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How To Fill 1040nr

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How To Fill 1040nr

How to fill 1040nr Publication 4492 - Main Contents Table of Contents DefinitionsHurricane Katrina Disaster Area Katrina Covered Disaster Area Gulf Opportunity (GO) Zone (Core Disaster Area) Hurricane Rita Disaster Area (Rita Covered Disaster Area) Rita GO Zone Hurricane Wilma Disaster Area Wilma Covered Disaster Area Wilma GO Zone Extended Tax Deadlines Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Charitable Deduction for Contributions of Food Inventory Charitable Deduction for Contributions of Book Inventories to Public Schools Casualty and Theft LossesTime limit for making election. How to fill 1040nr Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Hurricane Distributions Repayment of Qualified Hurricane Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by Hurricane Katrina Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Work Opportunity Credit Employee Retention Credit Hurricane Katrina Housing Credit Reforestation Costs Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax Help Definitions The following definitions are used throughout this publication. How to fill 1040nr Hurricane Katrina Disaster Area The Hurricane Katrina disaster area covers the area for which the President declared a major disaster before September 14, 2005, because of Hurricane Katrina. How to fill 1040nr The Hurricane Katrina disaster area covers the entire states of Alabama, Florida, Louisiana, and Mississippi. How to fill 1040nr Katrina Covered Disaster Area A portion of the Hurricane Katrina disaster area has been designated by the IRS as a covered disaster area. How to fill 1040nr The Katrina covered disaster area covers the following areas in four states. How to fill 1040nr Alabama. How to fill 1040nr   The counties of Baldwin, Bibb, Choctaw, Clarke, Colbert, Cullman, Greene, Hale, Jefferson, Lamar, Lauderdale, Marengo, Marion, Mobile, Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. How to fill 1040nr Florida. How to fill 1040nr   The counties of Bay, Broward, Collier, Escambia, Franklin, Gulf, Miami-Dade, Monroe, Okaloosa, Santa Rosa, and Walton. How to fill 1040nr Louisiana. How to fill 1040nr   All parishes. How to fill 1040nr Mississippi. How to fill 1040nr   All counties. How to fill 1040nr Gulf Opportunity (GO) Zone (Core Disaster Area) The GO Zone (also called the core disaster area) covers the portion of the Hurricane Katrina disaster area determined by the Federal Emergency Management Agency (FEMA) to be eligible for either individual only or both individual and public assistance from the Federal Government. How to fill 1040nr The GO Zone covers the following areas in three states. How to fill 1040nr Alabama. How to fill 1040nr   The counties of Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa, and Washington. How to fill 1040nr Louisiana. How to fill 1040nr   The parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. How to fill 1040nr Bernard, St. How to fill 1040nr Charles, St. How to fill 1040nr Helena, St. How to fill 1040nr James, St. How to fill 1040nr John the Baptist, St. How to fill 1040nr Martin, St. How to fill 1040nr Mary, St. How to fill 1040nr Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge, and West Feliciana. How to fill 1040nr Mississippi. How to fill 1040nr   The counties of Adams, Amite, Attala, Choctaw, Claiborne, Clarke, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston, and Yazoo. How to fill 1040nr Hurricane Rita Disaster Area (Rita Covered Disaster Area) The Hurricane Rita disaster area (also designated by the IRS as the Rita covered disaster area) covers the area for which the President declared a major disaster before October 6, 2005, because of Hurricane Rita. How to fill 1040nr This area covers the entire states of Louisiana and Texas. How to fill 1040nr Rita GO Zone The Rita GO Zone covers the portion of the Hurricane Rita disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. How to fill 1040nr The Rita GO Zone covers the following areas in two states. How to fill 1040nr Louisiana. How to fill 1040nr   The parishes of Acadia, Allen, Ascension, Beauregard, Calcasieu, Cameron, Evangeline, Iberia, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Plaquemines, Sabine, St. How to fill 1040nr Landry, St. How to fill 1040nr Martin, St. How to fill 1040nr Mary, St. How to fill 1040nr Tammany, Terrebonne, Vermilion, Vernon, and West Baton Rouge. How to fill 1040nr Texas. How to fill 1040nr   The counties of Angelina, Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity, Tyler, and Walker. How to fill 1040nr Hurricane Wilma Disaster Area The Hurricane Wilma disaster area covers the area for which the President declared a major disaster before November 14, 2005, because of Hurricane Wilma. How to fill 1040nr The Hurricane Wilma disaster area covers the entire state of Florida. How to fill 1040nr Wilma Covered Disaster Area A portion of the Hurricane Wilma disaster area has been designated by the IRS as a covered disaster area. How to fill 1040nr The Wilma covered disaster area covers the following counties. How to fill 1040nr Florida. How to fill 1040nr   Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. How to fill 1040nr Lucie, and Sarasota. How to fill 1040nr Wilma GO Zone The Wilma GO Zone covers the portion of the Hurricane Wilma disaster area determined by FEMA to be eligible for either individual only or both individual and public assistance from the Federal Government. How to fill 1040nr The Wilma GO Zone covers the following counties. How to fill 1040nr Florida. How to fill 1040nr   Brevard, Broward, Collier, Glades, Hendry, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, and St. How to fill 1040nr Lucie. How to fill 1040nr Extended Tax Deadlines The IRS has extended deadlines that apply to filing returns, paying taxes, and performing certain other time-sensitive acts for certain taxpayers affected by Hurricane Katrina, Rita, or Wilma, until February 28, 2006. How to fill 1040nr The extension applies to deadlines (either an original or extended due date) that occur during the following periods. How to fill 1040nr After August 28, 2005 (August 23, 2005, for Florida affected taxpayers), and before February 28, 2006, for taxpayers affected by Hurricane Katrina. How to fill 1040nr After September 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Rita. How to fill 1040nr After October 22, 2005, and before February 28, 2006, for taxpayers affected by Hurricane Wilma. How to fill 1040nr Affected taxpayer. How to fill 1040nr   The following taxpayers are eligible for the extension. How to fill 1040nr Any individual whose main home is located in a covered disaster area. How to fill 1040nr Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. How to fill 1040nr Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained or whose tax professional's office is in a covered disaster area. How to fill 1040nr The main home or principal place of business does not have to be located in the covered area. How to fill 1040nr Any individual visiting a county or parish in the Hurricane Katrina or Hurricane Rita covered disaster area that was injured or killed (and the estate of an individual killed) as a result of the hurricane or its aftermath. How to fill 1040nr Any estate or trust whose tax records needed to meet a filing or payment deadline are maintained in a covered disaster area. How to fill 1040nr Generally, any individual who is a worker assisting in the relief activities in a covered disaster area. How to fill 1040nr However, a relief worker assisting in the Wilma covered disaster area is not an affected taxpayer unless the worker is affiliated with a recognized government or philanthropic organization assisting in the relief activities. How to fill 1040nr The spouse of an affected taxpayer, solely with regard to a joint income tax return with that taxpayer. How to fill 1040nr   To ensure correct processing, affected taxpayers should write the assigned disaster designation (for example, “Hurricane Katrina”) in red ink at the top of any forms or documents filed with the IRS. How to fill 1040nr Affected taxpayers can also identify themselves to the IRS or ask hurricane-related questions by calling the special IRS disaster hotline at 1-866-562-5227. How to fill 1040nr Acts extended. How to fill 1040nr   Deadlines for performing the following acts are extended. How to fill 1040nr Filing any return of income, estate, gift, generation-skipping transfer, excise, or employment tax. How to fill 1040nr Paying any income, estate, gift, generation-skipping transfer, excise, or employment tax. How to fill 1040nr This includes making estimated tax payments. How to fill 1040nr Making certain contributions, distributions, recharacterizing contributions, or making a rollover to or from a qualified retirement plan. How to fill 1040nr Filing certain petitions with the Tax Court. How to fill 1040nr Filing a claim for credit or refund of any tax. How to fill 1040nr Bringing suit upon a claim for credit or refund. How to fill 1040nr Certain other acts described in Revenue Procedure 2005-27. How to fill 1040nr You can find Revenue Procedure 2005-27 on page 1050 of Internal Revenue Bulletin 2005-20 at www. How to fill 1040nr irs. How to fill 1040nr gov/pub/irs-irbs/irb05-20. How to fill 1040nr pdf. How to fill 1040nr Forgiveness of interest and penalties. How to fill 1040nr   The IRS may forgive the interest and penalties on any underpaid income, estate, gift, employment, or excise tax for the length of any extension. How to fill 1040nr Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions Individuals. How to fill 1040nr   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. How to fill 1040nr A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2006, to a 50% limit organization (other than certain private foundations described in section 509(a)(3)) if you make an election to have the 50% limit not apply to these contributions. How to fill 1040nr   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. How to fill 1040nr You can carry over any contributions you are not able to deduct for 2005 because of this limit. How to fill 1040nr In 2006, treat the carryover of your unused qualified contributions as a carryover of contributions subject to the 50% limit. How to fill 1040nr Exception. How to fill 1040nr   Qualified contributions do not include a contribution to a segregated fund or account for which you (or any person you appoint or designate) have or expect to have advisory privileges with respect to distributions or investments based on your contribution. How to fill 1040nr Corporations. How to fill 1040nr   A corporation may elect to deduct qualified cash contributions without regard to the 10% taxable income limit if the contributions were made after August 27, 2005, and before January 1, 2006, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3)), for Hurricane Katrina, Rita, or Wilma relief efforts. How to fill 1040nr The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. How to fill 1040nr Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% limit. How to fill 1040nr Partners and shareholders. How to fill 1040nr   Each partner in a partnership and each shareholder in an S corporation makes a separate election to have the appropriate limit not apply. How to fill 1040nr More information. How to fill 1040nr   For more information, see Publication 526 or Publication 542, Corporations. How to fill 1040nr Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. How to fill 1040nr Standard Mileage Rate for Charitable Use of Vehicles The following are special standard mileage rates in effect in 2005 and 2006 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina. How to fill 1040nr 29 cents per mile for the period August 25 through August 31, 2005. How to fill 1040nr 34 cents per mile for the period September 1 through December 31, 2005. How to fill 1040nr 32 cents per mile for the period January 1 through December 31, 2006. How to fill 1040nr Mileage Reimbursements to Charitable Volunteers You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. How to fill 1040nr You cannot claim a deduction or credit for amounts you receive as a mileage reimbursement. How to fill 1040nr You must keep records of miles driven, time, place (or use), and purpose of the mileage. How to fill 1040nr The amount you can exclude from income cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. How to fill 1040nr 40. How to fill 1040nr 5 cents per mile for the period August 25 through August 31, 2005. How to fill 1040nr 48. How to fill 1040nr 5 cents per mile for the period September 1 through December 31, 2005. How to fill 1040nr 44. How to fill 1040nr 5 cents per mile for the period January 1 through December 31, 2006. How to fill 1040nr Charitable Deduction for Contributions of Food Inventory Any taxpayer engaged in a trade or business is eligible to claim a deduction for a contribution of “apparently wholesome food” inventory to a qualified charitable organization described in section 501(c)(3) (except for private nonoperating foundations) after August 27, 2005, and before January 1, 2006. How to fill 1040nr “Apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions. How to fill 1040nr The deduction is equal to the lesser of: The basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation, or Two times the basis of the donated food. How to fill 1040nr The taxpayer must receive written certification from the donee stating: The donated food is related to the purpose or function of the donee's basis for exemption under section 501(c)(3) and is to be used solely for the care of the ill, the needy, or infants; and The food was not given in exchange for money, other property, or services. How to fill 1040nr For a taxpayer other than a C corporation, the deduction is limited to 10% of the taxpayer's total net income from all trades or businesses from which the food contributions were made (figured without regard to the deduction for charitable contributions). How to fill 1040nr For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and each made a contribution of apparently wholesome food inventory, the taxpayer's deduction is limited to 10% of the taxpayer's total net income from the sole proprietorship, S corporation, and partnership (figured without regard to the deduction for charitable contributions). How to fill 1040nr Charitable Deduction for Contributions of Book Inventories to Public Schools A corporation (other than an S corporation) may be allowed a charitable deduction for a qualified book contribution made after August 27, 2005, and before January 1, 2006, to a public school that: Provides elementary or secondary education (kindergarten through grade 12), and Normally maintains a regular faculty and curriculum and has a regular enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. How to fill 1040nr . How to fill 1040nr The deduction is equal to the lesser of: The basis of the donated books plus one-half of the gain that would have been realized if the donated books had been sold at fair market value on the date of the donation, or Two times the basis of the donated books. How to fill 1040nr The corporation must receive written certification from the school stating that the donated books are suitable for the organization's educational programs and will be used for such programs. How to fill 1040nr Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that were caused by Hurricane Katrina, Rita, or Wilma. How to fill 1040nr For more information, see Publication 547. How to fill 1040nr Limits on personal casualty or theft losses caused by Hurricane Katrina, Rita, or Wilma. How to fill 1040nr   The following losses to personal use property are not subject to the $100 or 10% of adjusted gross income limits. How to fill 1040nr Losses that arose in the Hurricane Katrina disaster area after August 24, 2005, and that were caused by Hurricane Katrina. How to fill 1040nr Losses that arose in the Hurricane Rita disaster area after September 22, 2005, and that were caused by Hurricane Rita. How to fill 1040nr Losses that arose in the Hurricane Wilma disaster area after October 22, 2005, and that were caused by Hurricane Wilma. How to fill 1040nr Qualifying losses include losses from flooding or other casualty, and from theft, that arose in the hurricane disaster area and that were caused by the hurricane. How to fill 1040nr Special instructions for individuals who elect to claim a Hurricane Katrina, Rita, or Wilma casualty or theft loss for 2004. How to fill 1040nr   Casualty and theft losses are generally deductible only in the year the casualty occurred or theft was discovered. How to fill 1040nr However, Hurricane Katrina, Rita, and Wilma are Presidentially declared disasters. How to fill 1040nr Therefore, you can elect to deduct losses from these hurricanes on your tax return for the previous year. How to fill 1040nr If you make this election, use the following additional instructions to complete your forms. How to fill 1040nr   Individuals filing or amending their 2004 tax return whose only casualty or theft losses to personal use property claimed on that return were caused by Hurricane Katrina, Rita, or Wilma should write “Hurricane Katrina,” “Hurricane Rita,” or “Hurricane Wilma” at the top of Form 1040 or 1040X. How to fill 1040nr They must also complete and attach the 2004 Form 4684 and write “Hurricane Katrina,”“Hurricane Rita,” or “Hurricane Wilma” on the dotted line next to line 11 and enter -0- on lines 11 and 17. How to fill 1040nr   Individuals filing or amending their 2004 tax return who also have casualty or theft losses to personal use property not related to Hurricane Katrina, Rita, or Wilma should disregard the caution directing taxpayers to use only one Form 4684, located above line 13, and complete lines 13 through 18 on two Forms 4684. How to fill 1040nr The Form 1040 or 1040X and the first Form 4684 should be prepared as explained above for Hurricane Katrina, Rita, or Wilma losses only. How to fill 1040nr The second Form 4684 should be prepared in the normal manner for all gains and non-Hurricane Katrina, Rita or Wilma losses. How to fill 1040nr If both Forms 4684 have a loss on line 18, they should carry the combined losses from that line to Schedule A (Form 1040), line 19. How to fill 1040nr If there is a gain on line 15 of the second Form 4684, disregard the instruction to enter it on Schedule D (Form 1040), and instead enter on Schedule A (Form 1040), line 19, the excess of the loss from the first Form 4684 over the gain on line 15 of the second Form 4684. How to fill 1040nr , Time limit for making election. How to fill 1040nr   You must make this election to claim your casualty or theft loss in 2004 by the later of the following dates. How to fill 1040nr The due date (without extensions) for filing your 2005 income tax return. How to fill 1040nr The due date (with extensions) for filing your 2004 income tax return. How to fill 1040nr Example. How to fill 1040nr If you are a calendar year individual taxpayer, you have until April 17, 2006, to amend your 2004 tax return to claim a casualty or theft loss that occurred during 2005. How to fill 1040nr Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. How to fill 1040nr Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). How to fill 1040nr However, for property that was involuntarily converted after August 24, 2005, as a result of Hurricane Katrina, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. How to fill 1040nr For more information, see the Instructions for Form 4684. How to fill 1040nr Net Operating Losses Qualified GO Zone loss. How to fill 1040nr   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. How to fill 1040nr However, the portion of an NOL that is a qualified GO Zone loss can be carried back to the 5 tax years before the NOL year. How to fill 1040nr In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. How to fill 1040nr   A qualified GO Zone loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified GO Zone casualty loss (as defined below), Moving expenses paid or incurred after August 27, 2005, and before January 1, 2008, for the employment of an individual whose main home was in the GO Zone before August 28, 2005, who was unable to remain in that home because of Hurricane Katrina, and whose main job location (after the move) is in the GO Zone, Temporary housing expenses paid or incurred after August 27, 2005, and before January 1, 2008, to house employees of the taxpayer whose main job location is in the GO Zone, Depreciation or amortization allowable for any qualified GO Zone property (even if you elected not to claim the special GO Zone depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after August 27, 2005, and before January 1, 2008, for any damage from Hurricane Katrina to property located in the GO Zone. How to fill 1040nr Qualified GO Zone casualty loss. How to fill 1040nr   A qualified GO Zone casualty loss is any deductible section 1231 loss of property located in the GO Zone if the loss was caused by Hurricane Katrina. How to fill 1040nr For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by Hurricane Katrina of property located in the GO Zone. How to fill 1040nr Any such loss taken into account in figuring your qualified GO Zone loss is not eligible for the election to be treated as having occurred in the previous tax year. How to fill 1040nr 5-year NOL carryback of certain timber losses. How to fill 1040nr   Generally, you can carry the portion of an NOL due to income and deductions attributable to a farming business back to the 5 tax years before the NOL year. How to fill 1040nr You can treat income and deductions attributable to qualified timber property as attributable to a farming business if any portion of the property is located in the GO Zone, Rita GO Zone, or Wilma GO Zone, and the income and deductions are allocable to the part of your tax year which is after the applicable date below. How to fill 1040nr August 27, 2005, if any portion of the property is located in the GO Zone. How to fill 1040nr September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). How to fill 1040nr October 22, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the RITA GO Zone). How to fill 1040nr   These rules will not apply after 2006. How to fill 1040nr   However, these rules apply only to a timber producer who: Held qualified timber property (defined in Publication 535, Business Expenses) on the applicable date below: August 28, 2005, if any portion of the property is located in the GO Zone, September 23, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone), or October 23, 2005, if any portion of the property is located in the Wilma GO Zone (but not in the GO Zone or the Rita GO Zone); Is not a corporation with stock publicly traded on an established securities market; Is not a real estate investment trust; and Did not hold more than 500 acres of qualified timber property on the applicable date above. How to fill 1040nr More information. How to fill 1040nr   For more information on NOLs, see Publication 536 or Publication 542, Corporations. How to fill 1040nr IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of Hurricane Katrina, Rita, or Wilma. How to fill 1040nr Definitions Qualified hurricane distribution. How to fill 1040nr   A qualified hurricane distribution is any distribution you received from an eligible retirement plan if all of the following apply. How to fill 1040nr The distribution was made: After August 24, 2005, and before January 1, 2007, for Hurricane Katrina; After September 22, 2005, and before January 1, 2007, for Hurricane Rita; or After October 22, 2005, and before January 1, 2007, for Hurricane Wilma. How to fill 1040nr Your main home was located in a hurricane disaster area listed below on the date shown for that area. How to fill 1040nr August 28, 2005, for the Hurricane Katrina disaster area. How to fill 1040nr September 23, 2005, for the Hurricane Rita disaster area. How to fill 1040nr October 23, 2005, for the Hurricane Wilma disaster area. How to fill 1040nr You sustained an economic loss because of Hurricane Katrina, Rita, or Wilma and your main home was in that hurricane disaster area on the date shown in (2) above for that hurricane. How to fill 1040nr Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. How to fill 1040nr   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified hurricane distribution, regardless of whether the distribution was made on account of Hurricane Katrina, Rita, or Wilma. How to fill 1040nr Qualified hurricane distributions are permitted without regard to your need or the actual amount of your economic loss. How to fill 1040nr   The total of your qualified hurricane distributions from all plans is limited to $100,000. How to fill 1040nr If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. How to fill 1040nr   A reduction or offset (after August 24, 2005, for Katrina; after September 22, 2005, for Rita; or after October 22, 2005, for Wilma) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified hurricane distribution. How to fill 1040nr Eligible retirement plan. How to fill 1040nr   An eligible retirement plan can be any of the following. How to fill 1040nr A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). How to fill 1040nr A qualified annuity plan. How to fill 1040nr A tax-sheltered annuity contract. How to fill 1040nr A governmental section 457 deferred compensation plan. How to fill 1040nr A traditional, SEP, SIMPLE, or Roth IRA. How to fill 1040nr Main home. How to fill 1040nr   Generally, your main home is the home where you live most of the time. How to fill 1040nr A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. How to fill 1040nr Taxation of Qualified Hurricane Distributions Qualified hurricane distributions are included in income in equal amounts over three years. How to fill 1040nr However, if you elect, you can include the entire distribution in your income in the year it was received. How to fill 1040nr Qualified hurricane distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). How to fill 1040nr However, any distributions you receive in excess of the $100,000 qualified hurricane distribution limit may be subject to the additional tax on early distributions. How to fill 1040nr For more information, see Form 8915. How to fill 1040nr Repayment of Qualified Hurricane Distributions If you choose, you generally can repay any portion of a qualified hurricane distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. How to fill 1040nr Also, you can repay a qualified hurricane distribution made on account of a hardship from a retirement plan. How to fill 1040nr However, see Exceptions below for qualified hurricane distributions you cannot repay. How to fill 1040nr You have three years from the day after the date you received the distribution to make a repayment. How to fill 1040nr Amounts that are repaid are treated as a qualified rollover and are not included in income. How to fill 1040nr Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. How to fill 1040nr See Form 8915 for more information on how to report repayments. How to fill 1040nr Exceptions. How to fill 1040nr   You cannot repay the following types of distributions. How to fill 1040nr Qualified hurricane distributions received as a beneficiary (other than a surviving spouse). How to fill 1040nr Required minimum distributions. How to fill 1040nr Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. How to fill 1040nr Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area, you can repay that distribution before March 1, 2006, to an eligible retirement plan after August 24, 2005 (Katrina); after September 22, 2005 (Rita); or after October 22, 2005 (Wilma). How to fill 1040nr For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. How to fill 1040nr To be a qualified distribution, the distribution must meet all of the following requirements. How to fill 1040nr The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. How to fill 1040nr The distribution was received in 2005 after February 28 and before: August 29 for Hurricane Katrina; September 24 for Hurricane Rita; or October 24 for Hurricane Wilma. How to fill 1040nr The distribution was to be used to purchase or construct a main home in the Hurricane Katrina, Rita, or Wilma disaster area that was not purchased or constructed because of Hurricane Katrina, Rita, or Wilma. How to fill 1040nr Amounts that are repaid before March 1, 2006, are treated as a qualified rollover and are not included in income. How to fill 1040nr Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. How to fill 1040nr A qualified distribution not repaid before March 1, 2006, may be taxable for 2005 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. How to fill 1040nr You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before March 1, 2006. How to fill 1040nr Loans From Qualified Plans The following benefits are available to qualified individuals. How to fill 1040nr Increases to the limits for distributions treated as loans from employer plans. How to fill 1040nr A 1-year suspension for payments due on plan loans. How to fill 1040nr Qualified individual. How to fill 1040nr   You are a qualified individual if any of the following apply. How to fill 1040nr Your main home on August 28, 2005, was located in the Hurricane Katrina disaster area and you had an economic loss because of Hurricane Katrina. How to fill 1040nr Your main home on September 23, 2005, was located in the Hurricane Rita disaster area and you had an economic loss because of Hurricane Rita. How to fill 1040nr Your main home on October 23, 2005, was located in the Hurricane Wilma disaster area and you had an economic loss because of Hurricane Wilma. How to fill 1040nr Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. How to fill 1040nr Limits on plan loans. How to fill 1040nr   The $50,000 limit for distributions treated as plan loans is increased to $100,000. How to fill 1040nr In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. How to fill 1040nr The higher limits apply only to loans received during the following period. How to fill 1040nr If your main home was located in the Hurricane Katrina disaster area, the period began on September 24, 2005, and ends on December 31, 2006. How to fill 1040nr If your main home was located in the Hurricane Rita or Wilma disaster area, the period began on December 21, 2005, and ends on December 31, 2006. How to fill 1040nr If you are a qualified individual based on Hurricane Katrina and another hurricane, use the period based on Hurricane Katrina. How to fill 1040nr One-year suspension of loan payments. How to fill 1040nr   Payments on plan loans due before 2007 may be suspended for 1 year by the plan administrator. How to fill 1040nr To qualify for the suspension, the due date for any loan payment must occur during the period beginning on: August 28, 2005, if your main home was located in the Hurricane Katrina disaster area. How to fill 1040nr September 23, 2005, if your main home was located in the Hurricane Rita disaster area. How to fill 1040nr October 23, 2005, if your main home was located in the Hurricane Wilma disaster area. How to fill 1040nr If you are a qualified individual based on more than one hurricane, use the period with the earliest beginning date. How to fill 1040nr Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit You can elect to use your 2004 earned income to figure your earned income credit (EIC) and additional child tax credit for 2005 if: Your 2005 earned income is less than your 2004 earned income, and At least one of the following statements is true. How to fill 1040nr Your main home on August 25, 2005, was in the Gulf Opportunity (GO) Zone. How to fill 1040nr Your main home on August 25, 2005, was in the Hurricane Katrina disaster area and you were displaced from that home because of Hurricane Katrina. How to fill 1040nr Your main home on September 23, 2005, was in the Rita GO Zone. How to fill 1040nr Your main home on September 23, 2005, was in the Hurricane Rita disaster area and you were displaced from that home because of Hurricane Rita. How to fill 1040nr Your main home on October 23, 2005, was in the Wilma GO Zone. How to fill 1040nr Your main home on October 23, 2005, was in the Hurricane Wilma disaster area and you were displaced from that home because of Hurricane Wilma. How to fill 1040nr Earned income. How to fill 1040nr    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. How to fill 1040nr If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. How to fill 1040nr Joint returns. How to fill 1040nr   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. How to fill 1040nr If you make the election, your 2004 earned income is the sum of your 2004 earned income and your spouse's 2004 earned income. How to fill 1040nr Making the election. How to fill 1040nr   If you make the election to use your 2004 earned income, the election applies for figuring both the EIC and the additional child tax credit. How to fill 1040nr However, you can make the election for the additional child tax credit even if you do not take the EIC. How to fill 1040nr   Electing to use your 2004 earned income may increase or decrease your EIC. How to fill 1040nr Take the following steps to decide whether to make the election. How to fill 1040nr Figure your 2005 EIC using your 2004 earned income. How to fill 1040nr Figure your 2005 additional child tax credit using your 2004 earned income for EIC purposes. How to fill 1040nr Add the results of (1) and (2). How to fill 1040nr Figure your 2005 EIC using your 2005 earned income. How to fill 1040nr Figure your 2005 additional child tax credit using your 2005 earned income for additional child tax credit purposes. How to fill 1040nr Add the results of (4) and (5). How to fill 1040nr Compare the results of (3) and (6). How to fill 1040nr If (3) is larger than (6), it is to your benefit to make the election. How to fill 1040nr If (3) is equal to or smaller than (6), making the election will not help you. How to fill 1040nr   If you elect to use your 2004 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2004 earned income on the dotted line next to line 66a of Form 1040, on the line next to line 41a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. How to fill 1040nr   If you elect to use your 2004 earned income and you are claiming the additional child tax credit, enter your 2004 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. How to fill 1040nr   Because Form 8812 was released before the GO Zone legislation was enacted, the instructions refer only to individuals whose main home was in the Hurricane Katrina disaster area. How to fill 1040nr When completing Form 8812, line 4a, use the above rules to determine your eligibility to make the election (instead of the Form 8812 instructions). How to fill 1040nr Getting your 2004 tax return information. How to fill 1040nr   If you do not have your 2004 tax records, you can get the amount of earned income used to figure your 2004 EIC by calling 1-866-562-5227. How to fill 1040nr You can also get this information by visiting the IRS website at www. How to fill 1040nr irs. How to fill 1040nr gov. How to fill 1040nr   If you prefer to figure your 2004 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. How to fill 1040nr See Request for Copy or Transcript of Tax Return on page 16. How to fill 1040nr Additional Exemption for Housing Individuals Displaced by Hurricane Katrina You may be able to claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by Hurricane Katrina. How to fill 1040nr The additional exemption amount is claimed on new Form 8914. How to fill 1040nr The additional exemption amount is allowable once per taxpayer for a specific individual in 2005 or 2006, but not in both years. How to fill 1040nr The maximum additional exemption amount you can claim for all displaced individuals is $2,000 ($1,000 if married filing separately). How to fill 1040nr The additional exemption amount you claim for displaced individuals in 2005 will reduce the $2,000 maximum for 2006. How to fill 1040nr If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. How to fill 1040nr If married filing separately, only one spouse may claim the additional exemption amount for a specific displaced individual. How to fill 1040nr In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). How to fill 1040nr To qualify as a displaced individual, the individual: Must have had his or her main home in the Hurricane Katrina disaster area on August 28, 2005, and he or she must have been displaced from that home. How to fill 1040nr If the individual's main home was located outside the core disaster area, that home must have been damaged by Hurricane Katrina or the individual must have been evacuated from that home because of Hurricane Katrina, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. How to fill 1040nr You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. How to fill 1040nr You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. How to fill 1040nr Food, clothing, or personal items consumed or used by the displaced individual. How to fill 1040nr Reimbursement for the cost of any long distance telephone calls made by the displaced individual. How to fill 1040nr Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. How to fill 1040nr However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. How to fill 1040nr Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. How to fill 1040nr For more information, see Form 8914. How to fill 1040nr Education Credits The education credits have been expanded for students attending an eligible educational institution located in the Gulf Opportunity Zone (GOZ students) for any tax year beginning in 2005 or 2006. How to fill 1040nr The Hope credit for a GOZ student is increased to 100% of the first $2,000 in qualified education expenses and 50% of the next $2,000 of qualified education expenses for a maximum credit of $3,000 per student. How to fill 1040nr The lifetime learning credit rate for a GOZ student is increased from 20% to 40%. How to fill 1040nr The definition of qualified education expenses for a GOZ student also has been expanded. How to fill 1040nr In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a GOZ student include the following. How to fill 1040nr Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. How to fill 1040nr For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. How to fill 1040nr For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. How to fill 1040nr The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. How to fill 1040nr The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. How to fill 1040nr You will need to contact the eligible educational institution for qualified room and board costs. How to fill 1040nr For more information, see Form 8863. How to fill 1040nr Recapture of Federal Mortgage Subsidy Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. How to fill 1040nr However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. How to fill 1040nr This amount is increased to $150,000 if the loan was provided before 2011 and was used to: Repair damage caused by Hurricane Katrina to a residence in the Hurricane Katrina disaster area, or Alter, repair, or improve an existing owner-occupied residence in the GO Zone, Rita GO Zone, or Wilma GO Zone. How to fill 1040nr Exclusion of Certain Cancellations of Indebtedness by Reason of Hurricane Katrina Generally, discharges of nonbusiness debts (such as mortgages) made after August 24, 2005, and before January 1, 2007, are excluded from income for individuals whose main home was in the Hurricane Katrina disaster area on August 25, 2005. How to fill 1040nr If the individual's main home was located outside the core disaster area, the individual also must have had an economic loss because of Hurricane Katrina. How to fill 1040nr Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. How to fill 1040nr This relief does not apply to any debt secured by real property located outside the Hurricane Katrina disaster area. How to fill 1040nr You may also have to reduce certain tax attributes by the amount excluded. How to fill 1040nr For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). How to fill 1040nr Tax Relief for Temporary Relocation Under the Gulf Opportunity Zone Act of 2005, the IRS may adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2005 or 2006 as a result of a temporary relocation caused by Hurricane Katrina, Rita, or Wilma. How to fill 1040nr However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. How to fill 1040nr The IRS has exercised this authority as follows. How to fill 1040nr In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. How to fill 1040nr In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of Hurricane Katrina, Rita, or Wilma. How to fill 1040nr You can treat as a student an individual who enrolled in school before August 25, 2005, and who is unable to attend classes because of Hurricane Katrina, for each month of the enrollment period that individual is prevented by Hurricane Katrina from attending school as planned. How to fill 1040nr You can treat as a student an individual who enrolled in school before September 23, 2005, and who is unable to attend classes because of Hurricane Rita, for each month of the enrollment period that individual is prevented by Hurricane Rita from attending school as planned. How to fill 1040nr You can treat as a student an individual who enrolled in school before October 23, 2005, and who is unable to attend classes because of Hurricane Wilma, for each month of the enrollment period that individual is prevented by Hurricane Wilma from attending school as planned. How to fill 1040nr Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified Gulf Opportunity (GO) Zone property (as defined below) you place in service after August 27, 2005. How to fill 1040nr The allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). How to fill 1040nr The special allowance applies only for the first year the property is placed in service. How to fill 1040nr The allowance is deductible for both the regular tax and the alternative minimum tax (AMT). How to fill 1040nr There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. How to fill 1040nr You can elect not to deduct the special GO Zone depreciation allowance for qualified property. How to fill 1040nr If you make this election for any property, it applies to all property in the same class placed in service during the year. How to fill 1040nr Qualified GO Zone property. How to fill 1040nr   Property that qualifies for the special GO Zone depreciation allowance includes the following. How to fill 1040nr Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. How to fill 1040nr Water utility property. How to fill 1040nr Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. How to fill 1040nr (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. How to fill 1040nr ) Qualified leasehold improvement property. How to fill 1040nr Nonresidential real property and residential rental property. How to fill 1040nr   For more information on this property, see Publication 946. How to fill 1040nr Other tests to be met. How to fill 1040nr   To be qualified GO Zone property, the property must also meet all of the following tests. How to fill 1040nr You must have acquired the property, by purchase, after August 27, 2005, but only if no binding written contract for the acquisition was in effect before August 28, 2005. How to fill 1040nr The property must be placed in service before 2008 (2009 in the case of nonresidential real property and residential rental property). How to fill 1040nr Substantially all of the use of the property must be in the GO Zone and in the active conduct of your trade or business in the GO Zone. How to fill 1040nr The original use of the property in the GO Zone must begin with you after August 27, 2005. How to fill 1040nr Used property can be qualified GO Zone property if it has not previously been used within the GO Zone. How to fill 1040nr Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. How to fill 1040nr Excepted property. How to fill 1040nr   Qualified GO Zone property does not include any of the following. How to fill 1040nr Property required to be depreciated using the Alternative Depreciation System (ADS). How to fill 1040nr Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. How to fill 1040nr Property for which you are claiming a commercial revitalization deduction. How to fill 1040nr Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. How to fill 1040nr Any gambling or animal racing property (as defined below). How to fill 1040nr Property in the same class as that for which you elected not to claim the special GO Zone depreciation allowance. How to fill 1040nr   Gambling or animal racing property is: Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and The portion of any real property (determined by square footage) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing, unless this portion is less than 100 square feet. How to fill 1040nr Recapture of special allowance. How to fill 1040nr   If, in any year after the year you claim the special allowance, the property ceases to be qualified GO Zone property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. How to fill 1040nr Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 Gulf Opportunity (GO) Zone property (as defined later) placed in service in the GO Zone. How to fill 1040nr Increased dollar limit. How to fill 1040nr   The limit on the section 179 deduction ($105,000 for 2005, $108,000 for 2006) for qualified section 179 GO Zone property acquired after August 27, 2005, is increased by the smaller of: $100,000, or The cost of qualified section 179 GO Zone property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). How to fill 1040nr   The amount for which you can make the election is reduced if the cost of all qualified section 179 GO Zone property you placed in service during the year exceeds $420,000 for 2005 ($430,000 for 2006) increased by the smaller of: $600,000, or The cost of qualified section 179 GO Zone property placed in service during the year. How to fill 1040nr Qualified section 179 GO Zone property. How to fill 1040nr   Qualified section 179 GO Zone property is section 179 property that is qualified GO Zone property (explained earlier under Special Depreciation Allowance). How to fill 1040nr Section 179 property does not include nonresidential real property or residential rental property. How to fill 1040nr For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. How to fill 1040nr Work Opportunity Credit For the work opportunity credit, the definition of “targeted group employee” has been expanded to include a Hurricane Katrina employee. How to fill 1040nr Hurricane Katrina employee. How to fill 1040nr   A Hurricane Katrina employee is: A person who, on August 28, 2005, had a main home in the core disaster area and, within a two-year period beginning on that date, is hired to perform services principally in the core disaster area; or A person who, on August 28, 2005, had a main home in the core disaster area, was displaced from that main home as a result of Hurricane Katrina, and was hired during the period beginning on August 28, 2005, and ending on December 31, 2005. How to fill 1040nr Qualified wages. How to fill 1040nr   Generally, qualified wages do not include wages you paid to a targeted group employee who worked for you previously. How to fill 1040nr However, wages will qualify if: You paid them to an employee who is a Hurricane Katrina employee, The employee was not in your employment on August 28, 2005, and This is your first hire of the employee as a Hurricane Katrina employee after August 28, 2005. How to fill 1040nr   For more information, see Form 5884. How to fill 1040nr Certification requirements. How to fill 1040nr   An employee must provide to the employer reasonable evidence that he or she is a Hurricane Katrina employee. How to fill 1040nr An employer may accept a completed Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits, as such evidence. How to fill 1040nr The certification requirements described in Form 8850 do not apply to a Hurricane Katrina employee. How to fill 1040nr Do not send any Forms 8850 that have only box 1 checked to the state employment security agency. How to fill 1040nr Instead, the employer should keep these Forms 8850 with the employer's other records. How to fill 1040nr For more information, see Form 8850 and its instructions. How to fill 1040nr Employee Retention Credit An eligible employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone, the Rita GO Zone, or the Wilma GO Zone can claim the employee retention credit. How to fill 1040nr The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). How to fill 1040nr Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). How to fill 1040nr Use Form 5884-A to claim the credit. How to fill 1040nr See the following rules and definitions for each hurricane. How to fill 1040nr Employers affected by Hurricane Katrina. How to fill 1040nr   The following definitions apply to employers affected by Hurricane Katrina. How to fill 1040nr Eligible employer. How to fill 1040nr   For this purpose, an eligible employer is any employer who conducted an active trade or business on August 28, 2005, in the GO Zone and whose trade or business was inoperable on any day after August 28, 2005, and before January 1, 2006, because of damage caused by Hurricane Katrina. How to fill 1040nr Eligible employee. How to fill 1040nr   For this purpose, an eligible employee is an employee whose principal place of employment on August 28, 2005, with such eligible employer was in the GO Zone. How to fill 1040nr An employee is not an eligible employee for purposes of Hurricane Katrina if the employee is treated as an eligible employee for the work opportunity credit. How to fill 1040nr Employers affected by Hurricane Rita. How to fill 1040nr   The following definitions apply to employers affected by Hurricane Rita. How to fill 1040nr Eligible employer. How to fill 1040nr   For this purpose, an eligible employer is any employer who conducted an active trade or business on September 23, 2005, in the Rita GO Zone and whose trade or business was inoperable on any day after September 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Rita. How to fill 1040nr Eligible employee. How to fill 1040nr   For this purpose, an eligible employee is an employee whose principal place of employment on September 23, 2005, with such eligible employer was in the Rita GO Zone. How to fill 1040nr An employee is not an eligible employee for purposes of Hurricane Rita if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina employee retention credit. How to fill 1040nr Employers affected by Hurricane Wilma. How to fill 1040nr   The following definitions apply to employers affected by Hurricane Wilma. How to fill 1040nr Eligible employer. How to fill 1040nr   For this purpose, an eligible employer is any employer who conducted an active trade or business on October 23, 2005, in the Wilma GO Zone and whose trade or business was inoperable on any day after October 23, 2005, and before January 1, 2006, because of damage caused by Hurricane Wilma. How to fill 1040nr Eligible employee. How to fill 1040nr   For this purpose, an eligible employee is an employee whose principal place of employment on October 23, 2005, with such eligible employer was in the Wilma GO Zone. How to fill 1040nr An employee is not an eligible employee for purposes of Hurricane Wilma if the employee is treated as an eligible employee for the work opportunity credit or the Hurricane Katrina or Rita employee retention credit. How to fill 1040nr Qualified wages. How to fill 1040nr   Qualified wages are wages you paid or incurred before January 1, 2006, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable hurricane, and ending on the date your trade or business resumed significant operations at that place. How to fill 1040nr In addition, the wages must have been paid or incurred after the following date. How to fill 1040nr August 28, 2005, for Hurricane Katrina. How to fill 1040nr September 23, 2005, for Hurricane Rita. How to fill 1040nr October 23, 2005, for Hurricane Wilma. How to fill 1040nr    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. How to fill 1040nr    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). How to fill 1040nr Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. How to fill 1040nr Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. How to fill 1040nr   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. How to fill 1040nr For a special rule that applies to railroad employees, see section 51(h)(1)(B). How to fill 1040nr   Qualified wages do not include the following. How to fill 1040nr Wages paid to your dependent or a related individual. How to fill 1040nr See section 51(i)(1). How to fill 1040nr Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. How to fill 1040nr Wages for services of replacement workers during a strike or lockout. How to fill 1040nr   For more information, see Form 5884-A. How to fill 1040nr Hurricane Katrina Housing Credit An employer who conducted an active trade or business in the Gulf Opportunity (GO) Zone can claim the Hurricane Katrina housing credit. How to fill 1040nr The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from January 1, 2006, through July 1, 2006. How to fill 1040nr The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). How to fill 1040nr Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). How to fill 1040nr The employer must use Form 5884-A to claim the credit. How to fill 1040nr A qualified employee is an individual who had a main home in the GO Zone on August 28, 2005, and who performs substantially all employment services in the GO Zone for the employer furnishing the lodging. How to fill 1040nr The employee cannot be your dependent or a related individual. How to fill 1040nr See section 51(i)(1). How to fill 1040nr For more information, see Form 5884-A. How to fill 1040nr Reforestation Costs You may be able to elect to deduct a limited amount of reforestation costs for each qualified timber property. How to fill 1040nr The deduction for any tax year generally is limited to $10,000 ($5,000 if married filing separately, $0 for a trust). How to fill 1040nr However, this limit is increased if you paid or incurred reforestation costs after the applicable date below and any portion of the qualified timber property is located in one of the following areas. How to fill 1040nr August 27, 2005, if any portion of the property is located in the GO Zone. How to fill 1040nr September 22, 2005, if any portion of the property is located in the Rita GO Zone (but not in the GO Zone). How to fill 1040nr October 22, 2005, if any portion of the property is located in the Wilma GO Zone. How to fill 1040nr The limit for each qualified timber property is increased by the smaller of: $10,000 ($5,000 if married filing separately, $0 for a trust), or The amount of reforestation costs you paid or incurred after the applicable date for the qualified timber property, any portion of which is located in the zone described above. How to fill 1040nr The increase in the limit applies only to costs paid or incurred before 2008. How to fill 1040nr However, these rules do not apply to any timber producer who: Held more than 500 acres of qualified timber property at any time during the tax year, Is a corporation with stock publicly traded on an established securities market, or Is a real estate investment trust. How to fill 1040nr For more information about the election to deduct reforestation costs, see chapter 8 in Publication 535, Business Expenses. How to fill 1040nr Demolition and Clean-up Costs You can elect to deduct 50% of any qualified GO Zone clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. How to fill 1040nr Qualified GO Zone clean-up costs are any amounts paid or incurred after August 27, 2005, and before January 1, 2008, for the removal of debris from, or the demolition of structures on, real property located in the GO Zone that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. How to fill 1040nr Increase in Rehabilitation Tax Credit The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred after August 27, 2005, and before January 1, 2009, on buildings located in the GO Zone as follows. How to fill 1040nr For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. How to fill 1040nr For certified historic structures, the credit percentage is increased from 20% to 26%. How to fill 1040nr For more information, see Form 3468, Investment Credit. How to fill 1040nr Request for Copy or Transcript of Tax Return Request for copy of tax return. How to fill 1040nr   You can use Form 4506 to order a copy of your tax return. How to fill 1040nr Generally, there is a $39. How to fill 1040nr 00 fee for requesting each copy of a tax return. How to fill 1040nr If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Hurricane Katrina”) is written in red across the top of the form when filed. How to fill 1040nr Request for transcript of tax return. How to fill 1040nr   You can use Form 4506-T to order a free transcript of your tax return. How to fill 1040nr A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. How to fill 1040nr You can also call 1-800-829-1040 to order a transcript. How to fill 1040nr How To Get Tax Help Special IRS assistance. How to fill 1040nr   The IRS is providing special help for those affected by Hurricane Katrina, Rita, or Wilma, as well as survivors and personal representatives of the victims. How to fill 1040nr We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by Hurricane Katrina, Rita, or Wilma, or who have other tax issues related to the hurricanes. How to fill 1040nr Call 1-866-562-5227 Monday through Friday In English-7 a. How to fill 1040nr m. How to fill 1040nr to 10 p. How to fill 1040nr m. How to fill 1040nr local time In Spanish-8 a. How to fill 1040nr m. How to fill 1040nr to 9:30 p. How to fill 1040nr m. How to fill 1040nr local time   The IRS website at www. How to fill 1040nr irs. How to fill 1040nr gov has notices and other tax relief information. How to fill 1040nr Check it periodically for any new guidance. How to fill 1040nr Other help from the IRS. How to fill 1040nr   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. How to fill 1040nr By selecting the method that is best for you, you will have quick and easy access to tax help. How to fill 1040nr Contacting your Taxpayer Advocate. How to fill 1040nr   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. How to fill 1040nr   The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. How to fill 1040nr While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. How to fill 1040nr   To contact your Taxpayer Advocate: Call the Taxpayer Advocate toll free at 1-877-777-4778. How to fill 1040nr Call, write, or fax the Taxpayer Advocate office in your area. How to fill 1040nr Call 1-800-829-4059 if you are a TTY/TDD user. How to fill 1040nr Visit www. How to fill 1040nr irs. How to fill 1040nr gov/advocate. How to fill 1040nr   For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish). How to fill 1040nr Free tax services. How to fill 1040nr   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. How to fill 1040nr It contains a list of free tax publications and an index of tax topics. How to fill 1040nr It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. How to fill 1040nr Internet. How to fill 1040nr You can access the IRS website 24 hours a day, 7 days a week, at www. How to fill 1040nr irs. How to fill 1040nr gov to: E-file your return. How to fill 1040nr Find out about commercial tax preparation and e-file services available free to eligible taxpayers. How to fill 1040nr Check the status of your refund. How to fill 1040nr Click on Where's My Refund. How to fill 1040nr Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). How to fill 1040nr Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. How to fill 1040nr Download forms, instructions, and publications. How to fill 1040nr Order IRS products online. How to fill 1040nr Research your tax questions online. How to fill 1040nr Search publications online by topic or keyword. How to fill 1040nr View Internal Revenue Bulletins (IRBs) published in the last few years. How to fill 1040nr Figure your withholdin
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How to fill 1040nr 18. How to fill 1040nr   Alimony Table of Contents IntroductionSpouse or former spouse. How to fill 1040nr Divorce or separation instrument. How to fill 1040nr Useful Items - You may want to see: General RulesMortgage payments. How to fill 1040nr Taxes and insurance. How to fill 1040nr Other payments to a third party. How to fill 1040nr Instruments Executed After 1984Payments to a third party. How to fill 1040nr Exception. How to fill 1040nr Substitute payments. How to fill 1040nr Specifically designated as child support. How to fill 1040nr Contingency relating to your child. How to fill 1040nr Clearly associated with a contingency. How to fill 1040nr How To Deduct Alimony Paid How To Report Alimony Received Recapture Rule Introduction This chapter discusses the rules that apply if you pay or receive alimony. How to fill 1040nr It covers the following topics. How to fill 1040nr What payments are alimony. How to fill 1040nr What payments are not alimony, such as child support. How to fill 1040nr How to deduct alimony you paid. How to fill 1040nr How to report alimony you received as income. How to fill 1040nr Whether you must recapture the tax benefits of alimony. How to fill 1040nr Recapture means adding back in your income all or part of a deduction you took in a prior year. How to fill 1040nr Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. How to fill 1040nr It does not include voluntary payments that are not made under a divorce or separation instrument. How to fill 1040nr Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. How to fill 1040nr Although this chapter is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. How to fill 1040nr To be alimony, a payment must meet certain requirements. How to fill 1040nr Different requirements generally apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. How to fill 1040nr This chapter discusses the rules for payments under instruments executed after 1984. How to fill 1040nr If you need the rules for payments under pre-1985 instruments, get and keep a copy of the 2004 version of Publication 504. How to fill 1040nr That was the last year the information on pre-1985 instruments was included in Publication 504. How to fill 1040nr Use Table 18-1 in this chapter as a guide to determine whether certain payments are considered alimony. How to fill 1040nr Definitions. How to fill 1040nr   The following definitions apply throughout this chapter. How to fill 1040nr Spouse or former spouse. How to fill 1040nr   Unless otherwise stated, the term “spouse” includes former spouse. How to fill 1040nr Divorce or separation instrument. How to fill 1040nr   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. How to fill 1040nr This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). How to fill 1040nr Useful Items - You may want to see: Publication 504 Divorced or Separated Individuals General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. How to fill 1040nr Payments not alimony. How to fill 1040nr   Not all payments under a divorce or separation instrument are alimony. How to fill 1040nr Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained under Community Property in Publication 504, Payments to keep up the payer's property, or Use of the payer's property. How to fill 1040nr Payments to a third party. How to fill 1040nr   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. How to fill 1040nr These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. How to fill 1040nr ), taxes, tuition, etc. How to fill 1040nr The payments are treated as received by your spouse and then paid to the third party. How to fill 1040nr Life insurance premiums. How to fill 1040nr   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. How to fill 1040nr Payments for jointly-owned home. How to fill 1040nr   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse, some of your payments may be alimony. How to fill 1040nr Mortgage payments. How to fill 1040nr   If you must pay all the mortgage payments (principal and interest) on a jointly-owned home, and they otherwise qualify as alimony, you can deduct one-half of the total payments as alimony. How to fill 1040nr If you itemize deductions and the home is a qualified home, you can claim one-half of the interest in figuring your deductible interest. How to fill 1040nr Your spouse must report one-half of the payments as alimony received. How to fill 1040nr If your spouse itemizes deductions and the home is a qualified home, he or she can claim one-half of the interest on the mortgage in figuring deductible interest. How to fill 1040nr Taxes and insurance. How to fill 1040nr   If you must pay all the real estate taxes or insurance on a home held as tenants in common, you can deduct one-half of these payments as alimony. How to fill 1040nr Your spouse must report one-half of these payments as alimony received. How to fill 1040nr If you and your spouse itemize deductions, you can each claim one-half of the real estate taxes and none of the home insurance. How to fill 1040nr    If your home is held as tenants by the entirety or joint tenants, none of your payments for taxes or insurance are alimony. How to fill 1040nr But if you itemize deductions, you can claim all of the real estate taxes and none of the home insurance. How to fill 1040nr Other payments to a third party. How to fill 1040nr   If you made other third-party payments, see Publication 504 to see whether any part of the payments qualifies as alimony. How to fill 1040nr Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. How to fill 1040nr Exception for instruments executed before 1985. How to fill 1040nr   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. How to fill 1040nr A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. How to fill 1040nr A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. How to fill 1040nr   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, get the 2004 version of Publication 504 at www. How to fill 1040nr irs. How to fill 1040nr gov/pub504. How to fill 1040nr Example 1. How to fill 1040nr In November 1984, you and your former spouse executed a written separation agreement. How to fill 1040nr In February 1985, a decree of divorce was substituted for the written separation agreement. How to fill 1040nr The decree of divorce did not change the terms for the alimony you pay your former spouse. How to fill 1040nr The decree of divorce is treated as executed before 1985. How to fill 1040nr Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. How to fill 1040nr Example 2. How to fill 1040nr Assume the same facts as in Example 1 except that the decree of divorce changed the amount of the alimony. How to fill 1040nr In this example, the decree of divorce is not treated as executed before 1985. How to fill 1040nr The alimony payments are subject to the rules for payments under instruments executed after 1984. How to fill 1040nr Alimony requirements. How to fill 1040nr   A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. How to fill 1040nr The payment is in cash. How to fill 1040nr The instrument does not designate the payment as not alimony. How to fill 1040nr Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. How to fill 1040nr There is no liability to make any payment (in cash or property) after the death of the recipient spouse. How to fill 1040nr The payment is not treated as child support. How to fill 1040nr Each of these requirements is discussed below. How to fill 1040nr Cash payment requirement. How to fill 1040nr   Only cash payments, including checks and money orders, qualify as alimony. How to fill 1040nr The following do not qualify as alimony. How to fill 1040nr Transfers of services or property (including a debt instrument of a third party or an annuity contract). How to fill 1040nr Execution of a debt instrument by the payer. How to fill 1040nr The use of the payer's property. How to fill 1040nr Payments to a third party. How to fill 1040nr   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. How to fill 1040nr See Payments to a third party under General Rules, earlier. How to fill 1040nr   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. How to fill 1040nr The payments are in lieu of payments of alimony directly to your spouse. How to fill 1040nr The written request states that both spouses intend the payments to be treated as alimony. How to fill 1040nr You receive the written request from your spouse before you file your return for the year you made the payments. How to fill 1040nr Payments designated as not alimony. How to fill 1040nr   You and your spouse can designate that otherwise qualifying payments are not alimony. How to fill 1040nr You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. How to fill 1040nr For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). How to fill 1040nr If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. How to fill 1040nr   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. How to fill 1040nr The copy must be attached each year the designation applies. How to fill 1040nr Spouses cannot be members of the same household. How to fill 1040nr    Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. How to fill 1040nr A home you formerly shared is considered one household, even if you physically separate yourselves in the home. How to fill 1040nr   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. How to fill 1040nr Exception. How to fill 1040nr   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. How to fill 1040nr Table 18-1. How to fill 1040nr Alimony Requirements (Instruments Executed After 1984) Payments ARE alimony if all of the following are true: Payments are NOT alimony if any of the following are true: Payments are required by a divorce or separation instrument. How to fill 1040nr Payments are not required by a divorce or separation instrument. How to fill 1040nr Payer and recipient spouse do not file a joint return with each other. How to fill 1040nr Payer and recipient spouse file a joint return with each other. How to fill 1040nr Payment is in cash (including checks or money orders). How to fill 1040nr Payment is: Not in cash, A noncash property settlement, Spouse's part of community income, or To keep up the payer's property. How to fill 1040nr Payment is not designated in the instrument as not alimony. How to fill 1040nr Payment is designated in the instrument as not alimony. How to fill 1040nr Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. How to fill 1040nr Spouses legally separated under a decree of divorce or separate maintenance are members of the same household. How to fill 1040nr Payments are not required after death of the recipient spouse. How to fill 1040nr Payments are required after death of the recipient spouse. How to fill 1040nr Payment is not treated as child support. How to fill 1040nr Payment is treated as child support. How to fill 1040nr These payments are deductible by the payer and includible in income by the recipient. How to fill 1040nr These payments are neither deductible by the payer nor includible in income by the recipient. How to fill 1040nr Liability for payments after death of recipient spouse. How to fill 1040nr   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony, whether made before or after the death. How to fill 1040nr If all of the payments would continue, then none of the payments made before or after the death are alimony. How to fill 1040nr   The divorce or separation instrument does not have to expressly state that the payments cease upon the death of your spouse if, for example, the liability for continued payments would end under state law. How to fill 1040nr Example. How to fill 1040nr You must pay your former spouse $10,000 in cash each year for 10 years. How to fill 1040nr Your divorce decree states that the payments will end upon your former spouse's death. How to fill 1040nr You must also pay your former spouse or your former spouse's estate $20,000 in cash each year for 10 years. How to fill 1040nr The death of your spouse would not terminate these payments under state law. How to fill 1040nr The $10,000 annual payments may qualify as alimony. How to fill 1040nr The $20,000 annual payments that do not end upon your former spouse's death are not alimony. How to fill 1040nr Substitute payments. How to fill 1040nr   If you must make any payments in cash or property after your spouse's death as a substitute for continuing otherwise qualifying payments before the death, the otherwise qualifying payments are not alimony. How to fill 1040nr To the extent that your payments begin, accelerate, or increase because of the death of your spouse, otherwise qualifying payments you made may be treated as payments that were not alimony. How to fill 1040nr Whether or not such payments will be treated as not alimony depends on all the facts and circumstances. How to fill 1040nr Example 1. How to fill 1040nr Under your divorce decree, you must pay your former spouse $30,000 annually. How to fill 1040nr The payments will stop at the end of 6 years or upon your former spouse's death, if earlier. How to fill 1040nr Your former spouse has custody of your minor children. How to fill 1040nr The decree provides that if any child is still a minor at your spouse's death, you must pay $10,000 annually to a trust until the youngest child reaches the age of majority. How to fill 1040nr The trust income and corpus (principal) are to be used for your children's benefit. How to fill 1040nr These facts indicate that the payments to be made after your former spouse's death are a substitute for $10,000 of the $30,000 annual payments. How to fill 1040nr Of each of the $30,000 annual payments, $10,000 is not alimony. How to fill 1040nr Example 2. How to fill 1040nr Under your divorce decree, you must pay your former spouse $30,000 annually. How to fill 1040nr The payments will stop at the end of 15 years or upon your former spouse's death, if earlier. How to fill 1040nr The decree provides that if your former spouse dies before the end of the 15-year period, you must pay the estate the difference between $450,000 ($30,000 × 15) and the total amount paid up to that time. How to fill 1040nr For example, if your spouse dies at the end of the tenth year, you must pay the estate $150,000 ($450,000 − $300,000). How to fill 1040nr These facts indicate that the lump-sum payment to be made after your former spouse's death is a substitute for the full amount of the $30,000 annual payments. How to fill 1040nr None of the annual payments are alimony. How to fill 1040nr The result would be the same if the payment required at death were to be discounted by an appropriate interest factor to account for the prepayment. How to fill 1040nr Child support. How to fill 1040nr   A payment that is specifically designated as child support or treated as specifically designated as child support under your divorce or separation instrument is not alimony. How to fill 1040nr The amount of child support may vary over time. How to fill 1040nr Child support payments are not deductible by the payer and are not taxable to the recipient. How to fill 1040nr Specifically designated as child support. How to fill 1040nr   A payment will be treated as specifically designated as child support to the extent that the payment is reduced either: On the happening of a contingency relating to your child, or At a time that can be clearly associated with the contingency. How to fill 1040nr A payment may be treated as specifically designated as child support even if other separate payments are specifically designated as child support. How to fill 1040nr Contingency relating to your child. How to fill 1040nr   A contingency relates to your child if it depends on any event relating to that child. How to fill 1040nr It does not matter whether the event is certain or likely to occur. How to fill 1040nr Events relating to your child include the child's: Becoming employed, Dying, Leaving the household, Leaving school, Marrying, or Reaching a specified age or income level. How to fill 1040nr Clearly associated with a contingency. How to fill 1040nr   Payments that would otherwise qualify as alimony are presumed to be reduced at a time clearly associated with the happening of a contingency relating to your child only in the following situations. How to fill 1040nr The payments are to be reduced not more than 6 months before or after the date the child will reach 18, 21, or local age of majority. How to fill 1040nr The payments are to be reduced on two or more occasions that occur not more than 1 year before or after a different one of your children reaches a certain age from 18 to 24. How to fill 1040nr This certain age must be the same for each child, but need not be a whole number of years. How to fill 1040nr In all other situations, reductions in payments are not treated as clearly associated with the happening of a contingency relating to your child. How to fill 1040nr   Either you or the IRS can overcome the presumption in the two situations above. How to fill 1040nr This is done by showing that the time at which the payments are to be reduced was determined independently of any contingencies relating to your children. How to fill 1040nr For example, if you can show that the period of alimony payments is customary in the local jurisdiction, such as a period equal to one-half of the duration of the marriage, you can overcome the presumption and may be able to treat the amount as alimony. How to fill 1040nr How To Deduct Alimony Paid You can deduct alimony you paid, whether or not you itemize deductions on your return. How to fill 1040nr You must file Form 1040. How to fill 1040nr You cannot use Form 1040A or Form 1040EZ. How to fill 1040nr Enter the amount of alimony you paid on Form 1040, line 31a. How to fill 1040nr In the space provided on line 31b, enter your spouse's social security number (SSN) or individual taxpayer identification number (ITIN). How to fill 1040nr If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. How to fill 1040nr Show the SSN or ITIN and amount paid to each other recipient on an attached statement. How to fill 1040nr Enter your total payments on line 31a. How to fill 1040nr You must provide your spouse's SSN or ITIN. How to fill 1040nr If you do not, you may have to pay a $50 penalty and your deduction may be disallowed. How to fill 1040nr For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. How to fill 1040nr How To Report Alimony Received Report alimony you received as income on Form 1040, line 11. How to fill 1040nr You cannot use Form 1040A or Form 1040EZ. How to fill 1040nr You must give the person who paid the alimony your SSN or ITIN. How to fill 1040nr If you do not, you may have to pay a $50 penalty. How to fill 1040nr Recapture Rule If your alimony payments decrease or end during the first 3 calendar years, you may be subject to the recapture rule. How to fill 1040nr If you are subject to this rule, you have to include in income in the third year part of the alimony payments you previously deducted. How to fill 1040nr Your spouse can deduct in the third year part of the alimony payments he or she previously included in income. How to fill 1040nr The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. How to fill 1040nr Do not include any time in which payments were being made under temporary support orders. How to fill 1040nr The second and third years are the next 2 calendar years, whether or not payments are made during those years. How to fill 1040nr The reasons for a reduction or end of alimony payments that can require a recapture include: A change in your divorce or separation instrument, A failure to make timely payments, A reduction in your ability to provide support, or A reduction in your spouse's support needs. How to fill 1040nr When to apply the recapture rule. How to fill 1040nr   You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year. How to fill 1040nr   When you figure a decrease in alimony, do not include the following amounts. How to fill 1040nr Payments made under a temporary support order. How to fill 1040nr Payments required over a period of at least 3 calendar years that vary because they are a fixed part of your income from a business or property, or from compensation for employment or self-employment. How to fill 1040nr Payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year. How to fill 1040nr Figuring the recapture. How to fill 1040nr   You can use Worksheet 1 in Publication 504 to figure recaptured alimony. How to fill 1040nr Including the recapture in income. How to fill 1040nr   If you must include a recapture amount in income, show it on Form 1040, line 11 (“Alimony received”). How to fill 1040nr Cross out “received” and enter “recapture. How to fill 1040nr ” On the dotted line next to the amount, enter your spouse's last name and SSN or ITIN. How to fill 1040nr Deducting the recapture. How to fill 1040nr   If you can deduct a recapture amount, show it on Form 1040, line 31a (“Alimony paid”). How to fill 1040nr Cross out “paid” and enter “recapture. How to fill 1040nr ” In the space provided, enter your spouse's SSN or ITIN. How to fill 1040nr Prev  Up  Next   Home   More Online Publications