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2012 Tax Return Booklet

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2012 Tax Return Booklet

2012 tax return booklet 2. 2012 tax return booklet   American Opportunity Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible StudentException. 2012 tax return booklet Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Refundable Part of Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. 2012 tax return booklet They are the American opportunity credit (this chapter) and the lifetime learning credit ( chapter 3 ). 2012 tax return booklet This chapter explains: Who can claim the American opportunity credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. 2012 tax return booklet What is the tax benefit of the American opportunity credit. 2012 tax return booklet   For the tax year, you may be able to claim an American opportunity credit of up to $2,500 for qualified education expenses paid for each eligible student. 2012 tax return booklet   A tax credit reduces the amount of income tax you may have to pay. 2012 tax return booklet Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. 2012 tax return booklet Forty percent of the American opportunity credit may be refundable. 2012 tax return booklet This means that if the refundable portion of your credit is more than your tax, the excess will be refunded to you. 2012 tax return booklet   Your allowable American opportunity credit may be limited by the amount of your income. 2012 tax return booklet Also, the nonrefundable part of the credit may be limited by the amount of your tax. 2012 tax return booklet Overview of the American opportunity credit. 2012 tax return booklet   See Table 2-1, Overview of the American Opportunity Credit , for the basics of this credit. 2012 tax return booklet The details are discussed in this chapter. 2012 tax return booklet Can you claim more than one education credit this year. 2012 tax return booklet   For each student, you can elect for any year only one of the credits. 2012 tax return booklet For example, if you elect to take the American opportunity credit for a child on your 2013 tax return, you cannot use that same child's qualified education expenses to figure the lifetime learning credit for 2013. 2012 tax return booklet   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity credit on a per-student, per-year basis. 2012 tax return booklet If you pay qualified education expenses for a student (or students) for whom you do not claim the American opportunity credit, you can use the adjusted qualified education expenses of that student (or those students) in figuring your lifetime learning credit. 2012 tax return booklet This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. 2012 tax return booklet Differences between the American opportunity and lifetime learning credits. 2012 tax return booklet   There are several differences between these two credits. 2012 tax return booklet For example, you can claim the American opportunity credit based on the same student's expenses for no more than 4 tax years, which includes any tax years you claimed the Hope Scholarship Credit for that student. 2012 tax return booklet However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. 2012 tax return booklet The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. 2012 tax return booklet If you claim the American opportunity credit for any student, you can choose between using that student's adjusted qualified education expenses for the American opportunity credit or the lifetime learning credit. 2012 tax return booklet If you have the choice, the American opportunity credit will always be greater than the lifetime learning credit. 2012 tax return booklet Table 2-1. 2012 tax return booklet Overview of the American Opportunity Credit Maximum credit Up to $2,500 credit per eligible student Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) Hope Scholarship Credit was claimed) Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period that begins during the tax year Felony drug conviction As of the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Can You Claim the Credit The following rules will help you determine if you are eligible to claim the American opportunity credit on your tax return. 2012 tax return booklet Who Can Claim the Credit Generally, you can claim the American opportunity credit if all three of the following requirements are met. 2012 tax return booklet You pay qualified education expenses of higher education. 2012 tax return booklet You pay the education expenses for an eligible student. 2012 tax return booklet The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. 2012 tax return booklet Student qualifications. 2012 tax return booklet   Generally, you can take the American opportunity credit for a student only if all of the following four requirements are met. 2012 tax return booklet As of the beginning of 2013, the student had not completed the first four years of postsecondary education (generally, the freshman through senior years of college), as determined by the eligible educational institution. 2012 tax return booklet For this purpose, do not include academic credit awarded solely because of the student's performance on proficiency examinations. 2012 tax return booklet Neither the American opportunity credit nor the Hope Scholarship Credit has been claimed (by you or anyone else) for this student for any four tax years before 2013. 2012 tax return booklet If the American opportunity credit (and Hope Scholarship Credit) has been claimed for this student for any three or fewer tax years before 2013, this requirement is met. 2012 tax return booklet For at least one academic period beginning (or treated as beginning) in 2013, the student both: Was enrolled in a program that leads to a degree, certificate, or other recognized educational credential; and Carried at least one-half the normal full-time workload for his or her course of study. 2012 tax return booklet The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 2012 tax return booklet However, the standard may not be lower than any of those established by the U. 2012 tax return booklet S. 2012 tax return booklet Department of Education under the Higher Education Act of 1965. 2012 tax return booklet For purposes of whether the student satisfies this third requirement for 2013, treat an academic period beginning in the first three months of 2014 as if it began in 2013 if qualified education expenses for the student were paid in 2013 for that academic period. 2012 tax return booklet See Prepaid expenses, later. 2012 tax return booklet As of the end of 2013, the student had not been convicted of a federal or state felony for possessing or distributing a controlled substance. 2012 tax return booklet Example 1. 2012 tax return booklet Sharon was eligible for the Hope Scholarship Credit for 2007 and 2008 and for the American opportunity credit for 2010 and 2012. 2012 tax return booklet Her parents claimed the Hope Scholarship Credit for Sharon on their tax returns for 2007 and 2008 and claimed the American opportunity credit for Sharon on their 2010 tax return. 2012 tax return booklet Sharon claimed the American opportunity credit on her 2012 tax return. 2012 tax return booklet The American opportunity credit and Hope Scholarship Credit have been claimed for Sharon for four tax years before 2013. 2012 tax return booklet Therefore, the American opportunity credit cannot be claimed by Sharon for 2013. 2012 tax return booklet If Sharon were to file Form 8863 for 2013, she would check “Yes” for Part III, line 23, and would be eligible to claim only the lifetime learning credit. 2012 tax return booklet Example 2. 2012 tax return booklet Wilbert was eligible for the American opportunity credit for 2009, 2010, 2011, and 2013. 2012 tax return booklet His parents claimed the American opportunity credit for Wilbert on their tax returns for 2009, 2010, and 2011. 2012 tax return booklet No one claimed an American opportunity credit or Hope Scholarship Credit for Wilbert for any other tax year. 2012 tax return booklet The American opportunity credit and Hope Scholarship Credit have been claimed for Wilbert for only three tax years before 2013. 2012 tax return booklet Therefore, Wilbert meets the second requirement to be eligible for the American opportunity credit. 2012 tax return booklet If Wilbert were to file Form 8863 for 2013, he would check “No” for Part III, line 23. 2012 tax return booklet If Wilbert meets all of the other requirements, he is eligible for the American opportunity credit. 2012 tax return booklet Example 3. 2012 tax return booklet Glenda enrolls on a full-time basis in a degree program for the 2014 Spring semester, which begins in January 2014. 2012 tax return booklet Glenda pays her tuition for the 2014 Spring semester in December 2013. 2012 tax return booklet Because the tuition Glenda paid in 2013 relates to an academic period that begins in the first 3 months of 2014, her eligibility to claim an American opportunity credit in 2013 is determined as if the 2014 Spring semester began in 2013. 2012 tax return booklet If the requirements above are not met for any student, you cannot take the American opportunity credit for that student. 2012 tax return booklet You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. 2012 tax return booklet Note. 2012 tax return booklet Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. 2012 tax return booklet “Qualified education expenses” are defined later under Qualified Education Expenses . 2012 tax return booklet “Eligible students” are defined later under Who Is an Eligible Student . 2012 tax return booklet A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . 2012 tax return booklet You may find Figure 2-1, Can You Claim the American Opportunity Credit for 2013 , later, helpful in determining if you can claim an American opportunity credit on your tax return. 2012 tax return booklet This image is too large to be displayed in the current screen. 2012 tax return booklet Please click the link to view the image. 2012 tax return booklet Figure 2-1 Can you claim the American opportunity credit for 2012? Who Cannot Claim the Credit You cannot claim the American opportunity credit for 2013 if any of the following apply. 2012 tax return booklet Your filing status is married filing separately. 2012 tax return booklet You are listed as a dependent on another person's tax return (such as your parents'). 2012 tax return booklet See Who Can Claim a Dependent's Expenses , later. 2012 tax return booklet Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more in the case of a joint return). 2012 tax return booklet MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . 2012 tax return booklet You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. 2012 tax return booklet More information on nonresident aliens can be found in Publication 519, U. 2012 tax return booklet S. 2012 tax return booklet Tax Guide for Aliens. 2012 tax return booklet What Expenses Qualify The American opportunity credit is based on adjusted qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. 2012 tax return booklet Generally, the credit is allowed for adjusted qualified education expenses paid in 2013 for an academic period beginning in 2013 or beginning in the first three months of 2014. 2012 tax return booklet For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning January 2014, you can use that $1,500 in figuring your 2013 credit. 2012 tax return booklet Academic period. 2012 tax return booklet   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. 2012 tax return booklet In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. 2012 tax return booklet Paid with borrowed funds. 2012 tax return booklet   You can claim an American opportunity credit for qualified education expenses paid with the proceeds of a loan. 2012 tax return booklet Use the expenses to figure the American opportunity credit for the year in which the expenses are paid, not the year in which the loan is repaid. 2012 tax return booklet Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. 2012 tax return booklet Student withdraws from class(es). 2012 tax return booklet   You can claim an American opportunity credit for qualified education expenses not refunded when a student withdraws. 2012 tax return booklet Qualified Education Expenses For purposes of the American opportunity credit, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. 2012 tax return booklet Eligible educational institution. 2012 tax return booklet   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 2012 tax return booklet S. 2012 tax return booklet Department of Education. 2012 tax return booklet It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2012 tax return booklet The educational institution should be able to tell you if it is an eligible educational institution. 2012 tax return booklet   Certain educational institutions located outside the United States also participate in the U. 2012 tax return booklet S. 2012 tax return booklet Department of Education's Federal Student Aid (FSA) programs. 2012 tax return booklet Related expenses. 2012 tax return booklet   Student-activity fees are included in qualified education expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. 2012 tax return booklet   However, expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution. 2012 tax return booklet Prepaid expenses. 2012 tax return booklet   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. 2012 tax return booklet See Academic period, earlier. 2012 tax return booklet For example, if you pay $2,000 in December 2013, for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). 2012 tax return booklet    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). 2012 tax return booklet   In the following examples, assume that each student is an eligible student at an eligible educational institution. 2012 tax return booklet Example 1. 2012 tax return booklet Jefferson is a sophomore in University V's degree program in dentistry. 2012 tax return booklet This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. 2012 tax return booklet Because the equipment rental is needed for his course of study, Jefferson's equipment rental fee is a qualified expense. 2012 tax return booklet Example 2. 2012 tax return booklet Grace and William, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. 2012 tax return booklet The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. 2012 tax return booklet William bought his books from a friend; Grace bought hers at College W's bookstore. 2012 tax return booklet Both are qualified education expenses for the American opportunity credit. 2012 tax return booklet Example 3. 2012 tax return booklet When Kelly enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. 2012 tax return booklet This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. 2012 tax return booklet No portion of the fee covers personal expenses. 2012 tax return booklet Although labeled as a student activity fee, the fee is required for Kelly's enrollment and attendance at College X and is a qualified expense. 2012 tax return booklet No Double Benefit Allowed You cannot do any of the following. 2012 tax return booklet Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an American opportunity credit based on those same expenses. 2012 tax return booklet Claim an American opportunity credit in the same year that you are claiming a tuition and fees deduction for the same student. 2012 tax return booklet Claim an American opportunity credit for any student and use any of that student's expenses in figuring your lifetime learning credit. 2012 tax return booklet Figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP) using the same expenses you used to figure the American opportunity credit. 2012 tax return booklet See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. 2012 tax return booklet Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. 2012 tax return booklet See Adjustments to Qualified Education Expenses, next. 2012 tax return booklet Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. 2012 tax return booklet The result is the amount of adjusted qualified education expenses for each student. 2012 tax return booklet Tax-free educational assistance. 2012 tax return booklet   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. 2012 tax return booklet See Academic period, earlier. 2012 tax return booklet   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. 2012 tax return booklet This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). 2012 tax return booklet   If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. 2012 tax return booklet If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. 2012 tax return booklet   Tax-free educational assistance includes: The tax-free parts of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions). 2012 tax return booklet Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2012 tax return booklet Generally, any scholarship or fellowship is treated as tax free. 2012 tax return booklet However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. 2012 tax return booklet The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2012 tax return booklet The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2012 tax return booklet You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. 2012 tax return booklet For examples, see Coordination with Pell grants and other scholarships, later. 2012 tax return booklet Refunds. 2012 tax return booklet   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. 2012 tax return booklet Some tax-free educational assistance received after 2013 may be treated as a refund. 2012 tax return booklet See Tax-free educational assistance, earlier. 2012 tax return booklet Refunds received in 2013. 2012 tax return booklet   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. 2012 tax return booklet Refunds received after 2013 but before your income tax return is filed. 2012 tax return booklet   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. 2012 tax return booklet Refunds received after 2013 and after your income tax return is filed. 2012 tax return booklet   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. 2012 tax return booklet See Credit recapture, next. 2012 tax return booklet Credit recapture. 2012 tax return booklet    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. 2012 tax return booklet You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. 2012 tax return booklet You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you claimed the refigured credit(s). 2012 tax return booklet Include that amount as an additional tax for the year the refund or tax-free assistance was received. 2012 tax return booklet Example. 2012 tax return booklet   You paid $7,000 tuition and fees in August 2013, and your child began college in September 2013. 2012 tax return booklet You filed your 2013 tax return on February 17, 2014, and claimed an American opportunity credit of $2,500. 2012 tax return booklet After you filed your return, you received a refund of $4,000. 2012 tax return booklet You must refigure your 2013 American opportunity credit using $3,000 of qualified education expenses instead of $7,000. 2012 tax return booklet The refigured credit is $2,250. 2012 tax return booklet The increase to your tax liability is also $250. 2012 tax return booklet Include the difference of $250 as additional tax on your 2014 tax return. 2012 tax return booklet See the instructions for your 2014 income tax return to determine where to include this tax. 2012 tax return booklet If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. 2012 tax return booklet Amounts that do not reduce qualified education expenses. 2012 tax return booklet   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 2012 tax return booklet   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. 2012 tax return booklet The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2012 tax return booklet The use of the money is not restricted. 2012 tax return booklet Example 1. 2012 tax return booklet Joan paid $3,000 for tuition and $5,000 for room and board at University X. 2012 tax return booklet The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. 2012 tax return booklet To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. 2012 tax return booklet The terms of the scholarship state that it can be used to pay any of Joan's college expenses. 2012 tax return booklet University X applies the $2,000 scholarship against Joan's $8,000 total bill, and Joan pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. 2012 tax return booklet Joan does not report any portion of the scholarship as income on her tax return. 2012 tax return booklet In figuring the amount of either education credit (American opportunity or lifetime learning), Joan must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. 2012 tax return booklet The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. 2012 tax return booklet Joan is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship). 2012 tax return booklet Example 2. 2012 tax return booklet The facts are the same as in Example 1, except that Joan reports her entire scholarship as income on her tax return. 2012 tax return booklet Because Joan reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. 2012 tax return booklet Joan is treated as having paid $3,000 in qualified education expenses. 2012 tax return booklet Coordination with Pell grants and other scholarships. 2012 tax return booklet   In some cases, you may be able to reduce your tax liability by including scholarships in income. 2012 tax return booklet If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. 2012 tax return booklet The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. 2012 tax return booklet Example 1—No scholarship. 2012 tax return booklet Bill Pass, age 28 and unmarried, enrolled full-time in 2013 as a first-year student at a local college to earn a degree in law enforcement. 2012 tax return booklet This was his first year of postsecondary education. 2012 tax return booklet During 2013, he paid $5,600 for his qualified education expenses and $4,400 for his room and board for the fall 2013 semester. 2012 tax return booklet He and the college meet all the requirements for the American opportunity credit. 2012 tax return booklet Bill's AGI and his MAGI, for purposes of figuring his credit, are $30,000. 2012 tax return booklet Bill takes the standard deduction of $5,950 and personal exemption of $3,800, reducing his AGI to taxable income of $20,250. 2012 tax return booklet His income tax liability, before credits, is $2,599 and Bill claims no credits other than the American opportunity credit. 2012 tax return booklet He figures his American opportunity credit based on qualified education expenses of $4,000, which results in a credit of $2,500 and tax after credits of $99. 2012 tax return booklet Example 2—Scholarship excluded from income. 2012 tax return booklet The facts are the same as in Example 1—No scholarship, except that Bill was awarded a $5,600 scholarship. 2012 tax return booklet Under the terms of his scholarship, it may be used to pay any educational expenses, including room and board. 2012 tax return booklet If Bill excludes the scholarship from income, he will be deemed (for purposes of computing his education credit) to have used the scholarship to pay for tuition, required fees, and course materials. 2012 tax return booklet His adjusted qualified education expenses will be zero and he will not have an education credit. 2012 tax return booklet Therefore, Bill's tax after credits would be $2,599. 2012 tax return booklet Example 3—Scholarship partially included in income. 2012 tax return booklet The facts are the same as in Example 2—Scholarship excluded from income. 2012 tax return booklet If, unlike Example 2, Bill includes $4,000 of the scholarship in income, he will be deemed to have used that amount to pay for room and board. 2012 tax return booklet The remaining $1,600 of the $5,600 scholarship will reduce his qualified education expenses and his adjusted qualified education expenses will be $4,000. 2012 tax return booklet Bill's AGI will increase to $34,000, his taxable income will increase to $24,250, and his tax before credits will increase to $3,199. 2012 tax return booklet Based on his adjusted qualified education expenses of $4,000, Bill would be able to claim an American opportunity tax credit of $2,500 and his tax after credits would be $699. 2012 tax return booklet Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. 2012 tax return booklet This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. 2012 tax return booklet Sports, games, hobbies, and noncredit courses. 2012 tax return booklet   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. 2012 tax return booklet However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify. 2012 tax return booklet Comprehensive or bundled fees. 2012 tax return booklet   Some eligible educational institutions combine all of their fees for an academic period into one amount. 2012 tax return booklet If you do not receive or do not have access to an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed earlier, contact the institution. 2012 tax return booklet The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T, Tuition Statement. 2012 tax return booklet See Figuring the Credit , later, for more information about Form 1098-T. 2012 tax return booklet Who Is an Eligible Student To claim the American opportunity credit, the student for whom you pay qualified education expenses must be an eligible student. 2012 tax return booklet This is a student who meets all of the following requirements. 2012 tax return booklet The student did not have expenses that were used to figure an American opportunity credit in any 4 earlier tax years. 2012 tax return booklet This includes any tax year(s) in which you claimed the Hope Scholarship Credit for the same student. 2012 tax return booklet The student had not completed the first 4 years of postsecondary education (generally, the freshman, sophomore, junior, and senior years of college) before 2013. 2012 tax return booklet For at least one academic period beginning in 2013, the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. 2012 tax return booklet The student has not been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2013. 2012 tax return booklet These requirements are also shown in Figure 2-2, Who is an Eligible Student for the American Opportunity Credit , later. 2012 tax return booklet Completion of first 4 years. 2012 tax return booklet   A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2013. 2012 tax return booklet This student generally would not be an eligible student for purposes of the American opportunity credit. 2012 tax return booklet Exception. 2012 tax return booklet   Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 4 years of postsecondary education. 2012 tax return booklet Enrolled at least half-time. 2012 tax return booklet   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. 2012 tax return booklet   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 2012 tax return booklet However, the standard may not be lower than any of those established by the U. 2012 tax return booklet S. 2012 tax return booklet Department of Education under the Higher Education Act of 1965. 2012 tax return booklet Please click here for the text description of the image. 2012 tax return booklet Figure 2-2 Example 1. 2012 tax return booklet Mack graduated from high school in June 2012. 2012 tax return booklet In September, he enrolled in an undergraduate degree program at College U, and attended full-time for both the 2012 fall and 2013 spring semesters. 2012 tax return booklet For the 2013 fall semester, Mack was enrolled less than half-time. 2012 tax return booklet Because Mack was enrolled in an undergraduate degree program on at least a half-time basis for at least one academic period that began during 2012 and at least one academic period that began during 2013, he is an eligible student for tax years 2012 and 2013 (including the 2013 fall semester when he enrolled at College U on less than a half-time basis). 2012 tax return booklet Example 2. 2012 tax return booklet After taking classes at College V on a part-time basis for a few years, Shelly became a full-time student for the 2013 spring semester. 2012 tax return booklet College V classified Shelly as a second-semester senior (fourth year) for the 2013 spring semester and as a first-semester graduate student (fifth year) for the 2013 fall semester. 2012 tax return booklet Because College V did not classify Shelly as having completed the first 4 years of postsecondary education as of the beginning of 2013, Shelly is an eligible student for tax year 2013. 2012 tax return booklet Therefore, the qualified education expenses paid for the 2013 spring semester and the 2013 fall semester are taken into account in calculating the American opportunity credit for 2013. 2012 tax return booklet Example 3. 2012 tax return booklet During the 2012 fall semester, Larry was a high school student who took classes on a half-time basis at College X. 2012 tax return booklet Larry was not enrolled as part of a degree program at College X because College X only admits students to a degree program if they have a high school diploma or equivalent. 2012 tax return booklet Because Larry was not enrolled in a degree program at College X during 2012, Larry was not an eligible student for tax year 2012. 2012 tax return booklet Example 4. 2012 tax return booklet The facts are the same as in Example 3. 2012 tax return booklet During the 2013 spring semester, Larry again attended College X but not as part of a degree program. 2012 tax return booklet Larry graduated from high school in June 2013. 2012 tax return booklet For the 2013 fall semester, Larry enrolled as a full-time student in College X as part of a degree program, and College X awarded Larry credit for his prior coursework at College X. 2012 tax return booklet Because Larry was enrolled in a degree program at College X for the 2013 fall term on at least a half-time basis, Larry is an eligible student for all of tax year 2013. 2012 tax return booklet Therefore, the qualified education expenses paid for classes taken at College X during both the 2013 spring semester (during which Larry was not enrolled in a degree program) and the 2013 fall semester are taken into account in computing any American opportunity credit. 2012 tax return booklet Example 5. 2012 tax return booklet Dee graduated from high school in June 2012. 2012 tax return booklet In January 2013, Dee enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a travel agent. 2012 tax return booklet Dee completed the program in December 2013, and was awarded a certificate. 2012 tax return booklet In January 2014, she enrolled in a 1-year postsecondary certificate program on a full-time basis to obtain a certificate as a computer programmer. 2012 tax return booklet Dee is an eligible student for both tax years 2013 and 2014 because she meets the degree requirement, the work load requirement, and the year of study requirement for those years. 2012 tax return booklet Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim an American opportunity credit for your dependent's expenses for that year. 2012 tax return booklet For you to claim an American opportunity credit for your dependent's expenses, you must also claim an exemption for your dependent. 2012 tax return booklet You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. 2012 tax return booklet IF you. 2012 tax return booklet . 2012 tax return booklet . 2012 tax return booklet THEN only. 2012 tax return booklet . 2012 tax return booklet . 2012 tax return booklet claim an exemption on  your tax return for a  dependent who is an  eligible student you can claim the American opportunity credit based on that dependent's expenses. 2012 tax return booklet The dependent cannot claim the credit. 2012 tax return booklet do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the American opportunity credit. 2012 tax return booklet You cannot claim the credit based on this dependent's expenses. 2012 tax return booklet Expenses paid by dependent. 2012 tax return booklet   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. 2012 tax return booklet Include these expenses when figuring the amount of your American opportunity credit. 2012 tax return booklet    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. 2012 tax return booklet Expenses paid by you. 2012 tax return booklet   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the American opportunity credit. 2012 tax return booklet If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the American opportunity credit. 2012 tax return booklet Expenses paid by others. 2012 tax return booklet   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. 2012 tax return booklet In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. 2012 tax return booklet If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. 2012 tax return booklet Example. 2012 tax return booklet In 2013, Ms. 2012 tax return booklet Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. 2012 tax return booklet For purposes of claiming an American opportunity credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. 2012 tax return booklet Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim an American opportunity credit. 2012 tax return booklet If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim an American opportunity credit. 2012 tax return booklet If anyone else claims an exemption for Todd, Todd cannot claim an American opportunity credit. 2012 tax return booklet Tuition reduction. 2012 tax return booklet    When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. 2012 tax return booklet If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. 2012 tax return booklet For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2012 tax return booklet Figuring the Credit The amount of the American opportunity credit (per eligible student) is the sum of: 100% of the first $2,000 of qualified education expenses you paid for the eligible student, and 25% of the next $2,000 of qualified education expenses you paid for that student. 2012 tax return booklet The maximum amount of American opportunity credit you can claim in 2013 is $2,500 multiplied by the number of eligible students. 2012 tax return booklet You can claim the full $2,500 for each eligible student for whom you paid at least $4,000 of adjusted qualified education expenses. 2012 tax return booklet However, the credit may be reduced based on your MAGI. 2012 tax return booklet See Effect of the Amount of Your Income on the Amount of Your Credit , later. 2012 tax return booklet Example. 2012 tax return booklet Jack and Kay Ford are married and file a joint tax return. 2012 tax return booklet For 2013, they claim an exemption for their dependent daughter on their tax return. 2012 tax return booklet Their MAGI is $70,000. 2012 tax return booklet Their daughter is in her junior (third) year of studies at the local university. 2012 tax return booklet Jack and Kay paid qualified education expenses of $4,300 in 2013. 2012 tax return booklet Jack and Kay, their daughter, and the local university meet all of the requirements for the American opportunity credit. 2012 tax return booklet Jack and Kay can claim a $2,500 American opportunity credit in 2013. 2012 tax return booklet This is 100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000. 2012 tax return booklet Form 1098-T. 2012 tax return booklet   To help you figure your American opportunity credit, the student should receive Form 1098-T, Tuition Statement. 2012 tax return booklet Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. 2012 tax return booklet An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. 2012 tax return booklet However, the amounts in boxes 1 and 2 of Form 1098-T might be different than what you paid. 2012 tax return booklet When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. 2012 tax return booklet   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. 2012 tax return booklet    The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number. 2012 tax return booklet Effect of the Amount of Your Income on the Amount of Your Credit The amount of your American opportunity credit is phased out (gradually reduced) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). 2012 tax return booklet You cannot claim an American opportunity credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return). 2012 tax return booklet Modified adjusted gross income (MAGI). 2012 tax return booklet   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. 2012 tax return booklet MAGI when using Form 1040A. 2012 tax return booklet   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. 2012 tax return booklet MAGI when using Form 1040. 2012 tax return booklet   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. 2012 tax return booklet You can use Worksheet 2-1, next, to figure your MAGI. 2012 tax return booklet    Worksheet 2-1. 2012 tax return booklet MAGI for the American Opportunity Credit 1. 2012 tax return booklet Enter your adjusted gross income  (Form 1040, line 38)   1. 2012 tax return booklet   2. 2012 tax return booklet Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. 2012 tax return booklet       3. 2012 tax return booklet Enter your foreign housing deduction (Form 2555, line 50)   3. 2012 tax return booklet       4. 2012 tax return booklet Enter the amount of income from Puerto Rico you are excluding   4. 2012 tax return booklet       5. 2012 tax return booklet Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. 2012 tax return booklet       6. 2012 tax return booklet Add the amounts on lines 2, 3, 4, and 5   6. 2012 tax return booklet   7. 2012 tax return booklet Add the amounts on lines 1 and 6. 2012 tax return booklet  This is your modified adjusted  gross income. 2012 tax return booklet Enter here and  on Form 8863, line 3   7. 2012 tax return booklet   Phaseout. 2012 tax return booklet   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 2-7, of Form 8863, Part I. 2012 tax return booklet The same method is shown in the following example. 2012 tax return booklet Example. 2012 tax return booklet You are filing a joint return and your MAGI is $165,000. 2012 tax return booklet In 2013, you paid $5,000 of qualified education expenses. 2012 tax return booklet You figure a tentative American opportunity credit of $2,500 (100% of the first $2,000 of qualified education expenses, plus 25% of the next $2,000 of qualified education expenses). 2012 tax return booklet Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($2,500) by a fraction. 2012 tax return booklet The numerator of the fraction is $180,000 (the upper limit for those filing a joint return) minus your MAGI. 2012 tax return booklet The denominator is $20,000, the range of incomes for the phaseout ($160,000 to $180,000). 2012 tax return booklet The result is the amount of your phased out (reduced) American opportunity credit ($1,875). 2012 tax return booklet      $2,500 × $180,000 − $165,000  $20,000 = $1,875   Refundable Part of Credit Forty percent of the American opportunity credit is refundable for most taxpayers. 2012 tax return booklet However, if you were under age 24 at the end of 2013 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. 2012 tax return booklet Instead, your allowed credit (figured on Form 8863, Part II) will be used to reduce your tax as a nonrefundable credit only. 2012 tax return booklet You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you. 2012 tax return booklet You were: Under age 18 at the end of 2013, or Age 18 at the end of 2013 and your earned income (defined below) was less than one-half of your support (defined below), or Over age 18 and under age 24 at the end of 2013 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below). 2012 tax return booklet At least one of your parents was alive at the end of 2013. 2012 tax return booklet You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2013. 2012 tax return booklet Earned income. 2012 tax return booklet   Earned income includes wages, salaries, professional fees, and other payments received for personal services actually performed. 2012 tax return booklet Earned income includes the part of any scholarship or fellowship that represents payment for teaching, research, or other services performed by the student that are required as a condition for receiving the scholarship or fellowship. 2012 tax return booklet Earned income does not include that part of the compensation for personal services rendered to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. 2012 tax return booklet   If you are a sole proprietor or a partner in a trade or business in which both personal services and capital are material income-producing factors, earned income also includes a reasonable allowance for compensation for personal services, but not more than 30% of your share of the net profits from that trade or business (after subtracting the deduction for one-half of self-employment tax). 2012 tax return booklet However, if capital is not an income-producing factor and your personal services produced the business income, the 30% limit does not apply. 2012 tax return booklet Support. 2012 tax return booklet   Your support includes food, shelter, clothing, medical and dental care, education, and the like. 2012 tax return booklet Generally, the amount of the item of support will be the amount of expenses incurred by the one furnishing such item. 2012 tax return booklet If the item of support is in the form of property or lodging, measure the amount of such item of support by its fair market value. 2012 tax return booklet However, a scholarship received by you is not considered support if you are a full-time student. 2012 tax return booklet See Publication 501 for details. 2012 tax return booklet Full-time student. 2012 tax return booklet   You are a full-time student for 2013 if during any part of any 5 calendar months during the year you were enrolled as a full-time student at an eligible educational institution (defined earlier), or took a full-time, on-farm training course given by such an institution or by a state, county, or local government agency. 2012 tax return booklet Claiming the Credit You claim the American opportunity credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. 2012 tax return booklet Enter the nonrefundable part of the credit on Form 1040, line 49, or on Form 1040A, line 31. 2012 tax return booklet Enter the refundable part of the credit on Form 1040, line 66, or on Form 1040A, line 40. 2012 tax return booklet A filled-in Form 8863 is shown at the end of this publication. 2012 tax return booklet Note. 2012 tax return booklet In Appendix A. 2012 tax return booklet at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return. 2012 tax 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Identity Protection

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The IRS is committed to working with taxpayers who are the victims of identity theft

The IRS has taken numerous steps to combat identity theft and protect taxpayers. We are continually looking at ways to increase data security and protect taxpayers' identities with assistance from our Identity Protection Specialized Unit. Identity theft cases are among the most complex ones we handle.

We know identity theft is a frustrating process for victims. We take this issue very seriously and continue to expand on our robust screening process in order to stop fraudulent returns and protect innocent taxpayers.

On this page, you will find a wide range of information. Depending upon your personal circumstances, the information found here will cover a variety of scenarios involving identity theft, ranging from contacting us with a case of identity theft to providing tips to help keep your records safe.

  • Victim of identity theft?

Do you have reason to believe you are the victim of identity theft and your tax accounts have been affected?

Have you been informed that someone may be using your Social Security number for employment purposes?

Remember:
The IRS does not initiate contact with taxpayers by email to request personal or financial information.  This includes any type of electronic communication, such as text messages and social media channels.

Page Last Reviewed or Updated: 13-Mar-2014

The 2012 Tax Return Booklet

2012 tax return booklet Publication 54 - Additional Material Questions and AnswersThis section answers tax- related questions commonly asked by taxpayers living abroad. 2012 tax return booklet 1. 2012 tax return booklet Filing Requirements—Where, When, and How . 2012 tax return booklet 1) When are U. 2012 tax return booklet S. 2012 tax return booklet income tax returns due? . 2012 tax return booklet 2) I am going abroad this year and expect to qualify for the foreign earned income exclusion. 2012 tax return booklet How can I secure an extension of time to file my return, when should I file my return, and what forms are required? . 2012 tax return booklet 3) My entire income qualifies for the foreign earned income exclusion. 2012 tax return booklet Must I file a tax return? . 2012 tax return booklet 4) I was sent abroad by my company in November of last year. 2012 tax return booklet I plan to secure an extension of time on Form 2350 to file my tax return for last year because I expect to qualify for the foreign earned income exclusion under the physical presence test. 2012 tax return booklet However, if my company recalls me to the United States before the end of the qualifying period and I find I will not qualify for the exclusion, how and when should I file my return? . 2012 tax return booklet 5) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen and have no taxable income from the United States, but I have substantial income from a foreign source. 2012 tax return booklet Am I required to file a U. 2012 tax return booklet S. 2012 tax return booklet income tax return? . 2012 tax return booklet 6) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen who has retired, and I expect to remain in a foreign country. 2012 tax return booklet Do I have any further U. 2012 tax return booklet S. 2012 tax return booklet tax obligations? . 2012 tax return booklet 7) I have been a bona fide resident of a foreign country for over 5 years. 2012 tax return booklet Is it necessary for me to pay estimated tax? . 2012 tax return booklet 8) Will a check payable in foreign currency be acceptable in payment of my U. 2012 tax return booklet S. 2012 tax return booklet tax? . 2012 tax return booklet 9) I have met the test for physical presence in a foreign country and am filing returns for 2 years. 2012 tax return booklet Must I file a separate Form 2555 (or Form 2555-EZ) with each return? . 2012 tax return booklet 10) Does a Form 2555 (or 2555-EZ) with a Schedule C or Form W-2 attached constitute a return? . 2012 tax return booklet 11) On Form 2350, Application for Extension of Time To File U. 2012 tax return booklet S. 2012 tax return booklet Income Tax Return, I stated that I would qualify for the foreign earned income exclusion under the physical presence test. 2012 tax return booklet If I qualify under the bona fide residence test, can I file my return on that basis? . 2012 tax return booklet 12) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen who worked in the United States for 6 months last year. 2012 tax return booklet I accepted employment overseas in July of last year and expect to qualify for the foreign earned income exclusion. 2012 tax return booklet Should I file a return and pay tax on the income earned in the United States during the first 6 months and then, when I qualify, file another return covering the last 6 months of the year? . 2012 tax return booklet 13) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen. 2012 tax return booklet I have lived abroad for a number of years and recently realized that I should have been filing U. 2012 tax return booklet S. 2012 tax return booklet income tax returns. 2012 tax return booklet How do I correct this oversight in not having filed returns for these years? . 2012 tax return booklet 14) In 2008, I qualified to exclude my foreign earned income, but I did not claim this exclusion on the return I filed in 2009. 2012 tax return booklet I paid all outstanding taxes with the return. 2012 tax return booklet Can I file a claim for refund now? . 2012 tax return booklet 1) When are U. 2012 tax return booklet S. 2012 tax return booklet income tax returns due? Generally, for calendar year taxpayers, U. 2012 tax return booklet S. 2012 tax return booklet income tax returns are due on April 15. 2012 tax return booklet If you are a U. 2012 tax return booklet S. 2012 tax return booklet citizen or resident and both your tax home and your abode are outside the United States and Puerto Rico on the regular due date, an automatic extension is granted to June 15 for filing the return. 2012 tax return booklet Interest will be charged on any tax due, as shown on the return, from April 15. 2012 tax return booklet a) You should file Form 2350 by the due date of your return to request an extension of time to file. 2012 tax return booklet Form 2350 is a special form for those U. 2012 tax return booklet S. 2012 tax return booklet citizens or residents abroad who expect to qualify for the foreign earned income exclusion or the housing exclusion or deduction under either the bona fide residence test or physical presence test and would like to have an extension of time to delay filing until after they have qualified. 2012 tax return booklet b) If the extension is granted, you should file your return after you qualify, but by the approved extension date. 2012 tax return booklet c) You must file your Form 1040 with Form 2555 (or Form 2555-EZ). 2012 tax return booklet Generally, yes. 2012 tax return booklet Every U. 2012 tax return booklet S. 2012 tax return booklet citizen or resident who receives income must file a U. 2012 tax return booklet S. 2012 tax return booklet income tax return unless total income without regard to the foreign earned income exclusion is below an amount based on filing status. 2012 tax return booklet The income levels for filing purposes are discussed under Filing Requirements in chapter 1. 2012 tax return booklet If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. 2012 tax return booklet Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. 2012 tax return booklet You must report your worldwide income on the return. 2012 tax return booklet If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax. 2012 tax return booklet However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. 2012 tax return booklet Yes. 2012 tax return booklet All U. 2012 tax return booklet S. 2012 tax return booklet citizens and resident aliens are subject to U. 2012 tax return booklet S. 2012 tax return booklet tax on their worldwide income. 2012 tax return booklet If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax liability for the foreign taxes paid. 2012 tax return booklet Form 1116 is used to figure the allowable credit. 2012 tax return booklet Your U. 2012 tax return booklet S. 2012 tax return booklet tax obligation on your income is the same as that of a retired person living in the United States. 2012 tax return booklet (See the discussion on filing requirements in chapter 1 of this publication. 2012 tax return booklet ) U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 2) I am going abroad this year and expect to qualify for the foreign earned income exclusion. 2012 tax return booklet How can I secure an extension of time to file my return, when should I file my return, and what forms are required? a) You should file Form 2350 by the due date of your return to request an extension of time to file. 2012 tax return booklet Form 2350 is a special form for those U. 2012 tax return booklet S. 2012 tax return booklet citizens or residents abroad who expect to qualify for the foreign earned income exclusion or the housing exclusion or deduction under either the bona fide residence test or physical presence test and would like to have an extension of time to delay filing until after they have qualified. 2012 tax return booklet b) If the extension is granted, you should file your return after you qualify, but by the approved extension date. 2012 tax return booklet c) You must file your Form 1040 with Form 2555 (or Form 2555-EZ). 2012 tax return booklet Generally, yes. 2012 tax return booklet Every U. 2012 tax return booklet S. 2012 tax return booklet citizen or resident who receives income must file a U. 2012 tax return booklet S. 2012 tax return booklet income tax return unless total income without regard to the foreign earned income exclusion is below an amount based on filing status. 2012 tax return booklet The income levels for filing purposes are discussed under Filing Requirements in chapter 1. 2012 tax return booklet If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. 2012 tax return booklet Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. 2012 tax return booklet You must report your worldwide income on the return. 2012 tax return booklet If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax. 2012 tax return booklet However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. 2012 tax return booklet Yes. 2012 tax return booklet All U. 2012 tax return booklet S. 2012 tax return booklet citizens and resident aliens are subject to U. 2012 tax return booklet S. 2012 tax return booklet tax on their worldwide income. 2012 tax return booklet If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax liability for the foreign taxes paid. 2012 tax return booklet Form 1116 is used to figure the allowable credit. 2012 tax return booklet Your U. 2012 tax return booklet S. 2012 tax return booklet tax obligation on your income is the same as that of a retired person living in the United States. 2012 tax return booklet (See the discussion on filing requirements in chapter 1 of this publication. 2012 tax return booklet ) U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 3) My entire income qualifies for the foreign earned income exclusion. 2012 tax return booklet Must I file a tax return? Generally, yes. 2012 tax return booklet Every U. 2012 tax return booklet S. 2012 tax return booklet citizen or resident who receives income must file a U. 2012 tax return booklet S. 2012 tax return booklet income tax return unless total income without regard to the foreign earned income exclusion is below an amount based on filing status. 2012 tax return booklet The income levels for filing purposes are discussed under Filing Requirements in chapter 1. 2012 tax return booklet If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. 2012 tax return booklet Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. 2012 tax return booklet You must report your worldwide income on the return. 2012 tax return booklet If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax. 2012 tax return booklet However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. 2012 tax return booklet Yes. 2012 tax return booklet All U. 2012 tax return booklet S. 2012 tax return booklet citizens and resident aliens are subject to U. 2012 tax return booklet S. 2012 tax return booklet tax on their worldwide income. 2012 tax return booklet If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax liability for the foreign taxes paid. 2012 tax return booklet Form 1116 is used to figure the allowable credit. 2012 tax return booklet Your U. 2012 tax return booklet S. 2012 tax return booklet tax obligation on your income is the same as that of a retired person living in the United States. 2012 tax return booklet (See the discussion on filing requirements in chapter 1 of this publication. 2012 tax return booklet ) U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 4) I was sent abroad by my company in November of last year. 2012 tax return booklet I plan to secure an extension of time on Form 2350 to file my tax return for last year because I expect to qualify for the foreign earned income exclusion under the physical presence test. 2012 tax return booklet However, if my company recalls me to the United States before the end of the qualifying period and I find I will not qualify for the exclusion, how and when should I file my return? If your regular filing date has passed, you should file a return, Form 1040, as soon as possible for last year. 2012 tax return booklet Include a statement with this return noting that you have returned to the United States and will not qualify for the foreign earned income exclusion. 2012 tax return booklet You must report your worldwide income on the return. 2012 tax return booklet If you paid a foreign tax on the income earned abroad, you may be able to either deduct this tax as an itemized deduction or claim it as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax. 2012 tax return booklet However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. 2012 tax return booklet Yes. 2012 tax return booklet All U. 2012 tax return booklet S. 2012 tax return booklet citizens and resident aliens are subject to U. 2012 tax return booklet S. 2012 tax return booklet tax on their worldwide income. 2012 tax return booklet If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax liability for the foreign taxes paid. 2012 tax return booklet Form 1116 is used to figure the allowable credit. 2012 tax return booklet Your U. 2012 tax return booklet S. 2012 tax return booklet tax obligation on your income is the same as that of a retired person living in the United States. 2012 tax return booklet (See the discussion on filing requirements in chapter 1 of this publication. 2012 tax return booklet ) U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 5) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen and have no taxable income from the United States, but I have substantial income from a foreign source. 2012 tax return booklet Am I required to file a U. 2012 tax return booklet S. 2012 tax return booklet income tax return? Yes. 2012 tax return booklet All U. 2012 tax return booklet S. 2012 tax return booklet citizens and resident aliens are subject to U. 2012 tax return booklet S. 2012 tax return booklet tax on their worldwide income. 2012 tax return booklet If you paid taxes to a foreign government on income from sources outside the United States, you may be able to claim a foreign tax credit against your U. 2012 tax return booklet S. 2012 tax return booklet income tax liability for the foreign taxes paid. 2012 tax return booklet Form 1116 is used to figure the allowable credit. 2012 tax return booklet Your U. 2012 tax return booklet S. 2012 tax return booklet tax obligation on your income is the same as that of a retired person living in the United States. 2012 tax return booklet (See the discussion on filing requirements in chapter 1 of this publication. 2012 tax return booklet ) U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 6) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen who has retired, and I expect to remain in a foreign country. 2012 tax return booklet Do I have any further U. 2012 tax return booklet S. 2012 tax return booklet tax obligations? Your U. 2012 tax return booklet S. 2012 tax return booklet tax obligation on your income is the same as that of a retired person living in the United States. 2012 tax return booklet (See the discussion on filing requirements in chapter 1 of this publication. 2012 tax return booklet ) U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 7) I have been a bona fide resident of a foreign country for over 5 years. 2012 tax return booklet Is it necessary for me to pay estimated tax? U. 2012 tax return booklet S. 2012 tax return booklet taxpayers overseas have the same requirements for paying estimated tax as those in the United States. 2012 tax return booklet See the discussion under Estimated Tax in chapter 1. 2012 tax return booklet Overseas taxpayers should not include in their estimated income any income they receive that is, or will be, exempt from U. 2012 tax return booklet S. 2012 tax return booklet taxation. 2012 tax return booklet Overseas taxpayers can deduct their estimated housing deduction in figuring their estimated tax. 2012 tax return booklet The first installment of estimated tax is due on April 15 of the year for which the income is earned. 2012 tax return booklet Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 8) Will a check payable in foreign currency be acceptable in payment of my U. 2012 tax return booklet S. 2012 tax return booklet tax? Generally, only U. 2012 tax return booklet S. 2012 tax return booklet currency is acceptable for payment of income tax. 2012 tax return booklet However, if you are a Fulbright grantee, see Fulbright Grant in chapter 1. 2012 tax return booklet Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 9) I have met the test for physical presence in a foreign country and am filing returns for 2 years. 2012 tax return booklet Must I file a separate Form 2555 (or Form 2555-EZ) with each return? Yes. 2012 tax return booklet A Form 2555 (or Form 2555-EZ) must be filed with each Form 1040 tax return on which the benefits of income earned abroad are claimed. 2012 tax return booklet No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 10) Does a Form 2555 (or 2555-EZ) with a Schedule C or Form W-2 attached constitute a return? No. 2012 tax return booklet The Form 2555 (or 2555-EZ), Schedule C, and Form W-2 are merely attachments and do not relieve you of the requirement to file a Form 1040 to show the sources of income reported and the exclusions or deductions claimed. 2012 tax return booklet Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 11) On Form 2350, Application for Extension of Time To File U. 2012 tax return booklet S. 2012 tax return booklet Income Tax Return, I stated that I would qualify for the foreign earned income exclusion under the physical presence test. 2012 tax return booklet If I qualify under the bona fide residence test, can I file my return on that basis? Yes. 2012 tax return booklet You can claim the foreign earned income exclusion and the foreign housing exclusion or deduction under either test as long as you meet the requirements. 2012 tax return booklet You are not bound by the test indicated in the application for extension of time. 2012 tax return booklet You must be sure, however, that you file the Form 1040 by the date approved on Form 2350, since a return filed after that date may be subject to a failure to file penalty. 2012 tax return booklet If you will not qualify under the bona fide residence test until a date later than the extension granted under the physical presence rule, apply for a new extension to a date 30 days beyond the date you expect to qualify as a bona fide resident. 2012 tax return booklet No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 12) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen who worked in the United States for 6 months last year. 2012 tax return booklet I accepted employment overseas in July of last year and expect to qualify for the foreign earned income exclusion. 2012 tax return booklet Should I file a return and pay tax on the income earned in the United States during the first 6 months and then, when I qualify, file another return covering the last 6 months of the year? No. 2012 tax return booklet You have the choice of one of the following two methods of filing your return: a) You can file your return when due under the regular filing rules, report all your income without excluding your foreign earned income, and pay the tax due. 2012 tax return booklet After you have qualified for the exclusion, you can file an amended return, Form 1040X, accompanied by Form 2555 (or 2555-EZ), for a refund of any excess tax paid. 2012 tax return booklet b) You can postpone the filing of your tax return by applying on Form 2350 for an extension of time to file to a date 30 days beyond the date you expect to qualify under either the bona fide residence test or the physical presence test, then file your return reflecting the exclusion of foreign earned income. 2012 tax return booklet This allows you to file only once and saves you from paying the tax and waiting for a refund. 2012 tax return booklet However, interest is charged on any tax due on the postponed tax return, but interest is not paid on refunds paid within 45 days after the return is filed. 2012 tax return booklet If you have moving expenses that are for services performed in two years, you can be granted an extension until after the end of the second year. 2012 tax return booklet File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 13) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen. 2012 tax return booklet I have lived abroad for a number of years and recently realized that I should have been filing U. 2012 tax return booklet S. 2012 tax return booklet income tax returns. 2012 tax return booklet How do I correct this oversight in not having filed returns for these years? File the late returns as soon as possible, stating your reason for filing late. 2012 tax return booklet For advice on filing the returns, you should contact an  Internal Revenue Service representative in one of the four overseas offices listed in chapter 7. 2012 tax return booklet It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet . 2012 tax return booklet 14) In 2008, I qualified to exclude my foreign earned income, but I did not claim this exclusion on the return I filed in 2009. 2012 tax return booklet I paid all outstanding taxes with the return. 2012 tax return booklet Can I file a claim for refund now? It is too late to claim this refund since a claim for refund must be filed within 3 years from the date the return was filed or 2 years from the date the tax was paid, whichever is later. 2012 tax return booklet A return filed before the due date is considered filed on the due date. 2012 tax return booklet 2. 2012 tax return booklet Meeting the Requirements of Either the Bona Fide Residence Test or the Physical Presence Test . 2012 tax return booklet 1) I recently came to Country X to work for the Orange Tractor Co. 2012 tax return booklet and I expect to be here for 5 or 6 years. 2012 tax return booklet I understand that upon the completion of 1 full year I will qualify for an exclusion or deduction under the bona fide residence test. 2012 tax return booklet Is this correct? . 2012 tax return booklet 2) I understand the physical presence test to be simply a matter of being physically present in a foreign country for at least 330 days within 12 consecutive months; but what are the criteria of the bona fide residence test? . 2012 tax return booklet 3) To meet the qualification of an uninterrupted period which includes an entire taxable year, do I have to be physically present in a foreign country for the entire year? . 2012 tax return booklet 4) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen and during 2012 was a bona fide resident of Country X. 2012 tax return booklet On January 15, 2013, I was notified that I was to be assigned to Country Y. 2012 tax return booklet I was recalled to New York for 90 days orientation and then went to Country Y, where I have been since. 2012 tax return booklet Although I was not in Country Y on January 1, I was a bona fide resident of Country X and was in Country Y on December 31, 2013. 2012 tax return booklet My family remained in Country X until completion of the orientation period, and my household goods were shipped directly to my new post. 2012 tax return booklet Am I a bona fide resident of a foreign country for 2013, or must I wait for the entire year of 2014 to become one? . 2012 tax return booklet 5) Due to illness, I returned to the United States before I completed my qualifying period to claim the foreign earned income exclusion. 2012 tax return booklet Can I figure the exclusion for the period I resided abroad? . 2012 tax return booklet 6) Can a resident alien of the United States qualify for an exclusion or deduction under the bona fide residence test or the physical presence test? . 2012 tax return booklet 7) On August 13 of last year I left the United States and arrived in Country Z to work for the Gordon Manufacturing Company. 2012 tax return booklet I expected to be able to exclude my foreign earned income under the physical presence test because I planned to be in Country Z for at least 1 year. 2012 tax return booklet However, I was reassigned back to the United States and left Country Z on July 1 of this year. 2012 tax return booklet Can I exclude any of my foreign earned income? . 2012 tax return booklet 1) I recently came to Country X to work for the Orange Tractor Co. 2012 tax return booklet and I expect to be here for 5 or 6 years. 2012 tax return booklet I understand that upon the completion of 1 full year I will qualify for an exclusion or deduction under the bona fide residence test. 2012 tax return booklet Is this correct? Not necessarily. 2012 tax return booklet The law provides that to qualify under this test for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, a person must be a “bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year. 2012 tax return booklet ” If, like most U. 2012 tax return booklet S. 2012 tax return booklet citizens, you file your return on a calendar year basis, the taxable year referred to in the law would be from January 1 to December 31 of any particular year. 2012 tax return booklet Unless you established residence in Country X on January 1, it would be more than 1 year before you would be a bona fide resident of a foreign country. 2012 tax return booklet Once you have completed your qualifying period, however, you are entitled to exclude the income or to claim the housing exclusion or deduction from the date you established bona fide residence. 2012 tax return booklet To be a bona fide resident of a foreign country, you must show that you entered a foreign country intending to remain there for an indefinite or prolonged period and, to that end, you are making your home in that country. 2012 tax return booklet Consideration is given to the type of quarters occupied, whether your family went with you, the type of visa, the employment agreement, and any other factor pertinent to show whether your stay in the foreign country is indefinite or prolonged. 2012 tax return booklet To claim the foreign earned income exclusion or foreign housing exclusion or deduction under this test, the period of foreign residence must include 1 full tax year (usually January 1 – December 31), but once you meet this time requirement, you figure the exclusions and the deduction from the date the residence actually began. 2012 tax return booklet No. 2012 tax return booklet Uninterrupted refers to the bona fide residence proper and not to the physical presence of the individual. 2012 tax return booklet During the period of bona fide residence in a foreign country, even during the first full year, you can leave the country for brief and temporary trips back to the United States or elsewhere for vacation, or even for business. 2012 tax return booklet To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from those trips, without unreasonable delay, to your foreign residence. 2012 tax return booklet Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. 2012 tax return booklet No. 2012 tax return booklet You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. 2012 tax return booklet If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet tax. 2012 tax return booklet Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. 2012 tax return booklet Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. 2012 tax return booklet No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet . 2012 tax return booklet 2) I understand the physical presence test to be simply a matter of being physically present in a foreign country for at least 330 days within 12 consecutive months; but what are the criteria of the bona fide residence test? To be a bona fide resident of a foreign country, you must show that you entered a foreign country intending to remain there for an indefinite or prolonged period and, to that end, you are making your home in that country. 2012 tax return booklet Consideration is given to the type of quarters occupied, whether your family went with you, the type of visa, the employment agreement, and any other factor pertinent to show whether your stay in the foreign country is indefinite or prolonged. 2012 tax return booklet To claim the foreign earned income exclusion or foreign housing exclusion or deduction under this test, the period of foreign residence must include 1 full tax year (usually January 1 – December 31), but once you meet this time requirement, you figure the exclusions and the deduction from the date the residence actually began. 2012 tax return booklet No. 2012 tax return booklet Uninterrupted refers to the bona fide residence proper and not to the physical presence of the individual. 2012 tax return booklet During the period of bona fide residence in a foreign country, even during the first full year, you can leave the country for brief and temporary trips back to the United States or elsewhere for vacation, or even for business. 2012 tax return booklet To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from those trips, without unreasonable delay, to your foreign residence. 2012 tax return booklet Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. 2012 tax return booklet No. 2012 tax return booklet You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. 2012 tax return booklet If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet tax. 2012 tax return booklet Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. 2012 tax return booklet Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. 2012 tax return booklet No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet . 2012 tax return booklet 3) To meet the qualification of “an uninterrupted period which includes an entire taxable year,” do I have to be physically present in a foreign country for the entire year? No. 2012 tax return booklet Uninterrupted refers to the bona fide residence proper and not to the physical presence of the individual. 2012 tax return booklet During the period of bona fide residence in a foreign country, even during the first full year, you can leave the country for brief and temporary trips back to the United States or elsewhere for vacation, or even for business. 2012 tax return booklet To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from those trips, without unreasonable delay, to your foreign residence. 2012 tax return booklet Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. 2012 tax return booklet No. 2012 tax return booklet You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. 2012 tax return booklet If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet tax. 2012 tax return booklet Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. 2012 tax return booklet Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. 2012 tax return booklet No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet . 2012 tax return booklet 4) I am a U. 2012 tax return booklet S. 2012 tax return booklet citizen and during 2012 was a bona fide resident of Country X. 2012 tax return booklet On January 15, 2013, I was notified that I was to be assigned to Country Y. 2012 tax return booklet I was recalled to New York for 90 days orientation and then went to Country Y, where I have been since. 2012 tax return booklet Although I was not in Country Y on January 1, I was a bona fide resident of Country X and was in Country Y on December 31, 2013. 2012 tax return booklet My family remained in Country X until completion of the orientation period, and my household goods were shipped directly to my new post. 2012 tax return booklet Am I a bona fide resident of a foreign country for 2013, or must I wait for the entire year of 2014 to become one? Since you did not break your period of foreign residence, you would continue to be a bona fide resident of a foreign country for 2013. 2012 tax return booklet No. 2012 tax return booklet You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. 2012 tax return booklet If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet tax. 2012 tax return booklet Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. 2012 tax return booklet Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. 2012 tax return booklet No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet . 2012 tax return booklet 5) Due to illness, I returned to the United States before I completed my qualifying period to claim the foreign earned income exclusion. 2012 tax return booklet Can I figure the exclusion for the period I resided abroad? No. 2012 tax return booklet You are not entitled to any exclusion of foreign earned income since you did not complete your qualifying period under either the bona fide residence test or physical presence test. 2012 tax return booklet If you paid foreign tax on the income earned abroad, you may be able to claim that tax as a deduction or as a credit against your U. 2012 tax return booklet S. 2012 tax return booklet tax. 2012 tax return booklet Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. 2012 tax return booklet Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. 2012 tax return booklet No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet . 2012 tax return booklet 6) Can a resident alien of the United States qualify for an exclusion or deduction under the bona fide residence test or the physical presence test? Resident aliens of the United States can qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction if they meet the requirements of the physical presence test. 2012 tax return booklet Resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect also can qualify under the bona fide residence test. 2012 tax return booklet No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet . 2012 tax return booklet 7) On August 13 of last year I left the United States and arrived in Country Z to work for the Gordon Manufacturing Company. 2012 tax return booklet I expected to be able to exclude my foreign earned income under the physical presence test because I planned to be in Country Z for at least 1 year. 2012 tax return booklet However, I was reassigned back to the United States and left Country Z on July 1 of this year. 2012 tax return booklet Can I exclude any of my foreign earned income? No. 2012 tax return booklet You cannot exclude any of the income you earned in Country Z because you were not in a foreign country for at least 330 full days as required under the physical presence test. 2012 tax return booklet 3. 2012 tax return booklet Foreign Earned Income . 2012 tax return booklet 1) I am an employee of the U. 2012 tax return booklet S. 2012 tax return booklet Government working abroad. 2012 tax return booklet Can all or part of my government income earned abroad qualify for the foreign earned income exclusion? . 2012 tax return booklet 2) I qualify for the foreign earned income exclusion under the bona fide residence test. 2012 tax return booklet Does my foreign earned income include my U. 2012 tax return booklet S. 2012 tax return booklet dividends and the interest I receive on a foreign bank account? . 2012 tax return booklet 3) My company pays my foreign income tax on my foreign earnings. 2012 tax return booklet Is this taxable compensation? . 2012 tax return booklet 4) I live in an apartment in a foreign city for which my employer pays the rent. 2012 tax return booklet Should I include in my income the cost to my employer ($1,200 a month) or the fair market value of equivalent housing in the United States ($800 a month)? . 2012 tax return booklet 5) My U. 2012 tax return booklet S. 2012 tax return booklet employer pays my salary into my U. 2012 tax return booklet S. 2012 tax return booklet bank account. 2012 tax return booklet Is this income considered earned in the United States or is it considered foreign earned income? . 2012 tax return booklet 6) What is considered a foreign country? . 2012 tax return booklet 7) What is the source of earned income? . 2012 tax return booklet 1) I am an employee of the U. 2012 tax return booklet S. 2012 tax return booklet Government working abroad. 2012 tax return booklet Can all or part of my government income earned abroad qualify for the foreign earned income exclusion? No. 2012 tax return booklet The foreign earned income exclusion applies to your foreign earned income. 2012 tax return booklet Amounts paid by the United States or its agencies to their employees are not treated, for this purpose, as foreign earned income. 2012 tax return booklet No. 2012 tax return booklet The only income that is foreign earned income is income from the performance of personal services abroad. 2012 tax return booklet Investment income is not earned income. 2012 tax return booklet However, you must include it in gross income reported on your Form 1040. 2012 tax return booklet Yes. 2012 tax return booklet The amount is compensation for services performed. 2012 tax return booklet The tax paid by your company should be reported on Form 1040, line 7, and on Form 2555, Part IV, line 22(f) (or on Form 2555-EZ, Part IV, line 17). 2012 tax return booklet You must include in income the fair market value (FMV) of the facility provided, where it is provided. 2012 tax return booklet This will usually be the rent your employer pays. 2012 tax return booklet Situations when the FMV is not included in income are discussed in chapter 4 under Exclusion of Meals and Lodging. 2012 tax return booklet If you performed the services to earn this salary outside the United States, your salary is considered earned abroad. 2012 tax return booklet It does not matter that you are paid by a U. 2012 tax return booklet S. 2012 tax return booklet employer or that your salary is deposited in a U. 2012 tax return booklet S. 2012 tax return booklet bank account in the United States. 2012 tax return booklet The source of salary, wages, commissions, and other personal service income is the place where you perform the services. 2012 tax return booklet For the purposes of the foreign earned income exclusion and the foreign housing exclusion or deduction, any territory under the sovereignty of a countr