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1040ez Tax Table

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1040ez Tax Table

1040ez tax table Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. 1040ez tax table Adjustment for premium. 1040ez tax table Adjustment for acquisition premium. 1040ez tax table Adjustment for market discount. 1040ez tax table Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. 1040ez tax table “Original issue discount” is defined first. 1040ez tax table The other terms are listed alphabetically. 1040ez tax table Original issue discount (OID). 1040ez tax table   OID is a form of interest. 1040ez tax table It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). 1040ez tax table Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. 1040ez tax table Accrual period. 1040ez tax table   An accrual period is an interval of time used to measure OID. 1040ez tax table The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. 1040ez tax table Acquisition premium. 1040ez tax table   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. 1040ez tax table A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. 1040ez tax table See Premium, later. 1040ez tax table Adjusted issue price. 1040ez tax table   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. 1040ez tax table In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. 1040ez tax table The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. 1040ez tax table Debt instrument. 1040ez tax table   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). 1040ez tax table It generally does not include an annuity contract. 1040ez tax table Issue price. 1040ez tax table   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. 1040ez tax table Market discount. 1040ez tax table   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. 1040ez tax table An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. 1040ez tax table The market discount is the difference between the issue price plus accrued OID and your adjusted basis. 1040ez tax table Premium. 1040ez tax table   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. 1040ez tax table The premium is the excess of the adjusted basis over the payable amounts. 1040ez tax table See Publication 550 for information on the tax treatment of bond premium. 1040ez tax table Qualified stated interest. 1040ez tax table   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. 1040ez tax table Stated redemption price at maturity. 1040ez tax table   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. 1040ez tax table Yield to maturity (YTM). 1040ez tax table   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. 1040ez tax table The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. 1040ez tax table If you do not have this information, consult your broker, tax advisor, or the issuer. 1040ez tax table Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. 1040ez tax table If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. 1040ez tax table The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. 1040ez tax table For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. 1040ez tax table The following discussions explain what information is contained in each section of the list. 1040ez tax table Section I. 1040ez tax table   This section contains publicly offered, long-term debt instruments. 1040ez tax table Section I-A: Corporate Debt Instruments Issued Before 1985. 1040ez tax table Section I-B: Corporate Debt Instruments Issued After 1984. 1040ez tax table Section I-C: Inflation-Indexed Debt Instruments. 1040ez tax table For each publicly offered debt instrument in Section I, the list contains the following information. 1040ez tax table The name of the issuer. 1040ez tax table The Committee on Uniform Security Identification Procedures (CUSIP) number. 1040ez tax table The issue date. 1040ez tax table The maturity date. 1040ez tax table The issue price expressed as a percent of principal or of stated redemption price at maturity. 1040ez tax table The annual stated or coupon interest rate. 1040ez tax table (This rate is shown as 0. 1040ez tax table 00 if no annual interest payments are provided. 1040ez tax table ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. 1040ez tax table The total OID accrued up to January 1 of a calendar year. 1040ez tax table (This information is not available for every instrument. 1040ez tax table ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. 1040ez tax table The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. 1040ez tax table Section II. 1040ez tax table   This section contains stripped coupons and principal components of U. 1040ez tax table S. 1040ez tax table Treasury and Government-Sponsored Enterprise debt instruments. 1040ez tax table These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. 1040ez tax table This section also includes debt instruments backed by U. 1040ez tax table S. 1040ez tax table Treasury securities that represent ownership interests in those securities. 1040ez tax table   The obligations listed in Section II are arranged by maturity date. 1040ez tax table The amounts listed are the total OID for a calendar year per $1,000 of redemption price. 1040ez tax table Section III. 1040ez tax table   This section contains short-term discount obligations. 1040ez tax table Section III-A: Short-Term U. 1040ez tax table S. 1040ez tax table Treasury Bills. 1040ez tax table Section III-B: Federal Home Loan Banks. 1040ez tax table Section III-C: Federal National Mortgage Association. 1040ez tax table Section III-D: Federal Farm Credit Banks. 1040ez tax table Section III-E: Federal Home Loan Mortgage Corporation. 1040ez tax table Section III-F: Federal Agricultural Mortgage Corporation. 1040ez tax table    Information that supplements Section III-A is available on the Internet at http://www. 1040ez tax table treasurydirect. 1040ez tax table gov/tdhome. 1040ez tax table htm. 1040ez tax table   The short-term obligations listed in this section are arranged by maturity date. 1040ez tax table For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. 1040ez tax table Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. 1040ez tax table Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. 1040ez tax table U. 1040ez tax table S. 1040ez tax table savings bonds. 1040ez tax table Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. 1040ez tax table Obligations issued by tax-exempt organizations. 1040ez tax table OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. 1040ez tax table Mortgage-backed securities and mortgage participation certificates. 1040ez tax table Long-term OID debt instruments issued before May 28, 1969. 1040ez tax table Short-term obligations, other than the obligations listed in Section III. 1040ez tax table Debt instruments issued at a discount by states or their political subdivisions. 1040ez tax table REMIC regular interests and CDOs. 1040ez tax table Commercial paper and banker's acceptances issued at a discount. 1040ez tax table Obligations issued at a discount by individuals. 1040ez tax table Foreign obligations not traded in the United States and obligations not issued in the United States. 1040ez tax table Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. 1040ez tax table In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. 1040ez tax table You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. 1040ez tax table See Backup Withholding, later. 1040ez tax table If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. 1040ez tax table File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). 1040ez tax table Electronic payee statements. 1040ez tax table   You can issue Form 1099-OID electronically with the consent of the recipient. 1040ez tax table More information. 1040ez tax table   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. 1040ez tax table Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. 1040ez tax table To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. 1040ez tax table If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. 1040ez tax table Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. 1040ez tax table If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. 1040ez tax table A special rule is used to determine the original issue price for information reporting on U. 1040ez tax table S. 1040ez tax table Treasury bills (T-bills) listed in Section III-A. 1040ez tax table Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. 1040ez tax table This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. 1040ez tax table A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. 1040ez tax table Example 1. 1040ez tax table There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. 1040ez tax table The price actually paid by the owner cannot be established by owner or middleman records. 1040ez tax table You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. 1040ez tax table The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. 1040ez tax table Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. 1040ez tax table For this purpose, you can rely on Section I of the OID list to determine the following information. 1040ez tax table Whether a debt instrument has OID. 1040ez tax table The OID to be reported on the Form 1099-OID. 1040ez tax table In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. 1040ez tax table You also can report OID on other long-term debt instruments. 1040ez tax table Form 1099-OID. 1040ez tax table   On Form 1099-OID for a calendar year show the following information. 1040ez tax table Box 1. 1040ez tax table The OID for the actual dates the owner held the debt instruments during a calendar year. 1040ez tax table To determine this amount, see Figuring OID, next. 1040ez tax table Box 2. 1040ez tax table The qualified stated interest paid or credited during the calendar year. 1040ez tax table Interest reported here is not reported on Form 1099-INT. 1040ez tax table The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. 1040ez tax table Box 3. 1040ez tax table Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. 1040ez tax table Do not reduce the amounts in boxes 1 and 2 by the forfeiture. 1040ez tax table Box 4. 1040ez tax table Any backup withholding for this debt instrument. 1040ez tax table Box 7. 1040ez tax table The CUSIP number, if any. 1040ez tax table If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. 1040ez tax table 50 2006). 1040ez tax table If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. 1040ez tax table Box 8. 1040ez tax table The OID on a U. 1040ez tax table S. 1040ez tax table Treasury obligation for the part of the year the owner held the debt instrument. 1040ez tax table Box 9. 1040ez tax table Investment expenses passed on to holders of a single-class REMIC. 1040ez tax table Boxes 10-12. 1040ez tax table Use to report any state income tax withheld for this debt instrument. 1040ez tax table Figuring OID. 1040ez tax table   You can determine the OID on a long-term debt instrument by using either of the following. 1040ez tax table Section I of the OID list. 1040ez tax table The income tax regulations. 1040ez tax table Using Section I. 1040ez tax table   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. 1040ez tax table Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. 1040ez tax table For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. 1040ez tax table   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. 1040ez tax table Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. 1040ez tax table Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. 1040ez tax table Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. 1040ez tax table Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. 1040ez tax table If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. 1040ez tax table Report the result on Form 1099-OID in box 1. 1040ez tax table Using the income tax regulations. 1040ez tax table   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. 1040ez tax table For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. 1040ez tax table (If you use Section I-B, the OID is figured using 6-month accrual periods. 1040ez tax table )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. 1040ez tax table Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. 1040ez tax table You must file an information return showing the reportable interest and OID, if any, on the CD. 1040ez tax table These rules apply whether or not you sold the CD to the owner. 1040ez tax table Report OID on a CD in the same way as OID on other debt instruments. 1040ez tax table See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. 1040ez tax table Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. 1040ez tax table However, do not report the interest if either of the following apply. 1040ez tax table You hold the bond as a nominee for the true owner. 1040ez tax table The payee is a foreign person. 1040ez tax table See Payments to foreign person under Backup Withholding, later. 1040ez tax table Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. 1040ez tax table The coupon may have been “stripped” (separated) from the bond and separately purchased. 1040ez tax table However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. 1040ez tax table Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. 1040ez tax table The backup withholding is deducted at the time a cash payment is made. 1040ez tax table See Pub. 1040ez tax table 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. 1040ez tax table Backup withholding generally applies in the following situations. 1040ez tax table The payee does not give you a taxpayer identification number (TIN). 1040ez tax table The IRS notifies you that the payee gave an incorrect TIN. 1040ez tax table The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. 1040ez tax table For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. 1040ez tax table However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. 1040ez tax table S. 1040ez tax table savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. 1040ez tax table Short-term obligations. 1040ez tax table   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. 1040ez tax table However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. 1040ez tax table   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. 1040ez tax table However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. 1040ez tax table If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. 1040ez tax table Long-term obligations. 1040ez tax table   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. 1040ez tax table The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. 1040ez tax table The amount to be withheld is limited to the cash paid. 1040ez tax table Registered long-term obligations with cash payments. 1040ez tax table   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. 1040ez tax table The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. 1040ez tax table If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. 1040ez tax table For any payment, the required withholding is limited to the cash paid. 1040ez tax table Payee not the original owner. 1040ez tax table   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). 1040ez tax table The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. 1040ez tax table Bearer long-term obligations with cash payments. 1040ez tax table   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. 1040ez tax table For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. 1040ez tax table For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. 1040ez tax table The required withholding at maturity is limited to the cash paid. 1040ez tax table Sales and redemptions. 1040ez tax table   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. 1040ez tax table Backup withholding applies in the following situations. 1040ez tax table The payee does not give you a TIN. 1040ez tax table The IRS notifies you that the payee gave an incorrect TIN. 1040ez tax table For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. 1040ez tax table Payments outside the United States to U. 1040ez tax table S. 1040ez tax table person. 1040ez tax table   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. 1040ez tax table S. 1040ez tax table person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. 1040ez tax table S. 1040ez tax table trade or business. 1040ez tax table Payments to foreign person. 1040ez tax table   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. 1040ez tax table U. 1040ez tax table S. 1040ez tax table -source amount. 1040ez tax table   Backup withholding and information reporting are not required for payments of U. 1040ez tax table S. 1040ez tax table -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. 1040ez tax table A U. 1040ez tax table S. 1040ez tax table resident is not a foreign person. 1040ez tax table For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. 1040ez tax table Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. 1040ez tax table S. 1040ez tax table person. 1040ez tax table   For information about the 28% withholding tax that may apply to payments of U. 1040ez tax table S. 1040ez tax table -source OID or interest to foreign persons, see Publication 515. 1040ez tax table Foreign-source amount. 1040ez tax table   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. 1040ez tax table However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. 1040ez tax table More information. 1040ez tax table   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. 1040ez tax table 6049-5. 1040ez tax table Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. 1040ez tax table It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. 1040ez tax table It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. 1040ez tax table However, the information provided does not cover every situation. 1040ez tax table More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. 1040ez tax table Including OID in income. 1040ez tax table   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. 1040ez tax table Exceptions. 1040ez tax table   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. 1040ez tax table U. 1040ez tax table S. 1040ez tax table savings bonds. 1040ez tax table Tax-exempt obligations. 1040ez tax table (However, see Tax-Exempt Bonds and Coupons, later. 1040ez tax table ) Obligations issued by individuals before March 2, 1984. 1040ez tax table Loans of $10,000 or less between individuals who are not in the business of lending money. 1040ez tax table (The dollar limit includes outstanding prior loans by the lender to the borrower. 1040ez tax table ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. 1040ez tax table   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. 1040ez tax table Publication 550 also discusses rules for holders of REMIC interests and CDOs. 1040ez tax table De minimis rule. 1040ez tax table   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. 1040ez tax table 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. 1040ez tax table Debt instruments with de minimis OID are not listed in this publication. 1040ez tax table There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. 1040ez tax table Also, the de minimis rules generally do not apply to tax-exempt obligations. 1040ez tax table Example 2. 1040ez tax table You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. 1040ez tax table One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. 1040ez tax table Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. 1040ez tax table Example 3. 1040ez tax table Assume the same facts as Example 2, except the debt instrument was issued at $950. 1040ez tax table You must report part of the $50 OID each year because it is more than $25. 1040ez tax table Choice to report all interest as OID. 1040ez tax table   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. 1040ez tax table See Constant yield method under Debt Instruments Issued After 1984, later, for more information. 1040ez tax table   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. 1040ez tax table For more information, see Regulations section 1. 1040ez tax table 1272-3. 1040ez tax table Purchase after date of original issue. 1040ez tax table   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. 1040ez tax table If so, the OID reported to you on Form 1099-OID may have to be adjusted. 1040ez tax table For more information, see Showing an OID adjustment under How To Report OID, later. 1040ez tax table The following rules generally do not apply to contingent payment debt instruments. 1040ez tax table Adjustment for premium. 1040ez tax table   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. 1040ez tax table Your adjustment is the total OID shown on your Form 1099-OID. 1040ez tax table Adjustment for acquisition premium. 1040ez tax table   If your debt instrument has acquisition premium, reduce the OID you report. 1040ez tax table Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. 1040ez tax table Adjustment for market discount. 1040ez tax table   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. 1040ez tax table Your adjustment is the accrued market discount for the year. 1040ez tax table See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. 1040ez tax table If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. 1040ez tax table The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. 1040ez tax table For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. 1040ez tax table 1275-7. 1040ez tax table Sale, exchange, or redemption. 1040ez tax table   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. 1040ez tax table If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. 1040ez tax table Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). 1040ez tax table   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. 1040ez tax table Your basis, generally, is your cost increased by the OID you have included in income each year you held it. 1040ez tax table In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. 1040ez tax table   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. 1040ez tax table Example 4. 1040ez tax table Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. 1040ez tax table 00 on November 1 of Year 1. 1040ez tax table The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. 1040ez tax table The debt instrument provides for semiannual payments of interest at 10%. 1040ez tax table Assume the debt instrument is a capital asset in Larry's hands. 1040ez tax table The debt instrument has $13,765. 1040ez tax table 00 of OID ($100,000 stated redemption price at maturity minus $86,235. 1040ez tax table 00 issue price). 1040ez tax table Larry sold the debt instrument for $90,000 on November 1 of Year 4. 1040ez tax table Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. 1040ez tax table 00 of OID in income and has increased his basis by that amount to $90,791. 1040ez tax table 00. 1040ez tax table Larry has realized a loss of $791. 1040ez tax table 00. 1040ez tax table All of Larry's loss is capital loss. 1040ez tax table Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. 1040ez tax table Form 1099-OID shows all OID income in box 1 except OID on a U. 1040ez tax table S. 1040ez tax table Treasury obligation, which is shown in box 8. 1040ez tax table It also shows, in box 2, any qualified stated interest you must include in income. 1040ez tax table (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. 1040ez tax table ) A copy of Form 1099-OID will be sent to the IRS. 1040ez tax table Do not attach your copy to your tax return. 1040ez tax table Keep it for your records. 1040ez tax table If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. 1040ez tax table A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. 1040ez tax table Form 1099-OID not received. 1040ez tax table   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. 1040ez tax table Refiguring OID. 1040ez tax table   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. 1040ez tax table You bought the debt instrument at a premium or at an acquisition premium. 1040ez tax table The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. 1040ez tax table S. 1040ez tax table Treasury securities). 1040ez tax table The debt instrument is a contingent payment or inflation-indexed debt instrument. 1040ez tax table See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. 1040ez tax table Refiguring interest. 1040ez tax table   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. 1040ez tax table Nominee. 1040ez tax table   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. 1040ez tax table ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. 1040ez tax table Show the owner of the debt instrument as the “recipient” and you as the “payer. 1040ez tax table ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. 1040ez tax table You must also give a copy of the Form 1099-OID to the actual owner. 1040ez tax table However, you are not required to file a nominee return to show amounts belonging to your spouse. 1040ez tax table See the Form 1099 instructions for more information. 1040ez tax table   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. 1040ez tax table How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. 1040ez tax table Form 1040 or Form 1040A required. 1040ez tax table   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. 1040ez tax table You received a Form 1099-OID as a nominee for the actual owner. 1040ez tax table Your total interest and OID income for the year was more than $1,500. 1040ez tax table Form 1040 required. 1040ez tax table   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. 1040ez tax table For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. 1040ez tax table Also, you must use Form 1040 if you were charged an early withdrawal penalty. 1040ez tax table Where to report. 1040ez tax table   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. 1040ez tax table Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. 1040ez tax table Also include any other OID and interest income for which you did not receive a Form 1099. 1040ez tax table Showing an OID adjustment. 1040ez tax table   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. 1040ez tax table   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. 1040ez tax table If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. 1040ez tax table Under your last entry on line 1, subtotal all interest and OID income listed on line 1. 1040ez tax table Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. 1040ez tax table Subtract that OID from the subtotal and enter the result on line 2. 1040ez tax table If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. 1040ez tax table Under your last entry on line 1, subtotal all interest and OID income listed on line 1. 1040ez tax table Below the subtotal, write “OID Adjustment” and show the additional OID. 1040ez tax table Add that OID to the subtotal and enter the result on line 2. 1040ez tax table Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. 1040ez tax table It also may depend on the type of the debt instrument. 1040ez tax table There are different rules for each of the following debt instruments. 1040ez tax table Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. 1040ez tax table Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. 1040ez tax table Debt instruments issued after July 1, 1982, and before 1985. 1040ez tax table Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). 1040ez tax table Contingent payment debt instruments issued after August 12, 1996. 1040ez tax table Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. 1040ez tax table Zero coupon bonds. 1040ez tax table   The rules for figuring OID on zero coupon bonds backed by U. 1040ez tax table S. 1040ez tax table Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. 1040ez tax table Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. 1040ez tax table The OID, which is taxed as ordinary income, generally equals the following amount. 1040ez tax table   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. 1040ez tax table If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. 1040ez tax table Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. 1040ez tax table For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. 1040ez tax table Your basis in the debt instrument is increased by the OID you include in income. 1040ez tax table Form 1099-OID. 1040ez tax table   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. 1040ez tax table However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. 1040ez tax table See Reduction for acquisition premium, later. 1040ez tax table If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. 1040ez tax table irs. 1040ez tax table gov/pub1212 by clicking the link under Recent Developments. 1040ez tax table Form 1099-OID not received. 1040ez tax table    The OID listed is for each $1,000 of redemption price. 1040ez tax table You must adjust the listed amount if your debt instrument has a different principal amount. 1040ez tax table For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. 1040ez tax table   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. 1040ez tax table (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. 1040ez tax table ) If you did not hold the debt instrument the entire year, figure your OID using the following method. 1040ez tax table Divide the OID shown by 12. 1040ez tax table Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. 1040ez tax table This is the OID to include in income unless you paid an acquisition premium. 1040ez tax table The reduction for acquisition premium is discussed next. 1040ez tax table Reduction for acquisition premium. 1040ez tax table   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. 1040ez tax table Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. 1040ez tax table This is the monthly OID. 1040ez tax table Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. 1040ez tax table (If the result is zero or less, stop here. 1040ez tax table You did not pay an acquisition premium. 1040ez tax table ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. 1040ez tax table Subtract the amount figured in (3) from the amount figured in (1). 1040ez tax table This is the OID to include in income for each month you hold the debt instrument during the year. 1040ez tax table Transfers during the month. 1040ez tax table   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. 1040ez tax table Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. 1040ez tax table Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. 1040ez tax table For information about showing the correct OID on your tax return, see How To Report OID, earlier. 1040ez tax table Form 1099-OID. 1040ez tax table   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. 1040ez tax table However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. 1040ez tax table See Constant yield method and the discussions on acquisition premium that follow, later. 1040ez tax table If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. 1040ez tax table irs. 1040ez tax table gov/pub1212 by clicking the link under Recent Developments. 1040ez tax table Form 1099-OID not received. 1040ez tax table    The OID listed is for each $1,000 of redemption price. 1040ez tax table You must adjust the listed amount if your debt instrument has a different principal amount. 1040ez tax table For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. 1040ez tax table   If you held the debt instrument the entire year, use the OID shown in Section I-A. 1040ez tax table (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. 1040ez tax table ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. 1040ez tax table Method 1. 1040ez tax table    Divide the total OID for a calendar year by 365 (366 for leap years). 1040ez tax table Multiply the result in (1) by the number of days you held the debt instrument during that particular year. 1040ez tax table  This computation is an approximation and may result in a slightly higher OID than Method 2. 1040ez tax table Method 2. 1040ez tax table    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. 1040ez tax table (See Accrual period under Constant yield method, next. 1040ez tax table ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. 1040ez tax table If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. 1040ez tax table Add the results of (2) and (3). 1040ez tax table This is the OID to include in income, unless you paid an acquisition premium. 1040ez tax table (The reduction for acquisition premium is discussed later. 1040ez tax table ) Constant yield method. 1040ez tax table   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. 1040ez tax table OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. 1040ez tax table   Figure the OID allocable to any accrual period as follows. 1040ez tax table Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. 1040ez tax table Subtract from the result in (1) any qualified stated interest allocable to the accrual period. 1040ez tax table Accrual period. 1040ez tax table   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. 1040ez tax table Your tax year will usually include parts of two accrual periods. 1040ez tax table Daily OID. 1040ez tax table   The OID for any accrual period is allocated equally to each day in the accrual period. 1040ez tax table You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. 1040ez tax table If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. 1040ez tax table Figuring daily OID. 1040ez tax table   The daily OID for the initial accrual period is figured using the following formula. 1040ez tax table   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. 1040ez tax table Reduction for acquisition premium on debt instruments purchased before July 19, 1984. 1040ez tax table   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. 1040ez tax table Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. 1040ez tax table Reduction for acquisition premium on debt instruments purchased after July 18, 1984. 1040ez tax table   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. 1040ez tax table However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. 1040ez tax table To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. 1040ez tax table The numerator is the acquisition premium. 1040ez tax table The denominator is the total OID remaining for the debt instrument after your purchase date. 1040ez tax table Section I-A is available at www. 1040ez tax table irs. 1040ez tax table gov/pub1212 and clicking the link under Recent Developments. 1040ez tax table Using Section I-A to figure accumulated OID. 1040ez tax table   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. 1040ez tax table The amount from the “Total OID to January 1, YYYY” column for your debt instrument. 1040ez tax table The OID from January 1 of a calendar year to the date of purchase, figured as follows. 1040ez tax table Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. 1040ez tax table Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. 1040ez tax table Add the amounts figured in (2a) and (2b). 1040ez tax table Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. 1040ez tax table You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. 1040ez tax table Your basis in the debt instrument is increased by the OID you include in income. 1040ez tax table For information about showing the correct OID on your tax return, see How To Report OID, earlier. 1040ez tax table Form 1099-OID. 1040ez tax table   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. 1040ez tax table However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. 1040ez tax table See Constant yield method and Reduction for acquisition premium, later. 1040ez tax table   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. 1040ez tax table See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. 1040ez tax table If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. 1040ez tax table irs. 1040ez tax table gov/pub1212 by clicking the link under Recent Developments. 1040ez tax table Form 1099-OID not received. 1040ez tax table   The OID listed is for each $1,000 of redemption price. 1040ez tax table You must adjust the listed amount if your debt instrument has a different principal amount. 1040ez tax table For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. 1040ez tax table   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. 1040ez tax table (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. 1040ez tax table ) If you did not hold the debt instrument the entire year, figure your OID as follows. 1040ez tax table Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. 1040ez tax table (See Accrual period under Constant yield method, later. 1040ez tax table ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. 1040ez tax table Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. 1040ez tax table Add the results of (2) and (3). 1040ez tax table This is the OID to include in income for that year, unless you paid an acquisition premium. 1040ez tax table (The reduction for acquisition premium is discussed later. 1040ez tax table ) Tax-exempt bond. 1040ez tax table   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. 1040ez tax table You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. 1040ez tax table In general, use the rules that follow to determine your OID. 1040ez tax table Constant yield method. 1040ez tax table   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. 1040ez tax table (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. 1040ez tax table ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. 1040ez tax table   Figure the OID allocable to any accrual period as follows. 1040ez tax table Multiply the adjusted issue price at the beginning of the accrual period by a fraction. 1040ez tax table The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. 1040ez tax table The yield must be stated appropriately taking into account the length of the particular accrual period. 1040ez tax table Subtract from the result in (1) any qualified stated interest allocable to the accrual period. 1040ez tax table Accrual period. 1040ez tax table   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. 1040ez tax table For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. 1040ez tax table Any short period is included as the first accrual period. 1040ez tax table   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. 1040ez tax table However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. 1040ez tax table Daily OID. 1040ez tax table   The OID for any accrual period is allocated equally to each day in the accrual period. 1040ez tax table Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. 1040ez tax table Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. 1040ez tax table If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. 1040ez tax table Figuring daily OID. 1040ez tax table   The daily OID for the initial accrual period is figured using the following formula. 1040ez tax table   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. 1040ez tax table Example 5. 1040ez tax table On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. 1040ez tax table 17. 1040ez tax table According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. 1040ez tax table The yield to maturity is 12%, compounded semiannually. 1040ez tax table The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. 1040ez tax table The accrual periods are the 6-month periods ending on each of these dates. 1040ez tax table The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). 1040ez tax table The daily OID for the first accrual period is figured as follows. 1040ez tax table   ($86,235. 1040ez tax table 17 x . 1040ez tax table 12/2) – $5,000     181 days     = $174. 1040ez tax table 11020 = $. 1040ez tax table 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. 1040ez tax table 17 + $174. 1040ez tax table 11), or $86,409. 1040ez tax table 28. 1040ez tax table The number of days for the second accrual period (July 1 through December 31) is 184 days. 1040ez tax table The daily OID for the second accrual period is figured as follows. 1040ez tax table   ($86,409. 1040ez tax table 28 x . 1040ez tax table 12/2) – $5,000     184 days     = $184. 1040ez tax table 55681 = $1. 1040ez tax table 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. 1040ez tax table 11 ($. 1040ez tax table 95665 × 182 days) plus $184. 1040ez tax table 56 ($1. 1040ez tax table 00303 × 184 days), or $358. 1040ez tax table 67. 1040ez tax table Add the OID to the $10,000 interest you report on your income tax return for Year 1. 1040ez tax table Example 6. 1040ez tax table Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. 1040ez tax table Also, the interest payment dates are October 31 and April 30 of each calendar year. 1040ez tax table The accrual periods are the 6-month periods ending on each of these dates. 1040ez tax table The number of days for the first accrual period (May 1 through October 31) is 184 days. 1040ez tax table The daily OID for the first accrual period is figured as follows. 1040ez tax table   ($86,235. 1040ez tax table 17 x . 1040ez tax table 12/2) – $5,000     184 days     = $174. 1040ez tax table 11020 = $. 1040ez tax table 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). 1040ez tax table The daily OID for the second accrual period is figured as follows. 1040ez tax table   ($86,409. 1040ez tax table 28 x . 1040ez tax table 12/2) – $5,000     181 days     = $184. 1040ez tax table 55681 = $1. 1040ez tax table 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. 1040ez tax table 31 of OID in income. 1040ez tax table This is $174. 1040ez tax table 11 ($. 1040ez tax table 94625 × 184 days) for the period May 1 through October 31 plus $62. 1040ez tax table 20 ($1. 1040ez tax table 01965 × 61 days) for the period November 1 through December 31. 1040ez tax table The OID is added to the $5,000 interest income paid on October 31 of Year 1. 1040ez tax table Your basis in the debt instrument is increased by the OID you include in income. 1040ez tax table On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. 1040ez tax table 48 ($86,235. 1040ez tax table 17 + $236. 1040ez tax table 31). 1040ez tax table Short first accrual period. 1040ez tax table   You may have to make adjustments if a debt instrument has a short first accrual period. 1040ez tax table For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. 1040ez tax table (The remaining accrual periods begin on May 1 and November 1. 1040ez tax table ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. 1040ez tax table You may use any reasonable compounding method in determining OID for a short period. 1040ez tax table Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). 1040ez tax table Consult your tax advisor for more information about making this computation. 1040ez tax table   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. 1040ez tax table Reduction for acquisition premium. 1040ez tax table   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. 1040ez tax table To figure the daily acquisition premium, multiply the daily OID by the following fraction. 1040ez tax table The numerator is the acquisition premium. 1040ez tax table The denominator is the total OID remaining for the debt instrument after your purchase date. 1040ez tax table Example 7. 1040ez tax table Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. 1040ez tax table The adjusted issue price on November 1 of Year 1 is $86,409. 1040ez tax table 28 ($86,235. 1040ez tax table 17 + $174. 1040ez tax table 11). 1040ez tax table In this case, you paid an acquisition premium of $590. 1040ez tax table 72 ($87,000 − $86,409. 1040ez tax table 28). 1040ez tax table The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. 1040ez tax table 1) Daily OID on date of purchase (2nd accrual period) $1. 1040ez tax table 01965*  2)  Acquisition premium $590. 1040ez tax table 72    3)  Total OID remaining after purchase date ($13,764. 1040ez tax table 83 − $174. 1040ez tax table 11) 13,590. 1040ez tax table 72   4) Line 2 ÷ line 3 . 1040ez tax table 04346  5)  Line 1 × line 4 . 1040ez tax table 04432  6)  Daily OID reduced for the acquisition premium. 1040ez tax table Line 1 − line 5 $0. 1040ez tax table 97533  * As shown in Example 6. 1040ez tax table The total OID to include in income for Year 1 is $59. 1040ez tax table 50 ($. 1040ez tax table 97533 × 61 days). 1040ez tax table Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. 1040ez tax table In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. 1040ez tax table If you hold a contingent payment bond, you must report OID as it accrues each year. 1040ez tax table Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. 1040ez tax table To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. 1040ez tax table Noncontingent bond method. 1040ez tax table    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. 1040ez tax table In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. 1040ez tax table When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. 1040ez tax table If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. 1040ez tax table If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. 1040ez tax table Form 1099-OID. 1040ez tax table   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. 1040ez tax table For example, the amount may not be correct if the contingent payment was different from the projected amount. 1040ez tax table If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. 1040ez tax table For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. 1040ez tax table Figuring OID. 1040ez tax table   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. 1040ez tax table The issuer must make these available to you. 1040ez tax table Comparable yield. 1040ez tax table   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. 1040ez tax table The comparable yield is determined as of the debt instrument's issue date. 1040ez tax table Projected payment schedule. 1040ez tax table   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. 1040ez tax table The projected payment schedule is created by the issuer as of the debt instrument's issue date. 1040ez tax table It is used to determine the issuer's and holder's interest accruals and adjustments. 1040ez tax table Steps for figuring OID. 1040ez tax table   Figure the OID on a contingent payment debt instrument in two steps. 1040ez tax table Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. 1040ez tax table Use the comparable yield as the yield to maturity. 1040ez tax table In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). 1040ez tax table Do not treat any amount payable as qualified stated interest. 1040ez tax table Adjust the OID in (1) to account for actual contingent payments. 1040ez tax table If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. 1040ez tax table If the contingent payment is less than the projected fixed amount, you have a negative adjustment. 1040ez tax table Net positive adjustment. 1040ez tax table   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. 1040ez tax table Treat a net positive adjustment as additional OID for the tax year. 1040ez tax table Net negative adjustment. 1040ez tax table   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. 1040ez tax table Use a net negative adjustment to offset OID on the debt instrument for the tax year. 1040ez tax table If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. 1040ez tax table However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. 1040ez tax table You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. 1040ez tax table Basis adjustments. 1040ez tax table   In general, increase your basis in a contingent payment debt instrument by the OID included in income. 1040ez tax table Your basis, however, is not affected by any negative or positive adjustments. 1040ez tax table Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. 1040ez tax table Treatment of gain or loss on sale or exchange. 1040ez tax table   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. 1040ez tax table If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. 1040ez tax table If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. 1040ez tax table See Regulations section 1. 1040ez tax table 1275-4 for exceptions to these rules. 1040ez tax table Premium, acquisition premium, and market discount. 1040ez tax table   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. 1040ez tax table See Regulations section 1. 1040ez tax table 1275-4 to determine how to account for these items. 1040ez tax table Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. 1040ez tax table An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d
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Contact My Local Office in California

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Bakersfield 4825 Coffee Rd.
Bakersfield, CA 93308

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(661) 632-2799
Camarillo 751 Daily Dr.
Camarillo, CA 93010

Monday-Friday - 8:30 a.m. - 4:30 p.m.
 

Services Provided

(805) 445-4771
Chico 1395 Ridgewood Dr.
Chico, CA 95973

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)
 

Services Provided

(530) 343-2324
El Centro 2345 S. Second St.
El Centro, CA 92243

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(760) 352-3721
El Monte 9350 East Flair Dr.
El Monte, CA 91731

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(626) 927-1201
Fresno 2525 Capitol St
Fresno, CA 93721

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(559) 444-2044
Laguna Niguel 24000 Avila Rd.
Laguna Niguel, CA 92677

Monday-Friday 8:30 a.m.- 4:30 p.m.

 

Services Provided

(949) 389-4002
Long Beach 501 W. Ocean Blvd.
Long Beach, CA 90802

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(562) 491-7751
Los Angeles 300 N. Los Angeles St.
Los Angeles, CA 90012

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(213) 576-3009
Modesto 1533 Lakewood Ave.
Modesto, CA 95355

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(209) 548-7388
Oakland 1301 Clay St.
Oakland, CA 94612

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**
 

Services Provided

(510) 637-2487
Palm Springs 556 S. Paseo Dorotea
Palm Springs, CA 92264

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 1:00 p.m. - 2:00 p.m.)

 

Services Provided

(760) 866-6125
Redding 850 Industrial St.
Redding, CA 96002

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(530) 224-0695
Sacramento  4330 Watt Ave.
Sacramento, CA 95821 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**
 

Services Provided

(916) 974-5225 
Salinas  928 East Blanco Rd
Salinas, CA  93901 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(831) 753-6895 
San Bernardino  290 N. D St.
San Bernardino, CA 92401 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(909) 388-8108 
San Diego  880 Front St.
San Diego, CA 92101 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

  Services Provided

(619) 615-9555 
San Francisco  450 Golden Gate Ave.
San Francisco, CA 94102 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(415) 553-8990 
San Jose  55 S. Market St.
San Jose, CA 95113 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**
 

Services Provided

(408) 282-0179 
San Marcos  1 Civic Center Dr.
San Marcos, CA 92069 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**
 

Services Provided

(760) 736-7355
Santa Ana  801 Civic Center Drive W.
Santa Ana, CA 92701 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(714) 347-9204 
Santa Barbara  1332 Anacapa St.
Santa Barbara, CA 93101 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.) 

 

Services Provided

(805) 564-7555 
Santa Maria  2384 Professional Parkway
Santa Maria, CA 93455 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 1:00 p.m. - 2:00 p.m.)
 

Services Provided

(805) 352-0355 
Santa Rosa  777 Sonoma Ave.
Santa Rosa, CA 95404 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(707) 523-0924
Stockton  4643 Quail Lakes Dr.
Stockton, CA 95207 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(209) 942-1910 
Van Nuys  6230 Van Nuys Blvd.
Van Nuys, CA 91401 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(818) 779-3625 
Visalia  5300 W. Tulare St.
Visalia, CA 93277

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.) 
 

Services Provided

(559) 265-4109 

Walnut Creek  185 Lennon Lane
Walnut Creek, CA 94598 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(925) 935-9308

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service:  Within California call:

 Oakland  (510) 637-2703
 San Jose  (408) 817-6850
 Los Angeles  (213) 576-3140
 Laguna Niguel  (949) 389-4804
 Sacramento   (916) 974-5007

Call 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
300 North Los Angeles St. MS 6602
Los Angeles, CA 90012

Internal Revenue Service
4330 Watt Avenue, SA 5650
North Highlands, CA 95660

Internal Revenue Service
1 Civic Center Drive, Ste. 400
San Marcos, CA 92069

Internal Revenue Service
1301 Clay Street, 110S
Oakland, CA 94612

Internal Revenue Service
55 South Market HQ 6600
San Jose, CA 95113

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The 1040ez Tax Table

1040ez tax table 1. 1040ez tax table   Nonresident Alien or Resident Alien? Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Nonresident Aliens Resident AliensGreen Card Test Substantial Presence Test Effect of Tax Treaties Dual-Status AliensFirst Year of Residency Choosing Resident Alien Status Last Year of Residency Nonresident Spouse Treated as a ResidentHow To Make the Choice Aliens From American Samoa or Puerto Rico Introduction You should first determine whether, for income tax purposes, you are a nonresident alien or a resident alien. 1040ez tax table If you are both a nonresident and resident in the same year, you have a dual status. 1040ez tax table Dual status is explained later. 1040ez tax table Also explained later are a choice to treat your nonresident spouse as a resident and some other special situations. 1040ez tax table Topics - This chapter discusses: How to determine if you are a nonresident, resident, or dual-status alien, and How to treat a nonresident spouse as a resident alien. 1040ez tax table Useful Items - You may want to see: Form (and Instructions) 1040 U. 1040ez tax table S. 1040ez tax table Individual Income Tax Return 1040A U. 1040ez tax table S. 1040ez tax table Individual Income Tax Return 1040NR U. 1040ez tax table S. 1040ez tax table Nonresident Alien Income Tax Return 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) 8840 Closer Connection Exception Statement for Aliens 8843 Statement for Exempt Individuals and Individuals With a Medical Condition See chapter 12 for information about getting these forms. 1040ez tax table Nonresident Aliens If you are an alien (not a U. 1040ez tax table S. 1040ez tax table citizen), you are considered a nonresident alien unless you meet one of the two tests described next under Resident Aliens. 1040ez tax table Resident Aliens You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for calendar year 2013 (January 1–December 31). 1040ez tax table Even if you do not meet either of these tests, you may be able to choose to be treated as a U. 1040ez tax table S. 1040ez tax table resident for part of the year. 1040ez tax table See First-Year Choice under Dual-Status Aliens, later. 1040ez tax table Green Card Test You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2013. 1040ez tax table (However, see Dual-Status Aliens , later. 1040ez tax table ) This is known as the “green card” test. 1040ez tax table You are a lawful permanent resident of the United States at any time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. 1040ez tax table You generally have this status if the U. 1040ez tax table S. 1040ez tax table Citizenship and Immigration Services (USCIS) (or its predecessor organization) has issued you an alien registration card, also known as a “green card. 1040ez tax table ” You continue to have resident status under this test unless the status is taken away from you or is administratively or judicially determined to have been abandoned. 1040ez tax table Resident status taken away. 1040ez tax table   Resident status is considered to have been taken away from you if the U. 1040ez tax table S. 1040ez tax table government issues you a final administrative or judicial order of exclusion or deportation. 1040ez tax table A final judicial order is an order that you may no longer appeal to a higher court of competent jurisdiction. 1040ez tax table Resident status abandoned. 1040ez tax table   An administrative or judicial determination of abandonment of resident status may be initiated by you, the USCIS, or a U. 1040ez tax table S. 1040ez tax table consular officer. 1040ez tax table    If you initiate the determination, your resident status is considered to be abandoned when you file either of the following with the USCIS or U. 1040ez tax table S. 1040ez tax table consular officer. 1040ez tax table Your application for abandonment. 1040ez tax table Your Alien Registration Receipt Card attached to a letter stating your intent to abandon your resident status. 1040ez tax table You must file the letter by certified mail, return receipt requested. 1040ez tax table You must keep a copy of the letter and proof that it was mailed and received. 1040ez tax table    Until you have proof your letter was received, you remain a resident alien for tax purposes even if the USCIS would not recognize the validity of your green card because it is more than ten years old or because you have been absent from the United States for a period of time. 1040ez tax table   If the USCIS or U. 1040ez tax table S. 1040ez tax table consular officer initiates this determination, your resident status will be considered to be abandoned when the final administrative order of abandonment is issued. 1040ez tax table If you are granted an appeal to a federal court of competent jurisdiction, a final judicial order is required. 1040ez tax table   Under U. 1040ez tax table S. 1040ez tax table 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. 1040ez tax table    A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. 1040ez tax table See Expatriation Tax in chapter 4. 1040ez tax table Termination of residency after June 3, 2004, and before June 17, 2008. 1040ez tax table   If you terminated your residency after June 3, 2004, and before June 17, 2008, you will still be considered a U. 1040ez tax table S. 1040ez tax table resident for tax purposes until you notify the Secretary of Homeland Security and file Form 8854, Initial and Annual Expatriation Statement. 1040ez tax table Termination of residency after June 16, 2008. 1040ez tax table   For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4. 1040ez tax table Substantial Presence Test You will be considered a U. 1040ez tax table S. 1040ez tax table resident for tax purposes if you meet the substantial presence test for calendar year 2013. 1040ez tax table To meet this test, you must be physically present in the United States on at least: 31 days during 2013, and 183 days during the 3-year period that includes 2013, 2012, and 2011, counting: All the days you were present in 2013, and 1/3 of the days you were present in 2012, and 1/6 of the days you were present in 2011. 1040ez tax table Example. 1040ez tax table You were physically present in the United States on 120 days in each of the years 2011, 2012, and 2013. 1040ez tax table To determine if you meet the substantial presence test for 2013, count the full 120 days of presence in 2013, 40 days in 2012 (1/3 of 120), and 20 days in 2011 (1/6 of 120). 1040ez tax table Because the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2013. 1040ez tax table The term United States includes the following areas. 1040ez tax table All 50 states and the District of Columbia. 1040ez tax table The territorial waters of the United States. 1040ez tax table The seabed and subsoil of those submarine areas that are adjacent to U. 1040ez tax table S. 1040ez tax table territorial waters and over which the United States has exclusive rights under international law to explore and exploit natural resources. 1040ez tax table The term does not include U. 1040ez tax table S. 1040ez tax table possessions and territories or U. 1040ez tax table S. 1040ez tax table airspace. 1040ez tax table Days of Presence in the United States You are treated as present in the United States on any day you are physically present in the country at any time during the day. 1040ez tax table However, there are exceptions to this rule. 1040ez tax table Do not count the following as days of presence in the United States for the substantial presence test. 1040ez tax table Days you commute to work in the United States from a residence in Canada or Mexico if you regularly commute from Canada or Mexico. 1040ez tax table Days you are in the United States for less than 24 hours when you are in transit between two places outside the United States. 1040ez tax table Days you are in the United States as a crew member of a foreign vessel. 1040ez tax table Days you are unable to leave the United States because of a medical condition that arose while you are in the United States. 1040ez tax table Days you are an exempt individual. 1040ez tax table The specific rules that apply to each of these categories are discussed next. 1040ez tax table Regular commuters from Canada or Mexico. 1040ez tax table   Do not count the days on which you commute to work in the United States from your residence in Canada or Mexico if you regularly commute from Canada or Mexico. 1040ez tax table You are considered to commute regularly if you commute to work in the United States on more than 75% of the workdays during your working period. 1040ez tax table   For this purpose, “commute” means to travel to work and return to your residence within a 24-hour period. 1040ez tax table “Workdays” are the days on which you work in the United States or Canada or Mexico. 1040ez tax table “Working period” means the period beginning with the first day in the current year on which you are physically present in the United States to work and ending on the last day in the current year on which you are physically present in the United States to work. 1040ez tax table If your work requires you to be present in the United States only on a seasonal or cyclical basis, your working period begins on the first day of the season or cycle on which you are present in the United States to work and ends on the last day of the season or cycle on which you are present in the United States to work. 1040ez tax table You can have more than one working period in a calendar year, and your working period can begin in one calendar year and end in the following calendar year. 1040ez tax table Example. 1040ez tax table Maria Perez lives in Mexico and works for Compañía ABC in its office in Mexico. 1040ez tax table She was assigned to her firm's office in the United States from February 1 through June 1. 1040ez tax table On June 2, she resumed her employment in Mexico. 1040ez tax table On 69 days, Maria commuted each morning from her home in Mexico to work in Compañía ABC's U. 1040ez tax table S. 1040ez tax table office. 1040ez tax table She returned to her home in Mexico on each of those evenings. 1040ez tax table On 7 days, she worked in her firm's Mexico office. 1040ez tax table For purposes of the substantial presence test, Maria does not count the days she commuted to work in the United States because those days equal more than 75% of the workdays during the working period (69 workdays in the United States divided by 76 workdays in the working period equals 90. 1040ez tax table 8%). 1040ez tax table Days in transit. 1040ez tax table   Do not count the days you are in the United States for less than 24 hours and you are in transit between two places outside the United States. 1040ez tax table You are considered to be in transit if you engage in activities that are substantially related to completing travel to your foreign destination. 1040ez tax table For example, if you travel between airports in the United States to change planes en route to your foreign destination, you are considered to be in transit. 1040ez tax table However, you are not considered to be in transit if you attend a business meeting while in the United States. 1040ez tax table This is true even if the meeting is held at the airport. 1040ez tax table Crew members. 1040ez tax table   Do not count the days you are temporarily present in the United States as a regular crew member of a foreign vessel (boat or ship) engaged in transportation between the United States and a foreign country or a U. 1040ez tax table S. 1040ez tax table possession. 1040ez tax table However, this exception does not apply if you otherwise engage in any trade or business in the United States on those days. 1040ez tax table Medical condition. 1040ez tax table   Do not count the days you intended to leave, but could not leave the United States because of a medical condition or problem that arose while you were in the United States. 1040ez tax table Whether you intended to leave the United States on a particular day is determined based on all the facts and circumstances. 1040ez tax table For example, you may be able to establish that you intended to leave if your purpose for visiting the United States could be accomplished during a period that is not long enough to qualify you for the substantial presence test. 1040ez tax table However, if you need an extended period of time to accomplish the purpose of your visit and that period would qualify you for the substantial presence test, you would not be able to establish an intent to leave the United States before the end of that extended period. 1040ez tax table   In the case of an individual who is judged mentally incompetent, proof of intent to leave the United States can be determined by analyzing the individual's pattern of behavior before he or she was judged mentally incompetent. 1040ez tax table   If you qualify to exclude days of presence because of a medical condition, you must file a fully completed Form 8843 with the IRS. 1040ez tax table See Form 8843 , later. 1040ez tax table   You cannot exclude any days of presence in the United States under the following circumstances. 1040ez tax table You were initially prevented from leaving, were then able to leave, but remained in the United States beyond a reasonable period for making arrangements to leave. 1040ez tax table You returned to the United States for treatment of a medical condition that arose during a prior stay. 1040ez tax table The condition existed before your arrival in the United States and you were aware of the condition. 1040ez tax table It does not matter whether you needed treatment for the condition when you entered the United States. 1040ez tax table Exempt individual. 1040ez tax table   Do not count days for which you are an exempt individual. 1040ez tax table The term “exempt individual” does not refer to someone exempt from U. 1040ez tax table S. 1040ez tax table tax, but to anyone in the following categories. 1040ez tax table An individual temporarily present in the United States as a foreign government-related individual under an “A” or “G” visa. 1040ez tax table A teacher or trainee temporarily present in the United States under a “J” or “Q” visa, who substantially complies with the requirements of the visa. 1040ez tax table A student temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa, who substantially complies with the requirements of the visa. 1040ez tax table A professional athlete temporarily in the United States to compete in a charitable sports event. 1040ez tax table   The specific rules for each of these four categories (including any rules on the length of time you will be an exempt individual) are discussed next. 1040ez tax table Foreign government-related individuals. 1040ez tax table   A foreign government-related individual is an individual (or a member of the individual's immediate family) who is temporarily present in the United States: As a full-time employee of an international organization, By reason of diplomatic status, or By reason of a visa (other than a visa that grants lawful permanent residence) that the Secretary of the Treasury determines represents full-time diplomatic or consular status. 1040ez tax table Note. 1040ez tax table You are considered temporarily present in the United States regardless of the actual amount of time you are present in the United States. 1040ez tax table    An international organization is any public international organization that the President of the United States has designated by Executive Order as being entitled to the privileges, exemptions, and immunities provided for in the International Organizations Act. 1040ez tax table An individual is a full-time employee if his or her work schedule meets the organization's standard full-time work schedule. 1040ez tax table   An individual is considered to have full-time diplomatic or consular status if he or she: Has been accredited by a foreign government that is recognized by the United States, Intends to engage primarily in official activities for that foreign government while in the United States, and Has been recognized by the President, Secretary of State, or a consular officer as being entitled to that status. 1040ez tax table Note. 1040ez tax table If you are present in the United States under an “A” or “G” visa you are considered a foreign government-related individual (with full-time diplomatic or consular status). 1040ez tax table None of your days count for purposes of the substantial presence test. 1040ez tax table   Members of the immediate family include the individual's spouse and unmarried children (whether by blood or adoption) but only if the spouse's or unmarried children's visa statuses are derived from and dependent on the exempt individual's visa classification. 1040ez tax table Unmarried children are included only if they: Are under 21 years of age, Reside regularly in the exempt individual's household, and Are not members of another household. 1040ez tax table Teachers and trainees. 1040ez tax table   A teacher or trainee is an individual, other than a student, who is temporarily in the United States under a “J” or “Q” visa and substantially complies with the requirements of that visa. 1040ez tax table You are considered to have substantially complied with the visa requirements if you have not engaged in activities that are prohibited by U. 1040ez tax table S. 1040ez tax table immigration laws and could result in the loss of your visa status. 1040ez tax table   Also included are immediate family members of exempt teachers and trainees. 1040ez tax table See the definition of immediate family, earlier, under Foreign government-related individuals . 1040ez tax table   You will not be an exempt individual as a teacher or trainee in 2013 if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years. 1040ez tax table However, you will be an exempt individual if all of the following conditions are met. 1040ez tax table You were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years, A foreign employer paid all of your compensation during 2013, and A foreign employer paid all of your compensation during each of the preceding 6 years you were present in the United States as a teacher or trainee. 1040ez tax table A foreign employer includes an office or place of business of an American entity in a foreign country or a U. 1040ez tax table S. 1040ez tax table possession. 1040ez tax table   If you qualify to exclude days of presence as a teacher or trainee, you must file a fully completed Form 8843 with the IRS. 1040ez tax table See Form 8843 , later. 1040ez tax table Example. 1040ez tax table Carla was temporarily in the United States during the year as a teacher on a “J” visa. 1040ez tax table Her compensation for the year was paid by a foreign employer. 1040ez tax table Carla was treated as an exempt teacher for the previous 2 years but her compensation was not paid by a foreign employer. 1040ez tax table She will not be considered an exempt individual for the current year because she was exempt as a teacher for at least 2 of the past 6 years. 1040ez tax table If her compensation for the past 2 years had been paid by a foreign employer, she would be an exempt individual for the current year. 1040ez tax table Students. 1040ez tax table   A student is any individual who is temporarily in the United States on an “F,” “J,” “M,” or “Q” visa and who substantially complies with the requirements of that visa. 1040ez tax table You are considered to have substantially complied with the visa requirements if you have not engaged in activities that are prohibited by U. 1040ez tax table S. 1040ez tax table immigration laws and could result in the loss of your visa status. 1040ez tax table   Also included are immediate family members of exempt students. 1040ez tax table See the definition of immediate family, earlier, under Foreign government-related individuals . 1040ez tax table   You will not be an exempt individual as a student in 2013 if you have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless you meet both of the following requirements. 1040ez tax table You establish that you do not intend to reside permanently in the United States. 1040ez tax table You have substantially complied with the requirements of your visa. 1040ez tax table The facts and circumstances to be considered in determining if you have demonstrated an intent to reside permanently in the United States include, but are not limited to, the following. 1040ez tax table Whether you have maintained a closer connection to a foreign country (discussed later). 1040ez tax table Whether you have taken affirmative steps to change your status from nonimmigrant to lawful permanent resident as discussed later under Closer Connection to a Foreign Country . 1040ez tax table   If you qualify to exclude days of presence as a student, you must file a fully completed Form 8843 with the IRS. 1040ez tax table See Form 8843 , later. 1040ez tax table Professional athletes. 1040ez tax table   A professional athlete who is temporarily in the United States to compete in a charitable sports event is an exempt individual. 1040ez tax table A charitable sports event is one that meets the following conditions. 1040ez tax table The main purpose is to benefit a qualified charitable organization. 1040ez tax table The entire net proceeds go to charity. 1040ez tax table Volunteers perform substantially all the work. 1040ez tax table   In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in a sports event. 1040ez tax table You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. 1040ez tax table   If you qualify to exclude days of presence as a professional athlete, you must file a fully completed Form 8843 with the IRS. 1040ez tax table See Form 8843 , next. 1040ez tax table Form 8843. 1040ez tax table   If you exclude days of presence in the United States because you fall into any of the following categories, you must file a fully completed Form 8843. 1040ez tax table You were unable to leave the United States as planned because of a medical condition or problem. 1040ez tax table You were temporarily in the United States as a teacher or trainee on a “J” or “Q” visa. 1040ez tax table You were temporarily in the United States as a student on an “F,” “J,” “M,” or “Q” visa. 1040ez tax table You were a professional athlete competing in a charitable sports event. 1040ez tax table Attach Form 8843 to your 2013 income tax return. 1040ez tax table If you do not have to file a return, send Form 8843 to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, by the due date for filing Form 1040NR or Form 1040NR-EZ. 1040ez tax table The due date for filing is discussed in chapter 7. 1040ez tax table If you do not timely file Form 8843, you cannot exclude the days you were present in the United States as a professional athlete or because of a medical condition that arose while you were in the United States. 1040ez tax table This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements. 1040ez tax table Closer Connection to a Foreign Country Even if you meet the substantial presence test, you can be treated as a nonresident alien if you: Are present in the United States for less than 183 days during the year, Maintain a tax home in a foreign country during the year, and Have a closer connection during the year to one foreign country in which you have a tax home than to the United States (unless you have a closer connection to two foreign countries, discussed next). 1040ez tax table Closer connection to two foreign countries. 1040ez tax table   You can demonstrate that you have a closer connection to two foreign countries (but not more than two) if you meet all of the following conditions. 1040ez tax table You maintained a tax home beginning on the first day of the year in one foreign country. 1040ez tax table You changed your tax home during the year to a second foreign country. 1040ez tax table You continued to maintain your tax home in the second foreign country for the rest of the year. 1040ez tax table You had a closer connection to each foreign country than to the United States for the period during which you maintained a tax home in that foreign country. 1040ez tax table You are subject to tax as a resident under the tax laws of either foreign country for the entire year or subject to tax as a resident in both foreign countries for the period during which you maintained a tax home in each foreign country. 1040ez tax table Tax home. 1040ez tax table   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. 1040ez tax table Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. 1040ez tax table If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. 1040ez tax table If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. 1040ez tax table   For determining whether you have a closer connection to a foreign country, your tax home must also be in existence for the entire current year, and must be located in the same foreign country to which you are claiming to have a closer connection. 1040ez tax table Foreign country. 1040ez tax table   In determining whether you have a closer connection to a foreign country, the term “foreign country” means: Any territory under the sovereignty of the United Nations or a government other than that of the United States, The territorial waters of the foreign country (determined under U. 1040ez tax table S. 1040ez tax table law), The seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the foreign country and over which the foreign country has exclusive rights under international law to explore and exploit natural resources, and Possessions and territories of the United States. 1040ez tax table Establishing a closer connection. 1040ez tax table   You will be considered to have a closer connection to a foreign country than the United States if you or the IRS establishes that you have maintained more significant contacts with the foreign country than with the United States. 1040ez tax table In determining whether you have maintained more significant contacts with the foreign country than with the United States, the facts and circumstances to be considered include, but are not limited to, the following. 1040ez tax table The country of residence you designate on forms and documents. 1040ez tax table The types of official forms and documents you file, such as Form W-9, Form W-8BEN, or Form W-8ECI. 1040ez tax table The location of: Your permanent home, Your family, Your personal belongings, such as cars, furniture, clothing, and jewelry, Your current social, political, cultural, professional, or religious affiliations, Your business activities (other than those that constitute your tax home), The jurisdiction in which you hold a driver's license, The jurisdiction in which you vote, and Charitable organizations to which you contribute. 1040ez tax table It does not matter whether your permanent home is a house, an apartment, or a furnished room. 1040ez tax table It also does not matter whether you rent or own it. 1040ez tax table It is important, however, that your home be available at all times, continuously, and not solely for short stays. 1040ez tax table When you cannot have a closer connection. 1040ez tax table   You cannot claim you have a closer connection to a foreign country if either of the following applies: You personally applied, or took other steps during the year, to change your status to that of a permanent resident, or You had an application pending for adjustment of status during the current year. 1040ez tax table Steps to change your status to that of a permanent resident include, but are not limited to, the filing of the following forms. 1040ez tax table Form I-508, Waiver of Rights, Privileges, Exemptions and Immunities Form I-485, Application to Register Permanent Residence or Adjust Status Form I-130, Petition for Alien Relative, on your behalf Form I-140, Immigrant Petition for Alien Worker, on your behalf Form ETA-750, Application for Alien Employment Certification, on your behalf Form DS-230, Application for Immigrant Visa and Alien Registration Form 8840. 1040ez tax table   You must attach a fully completed Form 8840 to your income tax return to claim you have a closer connection to a foreign country or countries. 1040ez tax table   If you do not have to file a return, send the form to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, by the due date for filing Form 1040NR or Form 1040NR-EZ. 1040ez tax table The due date for filing is discussed later in chapter 7. 1040ez tax table   If you do not timely file Form 8840, you cannot claim a closer connection to a foreign country or countries. 1040ez tax table This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements. 1040ez tax table Effect of Tax Treaties The rules given here to determine if you are a U. 1040ez tax table S. 1040ez tax table resident do not override tax treaty definitions of residency. 1040ez tax table If you are a dual-resident taxpayer, you can still claim the benefits under an income tax treaty. 1040ez tax table A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. 1040ez tax table The income tax treaty between the two countries must contain a provision that provides for resolution of conflicting claims of residence (tie-breaker rule). 1040ez tax table If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U. 1040ez tax table S. 1040ez tax table income tax. 1040ez tax table For purposes other than figuring your tax, you will be treated as a U. 1040ez tax table S. 1040ez tax table resident. 1040ez tax table For example, the rules discussed here do not affect your residency time periods as discussed later under Dual-Status Aliens . 1040ez tax table Information to be reported. 1040ez tax table   If you are a dual-resident taxpayer and you claim treaty benefits, you must file a return by the due date (including extensions) using Form 1040NR or Form 1040NR-EZ, and compute your tax as a nonresident alien. 1040ez tax table You must also attach a fully completed Form 8833 if you determine your residency under a tax treaty and receive payments or income items totaling more than $100,000. 1040ez tax table You may also have to attach Form 8938 (discussed in chapter 7). 1040ez tax table See Reporting Treaty Benefits Claimed in chapter 9 for more information on reporting treaty benefits. 1040ez tax table Dual-Status Aliens You can be both a nonresident alien and a resident alien during the same tax year. 1040ez tax table This usually occurs in the year you arrive in or depart from the United States. 1040ez tax table Aliens who have dual status should see chapter 6 for information on filing a return for a dual-status tax year. 1040ez tax table First Year of Residency If you are a U. 1040ez tax table S. 1040ez tax table resident for the calendar year, but you were not a U. 1040ez tax table S. 1040ez tax table resident at any time during the preceding calendar year, you are a U. 1040ez tax table S. 1040ez tax table resident only for the part of the calendar year that begins on the residency starting date. 1040ez tax table You are a nonresident alien for the part of the year before that date. 1040ez tax table Residency starting date under substantial presence test. 1040ez tax table   If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year. 1040ez tax table However, you do not have to count up to 10 days of actual presence in the United States if on those days you establish that: You had a closer connection to a foreign country than to the United States, and Your tax home was in that foreign country. 1040ez tax table See Closer Connection to a Foreign Country , earlier. 1040ez tax table   In determining whether you can exclude up to 10 days, the following rules apply. 1040ez tax table You can exclude days from more than one period of presence as long as the total days in all periods are not more than 10. 1040ez tax table You cannot exclude any days in a period of consecutive days of presence if all the days in that period cannot be excluded. 1040ez tax table Although you can exclude up to 10 days of presence in determining your residency starting date, you must include those days when determining whether you meet the substantial presence test. 1040ez tax table Example. 1040ez tax table Ivan Ivanovich is a citizen of Russia. 1040ez tax table He came to the United States for the first time on January 6, 2013, to attend a business meeting and returned to Russia on January 10, 2013. 1040ez tax table His tax home remained in Russia. 1040ez tax table On March 1, 2013, he moved to the United States and resided here for the rest of the year. 1040ez tax table Ivan is able to establish a closer connection to Russia for the period January 6–10. 1040ez tax table Thus, his residency starting date is March 1. 1040ez tax table Statement required to exclude up to 10 days of presence. 1040ez tax table   You must file a statement with the IRS if you are excluding up to 10 days of presence in the United States for purposes of your residency starting date. 1040ez tax table You must sign and date this statement and include a declaration that it is made under penalties of perjury. 1040ez tax table The statement must contain the following information (as applicable). 1040ez tax table Your name, address, U. 1040ez tax table S. 1040ez tax table taxpayer identification number (if any), and U. 1040ez tax table S. 1040ez tax table visa number (if any). 1040ez tax table Your passport number and the name of the country that issued your passport. 1040ez tax table The tax year for which the statement applies. 1040ez tax table The first day that you were present in the United States during the year. 1040ez tax table The dates of the days you are excluding in figuring your first day of residency. 1040ez tax table Sufficient facts to establish that you have maintained your tax home in and a closer connection to a foreign country during the period you are excluding. 1040ez tax table   Attach the required statement to your income tax return. 1040ez tax table If you are not required to file a return, send the statement to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, on or before the due date for filing Form 1040NR or Form 1040NR-EZ. 1040ez tax table The due date for filing is discussed in chapter 7. 1040ez tax table   If you do not file the required statement as explained above, you cannot claim that you have a closer connection to a foreign country or countries. 1040ez tax table Therefore, your first day of residency will be the first day you are present in the United States. 1040ez tax table This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements. 1040ez tax table Residency starting date under green card test. 1040ez tax table   If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident. 1040ez tax table   If you meet both the substantial presence test and the green card test, your residency starting date is the earlier of the first day during the year you are present in the United States under the substantial presence test or as a lawful permanent resident. 1040ez tax table Residency during the preceding year. 1040ez tax table   If you were a U. 1040ez tax table S. 1040ez tax table resident during any part of the preceding calendar year and you are a U. 1040ez tax table S. 1040ez tax table resident for any part of the current year, you will be considered a U. 1040ez tax table S. 1040ez tax table resident at the beginning of the current year. 1040ez tax table This applies whether you are a resident under the substantial presence test or green card test. 1040ez tax table Example. 1040ez tax table Robert Bach is a citizen of Switzerland. 1040ez tax table He came to the United States as a U. 1040ez tax table S. 1040ez tax table resident for the first time on May 1, 2012, and remained until November 5, 2012, when he returned to Switzerland. 1040ez tax table Robert came back to the United States on March 5, 2013, as a lawful permanent resident and still resides here. 1040ez tax table In calendar year 2013, Robert's U. 1040ez tax table S. 1040ez tax table residency is deemed to begin on January 1, 2013, because he qualified as a resident in calendar year 2012. 1040ez tax table First-Year Choice If you do not meet either the green card test or the substantial presence test for 2012 or 2013 and you did not choose to be treated as a resident for part of 2012, but you meet the substantial presence test for 2014, you can choose to be treated as a U. 1040ez tax table S. 1040ez tax table resident for part of 2013. 1040ez tax table To make this choice, you must: Be present in the United States for at least 31 days in a row in 2013, and Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of 2013. 1040ez tax table For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States. 1040ez tax table When counting the days of presence in (1) and (2) above, do not count the days you were in the United States under any of the exceptions discussed earlier under Days of Presence in the United States. 1040ez tax table If you make the first-year choice, your residency starting date for 2013 is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. 1040ez tax table You are treated as a U. 1040ez tax table S. 1040ez tax table resident for the rest of the year. 1040ez tax table If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. 1040ez tax table If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period. 1040ez tax table Note. 1040ez tax table You do not have to be married to make this choice. 1040ez tax table Example 1. 1040ez tax table Juan DaSilva is a citizen of the Philippines. 1040ez tax table He came to the United States for the first time on November 1, 2013, and was here on 31 consecutive days (from November 1 through December 1, 2013). 1040ez tax table Juan returned to the Philippines on December 1 and came back to the United States on December 17, 2013. 1040ez tax table He stayed in the United States for the rest of the year. 1040ez tax table During 2014, Juan was a resident of the United States under the substantial presence test. 1040ez tax table Juan can make the first-year choice for 2013 because he was in the United States in 2013 for a period of 31 days in a row (November 1 through December 1) and for at least 75% of the days following (and including) the first day of his 31-day period (46 total days of presence in the United States divided by 61 days in the period from November 1 through December 31 equals 75. 1040ez tax table 4%). 1040ez tax table If Juan makes the first-year choice, his residency starting date will be November 1, 2013. 1040ez tax table Example 2. 1040ez tax table The facts are the same as in Example 1, except that Juan was also absent from the United States on December 24, 25, 29, 30, and 31. 1040ez tax table He can make the first-year choice for 2013 because up to 5 days of absence are considered days of presence for purposes of the 75% requirement. 1040ez tax table Statement required to make the first-year choice for 2013. 1040ez tax table   You must attach a statement to Form 1040 to make the first-year choice for 2013. 1040ez tax table The statement must contain your name and address and specify the following. 1040ez tax table That you are making the first-year choice for 2013. 1040ez tax table That you were not a resident in 2012. 1040ez tax table That you are a resident under the substantial presence test in 2014. 1040ez tax table The number of days of presence in the United States during 2014. 1040ez tax table The date or dates of your 31-day period of presence and the period of continuous presence in the United States during 2013. 1040ez tax table The date or dates of absence from the United States during 2013 that you are treating as days of presence. 1040ez tax table You cannot file Form 1040 or the statement until you meet the substantial presence test for 2014. 1040ez tax table If you have not met the test for 2014 as of April 15, 2014, you can request an extension of time for filing your 2013 Form 1040 until a reasonable period after you have met that test. 1040ez tax table To request an extension to file until October 15, 2014, use Form 4868, Application for Automatic Extension of Time To File U. 1040ez tax table S. 1040ez tax table Individual Income Tax Return. 1040ez tax table You can file the paper form or use one of the electronic filing options explained in the Form 4868 instructions. 1040ez tax table You should pay with this extension the amount of tax you expect to owe for 2013 figured as if you were a nonresident alien the entire year. 1040ez tax table You can use Form 1040NR or Form 1040NR-EZ to figure the tax. 1040ez tax table Enter the tax on Form 4868. 1040ez tax table If you do not pay the tax due, you will be charged interest on any tax not paid by the regular due date of your return, and you may be charged a penalty on the late payment. 1040ez tax table   Once you make the first-year choice, you may not revoke it without the approval of the Internal Revenue Service. 1040ez tax table   If you do not follow the procedures discussed here for making the first-year choice, you will be treated as a nonresident alien for all of 2013. 1040ez tax table However, this does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing procedures and significant steps to comply with the procedures. 1040ez tax table Choosing Resident Alien Status If you are a dual-status alien, you can choose to be treated as a U. 1040ez tax table S. 1040ez tax table resident for the entire year if all of the following apply. 1040ez tax table You were a nonresident alien at the beginning of the year. 1040ez tax table You are a resident alien or U. 1040ez tax table S. 1040ez tax table citizen at the end of the year. 1040ez tax table You are married to a U. 1040ez tax table S. 1040ez tax table citizen or resident alien at the end of the year. 1040ez tax table Your spouse joins you in making the choice. 1040ez tax table This includes situations in which both you and your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year. 1040ez tax table Note. 1040ez tax table If you are single at the end of the year, you cannot make this choice. 1040ez tax table If you make this choice, the following rules apply. 1040ez tax table You and your spouse are treated as U. 1040ez tax table S. 1040ez tax table residents for the entire year for income tax purposes. 1040ez tax table You and your spouse are taxed on worldwide income. 1040ez tax table You and your spouse must file a joint return for the year of the choice. 1040ez tax table Neither you nor your spouse can make this choice for any later tax year, even if you are separated, divorced, or remarried. 1040ez tax table The special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you. 1040ez tax table Note. 1040ez tax table A similar choice is available if, at the end of the tax year, one spouse is a nonresident alien and the other spouse is a U. 1040ez tax table S. 1040ez tax table citizen or resident. 1040ez tax table See Nonresident Spouse Treated as a Resident , later. 1040ez tax table If you previously made that choice and it is still in effect, you do not need to make the choice explained here. 1040ez tax table Making the choice. 1040ez tax table   You should attach a statement signed by both spouses to your joint return for the year of the choice. 1040ez tax table The statement must contain the following information. 1040ez tax table A declaration that you both qualify to make the choice and that you choose to be treated as U. 1040ez tax table S. 1040ez tax table residents for the entire tax year. 1040ez tax table The name, address, and taxpayer identification number (SSN or ITIN) of each spouse. 1040ez tax table (If one spouse died, include the name and address of the person who makes the choice for the deceased spouse. 1040ez tax table )   You generally make this choice when you file your joint return. 1040ez tax table However, you also can make the choice by filing Form 1040X, Amended U. 1040ez tax table S. 1040ez tax table Individual Income Tax Return. 1040ez tax table Attach Form 1040, Form 1040A, or Form 1040EZ and print “Amended” across the top of the corrected return. 1040ez tax table If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. 1040ez tax table   You generally must file the amended joint return within 3 years from the date you filed your original U. 1040ez tax table S. 1040ez tax table income tax return or 2 years from the date you paid your income tax for that year, whichever is later. 1040ez tax table Last Year of Residency If you were a U. 1040ez tax table S. 1040ez tax table resident in 2013 but are not a U. 1040ez tax table S. 1040ez tax table resident during any part of 2014, you cease to be a U. 1040ez tax table S. 1040ez tax table resident on your residency termination date. 1040ez tax table Your residency termination date is December 31, 2013, unless you qualify for an earlier date as discussed next. 1040ez tax table Earlier residency termination date. 1040ez tax table   You may qualify for a residency termination date that is earlier than December 31. 1040ez tax table This date is: The last day in 2013 that you are physically present in the United States, if you met the substantial presence test, The first day in 2013 that you are no longer a lawful permanent resident of the United States, if you met the green card test, or The later of (1) or (2), if you met both tests. 1040ez tax table You can use this date only if, for the remainder of 2013, your tax home was in a foreign country and you had a closer connection to that foreign country. 1040ez tax table See Closer Connection to a Foreign Country , earlier. 1040ez tax table    A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. 1040ez tax table See Expatriation Tax in chapter 4. 1040ez tax table Termination of residency. 1040ez tax table   For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4. 1040ez tax table De minimis presence. 1040ez tax table   If you are a U. 1040ez tax table S. 1040ez tax table resident because of the substantial presence test and you qualify to use the earlier residency termination date, you can exclude up to 10 days of actual presence in the United States in determining your residency termination date. 1040ez tax table In determining whether you can exclude up to 10 days, the following rules apply. 1040ez tax table You can exclude days from more than one period of presence as long as the total days in all periods are not more than 10. 1040ez tax table You cannot exclude any days in a period of consecutive days of presence if all the days in that period cannot be excluded. 1040ez tax table Although you can exclude up to 10 days of presence in determining your residency termination date, you must include those days when determining whether you meet the substantial presence test. 1040ez tax table Example. 1040ez tax table Lola Bovary is a citizen of Malta. 1040ez tax table She came to the United States for the first time on March 1, 2013, and resided here until August 25, 2013. 1040ez tax table On December 12, 2013, Lola came to the United States for vacation and stayed here until December 16, 2013, when she returned to Malta. 1040ez tax table She is able to establish a closer connection to Malta for the period December 12–16. 1040ez tax table Lola is not a U. 1040ez tax table S. 1040ez tax table resident for tax purposes during 2014 and can establish a closer connection to Malta for the rest of calendar year 2013. 1040ez tax table Lola is a U. 1040ez tax table S. 1040ez tax table resident under the substantial presence test for 2013 because she was present in the United States for 183 days (178 days for the period March 1 to August 25 plus 5 days in December). 1040ez tax table Lola's residency termination date is August 25, 2013. 1040ez tax table Residency during the next year. 1040ez tax table   If you are a U. 1040ez tax table S. 1040ez tax table resident during any part of 2014 and you are a resident during any part of 2013, you will be treated as a resident through the end of 2013. 1040ez tax table This applies whether you have a closer connection to a foreign country than the United States during 2013, and whether you are a resident under the substantial presence test or green card test. 1040ez tax table Statement required to establish your residency termination date. 1040ez tax table   You must file a statement with the IRS to establish your residency termination date. 1040ez tax table You must sign and date this statement and include a declaration that it is made under penalties of perjury. 1040ez tax table The statement must contain the following information (as applicable). 1040ez tax table Your name, address, U. 1040ez tax table S. 1040ez tax table taxpayer identification number (if any), and U. 1040ez tax table S. 1040ez tax table visa number (if any). 1040ez tax table Your passport number and the name of the country that issued your passport. 1040ez tax table The tax year for which the statement applies. 1040ez tax table The last day that you were present in the United States during the year. 1040ez tax table Sufficient facts to establish that you have maintained your tax home in, and that you have a closer connection to, a foreign country following your last day of presence in the United States during the year or following the abandonment or rescission of your status as a lawful permanent resident during the year. 1040ez tax table The date that your status as a lawful permanent resident was abandoned or rescinded. 1040ez tax table Sufficient facts (including copies of relevant documents) to establish that your status as a lawful permanent resident has been abandoned or rescinded. 1040ez tax table If you can exclude days under the de minimis presence rule, discussed earlier, include the dates of the days you are excluding and sufficient facts to establish that you have maintained your tax home in and that you have a closer connection to a foreign country during the period you are excluding. 1040ez tax table   Attach the required statement to your income tax return. 1040ez tax table If you are not required to file a return, send the statement to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, on or before the due date for filing Form 1040NR or Form 1040NR-EZ. 1040ez tax table The due date for filing is discussed in chapter 7. 1040ez tax table   If you do not file the required statement as explained above, you cannot claim that you have a closer connection to a foreign country or countries. 1040ez tax table This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements. 1040ez tax table Nonresident Spouse Treated as a Resident If, at the end of your tax year, you are married and one spouse is a U. 1040ez tax table S. 1040ez tax table citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U. 1040ez tax table S. 1040ez tax table resident. 1040ez tax table This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year. 1040ez tax table If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. 1040ez tax table Neither you nor your spouse can claim under any tax treaty not to be a U. 1040ez tax table S. 1040ez tax table resident. 1040ez tax table You are both taxed on worldwide income. 1040ez tax table You must file a joint income tax return for the year you make the choice, but you and your spouse can file joint or separate returns in later years. 1040ez tax table If you file a joint return under this provision, the special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you. 1040ez tax table Example. 1040ez tax table Bob and Sharon Williams are married and both are nonresident aliens at the beginning of the year. 1040ez tax table In June, Bob became a resident alien and remained a resident for the rest of the year. 1040ez tax table Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return. 1040ez tax table Bob and Sharon must file a joint return for the year they make the choice, but they can file either joint or separate returns for later years. 1040ez tax table How To Make the Choice Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. 1040ez tax table It should contain the following information. 1040ez tax table A declaration that one spouse was a nonresident alien and the other spouse a U. 1040ez tax table S. 1040ez tax table citizen or resident alien on the last day of your tax year, and that you choose to be treated as U. 1040ez tax table S. 1040ez tax table residents for the entire tax year. 1040ez tax table The name, address, and identification number of each spouse. 1040ez tax table (If one spouse died, include the name and address of the person making the choice for the deceased spouse. 1040ez tax table ) Amended return. 1040ez tax table   You generally make this choice when you file your joint return. 1040ez tax table However, you can also make the choice by filing a joint amended return on Form 1040X. 1040ez tax table Attach Form 1040, Form 1040A, or Form 1040EZ and print “Amended” across the top of the corrected return. 1040ez tax table If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. 1040ez tax table   You generally must file the amended joint return within 3 years from the date you filed your original U. 1040ez tax table S. 1040ez tax table income tax return or 2 years from the date you paid your income tax for that year, whichever is later. 1040ez tax table Suspending the Choice The choice to be treated as a resident alien is suspended for any tax year (after the tax year you made the choice) if neither spouse is a U. 1040ez tax table S. 1040ez tax table citizen or resident alien at any time during the tax year. 1040ez tax table This means each spouse must file a separate return as a nonresident alien for that year if either meets the filing requirements for nonresident aliens discussed in chapter 7. 1040ez tax table Example. 1040ez tax table Dick Brown was a resident alien on December 31, 2010, and married to Judy, a nonresident alien. 1040ez tax table They chose to treat Judy as a resident alien and filed joint 2010 and 2011 income tax returns. 1040ez tax table On January 10, 2012, Dick became a nonresident alien. 1040ez tax table Judy had remained a nonresident alien throughout the period. 1040ez tax table Dick and Judy could have filed joint or separate returns for 2012 because Dick was a resident alien for part of that year. 1040ez tax table However, because neither Dick nor Judy is a resident alien at any time during 2013, their choice is suspended for that year. 1040ez tax table If either meets the filing requirements for nonresident aliens discussed in chapter 7, they must file separate returns as nonresident aliens for 2013. 1040ez tax table If Dick becomes a resident alien again in 2014, their choice is no longer suspended. 1040ez tax table Ending the Choice Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier under Suspending the Choice ) or ended in one of the following ways. 1040ez tax table If the choice is ended in one of the following ways, neither spouse can make this choice in any later tax year. 1040ez tax table Revocation. 1040ez tax table Either spouse can revoke the choice for any tax year, provided he or she makes the revocation by the due date for filing the tax return for that tax year. 1040ez tax table The spouse who revokes the choice must attach a signed statement declaring that the choice is being revoked. 1040ez tax table The statement must include the name, address, and identification number of each spouse. 1040ez tax table (If one spouse dies, include the name and address of the person who is revoking the choice for the deceased spouse. 1040ez tax table ) The statement also must include a list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income. 1040ez tax table File the statement as follows. 1040ez tax table If the spouse revoking the choice must file a return, attach the statement to the return for the first year the revocation applies. 1040ez tax table If the spouse revoking the choice does not have to file a return, but does file a return (for example, to obtain a refund), attach the statement to the return. 1040ez tax table If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where you filed the last joint return. 1040ez tax table Death. 1040ez tax table The death of either spouse ends the choice, beginning with the first tax year following the year the spouse died. 1040ez tax table However, if the surviving spouse is a U. 1040ez tax table S. 1040ez tax table citizen or resident and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used. 1040ez tax table If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died. 1040ez tax table Legal separation. 1040ez tax table A legal separation under a decree of divorce or separate maintenance ends the choice as of the beginning of the tax year in which the legal separation occurs. 1040ez tax table Inadequate records. 1040ez tax table The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records. 1040ez tax table Aliens From American Samoa or Puerto Rico If you are a nonresident alien in the United States and a bona fide resident of American Samoa or Puerto Rico during the entire tax year, you are taxed, with certain exceptions, according to the rules for resident aliens of the United States. 1040ez tax table For more information, see Bona Fide Residents of American Samoa or Puerto Rico in chapter 5. 1040ez tax table If you are a nonresident alien from American Samoa or Puerto Rico who does not qualify as a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you are taxed as a nonresident alien. 1040ez tax table Resident aliens who formerly were bona fide residents of American Samoa or Puerto Rico are taxed according to the rules for resident aliens. 1040ez tax table Prev  Up  Next   Home   More Online Publications