   If you fail to notify the IRS of a foreign tax redetermination and cannot show reasonable cause for the failure, you may have to pay a penalty. I need to file my 2012 federal taxes   For each month, or part of a month, that the failure continues, you pay a penalty of 5% of the tax due resulting from a redetermination of your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax. I need to file my 2012 federal taxes This penalty cannot be more than 25% of the tax due. I need to file my 2012 federal taxes Foreign tax refund. I need to file my 2012 federal taxes   If you receive a foreign tax refund without interest from the foreign government, you will not have to pay interest on the amount of tax due resulting from the adjustment to your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax for the time before the date of the refund. I need to file my 2012 federal taxes   However, if you receive a foreign tax refund with interest, you must pay interest to the IRS up to the amount of the interest paid to you by the foreign government. I need to file my 2012 federal taxes The interest you must pay cannot be more than the interest you would have had to pay on taxes that were unpaid for any other reason for the same period. I need to file my 2012 federal taxes Interest also is owed from the time you receive a refund until you pay the additional tax due. I need to file my 2012 federal taxes Foreign tax imposed on foreign refund. I need to file my 2012 federal taxes   If your foreign tax refund is taxed by the foreign country, you cannot take a separate credit or deduction for this additional foreign tax. I need to file my 2012 federal taxes However, when you refigure the foreign tax credit taken for the original foreign tax, reduce the amount of the refund by the foreign tax paid on the refund. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You paid a foreign income tax of $3,000 in 2011, and received a foreign tax refund of $500 in 2013 on which a foreign tax of $100 was imposed. I need to file my 2012 federal taxes When you refigure your credit for 2011, you must reduce the $3,000 you paid by $400. I need to file my 2012 federal taxes Time Limit on Refund Claims You have 10 years to file a claim for refund of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax if you find that you paid or accrued a larger foreign tax than you claimed a credit for. I need to file my 2012 federal taxes The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the taxes were actually paid or accrued. I need to file my 2012 federal taxes You have 10 years to file your claim regardless of whether you claim the credit for taxes paid or taxes accrued. I need to file my 2012 federal taxes The 10-year period applies to claims for refund or credit based on: Fixing math errors in figuring qualified foreign taxes, Reporting qualified foreign taxes not originally reported on the return, or Any other change in the size of the credit (including one caused by correcting the foreign tax credit limit). I need to file my 2012 federal taxes The special 10-year period also applies to making or changing your choice to claim a deduction or credit for foreign taxes. I need to file my 2012 federal taxes See Making or Changing Your Choice discussed earlier under Choosing To Take Credit or Deduction. I need to file my 2012 federal taxes Who Can Take the Credit? U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizens, resident aliens, and nonresident aliens who paid foreign income tax and are subject to U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax on foreign source income may be able to take a foreign tax credit. I need to file my 2012 federal taxes U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Citizens If you are a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizen, you are taxed by the United States on your worldwide income wherever you live. I need to file my 2012 federal taxes You are normally entitled to take a credit for foreign taxes you pay or accrue. I need to file my 2012 federal taxes Resident Aliens If you are a resident alien of the United States, you can take a credit for foreign taxes subject to the same general rules as U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizens. I need to file my 2012 federal taxes If you are a bona fide resident of Puerto Rico for the entire tax year, you also come under the same rules. I need to file my 2012 federal taxes Usually, you can take a credit only for those foreign taxes imposed on income you actually or constructively received while you had resident alien status. I need to file my 2012 federal taxes For information on alien status, see Publication 519. I need to file my 2012 federal taxes Nonresident Aliens If you are a nonresident alien, you cannot take the credit in most cases. I need to file my 2012 federal taxes However, you may be able to take the credit if: You were a bona fide resident of Puerto Rico during your entire tax year, or You pay or accrue tax to a foreign country or U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possession on income from foreign sources that is effectively connected with a trade or business in the United States. I need to file my 2012 federal taxes But if you must pay tax to a foreign country or U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possession on income from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes sources only because you are a citizen or a resident of that country or U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possession, do not use that tax in figuring the amount of your credit. I need to file my 2012 federal taxes For information on alien status and effectively connected income, see Publication 519. I need to file my 2012 federal taxes What Foreign Taxes Qualify for the Credit? In most cases, the following four tests must be met for any foreign tax to qualify for the credit. I need to file my 2012 federal taxes The tax must be imposed on you. I need to file my 2012 federal taxes You must have paid or accrued the tax. I need to file my 2012 federal taxes The tax must be the legal and actual foreign tax liability. I need to file my 2012 federal taxes The tax must be an income tax (or a tax in lieu of an income tax). I need to file my 2012 federal taxes Certain foreign taxes do not qualify for the credit even if the four tests are met. I need to file my 2012 federal taxes See Foreign Taxes for Which You Cannot Take a Credit, later. I need to file my 2012 federal taxes Tax Must Be Imposed on You You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possession. I need to file my 2012 federal taxes For example, a tax that is deducted from your wages is considered to be imposed on you. I need to file my 2012 federal taxes You cannot shift the right to claim the credit by contract or other means. I need to file my 2012 federal taxes Foreign country. I need to file my 2012 federal taxes   A foreign country includes any foreign state and its political subdivisions. I need to file my 2012 federal taxes Income, war profits, and excess profits taxes paid or accrued to a foreign city or province qualify for the foreign tax credit. I need to file my 2012 federal taxes U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possessions. I need to file my 2012 federal taxes   For foreign tax credit purposes, all qualified taxes paid to U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possessions are considered foreign taxes. I need to file my 2012 federal taxes For this purpose, U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possessions include Puerto Rico and American Samoa. I need to file my 2012 federal taxes   When the term “foreign country” is used in this publication, it includes U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possessions unless otherwise stated. I need to file my 2012 federal taxes You Must Have Paid or Accrued the Tax In most cases, you can claim the credit only if you paid or accrued the foreign tax to a foreign country or U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes possession. I need to file my 2012 federal taxes However, the paragraphs that follow describe some instances in which you can claim the credit even if you did not directly pay or accrue the tax yourself. I need to file my 2012 federal taxes Joint return. I need to file my 2012 federal taxes   If you file a joint return, you can claim the credit based on the total foreign income taxes paid or accrued by you and your spouse. I need to file my 2012 federal taxes Combined income. I need to file my 2012 federal taxes   If foreign tax is imposed on the combined income of two or more persons (for example, spouses), the tax is allocated among, and considered paid by, these persons on a pro rata basis in proportion to each person's portion of the combined income, as determined under foreign law and Regulations section 1. I need to file my 2012 federal taxes 901-2(f)(3)(iii). I need to file my 2012 federal taxes Combined income with respect to each foreign tax that is imposed on a combined basis (and combined income subject to tax exemption or preferential tax rates) is computed separately, and the tax on that combined income is allocated separately. I need to file my 2012 federal taxes   These rules apply to foreign taxes paid or accrued in tax years beginning after February 14, 2012. I need to file my 2012 federal taxes However, you can choose to apply the new rules to foreign taxes paid or accrued in tax years beginning after December 31, 2010, and before February 15, 2012. I need to file my 2012 federal taxes For more details, see paragraphs (f) and (h) of Regulations section 1. I need to file my 2012 federal taxes 901-2. I need to file my 2012 federal taxes For similar rules applicable to prior tax years, see Regulations section 1. I need to file my 2012 federal taxes 901-2 (revised as of April 1, 2011). I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You and your spouse reside in Country X, which imposes income tax on your combined incomes. I need to file my 2012 federal taxes Both of you use the “u” as your functional currency. I need to file my 2012 federal taxes Country X apportions tax based on income. I need to file my 2012 federal taxes You had income of 30,000u and your spouse had income of 20,000u. I need to file my 2012 federal taxes Your filing status on your U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income tax return is married filing separately. I need to file my 2012 federal taxes You can claim only 60% (30,000u/50,000u) of the foreign taxes imposed on your income on your U. I need to file my 2012 federal taxes S income tax return. I need to file my 2012 federal taxes Your spouse can claim only 40% (20,000u/50,000u). I need to file my 2012 federal taxes Partner or S corporation shareholder. I need to file my 2012 federal taxes   If you are a member of a partnership, or a shareholder in an S corporation, you can claim the credit based on your proportionate share of the foreign income taxes paid or accrued by the partnership or the S corporation. I need to file my 2012 federal taxes These amounts will be shown on the Schedule K-1 you receive from the partnership or S corporation. I need to file my 2012 federal taxes However, if you are a shareholder in an S corporation that in turn owns stock in a foreign corporation, you cannot claim a credit for your share of foreign taxes paid by the foreign corporation. I need to file my 2012 federal taxes Beneficiary. I need to file my 2012 federal taxes   If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. I need to file my 2012 federal taxes This amount will be shown on the Schedule K-1 you receive from the estate or trust. I need to file my 2012 federal taxes However, you must show that the tax was imposed on income of the estate and not on income received by the decedent. I need to file my 2012 federal taxes Mutual fund shareholder. I need to file my 2012 federal taxes   If you are a shareholder of a mutual fund or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. I need to file my 2012 federal taxes You should receive from the mutual fund or other RIC a Form 1099-DIV, or similar statement, showing your share of the foreign income, and your share of the foreign taxes paid. I need to file my 2012 federal taxes If you do not receive this information, you will need to contact the fund. I need to file my 2012 federal taxes Controlled foreign corporation shareholder. I need to file my 2012 federal taxes   If you are a shareholder of a controlled foreign corporation and choose to be taxed at corporate rates on the amount you must include in gross income from that corporation, you can claim the credit based on your share of foreign taxes paid or accrued by the controlled foreign corporation. I need to file my 2012 federal taxes If you make this election, you must claim the credit by filing Form 1118, Foreign Tax Credit—Corporations. I need to file my 2012 federal taxes Controlled foreign corporation. I need to file my 2012 federal taxes   A controlled foreign corporation is a foreign corporation in which U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes shareholders own more than 50% of the voting power or value of the stock. I need to file my 2012 federal taxes You are considered a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes shareholder if you own, directly or indirectly, 10% or more of the total voting power of all classes of the foreign corporation's stock. I need to file my 2012 federal taxes See Internal Revenue Code sections 951(b) and 958(b) for more information. I need to file my 2012 federal taxes Tax Must Be the Legal and Actual Foreign Tax Liability The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country. I need to file my 2012 federal taxes Only the legal and actual foreign tax liability that you paid or accrued during the year qualifies for the credit. I need to file my 2012 federal taxes Foreign tax refund. I need to file my 2012 federal taxes   You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. I need to file my 2012 federal taxes   For example, the United States has tax treaties with many countries allowing U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizens and residents reductions in the rates of tax of those foreign countries. I need to file my 2012 federal taxes However, some treaty countries require U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizens and residents to pay the tax figured without regard to the lower treaty rates and then claim a refund for the amount by which the tax actually paid is more than the amount of tax figured using the lower treaty rate. I need to file my 2012 federal taxes The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable. I need to file my 2012 federal taxes Subsidy received. I need to file my 2012 federal taxes   Tax payments a foreign country returns to you in the form of a subsidy do not qualify for the foreign tax credit. I need to file my 2012 federal taxes This rule applies even if the subsidy is given to a person related to you, or persons who participated with you in a transaction or a related transaction. I need to file my 2012 federal taxes A subsidy can be provided by any means but must be determined, directly or indirectly, in relation to the amount of tax, or to the base used to figure the tax. I need to file my 2012 federal taxes   The term “subsidy” includes any type of benefit. I need to file my 2012 federal taxes Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. I need to file my 2012 federal taxes Shareholder receiving refund for corporate tax in integrated system. I need to file my 2012 federal taxes   Under some foreign tax laws and treaties, a shareholder is considered to have paid part of the tax that is imposed on the corporation. I need to file my 2012 federal taxes You may be able to claim a refund of these taxes from the foreign government. I need to file my 2012 federal taxes You must include the refund (including any amount withheld) in your income in the year received. I need to file my 2012 federal taxes Any tax withheld from the refund is a qualified foreign tax. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You are a shareholder of a French corporation. I need to file my 2012 federal taxes You receive a $100 refund of the tax paid to France by the corporation on the earnings distributed to you as a dividend. I need to file my 2012 federal taxes The French government imposes a 15% withholding tax ($15) on the refund you received. I need to file my 2012 federal taxes You receive a check for $85. I need to file my 2012 federal taxes You include $100 in your income. I need to file my 2012 federal taxes The $15 of tax withheld is a qualified foreign tax. I need to file my 2012 federal taxes Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) In most cases, only income, war profits, and excess profits taxes (income taxes) qualify for the foreign tax credit. I need to file my 2012 federal taxes Foreign taxes on wages, dividends, interest, and royalties qualify for the credit in most cases. I need to file my 2012 federal taxes Furthermore, foreign taxes on income can qualify even though they are not imposed under an income tax law if the tax is in lieu of an income, war profits, or excess profits tax. I need to file my 2012 federal taxes See Taxes in Lieu of Income Taxes , later. I need to file my 2012 federal taxes Income Tax Simply because the levy is called an income tax by the foreign taxing authority does not make it an income tax for this purpose. I need to file my 2012 federal taxes A foreign levy is an income tax only if it meets both of the following requirements. I need to file my 2012 federal taxes It is a tax; that is, you have to pay it and you get no specific economic benefit (discussed below) from paying it. I need to file my 2012 federal taxes The predominant character of the tax is that of an income tax in the U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes sense. I need to file my 2012 federal taxes A foreign levy may meet these requirements even if the foreign tax law differs from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax law. I need to file my 2012 federal taxes The foreign law may include in income items that U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes law does not include, or it may allow certain exclusions or deductions that U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes law does not allow. I need to file my 2012 federal taxes Specific economic benefit. I need to file my 2012 federal taxes   In most cases, you get a specific economic benefit if you receive, or are considered to receive, an economic benefit from the foreign country imposing the levy, and: If there is a generally imposed income tax, the economic benefit is not available on substantially the same terms to all persons subject to the income tax, or If there is no generally imposed income tax, the economic benefit is not available on substantially the same terms to the population of the foreign country in general. I need to file my 2012 federal taxes   You are considered to receive a specific economic benefit if you have a business transaction with a person who receives a specific economic benefit from the foreign country and, under the terms and conditions of the transaction, you receive directly or indirectly all or part of the benefit. I need to file my 2012 federal taxes   However, see the exception discussed later under Pension, unemployment, and disability fund payments . I need to file my 2012 federal taxes Economic benefits. I need to file my 2012 federal taxes   Economic benefits include the following. I need to file my 2012 federal taxes Goods. I need to file my 2012 federal taxes Services. I need to file my 2012 federal taxes Fees or other payments. I need to file my 2012 federal taxes Rights to use, acquire, or extract resources, patents, or other property the foreign country owns or controls. I need to file my 2012 federal taxes Discharges of contractual obligations. I need to file my 2012 federal taxes   In most cases, the right or privilege merely to engage in business is not an economic benefit. I need to file my 2012 federal taxes Dual-capacity taxpayers. I need to file my 2012 federal taxes   If you are subject to a foreign country's levy and you also receive a specific economic benefit from that foreign country, you are a “dual-capacity taxpayer. I need to file my 2012 federal taxes ” As a dual-capacity taxpayer, you cannot claim a credit for any part of the foreign levy, unless you establish that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for a direct or indirect specific economic benefit. I need to file my 2012 federal taxes    For more information on how to establish amounts paid under separate elements of a levy, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Pension, unemployment, and disability fund payments. I need to file my 2012 federal taxes   A foreign tax imposed on an individual to pay for retirement, old-age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. I need to file my 2012 federal taxes    No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. I need to file my 2012 federal taxes For more information about these agreements, see Publication 54. I need to file my 2012 federal taxes Soak-up taxes. I need to file my 2012 federal taxes   A foreign tax is not predominantly an income tax and does not qualify for credit to the extent it is a soak-up tax. I need to file my 2012 federal taxes A tax is a soak-up tax to the extent that liability for it depends on the availability of a credit for it against income tax imposed by another country. I need to file my 2012 federal taxes This rule applies only if and to the extent that the foreign tax would not be imposed if the credit were not available. I need to file my 2012 federal taxes Penalties and interest. I need to file my 2012 federal taxes   Amounts paid to a foreign government to satisfy a liability for interest, fines, penalties, or any similar obligation are not taxes and do not qualify for the credit. I need to file my 2012 federal taxes Taxes not based on income. I need to file my 2012 federal taxes   Foreign taxes based on gross receipts or the number of units produced, rather than on realized net income, do not qualify unless they are imposed in lieu of an income tax, as discussed next. I need to file my 2012 federal taxes Taxes based on assets, such as property taxes, do not qualify for the credit. I need to file my 2012 federal taxes Taxes in Lieu of Income Taxes A tax paid or accrued to a foreign country qualifies for the credit if it is imposed in lieu of an income tax otherwise generally imposed. I need to file my 2012 federal taxes A foreign levy is a tax in lieu of an income tax only if: It is not payment for a specific economic benefit as discussed earlier, and The tax is imposed in place of, and not in addition to, an income tax otherwise generally imposed. I need to file my 2012 federal taxes A tax in lieu of an income tax does not have to be based on realized net income. I need to file my 2012 federal taxes A foreign tax imposed on gross income, gross receipts or sales, or the number of units produced or exported can qualify for the credit. I need to file my 2012 federal taxes In most cases, a soak-up tax (discussed earlier) does not qualify as a tax in lieu of an income tax. I need to file my 2012 federal taxes However, if the foreign country imposes a soak-up tax in lieu of an income tax, the amount that does not qualify for foreign tax credit is the lesser of the following amounts. I need to file my 2012 federal taxes The soak-up tax. I need to file my 2012 federal taxes The foreign tax you paid that is more than the amount you would have paid if you had been subject to the generally imposed income tax. I need to file my 2012 federal taxes Foreign Taxes for Which You Cannot Take a Credit This part discusses the foreign taxes for which you cannot take a credit. I need to file my 2012 federal taxes These are: Taxes on excluded income, Taxes for which you can only take an itemized deduction, Taxes on foreign mineral income, Taxes from international boycott operations, A portion of taxes on combined foreign oil and gas income, Taxes of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes persons controlling foreign corporations and partnerships who fail to file required information returns, and Taxes related to a foreign tax splitting event. I need to file my 2012 federal taxes Taxes on Excluded Income You cannot take a credit for foreign taxes paid or accrued on certain income that is excluded from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes gross income. I need to file my 2012 federal taxes Foreign Earned Income and Housing Exclusions You must reduce your foreign taxes available for the credit by the amount of those taxes paid or accrued on income that is excluded from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes income under the foreign earned income exclusion or the foreign housing exclusion. I need to file my 2012 federal taxes See Publication 54 for more information on the foreign earned income and housing exclusions. I need to file my 2012 federal taxes Wages completely excluded. I need to file my 2012 federal taxes   If your wages are completely excluded, you cannot take a credit for any of the foreign taxes paid or accrued on these wages. I need to file my 2012 federal taxes Wages partly excluded. I need to file my 2012 federal taxes   If only part of your wages is excluded, you cannot take a credit for the foreign income taxes allocable to the excluded part. I need to file my 2012 federal taxes You find the amount allocable to your excluded wages by multiplying the foreign tax paid or accrued on foreign earned income received or accrued during the tax year by a fraction. I need to file my 2012 federal taxes   The numerator of the fraction is your foreign earned income and housing amounts excluded under the foreign earned income and housing exclusions for the tax year minus otherwise deductible expenses definitely related and properly apportioned to that income. I need to file my 2012 federal taxes Deductible expenses do not include the foreign housing deduction. I need to file my 2012 federal taxes   The denominator is your total foreign earned income received or accrued during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). I need to file my 2012 federal taxes If the foreign law taxes foreign earned income and some other income (for example, earned income from U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes sources or a type of income not subject to U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax), and the taxes on the other income cannot be segregated, the denominator of the fraction is the total amount of income subject to the foreign tax minus deductible expenses allocable to that income. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You are a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizen and a cash basis taxpayer, employed by Company X and living in Country A. I need to file my 2012 federal taxes Your records show the following: Foreign earned income received $125,000 Unreimbursed business travel expenses 20,000 Income tax paid to Country A 30,000 Exclusion of foreign earned  income and housing allowance 97,600     Because you can exclude part of your wages, you cannot claim a credit for part of the foreign taxes. I need to file my 2012 federal taxes To find that part, do the following. I need to file my 2012 federal taxes First, find the amount of business expenses allocable to excluded wages and therefore not deductible. I need to file my 2012 federal taxes To do this, multiply the otherwise deductible expenses by a fraction. I need to file my 2012 federal taxes That fraction is the excluded wages over your foreign earned income. I need to file my 2012 federal taxes   $20,000 × $97,600 $125,000 = $15,616             Next, find the numerator of the fraction by which you will multiply the foreign taxes paid. I need to file my 2012 federal taxes To do this, subtract business expenses allocable to excluded wages ($15,616) from excluded wages ($97,600). I need to file my 2012 federal taxes The result is $81,984. I need to file my 2012 federal taxes Then, find the denominator of the fraction by subtracting all your deductible expenses from all your foreign earned income ($125,000 − $20,000 = $105,000). I need to file my 2012 federal taxes Finally, multiply the foreign tax you paid by the resulting fraction. I need to file my 2012 federal taxes   $30,000 × $81,984  $105,000 = $23,424 The amount of Country A tax you cannot take a credit for is $23,424. I need to file my 2012 federal taxes Taxes on Income From Puerto Rico Exempt From U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Tax If you have income from Puerto Rican sources that is not taxable, you must reduce your foreign taxes paid or accrued by the taxes allocable to the exempt income. I need to file my 2012 federal taxes For information on figuring the reduction, see Publication 570. I need to file my 2012 federal taxes Possession Exclusion If you are a bona fide resident of American Samoa and exclude income from sources in American Samoa, you cannot take a credit for the taxes you pay or accrue on the excluded income. I need to file my 2012 federal taxes For more information on this exclusion, see Publication 570. I need to file my 2012 federal taxes Extraterritorial Income Exclusion You cannot take a credit for taxes you pay on qualifying foreign trade income excluded on Form 8873, Extraterritorial Income Exclusion. I need to file my 2012 federal taxes However, see Internal Revenue Code section 943(d) for an exception for certain withholding taxes. I need to file my 2012 federal taxes Taxes for Which You Can Only Take an Itemized Deduction You cannot claim a foreign tax credit for foreign income taxes paid or accrued under the following circumstances. I need to file my 2012 federal taxes However, you can claim an itemized deduction for these taxes. I need to file my 2012 federal taxes See Choosing To Take Credit or Deduction , earlier. I need to file my 2012 federal taxes Taxes Imposed By Sanctioned Countries (Section 901(j) Income) You cannot claim a foreign tax credit for income taxes paid or accrued to any country if the income giving rise to the tax is for a period (the sanction period) during which: The Secretary of State has designated the country as one that repeatedly provides support for acts of international terrorism, The United States has severed or does not conduct diplomatic relations with the country, or The United States does not recognize the country's government, and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act. I need to file my 2012 federal taxes The following countries meet this description for 2013. I need to file my 2012 federal taxes Income taxes paid or accrued to these countries in 2013 do not qualify for the credit. I need to file my 2012 federal taxes Cuba. I need to file my 2012 federal taxes Iran. I need to file my 2012 federal taxes Libya (but see Note later). I need to file my 2012 federal taxes North Korea. I need to file my 2012 federal taxes Sudan. I need to file my 2012 federal taxes Syria. I need to file my 2012 federal taxes Waiver of denial of the credit. I need to file my 2012 federal taxes   A waiver can be granted to a sanctioned country if the President of the United States determines that granting the waiver is in the national interest of the United States and will expand trade and investment opportunities for U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes companies in the sanctioned country. I need to file my 2012 federal taxes The President must report to Congress his intentions to grant the waiver and his reasons for granting the waiver not less than 30 days before the date on which the waiver is granted. I need to file my 2012 federal taxes Note. I need to file my 2012 federal taxes Effective December 10, 2004, the President granted a waiver to Libya. I need to file my 2012 federal taxes Income taxes arising on or after this date qualify for the credit if they meet the other requirements in this publication. I need to file my 2012 federal taxes Limit on credit. I need to file my 2012 federal taxes   In figuring the foreign tax credit limit, discussed later, income from a sanctioned country is a separate category of foreign income unless a Presidential waiver is granted. I need to file my 2012 federal taxes You must fill out a separate Form 1116 for this income. I need to file my 2012 federal taxes This will prevent you from claiming a credit for foreign taxes paid or accrued to the sanctioned country. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You lived and worked in Iran until August, when you were transferred to Italy. I need to file my 2012 federal taxes You paid taxes to each country on the income earned in that country. I need to file my 2012 federal taxes You cannot claim a foreign tax credit for the foreign taxes paid on the income earned in Iran. I need to file my 2012 federal taxes Because the income earned in Iran is a separate category of foreign income, you must fill out a separate Form 1116 for that income. I need to file my 2012 federal taxes You cannot take a credit for taxes paid on the income earned in Iran, but that income is taxable by the United States. I need to file my 2012 federal taxes Figuring the credit when a sanction ends. I need to file my 2012 federal taxes    Table 1 lists the countries for which sanctions have ended or for which a Presidential waiver has been granted. I need to file my 2012 federal taxes For any of these countries, you can claim a foreign tax credit for the taxes paid or accrued to that country on the income for the period that begins after the end of the sanction period or the date the Presidential waiver was granted. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes The sanctions against Country X ended on July 31. I need to file my 2012 federal taxes On August 19, you receive a distribution from a mutual fund of Country X income. I need to file my 2012 federal taxes The fund paid Country X income tax for you on the distribution. I need to file my 2012 federal taxes Because the distribution was made after the sanction ended, you may include the foreign tax paid on the distribution to compute your foreign tax credit. I need to file my 2012 federal taxes Amounts for the nonsanctioned period. I need to file my 2012 federal taxes   If a sanction period ends (or a Presidential waiver is granted) during your tax year and you are not able to determine the actual income and taxes for that period, you can allocate amounts to that period based on the number of days in the period that fall in your tax year. I need to file my 2012 federal taxes Multiply the income or taxes for the year by the following fraction to determine the amounts allocable to that period. I need to file my 2012 federal taxes   Number of nonsanctioned days in year  Number of days in year Example. I need to file my 2012 federal taxes You are a calendar year filer and received $20,000 of income from Country X in 2013 on which you paid tax of $4,500. I need to file my 2012 federal taxes Sanctions against Country X ended on July 11, 2013. I need to file my 2012 federal taxes You are unable to determine how much of the income or tax is for the nonsanctioned period. I need to file my 2012 federal taxes Because your tax year starts on January 1, and the Country X sanction ended on July 11, 2013, 173 days of your tax year are in the nonsanctioned period. I need to file my 2012 federal taxes You would compute the income for the nonsanctioned period as follows. I need to file my 2012 federal taxes 173 365 × $20,000 = $9,479             You would figure the tax for the nonsanctioned period as follows. I need to file my 2012 federal taxes 173 365 × $4,500 = $2,133 To figure your foreign tax credit, you would use $9,479 as the income from Country X and $2,133 as the tax. I need to file my 2012 federal taxes Further information. I need to file my 2012 federal taxes   The rules for figuring the foreign tax credit after a country's sanction period ends are more fully explained in Revenue Ruling 92-62, Cumulative Bulletin 1992-2, page 193. I need to file my 2012 federal taxes This Cumulative Bulletin can be found in many libraries and IRS offices. I need to file my 2012 federal taxes Table 1. I need to file my 2012 federal taxes Countries Removed From the Sanction List or Granted Presidential Waiver   Sanction Period Country Starting Date Ending Date Iraq February 1, 1991 June 27, 2004 Libya January 1, 1987 December 9, 2004* *Presidential waiver granted for qualified income taxes arising after December 9, 2004. I need to file my 2012 federal taxes Taxes Imposed on Certain Dividends You cannot claim a foreign tax credit for withholding tax (defined later ) on dividends paid or accrued if either of the following applies to the dividends. I need to file my 2012 federal taxes The dividends are on stock you held for less than 16 days during the 31-day period that begins 15 days before the ex-dividend date (defined later). I need to file my 2012 federal taxes The dividends are for a period or periods totaling more than 366 days on preferred stock you held for less than 46 days during the 91-day period that begins 45 days before the ex-dividend date. I need to file my 2012 federal taxes If the dividend is not for more than 366 days, rule (1) applies to the preferred stock. I need to file my 2012 federal taxes When figuring how long you held the stock, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. I need to file my 2012 federal taxes Regardless of how long you held the stock, you cannot claim the credit to the extent you have an obligation under a short sale or otherwise to make payments related to the dividend for positions in substantially similar or related property. I need to file my 2012 federal taxes Withholding tax. I need to file my 2012 federal taxes   For this purpose, withholding tax includes any tax determined on a gross basis. I need to file my 2012 federal taxes It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. I need to file my 2012 federal taxes Ex-dividend date. I need to file my 2012 federal taxes   The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. I need to file my 2012 federal taxes Example 1. I need to file my 2012 federal taxes You bought common stock from a foreign corporation on November 3. I need to file my 2012 federal taxes You sold the stock on November 19. I need to file my 2012 federal taxes You received a dividend on this stock because you owned it on the ex-dividend date of November 5. I need to file my 2012 federal taxes To claim the credit, you must have held the stock for at least 16 days within the 31-day period that began on October 21 (15 days before the ex-dividend date). I need to file my 2012 federal taxes Because you held the stock for 16 days, from November 4 until November 19, you are entitled to the credit. I need to file my 2012 federal taxes Example 2. I need to file my 2012 federal taxes The facts are the same as in Example 1 except that you sold the stock on November 14. I need to file my 2012 federal taxes You held the stock for only 11 days. I need to file my 2012 federal taxes You are not entitled to the credit. I need to file my 2012 federal taxes Exception. I need to file my 2012 federal taxes   If you are a securities dealer who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes paid on dividends regardless of how long you held the stock or whether you were obligated to make payments for positions in substantially similar or related property. I need to file my 2012 federal taxes See section 901(k)(4) of the Internal Revenue Code for more information. I need to file my 2012 federal taxes Taxes Withheld on Income or Gain (Other Than Dividends) For income or gain (other than dividends) paid or accrued on property, you cannot claim a foreign tax credit for withholding tax (defined later): If you have not held the property for at least 16 days during the 31-day period that begins 15 days before the date on which the right to receive the payment arises, or To the extent you have to make related payments on positions in substantially similar or related property. I need to file my 2012 federal taxes When figuring how long you held the property, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. I need to file my 2012 federal taxes Withholding tax. I need to file my 2012 federal taxes   For this purpose, withholding tax includes any tax determined on a gross basis. I need to file my 2012 federal taxes It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. I need to file my 2012 federal taxes Exception for dealers. I need to file my 2012 federal taxes   If you are a dealer in property who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes withheld on income or gain from that property regardless of how long you held it or whether you have to make related payments on positions in substantially similar or related property. I need to file my 2012 federal taxes See section 901(I)(2) of the Internal Revenue Code for more information. I need to file my 2012 federal taxes Covered Asset Acquisition ???You cannot take a credit for the disqualified portion of any foreign tax paid or accrued in connection with a covered asset acquisition. I need to file my 2012 federal taxes A covered asset acquisition includes certain acquisitions that result in a stepped-up basis for U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax purposes but not for foreign tax purposes. I need to file my 2012 federal taxes For more information, see Internal Revenue Code section 901(m). I need to file my 2012 federal taxes The IRS intends to issue guidance that will explain this provision in greater detail. I need to file my 2012 federal taxes Taxes in Connection With the Purchase or Sale of Oil or Gas You cannot claim a foreign tax credit for taxes paid or accrued to a foreign country in connection with the purchase or sale of oil or gas extracted in that country if you do not have an economic interest in the oil or gas, and the purchase price or sales price is different from the fair market value of the oil or gas at the time of purchase or sale. I need to file my 2012 federal taxes Taxes on Foreign Mineral Income You must reduce any taxes paid or accrued to a foreign country or possession on mineral income from that country or possession if you were allowed a deduction for percentage depletion for any part of the mineral income. I need to file my 2012 federal taxes For details, see Regulations section 1. I need to file my 2012 federal taxes 901-3. I need to file my 2012 federal taxes Taxes From International Boycott Operations If you participate in or cooperate with an international boycott during the tax year, your foreign taxes resulting from boycott activities will reduce the total taxes available for credit. I need to file my 2012 federal taxes See the instructions for line 12 in the Form 1116 instructions to figure this reduction. I need to file my 2012 federal taxes In most cases, this rule does not apply to employees with wages who are working and living in boycotting countries, or to retirees with pensions who are living in these countries. I need to file my 2012 federal taxes List of boycotting countries. I need to file my 2012 federal taxes   A list of the countries which may require participation in or cooperation with an international boycott is published by the Department of the Treasury. I need to file my 2012 federal taxes As of November 2013, the following countries are listed. I need to file my 2012 federal taxes Iraq. I need to file my 2012 federal taxes Kuwait. I need to file my 2012 federal taxes Lebanon. I need to file my 2012 federal taxes Libya. I need to file my 2012 federal taxes Qatar. I need to file my 2012 federal taxes Saudi Arabia. I need to file my 2012 federal taxes Syria. I need to file my 2012 federal taxes United Arab Emirates. I need to file my 2012 federal taxes Yemen. I need to file my 2012 federal taxes    For information concerning changes to the list, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Determinations of whether the boycott rule applies. I need to file my 2012 federal taxes   You may request a determination from the Internal Revenue Service as to whether a particular operation constitutes participation in or cooperation with an international boycott. I need to file my 2012 federal taxes The procedures for obtaining a determination from the Service are outlined in Revenue Procedure 77-9 in Cumulative Bulletin 1977-1. I need to file my 2012 federal taxes Cumulative Bulletins are available in most IRS offices and you are welcome to read them there. I need to file my 2012 federal taxes Public inspection. I need to file my 2012 federal taxes   A determination and any related background file is open to public inspection. I need to file my 2012 federal taxes However, your identity and certain other information will remain confidential. I need to file my 2012 federal taxes Reporting requirements. I need to file my 2012 federal taxes   You must file a report with the IRS if you or any of the following persons have operations in or related to a boycotting country or with the government, a company, or a national of a boycotting country. I need to file my 2012 federal taxes A foreign corporation in which you own 10% or more of the voting power of all voting stock but only if you own the stock of the foreign corporation directly or through foreign entities. I need to file my 2012 federal taxes A partnership in which you are a partner. I need to file my 2012 federal taxes A trust you are treated as owning. I need to file my 2012 federal taxes Form 5713 required. I need to file my 2012 federal taxes   If you have to file a report, you must use Form 5713, International Boycott Report, and attach all supporting schedules. I need to file my 2012 federal taxes See the Instructions for Form 5713 for information on when and where to file the form. I need to file my 2012 federal taxes Penalty for failure to file. I need to file my 2012 federal taxes   If you willfully fail to make a report, in addition to other penalties, you may be fined $25,000 or imprisoned for no more than one year, or both. I need to file my 2012 federal taxes Taxes on Combined Foreign Oil and Gas Income You must reduce your foreign taxes by a portion of any foreign taxes imposed on combined foreign oil and gas income. I need to file my 2012 federal taxes The amount of the reduction is the amount by which your foreign oil and gas taxes exceed the amount of your combined foreign oil and gas income multiplied by a fraction equal to your pre-credit U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes tax liability (Form 1040, line 44) divided by your worldwide taxable income. I need to file my 2012 federal taxes You may be entitled to carry over to other years taxes reduced under this rule. I need to file my 2012 federal taxes See Internal Revenue Code section 907(f). I need to file my 2012 federal taxes Combined foreign oil and gas income means the sum of foreign oil related income and foreign oil and gas extraction income. I need to file my 2012 federal taxes Foreign oil and gas taxes are the sum of foreign oil and gas extraction taxes and foreign oil related taxes. I need to file my 2012 federal taxes Taxes of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Persons Controlling Foreign Corporations and Partnerships If you had control of a foreign corporation or a foreign partnership for the annual accounting period of that corporation or partnership that ended with or within your tax year, you may have to file an annual information return. I need to file my 2012 federal taxes If you do not file the required information return, you may have to reduce the foreign taxes that may be used for the foreign tax credit. I need to file my 2012 federal taxes See Penalty for not filing Form 5471 or Form 8865 , later. I need to file my 2012 federal taxes U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes persons controlling foreign corporations. I need to file my 2012 federal taxes   If you are a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizen or resident who had control of a foreign corporation for an uninterrupted period of at least 30 days during the annual accounting period of that corporation, you may have to file an annual information return on Form 5471, Information Return of U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes Persons With Respect To Certain Foreign Corporations. I need to file my 2012 federal taxes Under this rule, you generally had control of a foreign corporation if at any time during your tax year you owned: Stock possessing more than 50% of the total combined voting power of all classes of stock entitled to vote, or More than 50% of the total value of shares of all classes of stock of the foreign corporation. I need to file my 2012 federal taxes U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes persons controlling foreign partnerships. I need to file my 2012 federal taxes   If you are a U. I need to file my 2012 federal taxes S. I need to file my 2012 federal taxes citizen or resident who had control of a foreign partnership at any time during the partnership's tax year, you may have to file