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Copy 2011 Taxes

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Copy 2011 Taxes

Copy 2011 taxes 7. Copy 2011 taxes   Ship Passenger Tax Table of Contents A tax of $3 per passenger is imposed on certain ship voyages, as explained later under Taxable situations. Copy 2011 taxes The tax is imposed only once for each passenger, either at the time of first embarkation or disembarkation in the United States. Copy 2011 taxes The person providing the voyage (the operator of the vessel) is liable for the tax. Copy 2011 taxes Voyage. Copy 2011 taxes   A voyage is the vessel's journey that includes the outward and homeward trips or passages. Copy 2011 taxes The voyage starts when the vessel begins to load passengers and continues until the vessel has completed at least one outward and one homeward passage. Copy 2011 taxes The tax may be imposed even if a passenger does not make both an outward and a homeward passage as long as the voyage begins or ends in the United States. Copy 2011 taxes Passenger. Copy 2011 taxes   A passenger is an individual carried on the vessel other than the Master or a crew member or other individual engaged in the business of the vessel or its owners. Copy 2011 taxes Example 1. Copy 2011 taxes John Smith works as a guest lecturer. Copy 2011 taxes The cruise line hired him for the benefit of the passengers. Copy 2011 taxes Therefore, he is engaged in the business of the vessel and is not a passenger. Copy 2011 taxes Example 2. Copy 2011 taxes Marian Green is a travel agent. Copy 2011 taxes She is taking the cruise as a promotional trip to determine if she wants to offer it to her clients. Copy 2011 taxes She is a passenger. Copy 2011 taxes Taxable situations. Copy 2011 taxes   There are two taxable situations. Copy 2011 taxes The first situation involves voyages on commercial passenger vessels extending over one or more nights. Copy 2011 taxes A voyage extends over one or more nights if it extends for more than 24 hours. Copy 2011 taxes A passenger vessel is any vessel with stateroom or berth accommodations for more than 16 passengers. Copy 2011 taxes   The second situation involves voyages on a commercial vessel transporting passengers engaged in gambling on the vessel beyond the territorial waters of the United States. Copy 2011 taxes Territorial waters of the United States are those waters within the international boundary line between the United States and any contiguous foreign country or within 3 nautical miles (3. Copy 2011 taxes 45 statute miles) from low tide on the coastline. Copy 2011 taxes If passengers participate as players in any policy game or other lottery, or any other game of chance for money or other thing of value that the owner or operator of the vessel (or their employee, agent, or franchisee) conducts, sponsors, or operates, the voyage is subject to the ship passenger tax. Copy 2011 taxes The tax applies regardless of the duration of the voyage. Copy 2011 taxes A casual, friendly game of chance with other passengers that is not conducted, sponsored, or operated by the owner or operator is not gambling for determining if the voyage is subject to the ship passenger tax. Copy 2011 taxes Exemptions. Copy 2011 taxes   The tax does not apply when a vessel is on a voyage of less than 12 hours between 2 points in the United States or if a vessel is owned or operated by a state or local government. Copy 2011 taxes Prev  Up  Next   Home   More Online Publications
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Copy 2011 taxes 8. Copy 2011 taxes   Paying Tax Through Withholding or Estimated Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Notification of Alien Status Withholding From CompensationWithholding on Wages Withholding on Pensions Withholding on Tip Income Independent Contractors Withholding From Other IncomeTax Withheld on Partnership Income Withholding on Scholarships and Fellowship Grants Income Entitled to Tax Treaty BenefitsStudents, teachers, and researchers. Copy 2011 taxes Tax Withheld on Real Property Sales Social Security and Medicare TaxesStudents and Exchange Visitors Agricultural Workers Self-Employment Tax International Social Security Agreements Estimated Tax Form 1040-ES (NR)Fiscal year. Copy 2011 taxes Introduction This chapter discusses how to pay your U. Copy 2011 taxes S. Copy 2011 taxes income tax as you earn or receive income during the year. Copy 2011 taxes In general, the federal income tax is a pay as you go tax. Copy 2011 taxes There are two ways to pay as you go. Copy 2011 taxes Withholding. Copy 2011 taxes If you are an employee, your employer probably withholds income tax from your pay. Copy 2011 taxes Tax may also be withheld from certain other income—including pensions, bonuses, commissions, and gambling winnings. Copy 2011 taxes In each case, the amount withheld is paid to the U. Copy 2011 taxes S. Copy 2011 taxes Treasury in your name. Copy 2011 taxes Estimated tax. Copy 2011 taxes If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Copy 2011 taxes People who are in business for themselves generally will have to pay their tax this way. Copy 2011 taxes You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. Copy 2011 taxes Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Copy 2011 taxes Topics - This chapter discusses: How to notify your employer of your alien status, Income subject to withholding of income tax, Exemptions from withholding, Social security and Medicare taxes, and Estimated tax rules. Copy 2011 taxes Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 901 U. Copy 2011 taxes S. Copy 2011 taxes Tax Treaties Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) W-8ECI Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States W-9 Request for Taxpayer Identification Number and Certification 1040-ES (NR) U. Copy 2011 taxes S. Copy 2011 taxes Estimated Tax for Nonresident Alien Individuals 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 8288-B Application for Withholding Certificate for Dispositions by Foreign Persons of U. Copy 2011 taxes S. Copy 2011 taxes Real Property Interests 13930 Application for Central Withholding Agreement See chapter 12 for information about getting these publications and forms. Copy 2011 taxes Notification of Alien Status You must let your employer know whether you are a resident or a nonresident alien so your employer can withhold the correct amount of tax from your wages. Copy 2011 taxes If you are a resident alien under the rules discussed in chapter 1, you must file Form W-9 or a similar statement with your employer. Copy 2011 taxes If you are a nonresident alien under those rules, you must furnish to your employer Form 8233 or Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that your compensation is subject to graduated withholding at the same rates as resident aliens or U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes If you are a resident alien and you receive income other than wages (such as dividends and royalties) from sources within the United States, file Form W-9 or similar statement with the withholding agent (generally, the payer of the income) so the agent will not withhold tax on the income at the 30% (or lower treaty) rate. Copy 2011 taxes If you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at the 30% (or lower treaty) rate. Copy 2011 taxes However, if the income is effectively connected with a U. Copy 2011 taxes S. Copy 2011 taxes trade or business, file Form W-8ECI instead. Copy 2011 taxes Withholding From Compensation The following discussion generally applies only to nonresident aliens. Copy 2011 taxes Tax is withheld from resident aliens in the same manner as U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes Wages and other compensation paid to a nonresident alien for services performed as an employee are usually subject to graduated withholding at the same rates as resident aliens and U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes Therefore, your compensation, unless it is specifically excluded from the term “wages” by law, or is exempt from tax by treaty, is subject to graduated withholding. Copy 2011 taxes Withholding on Wages If you are an employee and you receive wages subject to graduated withholding, you will be required to fill out a Form W-4. Copy 2011 taxes Also fill out Form W-4 for a scholarship or fellowship grant to the extent it represents payment for past, present, or future services and for which you are not claiming a tax treaty withholding exemption on Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). Copy 2011 taxes These are services you are required to perform as an employee and as a condition of receiving the scholarship or fellowship (or tuition reduction). Copy 2011 taxes Nonresident aliens should fill out Form W-4 using the following instructions instead of the instructions on the Form W-4. Copy 2011 taxes This is because of the restrictions on a nonresident alien's filing status, the limited number of personal exemptions a nonresident alien is allowed, and because a nonresident alien cannot claim the standard deduction. Copy 2011 taxes Enter your social security number (SSN) on line 2. Copy 2011 taxes Do not enter an individual taxpayer identification number (ITIN). Copy 2011 taxes Check only “Single” marital status on line 3 (regardless of your actual marital status). Copy 2011 taxes Claim only one allowance on line 5, unless you are a resident of Canada, Mexico, or South Korea, or a U. Copy 2011 taxes S. Copy 2011 taxes national. Copy 2011 taxes Write “Nonresident Alien” or “NRA” on the dotted line on line 6. Copy 2011 taxes You can request additional withholding on line 6 at your option. Copy 2011 taxes Do not claim “Exempt” withholding status on line 7. Copy 2011 taxes A U. Copy 2011 taxes S. Copy 2011 taxes national is an individual who, although not a U. Copy 2011 taxes S. Copy 2011 taxes citizen, owes his or her allegiance to the United States. Copy 2011 taxes U. Copy 2011 taxes S. Copy 2011 taxes nationals include American Samoans, and Northern Mariana Islanders who chose to become U. Copy 2011 taxes S. Copy 2011 taxes nationals instead of U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes See Withholding on Scholarships and Fellowship Grants later, for how to fill out Form W-4 if you receive a U. Copy 2011 taxes S. Copy 2011 taxes source scholarship or fellowship grant that is not a payment for services. Copy 2011 taxes Students and business apprentices from India. Copy 2011 taxes   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you may claim an additional withholding allowance for the standard deduction. Copy 2011 taxes You can claim an additional withholding allowance for your spouse only if your spouse will have no gross income for 2013 and cannot be claimed as a dependent on another U. Copy 2011 taxes S. Copy 2011 taxes taxpayer's 2013 return. Copy 2011 taxes You may also claim an additional withholding allowance for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes Household employees. Copy 2011 taxes   If you work as a household employee, your employer does not have to withhold income tax. Copy 2011 taxes However, you may agree to voluntary income tax withholding by filing a Form W-4 with your employer. Copy 2011 taxes The agreement goes into effect when your employer accepts the agreement by beginning the withholding. Copy 2011 taxes You or your employer may end the agreement by letting the other know in writing. Copy 2011 taxes Agricultural workers. Copy 2011 taxes   If you are an agricultural worker on an H-2A visa, your employer does not have to withhold income tax. Copy 2011 taxes However, your employer will withhold income tax only if you and your employer agree to withhold. Copy 2011 taxes In that case, you must provide your employer with a properly completed Form W-4. Copy 2011 taxes You can find more information about not having tax withheld at www. Copy 2011 taxes irs. Copy 2011 taxes gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Copy 2011 taxes Wages Exempt From Withholding Wages that are exempt from U. Copy 2011 taxes S. Copy 2011 taxes income tax under an income tax treaty are generally exempt from withholding. Copy 2011 taxes For information on how to claim this exemption from withholding, see Income Entitled to Tax Treaty Benefits , later. Copy 2011 taxes Wages paid to aliens who are residents of American Samoa, Canada, Mexico, Puerto Rico, or the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands may be exempt from withholding. Copy 2011 taxes The following paragraphs explain these exemptions. Copy 2011 taxes Residents of Canada or Mexico engaged in transportation-related employment. Copy 2011 taxes   Certain residents of Canada or Mexico who enter or leave the United States at frequent intervals are not subject to withholding on their wages. Copy 2011 taxes These persons either: Perform duties in transportation service between the United States and Canada or Mexico, or Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or crossing, the boundary between the United States and Canada or the boundary between the United States and Mexico. Copy 2011 taxes    This employment is subject to withholding of social security and Medicare taxes unless the services are performed for a railroad. Copy 2011 taxes   To qualify for the exemption from withholding during a tax year, a Canadian or Mexican resident must give the employer a statement in duplicate with name, address, and identification number, certifying that the resident: Is not a U. Copy 2011 taxes S. Copy 2011 taxes citizen or resident, Is a resident of Canada or Mexico, whichever applies, and Expects to perform duties previously described during the tax year in question. Copy 2011 taxes   The statement can be in any form, but it must be dated and signed by the employee and must include a written declaration that it is made under the penalties of perjury. Copy 2011 taxes Residents of American Samoa and Puerto Rico. Copy 2011 taxes   If you are a nonresident alien employee who is a resident of American Samoa or Puerto Rico, wages for services performed in American Samoa or Puerto Rico are generally not subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico. Copy 2011 taxes Residents of the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands. Copy 2011 taxes   Nonresident aliens who are bona fide residents of the U. Copy 2011 taxes S Virgin Islands are not subject to withholding of U. Copy 2011 taxes S. Copy 2011 taxes tax on income earned while temporarily employed in the United States. Copy 2011 taxes This is because those persons pay their income tax to the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands. Copy 2011 taxes To avoid having tax withheld on income earned in the United States, bona fide residents of the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands and expect to pay tax on all income to the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands. Copy 2011 taxes Withholding on Pensions If you receive a pension as a result of personal services performed in the United States, the pension income is subject to the 30% (or lower treaty) rate of withholding. Copy 2011 taxes You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after December 31, 1986. Copy 2011 taxes You must fill out Form W-8BEN and give it to the withholding agent or payer before the income is paid or credited to you. Copy 2011 taxes Withholding on Tip Income Tips you receive during the year for services performed in the United States are subject to U. Copy 2011 taxes S. Copy 2011 taxes income tax. Copy 2011 taxes Include them in taxable income. Copy 2011 taxes In addition, tips received while working for one employer, amounting to $20 or more in a month, are subject to graduated withholding. Copy 2011 taxes Independent Contractors If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding. Copy 2011 taxes However, if you are engaged in a trade or business in the United States during the tax year, your compensation for personal services as an independent contractor (independent personal services) may be entirely or partly exempt from withholding if you reach an agreement with the Internal Revenue Service on the amount of withholding required. Copy 2011 taxes An agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for payments covered by the agreement after it is agreed to by all parties. Copy 2011 taxes You must agree to timely file an income tax return for the current tax year. Copy 2011 taxes Central withholding agreements. Copy 2011 taxes   If you are a nonresident alien entertainer or athlete performing or participating in athletic events in the United States, you may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. Copy 2011 taxes Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability. Copy 2011 taxes   File Form 13930 and the required attachments with the IRS to request a central withholding agreement. Copy 2011 taxes Either you or your authorized representative can file the form. Copy 2011 taxes It should be sent to the IRS at least 45 days before the tour begins or the event occurs. Copy 2011 taxes Exceptions will be considered on a case by case basis. Copy 2011 taxes   For more information on the CWA program, go to www. Copy 2011 taxes irs. Copy 2011 taxes gov/Individuals/International-Taxpayers/Central-Withholding-Agreements. Copy 2011 taxes Final payment exemption. Copy 2011 taxes   Your final payment of compensation during the tax year for independent personal services may be entirely or partly exempt from withholding. Copy 2011 taxes This exemption is available only once during your tax year and applies to a maximum of $5,000 of compensation. Copy 2011 taxes To obtain this exemption, you or your agent must give the following statements and information to the Commissioner or his delegate. Copy 2011 taxes A statement by each withholding agent from whom you have received gross income effectively connected with a trade or business in the United States during the tax year, showing the amount of income paid and the tax withheld. Copy 2011 taxes Each statement must be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Copy 2011 taxes A statement by the withholding agent from whom you expect to receive the final payment of compensation, showing the amount of the payment and the amount of tax that would be withheld if a final payment exemption were not granted. Copy 2011 taxes This statement must also be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Copy 2011 taxes A statement by you that you do not intend to receive any other income effectively connected with a trade or business in the United States during the current tax year. Copy 2011 taxes The amount of tax that has been withheld or paid under any other provision of the Internal Revenue Code or regulations for any income effectively connected with your trade or business in the United States during the current tax year. Copy 2011 taxes The amount of your outstanding tax liabilities, if any, including interest and penalties, from the current tax year or prior tax periods. Copy 2011 taxes Any provision of an income tax treaty under which a partial or complete exemption from withholding may be claimed, the country of your residence, and a statement of sufficient facts to justify an exemption under the treaty. Copy 2011 taxes A statement signed by you, and verified by a declaration that it is made under penalties of perjury, that all the information given is true and that to your knowledge no relevant information has been omitted. Copy 2011 taxes   If satisfied with the information, the IRS will determine the amount of your tentative income tax for the tax year on gross income effectively connected with your trade or business in the United States. Copy 2011 taxes Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or his delegate. Copy 2011 taxes   The Commissioner or his delegate will send you a letter, directed to the withholding agent, showing the amount of the final payment of compensation that is exempt from withholding and the amount that can be paid to you because of the exemption. Copy 2011 taxes You must give two copies of the letter to the withholding agent and must also attach a copy of the letter to your income tax return for the tax year for which the exemption is effective. Copy 2011 taxes Allowance for Personal Exemption Withholding on payments for independent personal services is generally based on the amount of your compensation payment minus the value of one exemption ($3,950 for 2014). Copy 2011 taxes To determine the income for independent personal services performed in the United States to which the 30% (or lower treaty) rate will apply, you are allowed one personal exemption if you are not a U. Copy 2011 taxes S. Copy 2011 taxes national and are not a resident of Canada, Mexico, or South Korea. Copy 2011 taxes For purposes of 30% withholding, the exemption is prorated at $10. Copy 2011 taxes 82 a day in 2014 for the period that labor or personal services are performed in the United States. Copy 2011 taxes To claim an exemption from withholding on the personal exemption amount, fill out the applicable parts of Form 8233 and give it to the withholding agent. Copy 2011 taxes Example. Copy 2011 taxes Eric Johannsen, who is a resident of Country X worked under a contract with a U. Copy 2011 taxes S. Copy 2011 taxes firm (not as an employee) in the United States for 100 days during 2014 before returning to his country. Copy 2011 taxes He earned $6,000 for the services performed (not considered wages) in the United States. Copy 2011 taxes Eric is married and has three dependent children. Copy 2011 taxes His wife is not employed and has no income subject to U. Copy 2011 taxes S. Copy 2011 taxes tax. Copy 2011 taxes The amount of the personal exemption to be allowed against the income for his personal services performed within the United States in 2014 is $1,082 (100 days × $10. Copy 2011 taxes 82), and withholding at 30% is applied against the balance. Copy 2011 taxes Thus, $1,475. Copy 2011 taxes 40 in tax is withheld from Eric's earnings (30% of $4,918 ($6,000 − $1,082). Copy 2011 taxes U. Copy 2011 taxes S. Copy 2011 taxes nationals or residents of Canada, Mexico, or South Korea. Copy 2011 taxes   If you are a nonresident alien who is a resident of Canada, Mexico, or South Korea, or who is a national of the United States, you are subject to the same 30% withholding on your compensation for independent personal services performed in the United States. Copy 2011 taxes However, if you are a U. Copy 2011 taxes S. Copy 2011 taxes national or a resident of Canada or Mexico, you are allowed the same personal exemptions as U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes For the 30% (or lower treaty) rate withholding, you can take $10. Copy 2011 taxes 82 per day for each allowable exemption in 2014. Copy 2011 taxes If you are a resident of South Korea, you are allowed personal exemptions for yourself and for your spouse and children who live with you in the United States at any time during the tax year. Copy 2011 taxes However, the additional exemptions for your spouse and children must be further prorated as explained in chapter 5 under Exemptions . Copy 2011 taxes Students and business apprentices from India. Copy 2011 taxes   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are allowed an exemption for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Copy 2011 taxes S. Copy 2011 taxes taxpayer's 2014 return. Copy 2011 taxes You are also allowed an exemption for each dependent not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes For the 30% (or lower treaty rate) withholding on compensation for independent personal services performed in the United States, you are allowed $10. Copy 2011 taxes 82 per day for each allowable exemption in 2014. Copy 2011 taxes Refund of Taxes Withheld in Error Multi-level marketing. Copy 2011 taxes   If you are a distributor for a multi-level marketing company who had taxes withheld in error, file a U. Copy 2011 taxes S. Copy 2011 taxes income tax return (Form 1040NR, Form 1040NR-EZ, or Form 1120-F) or, if a tax return has already been filed, a claim for refund (Form 1040X or amended Form 1120-F) to recover the amount withheld in error. Copy 2011 taxes You must also attach to the U. Copy 2011 taxes S. Copy 2011 taxes income tax return or claim for refund supporting information that includes, but is not limited to, the following items. Copy 2011 taxes A copy of your Form W-2, Form 1042-S, or Form 1099 to prove the amount of taxes withheld. Copy 2011 taxes A statement explaining why income reported on your Form W-2, Form 1042-S, or Form 1099 is not subject to U. Copy 2011 taxes S. Copy 2011 taxes taxation. Copy 2011 taxes A statement listing all the dates you entered and left the United States during the taxable year. Copy 2011 taxes If the compensation is multi-year compensation, the statement must list all the dates you entered and left the United States during each of the taxable years to which the compensation is attributable. Copy 2011 taxes A copy of any documents or records that show the number of days you actually were present in the United States during the years listed. Copy 2011 taxes A statement providing: (a) the number of days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection with recruiting, training, and supporting your lower-tier distributors; and (b) the total number of days (or unit of time less than a day, if appropriate) that personal services were performed globally in connection with recruiting, training, and supporting your lower-tier distributors. Copy 2011 taxes Any further relevant document or record supporting your claim that the taxes were withheld in error. Copy 2011 taxes Withholding From Other Income Other income subject to 30% withholding generally includes fixed or determinable income such as interest (other than portfolio interest), dividends, pensions and annuities, and gains from certain sales and exchanges, discussed in chapter 4. Copy 2011 taxes It also includes 85% of social security benefits paid to nonresident aliens. Copy 2011 taxes Refund of taxes withheld in error on social security benefits paid to resident aliens. Copy 2011 taxes   Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. Copy 2011 taxes For U. Copy 2011 taxes S. Copy 2011 taxes income tax purposes, green card holders continue to be resident aliens until their lawful permanent resident status under immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Copy 2011 taxes See Green Card Test in chapter 1. Copy 2011 taxes If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Copy 2011 taxes SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Copy 2011 taxes If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Copy 2011 taxes You must also attach the following to your Form 1040 or 1040A. Copy 2011 taxes A copy of Form SSA-1042S, Social Security Benefit Statement. Copy 2011 taxes A copy of the “green card. Copy 2011 taxes ” A signed declaration that includes the following statements: The SSA should not have withheld income tax from my social security benefits because I am a U. Copy 2011 taxes S. Copy 2011 taxes lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Copy 2011 taxes I am filing a U. Copy 2011 taxes S. Copy 2011 taxes income tax return for the tax year as a resident alien reporting all of my worldwide income. Copy 2011 taxes I have not claimed benefits for the tax year under an income tax treaty as the resident of a country other than the United States. Copy 2011 taxes Other income not subject to withholding of 30% (or lower treaty) rate. Copy 2011 taxes   The following income is not subject to withholding at the 30% (or lower treaty) rate if you file Form W-8ECI with the payer of the income. Copy 2011 taxes Income (other than compensation) that is effectively connected with your U. Copy 2011 taxes S. Copy 2011 taxes trade or business. Copy 2011 taxes Income from real property that you choose to treat as effectively connected with a U. Copy 2011 taxes S. Copy 2011 taxes trade or business. Copy 2011 taxes See Income From Real Property in chapter 4 for details about this choice. Copy 2011 taxes   Special rules for withholding on partnership income, scholarships, and fellowships are explained next. Copy 2011 taxes Tax Withheld on Partnership Income If you are a foreign partner in a U. Copy 2011 taxes S. Copy 2011 taxes or foreign partnership, the partnership will withhold tax on your share of effectively connected taxable income (ECTI) from the partnership. Copy 2011 taxes You may be able to reduce your ECTI subject to withholding by certain partner-level deductions. Copy 2011 taxes Generally, you must use Form 8804-C for this purpose. Copy 2011 taxes See the Instructions for Form 8804-C for more information. Copy 2011 taxes The withholding rate on your share of effectively connected income is generally the highest rate of tax specified under section 1 of the Code (39. Copy 2011 taxes 6% for 2014). Copy 2011 taxes However, the partnership may withhold at the highest rate that applies to a particular type of income allocable to you if you gave the partnership the appropriate documentation. Copy 2011 taxes Long-term capital gain is an example of a particular type of income to which the highest tax rate applies. Copy 2011 taxes Claim the tax withheld as a credit on your 2014 Form 1040NR. Copy 2011 taxes The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Copy 2011 taxes A partnership that is publicly traded will withhold tax on your actual distributions of effectively connected income. Copy 2011 taxes In this case the partnership will give you a statement on Form 1042-S, Foreign Person's U. Copy 2011 taxes S. Copy 2011 taxes Source Income Subject to Withholding. Copy 2011 taxes Withholding on Scholarships and Fellowship Grants There is no withholding on a qualified scholarship received by a candidate for a degree. Copy 2011 taxes See chapter 3. Copy 2011 taxes If you are a nonresident alien student or grantee with an “F,” “J,” “M,” or “Q” visa and you receive a U. Copy 2011 taxes S. Copy 2011 taxes source grant or scholarship that is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax at 14% (or lower treaty rate) of the taxable part of the grant or scholarship that is not a payment for services. Copy 2011 taxes However, if you are not a candidate for a degree and the grant does not meet certain requirements, tax will be withheld at the 30% (or lower treaty) rate. Copy 2011 taxes Any part of a scholarship or fellowship grant that is a payment for services is subject to graduated withholding as discussed earlier under Withholding on Wages. Copy 2011 taxes Alternate Withholding Procedure Your withholding agent may choose to use an alternate procedure by asking you to fill out Form W-4 and the Personal Allowances Worksheet (attached to Form W-4). Copy 2011 taxes Use the following instructions instead of the Form W-4 instructions to complete the worksheet. Copy 2011 taxes Line A. Copy 2011 taxes   Enter the total of the following amounts on line A. Copy 2011 taxes Personal exemption. Copy 2011 taxes   Include the prorated part of your allowable personal exemption. Copy 2011 taxes Figure the amount by multiplying the number of days you expect to be in the United States in 2014 by the daily exemption amount ($10. Copy 2011 taxes 82). Copy 2011 taxes Expenses. Copy 2011 taxes   Include expenses that will be deductible on your return. Copy 2011 taxes These include away-from-home expenses (meals, lodging, and transportation), certain state and local income taxes, charitable contributions, and casualty losses, discussed earlier under Itemized Deductions in chapter 5. Copy 2011 taxes They also include business expenses, moving expenses, and the IRA deduction discussed under Deductions in chapter 5. Copy 2011 taxes Nontaxable grant or scholarship. Copy 2011 taxes   Include the part of your grant or scholarship that is not taxable under U. Copy 2011 taxes S. Copy 2011 taxes law or under a tax treaty. Copy 2011 taxes Line B. Copy 2011 taxes   Enter -0- unless the following paragraph applies to you. Copy 2011 taxes   If you are a student who qualifies under Article 21(2) of the United States-India Income Tax Treaty, and you are not claiming deductions for away-from-home expenses or other itemized deductions (discussed earlier), enter the standard deduction on line B. Copy 2011 taxes The standard deduction amount for 2013 is $6,100. Copy 2011 taxes Lines C and D. Copy 2011 taxes   Enter -0- on both lines unless the following paragraphs apply to you. Copy 2011 taxes   If you are a resident of Canada, Mexico, South Korea, or a U. Copy 2011 taxes S. Copy 2011 taxes national, an additional daily exemption amount may be allowed for your spouse and each of your dependents. Copy 2011 taxes   If you are a resident of India who is eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you can claim an additional daily exemption amount for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Copy 2011 taxes S. Copy 2011 taxes taxpayer's 2014 return. Copy 2011 taxes You can also claim an additional amount for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes   Enter any additional amount for your spouse on line C. Copy 2011 taxes Enter any additional amount for your dependents on line D. Copy 2011 taxes Lines E, F, and G. Copy 2011 taxes   No entries should be made on lines E, F, and G. Copy 2011 taxes Line H. Copy 2011 taxes   Add the amounts on lines A through D and enter the total on line H. Copy 2011 taxes Form W-4. Copy 2011 taxes   Complete lines 1 through 4 of Form W-4. Copy 2011 taxes Sign and date the form and give it with the Personal Allowances Worksheet to your withholding agent. Copy 2011 taxes   If you file a Form W-4 to reduce or eliminate the withholding on your scholarship or grant, you must file an annual U. Copy 2011 taxes S. Copy 2011 taxes income tax return to be allowed the exemptions and deductions you claimed on that form. Copy 2011 taxes If you are in the United States during more than one tax year, you must attach a statement to your yearly Form W-4 indicating that you have filed a U. Copy 2011 taxes S. Copy 2011 taxes income tax return for the previous year. Copy 2011 taxes If you have not been in the United States long enough to be required to file a return, you must attach a statement to your Form W-4 saying you will file a U. Copy 2011 taxes S. Copy 2011 taxes income tax return when required. Copy 2011 taxes After the withholding agent has accepted your Form W-4, tax will be withheld on your scholarship or grant at the graduated rates that apply to wages. Copy 2011 taxes The gross amount of the income is reduced by the amount on line H of the worksheet and the withholding tax is figured on the remainder. Copy 2011 taxes You will receive a Form 1042-S from the withholding agent (usually the payer of your grant) showing the gross amount of your taxable scholarship or fellowship grant less the withholding allowance amount, the tax rate, and the amount of tax withheld. Copy 2011 taxes Use this form to prepare your annual U. Copy 2011 taxes S. Copy 2011 taxes income tax return. Copy 2011 taxes Income Entitled to Tax Treaty Benefits If a tax treaty between the United States and your country provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payor of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. Copy 2011 taxes Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent. Copy 2011 taxes File Form W-8BEN for income that is not personal services income. Copy 2011 taxes File Form 8233 for personal services income as discussed next. Copy 2011 taxes Employees and independent contractors. Copy 2011 taxes   If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal service income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received. Copy 2011 taxes   Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. Copy 2011 taxes This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. Copy 2011 taxes In this case, you must file Form 1040NR (or Form 1040NR-EZ if you qualify) to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption. Copy 2011 taxes Students, teachers, and researchers. Copy 2011 taxes   Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. Copy 2011 taxes For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties. Copy 2011 taxes   If you received a scholarship or fellowship and personal services income from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income. Copy 2011 taxes Special events and promotions. Copy 2011 taxes   Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from rock music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. Copy 2011 taxes Form 13930 is used to request a reduction in withholding. Copy 2011 taxes Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. Copy 2011 taxes One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year. Copy 2011 taxes You will be required to pay U. Copy 2011 taxes S. Copy 2011 taxes tax, at the time of your departure from the United States, on any income for which you incorrectly claimed a treaty exemption. Copy 2011 taxes For more details on treaty provisions that apply to compensation, see Publication 901. Copy 2011 taxes Tax Withheld on Real Property Sales If you are a nonresident alien and you dispose of a U. Copy 2011 taxes S. Copy 2011 taxes real property interest, the transferee (buyer) of the property generally must withhold a tax equal to 10% of the amount realized on the disposition. Copy 2011 taxes A distribution by a qualified investment entity to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U. Copy 2011 taxes S. Copy 2011 taxes real property interest by the shareholder is subject to withholding at 35%. Copy 2011 taxes Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. Copy 2011 taxes These rules are covered in Publication 515. Copy 2011 taxes For information on the tax treatment of dispositions of U. Copy 2011 taxes S. Copy 2011 taxes real property interests, see Real Property Gain or Loss in chapter 4. Copy 2011 taxes If you are a partner in a domestic partnership, and the partnership disposes of a U. Copy 2011 taxes S. Copy 2011 taxes real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. Copy 2011 taxes Your share of the income and tax withheld will be reported to you on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U. Copy 2011 taxes S. Copy 2011 taxes Source Income Subject to Withholding (in the case of a publicly traded partnership). Copy 2011 taxes Withholding is not required in the following situations. Copy 2011 taxes The property is acquired by the buyer for use as a residence and the amount realized (sales price) is not more than $300,000. Copy 2011 taxes The property disposed of is an interest in a domestic corporation if any class of stock of the corporation is regularly traded on an established securities market. Copy 2011 taxes However, this exception does not apply to certain dispositions of substantial amounts of non-publicly traded interests in publicly traded corporations. Copy 2011 taxes The property disposed of is an interest in a U. Copy 2011 taxes S. Copy 2011 taxes corporation that is not regularly traded on an established market and you (the seller) give the buyer a copy of a statement issued by the corporation certifying that the interest is not a U. Copy 2011 taxes S. Copy 2011 taxes real property interest. Copy 2011 taxes You (the seller) give the buyer a certification stating, under penalties of perjury, that you are not a foreign person, and containing your name, U. Copy 2011 taxes S. Copy 2011 taxes taxpayer identification number, and home address. Copy 2011 taxes You can give the certification to a qualified substitute. Copy 2011 taxes The qualified substitute gives the buyer a statement, under penalties of perjury, that the certification is in the possession of the qualified substitute. Copy 2011 taxes For this purpose, a qualified substitute is (a) the person (including any attorney or title company) responsible for closing the transaction, other than your agent, and (b) the buyer's agent. Copy 2011 taxes The buyer receives a withholding certificate from the Internal Revenue Service. Copy 2011 taxes You give the buyer written notice that you are not required to recognize any gain or loss on the transfer because of a nonrecognition provision in the Internal Revenue Code or a provision in a U. Copy 2011 taxes S. Copy 2011 taxes tax treaty. Copy 2011 taxes The buyer must file a copy of the notice with the Ogden Service Center, P. Copy 2011 taxes O. Copy 2011 taxes Box 409101, Ogden, UT 84409. Copy 2011 taxes You must verify the notice as true and sign it under penalties of perjury. Copy 2011 taxes The notice must contain the following information. Copy 2011 taxes A statement that the notice is a notice of nonrecognition under regulation section 1. Copy 2011 taxes 1445-2(d)(2). Copy 2011 taxes Your name, taxpayer identification number, and home address. Copy 2011 taxes A statement that you are not required to recognize any gain or loss on the transfer. Copy 2011 taxes A brief description of the transfer. Copy 2011 taxes A brief summary of the law and facts supporting your claim that recognition of gain or loss is not required. Copy 2011 taxes You may not give the buyer a written notice for any of the following transfers: the sale of your main home on which you exclude gain, a like-kind exchange that does not qualify for nonrecognition treatment in its entirety, or a deferred like-kind exchange that has not been completed at the time the buyer must file Form 8288. Copy 2011 taxes Instead, a withholding certificate (described next) must be obtained. Copy 2011 taxes The amount you realize on the transfer of a U. Copy 2011 taxes S. Copy 2011 taxes real property interest is zero. Copy 2011 taxes The property is acquired by the United States, a U. Copy 2011 taxes S. Copy 2011 taxes state or possession, a political subdivision, or the District of Columbia. Copy 2011 taxes The distribution is from a domestically controlled qualified investment entity (QIE) and is treated as a distribution of a U. Copy 2011 taxes S. Copy 2011 taxes real property interest only because an interest in the entity was disposed of in an applicable wash sale transaction. Copy 2011 taxes For the definition of a QIE, see Qualified investment entities under Real Property Gain or Loss, earlier. Copy 2011 taxes See Wash sale under Real Property Gain or Loss in chapter 4. Copy 2011 taxes The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified substitute has actual knowledge, or receives notice from a seller's or buyer's agent (or substitute), that they are false. Copy 2011 taxes This also applies to the qualified substitute's statement under (4). Copy 2011 taxes Withholding certificates. Copy 2011 taxes   The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. Copy 2011 taxes Either you or the buyer can request a withholding certificate. Copy 2011 taxes   A withholding certificate can be issued due to any of the following. Copy 2011 taxes The IRS determines that reduced withholding is appropriate because either: The amount required to be withheld would be more than your maximum tax liability, or Withholding of the reduced amount would not jeopardize collection of the tax. Copy 2011 taxes All of your realized gain is exempt from U. Copy 2011 taxes S. Copy 2011 taxes tax. Copy 2011 taxes You or the buyer enters into an agreement for the payment of tax providing security for the tax liability. Copy 2011 taxes   Get Publication 515 and Form 8288-B for information on procedures to request a withholding certificate. Copy 2011 taxes Credit for tax withheld. Copy 2011 taxes   The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288, U. Copy 2011 taxes S. Copy 2011 taxes Withholding Tax Return for Dispositions by Foreign Persons of U. Copy 2011 taxes S. Copy 2011 taxes Real Property Interests. Copy 2011 taxes This form is filed with the IRS with copies A and B of Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. Copy 2011 taxes S. Copy 2011 taxes Real Property Interests. Copy 2011 taxes Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your taxpayer identification number (TIN). Copy 2011 taxes You must file Copy B with your tax return to take credit for the tax withheld. Copy 2011 taxes   A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. Copy 2011 taxes The IRS will send you a letter requesting the TIN and providing instructions for how to get a TIN. Copy 2011 taxes When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A. Copy 2011 taxes Social Security and Medicare Taxes If you work as an employee in the United States, you must pay social security and Medicare taxes in most cases. Copy 2011 taxes Your payments of these taxes contribute to your coverage under the U. Copy 2011 taxes S. Copy 2011 taxes social security system. Copy 2011 taxes Social security coverage provides retirement benefits, survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who meet certain eligibility requirements. Copy 2011 taxes In most cases, the first $113,700 of taxable wages received in 2013 for services performed in the United States is subject to social security tax. Copy 2011 taxes All taxable wages are subject to Medicare tax. Copy 2011 taxes Your employer deducts these taxes from each wage payment. Copy 2011 taxes Your employer must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. Copy 2011 taxes You can claim a credit for excess social security tax on your income tax return if you have more than one employer and the amount deducted from your combined wages for 2013 is more than $7,049. Copy 2011 taxes 40. Copy 2011 taxes Use the appropriate worksheet in chapter 3 of Publication 505, Tax Withholding and Estimated Tax, to figure your credit. Copy 2011 taxes If any one employer deducted more than $7,049. Copy 2011 taxes 40, you cannot claim a credit for that amount. Copy 2011 taxes Ask your employer to refund the excess. Copy 2011 taxes If your employer does not refund the excess, you can file a claim for refund using Form 843. Copy 2011 taxes In general, U. Copy 2011 taxes S. Copy 2011 taxes social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. Copy 2011 taxes In limited situations, these taxes apply to wages for services performed outside the United States. Copy 2011 taxes Your employer should be able to tell you if social security and Medicare taxes apply to your wages. Copy 2011 taxes You cannot make voluntary payments if no taxes are due. Copy 2011 taxes Additional Medicare Tax. Copy 2011 taxes   Beginning in 2013, in addition to the Medicare tax, a 0. Copy 2011 taxes 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $250,000 if married filing jointly, $125,000 if married filing separately, or $200,000 for any other filing status. Copy 2011 taxes   There are no special rules for nonresident aliens for purposes of Additional Medicare Tax. Copy 2011 taxes Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Copy 2011 taxes   Your employer is responsible for withholding the 0. Copy 2011 taxes 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in the calendar year. Copy 2011 taxes If you intend to file a joint return and you anticipate that you and your spouse's individual wages are not going to be more than $200,000 but your combined wages and self-employment income are going to be more than $250,000, you may want to request additional withholding on Form W-4 and/or make estimated tax payments. Copy 2011 taxes   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Copy 2011 taxes    See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Copy 2011 taxes For more information on Additional Medicare Tax, go to IRS. Copy 2011 taxes gov and enter “Additional Medicare Tax” in the search box. Copy 2011 taxes   Self-employed individuals may also be required to pay Additional Medicare Tax. Copy 2011 taxes See Self-Employment Tax , later. Copy 2011 taxes Students and Exchange Visitors Generally, services performed by you as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. Copy 2011 taxes This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. Copy 2011 taxes These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment. Copy 2011 taxes Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien as discussed in chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the same. Copy 2011 taxes Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security. Copy 2011 taxes Nonresident Alien Students If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. Copy 2011 taxes In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. Copy 2011 taxes Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien. Copy 2011 taxes Any student who is enrolled and regularly attending classes at a school may be exempt from social security and Medicare taxes on pay for services performed for that school. Copy 2011 taxes The U. Copy 2011 taxes S. Copy 2011 taxes Citizenship and Immigration Services (USCIS) permits on-campus work for students in “F-1” status if it does not displace a U. Copy 2011 taxes S. Copy 2011 taxes resident. Copy 2011 taxes On-campus work means work performed on the school's premises. Copy 2011 taxes On-campus work includes work performed at an off-campus location that is educationally affiliated with the school. Copy 2011 taxes On-campus work under the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study and is permitted by the USCIS. Copy 2011 taxes Social security and Medicare taxes are not withheld from pay for this work unless the student is considered a resident alien. Copy 2011 taxes If services performed by a nonresident alien student are not considered as performed to carry out the purpose for which the student was admitted to the United States, social security and Medicare taxes will be withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Copy 2011 taxes Exchange Visitors Exchange visitors are temporarily admitted to the United States under section 101(a)(15)(J) of the Immigration and Nationality Act. Copy 2011 taxes Social security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien. Copy 2011 taxes If services performed by an exchange visitor are not considered as performed to carry out the purpose for which the visitor was admitted to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Copy 2011 taxes Nonresident aliens temporarily admitted to the United States as participants in international cultural exchange programs under section 101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and Medicare taxes. Copy 2011 taxes The employer must be the petitioner through whom the alien obtained the “Q” visa. Copy 2011 taxes Social security and Medicare taxes are not withheld from pay for this work unless the alien is considered a resident alien. Copy 2011 taxes Refund of Taxes Withheld in Error If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Copy 2011 taxes If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Copy 2011 taxes Attach the following items to Form 843. Copy 2011 taxes A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld. Copy 2011 taxes A copy of your visa. Copy 2011 taxes Form I-94 (or other documentation showing your dates of arrival or departure). Copy 2011 taxes If you have an F-1 visa, documentation showing permission to work in the U. Copy 2011 taxes S. Copy 2011 taxes If you have a J-1 visa, documentation showing permission to work in the U. Copy 2011 taxes S. Copy 2011 taxes If you are engaged in optional practical training or employment due to severe economic necessity, documentation showing permission to work in the U. Copy 2011 taxes S. Copy 2011 taxes A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. Copy 2011 taxes If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer or on Form 8316 claiming your employer will not issue the refund. Copy 2011 taxes If you were exempt from social security and Medicare tax for only part of the year, pay statements showing the tax paid during the period you were exempt. Copy 2011 taxes File Form 843 (with attachments) with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0038. Copy 2011 taxes Do not use Form 843 to request a refund of Additional Medicare Tax. Copy 2011 taxes If Additional Medicare Tax was withheld from your pay in error, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959 with Form 1040 or 1040NR. Copy 2011 taxes If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040 or 1040NR, you must file Form 1040X, Amended U. Copy 2011 taxes S. Copy 2011 taxes Individual Income Tax Return, for the prior year in which the wages or compensation were originally received to recover the Additional Medicare Tax withheld in error. Copy 2011 taxes See the Instructions for Form 1040X. Copy 2011 taxes Agricultural Workers Agricultural workers temporarily admitted into the United States on H-2A visas are exempt from social security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. Copy 2011 taxes You can find more information about not having tax withheld at www. Copy 2011 taxes irs. Copy 2011 taxes gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Copy 2011 taxes Self-Employment Tax Self-employment tax is the social security and Medicare taxes for individuals who are self-employed. Copy 2011 taxes Nonresident aliens are not subject to self-employment tax unless an international social security agreement in effect determines that they are covered under the U. Copy 2011 taxes S. Copy 2011 taxes social security system. Copy 2011 taxes Residents of the U. Copy 2011 taxes S. Copy 2011 taxes Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are considered U. Copy 2011 taxes S. Copy 2011 taxes residents for this purpose and are subject to the self-employment tax. Copy 2011 taxes Resident aliens must pay self-employment tax under the same rules that apply to U. Copy 2011 taxes S. Copy 2011 taxes citizens. Copy 2011 taxes However, a resident alien employed by an international organization, a foreign government, or a wholly-owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States. Copy 2011 taxes Self-employment income you receive while you are a resident alien is subject to self-employment tax even if it was paid for services you performed as a nonresident alien. Copy 2011 taxes Example. Copy 2011 taxes Bill Jones is an author engaged in the business of writing books. Copy 2011 taxes Bill had several books published in a foreign country while he was a citizen and resident of that country. Copy 2011 taxes During 2013, Bill entered the United States as a resident alien. Copy 2011 taxes After becoming a U. Copy 2011 taxes S. Copy 2011 taxes resident, he continued to receive royalties from his foreign publisher. Copy 2011 taxes Bill reports his income and expenses on the cash basis (he reports income on his tax return when received and deducts expenses when paid). Copy 2011 taxes Bill's 2013 self-employment income includes the royalties received after he became a U. Copy 2011 taxes S. Copy 2011 taxes resident even though the books were published while he was a nonresident alien. Copy 2011 taxes This royalty income is subject to self-employment tax. Copy 2011 taxes Reporting self-employment tax. Copy 2011 taxes   Use Schedule SE (Form 1040) to report and figure your self-employment tax. Copy 2011 taxes Then enter the tax on Form 1040, line 56, or Form 1040NR, line 54. Copy 2011 taxes Attach Schedule SE to Form 1040 or Form 1040NR. Copy 2011 taxes Additional Medicare Tax. Copy 2011 taxes   Self-employed individuals must pay a 0. Copy 2011 taxes 9% Additional Medicare Tax on self-employment income that exceeds one of the following threshold amounts (based on your filing status): Married filing jointly — $250,000; Married filing separately — $125,000; Single, Head of household, or Qualifying widow(er) — $200,000. Copy 2011 taxes   If you have both wages and self-employment income, the threshold amount for applying the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. Copy 2011 taxes A self-employment loss should not be considered for purposes of this tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Copy 2011 taxes   See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Copy 2011 taxes For more information on Additional Medicare Tax, go to IRS. Copy 2011 taxes gov and enter “Additional Medicare Tax” in the search box. Copy 2011 taxes Deduction for employer-equivalent portion of self-employment tax. Copy 2011 taxes   If you must pay self-employment tax, you can deduct a portion of the self-employment tax paid in figuring your adjusted gross income. Copy 2011 taxes This deduction is figured on Schedule SE (Form 1040). Copy 2011 taxes Note. Copy 2011 taxes No portion of the Additional Medicare Tax is deductible for self-employment tax. Copy 2011 taxes More information. Copy 2011 taxes   Get Publication 334, Tax Guide for Small Business, for more information about self-employment tax. Copy 2011 taxes International Social Security Agreements The United States has entered into social security agreements with foreign countries to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries. Copy 2011 taxes These agreements are commonly referred to as totalization agreements. Copy 2011 taxes Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. Copy 2011 taxes The agreements generally make sure that social security taxes (including self-employment tax) are paid only to one country. Copy 2011 taxes Agreements are in effect with the following countries. Copy 2011 taxes Australia. Copy 2011 taxes Austria. Copy 2011 taxes Belgium. Copy 2011 taxes Canada. Copy 2011 taxes Chile. Copy 2011 taxes Czech Republic. Copy 2011 taxes Denmark. Copy 2011 taxes Finland. Copy 2011 taxes France. Copy 2011 taxes Germany. Copy 2011 taxes Greece. Copy 2011 taxes Ireland. Copy 2011 taxes Italy. Copy 2011 taxes Japan. Copy 2011 taxes Korea, South. Copy 2011 taxes Luxembourg. Copy 2011 taxes The Netherlands. Copy 2011 taxes Norway. Copy 2011 taxes Poland. Copy 2011 taxes Portugal. Copy 2011 taxes Spain. Copy 2011 taxes Sweden. Copy 2011 taxes Switzerland. Copy 2011 taxes The United Kingdom. Copy 2011 taxes Agreements with other countries are expected to enter into force in the future. Copy 2011 taxes Employees. Copy 2011 taxes   Generally, under these agreements, you are subject to social security taxes only in the country where you are working. Copy 2011 taxes However, if you are temporarily sent to work for the same employer in the United States and your pay would normally be subject to social security taxes in both countries, most agreements provide that you remain covered only by the social security system of the country from which you were sent. Copy 2011 taxes You can get more information on any agreement by contacting the U. Copy 2011 taxes S. Copy 2011 taxes Social Security Administration at the address given later. Copy 2011 taxes If you have access to the Internet, you can get more information at www. Copy 2011 taxes socialsecurity. Copy 2011 taxes gov/international. Copy 2011 taxes   To establish that your pay is subject only to foreign social security taxes and is exempt from U. Copy 2011 taxes S. Copy 2011 taxes social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage from the appropriate agency of the foreign country. Copy 2011 taxes This will usually be the same agency to which you or your employer pays your foreign social security taxes. Copy 2011 taxes The foreign agency will be able to tell you what information is needed for them to issue the certificate. Copy 2011 taxes Your employer should keep a copy of the certificate because it may be needed to show why you are exempt from U. Copy 2011 taxes S. Copy 2011 taxes social security taxes. Copy 2011 taxes Only wages paid on or after the effective date of the agreement can be exempt from U. Copy 2011 taxes S. Copy 2011 taxes social security taxes. Copy 2011 taxes    Some of the countries with which the United States has agreements will not issue certificates of coverage. Copy 2011 taxes In this case, either you or your employer should request a statement that your wages are not covered by the U. Copy 2011 taxes S. Copy 2011 taxes social security system. Copy 2011 taxes Request the statement from the following address. Copy 2011 taxes U. Copy 2011 taxes S. Copy 2011 taxes Social Security Administration Office of International Programs P. Copy 2011 taxes O. Copy 2011 taxes Box 17741 Baltimore, MD 21235-7741 Self-employed individuals. Copy 2011 taxes   Under most agreements, self-employed individuals are covered by the social security system of the country where they reside. Copy 2011 taxes However, under some agreements, you may be exempt from U. Copy 2011 taxes S. Copy 2011 taxes self-employment tax if you temporarily transfer your business activity to or from the United States. Copy 2011 taxes   If you believe that your self-employment income is subject only to U. Copy 2011 taxes S. Copy 2011 taxes self-employment tax and is exempt from foreign social security taxes, request a certificate of coverage from the U. Copy 2011 taxes S. Copy 2011 taxes Social Security Administration at the address given earlier. Copy 2011 taxes This certificate will establish your exemption from foreign social security taxes. Copy 2011 taxes   To establish that your self-employment income is subject only to foreign social security taxes and is exempt from U. Copy 2011 taxes S. Copy 2011 taxes self-employment tax, request a certificate of coverage from the appropriate agency of the foreign country. Copy 2011 taxes If the foreign country will not issue the certificate, you should request a statement that your income is not covered by the U. Copy 2011 taxes S. Copy 2011 taxes social security system. Copy 2011 taxes Request it from the U. Copy 2011 taxes S. Copy 2011 taxes Social Security Administration at the address given earlier. Copy 2011 taxes Attach a photocopy of either statement to Form 1040 each year you are exempt. Copy 2011 taxes Also print “Exempt, see attached statement” on the line for self-employment tax. Copy 2011 taxes Estimated Tax Form 1040-ES (NR) You may have income from which no U. Copy 2011 taxes S. Copy 2011 taxes income tax is withheld. Copy 2011 taxes Or the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. Copy 2011 taxes If so, you may have to pay estimated tax. Copy 2011 taxes Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax and you expect your withholding and certain refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 income tax return, or 100% of the tax shown on your 2013 income tax return (if your 2013 return covered all 12 months of the year). Copy 2011 taxes If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above if you are not a farmer or fisherman. Copy 2011 taxes Item (2) does not apply if you did not file a 2013 return. Copy 2011 taxes A nonresident alien should use Form 1040-ES (NR) to figure and pay estimated tax. Copy 2011 taxes If you pay by check, make it payable to the "United States Treasury. Copy 2011 taxes " How to estimate your tax for 2014. Copy 2011 taxes   If you filed a 2013 return on Form 1040NR or Form 1040NR-EZ and expect your income, number of exemptions, and total deductions for 2014 to be nearly the same, you should use your 2013 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR) instructions. Copy 2011 taxes If you did not file a return for 2013, or if your income, exemptions, deductions, or credits will be different for 2014, you must estimate these amounts. Copy 2011 taxes Figure your estimated tax liability using the Tax Rate Schedule in the 2014 Form 1040-ES (NR) instructions for your filing status. Copy 2011 taxes Note. Copy 2011 taxes If you expect to be a resident of Puerto Rico during the entire year, use Form 1040-ES or Formulario 1040-ES (PR). Copy 2011 taxes When to pay estimated tax. Copy 2011 taxes   Make your first estimated tax payment by the due date for filing the previous year's Form 1040NR or Form 1040NR-EZ. Copy 2011 taxes If you have wages subject to the same withholding rules that apply to U. Copy 2011 taxes S. Copy 2011 taxes citizens, you must file Form 1040NR or Form 1040NR-EZ and make your first estimated tax payment by April 15, 2014. Copy 2011 taxes If you do not have wages subject to withholding, file your income tax return and make your first estimated tax payment by June 16, 2014. Copy 2011 taxes   If your first estimated tax payment is due April 15, 2014, you can pay your estimated tax in full at that time or in four equal installments by the dates shown next. Copy 2011 taxes 1st installment April 15, 2014 2nd installment June 16, 2014 3rd installment Sept. Copy 2011 taxes 15, 2014 4th installment Jan. Copy 2011 taxes 15, 2015 If your first payment is not due until June 16, 2014, you can pay your estimated tax in full at that time or: ½ of your estimated tax by June 16, 2014, 1/4 of the tax by September 15, 2014, and 1/4 by January 15, 2015. Copy 2011 taxes    You do not have to make the payment due January 15, 2015, if you file your 2014 Form 1040NR or 1040NR-EZ by February 2, 2015, and pay the entire balance due with your return. Copy 2011 taxes Fiscal year. Copy 2011 taxes   If your return is not on a calendar year basis, your due dates are the 15th day of the 4th, 6th, and 9th months of your fiscal year, and the 1st month of the following fiscal year. Copy 2011 taxes If any date falls on a Saturday, Sunday, or legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday. Copy 2011 taxes Changes in income, deductions, or exemptions. Copy 2011 taxes   Even if you are not required to make an estimated tax payment in April or June, your circumstances may change so that you will have to make estimated tax payments later. Copy 2011 taxes This can happen if you receive additional income or if any of your deductions are reduced or eliminated. Copy 2011 taxes If so, see the instructions for Form 1040-ES (NR) and Publication 505 for information on figuring your estimated tax. Copy 2011 taxes Amended estimated tax. Copy 2011 taxes   If, after you have made estimated tax payments, you find your estimated tax is substantially increased or decreased because of a change in your income or exemptions, you should adjust your remaining estimated tax payments. Copy 2011 taxes To do this, see the instructions for Form 1040-ES (NR) and Publication 505. Copy 2011 taxes Penalty for failure to pay estimated income tax. Copy 2011 taxes   You will be subject to a penalty for underpayment of installments of estimated tax except in certain situations. Copy 2011 taxes These situations are explained on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Copy 2011 taxes Prev  Up  Next   Home   More Online Publications