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Filing State Taxes Free

Filing state taxes free 33. Filing state taxes free   Crédito para Ancianos o Personas Incapacitadas Table of Contents Introduction Useful Items - You may want to see: ¿Reúne los Requisitos del Crédito?Persona que Reúne los Requisitos Límites sobre los Ingresos Cómo Reclamar el CréditoEl Crédito Calculado por el IRS El Crédito Calculado por Usted Mismo Introduction Si reúne los requisitos, tal vez pueda reducir los impuestos que adeuda tomando el crédito para ancianos o personas incapacitadas, el cual se calcula en el Anexo R (Formulario 1040A o Formulario 1040). Filing state taxes free Este capítulo trata lo siguiente: Quién reúne los requisitos para reclamar el crédito para ancianos o personas incapacitadas. Filing state taxes free Cómo reclamar el crédito. Filing state taxes free Tal vez pueda tomar el crédito para ancianos o personas incapacitadas si: Tiene 65 años de edad o más al final del año 2013 o Se jubiló por incapacidad total y permanente y recibe ingresos por incapacidad sujetos a impuestos. Filing state taxes free Useful Items - You may want to see: Publicación 524 Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés 554 Tax Guide for Seniors (Guía tributaria para personas de la tercera edad), en inglés Formulario (e Instrucciones) Anexo R (Formulario 1040A o 1040) Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés ¿Reúne los Requisitos del Crédito? Puede reclamar el crédito para ancianos o personas incapacitadas si le corresponden ambas situaciones: Usted es una persona que reúne los requisitos. Filing state taxes free Sus ingresos no sobrepasan determinados límites. Filing state taxes free Puede utilizar la Figura 33-A y la Tabla 33-1 como guía para ver si tiene derecho al crédito. Filing state taxes free Primero, utilice la Figura 33-A para saber si reúne los requisitos. Filing state taxes free En tal caso, pase a la Tabla 33-1 para asegurarse que sus ingresos no superen los límites correspondientes al crédito. Filing state taxes free Puede reclamar el crédito sólo si presenta el Formulario 1040 o el Formulario 1040A. Filing state taxes free No puede reclamar el crédito si presenta el Formulario 1040EZ. Filing state taxes free Persona que Reúne los Requisitos Usted reúne los requisitos de este crédito si es ciudadano estadounidense o extranjero residente y cualquiera de las siguientes situaciones le corresponden: Tenía 65 años de edad o más al final del año 2013. Filing state taxes free Tenía menos de 65 años de edad al final del año 2013 y se cumplen las tres condiciones siguientes: Se jubiló por incapacidad total y permanente (se explica más adelante). Filing state taxes free Recibió ingresos sujetos a impuestos por incapacidad durante 2013. Filing state taxes free En el día 1 de enero de 2013, no había alcanzado la edad de jubilación obligatoria (se define más adelante bajo Ingresos por incapacidad ). Filing state taxes free 65 años de edad. Filing state taxes free   Se considera que tiene 65 años el día antes de cumplir los 65 años. Filing state taxes free Por lo tanto, si nació el 1 de enero de 1949, se considera que tiene 65 años de edad al final de 2013. Filing state taxes free Ciudadano o Extranjero Residente de los Estados Unidos Para reclamar el crédito, tiene que ser ciudadano o extranjero residente de los Estados Unidos (o ser tratado como extranjero residente). Filing state taxes free Normalmente, no puede reclamar el crédito si fue extranjero no residente en algún momento durante el año tributario. Filing state taxes free Excepciones. Filing state taxes free   Tal vez pueda tomar el crédito si es extranjero no residente casado con un ciudadano o extranjero residente de los EE. Filing state taxes free UU. Filing state taxes free al final del año tributario, y usted y su cónyuge optan por tratarlo a usted como extranjero residente de los Estados Unidos. Filing state taxes free En tal caso, se gravan impuestos sobre los ingresos que usted y su cónyuge reciban de cualquier parte del mundo. Filing state taxes free Si era extranjero no residente al comenzar el año y residente extranjero al final del año, y estaba casado con un ciudadano o extranjero residente de los EE. Filing state taxes free UU. Filing state taxes free al final del año, tal vez pueda optar por ser considerado extranjero residente de los EE. Filing state taxes free UU. Filing state taxes free durante todo el año. Filing state taxes free En ese caso, quizás se le permita reclamar el crédito. Filing state taxes free Para más información sobre estas opciones, vea el capítulo 1 de la Publicación 519, U. Filing state taxes free S. Filing state taxes free Tax Guide for Aliens (Guía tributaria sobre los impuestos estadounidenses para extranjeros), en inglés. Filing state taxes free Personas Casadas Normalmente, si está casado al final del año tributario, usted y su cónyuge tienen que presentar una declaración conjunta para reclamar el crédito. Filing state taxes free No obstante, si usted y su cónyuge no vivieron en la misma vivienda en ningún momento durante el año tributario, pueden presentar una declaración conjunta o declaraciones separadas y aún reclamar el crédito. Filing state taxes free Cabeza de familia. Filing state taxes free   Puede presentar la declaración como cabeza de familia y satisfacer las condiciones del crédito, aun si su cónyuge vivió con usted durante los primeros 6 meses del año, si cumple ciertos requisitos. Filing state taxes free Vea Cabeza de Familia en el capítulo 2, para averiguar qué requisitos tiene que cumplir. Filing state taxes free Personas Menores de 65 Años de Edad Si tiene menos de 65 años de edad al final del año 2013, puede reunir los requisitos del crédito sólo si está jubilado por incapacidad total y permanente (se explica a continuación) y ha recibido ingresos por incapacidad sujetos a impuestos (se explica más adelante, bajo el tema Ingresos por incapacidad ). Filing state taxes free Se le considera jubilado por incapacidad total y permanente si: Estaba total y permanentemente incapacitado cuando se jubiló y Se jubiló por incapacidad antes del cierre del año tributario. Filing state taxes free Aunque no se jubile oficialmente, puede que se le considere jubilado por incapacidad cuando haya dejado de trabajar debido a su incapacidad. Filing state taxes free Si se jubiló por incapacidad antes de 1977 y no estaba total y permanentemente incapacitado en ese momento, puede cumplir los requisitos del crédito si estaba total y permanentemente incapacitado el 1 de enero de 1976 o el 1 de enero de 1977. Filing state taxes free Total y permanentemente incapacitado. Filing state taxes free    Está total y permanentemente incapacitado si no puede dedicarse a ninguna actividad sustancial remunerada a causa de una condición física o mental. Filing state taxes free Un médico calificado tiene que confirmar por escrito que dicha condición ha durado o puede durar 12 meses o más, o que dicha condición puede culminar en la muerte. Filing state taxes free Vea Declaración del médico , más adelante. Filing state taxes free Actividad sustancial remunerada. Filing state taxes free   Se define “actividad sustancial remunerada” como el desempeño de deberes importantes a lo largo de un período de tiempo razonable, mientras uno trabaje para recibir remuneración u obtener ganancias; o un trabajo generalmente realizado a cambio de remuneración o ganancias. Filing state taxes free El mantener un empleo a tiempo completo (o un empleo a tiempo parcial a conveniencia de su empleador) en un ambiente laboral competitivo donde se paga por lo menos el salario mínimo se considera una prueba contundente de que puede dedicarse a una actividad sustancial remunerada. Filing state taxes free   Los trabajos realizados para cuidarse a sí mismo o cuidar su vivienda no se consideran actividades sustanciales remuneradas. Filing state taxes free Tampoco se considera actividad sustancial remunerada: el trabajo no remunerado desempeñado en relación con los pasatiempos, la capacitación o terapia institucional, asistencia a una escuela, los clubes, programas sociales y otras actividades semejantes. Filing state taxes free No obstante, realizar este tipo de trabajo puede demostrar que usted es capaz de dedicarse a una actividad sustancial remunerada. Filing state taxes free    El hecho de que no haya trabajado por algún tiempo no se considera una prueba concluyente de que no pueda dedicarse a una actividad sustancial remunerada. Filing state taxes free Empleo en establecimientos protegidos. Filing state taxes free   Ciertos trabajos ofrecidos a personas con incapacidad física o mental en establecimientos que reúnen ciertos requisitos se consideran empleo protegido. Filing state taxes free Dichos sitios se ubican en establecimientos protegidos, tales como talleres, hospitales e instituciones parecidas, programas laborales o educativos en el hogar y asilos patrocinados por el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés). Filing state taxes free   En comparación con el empleo comercial, la remuneración del empleo en establecimientos protegidos es más baja. Filing state taxes free Por lo tanto, una persona no suele buscar empleo en establecimientos protegidos si puede encontrar otro empleo. Filing state taxes free El hecho de que una persona haya aceptado un empleo en establecimientos protegidos no comprueba que la persona pueda dedicarse a una actividad sustancial remunerada. Filing state taxes free Declaración del médico. Filing state taxes free   Si tiene menos de 65 años de edad, su médico tiene que certificar por escrito que usted estaba total y permanentemente incapacitado en la fecha en que se jubiló. Filing state taxes free Puede utilizar la declaración en las Instrucciones del Anexo R (Fomulario 1040A o 1040). Filing state taxes free    Please click here for the text description of the image. Filing state taxes free Figura 33−A. Filing state taxes free ¿Es Usted una Persona que Reúne los Requisitos? Tabla 33-1. Filing state taxes free Límites sobre los Ingresos SI su estado civil para efectos de la declaración es . Filing state taxes free . Filing state taxes free . Filing state taxes free . Filing state taxes free ENTONCES aun si reúne los requisitos (vea la Figura 33-A ), NO PUEDE reclamar el crédito si . Filing state taxes free . Filing state taxes free . Filing state taxes free . Filing state taxes free Tiene ingresos brutos ajustados (AGI, por sus siglas en inglés)* iguales o superiores a . Filing state taxes free . Filing state taxes free . Filing state taxes free . Filing state taxes free O el total de su Seguro Social no sujeto a impuestos además de otras pensiones, anualidades o ingreso por incapacidad no sujetos a impuestos es igual o superior a . Filing state taxes free . Filing state taxes free . Filing state taxes free . Filing state taxes free soltero, cabeza de familia o viudo que reúne los requisitos con hijo dependiente $17,500 $5,000 casado que presenta una declaración conjunta y sólo uno de los cónyuges reúne los requisitos de la Figura 33-A $20,000 $5,000 casado que presenta una declaración conjunta y ambos cónyuges reúnen los requisitos de la Figura 33-A $25,000 $7,500 casado que presenta una declaración por separado y usted y su cónyuge no vivieron en la misma vivienda en ningún momento del año 2013 $12,500 $3,750 *El AGI es la cantidad indicada en la línea 22 del Formulario 1040A o la línea 38 del Formulario 1040. Filing state taxes free   No tiene que presentar esta declaración escrita junto con el Formulario 1040 o Formulario 1040A, pero tiene que guardarla con su documentación. Filing state taxes free Veteranos. Filing state taxes free   Si el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés) certifica que está total y permanentemente incapacitado, puede utilizar el Formulario 21-0172 del VA, Certification of Permanent and Total Disability (Certificación de incapacidad total y permanente), en inglés, en lugar de la declaración escrita de un médico que usted está obligado a conservar. Filing state taxes free El Formulario 21-0172 del VA tiene que ser firmado por una persona autorizada por el VA. Filing state taxes free Puede obtener este formulario de la oficina regional del VA de su área. Filing state taxes free Declaración escrita de un médico obtenida en un año anterior. Filing state taxes free   Si obtuvo una declaración escrita de su médico en un año anterior y, por su condición continua de incapacidad, no pudo dedicarse a ninguna actividad sustancial remunerada durante 2013, quizás no necesite obtener otra declaración escrita de su médico para 2013. Filing state taxes free Para leer una explicación detallada de las condiciones que tiene que cumplir, consulte la Parte II de las Instrucciones del Anexo R (Formulario 1040A o 1040). Filing state taxes free Si satisface las condiciones obligatorias, marque el recuadro 2 de la Parte II del Anexo R (Formulario 1040A o 1040). Filing state taxes free   Si marcó el recuadro 4, 5 ó 6 de la Parte I del Anexo R (Formulario 1040A o 1040), anote en el espacio por encima del recuadro de la línea 2 de la Parte II el (los) primer(os) nombre(s) del (de los) cónyuge(s) para el (los) cual(es) está marcado dicho recuadro. Filing state taxes free Ingresos por incapacidad. Filing state taxes free   Si tiene menos de 65 años de edad, tiene que tener también ingresos tributables de compensación por incapacidad para reunir los requisitos del crédito. Filing state taxes free Los ingresos de compensación por incapacidad tienen que cumplir los siguientes requisitos: Se tienen que pagar conforme al seguro de accidente o médico, o el plan de pensiones de su empleador. Filing state taxes free Se tienen que incluir en los ingresos como salario (o pagos en lugar de salario) durante el tiempo por el cual se ausentó del trabajo a raíz de una incapacidad total y permanente. Filing state taxes free Pagos que no se consideran ingresos por incapacidad. Filing state taxes free   Todo pago que reciba de un plan que no ofrece una opción para la jubilación por incapacidad no se considera ingreso por incapacidad. Filing state taxes free Todo pago global que reciba por vacaciones acumuladas al jubilarse por incapacidad se considera pago de salario en vez de ingreso por incapacidad. Filing state taxes free   Para propósitos del crédito para ancianos o personas incapacitadas, los ingresos por incapacidad no incluyen cantidades que usted reciba después de cumplir la edad obligatoria de jubilación. Filing state taxes free La edad obligatoria de jubilación es la edad establecida por su empleador en la que usted habría estado obligado a jubilarse si no se hubiera quedado incapacitado. Filing state taxes free Límites sobre los Ingresos Para determinar si puede reclamar el crédito, tiene que tener en cuenta dos límites sobre los ingresos. Filing state taxes free El primer límite es la cantidad de ingresos brutos ajustados (AGI, por sus siglas en inglés). Filing state taxes free El segundo límite es la cantidad de Seguro Social no sujeta a impuestos y otras pensiones, anualidades o compensación por incapacidad no sujetas a impuestos que haya recibido. Filing state taxes free Se indican los límites en la Tabla 33-1. Filing state taxes free Si tiene ingresos brutos ajustados y pensiones, anualidades o compensación por incapacidad no sujetos a impuestos inferiores a los límites de ingresos, quizás pueda reclamar el crédito. Filing state taxes free Vea Cómo Reclamar el Crédito , más adelante. Filing state taxes free Si tiene ingresos brutos ajustados o pensiones, anualidades o compensación por incapacidad no sujetos a impuestos iguales o superiores a los límites de ingresos, no puede reclamar el crédito. Filing state taxes free Cómo Reclamar el Crédito Puede calcular el crédito usted mismo o el Servicio de Impuestos Internos (IRS, por sus siglas en inglés) se lo calculará. Filing state taxes free El Crédito Calculado por el IRS Si opta por que el IRS le calcule el crédito, lea el tema presentado a continuación relacionado con el formulario que usted va a presentar (el Formulario 1040 o el Formulario 1040A). Filing state taxes free Si desea que el IRS le calcule su impuesto, vea el capítulo 30 . Filing state taxes free Formulario 1040. Filing state taxes free   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040 bajo Impuestos Calculados por el IRS en el capítulo 30. Filing state taxes free Formulario 1040A. Filing state taxes free   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040A bajo Impuestos Calculados por el IRS en el capítulo 30. Filing state taxes free El Crédito Calculado por Usted Mismo Si opta por calcular el crédito usted mismo, llene la primera página del Anexo R (Formulario 1040A o 1040). Filing state taxes free Luego, llene la Parte III del Anexo R (Formulario 1040A o 1040). Filing state taxes free Si presenta el Formulario 1040A, anote en la línea 30 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040). Filing state taxes free Si presenta el Formulario 1040, anote en la línea 53 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040), marque el recuadro c y escriba “Sch R” en la línea al lado de dicho recuadro. Filing state taxes free Para leer una explicación detallada sobre cómo llenar la Parte III del Anexo R, vea Figuring the Credit Yourself (Cómo calcular el crédito usted mismo), en la Publicación 524, en inglés. Filing state taxes free Límite del crédito. Filing state taxes free   La cantidad del crédito que puede reclamar, por lo general, suele limitarse a la cantidad de impuestos que tiene que pagar. Filing state taxes free Utilice la Credit Limit Worksheet (Hoja de trabajo para calcular el límite del crédito), en las Instrucciones del Anexo R (Formulario 1040A o Formulario 1040) para determinar si su crédito es limitado. Filing state taxes free Prev  Up  Next   Home   More Online Publications
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Filing state taxes free 2. Filing state taxes free   Possession Source Income Table of Contents Types of IncomeCompensation for Labor or Personal Services Investment Income Sales or Other Dispositions of Property Scholarships, Fellowships, Grants, Prizes, and Awards Effectively Connected Income In order to determine where to file your return and which form(s) you need to complete, you must determine the source of each item of income you received during the tax year. Filing state taxes free Income you received from sources within, or that was effectively connected with the conduct of a trade or business within, the relevant possession must be identified separately from U. Filing state taxes free S. Filing state taxes free or foreign source income. Filing state taxes free This chapter discusses the rules for determining if the source of your income is from: American Samoa, The Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of Puerto Rico (Puerto Rico), Guam, or The U. Filing state taxes free S. Filing state taxes free Virgin Islands (USVI). Filing state taxes free Generally, the same rules that apply for determining U. Filing state taxes free S. Filing state taxes free source income also apply for determining possession source income. Filing state taxes free However, there are some important exceptions to these rules. Filing state taxes free Both the general rules and the exceptions are discussed in this chapter. Filing state taxes free U. Filing state taxes free S. Filing state taxes free income rule. Filing state taxes free   This rule states that income is not possession source income if, under the rules of Internal Revenue Code sections 861–865, it is treated as income: From sources within the United States, or Effectively connected with the conduct of a trade or business within the United States. Filing state taxes free Table 2-1 shows the general rules for determining whether income is from sources within the United States. Filing state taxes free Table 2-1. Filing state taxes free General Rules for Determining U. Filing state taxes free S. Filing state taxes free Source of Income Item of Income Factor Determining Source Salaries, wages, and other compensation for labor or personal services Where labor or services performed Pensions Contributions: Where services were performed that earned the pension Investment earnings: Where pension trust is located Interest Residence of payer Dividends Where corporation created or organized Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. Filing state taxes free Where property is used Sale of business inventory—purchased Where sold Sale of business inventory—produced Allocation if produced and sold in different locations Sale of real property Location of property Sale of personal property Seller's tax home (but see Special Rules for Gains From Dispositions of Certain Property , later, for exceptions) Sale of natural resources Allocation based on fair market value of product at export terminal. Filing state taxes free For more information, see Regulations section 1. Filing state taxes free 863-1(b). Filing state taxes free Types of Income This section looks at the most common types of income received by individuals, and the rules for determining the source of the income. Filing state taxes free Generally, the same rules shown in Table 2-1 are used to determine if you have possession source income. Filing state taxes free Compensation for Labor or Personal Services Income from labor or personal services includes wages, salaries, commissions, fees, per diem allowances, employee allowances and bonuses, and fringe benefits. Filing state taxes free It also includes income earned by sole proprietors and general partners from providing personal services in the course of their trade or business. Filing state taxes free Services performed wholly within a relevant possession. Filing state taxes free   Generally, all pay you receive for services performed in a relevant possession is considered to be from sources within that possession. Filing state taxes free However, there is an exception for income earned as a member of the U. Filing state taxes free S. Filing state taxes free Armed Forces or a civilian spouse. Filing state taxes free U. Filing state taxes free S. Filing state taxes free Armed Forces. Filing state taxes free   If you are a bona fide resident of a relevant possession, your military service pay will be sourced in that possession even if you perform the services in the United States or another possession. Filing state taxes free However, if you are not a bona fide resident of a possession, your military service pay will be income from the  United States even if you perform services in a possession. Filing state taxes free Civilian spouse of active duty member of the U. Filing state taxes free S. Filing state taxes free Armed Forces. Filing state taxes free   If you are a bona fide resident of a U. Filing state taxes free S. Filing state taxes free possession and choose to keep that possession as your tax residence under MSRRA when relocating with your servicemember spouse under military orders, the source of income for your labor or personal services is considered to be that possession. Filing state taxes free Likewise, if your tax residence is in one of the 50 states or the District of Columbia before relocating and you choose to keep it as your tax residence, the source of income for services performed in any of the U. Filing state taxes free S. Filing state taxes free possessions is considered to be the United States and, specifically, your state of residence or the District of Columbia. Filing state taxes free Services performed partly inside and partly outside a relevant possession. Filing state taxes free   If you are an employee and receive compensation for labor or personal services performed both inside and outside the relevant possession, special rules apply in determining the source of the compensation. Filing state taxes free Compensation (other than certain fringe benefits) is sourced on a time basis. Filing state taxes free Certain fringe benefits (such as housing and education) are sourced on a geographical basis. Filing state taxes free   Or, you may be permitted to use an alternative basis to determine the source of compensation. Filing state taxes free See Alternative basis , later. Filing state taxes free   If you are self-employed, determine the source of your income for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. Filing state taxes free In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. Filing state taxes free Time basis. Filing state taxes free   Use a time basis to figure your compensation for labor or personal services from the relevant possession (other than the fringe benefits discussed later). Filing state taxes free Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed  services in the relevant  possession during the year     Total number of days you  performed services during the year           You can use a unit of time less than a day in the above fraction, if appropriate. Filing state taxes free The time period for which the income is made does not have to be a year. Filing state taxes free Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. Filing state taxes free Example. Filing state taxes free In 2013, you worked in your employer's office in the United States for 60 days and in the Puerto Rico office for 180 days, earning a total of $80,000 for the year. Filing state taxes free Your Puerto Rico source income is $60,000, figured as follows. Filing state taxes free       180 days 240 days × $80,000 = $60,000                 Multi-year compensation. Filing state taxes free   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. Filing state taxes free Multi-year compensation is compensation that is included in your income in 1 tax year but is attributable to a period that includes 2 or more tax years. Filing state taxes free You determine the period to which the income is attributable based on the facts and circumstances of your case. Filing state taxes free For more information on multi-year compensation, see Treasury Decision (T. Filing state taxes free D. Filing state taxes free ) 9212 and Regulations section 1. Filing state taxes free 861-4, 2005-35 I. Filing state taxes free R. Filing state taxes free B. Filing state taxes free 429, available at www. Filing state taxes free irs. Filing state taxes free gov/irb/2005-35_IRB/ar14. Filing state taxes free html. Filing state taxes free Certain fringe benefits sourced on a geographical basis. Filing state taxes free   If you received any of the following fringe benefits as compensation for labor or services performed as an employee partly inside and partly outside a relevant possession, you must source that income on a geographical basis. Filing state taxes free Housing. Filing state taxes free Education. Filing state taxes free Local transportation. Filing state taxes free Tax reimbursement. Filing state taxes free Hazardous or hardship duty pay. Filing state taxes free Moving expense reimbursement. Filing state taxes free For information on determining the source of the fringe benefits listed above, see Regulations section 1. Filing state taxes free 861-4. Filing state taxes free Alternative basis. Filing state taxes free   You can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your income than the time or geographical basis. Filing state taxes free If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your income. Filing state taxes free De minimis exception. Filing state taxes free   There is an exception to the rule for determining the source of income earned in a possession. Filing state taxes free Generally, you will not have income from a possession if during a tax year you: Are a U. Filing state taxes free S. Filing state taxes free citizen or resident, Are not a bona fide resident of that possession, Are not employed by or under contract with an individual, partnership, or corporation that is engaged in a trade or business in that possession, Temporarily perform services in that possession for 90 days or less, and Earned $3,000 or less from such services. Filing state taxes free This exception began with income earned during your 2008 tax year. Filing state taxes free Pensions. Filing state taxes free   Generally, pension income has two components: contributions to the pension plan and the earnings accrued from investing those contributions. Filing state taxes free The contribution portion is sourced according to where services were performed that earned the pension. Filing state taxes free The investment earnings portion is sourced according to the location of the pension trust. Filing state taxes free Example. Filing state taxes free You are a U. Filing state taxes free S. Filing state taxes free citizen who worked in Puerto Rico for a U. Filing state taxes free S. Filing state taxes free company. Filing state taxes free All services were performed in Puerto Rico. Filing state taxes free Upon retirement you remained in Puerto Rico and began receiving your pension from the U. Filing state taxes free S. Filing state taxes free pension trust of your employer. Filing state taxes free Distributions from the U. Filing state taxes free S. Filing state taxes free pension trust must be allocated between (1) contributions, which are Puerto Rico source income, and (2) investment earnings, which are U. Filing state taxes free S. Filing state taxes free source income. Filing state taxes free Investment Income This category includes such income as interest, dividends, rents, and royalties. Filing state taxes free Interest income. Filing state taxes free   The source of interest income is generally determined by the residence of the payer. Filing state taxes free Interest paid by corporations created or organized in a relevant possession (possession corporation) or by individuals who are bona fide residents of a relevant possession is considered income from sources within that possession. Filing state taxes free   However, there is an exception to this rule if you are a bona fide resident of a relevant possession, receive interest from a corporation created or organized in that possession, and are a shareholder of that corporation who owns, directly or indirectly, at least 10% of the total voting stock of the corporation. Filing state taxes free See Regulations section 1. Filing state taxes free 937-2(i) for more information. Filing state taxes free Dividends. Filing state taxes free   Generally, dividends paid by a corporation created or organized in a relevant possession will be considered income from sources within that possession. Filing state taxes free There are additional rules for bona fide residents of a relevant possession who receive dividend income from possession corporations, and who own, directly or indirectly, at least 10% of the voting stock of the corporation. Filing state taxes free For more information, see Regulations section 1. Filing state taxes free 937-2(g). Filing state taxes free Rental income. Filing state taxes free   Rents from property located in a relevant possession are treated as income from sources within that possession. Filing state taxes free Royalties. Filing state taxes free   Royalties from natural resources located in a relevant possession are considered income from sources within that possession. Filing state taxes free   Also considered possession source income are royalties received for the use of, or for the privilege of using, in a relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property. Filing state taxes free Sales or Other Dispositions of Property The source rules for sales or other dispositions of property are varied. Filing state taxes free The most common situations are discussed below. Filing state taxes free Real property. Filing state taxes free   Real property includes land and buildings, and generally anything built on, growing on, or attached to land. Filing state taxes free The location of the property generally determines the source of income from the sale. Filing state taxes free For example, if you are a bona fide resident of Guam and sell your home that is located in Guam, the gain on the sale is sourced in Guam. Filing state taxes free If, however, the home you sold was located in the United States, the gain is U. Filing state taxes free S. Filing state taxes free source income. Filing state taxes free Personal property. Filing state taxes free   The term “personal property” refers to property (such as machinery, equipment, or furniture) that is not real property. Filing state taxes free Generally, gain (or loss) from the sale or other disposition is sourced according to the seller's tax home. Filing state taxes free If personal property is sold by a bona fide resident of a relevant possession, the gain (or loss) from the sale is treated as sourced within that possession. Filing state taxes free   This rule does not apply to the sale of inventory, intangible property, depreciable personal property, or property sold through a foreign office or fixed place of business. Filing state taxes free The rules applying to sales of inventory are discussed below. Filing state taxes free For information on sales of the other types of property mentioned, see Internal Revenue Code section 865. Filing state taxes free Inventory. Filing state taxes free   Your inventory is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. Filing state taxes free The source of income from the sale of inventory depends on whether the inventory was purchased or produced. Filing state taxes free Purchased. Filing state taxes free   Income from the sale of inventory that you purchased is sourced where you sell the property. Filing state taxes free Generally, this is where title to the property passes to the buyer. Filing state taxes free Produced. Filing state taxes free   Income from the sale of inventory that you produced in a relevant possession and sold outside that possession (or vice versa) is sourced based on an allocation. Filing state taxes free For information on making the allocation, see Regulations section 1. Filing state taxes free 863-3(f). Filing state taxes free Special Rules for Gains From Dispositions of Certain Property There are special rules for gains from dispositions of certain investment property (for example, stocks, bonds, debt instruments, diamonds, and gold) owned by a U. Filing state taxes free S. Filing state taxes free citizen or resident alien prior to becoming a bona fide resident of a possession. Filing state taxes free You are subject to these special rules if you meet both of the following conditions. Filing state taxes free For the tax year for which the source of the gain must be determined, you are a bona fide resident of the relevant possession. Filing state taxes free For any of the 10 years preceding that year, you were a citizen or resident alien of the United States (other than a bona fide resident of the relevant possession). Filing state taxes free If you meet these conditions, gains from the disposition of this property will not be treated as income from sources within the relevant possession for purposes of the Internal Revenue Code. Filing state taxes free Accordingly, bona fide residents of American Samoa and Puerto Rico, for example, may not exclude the gain on their U. Filing state taxes free S. Filing state taxes free tax return. Filing state taxes free (See chapter 3 for additional filing information. Filing state taxes free ) With respect to the CNMI, Guam, and the USVI, the gain from the disposition of this property will not meet the requirements for certain tax rules that may allow bona fide residents of those possessions to reduce or obtain a rebate of taxes on income from sources within the relevant possessions. Filing state taxes free These rules apply to dispositions after April 11, 2005. Filing state taxes free For details, see Regulations section 1. Filing state taxes free 937-2(f)(1) and Examples 1 and 2 of section 1. Filing state taxes free 937-2(k). Filing state taxes free Example 1. Filing state taxes free In 2007, Cheryl Jones, a U. Filing state taxes free S. Filing state taxes free citizen, lived in the United States and paid $1,000 for 100 shares of stock in the Rose Corporation, a U. Filing state taxes free S. Filing state taxes free corporation listed on the New York Stock Exchange. Filing state taxes free On March 1, 2010, she moved to Puerto Rico and changed her tax home to Puerto Rico on the same date. Filing state taxes free Cheryl satisfied the presence test in 2010 and, under the year-of-move exception, she was considered a bona fide resident of Puerto Rico for the rest of 2010. Filing state taxes free On March 1, 2010, the closing value of Cheryl's stock in the Rose Corporation was $2,000. Filing state taxes free On January 5, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold all her Rose Corporation stock for $7,000. Filing state taxes free Under the earlier rules, none of Cheryl's $6,000 gain will be treated as income from sources within Puerto Rico. Filing state taxes free The source rules discussed in the preceding paragraphs supplement, and may apply in conjunction with, an existing special rule. Filing state taxes free This existing special rule applies if you are a U. Filing state taxes free S. Filing state taxes free citizen or resident alien who becomes a bona fide resident of American Samoa, the CNMI, or Guam, and who has gain from the disposition of certain U. Filing state taxes free S. Filing state taxes free assets during the 10-year period beginning when you became a bona fide resident. Filing state taxes free The gain is U. Filing state taxes free S. Filing state taxes free source income that generally is subject to U. Filing state taxes free S. Filing state taxes free tax if the property is either (1) located in the United States; (2) stock issued by a U. Filing state taxes free S. Filing state taxes free corporation or a debt obligation of a U. Filing state taxes free S. Filing state taxes free person or of the United States, a state (or political subdivision), or the District of Columbia; or (3) property that has a basis in whole or in part by reference to property described in (1) or (2). Filing state taxes free See chapter 3 for filing information. Filing state taxes free Special election. Filing state taxes free   For dispositions after April 11, 2005, you can choose to treat the part of gain (or loss) attributable to the time you held the property while a bona fide resident of the relevant possession (the possession holding period) as gain (or loss) from sources within that possession. Filing state taxes free Make the election by reporting the gain attributable to the possession holding period on your income tax return for the year of disposition. Filing state taxes free This election overrides both of the special rules discussed earlier. Filing state taxes free   There are two methods for figuring the gain for the possession holding period, one for marketable securities and another for other types of investment property. Filing state taxes free Marketable securities. Filing state taxes free   Marketable securities are those actively traded on an established financial market, such as stock in a publicly held corporation. Filing state taxes free Under the special election, allocate the gain (or loss) by figuring the appreciation separately for your possession and U. Filing state taxes free S. Filing state taxes free holding periods. Filing state taxes free   Your possession holding period begins on the first day you do not have a tax home outside the relevant possession. Filing state taxes free The gain (or loss) attributable to the possession holding period is the difference in fair market value of the security at the close of the market on the first and last days of this holding period. Filing state taxes free This is your gain (or loss) that is treated as being from sources within the relevant possession. Filing state taxes free If you were a bona fide resident of the relevant possession for more than one continuous period, combine the gains (or losses) from each possession holding period. Filing state taxes free Example 2. Filing state taxes free Assume the same facts as in Example 1, except that Cheryl makes the special election to allocate the gain between her U. Filing state taxes free S. Filing state taxes free and possession holding periods. Filing state taxes free Cheryl's possession holding period began March 1, 2010, the date her tax home changed to Puerto Rico. Filing state taxes free Therefore, the portion of gain attributable to her possession holding period is $5,000 ($7,000 sale price – $2,000 closing value on first day of the possession holding period). Filing state taxes free By reporting $5,000 of her $6,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. Filing state taxes free Other personal property. Filing state taxes free   For personal property other than marketable securities, use a time-based allocation. Filing state taxes free Figure the gain (or loss) attributable to the possession holding period by multiplying your total gain (or loss) by the following fraction. Filing state taxes free      Number of days in the  possession holding period     Total number of days  in your holding period         The result is your gain (or loss) that is treated as being from sources within the relevant possession. Filing state taxes free Example 3. Filing state taxes free In addition to the stock in Rose Corporation, Cheryl acquired a 5% interest in the Alder Partnership on January 1, 2009. Filing state taxes free On March 1, 2010, when she established bona fide residency in Puerto Rico, her partnership interest was not considered a marketable security. Filing state taxes free On September 16, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold her interest in Alder Partnership for a $100,000 gain. Filing state taxes free She had owned the interest for a total of 1,720 days. Filing state taxes free Cheryl's possession holding period (from March 1, 2010, through September 16, 2013) is 1,296 days. Filing state taxes free The portion of her gain attributable to Puerto Rico is $75,349 ($100,000 x (1,296 Puerto Rico days ÷ 1,720 total days)). Filing state taxes free By reporting $75,349 of her $100,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. Filing state taxes free Scholarships, Fellowships, Grants, Prizes, and Awards The source of these types of income is generally the residence of the payer, regardless of who actually disburses the funds. Filing state taxes free Therefore, in order to be possession source income, the payer must be a resident of the relevant possession, such as an individual who is a bona fide resident or a corporation created or organized in that possession. Filing state taxes free These rules do not apply to amounts paid as salary or other compensation for services. Filing state taxes free See Compensation for Labor or Personal Services, earlier in this chapter, for the source rules that apply. Filing state taxes free Effectively Connected Income In limited circumstances, some kinds of income from sources outside the relevant possession must be treated as effectively connected with a trade or business in that possession. Filing state taxes free These circumstances are listed below. Filing state taxes free You have an office or other fixed place of business in the relevant possession to which the income can be attributed. Filing state taxes free That office or place of business is a material factor in producing the income. Filing state taxes free The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. Filing state taxes free An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. Filing state taxes free The three kinds of income from sources outside the relevant possession to which these rules apply are the following. Filing state taxes free Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the relevant possession or from any interest in such property. Filing state taxes free Included are rents or royalties for the use of, or for the privilege of using, outside the relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the relevant possession. Filing state taxes free Dividends or interest from the active conduct of a banking, financing, or similar business in the relevant possession. Filing state taxes free Income, gain, or loss from the sale or exchange outside the relevant possession, through the office or other fixed place of business in the relevant possession, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. Filing state taxes free Item (3) will not apply if you sold the property for use, consumption, or disposition outside the relevant possession and an office or other fixed place of business in a foreign country was a material factor in the sale. Filing state taxes free Example. Filing state taxes free Marcy Jackson is a bona fide resident of American Samoa. Filing state taxes free Her business, which she conducts from an office in American Samoa, is developing and selling specialized computer software. Filing state taxes free A software purchaser will frequently pay Marcy an additional amount to install the software on the purchaser's operating system and to ensure that the software is functioning properly. Filing state taxes free Marcy installs the software at the purchaser's place of business, which may be in American Samoa, in the United States, or in another country. Filing state taxes free The income from selling the software is effectively connected with the conduct of Marcy's business in American Samoa, even though the product's destination may be outside the possession. Filing state taxes free However, the compensation she receives for installing the software (personal services) outside of American Samoa is not effectively connected with the conduct of her business in the possession—the income is sourced where she performs the services. Filing state taxes free Prev  Up  Next   Home   More Online Publications