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File Amended Tax Return 2012

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File Amended Tax Return 2012

File amended tax return 2012 5. File amended tax return 2012   Recordkeeping Table of Contents How To Prove ExpensesWhat Are Adequate Records? What If I Have Incomplete Records? Separating and Combining Expenses How Long To Keep Records and Receipts Examples of Records If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense. File amended tax return 2012 This chapter discusses the records you need to keep to prove these expenses. File amended tax return 2012 If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. File amended tax return 2012 You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan. File amended tax return 2012 These plans are discussed in chapter 6 under Reimbursements . File amended tax return 2012 How To Prove Expenses Table 5-1 is a summary of records you need to prove each expense discussed in this publication. File amended tax return 2012 You must be able to prove the elements listed across the top portion of the chart. File amended tax return 2012 You prove them by having the information and receipts (where needed) for the expenses listed in the first column. File amended tax return 2012 You cannot deduct amounts that you approximate or estimate. File amended tax return 2012 You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. File amended tax return 2012 You must generally prepare a written record for it to be considered adequate. File amended tax return 2012 This is because written evidence is more reliable than oral evidence alone. File amended tax return 2012 However, if you prepare a record on a computer, it is considered an adequate record. File amended tax return 2012 What Are Adequate Records? You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. File amended tax return 2012 You should also keep documentary evidence that, together with your record, will support each element of an expense. File amended tax return 2012 Documentary evidence. File amended tax return 2012   You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. File amended tax return 2012 Exception. File amended tax return 2012   Documentary evidence is not needed if any of the following conditions apply. File amended tax return 2012 You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. File amended tax return 2012 ( Accountable plans and per diem allowances are discussed in chapter 6. File amended tax return 2012 ) Your expense, other than lodging, is less than $75. File amended tax return 2012 You have a transportation expense for which a receipt is not readily available. File amended tax return 2012 Adequate evidence. File amended tax return 2012   Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. File amended tax return 2012   For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information. File amended tax return 2012 The name and location of the hotel. File amended tax return 2012 The dates you stayed there. File amended tax return 2012 Separate amounts for charges such as lodging, meals, and telephone calls. File amended tax return 2012   A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. File amended tax return 2012 The name and location of the restaurant. File amended tax return 2012 The number of people served. File amended tax return 2012 The date and amount of the expense. File amended tax return 2012 If a charge is made for items other than food and beverages, the receipt must show that this is the case. File amended tax return 2012 Canceled check. File amended tax return 2012   A canceled check, together with a bill from the payee, ordinarily establishes the cost. File amended tax return 2012 However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose. File amended tax return 2012 Duplicate information. File amended tax return 2012   You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner. File amended tax return 2012   You do not have to record amounts your employer pays directly for any ticket or other travel item. File amended tax return 2012 However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend. File amended tax return 2012 Timely-kept records. File amended tax return 2012   You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. File amended tax return 2012 A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall. File amended tax return 2012   You do not need to write down the elements of every expense on the day of the expense. File amended tax return 2012 If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record. File amended tax return 2012   If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. File amended tax return 2012 This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record. File amended tax return 2012 Proving business purpose. File amended tax return 2012   You must generally provide a written statement of the business purpose of an expense. File amended tax return 2012 However, the degree of proof varies according to the circumstances in each case. File amended tax return 2012 If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation. File amended tax return 2012 Example. File amended tax return 2012 If you are a sales representative who calls on customers on an established sales route, you do not have to give a written explanation of the business purpose for traveling that route. File amended tax return 2012 You can satisfy the requirements by recording the length of the delivery route once, the date of each trip at or near the time of the trips, and the total miles you drove the car during the tax year. File amended tax return 2012 You could also establish the date of each trip with a receipt, record of delivery, or other documentary evidence. File amended tax return 2012 Confidential information. File amended tax return 2012   You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. File amended tax return 2012 However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. File amended tax return 2012 What If I Have Incomplete Records? If you do not have complete records to prove an element of an expense, then you must prove the element with: Your own written or oral statement containing specific information about the element, and Other supporting evidence that is sufficient to establish the element. File amended tax return 2012 If the element is the description of a gift, or the cost, time, place, or date of an expense, the supporting evidence must be either direct evidence or documentary evidence. File amended tax return 2012 Direct evidence can be written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element. File amended tax return 2012 Documentary evidence can be receipts, paid bills, or similar evidence. File amended tax return 2012 If the element is either the business relationship of your guests or the business purpose of the amount spent, the supporting evidence can be circumstantial rather than direct. File amended tax return 2012 For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. File amended tax return 2012 Invoices of deliveries establish when you used the car for business. File amended tax return 2012 Table 5-1. File amended tax return 2012 How To Prove Certain Business Expenses IF you have expenses for . File amended tax return 2012 . File amended tax return 2012 THEN you must keep records that show details of the following elements . File amended tax return 2012 . File amended tax return 2012 . File amended tax return 2012   Amount Time Place or  Description Business Purpose Business Relationship Travel Cost of each separate expense for travel, lodging, and meals. File amended tax return 2012 Incidental expenses may be totaled in reasonable categories such as taxis, fees and tips, etc. File amended tax return 2012 Dates you left and returned for each trip and number of days spent on business. File amended tax return 2012 Destination or area of your travel (name of city, town, or other designation). File amended tax return 2012 Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. File amended tax return 2012    Relationship: N/A Entertainment Cost of each separate expense. File amended tax return 2012 Incidental expenses such as taxis, telephones, etc. File amended tax return 2012 , may be totaled on a daily basis. File amended tax return 2012 Date of entertainment. File amended tax return 2012 (Also see Business Purpose. File amended tax return 2012 ) Name and address or location of place of entertainment. File amended tax return 2012 Type of entertainment if not otherwise apparent. File amended tax return 2012 (Also see Business Purpose. File amended tax return 2012 ) Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. File amended tax return 2012  For entertainment, the nature of the business discussion or activity. File amended tax return 2012 If the entertainment was directly before or after a business discussion: the date, place, nature, and duration of the business discussion, and the identities of the persons who took part in both the business discussion and the entertainment activity. File amended tax return 2012    Relationship: Occupations or other information (such as names, titles, or other designations) about the recipients that shows their business relationship to you. File amended tax return 2012  For entertainment, you must also prove that you or your employee was present if the entertainment was a business meal. File amended tax return 2012 Gifts Cost of the gift. File amended tax return 2012 Date of the gift. File amended tax return 2012 Description of the gift. File amended tax return 2012   Transportation Cost of each separate expense. File amended tax return 2012 For car expenses, the cost of the car and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. File amended tax return 2012 Date of the expense. File amended tax return 2012 For car expenses, the date of the use of the car. File amended tax return 2012 Your business destination. File amended tax return 2012 Purpose: Business purpose for the expense. File amended tax return 2012    Relationship: N/A Sampling. File amended tax return 2012   You can keep an adequate record for parts of a tax year and use that record to prove the amount of business or investment use for the entire year. File amended tax return 2012 You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year. File amended tax return 2012 Example. File amended tax return 2012 You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. File amended tax return 2012 There is no other business use of the car, but you and your family use the car for personal purposes. File amended tax return 2012 You keep adequate records during the first week of each month that show that 75% of the use of the car is for business. File amended tax return 2012 Invoices and bills show that your business use continues at the same rate during the later weeks of each month. File amended tax return 2012 Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. File amended tax return 2012 Exceptional circumstances. File amended tax return 2012   You can satisfy the substantiation requirements with other evidence if, because of the nature of the situation in which an expense is made, you cannot get a receipt. File amended tax return 2012 This applies if all the following are true. File amended tax return 2012 You were unable to obtain evidence for an element of the expense or use that completely satisfies the requirements explained earlier under What Are Adequate Records . File amended tax return 2012 You are unable to obtain evidence for an element that completely satisfies the two rules listed earlier under What If I Have Incomplete Records . File amended tax return 2012 You have presented other evidence for the element that is the best proof possible under the circumstances. File amended tax return 2012 Destroyed records. File amended tax return 2012   If you cannot produce a receipt because of reasons beyond your control, you can prove a deduction by reconstructing your records or expenses. File amended tax return 2012 Reasons beyond your control include fire, flood, and other casualties. File amended tax return 2012    Table 5-2. File amended tax return 2012 Daily Business Mileage and Expense Log Name:       Odometer Readings Expenses Date Destination  (City, Town, or Area) Business Purpose Start Stop Miles  this trip Type  (Gas, oil, tolls, etc. File amended tax return 2012 ) Amount                                                                                                                   Weekly  Total             Total Year-to-Date             Separating and Combining Expenses This section explains when expenses must be kept separate and when expenses can be combined. File amended tax return 2012 Separating expenses. File amended tax return 2012   Each separate payment is generally considered a separate expense. File amended tax return 2012 For example, if you entertain a customer or client at dinner and then go to the theater, the dinner expense and the cost of the theater tickets are two separate expenses. File amended tax return 2012 You must record them separately in your records. File amended tax return 2012 Season or series tickets. File amended tax return 2012   If you buy season or series tickets for business use, you must treat each ticket in the series as a separate item. File amended tax return 2012 To determine the cost of individual tickets, divide the total cost (but not more than face value) by the number of games or performances in the series. File amended tax return 2012 You must keep records to show whether you use each ticket as a gift or entertainment. File amended tax return 2012 Also, you must be able to prove the cost of nonluxury box seat tickets if you rent a skybox or other private luxury box for more than one event. File amended tax return 2012 See Entertainment tickets in chapter 2. File amended tax return 2012 Combining items. File amended tax return 2012   You can make one daily entry in your record for reasonable categories of expenses. File amended tax return 2012 Examples are taxi fares, telephone calls, or other incidental travel costs. File amended tax return 2012 Meals should be in a separate category. File amended tax return 2012 You can include tips for meal-related services with the costs of the meals. File amended tax return 2012   Expenses of a similar nature occurring during the course of a single event are considered a single expense. File amended tax return 2012 For example, if during entertainment at a cocktail lounge, you pay separately for each serving of refreshments, the total expense for the refreshments is treated as a single expense. File amended tax return 2012 Car expenses. File amended tax return 2012   You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. File amended tax return 2012 Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use. File amended tax return 2012 Example. File amended tax return 2012 You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. File amended tax return 2012 You can account for these using a single record of miles driven. File amended tax return 2012 Gift expenses. File amended tax return 2012   You do not always have to record the name of each recipient of a gift. File amended tax return 2012 A general listing will be enough if it is evident that you are not trying to avoid the $25 annual limit on the amount you can deduct for gifts to any one person. File amended tax return 2012 For example, if you buy a large number of tickets to local high school basketball games and give one or two tickets to each of many customers, it is usually enough to record a general description of the recipients. File amended tax return 2012 Allocating total cost. File amended tax return 2012   If you can prove the total cost of travel or entertainment but you cannot prove how much it cost for each person who participated in the event, you may have to allocate the total cost among you and your guests on a pro rata basis. File amended tax return 2012 To do so, you must establish the number of persons who participated in the event. File amended tax return 2012   An allocation would be needed, for example, if you did not have a business relationship with all of your guests. File amended tax return 2012 See Allocating between business and nonbusiness in chapter 2. File amended tax return 2012 If your return is examined. File amended tax return 2012    If your return is examined, you may have to provide additional information to the IRS. File amended tax return 2012 This information could be needed to clarify or to establish the accuracy or reliability of information contained in your records, statements, testimony, or documentary evidence before a deduction is allowed. File amended tax return 2012    THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Table 5-3. File amended tax return 2012 Weekly Traveling Expense and Entertainment Record From: To: Name: Expenses Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total 1. File amended tax return 2012 Travel Expenses: Airlines                                 Excess Baggage                                 Bus – Train                                 Cab and Limousine                                 Tips                                 Porter                                 2. File amended tax return 2012 Meals and Lodging:  Breakfast                                 Lunch                                 Dinner                                 Hotel and Motel  (Detail in Schedule B)                                 3. File amended tax return 2012 Entertainment  (Detail in Schedule C)                                 4. File amended tax return 2012 Other Expenses:  Postage                                 Telephone & Telegraph                                 Stationery & Printing                                 Stenographer                                 Sample Room                                 Advertising                                 Assistant(s)                                 Trade Shows                                 5. File amended tax return 2012 Car Expenses: (List all car expenses - the division between business and personal expenses may be made at the end of the year. File amended tax return 2012 ) (Detail mileage in Schedule A. File amended tax return 2012 ) Gas, oil, lube, wash                                 Repairs, parts                                 Tires, supplies                                 Parking fees, tolls                                 6. File amended tax return 2012 Other (Identify)                                 Total                                 Note: Attach receipted bills for (1) ALL lodging and (2) any other expenses of $75. File amended tax return 2012 00 or more. File amended tax return 2012 Schedule A – Car Mileage: End                 Start                 Total                 Business Mileage                 Schedule B – Lodging Hotel or Motel Name                 City                 Schedule C – Entertainment Date Item Place Amount Business Purpose Business Relationship                                             WEEKLY REIMBURSEMENTS:     Travel and transportation expenses     Other reimbursements     TOTAL   How Long To Keep Records and Receipts You must keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. File amended tax return 2012 Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. File amended tax return 2012 A return filed early is considered filed on the due date. File amended tax return 2012 For a more complete explanation of how long to keep records, see Publication 583, Starting a Business and Keeping Records. File amended tax return 2012 You must keep records of the business use of your car for each year of the recovery period. File amended tax return 2012 See More-than-50%-use test in chapter 4 under Depreciation Deduction. File amended tax return 2012 Reimbursed for expenses. File amended tax return 2012   Employees who give their records and documentation to their employers and are reimbursed for their expenses generally do not have to keep copies of this information. File amended tax return 2012 However, you may have to prove your expenses if any of the following conditions apply. File amended tax return 2012 You claim deductions for expenses that are more than reimbursements. File amended tax return 2012 Your expenses are reimbursed under a nonaccountable plan. File amended tax return 2012 Your employer does not use adequate accounting procedures to verify expense accounts. File amended tax return 2012 You are related to your employer as defined under Per Diem and Car Allowances , in chapter 6. File amended tax return 2012 Reimbursements , adequate accounting , and nonaccountable plans are discussed in chapter 6. File amended tax return 2012 Examples of Records Table 5-2 and Table 5-3 are examples of worksheets which can be used for tracking business expenses. File amended tax return 2012 Prev  Up  Next   Home   More Online Publications
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Free File: Frequently Asked Questions

Find more information at www.freefile.irs.gov

What is Free File? 
Free File provides free federal tax prep and e-file for taxpayers, either through brand-name software or online fillable forms. This year, you have until April 15, 2014, to file and pay your taxes or request an extension.  

Who can use Free File?
You can, if your  Adjusted Gross Income (AGI) was $58,000 or less in 2013. You can use free brand-name software. You can find the company that’s best for you using the “Help Me Find Free File Software" tool. If your income was higher than $58,000, Free File Fillable Forms is available.

May I also file my state return for free?
Some participating Free File companies offer free state tax prep and e-file. Check the company's Free File home page to learn if free state income tax prep and e-file are available.

Note: AK, FL, NV, NH, SD, TN, TX, WA and WY do not have a state income tax return filing requirement for reporting W2 wage income. Two of these, NH and TN, require taxpayers to file returns for individual interest and dividend income.  

What forms and schedules can I  use to Free File?
Free File offers the most commonly filed forms/schedules. Review the list of most commonly filed forms. If a form/schedule is not listed, check the company's website for more information.

May I use Free File to e-file my prior year return? 
No. We are not set-up to accept prior year Free File returns electronically.    

How do I get a copy of my return? 
Always remember to print your return after you successfully e-file. If you forget to print your return, order a free
transcript from IRS. Depending on the type of transcript your request, you'll get more or less of the information from your return. 

Is customer support service available for Free File?
Yes. Access the Free File company's website to find customer support contact information. Browse the company’s website to find free customer service options such as online assistance, or an e-mail address for technical and/or tax law assistance. Direct specific questions about your individual tax return to the tax software company you are using. Contact the Free File company to resolve issues related to the company’s software. If you are not able to resolve your issue, try another Free File company’s software. 

Where do I enter the six-digit Identity Protection PIN?
If the IRS sent you a letter with an Identity Protection PIN, enter the six-digit PIN in the appropriate place in the Free File software you have selected. 

Where can I find answers to tax law questions? You can get answers to many questions on IRS.gov. Try the Interactive Tax Assistant, use Search in the upper right corner of IRS.gov, and check Tax Topics, Help and Resources and Individuals. If you still don’t find the answer to your question, call our toll-free tax assistance line at 1-800-829-1040 for individual tax questions or 1-800-829-4933 for business tax questions.

What can I do if I am not able to get into a Free File company from the IRS.gov website?
This problem may be due to your Internet service provider, your Internet security software and/or your IT department blocking expected information in the web request from your browser. This information is necessary to protect both you and IRS.gov systems from improper use such as phishing and other security threats. Unfortunately, due to the many differences between Internet browsers and individual computer configurations, we are unable to suggest Internet settings or configurations for you. Try selecting another company, use another computer or another browser. 

Does Free File use secure technologies?
Yes. We approve the Free File companies’ proprietary software. All Free File companies must get third-party privacy and security certificates. Taxpayers enter tax information in a secure session and the Free File companies transmit tax returns using secure technologies. In addition, the Free File tax software companies must comply with all federal rules governing e-filing and regulations covering taxpayer privacy. The companies may not disclose or use tax return information for purposes other than tax return preparation without the knowing, informed and voluntary consent of the taxpayer. These companies are also subject to the Federal Trade Commission Privacy and Safeguards Rules.

What information will the IRS collect or retain about me using Free File?
None. Our policy prohibits the use of permanent Internet cookies. We sometimes use “temporary” or “session” cookies to make sure you are the correct recipient of information you requested. These are deleted when your Internet visit ends.

Can a Free File company share my information with anybody besides the IRS?
No. As part of the agreement, the Free File Alliance companies must comply with our strict privacy standards. In accordance with Treasury regulations, the companies may not disclose your tax return information without your permission.

Page Last Reviewed or Updated: 16-Jan-2014

The File Amended Tax Return 2012

File amended tax return 2012 Publication 597 - Main Content Table of Contents Application of Treaty Personal Services Pensions, Annuities, Social Security, and AlimonyRoth IRAs. File amended tax return 2012 Tax-deferred plans. File amended tax return 2012 Investment Income From Canadian Sources Other Income Charitable ContributionsQualified charities. File amended tax return 2012 Income Tax Credits Competent Authority Assistance How To Get Tax HelpText of Treaty U. File amended tax return 2012 S. File amended tax return 2012 Taxation Canadian Taxation Application of Treaty The benefits of the income tax treaty are generally provided on the basis of residence for income tax purposes. File amended tax return 2012 That is, a person who is recognized as a resident of the United States who has income from Canada, will often pay less income tax to Canada on that income than if no treaty was in effect. File amended tax return 2012 Article IV provides definitions of residents of Canada and the United States, and provides specific criteria for applying the treaty in cases where a taxpayer is considered by both countries to be a resident. File amended tax return 2012 Saving clause. File amended tax return 2012   In most instances, a treaty does not affect the right of a country to tax its own residents (including those who are U. File amended tax return 2012 S. File amended tax return 2012 citizens) or of the United States to tax its residents or citizens (including U. File amended tax return 2012 S. File amended tax return 2012 citizens who are residents of the foreign country). File amended tax return 2012 This provision is known as the “saving clause. File amended tax return 2012 ”   For example, an individual who is a U. File amended tax return 2012 S. File amended tax return 2012 citizen and a resident of Canada may have dividend income from a U. File amended tax return 2012 S. File amended tax return 2012 corporation. File amended tax return 2012 The treaty provides a maximum rate of 15% on dividends received by a resident of Canada from sources in the United States. File amended tax return 2012 Even though a resident of Canada, the individual is a U. File amended tax return 2012 S. File amended tax return 2012 citizen and the saving clause overrides the treaty article that limits the U. File amended tax return 2012 S. File amended tax return 2012 tax to 15%. File amended tax return 2012    Exceptions to the saving clause can be found in Article XXIX, paragraph 3. File amended tax return 2012 Treaty-based position. File amended tax return 2012   If you take the position that any U. File amended tax return 2012 S. File amended tax return 2012 tax is overruled or otherwise reduced by a U. File amended tax return 2012 S. File amended tax return 2012 treaty (a treaty-based position), you generally must disclose that position on Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), and attach it to your return. File amended tax return 2012 Personal Services A U. File amended tax return 2012 S. File amended tax return 2012 citizen or resident who is temporarily present in Canada during the tax year is exempt from Canadian income taxes on pay for services performed, or remittances received from the United States, if the citizen or resident qualifies under one of the treaty exemption provisions set out below. File amended tax return 2012 Income from employment (Article XV). File amended tax return 2012   Income U. File amended tax return 2012 S. File amended tax return 2012 residents receive for the performance of dependent personal services in Canada (except as public entertainers) is exempt from Canadian tax if it is not more than $10,000 in Canadian currency for the year. File amended tax return 2012 If it is more than $10,000 for the year, it is exempt only if: The residents are present in Canada for no more than 183 days in any 12-month period beginning or ending in the year concerned, and The income is not paid by, or on behalf of, a Canadian resident and is not borne by a permanent establishment in Canada. File amended tax return 2012    Whether there is a permanent establishment in Canada is determined by the rules set forth in Article V. File amended tax return 2012 Example. File amended tax return 2012 You are a U. File amended tax return 2012 S. File amended tax return 2012 resident employed under an 8-month contract with a Canadian firm to install equipment in their Montreal plant. File amended tax return 2012 During the calendar year you were physically present in Canada for 179 days and were paid $16,500 (Canadian) for your services. File amended tax return 2012 Although you were in Canada for not more than 183 days during the year, your income is not exempt from Canadian income tax because it was paid by a Canadian resident and was more than $10,000 (Canadian) for the year. File amended tax return 2012 Pay received by a U. File amended tax return 2012 S. File amended tax return 2012 resident for work regularly done in more than one country as an employee on a ship, aircraft, motor vehicle, or train operated by a U. File amended tax return 2012 S. File amended tax return 2012 resident is exempt from Canadian tax. File amended tax return 2012 Income from self-employment (Article VII). File amended tax return 2012   Income from services performed (other than those performed as an employee) are taxed in Canada if they are attributable to a permanent establishment in Canada. File amended tax return 2012 This income is treated as business profits, and deductions similar to those allowed under U. File amended tax return 2012 S. File amended tax return 2012 law are allowable. File amended tax return 2012   If you carry on (or have carried on) business in both Canada and the United States, the business profits are attributable to each country based on the profits that the permanent establishment might be expected to make if it were a distinct and separate person engaged in the same or similar activities. File amended tax return 2012 The business profits attributable to the permanent establishment include only those profits derived from assets used, risks assumed, and activities performed by the permanent establishment. File amended tax return 2012   You may be considered to have a permanent establishment if you meet certain conditions. File amended tax return 2012 For more information, see Article V (Permanent Establishment) and Article VII (Business Profits). File amended tax return 2012 Public entertainers (Article XVI). File amended tax return 2012   The provisions under income from employment or income from self-employment do not apply to public entertainers (such as theater, motion picture, radio, or television artistes, musicians, or athletes) from the United States who receive more than $15,000 in gross receipts in Canadian currency, including reimbursed expenses, from their entertainment activities in Canada during the calendar year. File amended tax return 2012 However, this provision for public entertainers does not apply (and the other provisions will apply) to athletes participating in team sports in leagues with regularly scheduled games in both the United States and Canada. File amended tax return 2012 Compensation paid by the U. File amended tax return 2012 S. File amended tax return 2012 Government (Article XIX). File amended tax return 2012   Wages, salaries, and similar income (other than pensions) paid to a U. File amended tax return 2012 S. File amended tax return 2012 citizen by the United States or any of its agencies, instrumentalities, or political subdivisions for discharging governmental functions are exempt from Canadian income tax. File amended tax return 2012   The exemption does not apply to pay for services performed in connection with any trade or business carried on for profit by the United States, or any of its agencies, instrumentalities, or political subdivisions. File amended tax return 2012 Students and apprentices (Article XX). File amended tax return 2012   A full-time student, apprentice, or business trainee who is in Canada to study or acquire business experience is exempt from Canadian income tax on remittances received from any source outside Canada for maintenance, education, or training. File amended tax return 2012 The recipient must be or must have been a U. File amended tax return 2012 S. File amended tax return 2012 resident immediately before visiting Canada. File amended tax return 2012   An apprentice or business trainee can claim this exemption only for a period of one year from the date the individual first arrived in Canada for the purpose of training. File amended tax return 2012 Pensions, Annuities, Social Security, and Alimony Under Article XVIII, pensions and annuities from Canadian sources paid to U. File amended tax return 2012 S. File amended tax return 2012 residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity). File amended tax return 2012 Canadian pensions and annuities paid to U. File amended tax return 2012 S. File amended tax return 2012 residents may be taxed by the United States, but the amount of any pension included in income for U. File amended tax return 2012 S. File amended tax return 2012 tax purposes may not be more than the amount that would be included in income in Canada if the recipient were a Canadian resident. File amended tax return 2012 Pensions. File amended tax return 2012   A pension includes any payment under a pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances, and payments under a sickness, accident, or disability plan. File amended tax return 2012 It includes pensions paid by private employers and the government for services rendered. File amended tax return 2012   Pensions also include payments from individual retirement arrangements (IRAs) in the United States, registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) in Canada. File amended tax return 2012   Pensions do not include social security benefits. File amended tax return 2012 Roth IRAs. File amended tax return 2012   A distribution from a Roth IRA is exempt from Canadian tax to the extent it would be exempt from U. File amended tax return 2012 S. File amended tax return 2012 tax if paid to a U. File amended tax return 2012 S. File amended tax return 2012 resident. File amended tax return 2012 In addition, you may elect to defer any tax in Canada on income accrued within the Roth IRA but not distributed by the Roth IRA. File amended tax return 2012 However, you cannot defer tax on any accruals due to contributions made after you become a Canadian resident. File amended tax return 2012 Tax-deferred plans. File amended tax return 2012   Generally, income that accrues in a Canadian RRSP or RRIF is subject to U. File amended tax return 2012 S. File amended tax return 2012 tax, even if it is not distributed. File amended tax return 2012 However, a U. File amended tax return 2012 S. File amended tax return 2012 citizen or resident can elect to defer U. File amended tax return 2012 S. File amended tax return 2012 tax on income from the plan until the income is distributed. File amended tax return 2012 Form 8891 is used to make the election. File amended tax return 2012 Annuities. File amended tax return 2012    An annuity is a stated sum payable periodically at stated times, during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). File amended tax return 2012 Annuities do not include: Non-periodic payments, or An annuity the cost of which was deductible for tax purposes. File amended tax return 2012 Special rules. File amended tax return 2012    Special rules apply to pensions and annuities with respect to: Short-term assignments, Cross-border commuters, and Individuals who participate in a Canadian qualifying plan. File amended tax return 2012 Generally, distributions in such cases are deemed to be earned in the country in which the plan is established, without regard to where the services were rendered. File amended tax return 2012 Social security benefits. File amended tax return 2012   U. File amended tax return 2012 S. File amended tax return 2012 social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax. File amended tax return 2012 Alimony. File amended tax return 2012   Alimony and similar amounts (including child support payments) from Canadian sources paid to U. File amended tax return 2012 S. File amended tax return 2012 residents are exempt from Canadian tax. File amended tax return 2012 For purposes of U. File amended tax return 2012 S. File amended tax return 2012 tax, these amounts are excluded from income to the same extent they would be excluded from income in Canada if the recipient was a Canadian resident. File amended tax return 2012 Investment Income From Canadian Sources The treaty provides beneficial treatment for certain items of Canadian source income that result from an investment of capital. File amended tax return 2012 Dividends (Article X). File amended tax return 2012   For Canadian source dividends received by U. File amended tax return 2012 S. File amended tax return 2012 residents, the Canadian income tax generally may not be more than 15%. File amended tax return 2012   A 5% rate applies to intercorporate dividends paid from a subsidiary to a parent corporation owning at least 10% of the subsidiary's voting stock. File amended tax return 2012 However, a 10% rate applies if the payer of the dividend is a nonresident-owned Canadian investment corporation. File amended tax return 2012   These rates do not apply if the owner of the dividends carries on, or has carried on, a business in Canada through a permanent establishment and the holding on which the income is paid is effectively connected with that permanent establishment. File amended tax return 2012 Interest (Article XI). File amended tax return 2012   Generally, Canadian source interest received by U. File amended tax return 2012 S. File amended tax return 2012 residents is exempt from Canadian income tax. File amended tax return 2012   The exemption does not apply if the owner of the interest carries on, or has carried on, a business in Canada through a permanent establishment and the debt on which the income is paid is effectively connected with that permanent establishment. File amended tax return 2012 Gains from the sale of property (Article XIII). File amended tax return 2012   Generally, gains from the sale of personal property by a U. File amended tax return 2012 S. File amended tax return 2012 resident having no permanent establishment in Canada are exempt from Canadian income tax. File amended tax return 2012 However, the exemption from Canadian tax does not apply to gains realized by U. File amended tax return 2012 S. File amended tax return 2012 residents on Canadian real property, and on personal property belonging to a permanent establishment in Canada. File amended tax return 2012   If the property subject to Canadian tax is a capital asset and was owned by the U. File amended tax return 2012 S. File amended tax return 2012 resident on September 26, 1980, not as part of the business property of a permanent establishment in Canada, generally the taxable gain is limited to the appreciation after 1984. File amended tax return 2012 Royalties (Article XII). File amended tax return 2012   The following are exempt from Canadian tax: Copyright royalties and other like payments for the production or reproduction of any literary, dramatic, musical, or artistic work (other than payments for motion pictures and works on film, videotape, or other means of reproduction for use in connection with television, which may be taxed at 10%), Payments for the use of, or the right to use, computer software, Payments for the use of, or the right to use, any patent or any information concerning industrial, commercial, or scientific experience (but not within a rental or franchise agreement), and Payments for broadcasting as agreed to in an exchange of notes between the countries. File amended tax return 2012   This rate or exemption does not apply if the owner of the royalties carries on, or has carried on, a business in Canada through a permanent establishment and the right or property on which the income is paid is effectively connected with that permanent establishment. File amended tax return 2012   This exemption (or lower rate) does not apply to royalties to explore for or to exploit mineral deposits, timber, and other natural resources. File amended tax return 2012 Other Income Generally, Canadian source income that is not specifically mentioned in the treaty, may be taxed by Canada. File amended tax return 2012 Gambling losses. File amended tax return 2012   Canadian residents may deduct gambling losses in the U. File amended tax return 2012 S. File amended tax return 2012 against gambling winnings in the U. File amended tax return 2012 S. File amended tax return 2012 in the same manner as a U. File amended tax return 2012 S. File amended tax return 2012 resident. File amended tax return 2012 Charitable Contributions United States income tax return. File amended tax return 2012   Under Article XXI, you may deduct contributions to certain qualified Canadian charitable organizations on your United States income tax return. File amended tax return 2012 Besides being subject to the overall limits applicable to all your charitable contributions under U. File amended tax return 2012 S. File amended tax return 2012 tax law, your charitable contributions to Canadian organizations (other than contributions to a college or university at which you or a member of your family is or was enrolled) are subject to the U. File amended tax return 2012 S. File amended tax return 2012 percentage limits on charitable contributions, applied to your Canadian source income. File amended tax return 2012 If your return does not include gross income from Canadian sources, charitable contributions to Canadian organizations are generally not deductible. File amended tax return 2012 Example. File amended tax return 2012 You are a U. File amended tax return 2012 S. File amended tax return 2012 citizen living in Canada. File amended tax return 2012 You have both U. File amended tax return 2012 S. File amended tax return 2012 and Canadian source income. File amended tax return 2012 During your tax year, you contribute to Canadian organizations that would qualify as charitable organizations under U. File amended tax return 2012 S. File amended tax return 2012 tax law if they were U. File amended tax return 2012 S. File amended tax return 2012 organizations. File amended tax return 2012 To figure the maximum amount of the contribution to Canadian organizations that you can deduct on your U. File amended tax return 2012 S. File amended tax return 2012 income tax return, multiply your adjusted gross income from Canadian sources by the percentage limit that applies to contributions under U. File amended tax return 2012 S. File amended tax return 2012 income tax law. File amended tax return 2012 Then include this amount on your return along with all your domestic charitable contributions, subject to the appropriate percentage limit required for contributions under U. File amended tax return 2012 S. File amended tax return 2012 income tax law. File amended tax return 2012 The appropriate percentage limit for U. File amended tax return 2012 S. File amended tax return 2012 tax purposes is applied to your total adjusted gross income from all sources. File amended tax return 2012 Qualified charities. File amended tax return 2012   These Canadian organizations must meet the qualifications that a U. File amended tax return 2012 S. File amended tax return 2012 charitable organization must meet under U. File amended tax return 2012 S. File amended tax return 2012 tax law. File amended tax return 2012 Usually an organization will notify you if it qualifies. File amended tax return 2012 For further information on charitable contributions and the U. File amended tax return 2012 S. File amended tax return 2012 percentage limits, see Publication 526, Charitable Contributions. File amended tax return 2012 Canadian income tax return. File amended tax return 2012   Under certain conditions, contributions to qualified U. File amended tax return 2012 S. File amended tax return 2012 charitable organizations may also be claimed on your Canadian income tax return if you are a Canadian resident. File amended tax return 2012 Income Tax Credits The treaty contains a credit provision (Article XXIV) for the elimination of double taxation. File amended tax return 2012 In general, the United States and Canada both allow a credit against their income tax for the income tax paid to the other country on income from sources in that other country. File amended tax return 2012 For detailed discussions of the U. File amended tax return 2012 S. File amended tax return 2012 income tax treatment of tax paid to foreign countries, see Publication 514, Foreign Tax Credit for Individuals. File amended tax return 2012 See paragraphs (4) and (5) of Article XXIV for certain provisions that affect the computation of the credit allowed by the United States for Canadian income taxes paid by U. File amended tax return 2012 S. File amended tax return 2012 citizens residing in Canada. File amended tax return 2012 Competent Authority Assistance Under Article XXVI, a U. File amended tax return 2012 S. File amended tax return 2012 citizen or resident may request assistance from the U. File amended tax return 2012 S. File amended tax return 2012 competent authority when the actions of Canada, the United States, or both, potentially result in double taxation or taxation contrary to the treaty. File amended tax return 2012 The U. File amended tax return 2012 S. File amended tax return 2012 competent authority may then consult with the Canadian competent authority to determine if the double taxation or denial of treaty benefits in question can be avoided. File amended tax return 2012 If the competent authorities are not able to reach agreement in a case, binding arbitration proceedings may apply. File amended tax return 2012 It is important that your request for competent authority assistance be made as soon as you have been notified by either Canada or the United States of proposed adjustments that would result in denial of treaty benefits or in double taxation. File amended tax return 2012 This is so that implementation of any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. File amended tax return 2012 For information that you should include with your request for competent authority assistance, see Revenue Procedure 2006-54, 2006-49 IRB 1035, available at www. File amended tax return 2012 irs. File amended tax return 2012 gov/irb/2006-49_IRB/ar13. File amended tax return 2012 html. File amended tax return 2012 The request should be addressed to:  Deputy Commissioner (International) Large Business and International Division Attn: Office of Tax Treaty  Internal Revenue Service 1111 Constitution Ave. File amended tax return 2012 , NW Routing: MA3-322A Washington, D. File amended tax return 2012 C. File amended tax return 2012 20024 In addition to a timely request for assistance, you should take the following measures: File a timely protective claim for credit or refund of U. File amended tax return 2012 S. File amended tax return 2012 taxes on Form 1040X, Form 1120X, or amended Form 1041, whichever is appropriate. File amended tax return 2012 This will, among other things, give you the benefit of a foreign tax credit in case you do not qualify for the treaty benefit in question. File amended tax return 2012 For figuring this credit, attach either Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), or Form 1118, Foreign Tax Credit — Corporations, as appropriate. File amended tax return 2012 Attach your protective claim to your request for competent authority assistance. File amended tax return 2012 Take appropriate action under Canadian procedures to avoid the lapse or termination of your right of appeal under Canadian income tax law. File amended tax return 2012 How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS and the Canada Revenue Agency in several ways. File amended tax return 2012 Text of Treaty You can get the text of the U. File amended tax return 2012 S. File amended tax return 2012 —Canada income tax treaty from: Superintendent of Documents U. File amended tax return 2012 S. File amended tax return 2012 Government Printing Office P. File amended tax return 2012 O. File amended tax return 2012 Box 371954 Pittsburgh, PA 15250-7954 The treaty can also be found on the Internet at IRS. File amended tax return 2012 gov. File amended tax return 2012 U. File amended tax return 2012 S. File amended tax return 2012 Taxation During the filing season, the IRS conducts a taxpayer assistance program in Canada. File amended tax return 2012 To find out if IRS personnel will be in your area, you should contact the consular office at the nearest U. File amended tax return 2012 S. File amended tax return 2012 Embassy or consulate. File amended tax return 2012 Mail. File amended tax return 2012 For answers to technical or account questions, you can write to:   Internal Revenue Service International Section Philadelphia, PA 19255-0525 Phone. File amended tax return 2012 You can call the IRS for help at (267) 941-1000 (not a toll-free call). File amended tax return 2012 Canadian Taxation You can get information on Canadian taxation from the Canada Revenue Agency. File amended tax return 2012 The International Tax Services Office can be contacted on 1-800-267-5177 (from anywhere in Canada and the U. File amended tax return 2012 S. File amended tax return 2012 ) or on the Internet at www. File amended tax return 2012 cra-arc. File amended tax return 2012 gc. File amended tax return 2012 ca. 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