Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

1040nr Instructions

E File 2012 ReturnsHow Do You Do An Amendment To Your Tax ReturnFile 2006 Taxes For FreeIrs 1040xBest Tax SoftwareHow To File 2012 Taxes OnlineFiling Taxes With Unemployment Income 2011Irs Forms 2010Free Online Tax ExtensionAmended Tax FormHow Long Do I Have To File An Amended Tax ReturnForm1040ezMilitary Filing State TaxesFree 2010 Tax FormsH&r Block Tax FilingWhat Do I Need To File My 2012 Tax ReturnHandrblock2011 Tax Forms 1040ezCan I Efile A 2012 Tax ReturnFree Online Federal Tax Filing 2012File Federal And State Taxes Online For FreeFree Tax Filing 2013 TurbotaxTaxes For 2011Where Can I File State And Federal Taxes For FreeI Need To Print A Free 1040x FormIrs 1040 Ez Form 20122012 Income Tax FormCan You File State Taxes For Free2014 Ez Tax Form1040ez DownloadFile Taxes For 2010 Online Free1040 Ez Tax FormHow To File 1040ez Online2011 Tax Forms 1040ezTax Form For 2012File Back Tax Returns OnlineIncome Tax Return 1040ezHow Do I Efile My State TaxesHow To File A Tax AmendmentTaxslayer Coupon Code

1040nr Instructions

1040nr instructions 2. 1040nr instructions   Depreciation of Rental Property Table of Contents The BasicsWhat Rental Property Can Be Depreciated? When Does Depreciation Begin and End? Depreciation Methods Basis of Depreciable Property Claiming the Special Depreciation Allowance MACRS DepreciationDepreciation Systems Property Classes Under GDS Recovery Periods Under GDS Conventions Figuring Your Depreciation Deduction Figuring MACRS Depreciation Under ADS Claiming the Correct Amount of Depreciation You recover the cost of income producing property through yearly tax deductions. 1040nr instructions You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. 1040nr instructions Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. 1040nr instructions You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense. 1040nr instructions You can deduct depreciation only on the part of your property used for rental purposes. 1040nr instructions Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. 1040nr instructions You may have to use Form 4562 to figure and report your depreciation. 1040nr instructions See Which Forms To Use in chapter 3. 1040nr instructions Also see Publication 946. 1040nr instructions Section 179 deduction. 1040nr instructions   The section 179 deduction is a means of recovering part or all of the cost of certain qualifying property in the year you place the property in service. 1040nr instructions This deduction is not allowed for property used in connection with residential rental property. 1040nr instructions See chapter 2 of Publication 946. 1040nr instructions Alternative minimum tax (AMT). 1040nr instructions   If you use accelerated depreciation, you may be subject to the AMT. 1040nr instructions Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). 1040nr instructions   The prescribed depreciation methods for rental real estate are not accelerated, so the depreciation deduction is not adjusted for the AMT. 1040nr instructions However, accelerated methods are generally used for other property connected with rental activities (for example, appliances and wall-to-wall carpeting). 1040nr instructions   To find out if you are subject to the AMT, see the Instructions for Form 6251. 1040nr instructions The Basics The following section discusses the information you will need to have about the rental property and the decisions to be made before figuring your depreciation deduction. 1040nr instructions What Rental Property Can Be Depreciated? You can depreciate your property if it meets all the following requirements. 1040nr instructions You own the property. 1040nr instructions You use the property in your business or income-producing activity (such as rental property). 1040nr instructions The property has a determinable useful life. 1040nr instructions The property is expected to last more than one year. 1040nr instructions Property you own. 1040nr instructions   To claim depreciation, you usually must be the owner of the property. 1040nr instructions You are considered as owning property even if it is subject to a debt. 1040nr instructions Rented property. 1040nr instructions   Generally, if you pay rent for property, you cannot depreciate that property. 1040nr instructions Usually, only the owner can depreciate it. 1040nr instructions However, if you make permanent improvements to leased property, you may be able to depreciate the improvements. 1040nr instructions See Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 1040nr instructions Cooperative apartments. 1040nr instructions   If you are a tenant-stockholder in a cooperative housing corporation and rent your cooperative apartment to others, you can deduct depreciation on your stock in the corporation. 1040nr instructions See chapter 4, Special Situations. 1040nr instructions Property having a determinable useful life. 1040nr instructions   To be depreciable, your property must have a determinable useful life. 1040nr instructions This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 1040nr instructions What Rental Property Cannot Be Depreciated? Certain property cannot be depreciated. 1040nr instructions This includes land and certain excepted property. 1040nr instructions Land. 1040nr instructions   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. 1040nr instructions But if it does, the loss is accounted for upon disposition. 1040nr instructions The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. 1040nr instructions   Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. 1040nr instructions These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. 1040nr instructions Example. 1040nr instructions You built a new house to use as a rental and paid for grading, clearing, seeding, and planting bushes and trees. 1040nr instructions Some of the bushes and trees were planted right next to the house, while others were planted around the outer border of the lot. 1040nr instructions If you replace the house, you would have to destroy the bushes and trees right next to it. 1040nr instructions These bushes and trees are closely associated with the house, so they have a determinable useful life. 1040nr instructions Therefore, you can depreciate them. 1040nr instructions Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. 1040nr instructions Excepted property. 1040nr instructions   Even if the property meets all the requirements listed earlier under What Rental Property Can Be Depreciated , you cannot depreciate the following property. 1040nr instructions Property placed in service and disposed of (or taken out of business use) in the same year. 1040nr instructions Equipment used to build capital improvements. 1040nr instructions You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. 1040nr instructions For more information, see chapter 1 of Publication 946. 1040nr instructions When Does Depreciation Begin and End? You begin to depreciate your rental property when you place it in service for the production of income. 1040nr instructions You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first. 1040nr instructions Placed in Service You place property in service in a rental activity when it is ready and available for a specific use in that activity. 1040nr instructions Even if you are not using the property, it is in service when it is ready and available for its specific use. 1040nr instructions Example 1. 1040nr instructions On November 22 of last year, you purchased a dishwasher for your rental property. 1040nr instructions The appliance was delivered on December 7, but was not installed and ready for use until January 3 of this year. 1040nr instructions Because the dishwasher was not ready for use last year, it is not considered placed in service until this year. 1040nr instructions If the appliance had been installed and ready for use when it was delivered in December of last year, it would have been considered placed in service in December, even if it was not actually used until this year. 1040nr instructions Example 2. 1040nr instructions On April 6, you purchased a house to use as residential rental property. 1040nr instructions You made extensive repairs to the house and had it ready for rent on July 5. 1040nr instructions You began to advertise the house for rent in July and actually rented it beginning September 1. 1040nr instructions The house is considered placed in service in July when it was ready and available for rent. 1040nr instructions You can begin to depreciate the house in July. 1040nr instructions Example 3. 1040nr instructions You moved from your home in July. 1040nr instructions During August and September you made several repairs to the house. 1040nr instructions On October 1, you listed the property for rent with a real estate company, which rented it on December 1. 1040nr instructions The property is considered placed in service on October 1, the date when it was available for rent. 1040nr instructions Conversion to business use. 1040nr instructions   If you place property in service in a personal activity, you cannot claim depreciation. 1040nr instructions However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. 1040nr instructions You place the property in service for business or income-producing use on the date of the change. 1040nr instructions Example. 1040nr instructions You bought a house and used it as your personal home several years before you converted it to rental property. 1040nr instructions Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. 1040nr instructions You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income. 1040nr instructions Idle Property Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). 1040nr instructions For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent. 1040nr instructions Cost or Other Basis Fully Recovered You must stop depreciating property when the total of your yearly depreciation deductions equals your cost or other basis of your property. 1040nr instructions For this purpose, your yearly depreciation deductions include any depreciation that you were allowed to claim, even if you did not claim it. 1040nr instructions See Basis of Depreciable Property , later. 1040nr instructions Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. 1040nr instructions You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. 1040nr instructions You sell or exchange the property. 1040nr instructions You convert the property to personal use. 1040nr instructions You abandon the property. 1040nr instructions The property is destroyed. 1040nr instructions Depreciation Methods Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986. 1040nr instructions If you placed rental property in service before 1987, you are using one of the following methods. 1040nr instructions ACRS (Accelerated Cost Recovery System) for property placed in service after 1980 but before 1987. 1040nr instructions Straight line or declining balance method over the useful life of property placed in service before 1981. 1040nr instructions See MACRS Depreciation , later, for more information. 1040nr instructions Rental property placed in service before 2013. 1040nr instructions   Continue to use the same method of figuring depreciation that you used in the past. 1040nr instructions Use of real property changed. 1040nr instructions   Generally, you must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. 1040nr instructions This includes your residence that you changed to rental use. 1040nr instructions See Property Owned or Used in 1986 in Publication 946, chapter 1, for those situations in which MACRS is not allowed. 1040nr instructions Improvements made after 1986. 1040nr instructions   Treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. 1040nr instructions As a result, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. 1040nr instructions For more information about improvements, see Additions or improvements to property , later in this chapter under Recovery Periods Under GDS. 1040nr instructions This publication discusses MACRS depreciation only. 1040nr instructions If you need information about depreciating property placed in service before 1987, see Publication 534. 1040nr instructions Basis of Depreciable Property The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. 1040nr instructions This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity. 1040nr instructions If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property. 1040nr instructions Basis and adjusted basis are explained in the following discussions. 1040nr instructions If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. 1040nr instructions See Basis of Property Changed to Rental Use in chapter 4. 1040nr instructions Cost Basis The basis of property you buy is usually its cost. 1040nr instructions The cost is the amount you pay for it in cash, in debt obligation, in other property, or in services. 1040nr instructions Your cost also includes amounts you pay for: Sales tax charged on the purchase (but see Exception next), Freight charges to obtain the property, and Installation and testing charges. 1040nr instructions Exception. 1040nr instructions   If you deducted state and local general sales taxes as an itemized deduction on Schedule A (Form 1040), do not include those sales taxes as part of your cost basis. 1040nr instructions Such taxes were deductible before 1987 and after 2003. 1040nr instructions Loans with low or no interest. 1040nr instructions   If you buy property on any time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, less the amount considered to be unstated interest. 1040nr instructions See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. 1040nr instructions Real property. 1040nr instructions   If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. 1040nr instructions Real estate taxes. 1040nr instructions   If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller does not reimburse you, the taxes you pay are treated as part of your basis in the property. 1040nr instructions You cannot deduct them as taxes paid. 1040nr instructions   If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. 1040nr instructions Do not include that amount in your basis in the property. 1040nr instructions Settlement fees and other costs. 1040nr instructions   The following settlement fees and closing costs for buying the property are part of your basis in the property. 1040nr instructions Abstract fees. 1040nr instructions Charges for installing utility services. 1040nr instructions Legal fees. 1040nr instructions Recording fees. 1040nr instructions Surveys. 1040nr instructions Transfer taxes. 1040nr instructions Title insurance. 1040nr instructions Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. 1040nr instructions   The following are settlement fees and closing costs you cannot include in your basis in the property. 1040nr instructions Fire insurance premiums. 1040nr instructions Rent or other charges relating to occupancy of the property before closing. 1040nr instructions Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Mortgage insurance premiums, Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. 1040nr instructions   Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 1040nr instructions Assumption of a mortgage. 1040nr instructions   If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. 1040nr instructions Example. 1040nr instructions You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. 1040nr instructions Your basis is $300,000. 1040nr instructions Separating cost of land and buildings. 1040nr instructions   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. 1040nr instructions The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. 1040nr instructions   If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes. 1040nr instructions Example. 1040nr instructions You buy a house and land for $200,000. 1040nr instructions The purchase contract does not specify how much of the purchase price is for the house and how much is for the land. 1040nr instructions The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land. 1040nr instructions You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land. 1040nr instructions Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000). 1040nr instructions Basis Other Than Cost You cannot use cost as a basis for property that you received: In return for services you performed; In an exchange for other property; As a gift; From your spouse, or from your former spouse as the result of a divorce; or As an inheritance. 1040nr instructions If you received property in one of these ways, see Publication 551 for information on how to figure your basis. 1040nr instructions Adjusted Basis To figure your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service for business or the production of income. 1040nr instructions The result of these adjustments to the basis is the adjusted basis. 1040nr instructions Increases to basis. 1040nr instructions   You must increase the basis of any property by the cost of all items properly added to a capital account. 1040nr instructions These include the following. 1040nr instructions The cost of any additions or improvements made before placing your property into service as a rental that have a useful life of more than 1 year. 1040nr instructions Amounts spent after a casualty to restore the damaged property. 1040nr instructions The cost of extending utility service lines to the property. 1040nr instructions Legal fees, such as the cost of defending and perfecting title, or settling zoning issues. 1040nr instructions Additions or improvements. 1040nr instructions   Add to the basis of your property the amount an addition or improvement actually cost you, including any amount you borrowed to make the addition or improvement. 1040nr instructions This includes all direct costs, such as material and labor, but does not include your own labor. 1040nr instructions It also includes all expenses related to the addition or improvement. 1040nr instructions   For example, if you had an architect draw up plans for remodeling your property, the architect's fee is a part of the cost of the remodeling. 1040nr instructions Or, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. 1040nr instructions   Keep separate accounts for depreciable additions or improvements made after you place the property in service in your rental activity. 1040nr instructions For information on depreciating additions or improvements, see Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 1040nr instructions    The cost of landscaping improvements is usually treated as an addition to the basis of the land, which is not depreciable. 1040nr instructions However, see What Rental Property Cannot Be Depreciated, earlier. 1040nr instructions Assessments for local improvements. 1040nr instructions   Assessments for items which tend to increase the value of property, such as streets and sidewalks, must be added to the basis of the property. 1040nr instructions For example, if your city installs curbing on the street in front of your house, and assesses you and your neighbors for its cost, you must add the assessment to the basis of your property. 1040nr instructions Also add the cost of legal fees paid to obtain a decrease in an assessment levied against property to pay for local improvements. 1040nr instructions You cannot deduct these items as taxes or depreciate them. 1040nr instructions    However, you can deduct as taxes, charges or assessments for maintenance, repairs, or interest charges related to the improvements. 1040nr instructions Do not add them to your basis in the property. 1040nr instructions Deducting vs. 1040nr instructions capitalizing costs. 1040nr instructions   Do not add to your basis costs you can deduct as current expenses. 1040nr instructions However, there are certain costs you can choose either to deduct or to capitalize. 1040nr instructions If you capitalize these costs, include them in your basis. 1040nr instructions If you deduct them, do not include them in your basis. 1040nr instructions   The costs you may choose to deduct or capitalize include carrying charges, such as interest and taxes, that you must pay to own property. 1040nr instructions   For more information about deducting or capitalizing costs and how to make the election, see Carrying Charges in Publication 535, chapter 7. 1040nr instructions Decreases to basis. 1040nr instructions   You must decrease the basis of your property by any items that represent a return of your cost. 1040nr instructions These include the following. 1040nr instructions Insurance or other payment you receive as the result of a casualty or theft loss. 1040nr instructions Casualty loss not covered by insurance for which you took a deduction. 1040nr instructions Amount(s) you receive for granting an easement. 1040nr instructions Residential energy credits you were allowed before 1986, or after 2005, if you added the cost of the energy items to the basis of your home. 1040nr instructions Exclusion from income of subsidies for energy conservation measures. 1040nr instructions Special depreciation allowance claimed on qualified property. 1040nr instructions Depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. 1040nr instructions If you did not deduct enough or deducted too much in any year, see Depreciation under Decreases to Basis in Publication 551. 1040nr instructions   If your rental property was previously used as your main home, you must also decrease the basis by the following. 1040nr instructions Gain you postponed from the sale of your main home before May 7, 1997, if the replacement home was converted to your rental property. 1040nr instructions District of Columbia first-time homebuyer credit allowed on the purchase of your main home after August 4, 1997 and before January 1, 2012. 1040nr instructions Amount of qualified principal residence indebtedness discharged on or after January 1, 2007. 1040nr instructions Claiming the Special Depreciation Allowance For 2013, your residential rental property may qualify for a special depreciation allowance. 1040nr instructions This allowance is figured before you figure your regular depreciation deduction. 1040nr instructions See Publication 946, chapter 3, for details. 1040nr instructions Also see the Instructions for Form 4562, Line 14. 1040nr instructions If you qualify for, but choose not to take, a special depreciation allowance, you must attach a statement to your return. 1040nr instructions The details of this election are in Publication 946, chapter 3, and the Instructions for Form 4562, Line 14. 1040nr instructions MACRS Depreciation Most business and investment property placed in service after 1986 is depreciated using MACRS. 1040nr instructions This section explains how to determine which MACRS depreciation system applies to your property. 1040nr instructions It also discusses other information you need to know before you can figure depreciation under MACRS. 1040nr instructions This information includes the property's: Recovery class, Applicable recovery period, Convention, Placed-in-service date, Basis for depreciation, and Depreciation method. 1040nr instructions Depreciation Systems MACRS consists of two systems that determine how you depreciate your property—the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). 1040nr instructions You must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. 1040nr instructions Excluded Property You cannot use MACRS for certain personal property (such as furniture or appliances) placed in service in your rental property in 2013 if it had been previously placed in service before 1987 when MACRS became effective. 1040nr instructions In most cases, personal property is excluded from MACRS if you (or a person related to you) owned or used it in 1986 or if your tenant is a person (or someone related to the person) who owned or used it in 1986. 1040nr instructions However, the property is not excluded if your 2013 deduction under MACRS (using a half-year convention) is less than the deduction you would have under ACRS. 1040nr instructions For more information, see What Method Can You Use To Depreciate Your Property? in Publication 946, chapter 1. 1040nr instructions Electing ADS If you choose, you can use the ADS method for most property. 1040nr instructions Under ADS, you use the straight line method of depreciation. 1040nr instructions The election of ADS for one item in a class of property generally applies to all property in that class that is placed in service during the tax year of the election. 1040nr instructions However, the election applies on a property-by-property basis for residential rental property and nonresidential real property. 1040nr instructions If you choose to use ADS for your residential rental property, the election must be made in the first year the property is placed in service. 1040nr instructions Once you make this election, you can never revoke it. 1040nr instructions For property placed in service during 2013, you make the election to use ADS by entering the depreciation on Form 4562, Part III, Section C, line 20c. 1040nr instructions Property Classes Under GDS Each item of property that can be depreciated under MACRS is assigned to a property class, determined by its class life. 1040nr instructions The property class generally determines the depreciation method, recovery period, and convention. 1040nr instructions The property classes under GDS are: 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, Nonresidential real property, and Residential rental property. 1040nr instructions Under MACRS, property that you placed in service during 2013 in your rental activities generally falls into one of the following classes. 1040nr instructions 5-year property. 1040nr instructions This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc. 1040nr instructions ), automobiles, and light trucks. 1040nr instructions This class also includes appliances, carpeting, furniture, etc. 1040nr instructions , used in a residential rental real estate activity. 1040nr instructions Depreciation on automobiles, other property used for transportation, computers and related peripheral equipment, and property of a type generally used for entertainment, recreation, or amusement is limited. 1040nr instructions See chapter 5 of Publication 946. 1040nr instructions 7-year property. 1040nr instructions This class includes office furniture and equipment (desks, file cabinets, etc. 1040nr instructions ). 1040nr instructions This class also includes any property that does not have a class life and that has not been designated by law as being in any other class. 1040nr instructions 15-year property. 1040nr instructions This class includes roads, fences, and shrubbery (if depreciable). 1040nr instructions Residential rental property. 1040nr instructions This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. 1040nr instructions It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. 1040nr instructions If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. 1040nr instructions The other property classes do not generally apply to property used in rental activities. 1040nr instructions These classes are not discussed in this publication. 1040nr instructions See Publication 946 for more information. 1040nr instructions Recovery Periods Under GDS The recovery period of property is the number of years over which you recover its cost or other basis. 1040nr instructions The recovery periods are generally longer under ADS than GDS. 1040nr instructions The recovery period of property depends on its property class. 1040nr instructions Under GDS, the recovery period of an asset is generally the same as its property class. 1040nr instructions Class lives and recovery periods for most assets are listed in Appendix B of Publication 946. 1040nr instructions See Table 2-1 for recovery periods of property commonly used in residential rental activities. 1040nr instructions Qualified Indian reservation property. 1040nr instructions   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations. 1040nr instructions For more information, see chapter 4 of Publication 946. 1040nr instructions Additions or improvements to property. 1040nr instructions   Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes. 1040nr instructions   The property class and recovery period of the addition or improvement is the one that would apply to the original property if you had placed it in service at the same time as the addition or improvement. 1040nr instructions   The recovery period for an addition or improvement to property begins on the later of: The date the addition or improvement is placed in service, or The date the property to which the addition or improvement was made is placed in service. 1040nr instructions Example. 1040nr instructions You own a residential rental house that you have been renting since 1986 and depreciating under ACRS. 1040nr instructions You built an addition onto the house and placed it in service in 2013. 1040nr instructions You must use MACRS for the addition. 1040nr instructions Under GDS, the addition is depreciated as residential rental property over 27. 1040nr instructions 5 years. 1040nr instructions Table 2-1. 1040nr instructions MACRS Recovery Periods for Property Used in Rental Activities   MACRS Recovery Period   Type of Property General Depreciation System Alternative Depreciation System   Computers and their peripheral equipment 5 years 5 years   Office machinery, such as: Typewriters Calculators Copiers 5 years 6 years   Automobiles 5 years 5 years   Light trucks 5 years 5 years   Appliances, such as: Stoves Refrigerators 5 years 9 years   Carpets 5 years 9 years   Furniture used in rental property 5 years 9 years   Office furniture and equipment, such as: Desks Files 7 years 10 years   Any property that does not have a class life and that has not been designated by law as being in any other class 7 years 12 years   Roads 15 years 20 years   Shrubbery 15 years 20 years   Fences 15 years 20 years   Residential rental property (buildings or structures) and structural components such as furnaces, waterpipes, venting, etc. 1040nr instructions 27. 1040nr instructions 5 years 40 years   Additions and improvements, such as a new roof The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. 1040nr instructions   Conventions A convention is a method established under MACRS to set the beginning and end of the recovery period. 1040nr instructions The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. 1040nr instructions Mid-month convention. 1040nr instructions    A mid-month convention is used for all residential rental property and nonresidential real property. 1040nr instructions Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month. 1040nr instructions Mid-quarter convention. 1040nr instructions   A mid-quarter convention must be used if the mid-month convention does not apply and the total depreciable basis of MACRS property placed in service in the last 3 months of a tax year (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) is more than 40% of the total basis of all such property you place in service during the year. 1040nr instructions   Under this convention, you treat all property placed in service, or disposed of, during any quarter of a tax year as placed in service, or disposed of, at the midpoint of the quarter. 1040nr instructions Example. 1040nr instructions During the tax year, Tom Martin purchased the following items to use in his rental property. 1040nr instructions He elects not to claim the special depreciation allowance discussed earlier. 1040nr instructions A dishwasher for $400 that he placed in service in January. 1040nr instructions Used furniture for $100 that he placed in service in September. 1040nr instructions A refrigerator for $800 that he placed in service in October. 1040nr instructions Tom uses the calendar year as his tax year. 1040nr instructions The total basis of all property placed in service that year is $1,300. 1040nr instructions The $800 basis of the refrigerator placed in service during the last 3 months of his tax year exceeds $520 (40% × $1,300). 1040nr instructions Tom must use the mid-quarter convention instead of the half-year convention for all three items. 1040nr instructions Half-year convention. 1040nr instructions    The half-year convention is used if neither the mid-quarter convention nor the mid-month convention applies. 1040nr instructions Under this convention, you treat all property placed in service, or disposed of, during a tax year as placed in service, or disposed of, at the midpoint of that tax year. 1040nr instructions   If this convention applies, you deduct a half year of depreciation for the first year and the last year that you depreciate the property. 1040nr instructions You deduct a full year of depreciation for any other year during the recovery period. 1040nr instructions Figuring Your Depreciation Deduction You can figure your MACRS depreciation deduction in one of two ways. 1040nr instructions The deduction is substantially the same both ways. 1040nr instructions You can either: Actually compute the deduction using the depreciation method and convention that apply over the recovery period of the property, or Use the percentage from the MACRS percentage tables. 1040nr instructions In this publication we will use the percentage tables. 1040nr instructions For instructions on how to compute the deduction, see chapter 4 of Publication 946. 1040nr instructions Residential rental property. 1040nr instructions   You must use the straight line method and a mid-month convention for residential rental property. 1040nr instructions In the first year that you claim depreciation for residential rental property, you can claim depreciation only for the number of months the property is in use, and you must use the mid-month convention (explained under Conventions , earlier). 1040nr instructions 5-, 7-, or 15-year property. 1040nr instructions   For property in the 5- or 7-year class, use the 200% declining balance method and a half-year convention. 1040nr instructions However, in limited cases you must use the mid-quarter convention, if it applies. 1040nr instructions For property in the 15-year class, use the 150% declining balance method and a half-year convention. 1040nr instructions   You can also choose to use the 150% declining balance method for property in the 5- or 7-year class. 1040nr instructions The choice to use the 150% method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 1040nr instructions You make this election on Form 4562. 1040nr instructions In Part III, column (f), enter “150 DB. 1040nr instructions ” Once you make this election, you cannot change to another method. 1040nr instructions   If you use either the 200% or 150% declining balance method, you figure your deduction using the straight line method in the first tax year that the straight line method gives you an equal or larger deduction. 1040nr instructions   You can also choose to use the straight line method with a half-year or mid-quarter convention for 5-, 7-, or 15-year property. 1040nr instructions The choice to use the straight line method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 1040nr instructions You elect the straight line method on Form 4562. 1040nr instructions In Part III, column (f), enter “S/L. 1040nr instructions ” Once you make this election, you cannot change to another method. 1040nr instructions MACRS Percentage Tables You can use the percentages in Table 2-2, earlier, to compute annual depreciation under MACRS. 1040nr instructions The tables show the percentages for the first few years or until the change to the straight line method is made. 1040nr instructions See Appendix A of Publication 946 for complete tables. 1040nr instructions The percentages in Tables 2-2a, 2-2b, and 2-2c make the change from declining balance to straight line in the year that straight line will give a larger deduction. 1040nr instructions If you elect to use the straight line method for 5-, 7-, or 15-year property, or the 150% declining balance method for 5- or 7-year property, use the tables in Appendix A of Publication 946. 1040nr instructions How to use the percentage tables. 1040nr instructions   You must apply the table rates to your property's unadjusted basis (defined below) each year of the recovery period. 1040nr instructions   Once you begin using a percentage table to figure depreciation, you must continue to use it for the entire recovery period unless there is an adjustment to the basis of your property for a reason other than: Depreciation allowed or allowable, or An addition or improvement that is depreciated as a separate item of property. 1040nr instructions   If there is an adjustment for any reason other than (1) or (2), for example, because of a deductible casualty loss, you can no longer use the table. 1040nr instructions For the year of the adjustment and for the remaining recovery period, figure depreciation using the property's adjusted basis at the end of the year and the appropriate depreciation method, as explained earlier under Figuring Your Depreciation Deduction . 1040nr instructions See Figuring the Deduction Without Using the Tables in Publication 946, chapter 4. 1040nr instructions Unadjusted basis. 1040nr instructions   This is the same basis you would use to figure gain on a sale (see Basis of Depreciable Property , earlier), but without reducing your original basis by any MACRS depreciation taken in earlier years. 1040nr instructions   However, you do reduce your original basis by other amounts claimed on the property, including: Any amortization, Any section 179 deduction, and Any special depreciation allowance. 1040nr instructions For more information, see chapter 4 of Publication 946. 1040nr instructions Please click here for the text description of the image. 1040nr instructions Table 2-2 Tables 2-2a, 2-2b, and 2-2c. 1040nr instructions   The percentages in these tables take into account the half-year and mid-quarter conventions. 1040nr instructions Use Table 2-2a for 5-year property, Table 2-2b for 7-year property, and Table 2-2c for 15-year property. 1040nr instructions Use the percentage in the second column (half-year convention) unless you are required to use the mid-quarter convention (explained earlier). 1040nr instructions If you must use the mid-quarter convention, use the column that corresponds to the calendar year quarter in which you placed the property in service. 1040nr instructions Example 1. 1040nr instructions You purchased a stove and refrigerator and placed them in service in June. 1040nr instructions Your basis in the stove is $600 and your basis in the refrigerator is $1,000. 1040nr instructions Both are 5-year property. 1040nr instructions Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. 1040nr instructions For that year your depreciation deduction is $120 ($600 × . 1040nr instructions 20) for the stove and $200 ($1,000 × . 1040nr instructions 20) for the refrigerator. 1040nr instructions For Year 2, the depreciation percentage is 32%. 1040nr instructions That year's depreciation deduction will be $192 ($600 × . 1040nr instructions 32) for the stove and $320 ($1,000 × . 1040nr instructions 32) for the refrigerator. 1040nr instructions Example 2. 1040nr instructions Assume the same facts as in Example 1, except you buy the refrigerator in October instead of June. 1040nr instructions Since the refrigerator was placed in service in the last 3 months of the tax year, and its basis ($1,000) is more than 40% of the total basis of all property placed in service during the year ($1,600 × . 1040nr instructions 40 = $640), you are required to use the mid-quarter convention to figure depreciation on both the stove and refrigerator. 1040nr instructions Because you placed the refrigerator in service in October, you use the fourth quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 5%. 1040nr instructions Your depreciation deduction for the refrigerator is $50 ($1,000 x . 1040nr instructions 05). 1040nr instructions Because you placed the stove in service in June, you use the second quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 25%. 1040nr instructions For that year, your depreciation deduction for the stove is $150 ($600 x . 1040nr instructions 25). 1040nr instructions Table 2-2d. 1040nr instructions    Use this table when you are using the GDS 27. 1040nr instructions 5 year option for residential rental property. 1040nr instructions Find the row for the month that you placed the property in service. 1040nr instructions Use the percentages listed for that month to figure your depreciation deduction. 1040nr instructions The mid-month convention is taken into account in the percentages shown in the table. 1040nr instructions Continue to use the same row (month) under the column for the appropriate year. 1040nr instructions Example. 1040nr instructions You purchased a single family rental house for $185,000 and placed it in service on February 8. 1040nr instructions The sales contract showed that the building cost $160,000 and the land cost $25,000. 1040nr instructions Your basis for depreciation is its original cost, $160,000. 1040nr instructions This is the first year of service for your residential rental property and you decide to use GDS which has a recovery period of 27. 1040nr instructions 5 years. 1040nr instructions Using Table 2-2d, you find that the percentage for property placed in service in February of Year 1 is 3. 1040nr instructions 182%. 1040nr instructions That year's depreciation deduction is $5,091 ($160,000 x . 1040nr instructions 03182). 1040nr instructions Figuring MACRS Depreciation Under ADS Table 2–1, earlier, shows the ADS recovery periods for property used in rental activities. 1040nr instructions See Appendix B in Publication 946 for other property. 1040nr instructions If your property is not listed in Appendix B, it is considered to have no class life. 1040nr instructions Under ADS, personal property with no class life is depreciated using a recovery period of 12 years. 1040nr instructions Use the mid-month convention for residential rental property and nonresidential real property. 1040nr instructions For all other property, use the half-year or mid-quarter convention, as appropriate. 1040nr instructions See Publication 946 for ADS depreciation tables. 1040nr instructions Claiming the Correct Amount of Depreciation You should claim the correct amount of depreciation each tax year. 1040nr instructions If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. 1040nr instructions For more information, see Depreciation under Decreases to Basis in Publication 551. 1040nr instructions If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. 1040nr instructions S. 1040nr instructions Individual Income Tax Return. 1040nr instructions If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. 1040nr instructions Filing an amended return. 1040nr instructions   You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. 1040nr instructions You claimed the incorrect amount because of a mathematical error made in any year. 1040nr instructions You claimed the incorrect amount because of a posting error made in any year. 1040nr instructions You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. 1040nr instructions You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. 1040nr instructions   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return for the property used in your rental activity. 1040nr instructions This also occurs when you use the same impermissible method of determining depreciation (for example, using the wrong MACRS recovery period) in two or more consecutively filed tax returns. 1040nr instructions   If an amended return is allowed, you must file it by the later of the following dates. 1040nr instructions 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. 1040nr instructions A return filed before an unextended due date is considered filed on that due date. 1040nr instructions 2 years from the time you paid your tax for that year. 1040nr instructions Changing your accounting method. 1040nr instructions   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. 1040nr instructions In some instances, that consent is automatic. 1040nr instructions For more information, see Changing Your Accounting Method in Publication 946,  chapter 1. 1040nr instructions Prev  Up  Next   Home   More Online Publications
Español

Jobs, Education, and Volunteerism

Find government information on education, training, finding a job, public service and volunteerism, workplace issues and more.

  • Education and Training
    Primary, secondary, and higher education; adult, vocational, and special education; financial aid; job training; literacy resources...
  • Finding a Job
    Choosing a career, building a resume, applying for jobs, becoming self-employed, government jobs...
  • Government Jobs
    Federal, state, local, military, and volunteer opportunities available from the U.S. government...
  • Public Service and Volunteer Opportunities
    Learn more about government and public service; donate goods and money; give blood; volunteer your time...
  • Workplace Issues
    Family and medical leave, labor relations, the minimum wage, workers' compensation, workplace safety...
 

The 1040nr Instructions

1040nr instructions 21. 1040nr instructions   Medical and Dental Expenses Table of Contents What's New Introduction Useful Items - You may want to see: What Are Medical Expenses? What Expenses Can You Include This Year?Community property states. 1040nr instructions How Much of the Expenses Can You Deduct? Whose Medical Expenses Can You Include?Yourself Spouse Dependent Decedent What Medical Expenses Are Includible?Insurance Premiums Meals and Lodging Transportation Disabled Dependent Care Expenses How Do You Treat Reimbursements?Insurance Reimbursement Damages for Personal Injuries How Do You Figure and Report the Deduction on Your Tax Return?What Tax Form Do You Use? Impairment-Related Work Expenses Health Insurance Costs for Self-Employed Persons What's New Medical and dental expenses. 1040nr instructions  Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (AGI) (7. 1040nr instructions 5% if either you or your spouse is age 65 or older). 1040nr instructions Standard mileage rate. 1040nr instructions  The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 24 cents per mile. 1040nr instructions See Transportation under What Medical Expenses Are Includible. 1040nr instructions Introduction This chapter will help you determine the following. 1040nr instructions What medical expenses are. 1040nr instructions What expenses you can include this year. 1040nr instructions How much of the expenses you can deduct. 1040nr instructions Whose medical expenses you can include. 1040nr instructions What medical expenses are includible. 1040nr instructions How to treat reimbursements. 1040nr instructions How to report the deduction on your tax return. 1040nr instructions How to report impairment-related work expenses. 1040nr instructions How to report health insurance costs if you are self-employed. 1040nr instructions Useful Items - You may want to see: Publications 502 Medical and Dental Expenses 969 Health Savings Accounts and Other Tax-Favored Health Plans Form (and Instructions) Schedule A (Form 1040) Itemized Deductions What Are Medical Expenses? Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. 1040nr instructions These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. 1040nr instructions They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. 1040nr instructions Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. 1040nr instructions They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation. 1040nr instructions Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. 1040nr instructions Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract. 1040nr instructions What Expenses Can You Include This Year? You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. 1040nr instructions If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. 1040nr instructions If you use a “pay-by-phone” or “online” account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. 1040nr instructions If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged. 1040nr instructions Separate returns. 1040nr instructions   If you and your spouse live in a noncommunity property state and file separate returns, each of you can include only the medical expenses each actually paid. 1040nr instructions Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise. 1040nr instructions Community property states. 1040nr instructions   If you and your spouse live in a community property state and file separate returns, or are registered domestic partners in Nevada, Washington, or California, any medical expenses paid out of community funds are divided equally. 1040nr instructions Each of you should include half the expenses. 1040nr instructions If medical expenses are paid out of the separate funds of one individual, only the individual who paid the medical expenses can include them. 1040nr instructions If you live in a community property state, and are not filing a joint return, see Publication 555, Community Property. 1040nr instructions How Much of the Expenses Can You Deduct? Generally, you can deduct on Schedule A (Form 1040) only the amount of your medical and dental expenses that is more than 10% of your AGI (7. 1040nr instructions 5% of your AGI if either you or your spouse is age 65 or older)(Form 1040, line 38). 1040nr instructions Example. 1040nr instructions You are unmarried and under age 65 and your AGI is $40,000, 10% of which is $4,000. 1040nr instructions You paid medical expenses of $2,500. 1040nr instructions You cannot deduct any of your medical expenses because they are not more than 10% of your AGI. 1040nr instructions Whose Medical Expenses Can You Include? You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. 1040nr instructions There are different rules for decedents and for individuals who are the subject of multiple support agreements. 1040nr instructions See Support claimed under a multiple support agreement , later. 1040nr instructions Yourself You can include medical expenses you paid for yourself. 1040nr instructions Spouse You can include medical expenses you paid for your spouse. 1040nr instructions To include these expenses, you must have been married either at the time your spouse received the medical services or at the time you paid the medical expenses. 1040nr instructions Example 1. 1040nr instructions Mary received medical treatment before she married Bill. 1040nr instructions Bill paid for the treatment after they married. 1040nr instructions Bill can include these expenses in figuring his medical expense deduction even if Bill and Mary file separate returns. 1040nr instructions If Mary had paid the expenses, Bill could not include Mary's expenses in his separate return. 1040nr instructions Mary would include the amounts she paid during the year in her separate return. 1040nr instructions If they filed a joint return, the medical expenses both paid during the year would be used to figure their medical expense deduction. 1040nr instructions Example 2. 1040nr instructions This year, John paid medical expenses for his wife Louise, who died last year. 1040nr instructions John married Belle this year and they file a joint return. 1040nr instructions Because John was married to Louise when she received the medical services, he can include those expenses in figuring his medical expense deduction for this year. 1040nr instructions Dependent You can include medical expenses you paid for your dependent. 1040nr instructions For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses. 1040nr instructions A person generally qualifies as your dependent for purposes of the medical expense deduction if both of the following requirements are met. 1040nr instructions The person was a qualifying child (defined later) or a qualifying relative (defined later), and The person was a U. 1040nr instructions S. 1040nr instructions citizen or national, or a resident of the United States, Canada, or Mexico. 1040nr instructions If your qualifying child was adopted, see Exception for adopted child , next. 1040nr instructions You can include medical expenses you paid for an individual that would have been your dependent except that: He or she received gross income of $3,900 or more in 2013, He or she filed a joint return for 2013, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040nr instructions Exception for adopted child. 1040nr instructions   If you are a U. 1040nr instructions S. 1040nr instructions citizen or U. 1040nr instructions S. 1040nr instructions national and your adopted child lived with you as a member of your household for 2013, that child does not have to be a U. 1040nr instructions S. 1040nr instructions citizen or national or a resident of the United States, Canada, or Mexico. 1040nr instructions Qualifying Child A qualifying child is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was: Under age 19 at the end of 2013 and younger than you (or your spouse, if filing jointly), Under age 24 at the end of 2013, a full-time student, and younger than you (or your spouse, if filing jointly), or Any age and permanently and totally disabled, Lived with you for more than half of 2013, Did not provide over half of his or her own support for 2013, and Did not file a joint return, or, if he or she did, it was only to claim a refund. 1040nr instructions Adopted child. 1040nr instructions   A legally adopted child is treated as your own child. 1040nr instructions This includes a child lawfully placed with you for legal adoption. 1040nr instructions   You can include medical expenses that you paid for a child before adoption if the child qualified as your dependent when the medical services were provided or when the expenses were paid. 1040nr instructions   If you pay back an adoption agency or other persons for medical expenses they paid under an agreement with you, you are treated as having paid those expenses provided you clearly substantiate that the payment is directly attributable to the medical care of the child. 1040nr instructions   But if you pay the agency or other person for medical care that was provided and paid for before adoption negotiations began, you cannot include them as medical expenses. 1040nr instructions    You may be able to take an adoption credit for other expenses related to an adoption. 1040nr instructions See the Instructions for Form 8839, Qualified Adoption Expenses, for more information. 1040nr instructions Child of divorced or separated parents. 1040nr instructions   For purposes of the medical and dental expenses deduction, a child of divorced or separated parents can be treated as a dependent of both parents. 1040nr instructions Each parent can include the medical expenses he or she pays for the child, even if the other parent claims the child's dependency exemption, if: The child is in the custody of one or both parents for more than half the year, The child receives over half of his or her support during the year from his or her parents, and The child's parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Live apart at all times during the last 6 months of the year. 1040nr instructions This does not apply if the child's exemption is being claimed under a multiple support agreement (discussed later). 1040nr instructions Qualifying Relative A qualifying relative is a person: Who is your: Son, daughter, stepchild, foster child, or a descendant of any of them (for example, your grandchild), Brother, sister, half brother, half sister, or a son or daughter of either of them, Father, mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle), Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law, Who was not a qualifying child (see Qualifying Child earlier) of any other person for 2013, and For whom you provided over half of the support in 2013. 1040nr instructions But see Child of divorced or separated parents , earlier, and Support claimed under a multiple support agreement, next. 1040nr instructions Support claimed under a multiple support agreement. 1040nr instructions   If you are considered to have provided more than half of a qualifying relative's support under a multiple support agreement, you can include medical expenses you pay for that person. 1040nr instructions A multiple support agreement is used when two or more people provide more than half of a person's support, but no one alone provides more than half. 1040nr instructions   Any medical expenses paid by others who joined you in the agreement cannot be included as medical expenses by anyone. 1040nr instructions However, you can include the entire unreimbursed amount you paid for medical expenses. 1040nr instructions Example. 1040nr instructions You and your three brothers each provide one-fourth of your mother's total support. 1040nr instructions Under a multiple support agreement, you treat your mother as your dependent. 1040nr instructions You paid all of her medical expenses. 1040nr instructions Your brothers reimbursed you for three-fourths of these expenses. 1040nr instructions In figuring your medical expense deduction, you can include only one-fourth of your mother's medical expenses. 1040nr instructions Your brothers cannot include any part of the expenses. 1040nr instructions However, if you and your brothers share the nonmedical support items and you separately pay all of your mother's medical expenses, you can include the unreimbursed amount you paid for her medical expenses in your medical expenses. 1040nr instructions Decedent Medical expenses paid before death by the decedent are included in figuring any deduction for medical and dental expenses on the decedent's final income tax return. 1040nr instructions This includes expenses for the decedent's spouse and dependents as well as for the decedent. 1040nr instructions The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. 1040nr instructions The expenses must be paid within the 1-year period beginning with the day after the date of death. 1040nr instructions If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return. 1040nr instructions Qualified medical expenses paid before death by the decedent are not deductible if paid with a tax-free distribution from any Archer MSA, Medicare Advantage MSA, or health savings account. 1040nr instructions Amended returns and claims for refund are discussed in chapter 1. 1040nr instructions What if you pay medical expenses of a deceased spouse or dependent?   If you paid medical expenses for your deceased spouse or dependent, include them as medical expenses on your Form 1040 in the year paid, whether they are paid before or after the decedent's death. 1040nr instructions The expenses can be included if the person was your spouse or dependent either at the time the medical services were provided or at the time you paid the expenses. 1040nr instructions What Medical Expenses Are Includible? Use Table 21-1, later, as a guide to determine which medical and dental expenses you can include on Schedule A (Form 1040). 1040nr instructions This table does not include all possible medical expenses. 1040nr instructions To determine if an expense not listed can be included in figuring your medical expense deduction, see What Are Medical Expenses , earlier. 1040nr instructions Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. 1040nr instructions Medical care policies can provide payment for treatment that includes: Hospitalization, surgical services, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Long-term care (subject to additional limitations). 1040nr instructions See Qualified Long-Term Care Insurance Contracts in Publication 502. 1040nr instructions If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. 1040nr instructions The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement. 1040nr instructions Note. 1040nr instructions When figuring the amount of insurance premiums you can include in medical expenses on Schedule A, do not include any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. 1040nr instructions Also, do not include insurance premiums attributable to a nondependent child under age 27 if your premiums increased as a result of adding this child to your policy. 1040nr instructions Employer-sponsored health insurance plan. 1040nr instructions   Do not include in your medical and dental expenses any insurance premiums paid by an employer-sponsored health insurance plan unless the premiums are included in box 1 of your Form W-2. 1040nr instructions Also, do not include any other medical and dental expenses paid by the plan unless the amount paid is included in box 1 of your Form W-2. 1040nr instructions Example. 1040nr instructions You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. 1040nr instructions Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. 1040nr instructions Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you cannot deduct the premiums paid with that money. 1040nr instructions Long-term care services. 1040nr instructions   Contributions made by your employer to provide coverage for qualified long-term care services under a flexible spending or similar arrangement must be included in your income. 1040nr instructions This amount will be reported as wages in box 1 of your Form W-2. 1040nr instructions Health reimbursement arrangement (HRA). 1040nr instructions   If you have medical expenses that are reimbursed by a health reimbursement arrangement, you cannot include those expenses in your medical expenses. 1040nr instructions This is because an HRA is funded solely by the employer. 1040nr instructions Retired public safety officers. 1040nr instructions   If you are a retired public safety officer, do not include as medical expenses any health or long-term care premiums that you elected to have paid with tax-free distributions from your retirement plan. 1040nr instructions This applies only to distributions that would otherwise be included in income. 1040nr instructions Medicare A. 1040nr instructions   If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare A. 1040nr instructions The payroll tax paid for Medicare A is not a medical expense. 1040nr instructions   If you are not covered under social security (or were not a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. 1040nr instructions In this situation you can include the premiums you paid for Medicare A as a medical expense. 1040nr instructions Medicare B. 1040nr instructions   Medicare B is supplemental medical insurance. 1040nr instructions Premiums you pay for Medicare B are a medical expense. 1040nr instructions Check the information you received from the Social Security Administration to find out your premium. 1040nr instructions Medicare D. 1040nr instructions    Medicare D is a voluntary prescription drug insurance program for persons with Medicare A or B. 1040nr instructions You can include as a medical expense premiums you pay for Medicare D. 1040nr instructions Prepaid insurance premiums. 1040nr instructions   Premiums you pay before you are age 65 for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments, or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). 1040nr instructions Unused sick leave used to pay premiums. 1040nr instructions   You must include in gross income cash payments you receive at the time of retirement for unused sick leave. 1040nr instructions You also must include in gross income the value of unused sick leave that, at your option, your employer applies to the cost of your continuing participation in your employer's health plan after you retire. 1040nr instructions You can include this cost of continuing participation in the health plan as a medical expense. 1040nr instructions   If you participate in a health plan where your employer automatically applies the value of unused sick leave to the cost of your continuing participation in the health plan (and you do not have the option to receive cash), do not include the value of the unused sick leave in gross income. 1040nr instructions You cannot include this cost of continuing participation in that health plan as a medical expense. 1040nr instructions Table 21-1. 1040nr instructions Medical and Dental Expenses Checklist. 1040nr instructions See Publication 502 for more information about these and other expenses. 1040nr instructions You can include: You cannot include: Bandages Birth control pills prescribed by your doctor Body scan Braille books Breast pump and supplies Capital expenses for equipment or improvements to your home needed for medical care (see the worksheet in Publication 502) Diagnostic devices Expenses of an organ donor Eye surgery—to promote the correct function of the eye Fertility enhancement, certain procedures Guide dogs or other animals aiding the blind, deaf, and disabled Hospital services fees (lab work, therapy, nursing services, surgery, etc. 1040nr instructions ) Lead-based paint removal Legal abortion Legal operation to prevent having children such as a vasectomy or tubal ligation Long-term care contracts, qualified Meals and lodging provided by a hospital during medical treatment Medical services fees (from doctors, dentists, surgeons, specialists, and other medical practitioners) Medicare Part D premiums Medical and hospital insurance premiums Nursing services Oxygen equipment and oxygen Part of life-care fee paid to retirement home designated for medical care Physical examination Pregnancy test kit Prescription medicines (prescribed by a doctor) and insulin Psychiatric and psychological treatment Social security tax, Medicare tax, FUTA, and state employment tax for worker providing medical care (see Wages for nursing services, below) Special items (artificial limbs, false teeth, eye-glasses, contact lenses, hearing aids, crutches, wheelchair, etc. 1040nr instructions ) Special education for mentally or physically disabled persons Stop-smoking programs Transportation for needed medical care Treatment at a drug or alcohol center (includes meals and lodging provided by the center) Wages for nursing services Weight-loss, certain expenses for obesity Baby sitting and childcare Bottled water Contributions to Archer MSAs (see Publication 969) Diaper service Expenses for your general health (even if following your doctor's advice) such as— —Health club dues —Household help (even if recommended by a doctor) —Social activities, such as dancing or swimming lessons —Trip for general health improvement Flexible spending account reimbursements for medical expenses (if contributions were on a pre-tax basis) Funeral, burial, or cremation expenses Health savings account payments for medical expenses Illegal operation, treatment, or medicine Life insurance or income protection policies, or policies providing payment for loss of life, limb, sight, etc. 1040nr instructions Maternity clothes Medical insurance included in a car insurance policy covering all persons injured in or by your car Medicine you buy without a prescription Nursing care for a healthy baby Prescription drugs you brought in (or ordered shipped) from another country, in most cases Nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. 1040nr instructions , unless recommended by a medical practitioner as a treatment for a specific medical condition diagnosed by a physician Surgery for purely cosmetic reasons Toothpaste, toiletries, cosmetics, etc. 1040nr instructions Teeth whitening Weight-loss expenses not for the treatment of obesity or other disease Meals and Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to get medical care. 1040nr instructions See Nursing home , later. 1040nr instructions You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. 1040nr instructions You can include the cost of such lodging while away from home if all of the following requirements are met. 1040nr instructions The lodging is primarily for and essential to medical care. 1040nr instructions The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. 1040nr instructions The lodging is not lavish or extravagant under the circumstances. 1040nr instructions There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. 1040nr instructions The amount you include in medical expenses for lodging cannot be more than $50 for each night for each person. 1040nr instructions You can include lodging for a person traveling with the person receiving the medical care. 1040nr instructions For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. 1040nr instructions Meals are not included. 1040nr instructions Nursing home. 1040nr instructions   You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. 1040nr instructions This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care. 1040nr instructions   Do not include the cost of meals and lodging if the reason for being in the home is personal. 1040nr instructions You can, however, include in medical expenses the part of the cost that is for medical or nursing care. 1040nr instructions Transportation Include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. 1040nr instructions You can include: Bus, taxi, train, or plane fares, or ambulance service, Transportation expenses of a parent who must go with a child who needs medical care, Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment. 1040nr instructions Car expenses. 1040nr instructions   You can include out-of-pocket expenses, such as the cost of gas and oil, when you use your car for medical reasons. 1040nr instructions You cannot include depreciation, insurance, general repair, or maintenance expenses. 1040nr instructions   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents per mile. 1040nr instructions    You can also include parking fees and tolls. 1040nr instructions You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. 1040nr instructions Example. 1040nr instructions In 2013, Bill Jones drove 2,800 miles for medical reasons. 1040nr instructions He spent $500 for gas, $30 for oil, and $100 for tolls and parking. 1040nr instructions He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction. 1040nr instructions He figures the actual expenses first. 1040nr instructions He adds the $500 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $630. 1040nr instructions He then figures the standard mileage amount. 1040nr instructions He multiplies 2,800 miles by 24 cents a mile for a total of $672. 1040nr instructions He then adds the $100 tolls and parking for a total of $772. 1040nr instructions Bill includes the $772 of car expenses with his other medical expenses for the year because the $772 is more than the $630 he figured using actual expenses. 1040nr instructions Transportation expenses you cannot include. 1040nr instructions   You cannot include in medical expenses the cost of transportation in the following situations. 1040nr instructions Going to and from work, even if your condition requires an unusual means of transportation. 1040nr instructions Travel for purely personal reasons to another city for an operation or other medical care. 1040nr instructions Travel that is merely for the general improvement of one's health. 1040nr instructions The costs of operating a specially equipped car for other than medical reasons. 1040nr instructions Disabled Dependent Care Expenses Some disabled dependent care expenses may qualify as either: Medical expenses, or Work-related expenses for purposes of taking a credit for dependent care. 1040nr instructions (See chapter 32 and Publication 503, Child and Dependent Care Expenses. 1040nr instructions ) You can choose to apply them either way as long as you do not use the same expenses to claim both a credit and a medical expense deduction. 1040nr instructions How Do You Treat Reimbursements? You can include in medical expenses only those amounts paid during the taxable year for which you received no insurance or other reimbursement. 1040nr instructions Insurance Reimbursement You must reduce your total medical expenses for the year by all reimbursements for medical expenses that you receive from insurance or other sources during the year. 1040nr instructions This includes payments from Medicare. 1040nr instructions Even if a policy provides reimbursement for only certain specific medical expenses, you must use amounts you receive from that policy to reduce your total medical expenses, including those it does not reimburse. 1040nr instructions Example. 1040nr instructions You have insurance policies that cover your hospital and doctors' bills but not your nursing bills. 1040nr instructions The insurance you receive for the hospital and doctors' bills is more than their charges. 1040nr instructions In figuring your medical deduction, you must reduce the total amount you spent for medical care by the total amount of insurance you received, even if the policies do not cover some of your medical expenses. 1040nr instructions Health reimbursement arrangement (HRA). 1040nr instructions   A health reimbursement arrangement is an employer-funded plan that reimburses employees for medical care expenses and allows unused amounts to be carried forward. 1040nr instructions An HRA is funded solely by the employer and the reimbursements for medical expenses, up to a maximum dollar amount for a coverage period, are not included in your income. 1040nr instructions Other reimbursements. 1040nr instructions   Generally, you do not reduce medical expenses by payments you receive for: Permanent loss or loss of use of a member or function of the body (loss of limb, sight, hearing, etc. 1040nr instructions ) or disfigurement to the extent the payment is based on the nature of the injury without regard to the amount of time lost from work, or Loss of earnings. 1040nr instructions   You must, however, reduce your medical expenses by any part of these payments that is designated for medical costs. 1040nr instructions See How Do You Figure and Report the Deduction on Your Tax Return , later. 1040nr instructions   For how to treat damages received for personal injury or sickness, see Damages for Personal Injuries , later. 1040nr instructions You do not have a medical deduction if you are reimbursed for all of your medical expenses for the year. 1040nr instructions Excess reimbursement. 1040nr instructions   If you are reimbursed more than your medical expenses, you may have to include the excess in income. 1040nr instructions You may want to use Figure 21-A to help you decide if any of your reimbursement is taxable. 1040nr instructions Premiums paid by you. 1040nr instructions   If you pay either the entire premium for your medical insurance or all of the costs of a plan similar to medical insurance and your insurance payments or other reimbursements are more than your total medical expenses for the year, you have an excess reimbursement. 1040nr instructions Generally, you do not include the excess reimbursement in your gross income. 1040nr instructions Premiums paid by you and your employer. 1040nr instructions   If both you and your employer contribute to your medical insurance plan and your employer's contributions are not included in your gross income, you must include in your gross income the part of your excess reimbursement that is from your employer's contribution. 1040nr instructions   See Publication 502 to figure the amount of the excess reimbursement you must include in gross income. 1040nr instructions Reimbursement in a later year. 1040nr instructions   If you are reimbursed in a later year for medical expenses you deducted in an earlier year, you generally must report the reimbursement as income up to the amount you previously deducted as medical expenses. 1040nr instructions   However, do not report as income the amount of reimbursement you received up to the amount of your medical deductions that did not reduce your tax for the earlier year. 1040nr instructions For more information about the recovery of an amount that you claimed as an itemized deduction in an earlier year, see Itemized Deduction Recoveries in chapter 12. 1040nr instructions Figure 21-A. 1040nr instructions Is Your Excess Medical Reimbursement Taxable? Please click here for the text description of the image. 1040nr instructions Figure 21-A. 1040nr instructions Is Your Excess Medical Reimbursement Taxable? Medical expenses not deducted. 1040nr instructions   If you did not deduct a medical expense in the year you paid it because your medical expenses were not more than 10% of your AGI (7. 1040nr instructions 5% of your AGI if either you or your spouse was age 65 or older), or because you did not itemize deductions, do not include the reimbursement up to the amount of the expense in income. 1040nr instructions However, if the reimbursement is more than the expense, see Excess reimbursement , earlier. 1040nr instructions Example. 1040nr instructions For 2013, you were unmarried and under age 65 and you had medical expenses of $500. 1040nr instructions You cannot deduct the $500 because it is less than 10% of your AGI. 1040nr instructions If, in a later year, you are reimbursed for any of the $500 in medical expenses, you do not include the amount reimbursed in your gross income. 1040nr instructions Damages for Personal Injuries If you receive an amount in settlement of a personal injury suit, part of that award may be for medical expenses that you deducted in an earlier year. 1040nr instructions If it is, you must include that part in your income in the year you receive it to the extent it reduced your taxable income in the earlier year. 1040nr instructions See Reimbursement in a Later Year , discussed under How Do You Treat Reimbursements, earlier. 1040nr instructions Future medical expenses. 1040nr instructions   If you receive an amount in settlement of a damage suit for personal injuries, part of that award may be for future medical expenses. 1040nr instructions If it is, you must reduce any future medical expenses for these injuries until the amount you received has been completely used. 1040nr instructions How Do You Figure and Report the Deduction on Your Tax Return? Once you have determined which medical expenses you can include, you figure and report the deduction on your tax return. 1040nr instructions What Tax Form Do You Use? You figure your medical expense deduction on Schedule A (Form 1040). 1040nr instructions You cannot claim medical expenses on Form 1040A or Form 1040EZ. 1040nr instructions If you need more information on itemized deductions or you are not sure if you can itemize, see chapter 20. 1040nr instructions Enter the amount you paid for medical and dental expenses on Schedule A (Form 1040). 1040nr instructions This should be your expenses that were not reimbursed by insurance or any other sources. 1040nr instructions Generally, you can deduct only the amount of your medical and dental expenses that is more than 10% of your AGI (7. 1040nr instructions 5% if either you or your spouse was age 65 or older) shown on line 38, Form 1040. 1040nr instructions Impairment-Related Work Expenses If you are a person with a disability, you can take a business deduction for expenses that are necessary for you to be able to work. 1040nr instructions If you take a business deduction for impairment-related work expenses, do not take a medical deduction for the same expenses. 1040nr instructions You have a disability if you have: A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or A physical or mental impairment (for example, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working. 1040nr instructions Impairment-related expenses defined. 1040nr instructions   Impairment-related expenses are those ordinary and necessary business expenses that are: Necessary for you to do your work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. 1040nr instructions Where to report. 1040nr instructions   If you are self-employed, deduct the business expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. 1040nr instructions   If you are an employee, complete Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses. 1040nr instructions Enter on Schedule A (Form 1040), that part of the amount on Form 2106, or Form 2106-EZ, that is related to your impairment. 1040nr instructions Enter the amount that is unrelated to your impairment also on Schedule A (Form 1040). 1040nr instructions Your impairment-related work expenses are not subject to the 2%-of-adjusted-gross-income limit that applies to other employee business expenses. 1040nr instructions Example. 1040nr instructions You are blind. 1040nr instructions You must use a reader to do your work. 1040nr instructions You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. 1040nr instructions The reader's services are only for your work. 1040nr instructions You can deduct your expenses for the reader as business expenses. 1040nr instructions Health Insurance Costs for Self-Employed Persons If you were self-employed and had a net profit for the year, you may be able to deduct, as an adjustment to income, amounts paid for medical and qualified long-term care insurance on behalf of yourself, your spouse, your dependents, and, your children who were under age 27 at the end of 2013. 1040nr instructions For this purpose, you were self-employed if you were a general partner (or a limited partner receiving guaranteed payments) or you received wages from an S corporation in which you were more than a 2% shareholder. 1040nr instructions The insurance plan must be established under your trade or business and the deduction cannot be more than your earned income from that trade or business. 1040nr instructions You cannot deduct payments for medical insurance for any month in which you were eligible to participate in a health plan subsidized by your employer, your spouse's employer, or, an employer of your dependent or your child under age 27 at the end of 2013. 1040nr instructions You cannot deduct payments for a qualified long-term care insurance contract for any month in which you were eligible to participate in a long-term care insurance plan subsidized by your employer or your spouse's employer. 1040nr instructions If you qualify to take the deduction, use the Self-Employed Health Insurance Deduction Worksheet in the Form 1040 instructions to figure the amount you can deduct. 1040nr instructions But if any of the following applies, do not use that worksheet. 1040nr instructions You had more than one source of income subject to self-employment tax. 1040nr instructions You file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. 1040nr instructions You are using amounts paid for qualified long-term care insurance to figure the deduction. 1040nr instructions If you cannot use the worksheet in the Form 1040 instructions, use the worksheet in Publication 535, Business Expenses, to figure your deduction. 1040nr instructions Note. 1040nr instructions When figuring the amount you can deduct for insurance premiums, do not include any advance payments shown on Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. 1040nr instructions If you are claiming the health coverage tax credit, subtract the amount shown on Form 8885, from the total insurance premiums you paid. 1040nr instructions Do not include amounts paid for health insurance coverage with retirement plan distributions that were tax-free because you are a retired public safety officer. 1040nr instructions Where to report. 1040nr instructions    You take this deduction on Form 1040. 1040nr instructions If you itemize your deductions and do not claim 100% of your self-employed health insurance on Form 1040, you can generally include any remaining premiums with all other medical expenses on Schedule A (Form 1040), subject to the 10% limit (7. 1040nr instructions 5% if either you or your spouse was age 65 or older). 1040nr instructions See Self-Employed Health Insurance Deduction in chapter 6 of Publication 535, Business Expenses, and Medical and Dental Expenses in the Instructions for Schedule A (Form 1040), for more information. 1040nr instructions Prev  Up  Next   Home   More Online Publications