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2011 Tax Forms 1040a

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2011 Tax Forms 1040a

2011 tax forms 1040a 1. 2011 tax forms 1040a   Application, Approval, and Appeal Procedures Table of Contents Introduction Topics - This chapter discusses: Application ProceduresForms Required Required Inclusions Miscellaneous Procedures Rulings and Determination LettersEffective Date of Exemption Revocation or Modification of Exemption Appeal ProceduresAppeals Office Consideration EO Technical Consideration Administrative Remedies Appeal to Courts Group Exemption LetterCentral Organization Application Procedure Keeping the Group Exemption Letter in Force Events Causing Loss of Group Exemption Introduction If your organization is one of the organizations described in this publication and is seeking recognition of tax-exempt status from the IRS, you should follow the procedures described in this chapter and the instructions that accompany the appropriate application forms. 2011 tax forms 1040a For information on section 501(c)(3) organizations, go to Section 501(c)(3) Organizations chapter 3. 2011 tax forms 1040a If your organization is seeking exemption under one of the other paragraphs of section 501(c), see chapter 4. 2011 tax forms 1040a Topics - This chapter discusses: Application procedures that generally apply to all organizations discussed in this publication, including the application forms; Rulings and determination letters (approvals/disapprovals); Appeal procedures available if an adverse determination letter is proposed; and Group exemption letters. 2011 tax forms 1040a Application Procedures Oral requests for recognition of exemption will not be considered by the IRS. 2011 tax forms 1040a Your application for tax-exempt status must be in writing using the appropriate forms as discussed below. 2011 tax forms 1040a Forms Required If your organization is seeking recognition of exemption from federal income tax, it must use a specific application prescribed by the IRS in Revenue Procedure 2013–9, sec. 2011 tax forms 1040a 3. 2011 tax forms 1040a If your organization is a central organization with exempt status, see Group Exemption Letter , later. 2011 tax forms 1040a All applications must be signed by an authorized individual. 2011 tax forms 1040a Form 1023, Application for Recognition of Exemption. 2011 tax forms 1040a   File Form 1023 if you are seeking recognition of exemption under section: 501(c)(3) Corporations, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports, or prevention of cruelty for children or animals, 501(e) Cooperative hospital service organization, 501(f) Cooperative service organization of operating educational organizations, 501(k) Certain organizations providing child care, 501(n) Charitable risk pools, and 501(q) Credit counseling organizations. 2011 tax forms 1040a Form 1024, Application for Recognition of Exemption Under Section 501(a). 2011 tax forms 1040a    File Form 1024 if you are seeking recognition of exemption under section: 501(c)(2) Title holding corporations, 501(c)(4) Civic leagues, social welfare organizations, 501(c)(5) Labor, agricultural, or horticultural organizations, 501(c)(6) Business leagues, chambers of commerce, etc. 2011 tax forms 1040a , 501(c)(7) Social clubs, 501(c)(8) Fraternal beneficiary societies, orders, or associations, 501(c)(9) Voluntary employees’ beneficiary associations, 501(c)(10) Domestic fraternal societies, orders, etc. 2011 tax forms 1040a , 501(c)(12) Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies, 501(c)(13) Cemetery companies, 501(c)(15) Mutual insurance companies or associations, 501(c)(17) Trusts providing for the payment of supplemental unemployment compensation benefits, 501(c)(19) A post, organization, auxiliary unit, etc. 2011 tax forms 1040a of past or present members of the Armed Forces of the United States, and 501(c)(25) Title holding corporations or trusts. 2011 tax forms 1040a  Form 8718, User Fee for Exempt Organization Determination Letter Request, must also be sent along with Form 1024. 2011 tax forms 1040a Letter application. 2011 tax forms 1040a   If your organization is seeking recognition of exemption under section 501(c)(11), (14), (16), (18), (21), (22), (23), (26), (27), (28), or (29), submit a letter application with Form 8718. 2011 tax forms 1040a See Required Inclusions for the information to include with the letter application. 2011 tax forms 1040a Form 1028. 2011 tax forms 1040a   Use Form 1028 if your organization is a farmers’ cooperative seeking recognition of exemption under section 521. 2011 tax forms 1040a You must also submit Form 8718. 2011 tax forms 1040a Form 8871. 2011 tax forms 1040a    Use Form 8871 if you are a political party or campaign committee for a candidate for federal, state or local office seeking to be treated as tax-exempt under section 527. 2011 tax forms 1040a See Political Organization Income Tax Return , later. 2011 tax forms 1040a    Some organizations do not have to use specific application forms. 2011 tax forms 1040a The application your organization must use is specified in the chapter in this publication dealing with your kind of organization. 2011 tax forms 1040a It is also shown in the Organization Reference Chart, later. 2011 tax forms 1040a Power of attorney. 2011 tax forms 1040a   If your organization expects to be represented by an individual such as an attorney, CPA, officer or other person authorized to practice before the IRS, whether in person or by correspondence, you must file a Form 2848 with your exemption application. 2011 tax forms 1040a The power of attorney must specifically authorize an individual to represent your organization. 2011 tax forms 1040a You cannot name an organization, firm, etc. 2011 tax forms 1040a as your representative. 2011 tax forms 1040a Form 2848, Power of Attorney and Declaration of Representative, can be used for this purpose. 2011 tax forms 1040a The categories of individuals who can represent you before the IRS are listed on the form. 2011 tax forms 1040a Non-exemption for terrorist organizations. 2011 tax forms 1040a   An organization that is identified or designated as a terrorist organization within the meaning of section 501(p)(2) is not eligible to apply for recognition of exemption. 2011 tax forms 1040a User fee. 2011 tax forms 1040a   The law requires the payment of a user fee for determination letter requests such as your application for recognition of tax-exempt status. 2011 tax forms 1040a If you are filing Form 1023, user fee information is included in Part XI. 2011 tax forms 1040a If you are required to apply for recognition of exemption by submitting Form 1024, a letter application, etc. 2011 tax forms 1040a and you must pay a user fee, you should use Form 8718 to figure the amount of your user fee and to pay it. 2011 tax forms 1040a Your payment must accompany your request. 2011 tax forms 1040a The IRS will not process a request unless the fee has been paid. 2011 tax forms 1040a    For the current user fee amount and processing time for applications go to IRS. 2011 tax forms 1040a gov and select “Charities and Non-Profits” from the buttons near the top. 2011 tax forms 1040a Then select the underlined link “How to Apply To Be Tax-Exempt” for the latest user fees or I want to check the status of my application for more information. 2011 tax forms 1040a You can also call 1-877-829-5500. 2011 tax forms 1040a Required Inclusions Employer identification number (EIN). 2011 tax forms 1040a   Every exempt organization must have an EIN, whether or not it has any employees. 2011 tax forms 1040a An EIN is required before an exemption application is submitted. 2011 tax forms 1040a Information on how to apply for an EIN by using one of the following methods can be found at Employer ID Numbers (EIN): Online— This is the preferred method for requesting an EIN. 2011 tax forms 1040a The EIN is issued immediately once the application information is validated. 2011 tax forms 1040a By telephone at 1-800-829-4933, from 7:00 a. 2011 tax forms 1040a m. 2011 tax forms 1040a to 7:00 p. 2011 tax forms 1040a m. 2011 tax forms 1040a local time, Monday through Friday. 2011 tax forms 1040a The EIN is provided over the phone to an authorized individual. 2011 tax forms 1040a By mailing or faxing Form SS-4, Application for Employer Identification Number. 2011 tax forms 1040a If the faxed Form SS-4 includes the taxpayer's fax number, a fax will be sent back with the EIN within four (4) business days. 2011 tax forms 1040a    Use only one method for each entity so you do not receive more than one EIN for an entity. 2011 tax forms 1040a   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. 2011 tax forms 1040a Organizing documents. 2011 tax forms 1040a   Your application should include a copy of the organizing or enabling document that is signed by a principal officer or is accompanied by a written declaration signed by an authorized individual certifying that the document is a complete and accurate copy of the original or meets the requirements of a conformed copy. 2011 tax forms 1040a   If your organizing or enabling document are articles of incorporation, include evidence that it was filed and approved by a state official. 2011 tax forms 1040a (For example, a stamped “Filed” copy dated by the Secretary of State is prima facie evidence that it was filed and approved by a state official. 2011 tax forms 1040a ) A copy of the articles of incorporation can also be submitted with a written declaration signed by an authorized individual indicating the copy is complete and was filed and approved by the state, including the date filed. 2011 tax forms 1040a Bylaws. 2011 tax forms 1040a   Bylaws alone are not organizing documents. 2011 tax forms 1040a However, if your organization has adopted bylaws, include a current copy. 2011 tax forms 1040a The bylaws need not be signed if submitted as an attachment. 2011 tax forms 1040a   If your organization's name has been officially changed by an amendment to your organizing instruments, you should also attach a conformed copy of that amendment to your application. 2011 tax forms 1040a    Bylaws may be considered an organizing document only if they are properly structured (includes name, purpose, signatures, and intent to form an organization). 2011 tax forms 1040a Conformed copy. 2011 tax forms 1040a   A conformed copy is a copy that agrees with the original and all amendments to it. 2011 tax forms 1040a If the original document required a signature, the copy should either be signed by a principal officer or, if not signed, be accompanied by a written declaration signed by an authorized officer of the organization. 2011 tax forms 1040a With either option, the officer must certify that the document is a complete and accurate copy of the original. 2011 tax forms 1040a A certificate of incorporation should be approved and dated by an appropriate state official. 2011 tax forms 1040a Attachments. 2011 tax forms 1040a    When submitting attachments, every attachment should show your organization's name and EIN. 2011 tax forms 1040a It should also state that it is an attachment to your application form and identify the part and line item number to which it applies. 2011 tax forms 1040a Original documents. 2011 tax forms 1040a   Do not submit original documents because they become part of the IRS file and cannot be returned. 2011 tax forms 1040a Description of activities. 2011 tax forms 1040a   Your application must include a full description of the proposed activities of your organization, including each of the fundraising activities of a section 501(c)(3) organization and a narrative description of anticipated receipts and contemplated expenditures. 2011 tax forms 1040a When describing the activities in which your organization expects to engage, you must include the standards, criteria, procedures, or other means that your organization adopted or planned for carrying out those activities. 2011 tax forms 1040a   To determine the information you need to provide, you should study the part of this publication that applies to your organization. 2011 tax forms 1040a The appropriate chapter will describe the purposes and activities that your organization must pursue, engage in, and include in your application in order to achieve exempt status. 2011 tax forms 1040a   Often, your organization's articles of organization (or other organizing instruments) contain descriptions of your organization's purposes and activities. 2011 tax forms 1040a   Your application should describe completely and in detail your past, present, and planned activities. 2011 tax forms 1040a Financial data. 2011 tax forms 1040a   You must include in your application financial statements showing your receipts and expenditures and a balance sheet for the current year and the 3 preceding years (or for the number of years your organization was in existence, if less than 4 years). 2011 tax forms 1040a For each accounting period, you must describe the sources of your receipts and the nature of your expenditures. 2011 tax forms 1040a   If you have not yet begun operations, or have operated for less than 1 year, a proposed budget for 2 full accounting periods and a current statement of assets and liabilities will be acceptable. 2011 tax forms 1040a Exempt status established in application. 2011 tax forms 1040a   If your application and its supporting documents show that your organization meets the requirements for tax-exempt status under the Code section you applied, the IRS will issue a favorable determination letter or ruling. 2011 tax forms 1040a Miscellaneous Procedures To help in processing your application, be sure to attach all schedules, statements, and other documents required by the application form. 2011 tax forms 1040a If you do not attach them, you may have to resubmit your application or you may otherwise encounter a delay in processing your application. 2011 tax forms 1040a Incomplete application. 2011 tax forms 1040a   If an application is not complete and does not contain all the required attachments found under Required Inclusions, the IRS may return it to you for completion. 2011 tax forms 1040a The IRS may keep the application and send a letter requesting the missing information if most of the information has been received. 2011 tax forms 1040a   If the IRS returns the application or requests additional information from you, that application will be considered filed on the date the substantially completed application is postmarked, or if no postmark, received at the IRS. 2011 tax forms 1040a   Generally, the user fee will not be refunded if an incomplete application is filed. 2011 tax forms 1040a   Additional information may be requested if necessary to clarify the nature of your organization. 2011 tax forms 1040a Application made under wrong paragraph of section 501(c). 2011 tax forms 1040a   Occasionally, an organization appears to qualify for exemption under a paragraph of section 501(c) that is different from the one for which the organization applied. 2011 tax forms 1040a If the application was made on Form 1024, which applies to more than one paragraph of section 501(c), the organization can be recognized as exempt under any paragraph to which the form applies if the organization has agreed to have its application considered under that paragraph. 2011 tax forms 1040a It must also supply any additional information required for the application under the new paragraph. 2011 tax forms 1040a Different application form needed. 2011 tax forms 1040a   If a different application form is required for your organization, the IRS will so advise your organization and will provide the appropriate application form for your convenience in reapplying under that paragraph, if you wish to do so. 2011 tax forms 1040a Although supporting information previously furnished need not be duplicated, you must provide any necessary additional information required for the application. 2011 tax forms 1040a If your reply is not received within a limited time, your application will be processed only for the paragraph under which you originally applied. 2011 tax forms 1040a   When a specific application form is needed for the paragraph under which your organization qualifies, that form is required before a letter recognizing exemption can be issued. 2011 tax forms 1040a This includes cases in which a determination letter is modified to recognize an organization's exempt status under a paragraph other than the paragraph under which it originally established exemption. 2011 tax forms 1040a IRS responses. 2011 tax forms 1040a   Organizations that submit a complete application will receive an acknowledgment from the IRS. 2011 tax forms 1040a Others will receive a letter requesting more information or returning an incomplete application. 2011 tax forms 1040a Applicants also will be notified if the application is forwarded to EO Technical Office for consideration. 2011 tax forms 1040a These letters will be sent out as soon as possible after receipt of the organization's application. 2011 tax forms 1040a Withdrawal of application. 2011 tax forms 1040a   An application may be withdrawn at any time before the issuance of a ruling or determination letter upon the written request of a principal officer or authorized representative of your organization. 2011 tax forms 1040a However, the withdrawal will not prevent the information contained in the application from being used by the IRS in any subsequent examination of your organization's returns. 2011 tax forms 1040a The information forwarded with an application will not be returned to your organization and, generally, when an application is withdrawn, the user fee paid will not be refunded. 2011 tax forms 1040a Requests for withholding of information from the public. 2011 tax forms 1040a   The law requires many exempt organizations and private foundations to make their application forms and annual information returns available for public inspection. 2011 tax forms 1040a The law also requires the IRS to make available for public inspection, in accordance with section 6104 and the related regulations, your approved application for recognition of exemption (including any papers submitted in support of the application) and the ruling or determination letter (discussed later, under Rulings and Determination Letters . 2011 tax forms 1040a )   Any information submitted in the application or in support of it that relates to any trade secret, patent, process, style of work, or apparatus, upon request, can be withheld from public inspection if the IRS determines that the disclosure of such information would adversely affect the organization. 2011 tax forms 1040a Your request must: Identify the material to be withheld (the document, page, paragraph, and line) by clearly marking it “Not Subject To Public Inspection. 2011 tax forms 1040a ” Include the reasons for your organization's position that the information is of the type that can be withheld from public inspection. 2011 tax forms 1040a Be filed with the office where your organization files the documents in which the material to be withheld is contained. 2011 tax forms 1040a Where to file. 2011 tax forms 1040a   Send your application for exempt status and Form 8718, (if required) to: Internal Revenue Service PO Box 12192 Covington, KY 41012-0192   Your application will be considered by EO Determinations, who will either issue a favorable determination letter to your organization, issue an adverse determination letter denying the exempt status claimed in the application, or refer the case to the Exempt Organizations Technical Office (EO Technical). 2011 tax forms 1040a    Form 8940, Request for Miscellaneous Determination. 2011 tax forms 1040a You can request miscellaneous determinations under sections 507, 509(a), 4940, 4942, 4945, and 6033 with Form 8940. 2011 tax forms 1040a Nonexempt charitable trusts also file Form 8940 for an initial determination of section 509(a)(3) status or change to their type. 2011 tax forms 1040a See Form 8940 and instructions for more information. 2011 tax forms 1040a Requests other than applications. 2011 tax forms 1040a Requests other than applications for recognition of exemption or Form 8940 (for example, requests for rulings involving feeder organizations, application of excise taxes to activities of private foundations, taxation of unrelated business income, etc. 2011 tax forms 1040a ) should be sent to: Internal Revenue Service  Attention: EO Letter Rulings PO Box 27720 McPherson Station Washington, DC 20038 These requests, similar to applications for recognition of exemption previously discussed, must be accompanied by the appropriate user fee. 2011 tax forms 1040a The schedule for user fees, including those for requests other than applications, can be found in Revenue Procedure 2013-8, 2013-1 I. 2011 tax forms 1040a R. 2011 tax forms 1040a B. 2011 tax forms 1040a 237. 2011 tax forms 1040a Referral to EO Technical. 2011 tax forms 1040a   EO Determinations will refer to EO Technical any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. 2011 tax forms 1040a EO Determinations can request technical advice on any technical or procedural question that cannot be resolved on the basis of law, regulations, or a clearly applicable revenue ruling or other published precedent. 2011 tax forms 1040a An organization can request that an issue be referred to EO Technical for technical advice if it feels that a lack of uniformity exists as to the disposition of the issue or if an issue is so unusual or complex as to warrant consideration by EO Technical. 2011 tax forms 1040a If a determination letter is issued based on technical advice from EO Technical regarding qualification for exemption or foundation status, no further administrative appeal is available on the issue that was the subject of technical advice. 2011 tax forms 1040a Reminder. 2011 tax forms 1040a   The law requires payment of a user fee for determination letter requests. 2011 tax forms 1040a Go to IRS. 2011 tax forms 1040a gov/Charities and select Current User Fees-Exempt Organizations to find the required payment. 2011 tax forms 1040a Payment must accompany each request. 2011 tax forms 1040a Rulings and Determination Letters Elimination of the advance public charity status. 2011 tax forms 1040a   New regulations eliminate the advance ruling process for a section 501(c)(3) organization. 2011 tax forms 1040a Under the new regulations, a new section 501(c)(3) organization will be classified as a publicly supported organization and not a private foundation if it can show when it applies for tax-exempt status that it reasonably can be expected to be publicly supported. 2011 tax forms 1040a The new rules no longer require the organization to file Form 8734, Support Schedule for Advance Ruling Period, after completing its first 5 tax years. 2011 tax forms 1040a See Elimination of the Advance Ruling Process . 2011 tax forms 1040a An organization must describe fully the activities in which it expects to engage. 2011 tax forms 1040a This includes standards, procedures, or other means adopted or planned by the organization for carrying out its activities, expected sources of funds, and the nature of its contemplated expenses. 2011 tax forms 1040a When an organization does not supply the information previously mentioned under Application Procedures , or fails to furnish a sufficiently detailed description of its proposed activities to permit a conclusion that it will clearly be exempt, a proposed adverse determination letter or ruling may be issued. 2011 tax forms 1040a Adverse determination. 2011 tax forms 1040a   A proposed adverse ruling or determination letter will be issued to an organization that has not provided sufficiently detailed information to establish that it qualifies for exemption or if the information provided establishes that it does not qualify for exemption. 2011 tax forms 1040a An organization can appeal a proposed adverse ruling or determination letter. 2011 tax forms 1040a See Appeal Procedures , later. 2011 tax forms 1040a Effective Date of Exemption A ruling or determination letter recognizing exemption is usually effective as of the date of formation of an organization if, during the period before the date of the ruling or determination letter, its purposes and activities were those required by the law. 2011 tax forms 1040a (See Application for Recognition of Exemption in chapter 3 for the special rule for organizations applying for recognition of exemption under section 501(c)(3). 2011 tax forms 1040a ) Upon obtaining recognition of exemption, the organization can file a claim for a refund of income taxes paid for the period for which its exempt status is recognized. 2011 tax forms 1040a If an organization is required to alter its activities or substantially amend its charter to qualify, the ruling or determination letter recognizing exemption will be effective as of the date specified in the letter. 2011 tax forms 1040a If a nonsubstantive amendment is made, such as correction of a clerical error in the enabling instrument or the addition of a dissolution clause, exemption will ordinarily be recognized as of the date of formation if the activities of the organization before the ruling or determination are consistent with the exemption requirements. 2011 tax forms 1040a A ruling or determination letter recognizing exemption cannot be relied on if there is a material change, inconsistent with exemption, in the character, the purpose, or the method of operation of the organization. 2011 tax forms 1040a Also, a ruling or determination letter cannot be relied on if it is based on any inaccurate material factual representations. 2011 tax forms 1040a Revocation or Modification of Exemption A ruling or determination letter recognizing exemption may be revoked or modified by: A notice to the organization to which the ruling or determination letter originally was issued, Enactment of legislation or ratification of a tax treaty, A decision of the United States Supreme Court, Issuance of temporary or final regulations, or Issuance of a revenue ruling, a revenue procedure, or other statement published in the Internal Revenue Bulletin or Cumulative Bulletin. 2011 tax forms 1040a When revocation takes effect. 2011 tax forms 1040a   If the organization omitted or misstated a material fact, operated in a manner materially different from that originally represented, or, with regard to organizations to which section 503 applies, engaged in a prohibited transaction (such as diverting corpus or income from its exempt purpose), the revocation or modification may be retroactive. 2011 tax forms 1040a Material change in organization. 2011 tax forms 1040a   If there is a material change, inconsistent with exemption, in the character, purpose, or method of operation of the organization, revocation or modification will ordinarily take effect as of the date of that material change. 2011 tax forms 1040a Relief from retroactivity. 2011 tax forms 1040a   If a ruling or determination letter was issued in error or the IRS changed its position after issuing a letter or ruling, and if section 7805(b) relief is granted, retroactivity of the revocation or modification ordinarily will be limited to a date not earlier than that on which the original ruling or determination letter was modified or revoked. 2011 tax forms 1040a For more information on requesting section 7805(b) relief, see Revenue Procedure 2013-4, 2013-1 I. 2011 tax forms 1040a R. 2011 tax forms 1040a B. 2011 tax forms 1040a 126, sec. 2011 tax forms 1040a 13 (or later update). 2011 tax forms 1040a Foundations. 2011 tax forms 1040a   The determination of the effective date is the same for the revocation or modification of foundation status or operating foundation status unless the effective date is expressly covered by statute or regulations. 2011 tax forms 1040a Written notice. 2011 tax forms 1040a   If an EO area manager concludes, as a result of examining an information return or considering information from any other source, that a ruling or determination letter should be revoked or modified, the organization will be advised in writing of the proposed action and the reasons for it. 2011 tax forms 1040a   The organization will also be advised of its right to protest the proposed action by requesting Appeals Office consideration. 2011 tax forms 1040a The appeal procedures are discussed next. 2011 tax forms 1040a Appeal Procedures If your organization applies for tax-exempt status and EO Determination decides your organization does not qualify, your organization will be advised of its rights to protest the determination by requesting Appeals Office consideration. 2011 tax forms 1040a This process does not apply to determinations issued by EO Technical. 2011 tax forms 1040a Your organization must submit a statement of its views fully explaining its reasoning. 2011 tax forms 1040a The statement must be submitted within 30 days from the date of the adverse determination letter and must state whether it wishes Appeals Office consideration. 2011 tax forms 1040a Representation. 2011 tax forms 1040a   A principal officer or trustee can represent an organization at any level of appeal within the IRS. 2011 tax forms 1040a Also, an attorney, certified public accountant, or individual enrolled to practice before the IRS can represent the organization. 2011 tax forms 1040a   If the organization's representative attends a conference without a principal officer or trustee, the representative must file a proper power of attorney or a tax information authorization before receiving or inspecting confidential information. 2011 tax forms 1040a Form 2848 or Form 8821, Tax Information Authorization, as appropriate (or any other properly written power of attorney or authorization), can be used for this purpose. 2011 tax forms 1040a These forms can be obtained from the IRS. 2011 tax forms 1040a For more information, see Publication 947, Practice Before the IRS and Power of Attorney. 2011 tax forms 1040a Appeals Office Consideration EO Determinations will consider the statement protesting and appealing (hereinafter appealing) the adverse determination and decide if the information affects its determination. 2011 tax forms 1040a If the appeal does not provide a basis to reconsider its adverse determination, it will forward the appeal and case file to the Appeals Office. 2011 tax forms 1040a For more information about the role of the Appeals Office, see Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues. 2011 tax forms 1040a The appeal should include the following information. 2011 tax forms 1040a The organization's name, address, daytime telephone number, and employer identification number. 2011 tax forms 1040a A statement that the organization wants to protest the determination. 2011 tax forms 1040a A copy of the letter showing the determination you disagree with, or the date and symbols on the determination letter. 2011 tax forms 1040a A statement of facts supporting the organization's position in any contested factual issue. 2011 tax forms 1040a A statement outlining the law or other authority the organization is relying on. 2011 tax forms 1040a A statement as to whether a conference at the Appeals Office is desired. 2011 tax forms 1040a The statement of facts in item 4 must be declared true under penalties of perjury. 2011 tax forms 1040a This may be done by adding to the protest the following signed declaration:   “Under penalties of perjury, I declare that I have examined the statement of facts presented in this protest and in any accompanying schedules and statements and, to the best of my knowledge and belief, it is true, correct, and complete. 2011 tax forms 1040a ”           Signature. 2011 tax forms 1040a   If the organization's representative submits the appeal, a substitute declaration must be included, stating: That the representative prepared the appeal and accompanying documents, and Whether the representative knows personally that the statements of fact contained in the appeal and accompanying documents are true and correct. 2011 tax forms 1040a Be sure the appeal contains all of the information requested. 2011 tax forms 1040a Incomplete appeals will be returned for completion. 2011 tax forms 1040a If a conference is requested, it will be held at the Appeals Office, unless the organization requests that the meeting be held at a field office convenient to both parties. 2011 tax forms 1040a The Appeals Office, after considering the organization's appeal as well as information presented in any conference held, will notify the organization of its decision and issue an appropriate determination letter. 2011 tax forms 1040a An adverse decision can be appealed to the courts (discussed later). 2011 tax forms 1040a The Appeals Office must request technical advice from EO Technical on any exempt organization issue concerning qualification for exemption or foundation status for which there is no published precedent or for which there is reason to believe that nonuniformity exists. 2011 tax forms 1040a If an organization believes that its case involves such an issue, it should ask the Appeals Office to request technical advice. 2011 tax forms 1040a Any determination letter issued on the basis of technical advice from EO Technical cannot be appealed to the Appeals Office for those issues that were the subject of the technical advice from EO Technical. 2011 tax forms 1040a EO Technical Consideration If an application is referred to EO Technical for issuance of a ruling and an adverse ruling is issued, the organization will be informed of the basis for the conclusion, its right to file a protest within 30 days, and its right to have a conference with EO Technical. 2011 tax forms 1040a Administrative Remedies In the case of an application under section 501(c)(3), all of the following actions, called administrative remedies, must be completed by your organization before an unfavorable ruling or determination letter from the IRS can be appealed to the courts. 2011 tax forms 1040a The filing of a substantially completed application Form 1023 or group exemption request under section 501(c)(3) (described earlier in this chapter) or the filing of a request for a determination of foundation status (see Private Foundations and Public Charities in chapter 3). 2011 tax forms 1040a In the case of a late-filed application, requesting relief under Regulations section 301. 2011 tax forms 1040a 9100 regarding applications for extensions of time for making an election or application for relief from tax (see Application for Recognition of Exemption in chapter 3). 2011 tax forms 1040a The timely submission of all additional information requested to perfect an exemption application or request for determination of private foundation status. 2011 tax forms 1040a Exhaustion of all administrative appeals available within the IRS, including protest of an adverse ruling issued by EO Technical in the case of an exemption application. 2011 tax forms 1040a The actions just described will not be considered completed until the IRS has had a reasonable time to act upon the appeal or protest, as the case may be. 2011 tax forms 1040a An organization will not be considered to have exhausted its administrative remedies before the earlier of: The completion of the steps just listed and the sending by certified or registered mail of a notice of final determination, or The expiration of the 270-day period in which the IRS has not issued a notice of final determination and the organization has taken, in a timely manner, all reasonable steps to secure a ruling or determination. 2011 tax forms 1040a 270-day period. 2011 tax forms 1040a   The 270-day period will be considered by the IRS to begin on the date a substantially completed Form 1023 or group exemption request is sent to the IRS. 2011 tax forms 1040a See Application Procedures , earlier, for information needed to complete Form 1023. 2011 tax forms 1040a   If the application does not contain all of the required items, it will not be further processed and may be returned to the applicant for completion. 2011 tax forms 1040a The 270-day period, in this event, will not be considered as starting until the date the application is remailed to the IRS with the requested information, or, if a postmark is not evident, on the date the IRS receives a substantially completed application. 2011 tax forms 1040a Appeal to Courts If the IRS issues an unfavorable determination letter or ruling to your organization and you have exhausted all the administrative remedies just discussed, your organization can seek judicial remedies. 2011 tax forms 1040a For example, if your organization has paid the tax resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a refund in a U. 2011 tax forms 1040a S. 2011 tax forms 1040a District Court or the U. 2011 tax forms 1040a S. 2011 tax forms 1040a Court of Federal Claims. 2011 tax forms 1040a Or, if your organization elected not to pay the tax deficiency resulting from the adverse determination and met all other statutory prerequisites, it can file suit for a redetermination of the tax deficiencies in the United States Tax Court. 2011 tax forms 1040a For more information on these types of suits, get Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. 2011 tax forms 1040a In certain situations, your organization can file suit for a declaratory judgment in the U. 2011 tax forms 1040a S. 2011 tax forms 1040a District Court for the District of Columbia, the U. 2011 tax forms 1040a S. 2011 tax forms 1040a Court of Federal Claims, or the U. 2011 tax forms 1040a S. 2011 tax forms 1040a Tax Court. 2011 tax forms 1040a This remedy is available if your organization received an adverse notice of final determination, or if the IRS failed to make a timely determination on your initial or continuing qualification or classification as an exempt organization. 2011 tax forms 1040a However, your exempt status claim must be as: An organization qualifying under section 501(c)(3), An organization to which a deduction for a contribution is allowed under section 170(c)(2), An organization that is a private foundation under section 509(a), A private operating foundation under section 4942(j)(3), or A cooperative organization that is exempt from tax under section 521. 2011 tax forms 1040a Adverse notice of final determination. 2011 tax forms 1040a   The adverse notice of final determination referred to above is a ruling or determination letter sent by certified or registered mail holding that your organization: Is not described in section 501(c)(3) or section 170(c)(2), Is a private foundation as defined in section 4942(j)(3), or Is a public charity described in a part of section 509(a) or section 170(b)(1)(A) other than the part under which your organization requested classification. 2011 tax forms 1040a Favorable court rulings - IRS procedure. 2011 tax forms 1040a   If a suit results in a final determination that your organization is exempt from tax, the IRS will issue a favorable ruling or determination letter, provided your organization has filed an application for exemption and submitted a statement that the underlying facts and applicable law are the same as in the period considered by the court. 2011 tax forms 1040a Group Exemption Letter A group exemption letter is a ruling or determination letter issued to a central organization recognizing on a group basis the exemption under section 501(c) of subordinate organizations on whose behalf the central organization has applied for recognition of exemption. 2011 tax forms 1040a A central organization is an organization that has one or more subordinates under its general supervision or control. 2011 tax forms 1040a A subordinate organization is a chapter, local, post, or unit of a central organization. 2011 tax forms 1040a A central organization may be a subordinate itself, such as a state organization that has subordinate units and is itself affiliated with a national (central) organization. 2011 tax forms 1040a A subordinate organization may or may not be incorporated, but it must have an organizing document. 2011 tax forms 1040a A subordinate that is organized and operated in a foreign country cannot be included in a group exemption letter. 2011 tax forms 1040a A subordinate described in section 501(c)(3) cannot be included in a group exemption letter if it is a private foundation described in section 509(a). 2011 tax forms 1040a If your organization is a subordinate controlled by a central organization (for example, a church, a veterans' organization, or a fraternal organization), you should check with the central organization to see if it has been issued a group exemption letter that covers your organization. 2011 tax forms 1040a If it has, you do not have to file a separate application unless your organization no longer wants to be included in the group exemption letter. 2011 tax forms 1040a If the group exemption letter does not cover your organization, ask your central organization about being included in the next annual group ruling update that it submits to the IRS. 2011 tax forms 1040a Central Organization Application Procedure If your organization is a central organization with affiliated subordinates under its control, it can apply for a group exemption letter for its subordinates, provided it has obtained recognition of its own exemption before or concurrently with the group exemption. 2011 tax forms 1040a You should make the application for such subordinates by letter instead of submitting either Form 1023 or 1024. 2011 tax forms 1040a This procedure relieves each of the subordinates covered by a group exemption letter from filing its own application. 2011 tax forms 1040a A central organization obtains its own recognition of exemption by sending its application to the IRS address shown on Form 8718 or Form 1023. 2011 tax forms 1040a If the central organization has previously obtained recognition of its own exemption, it must indicate its employer identification number and the date of the letter recognizing its exemption. 2011 tax forms 1040a It need not forward documents already submitted. 2011 tax forms 1040a However, if it has not already done so, the central organization must submit a copy of any amendment to its governing instruments or internal regulations as well as any information about changes in its character, purposes, or method of operation. 2011 tax forms 1040a Employer identification number. 2011 tax forms 1040a   The central organization must have an EIN before it submits a completed exemption or group exemption application. 2011 tax forms 1040a Each subordinate must have its own EIN, even if it has no employees. 2011 tax forms 1040a When submitting its group exemption application, the central organization must provide an EIN for each subordinate organization. 2011 tax forms 1040a Information required for subordinate organizations. 2011 tax forms 1040a   In addition to the information required to obtain recognition of its own exemption, the central organization must submit information for those subordinates to be included in the group exemption letter. 2011 tax forms 1040a The information should be forwarded in a letter signed by a principal officer of the central organization setting forth or including as attachments the following. 2011 tax forms 1040a Information verifying that the subordinates: Are affiliated with the central organization at the close of its annual accounting period; Are subject to its general supervision or control; Are all eligible to qualify for exemption under the same paragraph of section 501(c), though not necessarily the paragraph under which the central organization itself is exempt; Are not private foundations if the application for a group exemption letter involves section 501(c)(3); Are all on the same accounting period as the central organization if they are to be included in group returns; and Are organizations that have been formed within the 15-month period preceding the date of submission of the group exemption application if they are claiming section 501(c)(3) status and are subject to the requirements of section 508(a) and wish to be recognized as exempt from their dates of creation (a group exemption letter may be issued covering subordinates, one or more of which have not been organized within the 15-month period preceding the date of submission, if all subordinates are willing to be recognized as exempt only from the date of application). 2011 tax forms 1040a A detailed description of the purposes and activities of the subordinates, including the sources of receipts and the nature of expenditures. 2011 tax forms 1040a A sample copy of a uniform governing instrument (such as a charter or articles of association) adopted by the subordinates, or, in its absence, copies of representative instruments. 2011 tax forms 1040a An affirmation to the effect that, to the best of the officer's knowledge, the purposes and activities of the subordinates are as stated in (2) and (3), above. 2011 tax forms 1040a A statement that each of the subordinates has provided a written authorization to the central organization, signed by an authorized officer of the subordinate, agreeing to be included in the group exemption (see also New 501(c)(3) organizations that want to be included , later in this section). 2011 tax forms 1040a A list of subordinates to be included in the group exemption letter to which the IRS has issued an outstanding ruling or determination letter relating to exemption. 2011 tax forms 1040a If the application for a group exemption letter involves section 501(c)(3) and is subject to the provisions of the Code requiring that it give timely notice that it is not a private foundation (see Private Foundations in chapter 3), an affirmation to the effect that, to the best of the officer's knowledge and belief, no subordinate to be included in the group exemption letter is a private foundation as defined in section 509(a). 2011 tax forms 1040a For each subordinate that is a school claiming exemption under section 501(c)(3), the information required by Revenue Ruling 71-447, 1971-2 C. 2011 tax forms 1040a B. 2011 tax forms 1040a 230 and Revenue Procedure 75-50, 1975-2 C. 2011 tax forms 1040a B. 2011 tax forms 1040a 587 (these requirements are fully described in chapter 3, under Private Schools ; see also Schedule B, Form 1023). 2011 tax forms 1040a For any school affiliated with a church, the information to show that the provisions of Revenue Ruling 75-231, 1975-1 C. 2011 tax forms 1040a B. 2011 tax forms 1040a 158, have been met. 2011 tax forms 1040a A list of the names, mailing addresses, actual addresses if different, and EINs of subordinates to be included in the group exemption letter. 2011 tax forms 1040a A current directory of subordinates may be furnished instead of the list if it includes the required information and if the subordinates not to be included in the group exemption letter are identified. 2011 tax forms 1040a New 501(c)(3) organizations that want to be included. 2011 tax forms 1040a   A new organization, described in section 501(c)(3), that wants to be included in a group exemption letter must submit its authorization (as explained in item number 5, earlier, under Information required for subordinate organizations ) to the central organization before the end of the 15th month after it was formed in order to satisfy the requirement of section 508(a). 2011 tax forms 1040a The central organization must also include this subordinate in its next annual submission of information, as discussed later, under Information Required Annually . 2011 tax forms 1040a Keeping the Group Exemption Letter in Force Continued effectiveness of a group exemption letter is based on the following conditions. 2011 tax forms 1040a The continued existence of the central organization. 2011 tax forms 1040a The continued qualification of the central organization for exemption under section 501(c). 2011 tax forms 1040a The submission by the central organization of the information regarding its subordinate organizations that is required annually (described under Information Required Annually). 2011 tax forms 1040a The annual filing of an information return (Form 990, for example) by the central organization if required. 2011 tax forms 1040a The continued effectiveness of a group exemption letter as to a particular subordinate is based on these four conditions, as well as on the continued conformity by the subordinate to the requirements for inclusion in a group exemption letter, the authorization for inclusion, and the annual filing of any required information return for the subordinate. 2011 tax forms 1040a Information Required Annually To maintain a group exemption letter, the central organization must submit annually, at least 90 days before the close of its annual accounting period, all of the following information. 2011 tax forms 1040a Information about all changes in the purposes, character, or method of operation of the subordinates included in the group exemption letter. 2011 tax forms 1040a A separate list (that includes the names, mailing addresses, actual addresses if different, and EINs of the affected subordinates) for each of the three following categories. 2011 tax forms 1040a Subordinates that have changed their names or addresses during the year. 2011 tax forms 1040a Subordinates no longer to be included in the group exemption letter because they no longer exist or have disaffiliated from or withdrawn their authorization to the central organization. 2011 tax forms 1040a Subordinates to be added to the group exemption letter because they are newly organized or affiliated or because they have recently authorized the central organization to include them. 2011 tax forms 1040a An annotated directory of subordinates will not be accepted for this purpose. 2011 tax forms 1040a If there were none of the above changes, the central organization must submit a statement to that effect. 2011 tax forms 1040a The same information about new subordinates that was required in the initial application for group exemption. 2011 tax forms 1040a (This information is listed in items 1 through 10, under Information required for subordinate organizations. 2011 tax forms 1040a , earlier. 2011 tax forms 1040a ) If a new subordinate does not differ in any material respects from the subordinates included in the application for group exemption, however, a statement to this effect may be submitted in lieu of detailed information. 2011 tax forms 1040a The organization should send this information to:   Ogden Service Center  Mail Stop 6271 Ogden, UT 84404-4749 Submitting the required information annually does not relieve the central organization or any of its subordinates of the duty to submit any other information that may be required by an EO area manager to determine whether the conditions for continued exemption are being met. 2011 tax forms 1040a Events Causing Loss of Group Exemption A group exemption letter no longer has effect, for either a particular subordinate or the group as a whole, when: The central organization notifies the IRS that it is going out of existence, The central organization notifies the IRS, by its annual submission or otherwise, that any of its subordinates will no longer fulfill the conditions for continued effectiveness, explained earlier, or The IRS notifies the central organization or the affected subordinate that the group exemption letter will no longer have effect for some or all of the group because the conditions for continued effectiveness of a group exemption letter have not been fulfilled. 2011 tax forms 1040a When notice is given under any of these three conditions, the IRS will no longer recognize the exempt status of the affected subordinates until they file separate applications on their own behalf or the central organization files complete supporting information for their reinclusion in the group exemption at the time of its annual submission. 2011 tax forms 1040a However, when the notice is given by the IRS and the withdrawal of recognition is based on the failure of the organization to comply with the requirements for recognition of tax-exempt status under the particular subsection of section 501(c), the revocation will ordinarily take effect as of the date of that failure. 2011 tax forms 1040a The notice, however, will be given only after the appeal procedures described earlier in this chapter are completed. 2011 tax forms 1040a Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in South Carolina

Face-to-face Tax Help

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

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

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

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

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

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

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

City  Street Address  Days/Hours of Service  Telephone* 
Charleston 1 Poston Rd. 
Charleston, SC 29407

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

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

 

    Services Provided

(843) 566-0209 
Columbia  1835 Assembly St.
Columbia, SC 29201 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

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

 

    Services Provided

(803) 765-5544 
Florence  401 W. Evans St.
Florence, SC 29501 

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

 

     Services Provided

(843) 664-8889 
Greenville  440 Roper Mountain Rd.
Greenville, SC 29615 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

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

 

    Services Provided

(864) 286-7095 
Myrtle Beach  601 19th Ave. N.
Myrtle Beach, SC 29577 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon-1:00 p.m.)

 

     Services Provided

(843) 626-2700 

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

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

The Taxpayer Advocate Service: Call (803)253-3029 in Columbia or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

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

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

Internal Revenue Service
1835 Assembly St. MDP 16
Columbia, SC 29201

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

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

Page Last Reviewed or Updated: 28-Mar-2014

The 2011 Tax Forms 1040a

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