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Filing Form 1040ez

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Filing Form 1040ez

Filing form 1040ez Publication 4492-A - Main Contents Table of Contents DefinitionsKansas Disaster Area Storms and Tornadoes Casualty and Theft Losses Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Recovery Assistance Distributions Repayment of Qualified Recovery Assistance Distributions How To Report Qualified Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Employee Retention Credit Demolition and Clean-up Costs Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Filing form 1040ez Definitions The following definitions are used throughout this publication. Filing form 1040ez Kansas Disaster Area The Kansas disaster area covers the Kansas counties of Barton, Clay, Cloud, Comanche, Dickinson, Edwards, Ellsworth, Kiowa, Leavenworth, Lyon, McPherson, Osage, Osborne, Ottawa, Phillips, Pottawatomie, Pratt, Reno, Rice, Riley, Saline, Shawnee, Smith, and Stafford. Filing form 1040ez Storms and Tornadoes The term “storms and tornadoes” as used in this publication, refers to the storms and tornadoes that began on May 4, 2007, and affected the Kansas disaster area (defined above). Filing form 1040ez Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area. Filing form 1040ez Limits on personal casualty or theft losses in the Kansas disaster area. Filing form 1040ez   Losses of personal use property that arose in the Kansas disaster area after May 3, 2007, are not subject to the $100 or 10% of adjusted gross income limits. Filing form 1040ez Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable to the storms and tornadoes. Filing form 1040ez When to deduct the loss. Filing form 1040ez   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. Filing form 1040ez However, the Kansas disaster area is a Presidentially declared disaster. Filing form 1040ez Therefore, you could have elected to deduct losses from these storms and tornadoes on your tax return for the previous year. Filing form 1040ez The deadline for making this election has expired. Filing form 1040ez   The following special instructions explain how to complete your forms if you deduct the loss in 2007 or elected to deduct the loss in 2006. Filing form 1040ez Special instructions for individuals who file Form 4684 to claim a Kansas disaster area casualty or theft loss for 2007 or are amending their 2006 return. Filing form 1040ez   Individuals filing or amending their 2007 tax return or amending their 2006 tax return for casualty or theft losses that were attributable to the storms and tornadoes should enter “Kansas Disaster Area” at the top of Form 1040 or 1040X. Filing form 1040ez They must also complete and attach the 2006 version of Form 4684 for either year and enter “Kansas Disaster Area” on the top and on the dotted line next to line 11 and enter -0- on line 11. Filing form 1040ez Individuals filing or amending their 2007 tax return should cross out “2006” and enter “2007” at the top of Form 4684. Filing form 1040ez They must also enter the amount from line 21 of that form on line 20 of Schedule A (Form 1040). Filing form 1040ez Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Filing form 1040ez Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). Filing form 1040ez However, for property that was involuntarily converted after May 3, 2007, as a result of the storms and tornadoes, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Kansas disaster area. Filing form 1040ez For more information, see the Instructions for Form 4684. Filing form 1040ez Net Operating Losses Qualified recovery assistance loss. Filing form 1040ez   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. Filing form 1040ez However, the portion of an NOL that is a qualified recovery assistance loss can be carried back to the 5 tax years before the NOL year. Filing form 1040ez In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. Filing form 1040ez   A qualified recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified recovery assistance casualty loss (as defined below), Moving expenses paid or incurred after May 3, 2007, and before January 1, 2010, for the employment of an individual whose main home was in the Kansas disaster area before May 4, 2007, who was unable to remain in that home because of the storms and tornadoes, and whose main job location (after the move) is in the Kansas disaster area, Temporary housing expenses paid or incurred after May 3, 2007, and before January 1, 2010, to house employees of the taxpayer whose main job location is in the Kansas disaster area, Depreciation or amortization allowable for any qualified recovery assistance property (even if you elected not to claim the special recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after May 3, 2007, and before January 1, 2010, for any damage from the storms and tornadoes to property located in the Kansas disaster area. Filing form 1040ez Qualified recovery assistance casualty loss. Filing form 1040ez   A qualified recovery assistance casualty loss is any deductible section 1231 loss of property located in the Kansas disaster area if the loss was caused by the storms and tornadoes. Filing form 1040ez For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the storms and tornadoes of property located in the Kansas disaster area. Filing form 1040ez Any such loss taken into account in figuring your qualified recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. Filing form 1040ez Amended return. Filing form 1040ez   If you have already filed your 2007 tax return and then carried your NOL back 2 years, you may file an amended return to carry back for 5 years your NOL attributable to a qualified recovery assistance loss. Filing form 1040ez More information. Filing form 1040ez    For more information on NOLs, see Publication 536. Filing form 1040ez IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for individuals who suffered economic losses as a result of the storms and tornadoes. Filing form 1040ez Definitions Qualified recovery assistance distribution. Filing form 1040ez   Except as provided below, a qualified recovery assistance distribution is any distribution you received and designated as such from an eligible retirement plan if all of the following apply. Filing form 1040ez The distribution was made after May 3, 2007, and before January 1, 2009. Filing form 1040ez Your main home was located in the Kansas disaster area on May 4, 2007. Filing form 1040ez You sustained an economic loss because of the storms and tornadoes. Filing form 1040ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Filing form 1040ez   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified recovery assistance distribution, regardless of whether the distribution was made on account of the storms and tornadoes. Filing form 1040ez Qualified recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. Filing form 1040ez   The total of your qualified recovery assistance distributions from all plans is limited to $100,000. Filing form 1040ez If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. Filing form 1040ez   A reduction or offset after May 3, 2007, of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified recovery assistance distribution. Filing form 1040ez Eligible retirement plan. Filing form 1040ez   An eligible retirement plan can be any of the following. Filing form 1040ez A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). Filing form 1040ez A qualified annuity plan. Filing form 1040ez A tax-sheltered annuity contract. Filing form 1040ez A governmental section 457 deferred compensation plan. Filing form 1040ez A traditional, SEP, SIMPLE, or Roth IRA. Filing form 1040ez Main home. Filing form 1040ez   Generally, your main home is the home where you live most of the time. Filing form 1040ez A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. Filing form 1040ez Taxation of Qualified Recovery Assistance Distributions Qualified recovery assistance distributions are included in income in equal amounts over three years. Filing form 1040ez However, if you elect, you can include the entire distribution in your income in the year it was received. Filing form 1040ez Qualified recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). Filing form 1040ez However, any distributions you receive in excess of the $100,000 qualified recovery assistance distribution limit may be subject to the additional tax on early distributions. Filing form 1040ez For more information, see How To Report Qualified Recovery Assistance Distributions on page 4. Filing form 1040ez Repayment of Qualified Recovery Assistance Distributions If you choose, you generally can repay any portion of a qualified recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Filing form 1040ez Also, you can repay a qualified recovery assistance distribution made on account of a hardship from a retirement plan. Filing form 1040ez However, see Exceptions below for qualified recovery assistance distributions you cannot repay. Filing form 1040ez You have three years from the day after the date you received the distribution to make a repayment. Filing form 1040ez Amounts that are repaid are treated as a qualified rollover and are not included in income. Filing form 1040ez Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Filing form 1040ez See Form 8915 for more information on how to report repayments. Filing form 1040ez Exceptions. Filing form 1040ez   You cannot repay the following types of distributions. Filing form 1040ez Qualified recovery assistance distributions received as a beneficiary (other than a surviving spouse). Filing form 1040ez Required minimum distributions. Filing form 1040ez Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. Filing form 1040ez How To Report Qualified Recovery Assistance Distributions You will need the following information to correctly report any 2007 or 2008 qualified recovery assistance distributions. Filing form 1040ez 2007 Qualified Recovery Assistance Distributions If you received a distribution after May 3, 2007, from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. Filing form 1040ez See Qualified recovery assistance distribution on page 3. Filing form 1040ez If you have not filed your 2007 income tax return, see Form 8915 and Form 8606 on this page to see how to complete these forms for any qualified recovery assistance distributions. Filing form 1040ez Be sure to attach Form 8915 and Form 8606 (if required) to your 2007 income tax return. Filing form 1040ez If you have filed your 2007 income tax return, you will need to amend your return to designate any distributions as qualified recovery assistance distributions. Filing form 1040ez You can amend your 2007 income tax return by using Form 1040X. Filing form 1040ez You will need to complete and attach Form 8915 and Form 8606 (if required) to your amended income tax return for any qualified recovery assistance distributions. Filing form 1040ez See Form 8915 and Form 8606 on this page. Filing form 1040ez Form 8915. Filing form 1040ez   For a 2007 qualified recovery assistance distribution, complete the 2005 Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments. Filing form 1040ez Before you complete the form, modify the form as follows. Filing form 1040ez Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. Filing form 1040ez ” To the right of the title, cross out “2005” and enter “2007. Filing form 1040ez ” In Part I, at the top of column (a), cross out “2005” and enter “2007. Filing form 1040ez ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. Filing form 1040ez ” On lines 10 and 11, cross out “2005” and enter “2007. Filing form 1040ez ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. Filing form 1040ez ” On line 12, cross out “hurricane” and enter “recovery assistance. Filing form 1040ez ” On lines 13 and 14, cross out “line 15b” and “line 25b. Filing form 1040ez ” On lines 18 and 19, cross out “2005” and enter “2007. Filing form 1040ez ”   You can now complete Form 8915. Filing form 1040ez For the instructions, use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions. Filing form 1040ez See Example 1 on page 5 to see how to complete Form 8915. Filing form 1040ez Form 8606. Filing form 1040ez   For a 2007 qualified recovery assistance distribution, complete or amend the 2007 Form 8606, Nondeductible IRAs. Filing form 1040ez Before you complete or amend the form, use the following additional instructions. Filing form 1040ez Form 8606, Part I. Filing form 1040ez    On line 6, subtract any repayments of qualified recovery assistance distributions from the amount you would otherwise enter on line 6. Filing form 1040ez Do not enter an amount less than -0-. Filing form 1040ez Include on line 7 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. Filing form 1040ez Complete line 15 as follows. Filing form 1040ez If all of your distributions are qualified recovery assistance distributions, enter the amount from line 15 on Form 8915, line 13. Filing form 1040ez Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Filing form 1040ez If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 15 by a fraction. Filing form 1040ez The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 7. Filing form 1040ez Enter the result in the white space in the bottom margin of the form under line 15. Filing form 1040ez To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 13. Filing form 1040ez Then, subtract this amount from the amount on line 15 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Filing form 1040ez Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. Filing form 1040ez To the left of this amount, enter “Other distributions. Filing form 1040ez ” Form 8606, Part III. Filing form 1040ez    Include on line 19 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. Filing form 1040ez Complete line 25 as follows. Filing form 1040ez If all of your distributions are qualified recovery assistance distributions, enter the amount from line 25 on Form 8915, line 14. Filing form 1040ez Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Filing form 1040ez If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 25 by a fraction. Filing form 1040ez The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 21. Filing form 1040ez Enter the result in the white space in the bottom margin of the form under line 25. Filing form 1040ez To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 14. Filing form 1040ez Then, subtract this amount from the amount on line 25 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Filing form 1040ez Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. Filing form 1040ez To the left of this amount, enter “Other distributions. Filing form 1040ez ” Example 1. Filing form 1040ez   On May 4, 2007, Margaret Maple lost her home due to the tornadoes on that day. Filing form 1040ez Her home was located in the Kansas disaster area. Filing form 1040ez On July 31, 2007, Margaret took out $30,000 from her 401(k) plan and an additional $15,000 from her traditional IRA in order to rebuild her home. Filing form 1040ez Margaret has not filed her 2007 return yet but would like to designate the $45,000 in distributions from her retirement plans as qualified recovery assistance distributions. Filing form 1040ez Since the distributions occurred in 2007, Margaret would modify and complete the 2005 Form 8915 as discussed on page 4. Filing form 1040ez Margaret would also need to complete Form 8606 since her distribution from her traditional IRA has nondeductible contributions from previous years. Filing form 1040ez   In addition to the $15,000 qualified recovery assistance distribution on July 31, 2007, Margaret received an additional distribution of $15,000 from her traditional IRA on October 31, 2007, that she did not designate as a qualified recovery assistance distribution. Filing form 1040ez Because Margaret has a qualified recovery assistance distribution as well as a distribution not so designated, Margaret must allocate the amount on Form 8606, line 15 to both distributions, as discussed earlier. Filing form 1040ez Margaret's qualified recovery assistance distributions are $13,125 ($26,250 × $15,000 ÷ $30,000). Filing form 1040ez Margaret enters in the white space in the bottom margin of Form 8606, the following, “Qualified recovery assistance distributions $13,125. Filing form 1040ez ” This amount is then reported on Form 8915, line 13. Filing form 1040ez Below this entry, Margaret enters “Other distributions $13,125,” and includes this amount on Form 1040, line 15b. Filing form 1040ez See Margaret's modified 2005 Form 8915 and 2007 Form 8606 shown on pages 6 through 8. Filing form 1040ez This image is too large to be displayed in the current screen. Filing form 1040ez Please click the link to view the image. Filing form 1040ez 2005 Form 8915, page 1, Illustrated Example 1. Filing form 1040ez This image is too large to be displayed in the current screen. Filing form 1040ez Please click the link to view the image. Filing form 1040ez 2005 Form 8915, page 2, Illustrated Example 1 This image is too large to be displayed in the current screen. Filing form 1040ez Please click the link to view the image. Filing form 1040ez Form 8606, page 1, Illustrated Example 1 2008 Qualified Recovery Assistance Distributions If you received a distribution in 2008 from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. Filing form 1040ez See Qualified recovery assistance distribution on page 3. Filing form 1040ez You will need to complete and attach Form 8915 and Form 8606 (if required) to your 2008 income tax return for any qualified recovery assistance distributions. Filing form 1040ez See Form 8915 and Form 8606 below. Filing form 1040ez Form 8915. Filing form 1040ez   For a 2008 qualified recovery assistance distribution, you will need to complete the 2006 Form 8915. Filing form 1040ez Before you complete the form, modify the form as follows. Filing form 1040ez Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. Filing form 1040ez ” To the right of the title, cross out “2006” and enter “2008. Filing form 1040ez ” In the first sentence of Part I and on line 1, cross out “hurricane” and enter “recovery assistance,” cross out “2006” and enter “2008,” and cross out “2005” and enter “2007. Filing form 1040ez ” At the top of column (a) cross out “2006” and enter “2008. Filing form 1040ez ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. Filing form 1040ez ” On lines 12, 14, and 15, cross out “2005” and enter “2007. Filing form 1040ez ” On lines 17 and 19, cross out “2006” and enter “2008. Filing form 1040ez ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. Filing form 1040ez ” On line 21, cross out “hurricane” and enter “recovery assistance. Filing form 1040ez ” On lines 22 and 23, cross out “line 15b” and “line 25b. Filing form 1040ez ” On lines 27, 29, and 30, cross out “2005” and enter “2007. Filing form 1040ez ” On lines 32 and 34, cross out “2006” and enter “2008. Filing form 1040ez ”   You can now complete Form 8915. Filing form 1040ez For the instructions, use the applicable dates and terms in this publication instead of those used in the 2006 Form 8915 instructions. Filing form 1040ez Example 2. Filing form 1040ez   On June 15, 2008, Margaret Maple, from the previous example, took out $15,000 from her 401(k) plan that she is designating as a qualified recovery assistance distribution. Filing form 1040ez Since the distribution occurred in 2008, Margaret would modify and complete the 2006 Form 8915 as discussed above. Filing form 1040ez Also, since Margaret is including her 2007 recovery assistance distributions in income over 3 years, she reports the applicable amount of those distributions on the modified 2006 Form 8915. Filing form 1040ez See Margaret's modified 2006 Form 8915 shown on pages 9 and 10. Filing form 1040ez This image is too large to be displayed in the current screen. Filing form 1040ez Please click the link to view the image. Filing form 1040ez 2006 Form 8915, page 1, Illustrated Example 2 This image is too large to be displayed in the current screen. Filing form 1040ez Please click the link to view the image. Filing form 1040ez 2006 Form 8915, page 2, Illustrated Example 2 Form 8606. Filing form 1040ez   For a 2008 qualified recovery assistance distribution, you may need to complete the 2008 Form 8606. Filing form 1040ez Before you complete Form 8606, use the additional instructions outlined in Form 8606, Part I, on page 4 and Form 8606, Part III, on this page. Filing form 1040ez Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Kansas disaster area, you can repay part or all of that distribution after May 3, 2007, but no later than October 22, 2008, to an eligible retirement plan. Filing form 1040ez For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. Filing form 1040ez To be a qualified distribution, the distribution must meet all of the following requirements. Filing form 1040ez The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. Filing form 1040ez The distribution was received after November 4, 2006, and before May 5, 2007. Filing form 1040ez The distribution was to be used to purchase or construct a main home in the Kansas disaster area that was not purchased or constructed because of the storms and tornadoes. Filing form 1040ez Amounts that are repaid before October 23, 2008, are treated as a qualified rollover and are not included in income. Filing form 1040ez Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. Filing form 1040ez A qualified distribution not repaid before October 23, 2008, may be taxable for 2006 or 2007 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. Filing form 1040ez You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before October 23, 2008. Filing form 1040ez See How to report, next, for information on completing Form 8915. Filing form 1040ez How to report. Filing form 1040ez   To report the repayment of a qualified distribution for the purchase or construction of a main home that was not purchased or constructed due to the storms and tornadoes, use the 2005 Form 8915, Part IV. Filing form 1040ez Before you complete the form, modify the form as follows. Filing form 1040ez Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. Filing form 1040ez ” To the right of the title, cross out “2005” and enter “2006” or “2007. Filing form 1040ez ” Enter only the year the distribution was received. Filing form 1040ez Cross out “Hurricane” in the title of Part IV and enter “Kansas. Filing form 1040ez ” In the sentence below the title of Part IV, cross out “March 1, 2006” and enter “October 23, 2008. Filing form 1040ez ” On line 24, cross out “March 1, 2006” and enter “October 23, 2008. Filing form 1040ez ” You can now complete Part IV of Form 8915. Filing form 1040ez Use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions to complete the form. Filing form 1040ez Attach Form 8915 to your original or amended return for the year of the distribution. Filing form 1040ez Amended return. Filing form 1040ez   If you repay part or all of a qualified distribution by October 22, 2008, you will need to file an amended return for that part of a distribution that was previously included in income. Filing form 1040ez Loans From Qualified Plans The following benefits are available to qualified individuals. Filing form 1040ez Increases to the limits for distributions treated as loans from employer plans. Filing form 1040ez A 1-year suspension for payments due on plan loans. Filing form 1040ez Qualified individual. Filing form 1040ez   You are a qualified individual if your main home on May 4, 2007, was located in the Kansas disaster area and you had an economic loss because of the storms and tornadoes. Filing form 1040ez Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. Filing form 1040ez Limits on plan loans. Filing form 1040ez   The $50,000 limit for distributions treated as plan loans is increased to $100,000. Filing form 1040ez In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. Filing form 1040ez If your home was located in the Kansas disaster area, the higher limits apply only to loans received during the period beginning on May 22, 2008, and ending on December 31, 2008. Filing form 1040ez One-year suspension of loan payments. Filing form 1040ez   Payments on plan loans outstanding after May 3, 2007, may be suspended for 1 year by the plan administrator. Filing form 1040ez To qualify for the suspension, the due date for any loan payment must occur during the period beginning on May 4, 2007, and ending on December 31, 2008. Filing form 1040ez Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified recovery assistance property (as defined below) you acquire after May 4, 2007. Filing form 1040ez The special allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). Filing form 1040ez The special allowance applies only for the first year the property is placed in service. Filing form 1040ez The special allowance is deductible for both the regular tax and the alternative minimum tax (AMT). Filing form 1040ez There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Filing form 1040ez You can elect not to deduct the special allowance for qualified recovery assistance property. Filing form 1040ez If you make this election for any property, it applies to all property in the same class placed in service during the year. Filing form 1040ez Qualified recovery assistance property. Filing form 1040ez   Property that qualifies for the special allowance for qualified recovery assistance property includes the following. Filing form 1040ez Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Filing form 1040ez Water utility property. Filing form 1040ez Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Filing form 1040ez (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Filing form 1040ez ) Qualified leasehold improvement property. Filing form 1040ez Nonresidential real property and residential rental property. Filing form 1040ez   For more information on this property, see Publication 946. Filing form 1040ez Other tests to be met. Filing form 1040ez   To be qualified recovery assistance property, the property must also meet all of the following tests. Filing form 1040ez You must have acquired the property, by purchase, after May 4, 2007, but only if no binding written contract for the acquisition was in effect before May 5, 2007. Filing form 1040ez The property must be placed in service before 2009 (2010 in the case of nonresidential real property and residential rental property). Filing form 1040ez Substantially all of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or business in the Kansas disaster area. Filing form 1040ez The original use of the property in the Kansas disaster area must begin with you after May 4, 2007. Filing form 1040ez Used property can be qualified recovery assistance property if it has not previously been used within the Kansas disaster area. Filing form 1040ez Also, additional capital expenditures you incurred after May 4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas disaster area began with you. Filing form 1040ez Excepted property. Filing form 1040ez   Qualified recovery assistance property does not include any of the following. Filing form 1040ez Property required to be depreciated using the Alternative Depreciation System (ADS). Filing form 1040ez Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. Filing form 1040ez Property for which you are claiming a commercial revitalization deduction. Filing form 1040ez Property in the same class as that for which you elected not to claim the special allowance for qualified recovery assistance property. Filing form 1040ez Property placed in service and disposed of in the same tax year. Filing form 1040ez Property converted from business use to personal use in the same tax year it is placed in service. Filing form 1040ez Property converted from personal use to business use in the same or later tax year may be qualified recovery assistance property. Filing form 1040ez Recapture of special allowance. Filing form 1040ez   If, in any year after the year you claim the special allowance, the property ceases to be qualified recovery assistance property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. Filing form 1040ez Amended return. Filing form 1040ez   If you have already filed your tax return, you may have to amend that return to claim any special allowance. Filing form 1040ez Additional guidance will be published on how you may claim, or elect not to claim, the special allowance if you have already filed your tax return. Filing form 1040ez Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 recovery assistance property (as defined later) placed in service in the Kansas disaster area. Filing form 1040ez Increased dollar limit. Filing form 1040ez   The limit on the section 179 deduction ($125,000 for 2007, $250,000 for 2008) is increased by the smaller of: $100,000, or The cost of qualified section 179 recovery assistance property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). Filing form 1040ez   The amount for which you can make the election is reduced if the cost of all section 179 property you placed in service during the year exceeds $500,000 for 2007 and $800,000 for 2008 increased by the smaller of: $600,000, or The cost of qualified section 179 recovery assistance property placed in service during the year. Filing form 1040ez Qualified section 179 recovery assistance property. Filing form 1040ez   Qualified section 179 recovery assistance property is section 179 property that is qualified recovery assistance property (explained earlier under Special Depreciation Allowance). Filing form 1040ez Section 179 property does not include nonresidential real property or residential rental property. Filing form 1040ez For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. Filing form 1040ez Amended return. Filing form 1040ez   If you have already filed your tax return, you may have to amend that return for any increased section 179 deduction. Filing form 1040ez Employee Retention Credit An eligible employer who conducted an active trade or business in the Kansas disaster area can claim the employee retention credit. Filing form 1040ez The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Filing form 1040ez Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Filing form 1040ez Use Form 5884-A to claim the credit. Filing form 1040ez See Form 5884-A later. Filing form 1040ez The following rules and definitions apply. Filing form 1040ez Employers affected by the storms and tornadoes. Filing form 1040ez   The following definitions apply to employers affected by the storms and tornadoes. Filing form 1040ez Eligible employer. Filing form 1040ez   For this purpose, an eligible employer is any employer who meets all of the following. Filing form 1040ez Employed an average of not more than 200 employees on business days during the tax year before May 4, 2007. Filing form 1040ez Conducted an active trade or business on May 4, 2007, in the Kansas disaster area. Filing form 1040ez Whose trade or business was inoperable on any day after May 4, 2007, and before January 1, 2008, because of damage caused by the storms and tornadoes. Filing form 1040ez Eligible employee. Filing form 1040ez   For this purpose, an eligible employee is an employee whose principal place of employment on May 4, 2007, with the eligible employer was in the Kansas disaster area. Filing form 1040ez An employee is not an eligible employee for purposes of the storms and tornadoes if the employee is treated as an eligible employee for the work opportunity credit. Filing form 1040ez Qualified wages. Filing form 1040ez   Qualified wages are wages you paid or incurred before January 1, 2008, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before May 4, 2007, and ending on the date your trade or business resumed significant operations at that place. Filing form 1040ez In addition, the wages must have been paid or incurred after May 4, 2007. Filing form 1040ez    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. Filing form 1040ez    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). Filing form 1040ez Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Filing form 1040ez Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. Filing form 1040ez   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. Filing form 1040ez For a special rule that applies to railroad employees, see section 51(h)(1)(B). Filing form 1040ez   Qualified wages do not include the following. Filing form 1040ez Wages paid to your dependent or a related individual. Filing form 1040ez See section 51(i)(1). Filing form 1040ez Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. Filing form 1040ez Wages for services of replacement workers during a strike or lockout. Filing form 1040ez Form 5884-A. Filing form 1040ez   Use Section A of Form 5884-A (Rev. Filing form 1040ez October 2006) to claim the employer retention credit. Filing form 1040ez Section B does not apply to the Kansas disaster area. Filing form 1040ez Before you complete the form, modify the form as follows. Filing form 1040ez Cross out “Hurricane Katrina, Rita, or Wilma” in the title at the top of the form and enter “Kansas Storms and Tornadoes. Filing form 1040ez ” On line 1a cross out “Hurricane Katrina” and enter “Kansas Storms and Tornadoes,” cross out “August 28, 2005,” and enter “May 4, 2007,” and cross out “January 1, 2006,” and enter “January 1, 2008. Filing form 1040ez ”   Complete the form as instructed. Filing form 1040ez Lines 1b and 1c do not apply. Filing form 1040ez Include the amount from Form 5884-A, line 4 in the amount entered on Form 3800, line 1x. Filing form 1040ez On the dotted line to the left of line 1x, enter “5884-A. Filing form 1040ez ” Use the applicable dates and terms in this publication instead of those used in the Form 5884-A instructions. Filing form 1040ez Amended return. Filing form 1040ez   You may have to amend a previously filed return to claim the employee retention credit. Filing form 1040ez Demolition and Clean-up Costs You can elect to deduct 50% of any qualified recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Filing form 1040ez Qualified recovery assistance clean-up costs are any amounts paid or incurred after May 3, 2007, and before January 1, 2010, for the removal of debris from, or the demolition of structures on, real property located in the Kansas disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. Filing form 1040ez Amended return. Filing form 1040ez   If you have already filed your tax return, you may have to amend that return to claim the 50% of any qualified recovery assistance clean-up costs. Filing form 1040ez Request for Copy or Transcript of Tax Return Request for copy of tax return. Filing form 1040ez   You can use Form 4506 to order a copy of your tax return. Filing form 1040ez Generally, there is a $39. Filing form 1040ez 00 fee (subject to change) for requesting each copy of a tax return. Filing form 1040ez If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Kansas Storms”) is written in red across the top of the form when filed. Filing form 1040ez Request for transcript of tax return. Filing form 1040ez   You can use Form 4506-T to order a free transcript of your tax return. Filing form 1040ez A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. Filing form 1040ez You can also call 1-800-829-1040 to order a transcript. Filing form 1040ez 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 in several ways. Filing form 1040ez By selecting the method that is best for you, you will have quick and easy access to tax help. Filing form 1040ez Contacting your Taxpayer Advocate. Filing form 1040ez   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Filing form 1040ez   You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. Filing form 1040ez You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. Filing form 1040ez You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. Filing form 1040ez For more information, go to www. Filing form 1040ez irs. Filing form 1040ez gov/advocate. Filing form 1040ez Low Income Taxpayer Clinics (LITCs). Filing form 1040ez   LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. Filing form 1040ez The clinics also provide tax education and outreach for taxpayers who speak English as a second language. Filing form 1040ez Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. Filing form 1040ez It is available at www. Filing form 1040ez irs. Filing form 1040ez gov or your local IRS office. Filing form 1040ez Free tax services. Filing form 1040ez   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. Filing form 1040ez It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. Filing form 1040ez It also has an index of over 100 TeleTax topics, (recorded tax information) you can listen to on your telephone. Filing form 1040ez   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Filing form 1040ez Free help with your return. Filing form 1040ez   Free help in preparing your return is available nationwide from IRS-trained volunteers. Filing form 1040ez The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Filing form 1040ez Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Filing form 1040ez To find a site near you, call 1-800-829-1040. Filing form 1040ez Or to find the nearest AARP TaxAide site, visit AARP's website at www. Filing form 1040ez aarp. Filing form 1040ez org/taxaide or call 1-888-227-7669. Filing form 1040ez For more information on these programs, go to www. Filing form 1040ez irs. Filing form 1040ez gov and enter keyword “VITA” in the upper right-hand corner. Filing form 1040ez Internet. Filing form 1040ez You can access the IRS website at www. Filing form 1040ez irs. Filing form 1040ez gov 24 hours a day, 7 days a week to: E-file your return. Filing form 1040ez Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Filing form 1040ez Check the status of your refund. Filing form 1040ez Click on Where's My Refund. Filing form 1040ez Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Filing form 1040ez Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. Filing form 1040ez Download forms, instructions, and publications. Filing form 1040ez Order IRS products online. Filing form 1040ez Research your tax questions online. Filing form 1040ez Search publications online by topic or keyword. Filing form 1040ez View Internal Revenue Bulletins (IRBs) published in the last few years. Filing form 1040ez Figure your withholding allowances using the withholding calculator online at www. Filing form 1040ez irs. Filing form 1040ez gov/individuals. Filing form 1040ez Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant. Filing form 1040ez Sign up to receive local and national tax news by email. Filing form 1040ez Get information on starting and operating a small business. Filing form 1040ez Phone. Filing form 1040ez Many services are available by phone. Filing form 1040ez Ordering forms, instructions, and publications. Filing form 1040ez Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. Filing form 1040ez You should receive your order within 10 days. Filing form 1040ez Asking tax questions. Filing form 1040ez Call the IRS with your tax questions at 1-800-829-1040. Filing form 1040ez Solving problems. Filing form 1040ez You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Filing form 1040ez An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Filing form 1040ez Call your local Taxpayer Assistance Center for an appointment. Filing form 1040ez To find the number, go to www. Filing form 1040ez irs. Filing form 1040ez gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Filing form 1040ez TTY/TDD equipment. Filing form 1040ez If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Filing form 1040ez TeleTax topics. Filing form 1040ez Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Filing form 1040ez Refund information. Filing form 1040ez To check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Filing form 1040ez Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Filing form 1040ez Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. Filing form 1040ez Evaluating the quality of our telephone services. Filing form 1040ez To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Filing form 1040ez One method is for a second IRS representative to listen in on or record random telephone calls. Filing form 1040ez Another is to ask some callers to complete a short survey at the end of the call. Filing form 1040ez Walk-in. Filing form 1040ez Many products and services are available on a walk-in basis. Filing form 1040ez Products. Filing form 1040ez You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Filing form 1040ez Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Filing form 1040ez Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Filing form 1040ez Services. Filing form 1040ez You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Filing form 1040ez An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Filing form 1040ez If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Filing form 1040ez No appointment is necessary — just walk in. Filing form 1040ez If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Filing form 1040ez A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Filing form 1040ez If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment may be requested. Filing form 1040ez All other issues will be handled without an appointment. Filing form 1040ez To find the number of your local office, go to www. Filing form 1040ez irs. Filing form 1040ez gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Filing form 1040ez Mail. Filing form 1040ez You can send your order for forms, instructions, and publications to the address below. Filing form 1040ez You should receive a response within 10 days after your request is received. Filing form 1040ez Internal Revenue Service 1201 N. Filing form 1040ez Mitsubishi Motorway Bloomington, IL 61705-6613 CD/DVD for tax products. Filing form 1040ez You can order Publication 1796, IRS Tax Products CD/DVD, and obtain: Current-year forms, instructions, and publications. Filing form 1040ez Prior-year forms, instructions, and publications. Filing form 1040ez Bonus: Historical Tax Products DVD - Ships with the final release. Filing form 1040ez IRS Tax Map: an electronic research tool and finding aid. Filing form 1040ez Tax law frequently asked questions (FAQ). Filing form 1040ez Tax Topics from the IRS telephone response system. Filing form 1040ez Fill-in, print, and save features for most tax forms. Filing form 1040ez Internal Revenue Bulletins. Filing form 1040ez Toll-free and email technical support. Filing form 1040ez The CD/DVD is released twice during the year in January and March. Filing form 1040ez Purchase the CD/DVD from National Technical Information Service (NTIS) at www. Filing form 1040ez irs. Filing form 1040ez gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). Filing form 1040ez Price is subject to change. Filing form 1040ez CD for small businesses. Filing form 1040ez Publication 3207, The Small Business Resource Guide CD, is a must for every small business owner or any taxpayer about to start a business. Filing form 1040ez This year's CD includes: Helpful information, such as how to prepare a business plan, find financing for your business, and much more. Filing form 1040ez All the business tax forms, instructions, and publications needed to successfully manage a business. Filing form 1040ez Tax law changes. Filing form 1040ez Tax Map: an electronic research tool and finding aid. Filing form 1040ez Web links to various government agencies, business associations, and IRS organizations. Filing form 1040ez “Rate the Product” survey—your opportunity to suggest changes for future editions. Filing form 1040ez A site map of the CD to help you navigate the pages of the CD with ease. Filing form 1040ez An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes. Filing form 1040ez An updated version of this CD is available each year in early April. Filing form 1040ez You can get a free copy by calling 1-800-829-3676 or by visiting www. Filing form 1040ez irs. Filing form 1040ez gov/smallbiz. 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The Filing Form 1040ez

Filing form 1040ez 3. Filing form 1040ez   Exclusions From Gross Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident AliensForeign Earned Income and Housing Amount Nonresident AliensInterest Income Dividend Income Services Performed for Foreign Employer Gambling Winnings From Dog or Horse Racing Gain From the Sale of Your Main Home Scholarships and Fellowship GrantsExpenses that do not qualify. Filing form 1040ez Introduction Resident and nonresident aliens are allowed exclusions from gross income if they meet certain conditions. Filing form 1040ez An exclusion from gross income is generally income you receive that is not included in your U. Filing form 1040ez S. Filing form 1040ez income and is not subject to U. Filing form 1040ez S. Filing form 1040ez tax. Filing form 1040ez This chapter covers some of the more common exclusions allowed to resident and nonresident aliens. Filing form 1040ez Topics - This chapter discusses: Nontaxable interest, Nontaxable dividends, Certain compensation paid by a foreign employer, Gain from sale of home, and Scholarships and fellowship grants. Filing form 1040ez Useful Items - You may want to see: Publication 54 Tax Guide for U. Filing form 1040ez S. Filing form 1040ez Citizens and Resident Aliens Abroad 523 Selling Your Home See chapter 12 for information about getting these publications. Filing form 1040ez Resident Aliens Resident aliens may be able to exclude the following items from their gross income. Filing form 1040ez Foreign Earned Income and Housing Amount If you are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, you may qualify for the foreign earned income exclusion. Filing form 1040ez The exclusion is $97,600 in 2013. Filing form 1040ez In addition, you may be able to exclude or deduct certain foreign housing amounts. Filing form 1040ez You may also qualify if you are a bona fide resident of a foreign country and you are a citizen or national of a country with which the United States has an income tax treaty. Filing form 1040ez For more information, see Publication 54. Filing form 1040ez Foreign country. Filing form 1040ez    A foreign country is any territory under the sovereignty of a government other than that of the United States. Filing form 1040ez   The term “foreign country” includes the country's territorial waters and airspace, but not international waters and the airspace above them. Filing form 1040ez It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. Filing form 1040ez   The term “foreign country” does not include U. Filing form 1040ez S. Filing form 1040ez possessions or territories. Filing form 1040ez It does not include the Antarctic region. Filing form 1040ez Nonresident Aliens Nonresident aliens can exclude the following items from their gross income. Filing form 1040ez Interest Income Interest income that is not connected with a U. Filing form 1040ez S. Filing form 1040ez trade or business is excluded from income if it is from: Deposits (including certificates of deposit) with persons in the banking business, Deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law (if the interest paid or credited can be deducted by the association), and Amounts held by an insurance company under an agreement to pay interest on them. Filing form 1040ez State and local government obligations. Filing form 1040ez   Interest on obligations of a state or political subdivision, the District of Columbia, or a U. Filing form 1040ez S. Filing form 1040ez possession, generally is not included in income. Filing form 1040ez However, interest on certain private activity bonds, arbitrage bonds, and certain bonds not in registered form is included in income. Filing form 1040ez Portfolio interest. Filing form 1040ez   Interest and original issue discount that qualifies as portfolio interest is not subject to NRA withholding. Filing form 1040ez To qualify as portfolio interest, the interest must be paid on obligations issued after July 18, 1984, and otherwise subject to NRA withholding. Filing form 1040ez Note. Filing form 1040ez For obligations issued after March 18, 2012, portfolio interest does not include interest paid on debt that is not in registered form. Filing form 1040ez Before March 19, 2012, portfolio interest included interest on certain registered and nonregistered (bearer) bonds if the obligations meet the requirements described below. Filing form 1040ez Obligations in registered form. Filing form 1040ez   Portfolio interest includes interest paid on an obligation that is in registered form, and for which you have received documentation that the beneficial owner of the obligation is not a United States person. Filing form 1040ez   Generally, an obligation is in registered form if: (i) the obligation is registered as to both principal and any stated interest with the issuer (or its agent) and any transfer of the obligation may be effected only by surrender of the old obligation and reissuance to the new holder; (ii) the right to principal and stated interest with respect to the obligation may be transferred only through a book entry system maintained by the issuer or its agent; or (iii) the obligation is registered as to both principal and stated interest with the issuer or its agent and can be transferred both by surrender and reissuance and through a book entry system. Filing form 1040ez   An obligation that would otherwise be considered to be in registered form is not considered to be in registered form as of a particular time if it can be converted at any time in the future into an obligation that is not in registered form. Filing form 1040ez For more information on whether obligations are considered to be in registered form, see Portfolio interest in Publication 515. Filing form 1040ez Obligations not in registered form. Filing form 1040ez    For obligations issued before March 19, 2012, interest on an obligation that is not in registered form (bearer obligation) is portfolio interest if the obligation is foreign-targeted. Filing form 1040ez A bearer obligation is foreign-targeted if: There are arrangements to ensure that the obligation will be sold, or resold in connection with the original issue, only to a person who is not a United States person, Interest on the obligation is payable only outside the United States and its possessions, and The face of the obligation contains a statement that any United States person who holds the obligation will be subject to limits under the United States income tax laws. Filing form 1040ez   Documentation is not required for interest on bearer obligations to qualify as portfolio interest. Filing form 1040ez In some cases, however, you may need documentation for purposes of Form 1099 reporting and backup withholding. Filing form 1040ez Interest that does not qualify as portfolio interest. Filing form 1040ez   Payments to certain persons and payments of contingent interest do not qualify as portfolio interest. Filing form 1040ez You must withhold at the statutory rate on such payments unless some other exception, such as a treaty provision, applies. Filing form 1040ez Contingent interest. Filing form 1040ez   Portfolio interest does not include contingent interest. Filing form 1040ez Contingent interest is either of the following: Interest that is determined by reference to: Any receipts, sales, or other cash flow of the debtor or related person, Income or profits of the debtor or related person, Any change in value of any property of the debtor or a related person, or Any dividend, partnership distributions, or similar payments made by the debtor or a related person. Filing form 1040ez For exceptions, see Internal Revenue Code section 871(h)(4)(C). Filing form 1040ez Any other type of contingent interest that is identified by the Secretary of the Treasury in regulations. Filing form 1040ez Related persons. Filing form 1040ez   Related persons include the following. Filing form 1040ez Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Filing form 1040ez ), and lineal descendants (children, grandchildren, etc. Filing form 1040ez ). Filing form 1040ez Any person who is a party to any arrangement undertaken for the purpose of avoiding the contingent interest rules. Filing form 1040ez Certain corporations, partnerships, and other entities. Filing form 1040ez For details, see Nondeductible Loss in chapter 2 of Publication 544. Filing form 1040ez Exception for existing debt. Filing form 1040ez   Contingent interest does not include interest paid or accrued on any debt with a fixed term that was issued: On or before April 7, 1993, or After April 7, 1993, pursuant to a written binding contract in effect on that date and at all times thereafter before that debt was issued. Filing form 1040ez Dividend Income The following dividend income is exempt from the 30% tax. Filing form 1040ez Certain dividends paid by foreign corporations. Filing form 1040ez   There is no 30% tax on U. Filing form 1040ez S. Filing form 1040ez source dividends you receive from a foreign corporation. Filing form 1040ez See Second exception under Dividends in chapter 2 for how to figure the amount of U. Filing form 1040ez S. Filing form 1040ez source dividends. Filing form 1040ez Certain interest-related dividends. Filing form 1040ez   There is no 30% tax on interest-related dividends from sources within the United States that you receive from a mutual fund or other regulated investment company in 2013. Filing form 1040ez The mutual fund will designate in writing which dividends are interest-related dividends. Filing form 1040ez Certain short-term capital gain dividends. Filing form 1040ez   There may not be any 30% tax on certain short-term capital gain dividends from sources within the United States that you receive from a mutual fund or other regulated investment company. Filing form 1040ez The mutual fund will designate in writing which dividends are short-term capital gain dividends. Filing form 1040ez This tax relief will not apply to you if you are present in the United States for 183 days or more during your tax year. Filing form 1040ez Services Performed for Foreign Employer If you were paid by a foreign employer, your U. Filing form 1040ez S. Filing form 1040ez source income may be exempt from U. Filing form 1040ez S. Filing form 1040ez tax, but only if you meet one of the situations discussed next. Filing form 1040ez Employees of foreign persons, organizations, or offices. Filing form 1040ez   Income for personal services performed in the United States as a nonresident alien is not considered to be from U. Filing form 1040ez S. Filing form 1040ez sources and is tax exempt if you meet all three of the following conditions. Filing form 1040ez You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U. Filing form 1040ez S. Filing form 1040ez corporation, a U. Filing form 1040ez S. Filing form 1040ez partnership, or a U. Filing form 1040ez S. Filing form 1040ez citizen or resident. Filing form 1040ez You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year. Filing form 1040ez Your pay for these services is not more than $3,000. Filing form 1040ez If you do not meet all three conditions, your income from personal services performed in the United States is U. Filing form 1040ez S. Filing form 1040ez source income and is taxed according to the rules in chapter 4. Filing form 1040ez   If your pay for these services is more than $3,000, the entire amount is income from a trade or business within the United States. Filing form 1040ez To find if your pay is more than $3,000, do not include any amounts you get from your employer for advances or reimbursements of business travel expenses, if you were required to and did account to your employer for those expenses. Filing form 1040ez If the advances or reimbursements are more than your expenses, include the excess in your pay for these services. Filing form 1040ez   A day means a calendar day during any part of which you are physically present in the United States. Filing form 1040ez Example 1. Filing form 1040ez During 2013, Henry Smythe, a nonresident alien from a nontreaty country, worked for an overseas office of a U. Filing form 1040ez S. Filing form 1040ez partnership. Filing form 1040ez Henry, who uses the calendar year as his tax year, was temporarily present in the United States for 60 days during 2013 performing personal services for the overseas office of the partnership. Filing form 1040ez That office paid him a total gross salary of $2,800 for those services. Filing form 1040ez During 2013, he was not engaged in a trade or business in the United States. Filing form 1040ez The salary is not considered U. Filing form 1040ez S. Filing form 1040ez source income and is exempt from U. Filing form 1040ez S. Filing form 1040ez tax. Filing form 1040ez Example 2. Filing form 1040ez The facts are the same as in Example 1, except that Henry's total gross salary for the services performed in the United States during 2013 was $4,500. Filing form 1040ez He received $2,875 in 2013, and $1,625 in 2014. Filing form 1040ez During 2013, he was engaged in a trade or business in the United States because the compensation for his personal services in the United States was more than $3,000. Filing form 1040ez Henry's salary is U. Filing form 1040ez S. Filing form 1040ez source income and is taxed under the rules in chapter 4. Filing form 1040ez Crew members. Filing form 1040ez   Compensation for services performed by a nonresident alien in connection with the individual's temporary presence in the United States as a regular crew member of a foreign vessel (for example, a boat or ship) engaged in transportation between the United States and a foreign country or U. Filing form 1040ez S. Filing form 1040ez possession is not U. Filing form 1040ez S. Filing form 1040ez source income and is exempt from U. Filing form 1040ez S. Filing form 1040ez tax. Filing form 1040ez This exemption does not apply to compensation for services performed on foreign aircraft. Filing form 1040ez Students and exchange visitors. Filing form 1040ez   Nonresident alien students and exchange visitors present in the United States under “F,” “J,” or “Q” visas can exclude from gross income pay received from a foreign employer. Filing form 1040ez   This group includes bona fide students, scholars, trainees, teachers, professors, research assistants, specialists, or leaders in a field of specialized knowledge or skill, or persons of similar description. Filing form 1040ez It also includes the alien's spouse and minor children if they come with the alien or come later to join the alien. Filing form 1040ez   A nonresident alien temporarily present in the United States under a “J” visa includes an alien individual entering the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. Filing form 1040ez Foreign employer. Filing form 1040ez   A foreign employer is: A nonresident alien individual, foreign partnership, or foreign corporation, or An office or place of business maintained in a foreign country or in a U. Filing form 1040ez S. Filing form 1040ez possession by a U. Filing form 1040ez S. Filing form 1040ez corporation, a U. Filing form 1040ez S. Filing form 1040ez partnership, or an individual who is a U. Filing form 1040ez S. Filing form 1040ez citizen or resident. Filing form 1040ez   The term “foreign employer” does not include a foreign government. Filing form 1040ez Pay from a foreign government that is exempt from U. Filing form 1040ez S. Filing form 1040ez income tax is discussed in chapter 10. Filing form 1040ez Income from certain annuities. Filing form 1040ez   Do not include in income any annuity received under a qualified annuity plan or from a qualified trust exempt from U. Filing form 1040ez S. Filing form 1040ez income tax if you meet both of the following conditions. Filing form 1040ez You receive the annuity only because: You performed personal services outside the United States while you were a nonresident alien, or You performed personal services inside the United States while you were a nonresident alien and you met the three conditions, described earlier, under Employees of foreign persons, organizations, or offices . Filing form 1040ez At the time the first amount is paid as an annuity under the plan (or by the trust), 90% or more of the employees for whom contributions or benefits are provided under the annuity plan (or under the plan of which the trust is a part) are U. Filing form 1040ez S. Filing form 1040ez citizens or residents. Filing form 1040ez   If the annuity qualifies under condition (1) but not condition (2) above, you do not have to include the amount in income if: You are a resident of a country that gives a substantially equal exclusion to U. Filing form 1040ez S. Filing form 1040ez citizens and residents, or You are a resident of a beneficiary developing country under Title V of the Trade Act of 1974. Filing form 1040ez   If you are not sure whether the annuity is from a qualified annuity plan or qualified trust, ask the person who made the payment. Filing form 1040ez Income affected by treaties. Filing form 1040ez   Income of any kind that is exempt from U. Filing form 1040ez S. Filing form 1040ez tax under a treaty to which the United States is a party is excluded from your gross income. Filing form 1040ez Income on which the tax is only limited by treaty, however, is included in gross income. Filing form 1040ez See chapter 9. Filing form 1040ez Gambling Winnings From Dog or Horse Racing You can exclude from your gross income winnings from legal wagers initiated outside the United States in a parimutuel pool with respect to a live horse or dog race in the United States. Filing form 1040ez Gain From the Sale of Your Main Home If you sold your main home, you may be able to exclude up to $250,000 of the gain on the sale of your home. Filing form 1040ez If you are married and file a joint return, you may be able to exclude up to $500,000. Filing form 1040ez For information on the requirements for this exclusion, see Publication 523. Filing form 1040ez This exclusion does not apply to nonresident aliens who are subject to the expatriation tax rules discussed in chapter 4. Filing form 1040ez Scholarships and Fellowship Grants If you are a candidate for a degree, you may be able to exclude from your income part or all of the amounts you receive as a qualified scholarship. Filing form 1040ez The rules discussed here apply to both resident and nonresident aliens. Filing form 1040ez If a nonresident alien receives a grant that is not from U. Filing form 1040ez S. Filing form 1040ez sources, it is not subject to U. Filing form 1040ez S. Filing form 1040ez tax. Filing form 1040ez See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your grant is from U. Filing form 1040ez S. Filing form 1040ez sources. Filing form 1040ez A scholarship or fellowship is excludable from income only if: You are a candidate for a degree at an eligible educational institution, and You use the scholarship or fellowship to pay qualified education expenses. Filing form 1040ez Candidate for a degree. Filing form 1040ez   You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an accredited educational institution that is authorized to provide: A program that is acceptable for full credit toward a bachelor's or higher degree, or A program of training to prepare students for gainful employment in a recognized occupation. Filing form 1040ez Eligible educational institution. Filing form 1040ez   An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Filing form 1040ez Qualified education expenses. Filing form 1040ez   These are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Filing form 1040ez These items must be required of all students in your course of instruction. Filing form 1040ez However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses. Filing form 1040ez Expenses that do not qualify. Filing form 1040ez   Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. Filing form 1040ez This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. Filing form 1040ez Scholarship or fellowship amounts used to pay these costs are taxable. Filing form 1040ez Amounts used to pay expenses that do not qualify. Filing form 1040ez   A scholarship amount used to pay any expense that does not qualify is taxable, even if the expense is a fee that must be paid to the institution as a condition of enrollment or attendance. Filing form 1040ez Payment for services. Filing form 1040ez   You cannot exclude from income the portion of any scholarship, fellowship, or tuition reduction that represents payment for past, present, or future teaching, research, or other services. Filing form 1040ez This is true even if all candidates for a degree are required to perform the services as a condition for receiving the degree. Filing form 1040ez Example. Filing form 1040ez On January 7, Maria Gomez is notified of a scholarship of $2,500 for the spring semester. Filing form 1040ez As a condition for receiving the scholarship, Maria must serve as a part-time teaching assistant. Filing form 1040ez Of the $2,500 scholarship, $1,000 represents payment for her services. Filing form 1040ez Assuming that Maria meets all other conditions, she can exclude no more than $1,500 from income as a qualified scholarship. Filing form 1040ez Prev  Up  Next   Home   More Online Publications