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How Do I Amend A 2009 Tax Return

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How Do I Amend A 2009 Tax Return

How do i amend a 2009 tax return 5. How do i amend a 2009 tax return   Exemptions, Deductions, and Credits Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Items Related to Excluded Income Exemptions Contributions to Foreign Charitable Organizations Moving ExpensesAllocation of Moving Expenses Forms To File Contributions to Individual Retirement Arrangements Taxes of Foreign Countries and U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return PossessionsCredit for Foreign Income Taxes Deduction for Foreign Income Taxes Deduction for Other Foreign Taxes How To Report Deductions Topics - This chapter discusses: The rules concerning items related to excluded income, Exemptions, Contributions to foreign charitable organizations, Moving expenses, Contributions to individual retirement arrangements (IRAs), Taxes of foreign countries and U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possessions, and How to report deductions. How do i amend a 2009 tax return Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 514 Foreign Tax Credit for Individuals 521 Moving Expenses 523 Selling Your Home 590 Individual Retirement Arrangements (IRAs) 597 Information on the United States—Canada Income Tax Treaty Form (and Instructions) 1116 Foreign Tax Credit 2106 Employee Business Expenses 2555 Foreign Earned Income 2555-EZ Foreign Earned Income Exclusion 3903 Moving Expenses Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business SS-5 Application for a Social Security Card W-7 Application for IRS Individual Taxpayer Identification Number See chapter 7 for information about getting these publications and forms. How do i amend a 2009 tax return Items Related to Excluded Income U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizens and resident aliens living outside the United States generally are allowed the same deductions as citizens and residents living in the United States. How do i amend a 2009 tax return If you choose to exclude foreign earned income or housing amounts, you cannot deduct, exclude, or claim a credit for any item that can be allocated to or charged against the excluded amounts. How do i amend a 2009 tax return This includes any expenses, losses, and other normally deductible items that are allocable to the excluded income. How do i amend a 2009 tax return You can deduct only those expenses connected with earning includible income. How do i amend a 2009 tax return These rules apply only to items definitely related to the excluded earned income and they do not apply to other items that are not definitely related to any particular type of gross income. How do i amend a 2009 tax return These rules do not apply to items such as: Personal exemptions, Qualified retirement contributions, Alimony payments, Charitable contributions, Medical expenses, Mortgage interest, or Real estate taxes on your personal residence. How do i amend a 2009 tax return For purposes of these rules, your housing deduction is not treated as allocable to your excluded income, but the deduction for self- employment tax is. How do i amend a 2009 tax return If you receive foreign earned income in a tax year after the year in which you earned it, you may have to file an amended return for the earlier year to properly adjust the amounts of deductions, credits, or exclusions allocable to your foreign earned income and housing exclusions. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return In 2012, you had $90,400 of foreign earned income and $9,500 of deductions allocable to your foreign earned income. How do i amend a 2009 tax return You did not have a housing exclusion. How do i amend a 2009 tax return Because you excluded all of your foreign earned income, you would not have been able to claim any of the deductions on your 2012 return. How do i amend a 2009 tax return In 2013, you received a $12,000 bonus for work you did abroad in 2012. How do i amend a 2009 tax return You can exclude $4,700 of the bonus because the limit on the foreign earned income exclusion for 2012 was $95,100 and you have already excluded $90,400. How do i amend a 2009 tax return Since you must include $7,300 of the bonus ($12,000 − $4,700) for work you did in 2012 in income, you can file an amended return for 2012 to claim $677 of the deductions. How do i amend a 2009 tax return This is the deductions allocable to the foreign earned income ($9,500) multiplied by the includible portion of the foreign earned income ($7,300) and divided by the total foreign earned income for 2012 ($102,400). How do i amend a 2009 tax return Exemptions You can claim an exemption for your nonresident alien spouse on your separate return, provided your spouse has no gross income for U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax purposes and is not the dependent of another U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return taxpayer. How do i amend a 2009 tax return You also can claim exemptions for individuals who qualify as your dependents. How do i amend a 2009 tax return To be your dependent, the individual must be a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen, U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return national, U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return resident alien, or a resident of Canada or Mexico for some part of the calendar year in which your tax year begins. How do i amend a 2009 tax return Children. How do i amend a 2009 tax return   Children usually are citizens or residents of the same country as their parents. How do i amend a 2009 tax return If you were a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen when your child was born, your child generally is a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen. How do i amend a 2009 tax return This is true even if the child's other parent is a nonresident alien, the child was born in a foreign country, and the child lives abroad with the other parent. How do i amend a 2009 tax return   If you have a legally adopted child who is not a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen, U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return resident, or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return national, the child meets the citizen requirement if you are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return national and the child lived with you as a member of your household all year. How do i amend a 2009 tax return Social security number. How do i amend a 2009 tax return   You must include on your return the social security number (SSN) of each dependent for whom you claim an exemption. How do i amend a 2009 tax return To get a social security number for a dependent, apply at a Social Security office or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return consulate. How do i amend a 2009 tax return You must provide original or certified copies of documents to verify the dependent's age, identity, and citizenship, and complete Form SS-5. How do i amend a 2009 tax return   If you do not have an SSN for a child who was born in 2013 and died in 2013, attach a copy of the child's birth certificate to your tax return. How do i amend a 2009 tax return Print “Died” in column (2) of line 6c of your Form 1040 or Form 1040A. How do i amend a 2009 tax return   If your dependent is a nonresident alien who is not eligible to get a social security number, you must list the dependent's individual taxpayer identification number (ITIN) instead of an SSN. How do i amend a 2009 tax return To apply for an ITIN, file Form W-7 with the IRS. How do i amend a 2009 tax return It usually takes 6 to 10 weeks to get an ITIN. How do i amend a 2009 tax return Enter your dependent's ITIN wherever an SSN is requested on your tax return. How do i amend a 2009 tax return More information. How do i amend a 2009 tax return   For more information about exemptions, see Publication 501. How do i amend a 2009 tax return Contributions to Foreign Charitable Organizations If you make contributions directly to a foreign church or other foreign charitable organization, you generally cannot deduct them. How do i amend a 2009 tax return Exceptions are explained under Canadian, Mexican, and Israeli charities, later. How do i amend a 2009 tax return You can deduct contributions to a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return organization that transfers funds to a charitable foreign organization if the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return organization controls the use of the funds by the foreign organization or if the foreign organization is just an administrative arm of the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return organization. How do i amend a 2009 tax return Canadian, Mexican, and Israeli charities. How do i amend a 2009 tax return   Under the income tax treaties with Canada, Mexico and Israel, you may be able to deduct contributions to certain Canadian, Mexican, and Israeli charitable organizations. How do i amend a 2009 tax return Generally, you must have income from sources in Canada, Mexico, or Israel, and the organization must meet certain requirements. How do i amend a 2009 tax return See Publication 597, Information on the United States-Canada Income Tax Treaty, and Publication 526, Charitable Contributions, for more information. How do i amend a 2009 tax return Moving Expenses If you moved to a new home in 2013 because of your job or business, you may be able to deduct the expenses of your move. How do i amend a 2009 tax return Generally, to be deductible, the moving expenses must have been paid or incurred in connection with starting work at a new job location. How do i amend a 2009 tax return See Publication 521 for a complete discussion of the deduction for moving expenses and information about moves within the United States. How do i amend a 2009 tax return Foreign moves. How do i amend a 2009 tax return   A foreign move is a move in connection with the start of work at a new job location outside the United States and its possessions. How do i amend a 2009 tax return A foreign move does not include a move back to the United States or its possessions. How do i amend a 2009 tax return Allocation of Moving Expenses When your new place of work is in a foreign country, your moving expenses are directly connected with the income earned in that foreign country. How do i amend a 2009 tax return If you exclude all or part of the income that you earn at the new location under the foreign earned income exclusion or the foreign housing exclusion, you cannot deduct the part of your moving expense that is allocable to the excluded income. How do i amend a 2009 tax return Also, you cannot deduct the part of the moving expense related to the excluded income for a move from a foreign country to the United States if you receive a reimbursement that you are able to treat as compensation for services performed in the foreign country. How do i amend a 2009 tax return Year to which expense is connected. How do i amend a 2009 tax return   The moving expense is connected with earning the income (including reimbursements, as discussed in chapter 4 under Reimbursement of moving expenses ) either entirely in the year of the move or in 2 years. How do i amend a 2009 tax return It is connected with earning the income entirely in the year of the move if you qualify for the foreign earned income exclusion under the bona fide residence test or physical presence test for at least 120 days during that tax year. How do i amend a 2009 tax return   If you do not qualify under either the bona fide residence test or the physical presence test for at least 120 days during the year of the move, the expense is connected with earning the income in 2 years. How do i amend a 2009 tax return The moving expense is connected with the year of the move and the following year if the move is from the United States to a foreign country. How do i amend a 2009 tax return The moving expense is connected with the year of the move and the preceding year if the move is from a foreign country to the United States. How do i amend a 2009 tax return Amount allocable to excluded income. How do i amend a 2009 tax return   To figure the amount of your moving expense that is allocable to your excluded foreign earned income (and not deductible), you must multiply your total moving expense deduction by a fraction. How do i amend a 2009 tax return The numerator (top number) of the fraction is the total of your excluded foreign earned income and housing amounts for both years and the denominator (bottom number) of the fraction is your total foreign earned income for both years. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return On November 1, 2012, you transfer to Monaco. How do i amend a 2009 tax return Your tax home is in Monaco, and you are a bona fide resident of Monaco for the entire tax year 2013. How do i amend a 2009 tax return In 2012, you paid $6,000 for allowable moving expenses for your move from the United States to Monaco. How do i amend a 2009 tax return You were fully reimbursed (under a nonaccountable plan) for these expenses in the same year. How do i amend a 2009 tax return The reimbursement is included in your income. How do i amend a 2009 tax return Your only other income consists of $16,000 wages earned in 2012 after the date of your move, and $100,100 wages earned in Monaco for 2013. How do i amend a 2009 tax return Because you did not meet the bona fide residence test for at least 120 days during 2012, the year of the move, the moving expenses are for services you performed in both 2012 and the following year, 2013. How do i amend a 2009 tax return Your total foreign earned income for both years is $122,100, consisting of $16,000 wages for 2012, $100,100 wages for 2013, and $6,000 moving expense reimbursement for both years. How do i amend a 2009 tax return You have no housing exclusion. How do i amend a 2009 tax return The total amount you can exclude is $113,190, consisting of the $97,600 full-year exclusion for 2013 and a $15,590 part-year exclusion for 2012 ($95,100 times the fraction of 60 qualifying bona fide residence days over 366 total days in the year). How do i amend a 2009 tax return To find the part of your moving expenses that is not deductible, multiply your $6,000 total expenses by the fraction $113,190 over $122,100. How do i amend a 2009 tax return The result, $5,562, is your nondeductible amount. How do i amend a 2009 tax return    You must report the full amount of the moving expense reimbursement in the year in which you received the reimbursement. How do i amend a 2009 tax return In the preceding example, this year was 2012. How do i amend a 2009 tax return You attribute the reimbursement to both 2012 and 2013 only to figure the amount of foreign earned income eligible for exclusion for each year. How do i amend a 2009 tax return Move between foreign countries. How do i amend a 2009 tax return   If you move between foreign countries, your moving expense is allocable to income earned in the year of the move if you qualified under either the bona fide residence test or the physical presence test for a period that includes at least 120 days in the year of the move. How do i amend a 2009 tax return New place of work in U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return   If your new place of work is in the United States, the deductible moving expenses are directly connected with the income earned in the United States. How do i amend a 2009 tax return If you treat a reimbursement from your employer as foreign earned income (see the discussion in chapter 4), you must allocate deductible moving expenses to foreign earned income. How do i amend a 2009 tax return Storage expenses. How do i amend a 2009 tax return   These expenses are attributable to work you do during the year in which you incur the storage expenses. How do i amend a 2009 tax return You cannot deduct the amount allocable to excluded income. How do i amend a 2009 tax return Moving Expense Attributable to Foreign Earnings in 2 Years If your moving expense deduction is attributable to your foreign earnings in 2 years (the year of the move and the following year), you should request an extension of time to file your return for the year of the move until after the end of the second year. How do i amend a 2009 tax return By then, you should have all the information needed to properly figure the moving expense deduction. How do i amend a 2009 tax return See Extensions under When To File and Pay in chapter 1. How do i amend a 2009 tax return If you do not request an extension, you should figure the part of the moving expense that you cannot deduct because it is allocable to the foreign earned income you are excluding. How do i amend a 2009 tax return You do this by multiplying the moving expense by a fraction, the numerator (top number) of which is your excluded foreign earned income for the year of the move, and the denominator (bottom number) of which is your total foreign earned income for the year of the move. How do i amend a 2009 tax return Once you know your foreign earnings and exclusion for the following year, you must either: Adjust the moving expense deduction by filing an amended return for the year of the move, or Recapture any additional unallowable amount as income on your return for the following year. How do i amend a 2009 tax return If, after you make the final computation, you have an additional amount of allowable moving expense deduction, you can claim this only on an amended return for the year of the move. How do i amend a 2009 tax return You cannot claim it on the return for the second year. How do i amend a 2009 tax return Forms To File Report your moving expenses on Form 3903. How do i amend a 2009 tax return Report your moving expense deduction on line 26 of Form 1040. How do i amend a 2009 tax return If you must reduce your moving expenses by the amount allocable to excluded income (as explained later under How To Report Deductions ), attach a statement to your return showing how you figured this amount. How do i amend a 2009 tax return For more information about figuring moving expenses, see Publication 521. How do i amend a 2009 tax return Contributions to Individual Retirement Arrangements Contributions to your individual retirement arrangements (IRAs) that are traditional IRAs or Roth IRAs are generally limited to the lesser of $5,500 ($6,500 if 50 or older) or your compensation that is includible in your gross income for the tax year. How do i amend a 2009 tax return In determining compensation for this purpose, do not take into account amounts you exclude under either the foreign earned income exclusion or the foreign housing exclusion. How do i amend a 2009 tax return Do not reduce your compensation by the foreign housing deduction. How do i amend a 2009 tax return If you are covered by an employer retirement plan at work, your deduction for your contributions to your traditional IRAs is generally limited based on your modified adjusted gross income. How do i amend a 2009 tax return This is your adjusted gross income figured without taking into account the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction. How do i amend a 2009 tax return Other modifications are also required. How do i amend a 2009 tax return For more information on IRAs, see Publication 590. How do i amend a 2009 tax return Taxes of Foreign Countries and U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Possessions You can take either a credit or a deduction for income taxes paid to a foreign country or a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possession. How do i amend a 2009 tax return Taken as a deduction, foreign income taxes reduce your taxable income. How do i amend a 2009 tax return Taken as a credit, foreign income taxes reduce your tax liability. How do i amend a 2009 tax return You must treat all foreign income taxes the same way. How do i amend a 2009 tax return If you take a credit for any foreign income taxes, you cannot deduct any foreign income taxes. How do i amend a 2009 tax return However, you may be able to deduct other foreign taxes. How do i amend a 2009 tax return See Deduction for Other Foreign Taxes, later. How do i amend a 2009 tax return There is no rule to determine whether it is to your advantage to take a deduction or a credit for foreign income taxes. How do i amend a 2009 tax return In most cases, it is to your advantage to take foreign income taxes as a tax credit, which you subtract directly from your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability, rather than as a deduction in figuring taxable income. How do i amend a 2009 tax return However, if foreign income taxes were imposed at a high rate and the proportion of foreign income to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return income is small, a lower final tax may result from deducting the foreign income taxes. How do i amend a 2009 tax return In any event, you should figure your tax liability both ways and then use the one that is better for you. How do i amend a 2009 tax return You can make or change your choice within 10 years from the due date for filing the tax return on which you are entitled to take either the deduction or the credit. How do i amend a 2009 tax return Foreign income taxes. How do i amend a 2009 tax return   These are generally income taxes you pay to any foreign country or possession of the United States. How do i amend a 2009 tax return Foreign income taxes on U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return return. How do i amend a 2009 tax return   Foreign income taxes can only be taken as a credit on Form 1040, line 47, or as an itemized deduction on Schedule A. How do i amend a 2009 tax return These amounts cannot be included as withheld income taxes on Form 1040, line 62. How do i amend a 2009 tax return Foreign taxes paid on excluded income. How do i amend a 2009 tax return   You cannot take a credit or deduction for foreign income taxes paid on earnings you exclude from tax under any of the following. How do i amend a 2009 tax return Foreign earned income exclusion. How do i amend a 2009 tax return Foreign housing exclusion. How do i amend a 2009 tax return Possession exclusion. How do i amend a 2009 tax return If your wages are completely excluded, you cannot deduct or take a credit for any of the foreign taxes paid on your wages. How do i amend a 2009 tax return   If only part of your wages is excluded, you cannot deduct or take a credit for the foreign income taxes allocable to the excluded part. How do i amend a 2009 tax return You find the taxes allocable to your excluded wages by applying a fraction to the foreign taxes paid on foreign earned income received during the tax year. How do i amend a 2009 tax return The numerator (top number) of the fraction is your excluded foreign earned income received during the tax year minus deductible expenses allocable to that income (not including the foreign housing deduction). How do i amend a 2009 tax return The denominator (bottom number) of the fraction is your total foreign earned income received during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). How do i amend a 2009 tax return   If foreign law taxes both earned income and some other type of income and the taxes on the other type cannot be separated, the denominator of the fraction is the total amount of income subject to foreign tax minus deductible expenses allocable to that income. How do i amend a 2009 tax return    If you take a foreign tax credit for tax on income you could have excluded under your choice to exclude foreign earned income or your choice to exclude foreign housing costs, one or both of the choices may be considered revoked. How do i amend a 2009 tax return Credit for Foreign Income Taxes If you take the foreign tax credit, you may have to file Form 1116 with Form 1040. How do i amend a 2009 tax return Form 1116 is used to figure the amount of foreign tax paid or accrued that can be claimed as a foreign tax credit. How do i amend a 2009 tax return Do not include the amount of foreign tax paid or accrued as withheld federal income taxes on Form 1040, line 62. How do i amend a 2009 tax return The foreign income tax for which you can claim a credit is the amount of legal and actual tax liability you pay or accrue during the year. How do i amend a 2009 tax return The amount for which you can claim a credit is not necessarily the amount withheld by the foreign country. How do i amend a 2009 tax return You cannot take a foreign tax credit for income tax you paid to a foreign country that would be refunded by the foreign country if you made a claim for refund. How do i amend a 2009 tax return Subsidies. How do i amend a 2009 tax return   If a foreign country returns your foreign tax payments to you in the form of a subsidy, you cannot claim a foreign tax credit based on these payments. How do i amend a 2009 tax return This rule applies to a subsidy provided by any means that is determined, directly or indirectly, by reference to the amount of tax, or to the base used to figure the tax. How do i amend a 2009 tax return   Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. How do i amend a 2009 tax return A credit is also not allowed if the subsidy is given to a person related to you, or persons who participated in a transaction or a related transaction with you. How do i amend a 2009 tax return Limit The foreign tax credit is limited to the part of your total U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax that is in proportion to your taxable income from sources outside the United States compared to your total taxable income. How do i amend a 2009 tax return The allowable foreign tax credit cannot be more than your actual foreign tax liability. How do i amend a 2009 tax return Exemption from limit. How do i amend a 2009 tax return   You will not be subject to this limit and will not have to file Form 1116 if you meet all three of the following requirements. How do i amend a 2009 tax return Your only foreign source income for the year is passive income (dividends, interest, royalties, etc. How do i amend a 2009 tax return ) that is reported to you on a payee statement (such as a Form 1099-DIV or 1099-INT). How do i amend a 2009 tax return Your foreign taxes for the year that qualify for the credit are not more than $300 ($600 if you are filing a joint return) and are reported on a payee statement. How do i amend a 2009 tax return You elect this procedure. How do i amend a 2009 tax return If you make this election, you cannot carry back or carry over any unused foreign tax to or from this year. How do i amend a 2009 tax return Separate limit. How do i amend a 2009 tax return   You must figure the limit on a separate basis with regard to “passive category income” and “general category income” (see the instructions for Form 1116). How do i amend a 2009 tax return Figuring the limit. How do i amend a 2009 tax return   In figuring taxable income in each category, you take into account only the amount that you must include in income on your federal tax return. How do i amend a 2009 tax return Do not take any excluded amount into account. How do i amend a 2009 tax return   To determine your taxable income in each category, deduct expenses and losses that are definitely related to that income. How do i amend a 2009 tax return   Other expenses (such as itemized deductions or the standard deduction) not definitely related to specific items of income must be apportioned to the foreign income in each category by multiplying them by a fraction. How do i amend a 2009 tax return The numerator (top number) of the fraction is your gross foreign income in the separate limit category. How do i amend a 2009 tax return The denominator (bottom number) of the fraction is your gross income from all sources. How do i amend a 2009 tax return For this purpose, gross income includes income that is excluded under the foreign earned income provisions but does not include any other exempt income. How do i amend a 2009 tax return You must use special rules for deducting interest expenses. How do i amend a 2009 tax return For more information on allocating and apportioning your deductions, see Publication 514. How do i amend a 2009 tax return Exemptions. How do i amend a 2009 tax return   Do not take the deduction for exemptions for yourself, your spouse, or your dependents in figuring taxable income for purposes of the limit. How do i amend a 2009 tax return Recapture of foreign losses. How do i amend a 2009 tax return   If you have an overall foreign loss and the loss reduces your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return source income (resulting in a reduction of your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability), you must recapture the loss in later years when you have taxable income from foreign sources. How do i amend a 2009 tax return This is done by treating a part of your taxable income from foreign sources in later years as U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return source income. How do i amend a 2009 tax return This reduces the numerator of the limiting fraction and the resulting foreign tax credit limit. How do i amend a 2009 tax return Recapture of domestic losses. How do i amend a 2009 tax return   If you have an overall domestic loss (resulting in no U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability), you cannot claim a foreign tax credit for taxes paid during that year. How do i amend a 2009 tax return You must recapture the loss in later years when you have U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return source taxable income. How do i amend a 2009 tax return This is done by treating a part of your taxable income from U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return sources in later years as foreign source income. How do i amend a 2009 tax return This increases the numerator of the limiting fraction and the resulting foreign tax credit limit. How do i amend a 2009 tax return Foreign tax credit carryback and carryover. How do i amend a 2009 tax return   The amount of foreign income tax not allowed as a credit because of the limit can be carried back 1 year and carried forward 10 years. How do i amend a 2009 tax return   More information on figuring the foreign tax credit can be found in Publication 514. How do i amend a 2009 tax return Deduction for Foreign Income Taxes Instead of taking the foreign tax credit, you can deduct foreign income taxes as an itemized deduction on Schedule A (Form 1040). How do i amend a 2009 tax return You can deduct only foreign income taxes paid on income that is subject to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax. How do i amend a 2009 tax return You cannot deduct foreign taxes paid on earnings you exclude from tax under any of the following. How do i amend a 2009 tax return Foreign earned income exclusion. How do i amend a 2009 tax return Foreign housing exclusion. How do i amend a 2009 tax return Possession exclusion. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen and qualify to exclude your foreign earned income. How do i amend a 2009 tax return Your excluded wages in Country X are $70,000 on which you paid income tax of $10,000. How do i amend a 2009 tax return You received dividends from Country X of $2,000 on which you paid income tax of $600. How do i amend a 2009 tax return You can deduct the $600 tax payment because the dividends relating to it are subject to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax. How do i amend a 2009 tax return Because you exclude your wages, you cannot deduct the income tax of $10,000. How do i amend a 2009 tax return If you exclude only a part of your wages, see the earlier discussion under Foreign taxes paid on excluded income. How do i amend a 2009 tax return Deduction for Other Foreign Taxes You can deduct real property taxes you pay that are imposed on you by a foreign country. How do i amend a 2009 tax return You take this deduction on Schedule A (Form 1040). How do i amend a 2009 tax return You cannot deduct other foreign taxes, such as personal property taxes, unless you incurred the expenses in a trade or business or in the production of income. How do i amend a 2009 tax return On the other hand, you generally can deduct personal property taxes when you pay them to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possessions. How do i amend a 2009 tax return But if you claim the possession exclusion, see Publication 570. How do i amend a 2009 tax return The deduction for foreign taxes other than foreign income taxes is not related to the foreign tax credit. How do i amend a 2009 tax return You can take deductions for these miscellaneous foreign taxes and also claim the foreign tax credit for income taxes imposed by a foreign country. How do i amend a 2009 tax return How To Report Deductions If you exclude foreign earned income or housing amounts, how you show your deductions on your tax return and how you figure the amount allocable to your excluded income depends on whether the expenses are used in figuring adjusted gross income (Form 1040, line 38) or are itemized deductions. How do i amend a 2009 tax return If you have deductions used in figuring adjusted gross income, enter the total amount for each of these items on the appropriate lines and schedules of Form 1040. How do i amend a 2009 tax return Generally, you figure the amount of a deduction related to the excluded income by multiplying the deduction by a fraction, the numerator of which is your foreign earned income exclusion and the denominator of which is your foreign earned income. How do i amend a 2009 tax return Enter the amount of the deduction(s) related to excluded income on line 44 of Form 2555. How do i amend a 2009 tax return If you have itemized deductions related to excluded income, enter on Schedule A (Form 1040) only the part not related to excluded income. How do i amend a 2009 tax return You figure that amount by subtracting from the total deduction the amount related to excluded income. How do i amend a 2009 tax return Generally, you figure the amount that is related to the excluded income by multiplying the total deduction by a fraction, the numerator of which is your foreign earned income exclusion and the denominator of which is your foreign earned income. How do i amend a 2009 tax return Attach a statement to your return showing how you figured the deductible amount. How do i amend a 2009 tax return Example 1. How do i amend a 2009 tax return You are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen employed as an accountant. How do i amend a 2009 tax return Your tax home is in Germany for the entire tax year. How do i amend a 2009 tax return You meet the physical presence test. How do i amend a 2009 tax return Your foreign earned income for the year was $122,000 and your investment income was $10,380. How do i amend a 2009 tax return After excluding $97,600, your AGI is $34,780. How do i amend a 2009 tax return You had unreimbursed business expenses of $2,500 for travel and entertainment in earning your foreign income, of which $500 was for meals and entertainment. How do i amend a 2009 tax return These expenses are deductible only as miscellaneous deductions on Schedule A (Form 1040). How do i amend a 2009 tax return You also have $500 of miscellaneous expenses that are not related to your foreign income that you enter on line 23 of Schedule A. How do i amend a 2009 tax return You must fill out Form 2106. How do i amend a 2009 tax return On that form, reduce your deductible meal and entertainment expenses by 50% ($250). How do i amend a 2009 tax return You must reduce the remaining $2,250 of travel and entertainment expenses by 80% ($1,800) because you excluded 80% ($97,600/$122,000) of your foreign earned income. How do i amend a 2009 tax return You carry the remaining total of $450 to line 21 of Schedule A. How do i amend a 2009 tax return Add the $450 to the $500 that you have on line 23 and enter the total ($950) on line 24. How do i amend a 2009 tax return On line 26 of Schedule A, enter $696, which is 2% of your adjusted gross income of $34,780 (line 38, Form 1040) and subtract it from the amount on line 24. How do i amend a 2009 tax return Enter $254 on line 27 of Schedule A. How do i amend a 2009 tax return Example 2. How do i amend a 2009 tax return You are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen, have a tax home in Spain, and meet the physical presence test. How do i amend a 2009 tax return You are self-employed and personal services produce the business income. How do i amend a 2009 tax return Your gross income was $116,931, business expenses $66,895, and net income (profit) $50,036. How do i amend a 2009 tax return You choose the foreign earned income exclusion and exclude $97,600 of your gross income. How do i amend a 2009 tax return Since your excluded income is 83. How do i amend a 2009 tax return 47% of your total income, 83. How do i amend a 2009 tax return 47% of your business expenses are not deductible. How do i amend a 2009 tax return Report your total income and expenses on Schedule C (Form 1040). How do i amend a 2009 tax return On Form 2555 you will show the following: Line 20a, $116,931, gross income, Lines 42 and 43, $97,600, foreign earned income exclusion, and Line 44, $55,837 (83. How do i amend a 2009 tax return 47% × $66,895) business expenses attributable to the exclusion. How do i amend a 2009 tax return In this situation (Example 2), you cannot use Form 2555-EZ since you had self-employment income and business expenses. How do i amend a 2009 tax return Example 3. How do i amend a 2009 tax return Assume in Example 2 that both capital and personal services combine to produce the business income. How do i amend a 2009 tax return No more than 30% of your net income, or $15,011, assuming that this amount is a reasonable allowance for your services, is considered earned and can be excluded. How do i amend a 2009 tax return Your exclusion of $15,011 is 12. How do i amend a 2009 tax return 84% of your gross income ($15,011 ÷ $116,931). How do i amend a 2009 tax return Because you excluded 12. How do i amend a 2009 tax return 84% of your total income, $8,589 (. How do i amend a 2009 tax return 1284 x $66,895) of your business expenses is attributable to the excluded income and is not deductible. How do i amend a 2009 tax return Example 4. How do i amend a 2009 tax return You are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen, have a tax home in Brazil, and meet the physical presence test. How do i amend a 2009 tax return You are self-employed and both capital and personal services combine to produce business income. How do i amend a 2009 tax return Your gross income was $146,000, business expenses were $172,000, and your net loss was $26,000. How do i amend a 2009 tax return A reasonable allowance for the services you performed for the business is $77,000. How do i amend a 2009 tax return Because you incurred a net loss, the earned income limit of 30% of your net profit does not apply. How do i amend a 2009 tax return The $77,000 is foreign earned income. How do i amend a 2009 tax return If you choose to exclude the $77,000, you exclude 52. How do i amend a 2009 tax return 74% of your gross income ($77,000 ÷ $146,000), and 52. How do i amend a 2009 tax return 74% of your business expenses ($90,713) is attributable to that income and is not deductible. How do i amend a 2009 tax return Show your total income and expenses on Schedule C (Form 1040). How do i amend a 2009 tax return On Form 2555, exclude $77,000 and show $90,713 on line 44. How do i amend a 2009 tax return Subtract line 44 from line 43, and enter the difference as a negative (in parentheses) on line 45. How do i amend a 2009 tax return Because this amount is negative, enter it as a positive (no parentheses) on line 21, Form 1040, and combine it with your other income to arrive at total income on line 22 of Form 1040. How do i amend a 2009 tax return In this situation (Example 4), you would probably not want to choose the foreign earned income exclusion if this was the first year you were eligible. How do i amend a 2009 tax return If you had chosen the exclusion in an earlier year, you might want to revoke the choice for this year. How do i amend a 2009 tax return To do so would mean that you could not claim the exclusion again for the next 5 tax years without IRS approval. How do i amend a 2009 tax return See Choosing the Exclusion in chapter 4. How do i amend a 2009 tax return Example 5. How do i amend a 2009 tax return You are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen, have a tax home in Panama, and meet the bona fide residence test. How do i amend a 2009 tax return You have been performing services for clients as a partner in a firm that provides services exclusively in Panama. How do i amend a 2009 tax return Capital investment is not material in producing the partnership's income. How do i amend a 2009 tax return Under the terms of the partnership agreement, you are to receive 50% of the net profits. How do i amend a 2009 tax return The partnership received gross income of $244,000 and incurred operating expenses of $98,250. How do i amend a 2009 tax return Of the net profits of $145,750, you received $72,875 as your distributive share. How do i amend a 2009 tax return You choose to exclude $97,600 of your share of the gross income. How do i amend a 2009 tax return Because you exclude 80% ($97,600 ÷ $122,000) of your share of the gross income, you cannot deduct $39,300, 80% of your share of the operating expenses (. How do i amend a 2009 tax return 80 × $49,125). How do i amend a 2009 tax return Report $72,875, your distributive share of the partnership net profit, on Schedule E (Form 1040), Supplemental Income and Loss. How do i amend a 2009 tax return On Form 2555, show $97,600 on line 42 and show $39,300 on line 44. How do i amend a 2009 tax return Your exclusion on Form 2555 is $58,300. How do i amend a 2009 tax return In this situation (Example 5), you cannot use Form 2555-EZ since you had earned income other than salaries and wages and you had business expenses. How do i amend a 2009 tax return Prev  Up  Next   Home   More Online Publications
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Withdrawal of Cycle C Cash Balance Applications

Cycle C determination letter applicants who intend to adopt a pre-approved cash balance plan may withdraw their applications for individually designed cash balance plans by May 31, 2014, if they sign Form 8905, Certification of Intent to Adopt a Pre-approved Plan, by March 31, 2014.

Background

Announcement 2014-4 extended the submission period for pre-approved defined benefit pension plans from January 31, 2014, to February 2, 2015, to allow time for the IRS to expand the pre-approved program to permit plans with cash balance features. The announcement also allowed Cycle C plan sponsors who want to adopt a pre-approved cash balance plan to complete Form 8905 by March 31, 2014, instead of submitting determination letter applications for individually designed plans by the Cycle C deadline of January 31, 2014.

Withdrawals for Cycle C applicants

Cycle C applicants who already submitted their applications for individually-designed cash balance plans during the second Cycle C remedial amendment cycle that ended January 31, 2014, and who instead wish to adopt a pre-approved cash balance plan, may sign the Form 8905, withdraw the application, and request a refund of the user fee by complying with the instructions below.

How to request a withdrawal and user fee refund

Request the return of your Cycle C determination letter application and a refund of the user fee in writing. Your request must be postmarked (or faxed) by May 31, 2014. You must include:

  1. the name of the plan sponsor
  2. plan number
  3. EIN
  4. the document locator number, if known (shown on your IRS acknowledgement letter)
  5. the following statement in bold letters: “Per Announcement 2014-4, we are withdrawing this application in order to submit under the pre-approved program.

Fax or mail your request

Mail address:

Internal Revenue Service
550 Main Street
Cincinnati, OH 45202
Attn:  Joyce Heinbuch

Fax number:

Attn: Ms. Heinbuch, (513) 263-4699 (not a toll-free call).

Additional resources

Page Last Reviewed or Updated: 19-Mar-2014

The How Do I Amend A 2009 Tax Return

How do i amend a 2009 tax return Publication 514 - Main Content Table of Contents Choosing To Take Credit or DeductionChoice Applies to All Qualified Foreign Taxes Making or Changing Your Choice Why Choose the Credit?Credit for Taxes Paid or Accrued Foreign Currency and Exchange Rates Foreign Tax Redetermination Who Can Take the Credit?U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Citizens Resident Aliens Nonresident Aliens What Foreign Taxes Qualify for the Credit?Tax Must Be Imposed on You You Must Have Paid or Accrued the Tax Tax Must Be the Legal and Actual Foreign Tax Liability Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) Foreign Taxes for Which You Cannot Take a CreditTaxes on Excluded Income Taxes for Which You Can Only Take an Itemized Deduction Taxes on Foreign Mineral Income Taxes From International Boycott Operations Taxes on Combined Foreign Oil and Gas Income Taxes of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Persons Controlling Foreign Corporations and Partnerships Taxes Related to a Foreign Tax Credit Splitting Event How To Figure the CreditLimit on the Credit Separate Limit Income Allocation of Foreign Taxes Foreign Taxes From a Partnership or an S Corporation Figuring the Limit Qualified Dividends Capital Gains and Losses Allocation of Foreign and U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Losses Tax Treaties Carryback and CarryoverTime Limit on Tax Assessment Claim for Refund Taxes All Credited or All Deducted Married Couples How To Claim the CreditForm 1116 Records To Keep Simple Example — Filled-In Form 1116Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Comprehensive Example — Filled-In Form 1116Foreign earned income. How do i amend a 2009 tax return Employee business expenses. How do i amend a 2009 tax return Forms 1116 Computation of Taxable Income Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Unused Foreign Taxes How To Get Tax HelpLow Income Taxpayer Clinics Choosing To Take Credit or Deduction You can choose whether to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. How do i amend a 2009 tax return You can change your choice for each year's taxes. How do i amend a 2009 tax return To choose the foreign tax credit, in most cases you must complete Form 1116 and attach it to your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax return. How do i amend a 2009 tax return However, you may qualify for the exception that allows you to claim the foreign tax credit without using Form 1116. How do i amend a 2009 tax return See How To Figure the Credit , later. How do i amend a 2009 tax return To choose to claim the taxes as an itemized deduction, use Schedule A (Form 1040), Itemized Deductions. How do i amend a 2009 tax return Figure your tax both ways—claiming the credit and claiming the deduction. How do i amend a 2009 tax return Then fill out your return the way that benefits you more. How do i amend a 2009 tax return See Why Choose the Credit, later. How do i amend a 2009 tax return Choice Applies to All Qualified Foreign Taxes As a general rule, you must choose to take either a credit or a deduction for all qualified foreign taxes. How do i amend a 2009 tax return If you choose to take a credit for qualified foreign taxes, you must take the credit for all of them. How do i amend a 2009 tax return You cannot deduct any of them. How do i amend a 2009 tax return Conversely, if you choose to deduct qualified foreign taxes, you must deduct all of them. How do i amend a 2009 tax return You cannot take a credit for any of them. How do i amend a 2009 tax return See What Foreign Taxes Qualify for the Credit , later, for the meaning of qualified foreign taxes. How do i amend a 2009 tax return There are exceptions to this general rule, which are described next. How do i amend a 2009 tax return Exceptions for foreign taxes not allowed as a credit. How do i amend a 2009 tax return   Even if you claim a credit for other foreign taxes, you can deduct any foreign tax that is not allowed as a credit if: You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act, You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time, You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time, You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property, You participated in or cooperated with an international boycott, You paid taxes in connection with the purchase or sale of oil or gas, or You paid or accrued taxes on income or gain in connection with a covered asset acquisition. How do i amend a 2009 tax return Covered asset acquisitions include certain acquisitions that result in a stepped-up basis for U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax purposes. How do i amend a 2009 tax return For more information, see Internal Revenue Code section 901(m). How do i amend a 2009 tax return The IRS intends to issue guidance that will explain this provision in greater detail. How do i amend a 2009 tax return   For more information on these items, see Taxes for Which You Can Only Take an Itemized Deduction , later, under Foreign Taxes for Which You Cannot Take a Credit. How do i amend a 2009 tax return Foreign taxes that are not income taxes. How do i amend a 2009 tax return   In most cases, only foreign income taxes qualify for the foreign tax credit. How do i amend a 2009 tax return Other taxes, such as foreign real and personal property taxes, do not qualify. How do i amend a 2009 tax return But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. How do i amend a 2009 tax return   In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. How do i amend a 2009 tax return However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040). How do i amend a 2009 tax return Carrybacks and carryovers. How do i amend a 2009 tax return   There is a limit on the credit you can claim in a tax year. How do i amend a 2009 tax return If your qualified foreign taxes exceed the credit limit, you may be able to carry over or carry back the excess to another tax year. How do i amend a 2009 tax return If you deduct qualified foreign taxes in a tax year, you cannot use a carryback or carryover in that year. How do i amend a 2009 tax return That is because you cannot take both a deduction and a credit for qualified foreign taxes in the same tax year. How do i amend a 2009 tax return   For more information on the limit, see How To Figure the Credit , later. How do i amend a 2009 tax return For more information on carrybacks and carryovers, see Carryback and Carryover , later. How do i amend a 2009 tax return Making or Changing Your Choice You can make or change your choice to claim a deduction or credit at any time during the period within 10 years from the regular due date for filing the return (without regard to any extension of time to file) for the tax year in which the taxes were actually paid or accrued. How do i amend a 2009 tax return You make or change your choice on your tax return (or on an amended return) for the year your choice is to be effective. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You paid foreign taxes for the last 13 years and chose to deduct them on your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return income tax returns. How do i amend a 2009 tax return You were timely in both filing your returns and paying your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability. How do i amend a 2009 tax return In February 2013, you file an amended return for tax year 2002 choosing to take a credit for your 2002 foreign taxes because you now realize that the credit is more advantageous than the deduction for that year. How do i amend a 2009 tax return Because the regular due date of your 2002 return was April 15, 2003, this choice is timely (within 10 years). How do i amend a 2009 tax return Because there is a limit on the credit for your 2002 foreign tax, you have unused 2002 foreign taxes. How do i amend a 2009 tax return Ordinarily, you first carry back unused foreign taxes arising in 2002 to, and claim them as a credit in, the 2 preceding tax years. How do i amend a 2009 tax return If you are unable to claim all of them in those 2 years, you carry them forward to the 10 years following the year in which they arose. How do i amend a 2009 tax return Because you originally chose to deduct your foreign taxes and the 10-year period for changing the choice for 2000 and 2001 has passed, you cannot change your choice and carry the unused 2002 foreign taxes back to tax years 2000 and 2001. How do i amend a 2009 tax return Because the 10-year periods for changing the choice have not passed for your 2003 through 2012 income tax returns, you can still choose to claim the credit for those years and carry forward any unused 2002 foreign taxes. How do i amend a 2009 tax return However, you must reduce the unused 2002 foreign taxes that you carry forward by the amount that would have been allowed as a carryback if you had timely carried back the foreign tax to tax years 2000 and 2001. How do i amend a 2009 tax return You cannot take a credit or a deduction for foreign taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. How do i amend a 2009 tax return See Foreign Earned Income and Housing Exclusions under Foreign Taxes for Which You Cannot Take a Credit, later. How do i amend a 2009 tax return Why Choose the Credit? The foreign tax credit is intended to relieve you of a double tax burden when your foreign source income is taxed by both the United States and the foreign country. How do i amend a 2009 tax return In most cases, if the foreign tax rate is higher than the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return rate, there will be no U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax on the foreign income. How do i amend a 2009 tax return If the foreign tax rate is lower than the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return rate, U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax on the foreign income will be limited to the difference between the rates. How do i amend a 2009 tax return The foreign tax credit can only reduce U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return taxes on foreign source income; it cannot reduce U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return taxes on U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return source income. How do i amend a 2009 tax return Although no one rule covers all situations, in most cases it is better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction. How do i amend a 2009 tax return This is because: A credit reduces your actual U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return income tax on a dollar-for-dollar basis, while a deduction reduces only your income subject to tax, You can choose to take the foreign tax credit even if you do not itemize your deductions. How do i amend a 2009 tax return You then are allowed the standard deduction in addition to the credit, and If you choose to take the foreign tax credit, and the taxes paid or accrued exceed the credit limit for the tax year, you may be able to carry over or carry back the excess to another tax year. How do i amend a 2009 tax return (See Limit on credit under How To Figure the Credit, later. How do i amend a 2009 tax return ) Example 1. How do i amend a 2009 tax return For 2013, you and your spouse have adjusted gross income of $80,300, including $20,000 of dividend income from foreign sources. How do i amend a 2009 tax return None of the dividends are qualified dividends. How do i amend a 2009 tax return You file a joint return and can claim two $3,900 exemptions. How do i amend a 2009 tax return You had to pay $2,000 in foreign income taxes on the dividend income. How do i amend a 2009 tax return If you take the foreign taxes as an itemized deduction, your total itemized deductions are $15,000. How do i amend a 2009 tax return Your taxable income then is $57,500 and your tax is $7,736. How do i amend a 2009 tax return If you take the credit instead, your itemized deductions are only $13,000. How do i amend a 2009 tax return Your taxable income then is $59,500 and your tax before the credit is $8,036. How do i amend a 2009 tax return After the credit, however, your tax is only $6,036. How do i amend a 2009 tax return Therefore, your tax is $1,700 lower ($7,736 − $6,036) by taking the credit. How do i amend a 2009 tax return Example 2. How do i amend a 2009 tax return In 2013, you receive investment income of $5,000 from a foreign country, which imposes a tax of $1,500 on that income. How do i amend a 2009 tax return You report on your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return return this income as well as $56,000 of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return source wages and an allowable $49,000 partnership loss from a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return partnership. How do i amend a 2009 tax return Your share of the partnership's gross income is $25,000 and your share of its expenses is $74,000. How do i amend a 2009 tax return You are single, entitled to one $3,900 exemption, and have other itemized deductions of $6,850. How do i amend a 2009 tax return If you deduct the foreign tax on your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return return, your taxable income is a negative $250 ($5,000 + $56,000 − $49,000 − $1,500 − $6,850 − $3,900) and your tax is $0. How do i amend a 2009 tax return If you take the credit instead, your taxable income is $1,250 ($5,000 + $56,000 − $49,000 − $3,900 − $6,850) and your tax before the credit is $126. How do i amend a 2009 tax return You can take a credit of only $113 because of limits discussed later. How do i amend a 2009 tax return Your tax after the credit is $13 ($126 − $113), which is $13 more than if you deduct the foreign tax. How do i amend a 2009 tax return If you choose the credit, you will have unused foreign taxes of $1,387 ($1,500 − $113). How do i amend a 2009 tax return When deciding whether to take the credit or the deduction this year, you will need to consider whether you can benefit from a carryback or carryover of that unused foreign tax. How do i amend a 2009 tax return Credit for Taxes Paid or Accrued You can claim the credit for a qualified foreign tax in the tax year in which you pay it or accrue it, depending on your method of accounting. How do i amend a 2009 tax return “Tax year” refers to the tax year for which your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return return is filed, not the tax year for which your foreign return is filed. How do i amend a 2009 tax return Accrual method of accounting. How do i amend a 2009 tax return   If you use an accrual method of accounting, you can claim the credit only in the year in which you accrue the tax. How do i amend a 2009 tax return You are using an accrual method of accounting if you report income when you earn it, rather than when you receive it, and you deduct your expenses when you incur them, rather than when you pay them. How do i amend a 2009 tax return   In most cases, foreign taxes accrue when all the events have taken place that fix the amount of the tax and your liability to pay it. How do i amend a 2009 tax return Generally, this occurs on the last day of the tax year for which your foreign return is filed. How do i amend a 2009 tax return Contesting your foreign tax liability. How do i amend a 2009 tax return   If you are contesting your foreign tax liability, you cannot accrue it and take a credit until the amount of foreign tax due is finally determined. How do i amend a 2009 tax return However, if you choose to pay the tax liability you are contesting, you can take a credit for the amount you pay before a final determination of foreign tax liability is made. How do i amend a 2009 tax return Once your liability is determined, the foreign tax credit is allowable for the year to which the foreign tax relates. How do i amend a 2009 tax return If the amount of foreign taxes taken as a credit differs from the final foreign tax liability, you may have to adjust the credit, as discussed later under Foreign Tax Redetermination . How do i amend a 2009 tax return You may have to post a bond. How do i amend a 2009 tax return   If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. How do i amend a 2009 tax return   The IRS can request this bond at any time without regard to the Time Limit on Tax Assessment discussed later under Carryback and Carryover. How do i amend a 2009 tax return Cash method of accounting. How do i amend a 2009 tax return   If you use the cash method of accounting, you can choose to take the credit either in the year you pay the tax or in the year you accrue it. How do i amend a 2009 tax return You are using the cash method of accounting if you report income in the year you actually or constructively receive it, and deduct expenses in the year you pay them. How do i amend a 2009 tax return Choosing to take credit in the year taxes accrue. How do i amend a 2009 tax return   Even if you use the cash method of accounting, you can choose to take a credit for foreign taxes in the year they accrue. How do i amend a 2009 tax return You make the choice by checking the box in Part II of Form 1116. How do i amend a 2009 tax return Once you make that choice, you must follow it in all later years and take a credit for foreign taxes in the year they accrue. How do i amend a 2009 tax return   In addition, the choice to take the credit when foreign taxes accrue applies to all foreign taxes qualifying for the credit. How do i amend a 2009 tax return You cannot take a credit for some foreign taxes when paid and take a credit for others when accrued. How do i amend a 2009 tax return   If you make the choice to take the credit when foreign taxes accrue and pay them in a later year, you cannot claim a deduction for any part of the previously accrued taxes. How do i amend a 2009 tax return Credit based on taxes paid in earlier year. How do i amend a 2009 tax return   If, in earlier years, you took the credit based on taxes paid, and this year you choose to take the credit based on taxes accrued, you may be able to take the credit this year for taxes from more than one year. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return Last year you took the credit based on taxes paid. How do i amend a 2009 tax return This year you chose to take the credit based on taxes accrued. How do i amend a 2009 tax return During the year you paid foreign income taxes owed for last year. How do i amend a 2009 tax return You also accrued foreign income taxes for this year that you did not pay by the end of the year. How do i amend a 2009 tax return You can base the credit on your return for this year on both last year's taxes that you paid and this year's taxes that you accrued. How do i amend a 2009 tax return Foreign Currency and Exchange Rates U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return income tax is imposed on income expressed in U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollars, while in most cases the foreign tax is imposed on income expressed in foreign currency. How do i amend a 2009 tax return Therefore, fluctuations in the value of the foreign currency relative to the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar may affect the foreign tax credit. How do i amend a 2009 tax return Translating foreign currency into U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollars. How do i amend a 2009 tax return   If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollars. How do i amend a 2009 tax return How and when you do this depends on your functional currency. How do i amend a 2009 tax return In most cases, your functional currency is the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar unless you are required to use the currency of a foreign country. How do i amend a 2009 tax return   You must make all federal income tax determinations in your functional currency. How do i amend a 2009 tax return The U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar is the functional currency for all taxpayers except some qualified business units. How do i amend a 2009 tax return A qualified business unit is a separate and clearly identified unit of a trade or business that maintains separate books and records. How do i amend a 2009 tax return Unless you are self-employed, your functional currency is the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar. How do i amend a 2009 tax return   Even if you are self-employed and have a qualified business unit, your functional currency is the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar if any of the following apply. How do i amend a 2009 tax return You conduct the business primarily in dollars. How do i amend a 2009 tax return The principal place of business is located in the United States. How do i amend a 2009 tax return You choose to or are required to use the dollar as your functional currency. How do i amend a 2009 tax return The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. How do i amend a 2009 tax return   If your functional currency is the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar, you must immediately translate into dollars all items of income, expense, etc. How do i amend a 2009 tax return , that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. How do i amend a 2009 tax return If there is more than one exchange rate, use the one that most properly reflects your income. How do i amend a 2009 tax return In most cases, you can get exchange rates from banks and U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Embassies. How do i amend a 2009 tax return   If your functional currency is not the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar, make all income tax determinations in your functional currency. How do i amend a 2009 tax return At the end of the year, translate the results, such as income or loss, into U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollars to report on your income tax return. How do i amend a 2009 tax return    For more information, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Rate of exchange for foreign taxes paid. How do i amend a 2009 tax return   Use the rate of exchange in effect on the date you paid the foreign taxes to the foreign country unless you meet the exception discussed next. How do i amend a 2009 tax return If your tax was withheld in foreign currency, use the rate of exchange in effect for the date on which the tax was withheld. How do i amend a 2009 tax return If you make foreign estimated tax payments, you use the rate of exchange in effect for the date on which you made the estimated tax payment. How do i amend a 2009 tax return   The exchange rate rules discussed here apply even if the foreign taxes are paid or accrued with respect to a foreign tax credit splitting event (discussed later). How do i amend a 2009 tax return Exception. How do i amend a 2009 tax return   If you claim the credit for foreign taxes on an accrual basis, in most cases you must use the average exchange rate for the tax year to which the taxes relate. How do i amend a 2009 tax return This rule applies to accrued taxes relating to tax years beginning after 1997 and only under the following conditions. How do i amend a 2009 tax return The foreign taxes are paid on or after the first day of the tax year to which they relate. How do i amend a 2009 tax return The foreign taxes are paid not later than 2 years after the close of the tax year to which they relate. How do i amend a 2009 tax return The foreign tax liability is not denominated in an inflationary currency (defined in the Form 1116 instructions). How do i amend a 2009 tax return (This condition applies to taxes paid or accrued in tax years beginning after November 6, 2007. How do i amend a 2009 tax return )   For all other foreign taxes, you should use the exchange rate in effect on the date you paid them. How do i amend a 2009 tax return Election to use exchange rate on date paid. How do i amend a 2009 tax return   If you have accrued foreign taxes that you are otherwise required to convert using the average exchange rate, you may elect to use the exchange rate in effect on the date the foreign taxes are paid if the taxes are denominated in a nonfunctional foreign currency. How do i amend a 2009 tax return If any of the accrued taxes are unpaid, you must translate them into U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollars using the exchange rate on the last day of the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax year to which those taxes relate. How do i amend a 2009 tax return You may make the election for all nonfunctional currency foreign income taxes or only those nonfunctional currency foreign income taxes that are attributable to qualified business units with a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar functional currency. How do i amend a 2009 tax return Once made, the election applies to the tax year for which made and all subsequent tax years unless revoked with the consent of the IRS. How do i amend a 2009 tax return The election is available for tax years beginning after 2004. How do i amend a 2009 tax return It must be made by the due date (including extensions) for filing the tax return for the first tax year to which the election applies. How do i amend a 2009 tax return Make the election by attaching a statement to the applicable tax return. How do i amend a 2009 tax return The statement must identify whether the election is made for all foreign taxes or only for foreign taxes attributable to qualified business units with a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollar functional currency. How do i amend a 2009 tax return Foreign Tax Redetermination A foreign tax redetermination is any change in your foreign tax liability that may affect your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return foreign tax credit claimed. How do i amend a 2009 tax return The year in which to claim the credit remains the year to which the foreign taxes paid or accrued relate, even if the change in foreign tax liability occurs in a later year. How do i amend a 2009 tax return If a foreign tax redetermination occurs, a redetermination of your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability is required if any of the following conditions apply. How do i amend a 2009 tax return The accrued taxes when paid differ from the amounts claimed as a credit. How do i amend a 2009 tax return The accrued taxes you claimed as a credit in one tax year are not paid within 2 years after the end of that tax year. How do i amend a 2009 tax return If this applies to you, you must reduce the credit previously claimed by the amount of the unpaid taxes. How do i amend a 2009 tax return You will not be allowed a credit for the unpaid taxes until you pay them. How do i amend a 2009 tax return When you pay the accrued taxes, a new foreign tax redetermination occurs and you must translate the taxes into U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return dollars using the exchange rate as of the date they were paid. How do i amend a 2009 tax return The foreign tax credit is allowed for the year to which the foreign tax relates. How do i amend a 2009 tax return See Rate of exchange for foreign taxes paid , earlier, under Foreign Currency and Exchange Rates. How do i amend a 2009 tax return The foreign taxes you paid are refunded in whole or in part. How do i amend a 2009 tax return For taxes taken into account when accrued but translated into dollars on the date of payment, the dollar value of the accrued tax differs from the dollar value of the tax paid because of fluctuations in the exchange rate between the date of accrual and the date of payment. How do i amend a 2009 tax return However, no redetermination is required if the change in foreign tax liability for each foreign country is solely attributable to exchange rate fluctuations and is less than the smaller of: $10,000, or 2% of the total dollar amount of the foreign tax initially accrued for that foreign country for the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax year. How do i amend a 2009 tax return In this case, you must adjust your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax in the tax year in which the accrued foreign taxes are paid. How do i amend a 2009 tax return Notice to the Internal Revenue Service (IRS) of Redetermination You are required to notify the IRS about a foreign tax credit redetermination that affects your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability for each tax year affected by the redetermination. How do i amend a 2009 tax return In most cases, you must file Form 1040X, Amended U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Individual Income Tax Return, with a revised Form 1116 and a statement that contains information sufficient for the IRS to redetermine your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability for the year or years affected. How do i amend a 2009 tax return See Contents of statement , later. How do i amend a 2009 tax return You are not required to attach Form 1116 for a tax year affected by a redetermination if: The amount of your creditable taxes paid or accrued during the tax year is not more than $300 ($600 if married filing a joint return) as a result of the foreign tax redetermination, and You meet the requirements listed under Exemption from foreign tax credit limit under How To Figure the Credit, later. How do i amend a 2009 tax return There are other exceptions to this requirement. How do i amend a 2009 tax return They are discussed later under Due date of notification to IRS . How do i amend a 2009 tax return Contents of statement. How do i amend a 2009 tax return   The statement must include all of the following. How do i amend a 2009 tax return Your name, address, and taxpayer identification number. How do i amend a 2009 tax return The tax year or years that are affected by the foreign tax redetermination. How do i amend a 2009 tax return The date or dates the foreign taxes were accrued, if applicable. How do i amend a 2009 tax return The date or dates the foreign taxes were paid. How do i amend a 2009 tax return The amount of foreign taxes paid or accrued on each date (in foreign currency) and the exchange rate used to translate each amount. How do i amend a 2009 tax return Information sufficient to determine any interest due from or owing to you, including the amount of any interest paid to you by the foreign government and the dates received. How do i amend a 2009 tax return   In the case of any foreign taxes that were not paid before the date two years after the close of the tax year to which those taxes relate, you must provide the amount of those taxes in foreign currency and the exchange rate that was used to translate that amount when originally claimed as a credit. How do i amend a 2009 tax return   If any foreign tax was refunded in whole or in part, you must provide the date and amount (in foreign currency) of each refund, the exchange rate that was used to translate each amount when originally claimed as a credit, and the exchange rate for the date the refund was received (for purposes of computing foreign currency gain or loss under Internal Revenue Code section 988). How do i amend a 2009 tax return Due date of notification to IRS. How do i amend a 2009 tax return   If you pay less foreign tax than you originally claimed a credit for, in most cases you must file a notification by the due date (with extensions) of your original return for your tax year in which the foreign tax redetermination occurred. How do i amend a 2009 tax return There is no limit on the time the IRS has to redetermine and assess the correct U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax due. How do i amend a 2009 tax return If you pay more foreign tax than you originally claimed a credit for, you have 10 years to file a claim for refund of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return taxes. How do i amend a 2009 tax return See Time Limit on Refund Claims , later. How do i amend a 2009 tax return   Exceptions to this due date are explained in the next two paragraphs. How do i amend a 2009 tax return Multiple redeterminations of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability for same tax year. How do i amend a 2009 tax return   Where more than one foreign tax redetermination requires a redetermination of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability for the same tax year and those redeterminations occur in the same tax year or within two consecutive tax years, you can file for that tax year one notification (Form 1040X with a Form 1116 and the required statement) that reflects all those tax redeterminations. How do i amend a 2009 tax return If you choose to file one notification, the due date for that notification is the due date of the original return (with extensions) for the year in which the first foreign tax redetermination that reduced your foreign tax liability occurred. How do i amend a 2009 tax return However, foreign tax redeterminations with respect to the tax year for which a redetermination of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability is required may occur after the due date for providing that notification. How do i amend a 2009 tax return In this situation, you may have to file more than one Form 1040X for that tax year. How do i amend a 2009 tax return Additional U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax due eliminated by foreign tax credit carryback or carryover. How do i amend a 2009 tax return   If a foreign tax redetermination requires a redetermination of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability that would otherwise result in an additional amount of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax due, but the additional tax is eliminated by a carryback or carryover of an unused foreign tax, you do not have to amend your tax return for the year affected by the redetermination. How do i amend a 2009 tax return Instead, you can notify the IRS by attaching a statement to the original return for the tax year in which the foreign tax redetermination occurred. How do i amend a 2009 tax return You must file the statement by the due date (with extensions) of that return. How do i amend a 2009 tax return The statement must show the amount of the unused foreign taxes paid or accrued and a detailed schedule showing the computation of the carryback or carryover (including the amounts carried back or over to the year for which a redetermination on U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability is required). How do i amend a 2009 tax return Failure-to-notify penalty. How do i amend a 2009 tax return   If you fail to notify the IRS of a foreign tax redetermination and cannot show reasonable cause for the failure, you may have to pay a penalty. How do i amend a 2009 tax return   For each month, or part of a month, that the failure continues, you pay a penalty of 5% of the tax due resulting from a redetermination of your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax. How do i amend a 2009 tax return This penalty cannot be more than 25% of the tax due. How do i amend a 2009 tax return Foreign tax refund. How do i amend a 2009 tax return   If you receive a foreign tax refund without interest from the foreign government, you will not have to pay interest on the amount of tax due resulting from the adjustment to your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax for the time before the date of the refund. How do i amend a 2009 tax return   However, if you receive a foreign tax refund with interest, you must pay interest to the IRS up to the amount of the interest paid to you by the foreign government. How do i amend a 2009 tax return The interest you must pay cannot be more than the interest you would have had to pay on taxes that were unpaid for any other reason for the same period. How do i amend a 2009 tax return Interest also is owed from the time you receive a refund until you pay the additional tax due. How do i amend a 2009 tax return Foreign tax imposed on foreign refund. How do i amend a 2009 tax return   If your foreign tax refund is taxed by the foreign country, you cannot take a separate credit or deduction for this additional foreign tax. How do i amend a 2009 tax return However, when you refigure the foreign tax credit taken for the original foreign tax, reduce the amount of the refund by the foreign tax paid on the refund. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You paid a foreign income tax of $3,000 in 2011, and received a foreign tax refund of $500 in 2013 on which a foreign tax of $100 was imposed. How do i amend a 2009 tax return When you refigure your credit for 2011, you must reduce the $3,000 you paid by $400. How do i amend a 2009 tax return Time Limit on Refund Claims You have 10 years to file a claim for refund of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax if you find that you paid or accrued a larger foreign tax than you claimed a credit for. How do i amend a 2009 tax return The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the taxes were actually paid or accrued. How do i amend a 2009 tax return You have 10 years to file your claim regardless of whether you claim the credit for taxes paid or taxes accrued. How do i amend a 2009 tax return The 10-year period applies to claims for refund or credit based on: Fixing math errors in figuring qualified foreign taxes, Reporting qualified foreign taxes not originally reported on the return, or Any other change in the size of the credit (including one caused by correcting the foreign tax credit limit). How do i amend a 2009 tax return The special 10-year period also applies to making or changing your choice to claim a deduction or credit for foreign taxes. How do i amend a 2009 tax return See Making or Changing Your Choice discussed earlier under Choosing To Take Credit or Deduction. How do i amend a 2009 tax return Who Can Take the Credit? U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizens, resident aliens, and nonresident aliens who paid foreign income tax and are subject to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax on foreign source income may be able to take a foreign tax credit. How do i amend a 2009 tax return U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Citizens If you are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen, you are taxed by the United States on your worldwide income wherever you live. How do i amend a 2009 tax return You are normally entitled to take a credit for foreign taxes you pay or accrue. How do i amend a 2009 tax return Resident Aliens If you are a resident alien of the United States, you can take a credit for foreign taxes subject to the same general rules as U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizens. How do i amend a 2009 tax return If you are a bona fide resident of Puerto Rico for the entire tax year, you also come under the same rules. How do i amend a 2009 tax return Usually, you can take a credit only for those foreign taxes imposed on income you actually or constructively received while you had resident alien status. How do i amend a 2009 tax return For information on alien status, see Publication 519. How do i amend a 2009 tax return Nonresident Aliens If you are a nonresident alien, you cannot take the credit in most cases. How do i amend a 2009 tax return However, you may be able to take the credit if: You were a bona fide resident of Puerto Rico during your entire tax year, or You pay or accrue tax to a foreign country or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possession on income from foreign sources that is effectively connected with a trade or business in the United States. How do i amend a 2009 tax return But if you must pay tax to a foreign country or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possession on income from U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return sources only because you are a citizen or a resident of that country or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possession, do not use that tax in figuring the amount of your credit. How do i amend a 2009 tax return For information on alien status and effectively connected income, see Publication 519. How do i amend a 2009 tax return What Foreign Taxes Qualify for the Credit? In most cases, the following four tests must be met for any foreign tax to qualify for the credit. How do i amend a 2009 tax return The tax must be imposed on you. How do i amend a 2009 tax return You must have paid or accrued the tax. How do i amend a 2009 tax return The tax must be the legal and actual foreign tax liability. How do i amend a 2009 tax return The tax must be an income tax (or a tax in lieu of an income tax). How do i amend a 2009 tax return Certain foreign taxes do not qualify for the credit even if the four tests are met. How do i amend a 2009 tax return See Foreign Taxes for Which You Cannot Take a Credit, later. How do i amend a 2009 tax return Tax Must Be Imposed on You You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possession. How do i amend a 2009 tax return For example, a tax that is deducted from your wages is considered to be imposed on you. How do i amend a 2009 tax return You cannot shift the right to claim the credit by contract or other means. How do i amend a 2009 tax return Foreign country. How do i amend a 2009 tax return   A foreign country includes any foreign state and its political subdivisions. How do i amend a 2009 tax return Income, war profits, and excess profits taxes paid or accrued to a foreign city or province qualify for the foreign tax credit. How do i amend a 2009 tax return U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possessions. How do i amend a 2009 tax return   For foreign tax credit purposes, all qualified taxes paid to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possessions are considered foreign taxes. How do i amend a 2009 tax return For this purpose, U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possessions include Puerto Rico and American Samoa. How do i amend a 2009 tax return   When the term “foreign country” is used in this publication, it includes U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possessions unless otherwise stated. How do i amend a 2009 tax return You Must Have Paid or Accrued the Tax In most cases, you can claim the credit only if you paid or accrued the foreign tax to a foreign country or U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return possession. How do i amend a 2009 tax return However, the paragraphs that follow describe some instances in which you can claim the credit even if you did not directly pay or accrue the tax yourself. How do i amend a 2009 tax return Joint return. How do i amend a 2009 tax return   If you file a joint return, you can claim the credit based on the total foreign income taxes paid or accrued by you and your spouse. How do i amend a 2009 tax return Combined income. How do i amend a 2009 tax return   If foreign tax is imposed on the combined income of two or more persons (for example, spouses), the tax is allocated among, and considered paid by, these persons on a pro rata basis in proportion to each person's portion of the combined income, as determined under foreign law and Regulations section 1. How do i amend a 2009 tax return 901-2(f)(3)(iii). How do i amend a 2009 tax return Combined income with respect to each foreign tax that is imposed on a combined basis (and combined income subject to tax exemption or preferential tax rates) is computed separately, and the tax on that combined income is allocated separately. How do i amend a 2009 tax return   These rules apply to foreign taxes paid or accrued in tax years beginning after February 14, 2012. How do i amend a 2009 tax return However, you can choose to apply the new rules to foreign taxes paid or accrued in tax years beginning after December 31, 2010, and before February 15, 2012. How do i amend a 2009 tax return For more details, see paragraphs (f) and (h) of Regulations section 1. How do i amend a 2009 tax return 901-2. How do i amend a 2009 tax return For similar rules applicable to prior tax years, see Regulations section 1. How do i amend a 2009 tax return 901-2 (revised as of April 1, 2011). How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You and your spouse reside in Country X, which imposes income tax on your combined incomes. How do i amend a 2009 tax return Both of you use the “u” as your functional currency. How do i amend a 2009 tax return Country X apportions tax based on income. How do i amend a 2009 tax return You had income of 30,000u and your spouse had income of 20,000u. How do i amend a 2009 tax return Your filing status on your U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return income tax return is married filing separately. How do i amend a 2009 tax return You can claim only 60% (30,000u/50,000u) of the foreign taxes imposed on your income on your U. How do i amend a 2009 tax return S income tax return. How do i amend a 2009 tax return Your spouse can claim only 40% (20,000u/50,000u). How do i amend a 2009 tax return Partner or S corporation shareholder. How do i amend a 2009 tax return   If you are a member of a partnership, or a shareholder in an S corporation, you can claim the credit based on your proportionate share of the foreign income taxes paid or accrued by the partnership or the S corporation. How do i amend a 2009 tax return These amounts will be shown on the Schedule K-1 you receive from the partnership or S corporation. How do i amend a 2009 tax return However, if you are a shareholder in an S corporation that in turn owns stock in a foreign corporation, you cannot claim a credit for your share of foreign taxes paid by the foreign corporation. How do i amend a 2009 tax return Beneficiary. How do i amend a 2009 tax return   If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. How do i amend a 2009 tax return This amount will be shown on the Schedule K-1 you receive from the estate or trust. How do i amend a 2009 tax return However, you must show that the tax was imposed on income of the estate and not on income received by the decedent. How do i amend a 2009 tax return Mutual fund shareholder. How do i amend a 2009 tax return   If you are a shareholder of a mutual fund or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. How do i amend a 2009 tax return You should receive from the mutual fund or other RIC a Form 1099-DIV, or similar statement, showing your share of the foreign income, and your share of the foreign taxes paid. How do i amend a 2009 tax return If you do not receive this information, you will need to contact the fund. How do i amend a 2009 tax return Controlled foreign corporation shareholder. How do i amend a 2009 tax return   If you are a shareholder of a controlled foreign corporation and choose to be taxed at corporate rates on the amount you must include in gross income from that corporation, you can claim the credit based on your share of foreign taxes paid or accrued by the controlled foreign corporation. How do i amend a 2009 tax return If you make this election, you must claim the credit by filing Form 1118, Foreign Tax Credit—Corporations. How do i amend a 2009 tax return Controlled foreign corporation. How do i amend a 2009 tax return   A controlled foreign corporation is a foreign corporation in which U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return shareholders own more than 50% of the voting power or value of the stock. How do i amend a 2009 tax return You are considered a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return shareholder if you own, directly or indirectly, 10% or more of the total voting power of all classes of the foreign corporation's stock. How do i amend a 2009 tax return See Internal Revenue Code sections 951(b) and 958(b) for more information. How do i amend a 2009 tax return Tax Must Be the Legal and Actual Foreign Tax Liability The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country. How do i amend a 2009 tax return Only the legal and actual foreign tax liability that you paid or accrued during the year qualifies for the credit. How do i amend a 2009 tax return Foreign tax refund. How do i amend a 2009 tax return   You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. How do i amend a 2009 tax return   For example, the United States has tax treaties with many countries allowing U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizens and residents reductions in the rates of tax of those foreign countries. How do i amend a 2009 tax return However, some treaty countries require U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizens and residents to pay the tax figured without regard to the lower treaty rates and then claim a refund for the amount by which the tax actually paid is more than the amount of tax figured using the lower treaty rate. How do i amend a 2009 tax return The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable. How do i amend a 2009 tax return Subsidy received. How do i amend a 2009 tax return   Tax payments a foreign country returns to you in the form of a subsidy do not qualify for the foreign tax credit. How do i amend a 2009 tax return This rule applies even if the subsidy is given to a person related to you, or persons who participated with you in a transaction or a related transaction. How do i amend a 2009 tax return A subsidy can be provided by any means but must be determined, directly or indirectly, in relation to the amount of tax, or to the base used to figure the tax. How do i amend a 2009 tax return   The term “subsidy” includes any type of benefit. How do i amend a 2009 tax return Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. How do i amend a 2009 tax return Shareholder receiving refund for corporate tax in integrated system. How do i amend a 2009 tax return   Under some foreign tax laws and treaties, a shareholder is considered to have paid part of the tax that is imposed on the corporation. How do i amend a 2009 tax return You may be able to claim a refund of these taxes from the foreign government. How do i amend a 2009 tax return You must include the refund (including any amount withheld) in your income in the year received. How do i amend a 2009 tax return Any tax withheld from the refund is a qualified foreign tax. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You are a shareholder of a French corporation. How do i amend a 2009 tax return You receive a $100 refund of the tax paid to France by the corporation on the earnings distributed to you as a dividend. How do i amend a 2009 tax return The French government imposes a 15% withholding tax ($15) on the refund you received. How do i amend a 2009 tax return You receive a check for $85. How do i amend a 2009 tax return You include $100 in your income. How do i amend a 2009 tax return The $15 of tax withheld is a qualified foreign tax. How do i amend a 2009 tax return Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) In most cases, only income, war profits, and excess profits taxes (income taxes) qualify for the foreign tax credit. How do i amend a 2009 tax return Foreign taxes on wages, dividends, interest, and royalties qualify for the credit in most cases. How do i amend a 2009 tax return Furthermore, foreign taxes on income can qualify even though they are not imposed under an income tax law if the tax is in lieu of an income, war profits, or excess profits tax. How do i amend a 2009 tax return See Taxes in Lieu of Income Taxes , later. How do i amend a 2009 tax return Income Tax Simply because the levy is called an income tax by the foreign taxing authority does not make it an income tax for this purpose. How do i amend a 2009 tax return A foreign levy is an income tax only if it meets both of the following requirements. How do i amend a 2009 tax return It is a tax; that is, you have to pay it and you get no specific economic benefit (discussed below) from paying it. How do i amend a 2009 tax return The predominant character of the tax is that of an income tax in the U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return sense. How do i amend a 2009 tax return A foreign levy may meet these requirements even if the foreign tax law differs from U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax law. How do i amend a 2009 tax return The foreign law may include in income items that U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return law does not include, or it may allow certain exclusions or deductions that U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return law does not allow. How do i amend a 2009 tax return Specific economic benefit. How do i amend a 2009 tax return   In most cases, you get a specific economic benefit if you receive, or are considered to receive, an economic benefit from the foreign country imposing the levy, and: If there is a generally imposed income tax, the economic benefit is not available on substantially the same terms to all persons subject to the income tax, or If there is no generally imposed income tax, the economic benefit is not available on substantially the same terms to the population of the foreign country in general. How do i amend a 2009 tax return   You are considered to receive a specific economic benefit if you have a business transaction with a person who receives a specific economic benefit from the foreign country and, under the terms and conditions of the transaction, you receive directly or indirectly all or part of the benefit. How do i amend a 2009 tax return   However, see the exception discussed later under Pension, unemployment, and disability fund payments . How do i amend a 2009 tax return Economic benefits. How do i amend a 2009 tax return   Economic benefits include the following. How do i amend a 2009 tax return Goods. How do i amend a 2009 tax return Services. How do i amend a 2009 tax return Fees or other payments. How do i amend a 2009 tax return Rights to use, acquire, or extract resources, patents, or other property the foreign country owns or controls. How do i amend a 2009 tax return Discharges of contractual obligations. How do i amend a 2009 tax return   In most cases, the right or privilege merely to engage in business is not an economic benefit. How do i amend a 2009 tax return Dual-capacity taxpayers. How do i amend a 2009 tax return   If you are subject to a foreign country's levy and you also receive a specific economic benefit from that foreign country, you are a “dual-capacity taxpayer. How do i amend a 2009 tax return ” As a dual-capacity taxpayer, you cannot claim a credit for any part of the foreign levy, unless you establish that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for a direct or indirect specific economic benefit. How do i amend a 2009 tax return    For more information on how to establish amounts paid under separate elements of a levy, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Pension, unemployment, and disability fund payments. How do i amend a 2009 tax return   A foreign tax imposed on an individual to pay for retirement, old-age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. How do i amend a 2009 tax return    No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. How do i amend a 2009 tax return For more information about these agreements, see Publication 54. How do i amend a 2009 tax return Soak-up taxes. How do i amend a 2009 tax return   A foreign tax is not predominantly an income tax and does not qualify for credit to the extent it is a soak-up tax. How do i amend a 2009 tax return A tax is a soak-up tax to the extent that liability for it depends on the availability of a credit for it against income tax imposed by another country. How do i amend a 2009 tax return This rule applies only if and to the extent that the foreign tax would not be imposed if the credit were not available. How do i amend a 2009 tax return Penalties and interest. How do i amend a 2009 tax return   Amounts paid to a foreign government to satisfy a liability for interest, fines, penalties, or any similar obligation are not taxes and do not qualify for the credit. How do i amend a 2009 tax return Taxes not based on income. How do i amend a 2009 tax return   Foreign taxes based on gross receipts or the number of units produced, rather than on realized net income, do not qualify unless they are imposed in lieu of an income tax, as discussed next. How do i amend a 2009 tax return Taxes based on assets, such as property taxes, do not qualify for the credit. How do i amend a 2009 tax return Taxes in Lieu of Income Taxes A tax paid or accrued to a foreign country qualifies for the credit if it is imposed in lieu of an income tax otherwise generally imposed. How do i amend a 2009 tax return A foreign levy is a tax in lieu of an income tax only if: It is not payment for a specific economic benefit as discussed earlier, and The tax is imposed in place of, and not in addition to, an income tax otherwise generally imposed. How do i amend a 2009 tax return A tax in lieu of an income tax does not have to be based on realized net income. How do i amend a 2009 tax return A foreign tax imposed on gross income, gross receipts or sales, or the number of units produced or exported can qualify for the credit. How do i amend a 2009 tax return In most cases, a soak-up tax (discussed earlier) does not qualify as a tax in lieu of an income tax. How do i amend a 2009 tax return However, if the foreign country imposes a soak-up tax in lieu of an income tax, the amount that does not qualify for foreign tax credit is the lesser of the following amounts. How do i amend a 2009 tax return The soak-up tax. How do i amend a 2009 tax return The foreign tax you paid that is more than the amount you would have paid if you had been subject to the generally imposed income tax. How do i amend a 2009 tax return Foreign Taxes for Which You Cannot Take a Credit This part discusses the foreign taxes for which you cannot take a credit. How do i amend a 2009 tax return These are: Taxes on excluded income, Taxes for which you can only take an itemized deduction, Taxes on foreign mineral income, Taxes from international boycott operations, A portion of taxes on combined foreign oil and gas income, Taxes of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return persons controlling foreign corporations and partnerships who fail to file required information returns, and Taxes related to a foreign tax splitting event. How do i amend a 2009 tax return Taxes on Excluded Income You cannot take a credit for foreign taxes paid or accrued on certain income that is excluded from U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return gross income. How do i amend a 2009 tax return Foreign Earned Income and Housing Exclusions You must reduce your foreign taxes available for the credit by the amount of those taxes paid or accrued on income that is excluded from U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return income under the foreign earned income exclusion or the foreign housing exclusion. How do i amend a 2009 tax return See Publication 54 for more information on the foreign earned income and housing exclusions. How do i amend a 2009 tax return Wages completely excluded. How do i amend a 2009 tax return   If your wages are completely excluded, you cannot take a credit for any of the foreign taxes paid or accrued on these wages. How do i amend a 2009 tax return Wages partly excluded. How do i amend a 2009 tax return   If only part of your wages is excluded, you cannot take a credit for the foreign income taxes allocable to the excluded part. How do i amend a 2009 tax return You find the amount allocable to your excluded wages by multiplying the foreign tax paid or accrued on foreign earned income received or accrued during the tax year by a fraction. How do i amend a 2009 tax return   The numerator of the fraction is your foreign earned income and housing amounts excluded under the foreign earned income and housing exclusions for the tax year minus otherwise deductible expenses definitely related and properly apportioned to that income. How do i amend a 2009 tax return Deductible expenses do not include the foreign housing deduction. How do i amend a 2009 tax return   The denominator is your total foreign earned income received or accrued during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). How do i amend a 2009 tax return If the foreign law taxes foreign earned income and some other income (for example, earned income from U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return sources or a type of income not subject to U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax), and the taxes on the other income cannot be segregated, the denominator of the fraction is the total amount of income subject to the foreign tax minus deductible expenses allocable to that income. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen and a cash basis taxpayer, employed by Company X and living in Country A. How do i amend a 2009 tax return Your records show the following: Foreign earned income received $125,000 Unreimbursed business travel expenses 20,000 Income tax paid to Country A 30,000 Exclusion of foreign earned  income and housing allowance 97,600     Because you can exclude part of your wages, you cannot claim a credit for part of the foreign taxes. How do i amend a 2009 tax return To find that part, do the following. How do i amend a 2009 tax return First, find the amount of business expenses allocable to excluded wages and therefore not deductible. How do i amend a 2009 tax return To do this, multiply the otherwise deductible expenses by a fraction. How do i amend a 2009 tax return That fraction is the excluded wages over your foreign earned income. How do i amend a 2009 tax return   $20,000 × $97,600 $125,000 = $15,616             Next, find the numerator of the fraction by which you will multiply the foreign taxes paid. How do i amend a 2009 tax return To do this, subtract business expenses allocable to excluded wages ($15,616) from excluded wages ($97,600). How do i amend a 2009 tax return The result is $81,984. How do i amend a 2009 tax return Then, find the denominator of the fraction by subtracting all your deductible expenses from all your foreign earned income ($125,000 − $20,000 = $105,000). How do i amend a 2009 tax return Finally, multiply the foreign tax you paid by the resulting fraction. How do i amend a 2009 tax return   $30,000 × $81,984  $105,000 = $23,424 The amount of Country A tax you cannot take a credit for is $23,424. How do i amend a 2009 tax return Taxes on Income From Puerto Rico Exempt From U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Tax If you have income from Puerto Rican sources that is not taxable, you must reduce your foreign taxes paid or accrued by the taxes allocable to the exempt income. How do i amend a 2009 tax return For information on figuring the reduction, see Publication 570. How do i amend a 2009 tax return Possession Exclusion If you are a bona fide resident of American Samoa and exclude income from sources in American Samoa, you cannot take a credit for the taxes you pay or accrue on the excluded income. How do i amend a 2009 tax return For more information on this exclusion, see Publication 570. How do i amend a 2009 tax return Extraterritorial Income Exclusion You cannot take a credit for taxes you pay on qualifying foreign trade income excluded on Form 8873, Extraterritorial Income Exclusion. How do i amend a 2009 tax return However, see Internal Revenue Code section 943(d) for an exception for certain withholding taxes. How do i amend a 2009 tax return Taxes for Which You Can Only Take an Itemized Deduction You cannot claim a foreign tax credit for foreign income taxes paid or accrued under the following circumstances. How do i amend a 2009 tax return However, you can claim an itemized deduction for these taxes. How do i amend a 2009 tax return See Choosing To Take Credit or Deduction , earlier. How do i amend a 2009 tax return Taxes Imposed By Sanctioned Countries (Section 901(j) Income) You cannot claim a foreign tax credit for income taxes paid or accrued to any country if the income giving rise to the tax is for a period (the sanction period) during which: The Secretary of State has designated the country as one that repeatedly provides support for acts of international terrorism, The United States has severed or does not conduct diplomatic relations with the country, or The United States does not recognize the country's government, and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act. How do i amend a 2009 tax return The following countries meet this description for 2013. How do i amend a 2009 tax return Income taxes paid or accrued to these countries in 2013 do not qualify for the credit. How do i amend a 2009 tax return Cuba. How do i amend a 2009 tax return Iran. How do i amend a 2009 tax return Libya (but see Note later). How do i amend a 2009 tax return North Korea. How do i amend a 2009 tax return Sudan. How do i amend a 2009 tax return Syria. How do i amend a 2009 tax return Waiver of denial of the credit. How do i amend a 2009 tax return   A waiver can be granted to a sanctioned country if the President of the United States determines that granting the waiver is in the national interest of the United States and will expand trade and investment opportunities for U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return companies in the sanctioned country. How do i amend a 2009 tax return The President must report to Congress his intentions to grant the waiver and his reasons for granting the waiver not less than 30 days before the date on which the waiver is granted. How do i amend a 2009 tax return Note. How do i amend a 2009 tax return Effective December 10, 2004, the President granted a waiver to Libya. How do i amend a 2009 tax return Income taxes arising on or after this date qualify for the credit if they meet the other requirements in this publication. How do i amend a 2009 tax return Limit on credit. How do i amend a 2009 tax return   In figuring the foreign tax credit limit, discussed later, income from a sanctioned country is a separate category of foreign income unless a Presidential waiver is granted. How do i amend a 2009 tax return You must fill out a separate Form 1116 for this income. How do i amend a 2009 tax return This will prevent you from claiming a credit for foreign taxes paid or accrued to the sanctioned country. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return You lived and worked in Iran until August, when you were transferred to Italy. How do i amend a 2009 tax return You paid taxes to each country on the income earned in that country. How do i amend a 2009 tax return You cannot claim a foreign tax credit for the foreign taxes paid on the income earned in Iran. How do i amend a 2009 tax return Because the income earned in Iran is a separate category of foreign income, you must fill out a separate Form 1116 for that income. How do i amend a 2009 tax return You cannot take a credit for taxes paid on the income earned in Iran, but that income is taxable by the United States. How do i amend a 2009 tax return Figuring the credit when a sanction ends. How do i amend a 2009 tax return    Table 1 lists the countries for which sanctions have ended or for which a Presidential waiver has been granted. How do i amend a 2009 tax return For any of these countries, you can claim a foreign tax credit for the taxes paid or accrued to that country on the income for the period that begins after the end of the sanction period or the date the Presidential waiver was granted. How do i amend a 2009 tax return Example. How do i amend a 2009 tax return The sanctions against Country X ended on July 31. How do i amend a 2009 tax return On August 19, you receive a distribution from a mutual fund of Country X income. How do i amend a 2009 tax return The fund paid Country X income tax for you on the distribution. How do i amend a 2009 tax return Because the distribution was made after the sanction ended, you may include the foreign tax paid on the distribution to compute your foreign tax credit. How do i amend a 2009 tax return Amounts for the nonsanctioned period. How do i amend a 2009 tax return   If a sanction period ends (or a Presidential waiver is granted) during your tax year and you are not able to determine the actual income and taxes for that period, you can allocate amounts to that period based on the number of days in the period that fall in your tax year. How do i amend a 2009 tax return Multiply the income or taxes for the year by the following fraction to determine the amounts allocable to that period. How do i amend a 2009 tax return   Number of nonsanctioned days in year  Number of days in year Example. How do i amend a 2009 tax return You are a calendar year filer and received $20,000 of income from Country X in 2013 on which you paid tax of $4,500. How do i amend a 2009 tax return Sanctions against Country X ended on July 11, 2013. How do i amend a 2009 tax return You are unable to determine how much of the income or tax is for the nonsanctioned period. How do i amend a 2009 tax return Because your tax year starts on January 1, and the Country X sanction ended on July 11, 2013, 173 days of your tax year are in the nonsanctioned period. How do i amend a 2009 tax return You would compute the income for the nonsanctioned period as follows. How do i amend a 2009 tax return 173 365 × $20,000 = $9,479             You would figure the tax for the nonsanctioned period as follows. How do i amend a 2009 tax return 173 365 × $4,500 = $2,133 To figure your foreign tax credit, you would use $9,479 as the income from Country X and $2,133 as the tax. How do i amend a 2009 tax return Further information. How do i amend a 2009 tax return   The rules for figuring the foreign tax credit after a country's sanction period ends are more fully explained in Revenue Ruling 92-62, Cumulative Bulletin 1992-2, page 193. How do i amend a 2009 tax return This Cumulative Bulletin can be found in many libraries and IRS offices. How do i amend a 2009 tax return Table 1. How do i amend a 2009 tax return Countries Removed From the Sanction List or Granted Presidential Waiver   Sanction Period Country Starting Date Ending Date Iraq February 1, 1991 June 27, 2004 Libya January 1, 1987 December 9, 2004* *Presidential waiver granted for qualified income taxes arising after December 9, 2004. How do i amend a 2009 tax return Taxes Imposed on Certain Dividends You cannot claim a foreign tax credit for withholding tax (defined later ) on dividends paid or accrued if either of the following applies to the dividends. How do i amend a 2009 tax return The dividends are on stock you held for less than 16 days during the 31-day period that begins 15 days before the ex-dividend date (defined later). How do i amend a 2009 tax return The dividends are for a period or periods totaling more than 366 days on preferred stock you held for less than 46 days during the 91-day period that begins 45 days before the ex-dividend date. How do i amend a 2009 tax return If the dividend is not for more than 366 days, rule (1) applies to the preferred stock. How do i amend a 2009 tax return When figuring how long you held the stock, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. How do i amend a 2009 tax return Regardless of how long you held the stock, you cannot claim the credit to the extent you have an obligation under a short sale or otherwise to make payments related to the dividend for positions in substantially similar or related property. How do i amend a 2009 tax return Withholding tax. How do i amend a 2009 tax return   For this purpose, withholding tax includes any tax determined on a gross basis. How do i amend a 2009 tax return It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. How do i amend a 2009 tax return Ex-dividend date. How do i amend a 2009 tax return   The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. How do i amend a 2009 tax return Example 1. How do i amend a 2009 tax return You bought common stock from a foreign corporation on November 3. How do i amend a 2009 tax return You sold the stock on November 19. How do i amend a 2009 tax return You received a dividend on this stock because you owned it on the ex-dividend date of November 5. How do i amend a 2009 tax return To claim the credit, you must have held the stock for at least 16 days within the 31-day period that began on October 21 (15 days before the ex-dividend date). How do i amend a 2009 tax return Because you held the stock for 16 days, from November 4 until November 19, you are entitled to the credit. How do i amend a 2009 tax return Example 2. How do i amend a 2009 tax return The facts are the same as in Example 1 except that you sold the stock on November 14. How do i amend a 2009 tax return You held the stock for only 11 days. How do i amend a 2009 tax return You are not entitled to the credit. How do i amend a 2009 tax return Exception. How do i amend a 2009 tax return   If you are a securities dealer who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes paid on dividends regardless of how long you held the stock or whether you were obligated to make payments for positions in substantially similar or related property. How do i amend a 2009 tax return See section 901(k)(4) of the Internal Revenue Code for more information. How do i amend a 2009 tax return Taxes Withheld on Income or Gain (Other Than Dividends) For income or gain (other than dividends) paid or accrued on property, you cannot claim a foreign tax credit for withholding tax (defined later): If you have not held the property for at least 16 days during the 31-day period that begins 15 days before the date on which the right to receive the payment arises, or To the extent you have to make related payments on positions in substantially similar or related property. How do i amend a 2009 tax return When figuring how long you held the property, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. How do i amend a 2009 tax return Withholding tax. How do i amend a 2009 tax return   For this purpose, withholding tax includes any tax determined on a gross basis. How do i amend a 2009 tax return It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. How do i amend a 2009 tax return Exception for dealers. How do i amend a 2009 tax return   If you are a dealer in property who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes withheld on income or gain from that property regardless of how long you held it or whether you have to make related payments on positions in substantially similar or related property. How do i amend a 2009 tax return See section 901(I)(2) of the Internal Revenue Code for more information. How do i amend a 2009 tax return Covered Asset Acquisition ???You cannot take a credit for the disqualified portion of any foreign tax paid or accrued in connection with a covered asset acquisition. How do i amend a 2009 tax return A covered asset acquisition includes certain acquisitions that result in a stepped-up basis for U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax purposes but not for foreign tax purposes. How do i amend a 2009 tax return For more information, see Internal Revenue Code section 901(m). How do i amend a 2009 tax return The IRS intends to issue guidance that will explain this provision in greater detail. How do i amend a 2009 tax return Taxes in Connection With the Purchase or Sale of Oil or Gas You cannot claim a foreign tax credit for taxes paid or accrued to a foreign country in connection with the purchase or sale of oil or gas extracted in that country if you do not have an economic interest in the oil or gas, and the purchase price or sales price is different from the fair market value of the oil or gas at the time of purchase or sale. How do i amend a 2009 tax return Taxes on Foreign Mineral Income You must reduce any taxes paid or accrued to a foreign country or possession on mineral income from that country or possession if you were allowed a deduction for percentage depletion for any part of the mineral income. How do i amend a 2009 tax return For details, see Regulations section 1. How do i amend a 2009 tax return 901-3. How do i amend a 2009 tax return Taxes From International Boycott Operations If you participate in or cooperate with an international boycott during the tax year, your foreign taxes resulting from boycott activities will reduce the total taxes available for credit. How do i amend a 2009 tax return See the instructions for line 12 in the Form 1116 instructions to figure this reduction. How do i amend a 2009 tax return In most cases, this rule does not apply to employees with wages who are working and living in boycotting countries, or to retirees with pensions who are living in these countries. How do i amend a 2009 tax return List of boycotting countries. How do i amend a 2009 tax return   A list of the countries which may require participation in or cooperation with an international boycott is published by the Department of the Treasury. How do i amend a 2009 tax return As of November 2013, the following countries are listed. How do i amend a 2009 tax return Iraq. How do i amend a 2009 tax return Kuwait. How do i amend a 2009 tax return Lebanon. How do i amend a 2009 tax return Libya. How do i amend a 2009 tax return Qatar. How do i amend a 2009 tax return Saudi Arabia. How do i amend a 2009 tax return Syria. How do i amend a 2009 tax return United Arab Emirates. How do i amend a 2009 tax return Yemen. How do i amend a 2009 tax return    For information concerning changes to the list, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Determinations of whether the boycott rule applies. How do i amend a 2009 tax return   You may request a determination from the Internal Revenue Service as to whether a particular operation constitutes participation in or cooperation with an international boycott. How do i amend a 2009 tax return The procedures for obtaining a determination from the Service are outlined in Revenue Procedure 77-9 in Cumulative Bulletin 1977-1. How do i amend a 2009 tax return Cumulative Bulletins are available in most IRS offices and you are welcome to read them there. How do i amend a 2009 tax return Public inspection. How do i amend a 2009 tax return   A determination and any related background file is open to public inspection. How do i amend a 2009 tax return However, your identity and certain other information will remain confidential. How do i amend a 2009 tax return Reporting requirements. How do i amend a 2009 tax return   You must file a report with the IRS if you or any of the following persons have operations in or related to a boycotting country or with the government, a company, or a national of a boycotting country. How do i amend a 2009 tax return A foreign corporation in which you own 10% or more of the voting power of all voting stock but only if you own the stock of the foreign corporation directly or through foreign entities. How do i amend a 2009 tax return A partnership in which you are a partner. How do i amend a 2009 tax return A trust you are treated as owning. How do i amend a 2009 tax return Form 5713 required. How do i amend a 2009 tax return   If you have to file a report, you must use Form 5713, International Boycott Report, and attach all supporting schedules. How do i amend a 2009 tax return See the Instructions for Form 5713 for information on when and where to file the form. How do i amend a 2009 tax return Penalty for failure to file. How do i amend a 2009 tax return   If you willfully fail to make a report, in addition to other penalties, you may be fined $25,000 or imprisoned for no more than one year, or both. How do i amend a 2009 tax return Taxes on Combined Foreign Oil and Gas Income You must reduce your foreign taxes by a portion of any foreign taxes imposed on combined foreign oil and gas income. How do i amend a 2009 tax return The amount of the reduction is the amount by which your foreign oil and gas taxes exceed the amount of your combined foreign oil and gas income multiplied by a fraction equal to your pre-credit U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return tax liability (Form 1040, line 44) divided by your worldwide taxable income. How do i amend a 2009 tax return You may be entitled to carry over to other years taxes reduced under this rule. How do i amend a 2009 tax return See Internal Revenue Code section 907(f). How do i amend a 2009 tax return Combined foreign oil and gas income means the sum of foreign oil related income and foreign oil and gas extraction income. How do i amend a 2009 tax return Foreign oil and gas taxes are the sum of foreign oil and gas extraction taxes and foreign oil related taxes. How do i amend a 2009 tax return Taxes of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Persons Controlling Foreign Corporations and Partnerships If you had control of a foreign corporation or a foreign partnership for the annual accounting period of that corporation or partnership that ended with or within your tax year, you may have to file an annual information return. How do i amend a 2009 tax return If you do not file the required information return, you may have to reduce the foreign taxes that may be used for the foreign tax credit. How do i amend a 2009 tax return See Penalty for not filing Form 5471 or Form 8865 , later. How do i amend a 2009 tax return U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return persons controlling foreign corporations. How do i amend a 2009 tax return   If you are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen or resident who had control of a foreign corporation for an uninterrupted period of at least 30 days during the annual accounting period of that corporation, you may have to file an annual information return on Form 5471, Information Return of U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return Persons With Respect To Certain Foreign Corporations. How do i amend a 2009 tax return Under this rule, you generally had control of a foreign corporation if at any time during your tax year you owned: Stock possessing more than 50% of the total combined voting power of all classes of stock entitled to vote, or More than 50% of the total value of shares of all classes of stock of the foreign corporation. How do i amend a 2009 tax return U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return persons controlling foreign partnerships. How do i amend a 2009 tax return   If you are a U. How do i amend a 2009 tax return S. How do i amend a 2009 tax return citizen or resident who had control of a foreign partnership at any time during the partnership's tax year, you may have to file