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Free 1040nr software 5. Free 1040nr software   Figuring Your Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Identification NumberF-1 and M-1 visa holders. Free 1040nr software J-1 visa holders. Free 1040nr software Filing StatusResident Aliens Nonresident Aliens Reporting Your Income DeductionsResident Aliens Nonresident Aliens ExemptionsResident Aliens Nonresident Aliens Itemized DeductionsResident Aliens Nonresident Aliens Tax Credits and PaymentsResident Aliens Nonresident Aliens Bona Fide Residents of American Samoa or Puerto Rico Introduction After you have determined your alien status, the source of your income, and if and how that income is taxed in the United States, your next step is to figure your tax. Free 1040nr software The information in this chapter is not as comprehensive for resident aliens as it is for nonresident aliens. Free 1040nr software Resident aliens should get publications, forms, and instructions for U. Free 1040nr software S. Free 1040nr software citizens, because the information for filing returns for resident aliens is generally the same as for U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software If you are both a nonresident alien and a resident alien in the same tax year, see chapter 6 for a discussion of dual-status aliens. Free 1040nr software Topics - This chapter discusses: Identification numbers, Filing status, Deductions, Exemptions, Tax credits and payments, and Special rules for bona fide residents of American Samoa and Puerto Rico. Free 1040nr software Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 521 Moving Expenses 526 Charitable Contributions 535 Business Expenses 597 Information on the United States–Canada Income Tax Treaty Form (and Instructions) W-7 Application for IRS Individual Taxpayer Identification Number 1040 U. Free 1040nr software S. Free 1040nr software Individual Income Tax Return 1040NR U. Free 1040nr software S. Free 1040nr software Nonresident Alien Income Tax Return 1040NR-EZ U. Free 1040nr software S. Free 1040nr software Income Tax Return for Certain Nonresident Aliens With No Dependents 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 3903 Moving Expenses 4563 Exclusion of Income for Bona Fide Residents of American Samoa 8959 Additional Medicare Tax See chapter 12 for information about getting these publications and forms. Free 1040nr software Tax Year You must figure your income and file a tax return on the basis of an annual accounting period called a tax year. Free 1040nr software If you have not previously established a fiscal tax year, your tax year is the calendar year. Free 1040nr software A calendar year is 12 consecutive months ending on December 31. Free 1040nr software If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December or a 52–53 week year) and are considered to be a U. Free 1040nr software S. Free 1040nr software resident for any calendar year, you will be treated as a U. Free 1040nr software S. Free 1040nr software resident for any part of your fiscal year that falls within that calendar year. Free 1040nr software Identification Number A taxpayer identification number must be furnished on returns, statements, and other tax-related documents. Free 1040nr software For an individual, this is a social security number (SSN). Free 1040nr software If you do not have and are not eligible to get an SSN, you must apply for an individual taxpayer identification number (ITIN). Free 1040nr software An employer identification number (EIN) is required if you are engaged in a trade or business as a sole proprietor and have employees or a qualified retirement plan. Free 1040nr software You must furnish a taxpayer identification number if you are: An alien who has income effectively connected with the conduct of a U. Free 1040nr software S. Free 1040nr software trade or business at any time during the year, An alien who has a U. Free 1040nr software S. Free 1040nr software office or place of business at any time during the year, A nonresident alien spouse treated as a resident, as discussed in chapter 1, or Any other alien who files a tax return, an amended return, or a refund claim (but not information returns). Free 1040nr software Social security number (SSN). Free 1040nr software   Generally, you can get an SSN if you have been lawfully admitted to the United States for permanent residence or under other immigration categories that authorize U. Free 1040nr software S. Free 1040nr software employment. Free 1040nr software   To apply for this number, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration (SSA) office or call the SSA at 1-800-772-1213. Free 1040nr software You can also download Form SS-5 from the SSA's website at www. Free 1040nr software socialsecurity. Free 1040nr software gov/ssnumber/ss5. Free 1040nr software htm. Free 1040nr software You must visit an SSA office in person and submit your Form SS-5 along with original documentation showing your age, identity, immigration status, and authority to work in the United States. Free 1040nr software Generally, you will receive your card about 2 weeks after the SSA has all of the necessary information. Free 1040nr software F-1 and M-1 visa holders. Free 1040nr software    If you are an F-1 or M-1 student, you must also show your Form I-20. Free 1040nr software For more information, see SSA Publication 05-10181, International Students and Social Security Numbers, available online at www. Free 1040nr software socialsecurity. Free 1040nr software gov/pubs/10181. Free 1040nr software html. Free 1040nr software J-1 visa holders. Free 1040nr software   If you are a J-1 exchange visitor, you will also need to show your Form DS-2019. Free 1040nr software For more information, see SSA Publication 05-10107, Foreign Workers and Social Security Numbers, available online at www. Free 1040nr software socialsecurity. Free 1040nr software gov/pubs/10107. Free 1040nr software html. Free 1040nr software Individual taxpayer identification number (ITIN). Free 1040nr software   If you do not have and are not eligible to get an SSN, you must apply for an ITIN. Free 1040nr software For details on how to do so, see Form W-7 and its instructions. Free 1040nr software Allow 6 to 10 weeks for the IRS to notify you of your ITIN. Free 1040nr software If you already have an ITIN, enter it wherever an SSN is required on your tax return. Free 1040nr software   An ITIN is for tax use only. Free 1040nr software It does not entitle you to social security benefits or change your employment or immigration status under U. Free 1040nr software S. Free 1040nr software law. Free 1040nr software   In addition to those aliens who are required to furnish a taxpayer identification number and are not eligible for an SSN, a Form W-7 must be filed for: Alien individuals who are claimed as dependents and are not eligible for an SSN, and Alien spouses who are claimed as exemptions and are not eligible for an SSN. Free 1040nr software Employer identification number (EIN). Free 1040nr software   An individual may use an SSN (or ITIN) for individual taxes and an EIN for business taxes. Free 1040nr software To apply for an EIN, file Form SS-4, Application for Employer Identification Number, with the IRS. Free 1040nr software Filing Status The amount of your tax depends on your filing status. Free 1040nr software Your filing status is important in determining whether you can take certain deductions and credits. Free 1040nr software The rules for determining your filing status are different for resident aliens and nonresident aliens. Free 1040nr software Resident Aliens Resident aliens can use the same filing statuses available to U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software See your form instructions or Publication 501 for more information on filing status. Free 1040nr software Married filing jointly. Free 1040nr software   Generally, you can file as married filing jointly only if both you and your spouse were resident aliens for the entire tax year, or if you make one of the choices discussed in chapter 1 to treat your spouse as a resident alien for the entire tax year. Free 1040nr software Qualifying widow(er). Free 1040nr software   If your spouse died in 2011 or 2012, you did not remarry before the end of 2013, and you have a dependent child living with you, you may qualify to file as a qualifying widow(er) and use the joint return tax rates. Free 1040nr software This applies only if you could have filed a joint return with your spouse for the year your spouse died. Free 1040nr software Head of household. Free 1040nr software   You can qualify as head of household if you are unmarried or considered unmarried on the last day of the year and you pay more than half the cost of keeping up a home for you and a qualifying person. Free 1040nr software You must be a resident alien for the entire tax year. Free 1040nr software   You are considered unmarried for this purpose if your spouse was a nonresident alien at any time during the year and you do not make one of the choices discussed in chapter 1 to treat your spouse as a resident alien for the entire tax year. Free 1040nr software Note. Free 1040nr software   Even if you are considered unmarried for head of household purposes because you are married to a nonresident alien, you may still be considered married for purposes of the earned income credit. Free 1040nr software In that case, you will not be entitled to the credit. Free 1040nr software See Publication 596 for more information. Free 1040nr software Nonresident Aliens If you are a nonresident alien filing Form 1040NR, you may be able to use one of the filing statuses discussed later. Free 1040nr software If you are filing Form 1040NR-EZ, you can only claim “Single nonresident alien” or “Married nonresident alien” as your filing status. Free 1040nr software Married nonresident alien. Free 1040nr software   Married nonresident aliens who are not married to U. Free 1040nr software S. Free 1040nr software citizens or residents generally must use the Tax Table column or the Tax Computation Worksheet for married filing separate returns when determining the tax on income effectively connected with a U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software Exceptions. Free 1040nr software   Married nonresident aliens normally cannot use the Tax Table column or the Tax Computation Worksheet for single individuals. Free 1040nr software However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a married resident of Canada, Mexico, South Korea, or are a married U. Free 1040nr software S. Free 1040nr software national. Free 1040nr software See the instructions for Form 1040NR or Form 1040NR-EZ to see if you qualify. Free 1040nr software U. Free 1040nr software S. Free 1040nr software national is defined later in this section under Qualifying widow(er) . Free 1040nr software   A nonresident alien generally cannot file as married filing jointly. Free 1040nr software However, a nonresident alien who is married to a U. Free 1040nr software S. Free 1040nr software citizen or resident can choose to be treated as a resident and file a joint return on Form 1040, Form 1040A, or Form 1040EZ. Free 1040nr software For information on these choices, see chapter 1. Free 1040nr software If you do not make the choice to file jointly, file Form 1040NR or Form 1040NR-EZ and use the Tax Table column or the Tax Computation Worksheet for married individuals filing separately. Free 1040nr software Qualifying widow(er). Free 1040nr software   You may be eligible to file as a qualifying widow(er) and use the joint return tax rates if all of the following conditions apply. Free 1040nr software You were a resident of Canada, Mexico, or South Korea, or a U. Free 1040nr software S. Free 1040nr software national (defined later). Free 1040nr software Your spouse died in 2011 or 2012 and you did not remarry before the end of 2013. Free 1040nr software You have a dependent child living with you. Free 1040nr software See the instructions for Form 1040NR for the rules for filing as a qualifying widow(er) with a dependent child. Free 1040nr software   A U. Free 1040nr software S. Free 1040nr software national is an individual who, although not a U. Free 1040nr software S. Free 1040nr software citizen, owes his or her allegiance to the United States. Free 1040nr software U. Free 1040nr software S. Free 1040nr software nationals include American Samoans and Northern Mariana Islanders who chose to become U. Free 1040nr software S. Free 1040nr software nationals instead of U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software Head of household. Free 1040nr software   You cannot file as head of household if you are a nonresident alien at any time during the tax year. Free 1040nr software However, if you are married, your spouse can qualify as a head of household if: Your spouse is a resident alien or U. Free 1040nr software S. Free 1040nr software citizen for the entire tax year, You do not choose to be treated as a resident alien, and Your spouse meets the other requirements for this filing status, as discussed earlier under Resident Aliens . Free 1040nr software Note. Free 1040nr software   Even if your spouse is considered unmarried for head of household purposes because you are a nonresident alien, your spouse may still be considered married for purposes of the earned income credit. Free 1040nr software In that case, your spouse will not be entitled to the credit. Free 1040nr software See Publication 596 for more information. Free 1040nr software Estates and trusts. Free 1040nr software   A nonresident alien estate or trust using Form 1040NR must use Tax Rate Schedule W in the Form 1040NR instructions when determining the tax on income effectively connected with a U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software Special rules for aliens from certain U. Free 1040nr software S. Free 1040nr software possessions. Free 1040nr software   A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico for the entire tax year and who is temporarily working in the United States should read Bona Fide Residents of American Samoa or Puerto Rico, at the end of this chapter, for information about special rules. Free 1040nr software Reporting Your Income You must report each item of income that is taxable according to the rules in chapters 2, 3, and 4. Free 1040nr software For resident aliens, this includes income from sources both within and outside the United States. Free 1040nr software For nonresident aliens, this includes both income that is effectively connected with a trade or business in the United States (subject to graduated tax rates) and income from U. Free 1040nr software S. Free 1040nr software sources that is not effectively connected (subject to a flat 30% tax rate or lower tax treaty rate). Free 1040nr software Deductions Resident and nonresident aliens can claim similar deductions on their U. Free 1040nr software S. Free 1040nr software tax returns. Free 1040nr software However, nonresident aliens generally can claim only deductions related to income that is effectively connected with their U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software Resident Aliens You can claim the same deductions allowed to U. Free 1040nr software S. Free 1040nr software citizens if you are a resident alien for the entire tax year. Free 1040nr software While the discussion that follows contains some of the same general rules and guidelines that apply to you, it is specifically directed toward nonresident aliens. Free 1040nr software You should get Form 1040 and instructions for more information on how to claim your allowable deductions. Free 1040nr software Nonresident Aliens You can claim deductions to figure your effectively connected taxable income. Free 1040nr software You generally cannot claim deductions related to income that is not connected with your U. Free 1040nr software S. Free 1040nr software business activities. Free 1040nr software Except for personal exemptions, and certain itemized deductions, discussed later, you can claim deductions only to the extent they are connected with your effectively connected income. Free 1040nr software Ordinary and necessary business expenses. Free 1040nr software   You can deduct all ordinary and necessary expenses in the operation of your U. Free 1040nr software S. Free 1040nr software trade or business to the extent they relate to income effectively connected with that trade or business. Free 1040nr software The deduction for travel expenses while in the United States is discussed under Itemized Deductions, later. Free 1040nr software For information about other business expenses, see Publication 535. Free 1040nr software Losses. Free 1040nr software   You can deduct losses resulting from transactions that you entered into for profit and that you were not reimbursed for by insurance, etc. Free 1040nr software to the extent that they relate to income that is effectively connected with a trade or business in the United States. Free 1040nr software Educator expenses. Free 1040nr software   If you were an eligible educator in 2013, you can deduct as an adjustment to income up to $250 in unreimbursed qualified expenses you paid or incurred during 2013 for books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment, and other equipment and materials used in the classroom. Free 1040nr software For more information, see your tax form instructions. Free 1040nr software Individual retirement arrangement (IRA). Free 1040nr software   If you made contributions to a traditional IRA for 2013, you may be able to take an IRA deduction. Free 1040nr software But you must have taxable compensation effectively connected with a U. Free 1040nr software S. Free 1040nr software trade or business to do so. Free 1040nr software A Form 5498 should be sent to you by May 31, 2014, that shows all contributions to your traditional IRA for 2013. Free 1040nr software If you were covered by a retirement plan (qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc. Free 1040nr software ) at work or through self-employment, your IRA deduction may be reduced or eliminated. Free 1040nr software But you can still make contributions to a traditional IRA even if you cannot deduct them. Free 1040nr software If you made nondeductible contributions to a traditional IRA for 2013, you must report them on Form 8606, Nondeductible IRAs. Free 1040nr software   For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Free 1040nr software Moving expenses. Free 1040nr software   If you are a nonresident alien temporarily in the United States earning taxable income for performing personal services, you can deduct moving expenses to the United States if you meet both of the following tests. Free 1040nr software You are a full-time employee for at least 39 weeks during the 12 months right after you move, or if you are self-employed, you work full time for at least 39 weeks during the first 12 months and 78 weeks during the first 24 months right after you move. Free 1040nr software Your new job location is at least 50 miles farther (by the shortest commonly traveled route) from your former home than your former job location was. Free 1040nr software If you had no former job location, the new job location must be at least 50 miles from your former home. Free 1040nr software   You cannot deduct the moving expense you have when returning to your home abroad or moving to a foreign job site. Free 1040nr software   Figure your deductible moving expenses to the United States on Form 3903, and deduct them on line 26 of Form 1040NR. Free 1040nr software   For more information on the moving expense deduction, see Publication 521. Free 1040nr software Reimbursements. Free 1040nr software   If your employer reimbursed you for allowable moving expenses under an accountable plan, your employer should have excluded these reimbursements from your income. Free 1040nr software You can only deduct allowable moving expenses that were not reimbursed by your employer or that were reimbursed but the reimbursement was included in your income. Free 1040nr software For more information, see Publication 521. Free 1040nr software Moving expense or travel expense. Free 1040nr software   If you deduct moving expenses to the United States, you cannot also deduct travel expenses (discussed later under Itemized Deductions) while temporarily away from your tax home in a foreign country. Free 1040nr software Moving expenses are based on a change in your principal place of business while travel expenses are based on your temporary absence from your principal place of business. Free 1040nr software Self-employed SEP, SIMPLE, and qualified retirement plans. Free 1040nr software   If you are self-employed, you may be able to deduct contributions to a SEP, SIMPLE, or qualified retirement plan that provides retirement benefits for yourself and your common-law employees, if any. Free 1040nr software To make deductible contributions for yourself, you must have net earnings from self-employment that are effectively connected with your U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software   Get Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans), for further information. Free 1040nr software Penalty on early withdrawal of savings. Free 1040nr software   You must include in income all effectively connected interest income you receive or that is credited to your account during the year. Free 1040nr software Do not reduce it by any penalty you must pay on an early withdrawal from a time savings account. Free 1040nr software However, if the interest income is effectively connected with your U. Free 1040nr software S. Free 1040nr software trade or business during the year, you can deduct on line 30 of Form 1040NR the amount of the early withdrawal penalty that the banking institution charged. Free 1040nr software Student loan interest expense. Free 1040nr software   If you paid interest on a student loan in 2013, you may be able to deduct up to $2,500 of the interest you paid. Free 1040nr software Generally, you can claim the deduction if all the following requirements are met. Free 1040nr software Your filing status is any filing status except married filing separately. Free 1040nr software Your modified adjusted gross income is less than $75,000. Free 1040nr software No one else is claiming an exemption for you on his or her 2013 tax return. Free 1040nr software You paid interest on a loan taken out only to pay tuition and other qualified higher education expenses for yourself, your spouse, someone who was your dependent when the loan was taken out, or someone you could have claimed as a dependent for the year the loan was taken out except that: The person filed a joint return, The person had gross income that was equal to or more than the exemption amount for that year ($3,900 for 2013), or You could be claimed as a dependent on someone else's return. Free 1040nr software The loan is not from a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan. Free 1040nr software The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out. Free 1040nr software The person for whom the expenses were paid or incurred was an eligible student. Free 1040nr software Use the worksheet in the Form 1040NR or Form 1040NR-EZ instructions to figure the deduction. Free 1040nr software For more information, see Publication 970, Tax Benefits for Education. Free 1040nr software Exemptions Resident aliens can claim personal exemptions and exemptions for dependents in the same way as U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software However, nonresident aliens generally can claim only a personal exemption for themselves on their U. Free 1040nr software S. Free 1040nr software tax return. Free 1040nr software Resident Aliens You can claim personal exemptions and exemptions for dependents according to the dependency rules for U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software You can claim an exemption for your spouse on a separate return if your spouse had no gross income for U. Free 1040nr software S. Free 1040nr software tax purposes and was not the dependent of another taxpayer. Free 1040nr software You can claim this exemption even if your spouse has not been a resident alien for a full tax year or is an alien who has not come to the United States. Free 1040nr software You can claim an exemption for each person who qualifies as a dependent according to the rules for U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software The dependent must be a citizen or national (defined earlier) of the United States or be a resident of the United States, Canada, or Mexico for some part of the calendar year in which your tax year begins. Free 1040nr software Get Publication 501 for more information. Free 1040nr software Your spouse and each dependent for whom you claim an exemption must have either an SSN or an ITIN. Free 1040nr software See Identification Number, earlier. Free 1040nr software Nonresident Aliens Generally, if you are a nonresident alien engaged in a trade or business in the United States, you can claim only one personal exemption ($3,900 for 2013). Free 1040nr software You may be able to claim an exemption for a spouse and a dependent if you are described in any of the following discussions. Free 1040nr software Your spouse and each dependent for whom you claim an exemption must have either an SSN or an ITIN. Free 1040nr software See Identification Number, earlier. Free 1040nr software Residents of Mexico or Canada or U. Free 1040nr software S. Free 1040nr software nationals. Free 1040nr software   If you are a resident of Mexico or Canada or a national of the United States (defined earlier), you can also claim a personal exemption for your spouse if your spouse had no gross income for U. Free 1040nr software S. Free 1040nr software tax purposes and cannot be claimed as the dependent on another U. Free 1040nr software S. Free 1040nr software taxpayer's return. Free 1040nr software In addition, you can claim exemptions for your dependents who meet certain tests. Free 1040nr software Residents of Mexico, Canada, or nationals of the United States must use the same rules as U. Free 1040nr software S. Free 1040nr software citizens to determine who is a dependent and for which dependents exemptions can be claimed. Free 1040nr software See Publication 501 for these rules. Free 1040nr software For purposes of these rules, dependents who are U. Free 1040nr software S. Free 1040nr software nationals meet the citizenship test discussed in Publication 501. Free 1040nr software Residents of South Korea. Free 1040nr software   Nonresident aliens who are residents of South Korea may be able to claim exemptions for a spouse and children. Free 1040nr software The income tax treaty with South Korea imposes two additional requirements on South Korean residents: The spouse and all children claimed must live with the alien in the United States at some time during the tax year, and The additional deduction for the exemptions must be prorated based on the ratio of the alien's U. Free 1040nr software S. Free 1040nr software source gross income effectively connected with a U. Free 1040nr software S. Free 1040nr software trade or business for the tax year to the alien's entire income from all sources during the tax year. Free 1040nr software Example. Free 1040nr software Mr. Free 1040nr software Park, a nonresident alien who is a resident of South Korea, lives temporarily in the United States with his wife and two children. Free 1040nr software During the tax year he receives U. Free 1040nr software S. Free 1040nr software compensation of $18,000. Free 1040nr software He also receives $6,000 of income from sources outside the United States that is not effectively connected with his U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software Thus, his total income for the year is $24,000. Free 1040nr software Mr. Free 1040nr software Park meets all requirements for claiming exemptions for his spouse and two children. Free 1040nr software The additional deduction for 2013 is $8,775 figured as follows: $18,000 $24,000 × $11,700* = $8,775               *3 × $3,900 = $11,700   Students and business apprentices from India. Free 1040nr software   Students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty may be able to claim exemptions for their spouse and dependents. Free 1040nr software   You can claim an exemption for your spouse if he or she had no gross income during the year and cannot be claimed as a dependent on another U. Free 1040nr software S. Free 1040nr software taxpayer's return. Free 1040nr software   You can claim exemptions for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software See Publication 501 for these rules. Free 1040nr software   List your spouse and dependents on line 7c of Form 1040NR. Free 1040nr software Enter the total on the appropriate line to the right of line 7c. Free 1040nr software Itemized Deductions Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. Free 1040nr software However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software Resident Aliens You can claim the same itemized deductions as U. Free 1040nr software S. Free 1040nr software citizens, using Schedule A of Form 1040. Free 1040nr software These deductions include certain medical and dental expenses, state and local income taxes, real estate taxes, interest you paid on a home mortgage, charitable contributions, casualty and theft losses, and miscellaneous deductions. Free 1040nr software If you do not itemize your deductions, you can claim the standard deduction for your particular filing status. Free 1040nr software For further information, see Form 1040 and instructions. Free 1040nr software Nonresident Aliens You can deduct certain itemized deductions if you receive income effectively connected with your U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software These deductions include state and local income taxes, charitable contributions to U. Free 1040nr software S. Free 1040nr software organizations, casualty and theft losses, and miscellaneous deductions. Free 1040nr software Use Schedule A of Form 1040NR to claim itemized deductions. Free 1040nr software If you are filing Form 1040NR-EZ, you can only claim a deduction for state or local income taxes. Free 1040nr software If you are claiming any other itemized deduction, you must file Form 1040NR. Free 1040nr software Standard deduction. Free 1040nr software   Nonresident aliens cannot claim the standard deduction. Free 1040nr software However, see Students and business apprentices from India , next. Free 1040nr software Students and business apprentices from India. Free 1040nr software   A special rule applies to students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty. Free 1040nr software You can claim the standard deduction provided you do not claim itemized deductions. Free 1040nr software   Use Worksheet 5-1 to figure your standard deduction. Free 1040nr software If you are married and your spouse files a return and itemizes deductions, you cannot take the standard deduction. Free 1040nr software State and local income taxes. Free 1040nr software   You can deduct state and local income taxes you paid on income that is effectively connected with a trade or business in the United States. Free 1040nr software If you received a refund or rebate in 2013 of taxes you paid in an earlier year, do not reduce your deduction by that amount. Free 1040nr software Instead, you must include the refund or rebate in income if you deducted the taxes in the earlier year and the deduction reduced your tax. Free 1040nr software See Recoveries in Publication 525 for details on how to figure the amount to include in income. Free 1040nr software Charitable contributions. Free 1040nr software   You can deduct your charitable contributions or gifts to qualified organizations subject to certain limits. Free 1040nr software Qualified organizations include organizations that are religious, charitable, educational, scientific, or literary in nature, or that work to prevent cruelty to children or animals. Free 1040nr software Certain organizations that promote national or international amateur sports competition are also qualified organizations. Free 1040nr software Foreign organizations. Free 1040nr software   Contributions made directly to a foreign organization are not deductible. Free 1040nr software However, you can deduct contributions to a U. Free 1040nr software S. Free 1040nr software organization that transfers funds to a charitable foreign organization if the U. Free 1040nr software S. Free 1040nr software organization controls the use of the funds or if the foreign organization is only an administrative arm of the U. Free 1040nr software S. Free 1040nr software organization. Free 1040nr software   For more information about organizations that qualify to receive charitable contributions, see Publication 526, Charitable Contributions. Free 1040nr software Worksheet 5-1. Free 1040nr software 2013 Standard Deduction Worksheet for Students and Business Apprentices From India Caution. Free 1040nr software If you are married filing a separate return and your spouse itemizes deductions, do not complete this worksheet. Free 1040nr software You cannot take the standard deduction even if you were born before January 2, 1949, or are blind. Free 1040nr software 1 Enter the amount shown below for your filing status. Free 1040nr software           Single or married filing separately—$6,100 Qualifying widow(er)—$12,200 1. Free 1040nr software           2 Can you be claimed as a dependent on someone else's U. Free 1040nr software S. Free 1040nr software income tax return?  No. Free 1040nr software Enter the amount from line 1 on line 4. Free 1040nr software Skip line 3 and go to line 5. Free 1040nr software   Yes. Free 1040nr software Go to line 3. Free 1040nr software         3 Is your earned income* more than $650?           Yes. Free 1040nr software Add $350 to your earned income. Free 1040nr software Enter the total. Free 1040nr software           No. Free 1040nr software Enter $1,000 3. Free 1040nr software       4 Enter the smaller of line 1 or line 3 4. Free 1040nr software   5 If born before January 2, 1949, OR blind, enter $1,200 ($1,500 if single). Free 1040nr software If born before January 2, 1949, AND blind, enter $2,400 ($3,000 if single). Free 1040nr software Otherwise, enter -0- 5. Free 1040nr software   6 Add lines 4 and 5. Free 1040nr software Enter the total here and on Form 1040NR, line 38 (or Form 1040NR-EZ, line 11). Free 1040nr software Print “Standard Deduction Allowed Under U. Free 1040nr software S. Free 1040nr software –India Income Tax Treaty” in the space to the left of these lines. Free 1040nr software This is your standard deduction for 2013. Free 1040nr software 6. Free 1040nr software   *Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Free 1040nr software It also includes any amount received as a scholarship that you must include in your income. Free 1040nr software Generally, your earned income is the total of the amount(s) you reported on Form 1040NR, lines 8,12,13, and 19, minus amounts on lines 27 and 31 (or Form 1040NR-EZ, lines 3 and 5, minus any amount on line 8). Free 1040nr software Contributions from which you benefit. Free 1040nr software   If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Free 1040nr software   If you pay more than the fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. Free 1040nr software For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Free 1040nr software Cash contributions. Free 1040nr software   You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written record from the charity. Free 1040nr software The written record must include the name of the charity, date of the contribution, and the amount of the contribution. Free 1040nr software   You may deduct a cash contribution of $250 or more only if you have a written statement from the charitable organization showing: The amount of any money contributed, Whether the organization gave you any goods or services in return for your contribution, and A description and estimate of the value of any goods or services described in (2). Free 1040nr software If you received only intangible religious benefits, the organization must state this, but it does not have to describe or value the benefit. Free 1040nr software Noncash contributions. Free 1040nr software   For contributions not made in cash, the records you must keep depend on the amount of your deduction. Free 1040nr software See Publication 526 for details. Free 1040nr software For example, if you make a noncash contribution and the amount of your deduction is more than $500, you must complete and attach to your tax return Form 8283, Noncash Charitable Contributions. Free 1040nr software If you deduct more than $500 for a contribution of a motor vehicle, boat, or airplane, you must also attach a statement from the charitable organization to your return. Free 1040nr software If your total deduction is over $5,000, you also may have to get appraisals of the values of the property. Free 1040nr software If the donated property is valued at more than $5,000, you must obtain a qualified appraisal. Free 1040nr software You generally must attach to your tax return an appraisal of any property if your deduction for the property is more than $500,000. Free 1040nr software See Form 8283 and its instructions for details. Free 1040nr software Contributions of appreciated property. Free 1040nr software   If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Free 1040nr software However, if you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Free 1040nr software Your basis in the property is generally what you paid for it. Free 1040nr software If you need more information about basis, get Publication 551, Basis of Assets. Free 1040nr software   Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. Free 1040nr software For information about these rules, see Publication 526. Free 1040nr software Limit. Free 1040nr software   The amount you can deduct in a tax year is limited in the same way it is for a citizen or resident of the United States. Free 1040nr software For a discussion of limits on charitable contributions and other information, get Publication 526. Free 1040nr software Casualty and theft losses. Free 1040nr software   You can deduct your loss from fire, storm, shipwreck, or other casualty, or theft of property even though your property is not connected with a U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software The property can be personal use property or income-producing property not connected with a U. Free 1040nr software S. Free 1040nr software trade or business. Free 1040nr software The property must be located in the United States at the time of the casualty or theft. Free 1040nr software You can deduct theft losses only in the year in which you discover the loss. Free 1040nr software   The amount of the loss is the fair market value of the property immediately before the casualty or theft less its fair market value immediately after the casualty or theft (but not more than its cost or adjusted basis) less any insurance or other reimbursement. Free 1040nr software The fair market value of property immediately after a theft is considered zero, because you no longer have the property. Free 1040nr software   If your property is covered by insurance, you should file a timely insurance claim for reimbursement. Free 1040nr software If you do not, you cannot deduct this loss as a casualty or theft loss. Free 1040nr software   Figure your deductible casualty and theft losses on Form 4684, Casualties and Thefts. Free 1040nr software Losses from personal use property. Free 1040nr software    You cannot deduct the first $100 of each casualty or theft loss to property held for personal use. Free 1040nr software You can deduct only the total of these losses for the year (reduced by the $100 limit) that is more than 10% of your adjusted gross income (line 37, Form 1040NR) for the year. Free 1040nr software Losses from income-producing property. Free 1040nr software   These losses are not subject to the limitations that apply to personal use property. Free 1040nr software Use Section B of Form 4684 to figure your deduction for these losses. Free 1040nr software Job expenses and other miscellaneous deductions. Free 1040nr software   You can deduct job expenses, such as allowable unreimbursed travel expenses (discussed next), and other miscellaneous deductions. Free 1040nr software Generally, the allowable deductions must be related to effectively connected income. Free 1040nr software Deductible expenses include: Union dues, Safety equipment and small tools needed for your job, Dues to professional organizations, Subscriptions to professional journals, Tax return preparation fees, and Casualty and theft losses of property used in performing services as an employee (employee property). Free 1040nr software   Most miscellaneous itemized deductions are deductible only if they are more than 2% of your adjusted gross income (line 37, Form 1040NR). Free 1040nr software For more information on miscellaneous deductions, see the instructions for Form 1040NR. Free 1040nr software Travel expenses. Free 1040nr software   You may be able to deduct your ordinary and necessary travel expenses while you are temporarily performing personal services in the United States. Free 1040nr software Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. Free 1040nr software You must be able to show you were present in the United States on an activity that required your temporary absence from your regular place of work. Free 1040nr software   For example, if you have established a “tax home” through regular employment in a foreign country, and intend to return to similar employment in the same country at the end of your temporary stay in the United States, you can deduct reasonable travel expenses you paid. Free 1040nr software You cannot deduct travel expenses for other members of your family or party. Free 1040nr software Deductible travel expenses. Free 1040nr software   If you qualify, you can deduct your expenses for: Transportation—airfare, local transportation, including train, bus, etc. Free 1040nr software , Lodging—rent paid, utilities (do not include telephone), hotel or motel room expenses, and Meal expenses—actual expenses allowed if you keep records of the amounts, or, if you do not wish to keep detailed records, you are generally allowed a standard meal allowance amount depending on the date and area of your travel. Free 1040nr software You generally can deduct only 50% of unreimbursed meal expenses. Free 1040nr software The standard meal allowance rates for high-cost areas are available at www. Free 1040nr software gsa. Free 1040nr software gov/perdiem. Free 1040nr software The rates for other areas are in Publication 463. Free 1040nr software   Use Form 2106 or 2106-EZ to figure your allowable expenses that you claim on line 7 of Schedule A (Form 1040NR). Free 1040nr software Expenses allocable to U. Free 1040nr software S. Free 1040nr software tax-exempt income. Free 1040nr software   You cannot deduct an expense, or part of an expense, that is allocable to U. Free 1040nr software S. Free 1040nr software tax-exempt income, including income exempt by tax treaty. Free 1040nr software Example. Free 1040nr software Irina Oak, a citizen of Poland, resided in the United States for part of the year to acquire business experience from a U. Free 1040nr software S. Free 1040nr software company. Free 1040nr software During her stay in the United States, she received a salary of $8,000 from her Polish employer. Free 1040nr software She received no other U. Free 1040nr software S. Free 1040nr software source income. Free 1040nr software She spent $3,000 on travel expenses, of which $1,000 were for meals. Free 1040nr software None of these expenses were reimbursed. Free 1040nr software Under the tax treaty with Poland, $5,000 of her salary is exempt from U. Free 1040nr software S. Free 1040nr software income tax. Free 1040nr software In filling out Form 2106-EZ, she must reduce her deductible meal expenses by half ($500). Free 1040nr software She must reduce the remaining $2,500 of travel expenses by 62. Free 1040nr software 5% ($1,563) because 62. Free 1040nr software 5% ($5,000 ÷ $8,000) of her salary is exempt from tax. Free 1040nr software She enters the remaining total of $937 on line 7 of Schedule A (Form 1040NR). Free 1040nr software She completes the remaining lines according to the instructions for Schedule A. Free 1040nr software More information. Free 1040nr software   For more information about deductible expenses, reimbursements, and recordkeeping, get Publication 463. Free 1040nr software Tax Credits and Payments This discussion covers tax credits and payments for resident aliens, followed by a discussion of the credits and payments for nonresident aliens. Free 1040nr software Resident Aliens Resident aliens generally claim tax credits and report tax payments, including withholding, using the same rules that apply to U. Free 1040nr software S. Free 1040nr software citizens. Free 1040nr software The following items are some of the credits you may be able to claim. Free 1040nr software Foreign tax credit. Free 1040nr software   You can claim a credit, subject to certain limits, for income tax you paid or accrued to a foreign country on foreign source income. Free 1040nr software You cannot claim a credit for taxes paid or accrued on excluded foreign earned income. Free 1040nr software To claim a credit for income taxes paid or accrued to a foreign country, you generally will file Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), with your Form 1040. Free 1040nr software   For more information, get Publication 514, Foreign Tax Credit for Individuals. Free 1040nr software Child and dependent care credit. Free 1040nr software   You may be able to take this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse, so that you can work or look for work. Free 1040nr software Generally, you must be able to claim an exemption for your dependent. Free 1040nr software   For more information, get Publication 503, Child and Dependent Care Expenses, and Form 2441, Child and Dependent Care Expenses. Free 1040nr software Credit for the elderly or the disabled. Free 1040nr software   You may qualify for this credit if you are 65 or older or if you retired on permanent and total disability. Free 1040nr software For more information on this credit, get Publication 524, Credit for the Elderly or the Disabled, and Schedule R (Form 1040A or 1040). Free 1040nr software Education credits. Free 1040nr software   You may qualify for these credits if you paid qualified education expenses for yourself, your spouse, or your dependent. Free 1040nr software There are two education credits: the American Opportunity Credit and the lifetime learning credit. Free 1040nr software You cannot claim these credits if you are married filing separately. Free 1040nr software Use Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to figure the credit. Free 1040nr software For more information, see Publication 970. Free 1040nr software Retirement savings contributions credit. Free 1040nr software   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Free 1040nr software You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than: $59,000, if your filing status is married filing jointly, $44,250, if your filing status is head of household, or $29,500, if your filing status is single, married filing separately, or qualifying widow(er). Free 1040nr software Use Form 8880, Credit for Qualified Retirement Savings Contributions, to figure the credit. Free 1040nr software For more information, see Publication 590. Free 1040nr software Child tax credit. Free 1040nr software   You may be able to take this credit if you have a qualifying child. Free 1040nr software   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Free 1040nr software Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Free 1040nr software Is a U. Free 1040nr software S. Free 1040nr software citizen, a U. Free 1040nr software S. Free 1040nr software national, or a resident alien. Free 1040nr software Did not provide over half of his or her own support for 2013. Free 1040nr software Lived with you more than half of 2013. Free 1040nr software Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Free 1040nr software Is claimed as a dependent on your return. Free 1040nr software An adopted child is always treated as your own child. Free 1040nr software An adopted child includes a child lawfully placed with you for legal adoption. Free 1040nr software   See your form instructions for additional details. Free 1040nr software Adoption credit. Free 1040nr software   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Free 1040nr software This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Free 1040nr software To claim the adoption credit, file Form 8839, Qualified Adoption Expenses, with your Form 1040. Free 1040nr software Earned income credit. Free 1040nr software   You may qualify for an earned income credit of up to $3,250 if a child lived with you in the United States and your earned income and adjusted gross income were each less than $37,870 ($43,210 if married filing jointly). Free 1040nr software If two children lived with you in the United States and your earned income and adjusted gross income were each less than $43,038 ($48,378 if married filing jointly), your credit could be as much as $5,372. Free 1040nr software If three or more children lived with you in the United States and your earned income and adjusted gross income were each less than $46,227 ($51,567 if married filing jointly), your credit could be as much as $6,044. Free 1040nr software If you do not have a qualifying child and your earned income and adjusted gross income were each less than $14,340 ($19,680 if married filing jointly), your credit could be as much as $487. Free 1040nr software You cannot claim the earned income credit if your filing status is married filing separately. Free 1040nr software    You and your spouse (if filing a joint return) and any qualifying child must have valid SSNs to claim this credit. Free 1040nr software You cannot claim the credit using an ITIN. Free 1040nr software If a social security card has a legend that says Not Valid for Employment and the number was issued so that you (or your spouse or your qualifying child) could receive a federally funded benefit, you cannot claim the earned income credit. Free 1040nr software An example of a federally funded benefit is Medicaid. Free 1040nr software If a card has this legend and the individual's immigration status has changed so that the individual is now a U. Free 1040nr software S. Free 1040nr software citizen or lawful permanent resident, ask the SSA to issue a new social security card without the legend. Free 1040nr software Other information. Free 1040nr software   There are other eligibility rules that are not discussed here. Free 1040nr software For more information, get Publication 596, Earned Income Credit. Free 1040nr software Nonresident Aliens You can claim some of the same credits that resident aliens can claim. Free 1040nr software You can also report certain taxes you paid, are considered to have paid, or that were withheld from your income. Free 1040nr software Credits Credits are allowed only if you receive effectively connected income. Free 1040nr software You may be able to claim some of the following credits. Free 1040nr software Foreign tax credit. Free 1040nr software   If you receive foreign source income that is effectively connected with a trade or business in the United States, you can claim a credit for any income taxes paid or accrued to any foreign country or U. Free 1040nr software S. Free 1040nr software possession on that income. Free 1040nr software   If you do not have foreign source income effectively connected with a U. Free 1040nr software S. Free 1040nr software trade or business, you cannot claim credits against your U. Free 1040nr software S. Free 1040nr software tax for taxes paid or accrued to a foreign country or U. Free 1040nr software S. Free 1040nr software possession. Free 1040nr software   You cannot take any credit for taxes imposed by a foreign country or U. Free 1040nr software S. Free 1040nr software possession on your U. Free 1040nr software S. Free 1040nr software source income if those taxes were imposed only because you are a citizen or resident of the foreign country or possession. Free 1040nr software   If you claim a foreign tax credit, you generally will have to attach to your return a Form 1116. Free 1040nr software See Publication 514 for more information. Free 1040nr software Child and dependent care credit. Free 1040nr software   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse, so that you can work or look for work. Free 1040nr software Generally, you must be able to claim an exemption for your dependent. Free 1040nr software   Married nonresident aliens can claim the credit only if they choose to file a joint return with a U. Free 1040nr software S. Free 1040nr software citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Joint Return Test in Publication 503). Free 1040nr software   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income from the United States for that tax year. Free 1040nr software Earned income generally means wages, salaries, and professional fees for personal services performed. Free 1040nr software   For more information, get Publication 503. Free 1040nr software Education credits. Free 1040nr software   If you are a nonresident alien for any part of the year, you generally cannot claim the education credits. Free 1040nr software However, if you are married and choose to file a joint return with a U. Free 1040nr software S. Free 1040nr software citizen or resident spouse as discussed in chapter 1, you may be eligible for these credits. Free 1040nr software Retirement savings contributions credit. Free 1040nr software   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Free 1040nr software You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. Free 1040nr software Use Form 8880 to figure the credit. Free 1040nr software For more information, see Publication 590. Free 1040nr software Child tax credit. Free 1040nr software   You may be able to take this credit if you have a qualifying child. Free 1040nr software   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Free 1040nr software Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Free 1040nr software Is a U. Free 1040nr software S. Free 1040nr software citizen, a U. Free 1040nr software S. Free 1040nr software national, or a resident alien. Free 1040nr software Did not provide over half of his or her own support for 2013. Free 1040nr software Lived with you more than half of 2013. Free 1040nr software Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Free 1040nr software Is claimed as a dependent on your return. Free 1040nr software An adopted child is always treated as your own child. Free 1040nr software An adopted child includes a child lawfully placed with you for legal adoption. Free 1040nr software   See your form instructions for additional details. Free 1040nr software Adoption credit. Free 1040nr software   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Free 1040nr software This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Free 1040nr software To claim the adoption credit, file Form 8839 with your Form 1040NR. Free 1040nr software   Married nonresident aliens can claim the credit only if they choose to file a joint return with a U. Free 1040nr software S. Free 1040nr software citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). Free 1040nr software Credit for prior year minimum tax. Free 1040nr software   If you paid alternative minimum tax in a prior year, get Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts, to see if you qualify for this credit. Free 1040nr software Earned income credit. Free 1040nr software   If you are a nonresident alien for any part of the tax year, you generally cannot get the earned income credit. Free 1040nr software However, if you are married and choose to file a joint return with a U. Free 1040nr software S. Free 1040nr software citizen or resident spouse as discussed in chapter 1, you may be eligible for the credit. Free 1040nr software    You, your spouse, and any qualifying child must have valid SSNs to claim this credit. Free 1040nr software You cannot claim the credit using an ITIN. Free 1040nr software If a social security card has a legend that says Not Valid for Employment and the number was issued so that you (or your spouse or your qualifying child) could receive a federally funded benefit, you cannot claim the earned income credit. Free 1040nr software An example of a federally funded benefit is Medicaid. Free 1040nr software If a card has this legend and the individual's immigration status has changed so that the individual is now a U. Free 1040nr software S. Free 1040nr software citizen or lawful permanent resident, ask the SSA to issue a new social security card without the legend. Free 1040nr software   See Publication 596 for more information on the credit. Free 1040nr software Tax Withheld You can claim the tax withheld during the year as a payment against your U. Free 1040nr software S. Free 1040nr software tax. Free 1040nr software You claim it on line 61 of Form 1040NR or on line 18 of Form 1040NR-EZ. Free 1040nr software The tax withheld reduces any tax you owe with Form 1040NR or Form 1040NR-EZ. Free 1040nr software Withholding from wages. Free 1040nr software   Any federal income tax withheld from your wages during the tax year while you were a nonresident alien is allowed as a payment against your U. Free 1040nr software S. Free 1040nr software income tax liability for the same year. Free 1040nr software You can claim the income tax withheld whether or not you were engaged in a trade or business in the United States during the year, and whether or not the wages (or any other income) were connected with a trade or business in the United States. Free 1040nr software Excess social security tax withheld. Free 1040nr software   If you have two or more employers, you may be able to claim a credit against your U. Free 1040nr software S. Free 1040nr software income tax liability for social security tax withheld in excess of the maximum required. Free 1040nr software See Social Security and Medicare Taxes in chapter 8 for more information. Free 1040nr software Additional Medicare Tax. Free 1040nr software   Your employer is responsible for withholding the 0. Free 1040nr software 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in 2013. Free 1040nr software If you do not owe Additional Medicare Tax, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959. Free 1040nr software Tax paid on undistributed long-term capital gains. Free 1040nr software   If you are a shareholder in a mutual fund (or other regulated investment company) or real estate investment trust, you can claim a credit for your share of any taxes paid by the company on its undistributed long-term capital gains. Free 1040nr software You will receive information on Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, which you must attach to your return. Free 1040nr software Tax withheld at the source. Free 1040nr software   You can claim as a payment any tax withheld at the source on investment and other fixed or determinable annual or periodic income paid to you. Free 1040nr software Fixed or determinable income includes interest, dividend, rental, and royalty income that you do not claim to be effectively connected income. Free 1040nr software Wage or salary payments can be fixed or determinable income to you, but usually are subject to withholding as discussed above. Free 1040nr software Taxes on fixed or determinable income are withheld at a 30% rate or at a lower treaty rate. Free 1040nr software Tax withheld on partnership income. Free 1040nr software   If you are a foreign partner in a partnership, the partnership will withhold tax on your share of effectively connected taxable income from the partnership. Free 1040nr software The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Free 1040nr software A partnership that is publicly traded may withhold on your actual distributions of effectively connected income. Free 1040nr software In this case, the partnership will give you a statement on Form 1042-S. Free 1040nr software Claim the tax withheld as a payment on line 61b or 61d of Form 1040NR, as appropriate. Free 1040nr software Claiming tax withheld on your return. Free 1040nr software   When you fill out your tax return, take extra care to enter the correct amount of any tax withheld shown on your information documents. Free 1040nr software The following table lists some of the more common information documents and shows where to find the amount of tax withheld. Free 1040nr software Form number Location  of tax  withheld RRB-1042S Box 12 SSA-1042S Box 9 W-2 Box 2 W-2c Box 2 1042-S Box 9 8805 Line 10 8288-A Box 2 Bona Fide Residents of American Samoa or Puerto Rico If you are a nonresident alien who is a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you generally are taxed the same as resident aliens. Free 1040nr software You should file Form 1040 and report all income from sources both in and outside the United States. Free 1040nr software However, you can exclude the income discussed in the following paragraphs. Free 1040nr software For tax purposes other than reporting income, however, you will be treated as a nonresident alien. Free 1040nr software For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Free 1040nr software There are also limits on what deductions and credits are allowed. Free 1040nr software See Nonresident Aliens under Deductions , Itemized Deductions , and Tax Credits and Payments in this chapter. Free 1040nr software Residents of Puerto Rico. Free 1040nr software   If you are a bona fide resident of Puerto Rico for the entire year, you can exclude from gross income all income from sources in Puerto Rico (other than amounts for services performed as an employee of the United States or any of its agencies). Free 1040nr software   If you report income on a calendar year basis and you do not have wages subject to withholding, file your return and pay your tax by June 15. Free 1040nr software You must also make your first payment of estimated tax by June 15. Free 1040nr software You cannot file a joint income tax return or make joint payments of estimated tax. Free 1040nr software However, if you are married to a U. Free 1040nr software S. Free 1040nr software citizen or resident, see Nonresident Spouse Treated as a Resident in chapter 1. Free 1040nr software   If you earn wages subject to withholding, your U. Free 1040nr software S. Free 1040nr software income tax return is due by April 15. Free 1040nr software Your first payment of estimated tax is also due by April 15. Free 1040nr software For information on withholding and estimated tax, see chapter 8 . Free 1040nr software Residents of American Samoa. Free 1040nr software   If you are a bona fide resident of American Samoa for the entire year, you can exclude from gross income all income from sources in American Samoa (other than amounts for services performed as an employee of the U. Free 1040nr software S. Free 1040nr software government or any of its agencies). Free 1040nr software An employee of the American Samoan government is not considered an employee of the U. Free 1040nr software S. Free 1040nr software government or any of its agencies for purposes of the exclusion. Free 1040nr software For more information about this exclusion, get Form 4563 and Publication 570, Tax Guide for Individuals With Income From U. Free 1040nr software S. Free 1040nr software Possessions. Free 1040nr software Prev  Up  Next   Home   More Online Publications
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Food, Nutrition, and Fitness

Find information about good nutrition; food safety; eating healthy meals on a budget; finding out if you're eligible for food stamps; and being physically active.

Healthy Eating

Good Nutrition

The foods you choose to eat everyday affect your overall health. Nutrition experts offer easy-to-read tip sheets to help you eat more whole grains, vegetables, fruit, calcium-rich foods, and lean protein.

Use the SuperTracker to set goals, keep track of what you eat, and get tips to help you make healthier choices. 

Food Safety

Each year, about one in six Americans become sick from food poisoning. Although most will recover without any lasting problems, some types of food poisoning can lead to kidney failure, chronic arthritis, brain and nerve damage, and even death.

By following four simple steps, you can help to avoid food poisoning at home:

  1. Clean: wash hands and surfaces often.
  2. Separate: don't cross-contaminate raw meat, poultry, seafood, or eggs with other ready-to-eat foods.
  3. Cook: use a food thermometer to ensure you've cooked to the right temperature.
  4. Chill: refrigerate food within two hours of cooking and never thaw foods on the counter.

On FoodSafety.gov, you can sign up to receive the latest information about food recalls.

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Eating on a Budget

Healthy Eating on a Tight Budget

Food can be expensive, but preparing your own meals is often healthier and less expensive than eating out. Get ideas to help you eat healthy meals on a budget, including:

Families with limited resources may qualify for the Expanded Food and Nutrition Education Program (EFNEP). This federally funded program shows participants how to make a food budget and select nutritious items.

Food Stamps

Food stamps are officially called the Supplemental Nutrition Assistance Program (SNAP). This federally funded program helps struggling families to put food on the table.

Use a pre-screening tool to find out if you're eligible for SNAP.

Learn more about how to apply for food stamp benefits.

Meal Programs for Children

Federally assisted meal programs, such as the National School Lunch Program and the School Breakfast Program, provide nutritionally balanced, low-cost or free meals to eligible children each school day. Learn more about these and other school meal programs.

The Summer Food Service Program helps to fill the nutrition gap for eligible children when school lets out for the summer. 

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Fitness

Being physically active can help you to live longer, feel happier, sleep well, and maintain a healthy weight.

For the biggest benefit, include both aerobic and muscle-strengthening activities in your exercise routine. Aerobic activities, such as walking and running, exercise your heart. Lifting weights and using exercise bands improve your muscle strength.

Get some ideas for increasing your physical activity. You can use the Physical Activity Tracker to monitor your level of activity from week to week.  

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The Free 1040nr Software

Free 1040nr software Publication 559 - Main Content Table of Contents Personal RepresentativeDuties Fees Received by Personal Representatives Final Income Tax Return for Decedent—Form 1040Name, Address, and Signature When and Where To File Filing Requirements Income To Include Exemptions and Deductions Credits, Other Taxes, and Payments Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Filing Reminders Other Tax InformationTax Benefits for Survivors Income in Respect of a Decedent Deductions in Respect of a Decedent Estate Tax Deduction Gifts, Insurance, and Inheritances Other Items of Income Income Tax Return of an Estate— Form 1041Filing Requirements Income To Include Exemption and Deductions Credits, Tax, and Payments Name, Address, and Signature When and Where To File Distributions to BeneficiariesIncome That Must Be Distributed Currently Other Amounts Distributed Discharge of a Legal Obligation Character of Distributions How and When To Report Bequest Termination of Estate Estate and Gift TaxesApplicable Credit Amount Gift Tax Estate Tax Generation-Skipping Transfer Tax Comprehensive ExampleFinal Return for Decedent—Form 1040 Income Tax Return of an Estate—Form 1041 How To Get Tax HelpLow Income Taxpayer Clinics Personal Representative A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Free 1040nr software Generally, an executor (or executrix) is named in a decedent's will to administer the estate and distribute properties as the decedent has directed. Free 1040nr software An administrator (or administratrix) is usually appointed by the court if no will exists, if no executor was named in the will, or if the named executor cannot or will not serve. Free 1040nr software In general, an executor and an administrator perform the same duties and have the same responsibilities. Free 1040nr software For estate tax purposes, if there is no executor or administrator appointed, qualified, and acting within the United States, the term “executor” includes anyone in actual or constructive possession of any property of the decedent. Free 1040nr software It includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and other custodians of property in this country; brokers holding securities of the decedent as collateral; and the debtors of the decedent who are in this country. Free 1040nr software Duties The primary duties of a personal representative are to collect all the decedent's assets, pay his or her creditors, and distribute the remaining assets to the heirs or other beneficiaries. Free 1040nr software The personal representative also must perform the following duties. Free 1040nr software Apply for an employer identification number (EIN) for the estate. Free 1040nr software File all tax returns, including income, estate and gift tax returns, when due. Free 1040nr software Pay the tax determined up to the date of discharge from duties. Free 1040nr software Other duties of the personal representative in federal tax matters are discussed in other sections of this publication. Free 1040nr software If any beneficiary is a nonresident alien, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for information on the personal representative's duties as a withholding agent. Free 1040nr software Penalty. Free 1040nr software   There is a penalty for failure to file a tax return when due unless the failure is due to reasonable cause. Free 1040nr software Reliance on an agent (attorney, accountant, etc. Free 1040nr software ) is not reasonable cause for late filing. Free 1040nr software It is the personal representative's duty to file the returns for the decedent and the estate when due. Free 1040nr software Identification number. Free 1040nr software   The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. Free 1040nr software You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. Free 1040nr software You also must give the number to payers of interest and dividends and other payers who must file a return concerning the estate. Free 1040nr software   You can get an EIN by applying online at www. Free 1040nr software irs. Free 1040nr software gov (click on "Apply for an EIN Online" under the Tools heading). Free 1040nr software Generally, if you apply online, you will receive your EIN immediately upon completing the application. Free 1040nr software You can also apply using Form SS-4, Application for Employer Identification Number. Free 1040nr software Generally, if you apply by mail, it takes about 4 weeks to get your EIN. Free 1040nr software See the form instructions for other ways to apply. Free 1040nr software   Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. Free 1040nr software After a decedent's death, Forms 1099 must reflect the identification number of the estate or beneficiary to whom the amounts are payable. Free 1040nr software As the personal representative handling the estate, you must furnish this identification number to the payer. Free 1040nr software For example, if interest is payable to the estate, the estate's EIN must be provided to the payer and used to report the interest on Form 1099-INT, Interest Income. Free 1040nr software If the interest is payable to a surviving joint owner, the survivor's identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest. Free 1040nr software   If the estate or a survivor may receive interest or dividends after you inform the payer of the decedent's death, the payer should give you (or the survivor) a Form W-9, Request for Taxpayer Identification Number and Certification (or a similar substitute form). Free 1040nr software Complete this form to inform the payer of the estate's (or if completed by the survivor, the survivor's) identification number and return it to the payer. Free 1040nr software    Do not use the deceased individual's identifying number to file an individual income tax return after the decedent's final tax return. Free 1040nr software Also do not use it to make estimated tax payments for a tax year after the year of death. Free 1040nr software Penalty. Free 1040nr software   If you do not include the EIN or the taxpayer identification number of another person where it is required on a return, statement, or other document, you are liable for a penalty for each failure, unless you can show reasonable cause. Free 1040nr software You also are liable for a penalty if you do not give the taxpayer identification number of another person when required on a return, statement, or other document. Free 1040nr software Notice of fiduciary relationship. Free 1040nr software   The term fiduciary means any person acting for another person. Free 1040nr software It applies to persons who have positions of trust on behalf of others. Free 1040nr software A personal representative for a decedent's estate is a fiduciary. Free 1040nr software Form 56. Free 1040nr software   If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Free 1040nr software Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. Free 1040nr software See the Instructions for Form 56 for filing requirements and other information. Free 1040nr software   File Form 56 as soon as all the necessary information (including the EIN) is available. Free 1040nr software It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. Free 1040nr software The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated. Free 1040nr software Termination of fiduciary relationship. Free 1040nr software   Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. Free 1040nr software See Form 56 and its instructions for more information. Free 1040nr software   At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905, to wind up your duties as fiduciary. Free 1040nr software See below for a discussion of these forms. Free 1040nr software Request for prompt assessment (charge) of tax. Free 1040nr software   The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. Free 1040nr software However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. Free 1040nr software This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. Free 1040nr software This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. Free 1040nr software This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries. Free 1040nr software Form 4810. Free 1040nr software   Form 4810 can be used for making this request. Free 1040nr software It must be filed separately from any other document. Free 1040nr software   As the personal representative for the decedent's estate, you are responsible for any additional taxes that may be due. Free 1040nr software You can request prompt assessment of any of the decedent's taxes (other than federal estate taxes) for any years for which the statutory period for assessment is open. Free 1040nr software This applies even though the returns were filed before the decedent's death. Free 1040nr software Failure to report income. Free 1040nr software   If you or the decedent failed to report substantial amounts of gross income (more than 25% of the gross income reported on the return) or filed a false or fraudulent return, your request for prompt assessment will not shorten the period during which the IRS may assess the additional tax. Free 1040nr software However, such a request may relieve you of personal liability for the tax if you did not have knowledge of the unpaid tax. Free 1040nr software Request for discharge from personal liability for tax. Free 1040nr software   An executor can make a request for discharge from personal liability for a decedent's income, gift, and estate taxes. Free 1040nr software The request must be made after the returns for those taxes are filed. Free 1040nr software To make the request, file Form 5495. Free 1040nr software For this purpose, an executor is an executor or administrator that is appointed, qualified, and acting within the United States. Free 1040nr software   Within 9 months after receipt of the request, the IRS will notify the executor of the amount of taxes due. Free 1040nr software If this amount is paid, the executor will be discharged from personal liability for any future deficiencies. Free 1040nr software If the IRS has not notified the executor, he or she will be discharged from personal liability at the end of the 9-month period. Free 1040nr software    Even if the executor is discharged from personal liability, the IRS will still be able to assess tax deficiencies against the executor to the extent he or she still has any of the decedent's property. Free 1040nr software Insolvent estate. Free 1040nr software   Generally, if a decedent's estate is insufficient to pay all the decedent's debts, the debts due to the United States must be paid first. Free 1040nr software Both the decedent's federal income tax liabilities at the time of death and the estate's income tax liability are debts due to the United States. Free 1040nr software The personal representative of an insolvent estate is personally responsible for any tax liability of the decedent or of the estate if he or she had notice of such tax obligations or failed to exercise due care in determining if such obligations existed before distribution of the estate's assets and before being discharged from duties. Free 1040nr software The extent of such personal responsibility is the amount of any other payments made before paying the debts due to the United States, except where such other debt paid has priority over the debts due to the United States. Free 1040nr software Income tax liabilities need not be formally assessed for the personal representative to be liable if he or she was aware or should have been aware of their existence. Free 1040nr software Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. Free 1040nr software If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Form 1040, line 21. Free 1040nr software If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C or Schedule C-EZ of your Form 1040. Free 1040nr software If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (or Schedule C-EZ) of your Form 1040. Free 1040nr software Final Income Tax Return for Decedent—Form 1040 The personal representative (defined earlier) must file the final income tax return (Form 1040) of the decedent for the year of death and any returns not filed for preceding years. Free 1040nr software A surviving spouse, under certain circumstances, may have to file the returns for the decedent. Free 1040nr software See Joint Return, later. Free 1040nr software Return for preceding year. Free 1040nr software   If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. Free 1040nr software The return for that year will be a regular return and the personal representative must file it. Free 1040nr software Example. Free 1040nr software Samantha Smith died on March 21, 2013, before filing her 2012 tax return. Free 1040nr software Her personal representative must file her 2012 return by April 15, 2013. Free 1040nr software Her final tax return covering the period from January 1, 2013, to March 20, 2013, is due April 15, 2014. Free 1040nr software Name, Address, and Signature Write the word “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Free 1040nr software If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. Free 1040nr software If a joint return is not being filed, write the decedent's name in the name field and the personal representative's name and address in the address field. Free 1040nr software Third party designee. Free 1040nr software   You can check the “Yes” box in the Third Party Designee area on page 2 of the return to authorize the IRS to discuss the return with a friend, family member, or any other person you choose. Free 1040nr software This allows the IRS to call the person you identified as the designee to answer any questions that may arise during the processing of the return. Free 1040nr software It also allows the designee to perform certain actions. Free 1040nr software See the Instructions for Form 1040 for details. Free 1040nr software Signature. Free 1040nr software   If a personal representative has been appointed, that person must sign the return. Free 1040nr software If it is a joint return, the surviving spouse must also sign it. Free 1040nr software If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse. Free 1040nr software ” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Free 1040nr software ” Paid preparer. Free 1040nr software   If you pay someone to prepare, assist in preparing, or review the tax return, that person must sign the return and fill in the other blanks in the Paid Preparer Use Only area of the return. Free 1040nr software See the Form 1040 instructions for details. Free 1040nr software When and Where To File The final income tax return is due at the same time the decedent's return would have been due had death not occurred. Free 1040nr software A final return for a decedent who was a calendar year taxpayer is generally due on April 15 following the year of death, regardless of when during that year death occurred. Free 1040nr software However, when the due date falls on a Saturday, Sunday, or legal holiday, the return is filed timely if filed by the next business day. Free 1040nr software The tax return must be prepared for the year of death regardless of when during the year death occurred. Free 1040nr software Generally, you must file the final income tax return of the decedent with the Internal Revenue Service Center for the place where you live. Free 1040nr software A tax return for a decedent can be electronically filed. Free 1040nr software A personal representative may also obtain an income tax filing extension on behalf of a decedent. Free 1040nr software Filing Requirements The gross income, age, and filing status of a decedent generally determine whether a return must be filed. Free 1040nr software Gross income is all income received by an individual from any source in the form of money, goods, property, and services that is not tax-exempt. Free 1040nr software It includes gross receipts from self-employment, but if the business involves manufacturing, merchandising, or mining, subtract any cost of goods sold. Free 1040nr software In general, filing status depends on whether the decedent was considered single or married at the time of death. Free 1040nr software See the income tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Free 1040nr software Refund A return must be filed to obtain a refund if tax was withheld from salaries, wages, pensions, or annuities, or if estimated tax was paid, even if a return is not otherwise required to be filed. Free 1040nr software Also, the decedent may be entitled to other credits that result in a refund. Free 1040nr software These advance payments of tax and credits are discussed later under Credits, Other Taxes, and Payments. Free 1040nr software Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Free 1040nr software   Form 1310 does not have to be filed if you are claiming a refund and you are: A surviving spouse filing an original or amended joint return with the decedent, or A court-appointed or certified personal representative filing the decedent’s original return and a copy of the court certificate showing your appointment is attached to the return. Free 1040nr software   If the personal representative is filing a claim for refund on Form 1040X, Amended U. Free 1040nr software S. Free 1040nr software Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. Free 1040nr software Example. Free 1040nr software Edward Green died before filing his tax return. Free 1040nr software You were appointed the personal representative for Edward's estate, and you file his Form 1040 showing a refund due. Free 1040nr software You do not need Form 1310 to claim the refund if you attach a copy of the court certificate showing you were appointed the personal representative. Free 1040nr software    If you are a surviving spouse and you receive a tax refund check in both your name and your deceased spouse's name, you can have the check reissued in your name alone. Free 1040nr software Return the joint-name check marked “VOID” to your local IRS office or the service center where you mailed your return, along with a written request for reissuance of the refund check. Free 1040nr software A new check will be issued in your name and mailed to you. Free 1040nr software Death certificate. Free 1040nr software   When filing the decedent's final income tax return, do not attach the death certificate or other proof of death to the final return. Free 1040nr software Instead, keep it for your records and provide it if requested. Free 1040nr software Nonresident Alien If the decedent was a nonresident alien who would have had to file Form 1040NR, U. Free 1040nr software S. Free 1040nr software Nonresident Alien Income Tax Return, you must file that form for the decedent's final tax year. Free 1040nr software See the Instructions for Form 1040NR for the filing requirements, due date, and where to file. Free 1040nr software Joint Return Generally, the personal representative and the surviving spouse can file a joint return for the decedent and the surviving spouse. Free 1040nr software However, the surviving spouse alone can file the joint return if no personal representative has been appointed before the due date for filing the final joint return for the year of death. Free 1040nr software This also applies to the return for the preceding year if the decedent died after the close of the preceding tax year and before filing the return for that year. Free 1040nr software The income of the decedent that was includible on his or her return for the year up to the date of death (see Income To Include, later) and the income of the surviving spouse for the entire year must be included in the final joint return. Free 1040nr software A final joint return with the decedent cannot be filed if the surviving spouse remarried before the end of the year of the decedent's death. Free 1040nr software The filing status of the decedent in this instance is married filing a separate return. Free 1040nr software For information about tax benefits to which a surviving spouse may be entitled, see Tax Benefits for Survivors, later, under Other Tax Information. Free 1040nr software Personal representative may revoke joint return election. Free 1040nr software   A court-appointed personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. Free 1040nr software This is done by filing a separate return for the decedent within one year from the due date of the return (including any extensions). Free 1040nr software The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability. Free 1040nr software Relief from joint liability. Free 1040nr software   In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Free 1040nr software If the decedent qualified for this relief while alive, the personal representative can pursue an existing request, or file a request, for relief from joint liability. Free 1040nr software For information on requesting this relief, see Publication 971, Innocent Spouse Relief. Free 1040nr software Income To Include The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. Free 1040nr software The method of accounting regularly used by the decedent before death also determines the income includible on the final return. Free 1040nr software This section explains how some types of income are reported on the final return. Free 1040nr software For more information about accounting methods, see Publication 538, Accounting Periods and Methods. Free 1040nr software Cash Method If the decedent accounted for income under the cash method, only those items actually or constructively received before death are included on the final return. Free 1040nr software Constructive receipt of income. Free 1040nr software   Interest from coupons on the decedent's bonds is constructively received by the decedent if the coupons matured in the decedent's final tax year, but had not been cashed. Free 1040nr software Include the interest income on the final return. Free 1040nr software   Generally, a dividend is considered constructively received if it was available for use by the decedent without restriction. Free 1040nr software If the corporation customarily mailed its dividend checks, the dividend was includible when received. Free 1040nr software If the individual died between the time the dividend was declared and the time it was received in the mail, the decedent did not constructively receive it before death. Free 1040nr software Do not include the dividend in the final return. Free 1040nr software Accrual Method Generally, under an accrual method of accounting, income is reported when earned. Free 1040nr software If the decedent used an accrual method, only the income items normally accrued before death are included on the final return. Free 1040nr software Interest and Dividend Income (Forms 1099) Form(s) 1099 reporting interest and dividends earned by the decedent before death should be received and the amounts included on the decedent's final return. Free 1040nr software A separate Form 1099 should show the interest and dividends earned after the date of the decedent's death and paid to the estate or other recipient that must include those amounts on its return. Free 1040nr software You can request corrected Forms 1099 if these forms do not properly reflect the right recipient or amounts. Free 1040nr software For example, a Form 1099-INT, reporting interest payable to the decedent, may include income that should be reported on the final income tax return of the decedent, as well as income that the estate or other recipient should report, either as income earned after death or as income in respect of the decedent (discussed later). Free 1040nr software For income earned after death, you should ask the payer for a Form 1099 that properly identifies the recipient (by name and identification number) and the proper amount. Free 1040nr software If that is not possible, or if the form includes an amount that represents income in respect of the decedent, report the interest as shown next under How to report. Free 1040nr software See U. Free 1040nr software S. Free 1040nr software savings bonds acquired from decedent under Income in Respect of a Decedent, later, for information on savings bond interest that may have to be reported on the final return. Free 1040nr software How to report. Free 1040nr software   If you are preparing the decedent's final return and you have received a Form 1099-INT for the decedent that includes amounts belonging to the decedent and to another recipient (the decedent's estate or another beneficiary), report the total interest shown on Form 1099-INT on Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Free 1040nr software Next, enter a subtotal of the interest shown on Forms 1099, and the interest reportable from other sources for which you did not receive Forms 1099. Free 1040nr software Then, show any interest (including any interest you receive as a nominee) belonging to another recipient separately and subtract it from the subtotal. Free 1040nr software Identify the amount of this adjustment as “Nominee Distribution” or other appropriate designation. Free 1040nr software   Report dividend income for which you received a Form 1099-DIV, Dividends and Distributions, on the appropriate schedule using the same procedure. Free 1040nr software    Note. Free 1040nr software If the decedent received amounts as a nominee, you must give the actual owner a Form 1099, unless the owner is the decedent's spouse. Free 1040nr software See General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) for more information on filing Forms 1099. Free 1040nr software Partnership Income The death of a partner closes the partnership's tax year for that partner. Free 1040nr software Generally, it does not close the partnership's tax year for the remaining partners. Free 1040nr software The decedent's distributive share of partnership items must be figured as if the partnership's tax year ended on the date the partner died. Free 1040nr software To avoid an interim closing of the partnership books, the partners can agree to estimate the decedent's distributive share by prorating the amounts the partner would have included for the entire partnership tax year. Free 1040nr software On the decedent's final return, include the decedent's distributive share of partnership items for the following periods. Free 1040nr software The partnership's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Free 1040nr software The period, if any, from the end of the partnership's tax year in (1) to the decedent's date of death. Free 1040nr software Example. Free 1040nr software Mary Smith was a partner in XYZ partnership and reported her income on a tax year ending December 31. Free 1040nr software The partnership uses a tax year ending June 30. Free 1040nr software Mary died August 31, 2013, and her estate established its tax year through August 31. Free 1040nr software The distributive share of partnership items based on the decedent's partnership interest is reported as follows. Free 1040nr software Final Return for the Decedent—January 1 through August 31, 2013, includes XYZ partnership items from (a) the partnership tax year ending June 30, 2013, and (b) the partnership tax year beginning July 1, 2013, and ending August 31, 2013 (the date of death). Free 1040nr software Income Tax Return of the Estate—September 1, 2013, through August 31, 2014, includes XYZ partnership items for the period September 1, 2013, through June 30, 2014. Free 1040nr software S Corporation Income If the decedent was a shareholder in an S corporation, include on the final return the decedent's share of the S corporation's items of income, loss, deduction, and credit for the following periods. Free 1040nr software The corporation's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Free 1040nr software The period, if any, from the end of the corporation's tax year in (1) to the decedent's date of death. Free 1040nr software Self-Employment Income Include self-employment income actually or constructively received or accrued, depending on the decedent's accounting method. Free 1040nr software For self-employment tax purposes only, the decedent's self-employment income will include the decedent's distributive share of a partnership's income or loss through the end of the month in which death occurred. Free 1040nr software For this purpose, the partnership's income or loss is considered to be earned ratably over the partnership's tax year. Free 1040nr software Community Income If the decedent was married and domiciled in a community property state, half of the income received and half of the expenses paid during the decedent's tax year by either the decedent or spouse may be considered to be the income and expenses of the other. Free 1040nr software For more information, see Publication 555, Community Property. Free 1040nr software HSA, Archer MSA, or Medicare Advantage MSA The treatment of an HSA (health savings account), an Archer MSA (medical savings account), or a Medicare Advantage MSA at the death of the account holder, depends on who acquires the interest in the account. Free 1040nr software If the decedent's estate acquires the interest, the fair market value (FMV) of the assets in the account on the date of death is included in income on the decedent's final return. Free 1040nr software The estate tax deduction, discussed later, does not apply to this amount. Free 1040nr software If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Free 1040nr software For other information on HSAs, Archer MSAs, or Medicare Advantage MSAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Free 1040nr software Coverdell Education Savings Account (ESA) Generally, the balance in a Coverdell ESA must be distributed within 30 days after the individual for whom the account was established reaches age 30, or dies, whichever is earlier. Free 1040nr software The treatment of the Coverdell ESA at the death of an individual under age 30 depends on who acquires the interest in the account. Free 1040nr software If the decedent's estate acquires the interest, the earnings on the account must be included on the final income tax return of the decedent. Free 1040nr software The estate tax deduction, discussed later, does not apply to this amount. Free 1040nr software If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Free 1040nr software The age 30 limitation does not apply if the individual for whom the account was established or the beneficiary that acquires the account is an individual with special needs. Free 1040nr software This includes an individual who, because of a physical, mental, or emotional condition (including a learning disability), requires additional time to complete his or her education. Free 1040nr software For more information on Coverdell ESAs, see Publication 970, Tax Benefits for Education. Free 1040nr software Accelerated Death Benefits Accelerated death benefits are amounts received under a life insurance contract before the death of the insured individual. Free 1040nr software These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Free 1040nr software Generally, if the decedent received accelerated death benefits on the life of a terminally or chronically ill individual, whether on his or her own life or on the life of another person, those benefits are not included in the decedent's income. Free 1040nr software For more information, see the discussion under Gifts, Insurance, and Inheritances under Other Tax Information, later. Free 1040nr software Exemptions and Deductions Generally, the rules for exemptions and deductions allowed to an individual also apply to the decedent's final income tax return. Free 1040nr software Show on the final return deductible items the decedent paid (or accrued, if the decedent reported deductions on an accrual method) before death. Free 1040nr software This section contains a detailed discussion of medical expenses because the tax treatment of the decedent's medical expenses can be different. Free 1040nr software See Medical Expenses, later. Free 1040nr software Exemptions You can claim the decedent's personal exemption on the final income tax return. Free 1040nr software If the decedent was another person's dependent (for example, a parent's), you cannot claim the personal exemption on the decedent's final return. Free 1040nr software Standard Deduction If you do not itemize deductions on the final return, the full amount of the appropriate standard deduction is allowed regardless of the date of death. Free 1040nr software For information on the appropriate standard deduction, see the Form 1040 income tax return instructions or Publication 501. Free 1040nr software Medical Expenses Medical expenses paid before death by the decedent are deductible, subject to limits, on the final income tax return if deductions are itemized. Free 1040nr software This includes expenses for the decedent, as well as for the decedent's spouse and dependents. Free 1040nr software Beginning in 2013, medical expenses exceeding 10% of adjusted gross income (AGI) may be deducted, unless the decedent or their spouse is age 65 or older. Free 1040nr software In that case medical expenses exceeding 7. Free 1040nr software 5% of AGI may be deducted. Free 1040nr software Qualified medical expenses are not deductible if paid with a tax-free distribution from an HSA or an Archer MSA. Free 1040nr software Election for decedent's expenses. Free 1040nr software   Medical expenses not paid before death are liabilities of the estate and are shown on the federal estate tax return (Form 706). Free 1040nr software However, if medical expenses for the decedent are paid out of the estate during the 1-year period beginning with the day after death, you can elect to treat all or part of the expenses as paid by the decedent at the time they were incurred. Free 1040nr software   If you make the election, you can claim all or part of the expenses on the decedent's income tax return (if deductions are itemized) rather than on the federal estate tax return (Form 706). Free 1040nr software You can deduct expenses incurred in the year of death on the final income tax return. Free 1040nr software You should file an amended return (Form 1040X) for medical expenses incurred in an earlier year, unless the statutory period for filing a claim for that year has expired. Free 1040nr software   The amount you can deduct on the income tax return is the amount above 10% of adjusted gross income (or 7. Free 1040nr software 5% of adjusted gross income if the decedent or the decedent's spouse was born before January 2, 1949). Free 1040nr software Amounts not deductible because of this percentage cannot be claimed on the federal estate tax return. Free 1040nr software Making the election. Free 1040nr software   You make the election by attaching a statement, in duplicate, to the decedent's income tax return or amended return. Free 1040nr software The statement must state that you have not claimed the amount as an estate tax deduction, and that the estate waives the right to claim the amount as a deduction. Free 1040nr software This election applies only to expenses incurred for the decedent, not to expenses incurred to provide medical care for dependents. Free 1040nr software Example. Free 1040nr software Richard Brown used the cash method of accounting and filed his income tax return on a calendar year basis. Free 1040nr software Richard died on June 1, 2013, at the age of 78, after incurring $800 in medical expenses. Free 1040nr software Of that amount, $500 was incurred in 2012 and $300 was incurred in 2013. Free 1040nr software Richard itemized his deductions when he filed his 2012 income tax return. Free 1040nr software The personal representative of the estate paid the entire $800 liability in August 2013. Free 1040nr software The personal representative may file an amended return (Form 1040X) for 2012 claiming the $500 medical expense as a deduction, subject to the 7. Free 1040nr software 5% limit. Free 1040nr software The $300 of expenses incurred in 2013 can be deducted on the final income tax return if deductions are itemized, subject to the 7. Free 1040nr software 5% limit. Free 1040nr software The personal representative must file a statement in duplicate with each return stating that these amounts have not been claimed on the federal estate tax return (Form 706), and waiving the right to claim such a deduction on Form 706 in the future. Free 1040nr software Medical expenses not paid by estate. Free 1040nr software   If you paid medical expenses for your deceased spouse or dependent, claim the expenses on your tax return for the year in which you paid them, whether they are paid before or after the decedent's death. Free 1040nr software If the decedent was a child of divorced or separated parents, the medical expenses can usually be claimed by both the custodial and noncustodial parent to the extent paid by that parent during the year. Free 1040nr software Insurance reimbursements. Free 1040nr software   Insurance reimbursements of previously deducted medical expenses due a decedent at the time of death and later received by the decedent's estate are includible in the income tax return of the estate (Form 1041) for the year the reimbursements are received. Free 1040nr software The reimbursements are also includible in the decedent's gross estate. Free 1040nr software No deduction for funeral expenses can be taken on the final Form 1040 of a decedent. Free 1040nr software These expenses may be deductible for estate tax purposes on Form 706. Free 1040nr software Deduction for Losses A decedent's net operating loss deduction from a prior year and any capital losses (including capital loss carryovers) can be deducted only on the decedent's final income tax return. Free 1040nr software A net operating loss on the decedent's final income tax return can be carried back to prior years. Free 1040nr software (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Free 1040nr software ) You cannot deduct any unused net operating loss or capital loss on the estate's income tax return. Free 1040nr software At-risk loss limits. Free 1040nr software   Special at-risk rules apply to most activities that are engaged in as a trade or business or for the production of income. Free 1040nr software   These rules limit the deductible loss to the amount which the individual was considered at-risk in the activity. Free 1040nr software An individual generally will be considered at-risk to the extent of the money and the adjusted basis of property that he or she contributed to the activity and certain amounts the individual borrowed for use in the activity. Free 1040nr software An individual will be considered at-risk for amounts borrowed only if he or she was personally liable for the repayment or if the amounts borrowed were secured by property other than that used in the activity. Free 1040nr software The individual is not considered at-risk for borrowed amounts if the lender has an interest in the activity or if the lender is related to a person who has an interest in the activity. Free 1040nr software For more information, see Publication 925, Passive Activity and At-Risk Rules. Free 1040nr software Passive activity rules. Free 1040nr software   A passive activity is any trade or business activity in which the taxpayer does not materially participate. Free 1040nr software To determine material participation, see Publication 925. Free 1040nr software Rental activities are passive activities regardless of the taxpayer's participation, unless the taxpayer meets certain eligibility requirements. Free 1040nr software   Individuals, estates, and trusts can offset passive activity losses only against passive activity income. Free 1040nr software Passive activity losses or credits not allowed in one tax year can be carried forward to the next year. Free 1040nr software   If a passive activity interest is transferred because a taxpayer dies, the accumulated unused passive activity losses are allowed as a deduction against the decedent's income in the year of death. Free 1040nr software Losses are allowed only to the extent they are greater than the excess of the transferee's (recipient of the interest transferred) basis in the property over the decedent's adjusted basis in the property immediately before death. Free 1040nr software The part of the accumulated losses equal to the excess is not allowed as a deduction for any tax year. Free 1040nr software   Use Form 8582, Passive Activity Loss Limitations, to summarize losses and income from passive activities and to figure the amounts allowed. Free 1040nr software For more information, see Publication 925. Free 1040nr software Credits, Other Taxes, and Payments Discussed below are some of the tax credits, types of taxes that may be owed, income tax withheld, and estimated tax payments reported on the final return of a decedent. Free 1040nr software Credits On the final income tax return, you can claim any tax credits that applied to the decedent before death. Free 1040nr software Some of these credits are discussed next. Free 1040nr software Earned income credit. Free 1040nr software   If the decedent was an eligible individual, you can claim the earned income credit on the decedent's final return even though the return covers less than 12 months. Free 1040nr software If the allowable credit is more than the tax liability for the year, the excess is refunded. Free 1040nr software   For more information, see Publication 596, Earned Income Credit (EIC). Free 1040nr software Credit for the elderly or the disabled. Free 1040nr software   This credit is allowable on a decedent's final income tax return if the decedent met both of the following requirements in the year of death. Free 1040nr software The decedent: Was a “qualified individual,” and Had income (adjusted gross income (AGI) and nontaxable social security and pensions) less than certain limits. Free 1040nr software   For details on qualifying for or figuring the credit, see Publication 524, Credit for the Elderly or the Disabled. Free 1040nr software Child tax credit. Free 1040nr software   If the decedent had a qualifying child, you may be able to claim the child tax credit on the decedent's final return even though the return covers less than 12 months. Free 1040nr software You may be able to claim the additional child tax credit and get a refund if the credit is more than the decedent's liability. Free 1040nr software For more information, see the Instructions for Form 1040. Free 1040nr software Adoption credit. Free 1040nr software   Depending upon when the adoption was finalized, this credit may be taken on a decedent's final income tax return if the decedent: Adopted an eligible child and paid qualified adoption expenses, or Has a carryforward of an adoption credit from a prior year. Free 1040nr software   Also, if the decedent is survived by a spouse who meets the filing status of qualifying widow(er), unused adoption credit may be carried forward and used following the death of the decedent. Free 1040nr software See Form 8839, Qualified Adoption Expenses, and its instructions for more details. Free 1040nr software General business tax credit. Free 1040nr software   The general business credit available to a taxpayer is limited. Free 1040nr software Any credit arising in a tax year beginning before 1998 that has not been used up can be carried forward for up to 15 years. Free 1040nr software Any unused credit arising in a tax year beginning after 1997 has a 1-year carryback and a 20-year carryforward period. Free 1040nr software   After the carryforward period, a deduction may be allowed for any unused business credit. Free 1040nr software If the taxpayer dies before the end of the carryforward period, the deduction generally is allowed in the year of death. Free 1040nr software   For more information on the general business credit, see Publication 334, Tax Guide for Small Business. Free 1040nr software Other Taxes Taxes other than income tax that may be owed on the final return of a decedent include self-employment tax and alternative minimum tax, which are reported on Form 1040. Free 1040nr software Self-employment tax. Free 1040nr software   Self-employment tax may be owed on the final return if either of the following applied to the decedent in the year of death: Net earnings from self-employment (excluding income described in (2)) were $400 or more; or Wages from services performed as a church employee were $108. Free 1040nr software 28 or more. Free 1040nr software Alternative minimum tax (AMT). Free 1040nr software   The tax laws give special treatment to certain types of income and allow special deductions and credits for certain types of expenses. Free 1040nr software The alternative minimum tax (AMT) was enacted so taxpayers who benefit from these laws still pay at least a minimum amount of tax. Free 1040nr software In general, the AMT is the excess of the tentative minimum tax over the regular tax shown on the return. Free 1040nr software Form 6251. Free 1040nr software    Use Form 6251, Alternative Minimum Tax—Individuals, to determine if this tax applies to the decedent. Free 1040nr software See the form instructions for information on when you must attach Form 6251 to Form 1040. Free 1040nr software Form 8801. Free 1040nr software   If the decedent paid AMT in a previous year or had a credit carryforward, the decedent may be eligible for a minimum tax credit. Free 1040nr software See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts. Free 1040nr software Payments of Tax The income tax withheld from the decedent's salary, wages, pensions, or annuities, and the amount paid as estimated tax are credits (advance payments of tax) that must be claimed on the final return. Free 1040nr software Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Income tax liability may be forgiven for a decedent who dies due to service in a combat zone, due to military or terrorist actions, as a result of a terrorist attack, or while serving in the line of duty as an astronaut. Free 1040nr software Combat Zone If a member of the Armed Forces of the United States dies while in active service in a combat zone or from wounds, disease, or injury incurred in a combat zone, the decedent's income tax liability is abated (forgiven) for the entire year in which death occurred and for any prior tax year ending on or after the first day the person served in a combat zone in active service. Free 1040nr software For this purpose, a qualified hazardous duty area is treated as a combat zone. Free 1040nr software If the tax (including interest, additions to the tax, and additional amounts) for these years has been assessed, the assessment will be forgiven. Free 1040nr software If the tax has been collected (regardless of the date of collection), that tax will be credited or refunded. Free 1040nr software Any of the decedent's income tax for tax years before those mentioned above that remains unpaid as of the actual (or presumptive) date of death will not be assessed. Free 1040nr software If any unpaid tax (including interest, additions to the tax, and additional amounts) has been assessed, this assessment will be forgiven. Free 1040nr software Also, if any tax was collected after the date of death, that amount will be credited or refunded. Free 1040nr software The date of death of a member of the Armed Forces reported as missing in action or as a prisoner of war is the date his or her name is removed from missing status for military pay purposes. Free 1040nr software This is true even if death actually occurred earlier. Free 1040nr software For other tax information for members of the Armed Forces, see Publication 3, Armed Forces' Tax Guide. Free 1040nr software Military or Terrorist Actions The decedent's income tax liability is forgiven if, at death, he or she was a military or civilian employee of the United States who died because of wounds or injury incurred: While a U. Free 1040nr software S. Free 1040nr software employee, and In a military or terrorist action. Free 1040nr software The forgiveness applies to the tax year in which death occurred and for any earlier tax year, beginning with the year before the year in which the wounds or injury occurred. Free 1040nr software Example. Free 1040nr software The income tax liability of a civilian employee of the United States who died in 2013 because of wounds incurred while a U. Free 1040nr software S. Free 1040nr software employee in a terrorist attack that occurred in 2008 will be forgiven for 2013 and for all prior tax years in the period 2007 through 2012. Free 1040nr software Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended, as discussed later. Free 1040nr software Military or terrorist action defined. Free 1040nr software   A military or terrorist action means the following. Free 1040nr software Any terrorist activity that most of the evidence indicates was directed against the United States or any of its allies. Free 1040nr software Any military action involving the U. Free 1040nr software S. Free 1040nr software Armed Forces and resulting from violence or aggression against the United States or any of its allies, or the threat of such violence or aggression. Free 1040nr software   Terrorist activity includes criminal offenses intended to coerce, intimidate, or retaliate against the government or civilian population. Free 1040nr software Military action does not include training exercises. Free 1040nr software Any multinational force in which the United States is participating is treated as an ally of the United States. Free 1040nr software Determining if a terrorist activity or military action has occurred. Free 1040nr software   You may rely on published guidance from the IRS to determine if a particular event is considered a terrorist activity or military action. Free 1040nr software Specified Terrorist Victim The Victims of Terrorism Tax Relief Act of 2001 (the Act) provides tax relief for those injured or killed as a result of terrorist attacks, certain survivors of those killed as a result of terrorist attacks, and others who were affected by terrorist attacks. Free 1040nr software Under the Act, the federal income tax liability of those killed in the following attacks (specified terrorist victim) is forgiven for certain tax years. Free 1040nr software The April 19, 1995, terrorist attack on the Alfred P. Free 1040nr software Murrah Federal Building (Oklahoma City). Free 1040nr software The September 11, 2001, terrorist attacks. Free 1040nr software The terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002. Free 1040nr software The Act also exempts from federal income tax the following types of income. Free 1040nr software Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Free 1040nr software Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Free 1040nr software Certain death benefits paid by an employer to the survivor of an employee because the employee died as a result of a terrorist attack. Free 1040nr software Payments from the September 11th Victim Compensation Fund 2001. Free 1040nr software The Act also reduces the estate tax of individuals who die as a result of a terrorist attack. Free 1040nr software See Publication 3920, Tax Relief for Victims of Terrorist Attacks, for more information. Free 1040nr software Astronauts Legislation extended the tax relief available under the Victims of Terrorism Tax Relief Act of 2001 (the Act) to astronauts who died in the line of duty after December 31, 2002. Free 1040nr software The decedent's income tax liability is forgiven for the tax year in which death occurs, and for the tax year prior to death. Free 1040nr software For information on death benefit payments and the reduction of federal estate taxes, see Publication 3920. Free 1040nr software However, the discussions in that publication under Death Benefits and Estate Tax Reduction should be modified for astronauts (for example, by using the date of death of the astronaut instead of September 11, 2001). Free 1040nr software For more information on the Act, see Publication 3920. Free 1040nr software Claim for Credit or Refund If any of these tax-forgiveness situations applies to a prior year tax, any tax paid for which the period for filing a claim has not ended will be credited or refunded. Free 1040nr software If any tax is still due, it will be canceled. Free 1040nr software The normal period for filing a claim for credit or refund is 3 years after the return was filed or 2 years after the tax was paid, whichever is later. Free 1040nr software If death occurred in a combat zone or from wounds, disease, or injury incurred in a combat zone, the period for filing the claim is extended by: The amount of time served in the combat zone (including any period in which the individual was in missing status), plus The period of continuous qualified hospitalization for injury from service in the combat zone, if any, plus The next 180 days. Free 1040nr software Qualified hospitalization means any hospitalization outside the United States and any hospitalization in the United States of not more than 5 years. Free 1040nr software This extended period for filing the claim also applies to a member of the Armed Forces who was deployed outside the United States in a designated contingency operation. Free 1040nr software Filing a claim. Free 1040nr software   Use the following procedures to file a claim. Free 1040nr software If a U. Free 1040nr software S. Free 1040nr software individual income tax return (Form 1040, 1040A, or 1040EZ) has not been filed, you should make a claim for refund of any withheld income tax or estimated tax payments by filing Form 1040. Free 1040nr software Form W-2, Wage and Tax Statement, must accompany all returns. Free 1040nr software If a U. Free 1040nr software S. Free 1040nr software individual income tax return has been filed, you should make a claim for refund by filing Form 1040X. Free 1040nr software You must file a separate Form 1040X for each year in question. Free 1040nr software   You must file these returns and claims at the following address for regular mail (U. Free 1040nr software S. Free 1040nr software Postal Service). Free 1040nr software    Internal Revenue Service 333 W. Free 1040nr software Pershing, P5–6503 Kansas City, MO 64108   Identify all returns and claims for refund by writing “Iraq—KIA,” “Enduring Freedom—KIA,” “Kosovo Operation—KIA,” “Desert Storm—KIA,” or “Former Yugoslavia—KIA” in bold letters on the top of page 1 of the return or claim. Free 1040nr software On the applicable return, write the same phrase on the line for total tax. Free 1040nr software If the individual was killed in a terrorist or military action, put “KITA” on the front of the return and on the line for total tax. Free 1040nr software   Include an attachment showing the computation of the decedent's tax liability and a computation of the amount to be forgiven. Free 1040nr software On joint returns, make an allocation of the tax as described below under Joint returns. Free 1040nr software If you cannot make a proper allocation, attach a statement of all income and deductions allocable to each spouse and the IRS will make the proper allocation. Free 1040nr software   You must attach Form 1310 to all returns and claims for refund. Free 1040nr software However, for exceptions to filing Form 1310, see Form 1310. Free 1040nr software Statement of Person Claiming Refund Due a Deceased Taxpayer, under Refund, earlier. Free 1040nr software   You must also attach proof of death that includes a statement that the individual was a U. Free 1040nr software S. Free 1040nr software employee on the date of injury and on the date of death and died as the result of a military or terrorist action. Free 1040nr software For military and civilian employees of the Department of Defense, attach DD Form 1300, Report of Casualty. Free 1040nr software For other U. Free 1040nr software S. Free 1040nr software civilian employees killed in the United States, attach a death certificate and a certification (letter) from the federal employer. Free 1040nr software For other U. Free 1040nr software S. Free 1040nr software civilian employees killed overseas, attach a certification from the Department of State. Free 1040nr software   If you do not have enough tax information to file a timely claim for refund, you can suspend the period for filing a claim by filing Form 1040X. Free 1040nr software Attach Form 1310, any required documentation currently available, and a statement that you will file an amended claim as soon as you have the required tax information. Free 1040nr software Joint returns. Free 1040nr software   If a joint return was filed, only the decedent's part of the income tax liability is eligible for forgiveness. Free 1040nr software Determine the decedent's tax liability as follows. Free 1040nr software Figure the income tax for which the decedent would have been liable if a separate return had been filed. Free 1040nr software Figure the income tax for which the spouse would have been liable if a separate return had been filed. Free 1040nr software Multiply the joint tax liability by a fraction. Free 1040nr software The numerator of the fraction is the amount in (1), above. Free 1040nr software The denominator of the fraction is the total of (1) and (2). Free 1040nr software   The resulting amount from (3) above is the decedent's tax liability eligible for forgiveness. Free 1040nr software Filing Reminders To minimize the time needed to process the decedent's final return and issue any refund, be sure to follow these procedures. Free 1040nr software Write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Free 1040nr software If a personal representative has been appointed, the personal representative must sign the return. Free 1040nr software If it is a joint return, the surviving spouse must also sign it. Free 1040nr software If you are the decedent's spouse filing a joint return with the decedent and no personal representative has been appointed, write “Filing as surviving spouse” in the area where you sign the return. Free 1040nr software If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Free 1040nr software ” To claim a refund for the decedent, do the following. Free 1040nr software If you are the decedent's spouse filing a joint return with the decedent, file only the tax return to claim the refund. Free 1040nr software If you are the personal representative and the return is not a joint return filed with the decedent's surviving spouse, file the return and attach a copy of the certificate that shows your appointment by the court. Free 1040nr software (A power of attorney or a copy of the decedent's will is not acceptable evidence of your appointment as the personal representative. Free 1040nr software ) If you are filing an amended return, attach Form 1310 and a copy of the certificate of appointment (or, if you have already sent the certificate of appointment to IRS, write “Certificate Previously Filed” at the bottom of Form 1310). Free 1040nr software If you are not filing a joint return as the surviving spouse and a personal representative has not been appointed, file the return and attach Form 1310. Free 1040nr software Other Tax Information Discussed below is information about the effect of an individual's death on the income tax liability of the survivors (including widows and widowers), the beneficiaries, and the estate. Free 1040nr software Tax Benefits for Survivors Survivors can qualify for certain benefits when filing their own income tax returns. Free 1040nr software Joint return by surviving spouse. Free 1040nr software   A surviving spouse can file a joint return for the year of death and may qualify for special tax rates for the following 2 years, as explained under Qualifying widows and widowers, later. Free 1040nr software Decedent as your dependent. Free 1040nr software   If the decedent qualified as your dependent for a part of the year before death, you can claim the exemption for the dependent on your tax return, regardless of when death occurred during the year. Free 1040nr software   If the decedent was your qualifying child, you may be able to claim the child tax credit or the earned income credit. Free 1040nr software To determine if you qualify for the child tax credit, see the instructions for Form 1040, line 51; Form 1040A, line 33; or Form 1040NR, line 48. Free 1040nr software To determine if you qualify for the earned income credit, see the instructions for Form 1040, lines 64a and 64b or Form 1040A, lines 38a and 38b. Free 1040nr software Qualifying widows and widowers. Free 1040nr software   If your spouse died within the 2 tax years preceding the year for which your return is being filed, you may be eligible to claim the filing status of qualifying widow(er) with dependent child and qualify to use the married-filing-jointly tax rates. Free 1040nr software Requirements. Free 1040nr software   Generally, you qualify for this special benefit if you meet all of the following requirements. Free 1040nr software You were entitled to file a joint return with your spouse for the year of death—whether or not you actually filed jointly. Free 1040nr software You did not remarry before the end of the current tax year. Free 1040nr software You have a child, stepchild, or foster child who qualifies as your dependent for the tax year. Free 1040nr software You provide more than half the cost of maintaining your home, which is the principal residence of that child for the entire year except for temporary absences. Free 1040nr software Example. Free 1040nr software William Burns' wife died in 2010. Free 1040nr software William has not remarried and continued throughout 2011 and 2012 to maintain a home for himself and his dependent child. Free 1040nr software For 2010, he was entitled to file a joint return for himself and his deceased wife. Free 1040nr software For 2011 and 2012, he qualifies to file as a qualifying widower with dependent child. Free 1040nr software For later years, he may qualify to file as a head of household. Free 1040nr software Figuring your tax. Free 1040nr software   Check the box on line 5 (Form 1040 or 1040A) under Filing Status on your tax return. Free 1040nr software Use the Tax Rate Schedule or the column in the Tax Table for Married filing jointly, which gives you the split-income benefits. Free 1040nr software   The last year you can file jointly with, or claim an exemption for, your deceased spouse is the year of death. Free 1040nr software Joint return filing rules. Free 1040nr software   If you are the surviving spouse and a personal representative is handling the estate for the decedent, you should coordinate filing your return for the year of death with this personal representative. Free 1040nr software See Joint Return under Final Income Tax Return for Decedent—Form 1040, earlier. Free 1040nr software Income in Respect of a Decedent All income the decedent would have received had death not occurred that was not properly includible on the final return, discussed earlier, is income in respect of a decedent. Free 1040nr software If the decedent is a specified terrorist victim (see Specified Terrorist Victim, earlier), income received after the date of death and before the end of the decedent's tax year (determined without regard to death) is excluded from the recipient's gross income. Free 1040nr software This exclusion does not apply to certain income. Free 1040nr software For more information, see Publication 3920. Free 1040nr software How To Report Income in respect of a decedent must be included in the income of one of the following. Free 1040nr software The decedent's estate, if the estate receives it. Free 1040nr software The beneficiary, if the right to income is passed directly to the beneficiary and the beneficiary receives it. Free 1040nr software Any person to whom the estate properly distributes the right to receive it. Free 1040nr software If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. Free 1040nr software See Estate Tax Deduction, later. Free 1040nr software Example 1. Free 1040nr software Frank Johnson owned and operated an apple orchard. Free 1040nr software He used the cash method of accounting. Free 1040nr software He sold and delivered 1,000 bushels of apples to a canning factory for $2,000, but did not receive payment before his death. Free 1040nr software The proceeds from the sale are income in respect of a decedent. Free 1040nr software When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Free 1040nr software When Frank's widow collects the $2,000, she must include that amount in her return. Free 1040nr software It is not reported on the final return of the decedent or on the return of the estate. Free 1040nr software Example 2. Free 1040nr software Assume the same facts as in Example 1, except that Frank used the accrual method of accounting. Free 1040nr software The amount accrued from the sale of the apples would be included on his final return. Free 1040nr software Neither the estate nor the widow would realize income in respect of a decedent when the money is later paid. Free 1040nr software Example 3. Free 1040nr software On February 1, George High, a cash method taxpayer, sold his tractor for $3,000, payable March 1 of the same year. Free 1040nr software His adjusted basis in the tractor was $2,000. Free 1040nr software George died on February 15, before receiving payment. Free 1040nr software The gain to be reported as income in respect of a decedent is the $1,000 difference between the decedent's basis in the property and the sale proceeds. Free 1040nr software In other words, the income in respect of a decedent is the gain the decedent would have realized had he lived. Free 1040nr software Example 4. Free 1040nr software Cathy O'Neil was entitled to a large salary payment at the date of her death. Free 1040nr software The amount was to be paid in five annual installments. Free 1040nr software The estate, after collecting two installments, distributed the right to the remaining installments to you, the beneficiary. Free 1040nr software The payments are income in respect of a decedent. Free 1040nr software None of the payments were includible on Cathy's final return. Free 1040nr software The estate must include in its income the two installments it received, and you must include in your income each of the three installments as you receive them. Free 1040nr software Example 5. Free 1040nr software You inherited the right to receive renewal commissions on life insurance sold by your father before his death. Free 1040nr software You inherited the right from your mother, who acquired it by bequest from your father. Free 1040nr software Your mother died before she received all the commissions she had the right to receive, so you received the rest. Free 1040nr software The commissions are income in respect of a decedent. Free 1040nr software None of these commissions were includible in your father's final return. Free 1040nr software The commissions received by your mother were included in her income. Free 1040nr software The commissions you received are not includible in your mother's income, even on her final return. Free 1040nr software You must include them in your income. Free 1040nr software Character of income. Free 1040nr software   The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. Free 1040nr software If the income would have been a capital gain to the decedent, it will be a capital gain to you. Free 1040nr software Transfer of right to income. Free 1040nr software   If you transfer your right to income in respect of a decedent, you must include in your income the greater of: The amount you receive for the right, or The fair market value of the right you transfer. Free 1040nr software   If you make a gift of such a right, you must include in your income the fair market value of the right at the time of the gift. Free 1040nr software   If the right to income from an installment obligation is transferred, the amount you must include in income is reduced by the basis of the obligation. Free 1040nr software See Installment obligations, later. Free 1040nr software Transfer defined. Free 1040nr software   A transfer for this purpose includes a sale, exchange, or other disposition, the satisfaction of an installment obligation at other than face value, or the cancellation of an installment obligation. Free 1040nr software Installment obligations. Free 1040nr software   If the decedent sold property using the installment method and you are collecting payments on an installment obligation acquired from the decedent, use the same gross profit percentage the decedent used to figure the part of each payment that represents profit. Free 1040nr software Include in your income the same profit the decedent would have included had death not occurred. Free 1040nr software For more information, see Publication 537, Installment Sales. Free 1040nr software   If you dispose of an installment obligation acquired from a decedent (other than by transfer to the obligor), the rules explained in Publication 537 for figuring gain or loss on the disposition apply to you. Free 1040nr software Transfer to obligor. Free 1040nr software   A transfer of a right to income, discussed earlier, has occurred if the decedent (seller) sold property using the installment method and the installment obligation was transferred to the obligor (buyer or person legally obligated to pay the installments). Free 1040nr software A transfer also occurs if the obligation was canceled either at death or by the estate or person receiving the obligation from the decedent. Free 1040nr software An obligation that becomes unenforceable is treated as having been canceled. Free 1040nr software   If such a transfer occurs, the amount included in the income of the transferor (the estate or beneficiary) is the greater of the amount received or the fair market value of the installment obligation at the time of transfer, reduced by the basis of the obligation. Free 1040nr software The basis of the obligation is the decedent's basis, adjusted for all installment payments received after the decedent's death and before the transfer. Free 1040nr software   If the decedent and obligor were related persons, the fair market value of the obligation cannot be less than its face value. Free 1040nr software Specific Types of Income in Respect of a Decedent This section explains and provides examples of some specific types of income in respect of a decedent. Free 1040nr software Wages. Free 1040nr software   The entire amount of wages or other employee compensation earned by the decedent but unpaid at the time of death is income in respect of a decedent. Free 1040nr software The income is not reduced by any amounts withheld by the employer. Free 1040nr software If the income is $600 or more, the employer should report it in box 3 of Form 1099-MISC, Miscellaneous Income, and give the recipient a copy of the form or a similar statement. Free 1040nr software   Wages paid as income in respect of a decedent are not subject to federal income tax withholding. Free 1040nr software However, if paid during the calendar year of death, they are subject to withholding for social security and Medicare taxes. Free 1040nr software These taxes should be included on the decedent's Form W-2 along with the taxes withheld before death. Free 1040nr software These wages are not included in box 1 of Form W-2. Free 1040nr software   Wages paid as income in respect of a decedent after the year of death generally are not subject to withholding for any federal taxe