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Where To File 2012 Form 1040

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Where To File 2012 Form 1040

Where to file 2012 form 1040 1. Where to file 2012 form 1040   Nonresident Alien or Resident Alien? Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Nonresident Aliens Resident AliensGreen Card Test Substantial Presence Test Effect of Tax Treaties Dual-Status AliensFirst Year of Residency Choosing Resident Alien Status Last Year of Residency Nonresident Spouse Treated as a ResidentHow To Make the Choice Aliens From American Samoa or Puerto Rico Introduction You should first determine whether, for income tax purposes, you are a nonresident alien or a resident alien. Where to file 2012 form 1040 If you are both a nonresident and resident in the same year, you have a dual status. Where to file 2012 form 1040 Dual status is explained later. Where to file 2012 form 1040 Also explained later are a choice to treat your nonresident spouse as a resident and some other special situations. Where to file 2012 form 1040 Topics - This chapter discusses: How to determine if you are a nonresident, resident, or dual-status alien, and How to treat a nonresident spouse as a resident alien. Where to file 2012 form 1040 Useful Items - You may want to see: Form (and Instructions) 1040 U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 Individual Income Tax Return 1040A U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 Individual Income Tax Return 1040NR U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 Nonresident Alien Income Tax Return 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) 8840 Closer Connection Exception Statement for Aliens 8843 Statement for Exempt Individuals and Individuals With a Medical Condition See chapter 12 for information about getting these forms. Where to file 2012 form 1040 Nonresident Aliens If you are an alien (not a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen), you are considered a nonresident alien unless you meet one of the two tests described next under Resident Aliens. Where to file 2012 form 1040 Resident Aliens You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for calendar year 2013 (January 1–December 31). Where to file 2012 form 1040 Even if you do not meet either of these tests, you may be able to choose to be treated as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for part of the year. Where to file 2012 form 1040 See First-Year Choice under Dual-Status Aliens, later. Where to file 2012 form 1040 Green Card Test You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2013. Where to file 2012 form 1040 (However, see Dual-Status Aliens , later. Where to file 2012 form 1040 ) This is known as the “green card” test. Where to file 2012 form 1040 You are a lawful permanent resident of the United States at any time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. Where to file 2012 form 1040 You generally have this status if the U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 Citizenship and Immigration Services (USCIS) (or its predecessor organization) has issued you an alien registration card, also known as a “green card. Where to file 2012 form 1040 ” You continue to have resident status under this test unless the status is taken away from you or is administratively or judicially determined to have been abandoned. Where to file 2012 form 1040 Resident status taken away. Where to file 2012 form 1040   Resident status is considered to have been taken away from you if the U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 government issues you a final administrative or judicial order of exclusion or deportation. Where to file 2012 form 1040 A final judicial order is an order that you may no longer appeal to a higher court of competent jurisdiction. Where to file 2012 form 1040 Resident status abandoned. Where to file 2012 form 1040   An administrative or judicial determination of abandonment of resident status may be initiated by you, the USCIS, or a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 consular officer. Where to file 2012 form 1040    If you initiate the determination, your resident status is considered to be abandoned when you file either of the following with the USCIS or U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 consular officer. Where to file 2012 form 1040 Your application for abandonment. Where to file 2012 form 1040 Your Alien Registration Receipt Card attached to a letter stating your intent to abandon your resident status. Where to file 2012 form 1040 You must file the letter by certified mail, return receipt requested. Where to file 2012 form 1040 You must keep a copy of the letter and proof that it was mailed and received. Where to file 2012 form 1040    Until you have proof your letter was received, you remain a resident alien for tax purposes even if the USCIS would not recognize the validity of your green card because it is more than ten years old or because you have been absent from the United States for a period of time. Where to file 2012 form 1040   If the USCIS or U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 consular officer initiates this determination, your resident status will be considered to be abandoned when the final administrative order of abandonment is issued. Where to file 2012 form 1040 If you are granted an appeal to a federal court of competent jurisdiction, a final judicial order is required. Where to file 2012 form 1040   Under U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. Where to file 2012 form 1040    A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. Where to file 2012 form 1040 See Expatriation Tax in chapter 4. Where to file 2012 form 1040 Termination of residency after June 3, 2004, and before June 17, 2008. Where to file 2012 form 1040   If you terminated your residency after June 3, 2004, and before June 17, 2008, you will still be considered a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for tax purposes until you notify the Secretary of Homeland Security and file Form 8854, Initial and Annual Expatriation Statement. Where to file 2012 form 1040 Termination of residency after June 16, 2008. Where to file 2012 form 1040   For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4. Where to file 2012 form 1040 Substantial Presence Test You will be considered a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for tax purposes if you meet the substantial presence test for calendar year 2013. Where to file 2012 form 1040 To meet this test, you must be physically present in the United States on at least: 31 days during 2013, and 183 days during the 3-year period that includes 2013, 2012, and 2011, counting: All the days you were present in 2013, and 1/3 of the days you were present in 2012, and 1/6 of the days you were present in 2011. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 You were physically present in the United States on 120 days in each of the years 2011, 2012, and 2013. Where to file 2012 form 1040 To determine if you meet the substantial presence test for 2013, count the full 120 days of presence in 2013, 40 days in 2012 (1/3 of 120), and 20 days in 2011 (1/6 of 120). Where to file 2012 form 1040 Because the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2013. Where to file 2012 form 1040 The term United States includes the following areas. Where to file 2012 form 1040 All 50 states and the District of Columbia. Where to file 2012 form 1040 The territorial waters of the United States. Where to file 2012 form 1040 The seabed and subsoil of those submarine areas that are adjacent to U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 territorial waters and over which the United States has exclusive rights under international law to explore and exploit natural resources. Where to file 2012 form 1040 The term does not include U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 possessions and territories or U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 airspace. Where to file 2012 form 1040 Days of Presence in the United States You are treated as present in the United States on any day you are physically present in the country at any time during the day. Where to file 2012 form 1040 However, there are exceptions to this rule. Where to file 2012 form 1040 Do not count the following as days of presence in the United States for the substantial presence test. Where to file 2012 form 1040 Days you commute to work in the United States from a residence in Canada or Mexico if you regularly commute from Canada or Mexico. Where to file 2012 form 1040 Days you are in the United States for less than 24 hours when you are in transit between two places outside the United States. Where to file 2012 form 1040 Days you are in the United States as a crew member of a foreign vessel. Where to file 2012 form 1040 Days you are unable to leave the United States because of a medical condition that arose while you are in the United States. Where to file 2012 form 1040 Days you are an exempt individual. Where to file 2012 form 1040 The specific rules that apply to each of these categories are discussed next. Where to file 2012 form 1040 Regular commuters from Canada or Mexico. Where to file 2012 form 1040   Do not count the days on which you commute to work in the United States from your residence in Canada or Mexico if you regularly commute from Canada or Mexico. Where to file 2012 form 1040 You are considered to commute regularly if you commute to work in the United States on more than 75% of the workdays during your working period. Where to file 2012 form 1040   For this purpose, “commute” means to travel to work and return to your residence within a 24-hour period. Where to file 2012 form 1040 “Workdays” are the days on which you work in the United States or Canada or Mexico. Where to file 2012 form 1040 “Working period” means the period beginning with the first day in the current year on which you are physically present in the United States to work and ending on the last day in the current year on which you are physically present in the United States to work. Where to file 2012 form 1040 If your work requires you to be present in the United States only on a seasonal or cyclical basis, your working period begins on the first day of the season or cycle on which you are present in the United States to work and ends on the last day of the season or cycle on which you are present in the United States to work. Where to file 2012 form 1040 You can have more than one working period in a calendar year, and your working period can begin in one calendar year and end in the following calendar year. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Maria Perez lives in Mexico and works for Compañía ABC in its office in Mexico. Where to file 2012 form 1040 She was assigned to her firm's office in the United States from February 1 through June 1. Where to file 2012 form 1040 On June 2, she resumed her employment in Mexico. Where to file 2012 form 1040 On 69 days, Maria commuted each morning from her home in Mexico to work in Compañía ABC's U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 office. Where to file 2012 form 1040 She returned to her home in Mexico on each of those evenings. Where to file 2012 form 1040 On 7 days, she worked in her firm's Mexico office. Where to file 2012 form 1040 For purposes of the substantial presence test, Maria does not count the days she commuted to work in the United States because those days equal more than 75% of the workdays during the working period (69 workdays in the United States divided by 76 workdays in the working period equals 90. Where to file 2012 form 1040 8%). Where to file 2012 form 1040 Days in transit. Where to file 2012 form 1040   Do not count the days you are in the United States for less than 24 hours and you are in transit between two places outside the United States. Where to file 2012 form 1040 You are considered to be in transit if you engage in activities that are substantially related to completing travel to your foreign destination. Where to file 2012 form 1040 For example, if you travel between airports in the United States to change planes en route to your foreign destination, you are considered to be in transit. Where to file 2012 form 1040 However, you are not considered to be in transit if you attend a business meeting while in the United States. Where to file 2012 form 1040 This is true even if the meeting is held at the airport. Where to file 2012 form 1040 Crew members. Where to file 2012 form 1040   Do not count the days you are temporarily present in the United States as a regular crew member of a foreign vessel (boat or ship) engaged in transportation between the United States and a foreign country or a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 possession. Where to file 2012 form 1040 However, this exception does not apply if you otherwise engage in any trade or business in the United States on those days. Where to file 2012 form 1040 Medical condition. Where to file 2012 form 1040   Do not count the days you intended to leave, but could not leave the United States because of a medical condition or problem that arose while you were in the United States. Where to file 2012 form 1040 Whether you intended to leave the United States on a particular day is determined based on all the facts and circumstances. Where to file 2012 form 1040 For example, you may be able to establish that you intended to leave if your purpose for visiting the United States could be accomplished during a period that is not long enough to qualify you for the substantial presence test. Where to file 2012 form 1040 However, if you need an extended period of time to accomplish the purpose of your visit and that period would qualify you for the substantial presence test, you would not be able to establish an intent to leave the United States before the end of that extended period. Where to file 2012 form 1040   In the case of an individual who is judged mentally incompetent, proof of intent to leave the United States can be determined by analyzing the individual's pattern of behavior before he or she was judged mentally incompetent. Where to file 2012 form 1040   If you qualify to exclude days of presence because of a medical condition, you must file a fully completed Form 8843 with the IRS. Where to file 2012 form 1040 See Form 8843 , later. Where to file 2012 form 1040   You cannot exclude any days of presence in the United States under the following circumstances. Where to file 2012 form 1040 You were initially prevented from leaving, were then able to leave, but remained in the United States beyond a reasonable period for making arrangements to leave. Where to file 2012 form 1040 You returned to the United States for treatment of a medical condition that arose during a prior stay. Where to file 2012 form 1040 The condition existed before your arrival in the United States and you were aware of the condition. Where to file 2012 form 1040 It does not matter whether you needed treatment for the condition when you entered the United States. Where to file 2012 form 1040 Exempt individual. Where to file 2012 form 1040   Do not count days for which you are an exempt individual. Where to file 2012 form 1040 The term “exempt individual” does not refer to someone exempt from U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 tax, but to anyone in the following categories. Where to file 2012 form 1040 An individual temporarily present in the United States as a foreign government-related individual under an “A” or “G” visa. Where to file 2012 form 1040 A teacher or trainee temporarily present in the United States under a “J” or “Q” visa, who substantially complies with the requirements of the visa. Where to file 2012 form 1040 A student temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa, who substantially complies with the requirements of the visa. Where to file 2012 form 1040 A professional athlete temporarily in the United States to compete in a charitable sports event. Where to file 2012 form 1040   The specific rules for each of these four categories (including any rules on the length of time you will be an exempt individual) are discussed next. Where to file 2012 form 1040 Foreign government-related individuals. Where to file 2012 form 1040   A foreign government-related individual is an individual (or a member of the individual's immediate family) who is temporarily present in the United States: As a full-time employee of an international organization, By reason of diplomatic status, or By reason of a visa (other than a visa that grants lawful permanent residence) that the Secretary of the Treasury determines represents full-time diplomatic or consular status. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 You are considered temporarily present in the United States regardless of the actual amount of time you are present in the United States. Where to file 2012 form 1040    An international organization is any public international organization that the President of the United States has designated by Executive Order as being entitled to the privileges, exemptions, and immunities provided for in the International Organizations Act. Where to file 2012 form 1040 An individual is a full-time employee if his or her work schedule meets the organization's standard full-time work schedule. Where to file 2012 form 1040   An individual is considered to have full-time diplomatic or consular status if he or she: Has been accredited by a foreign government that is recognized by the United States, Intends to engage primarily in official activities for that foreign government while in the United States, and Has been recognized by the President, Secretary of State, or a consular officer as being entitled to that status. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 If you are present in the United States under an “A” or “G” visa you are considered a foreign government-related individual (with full-time diplomatic or consular status). Where to file 2012 form 1040 None of your days count for purposes of the substantial presence test. Where to file 2012 form 1040   Members of the immediate family include the individual's spouse and unmarried children (whether by blood or adoption) but only if the spouse's or unmarried children's visa statuses are derived from and dependent on the exempt individual's visa classification. Where to file 2012 form 1040 Unmarried children are included only if they: Are under 21 years of age, Reside regularly in the exempt individual's household, and Are not members of another household. Where to file 2012 form 1040 Teachers and trainees. Where to file 2012 form 1040   A teacher or trainee is an individual, other than a student, who is temporarily in the United States under a “J” or “Q” visa and substantially complies with the requirements of that visa. Where to file 2012 form 1040 You are considered to have substantially complied with the visa requirements if you have not engaged in activities that are prohibited by U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 immigration laws and could result in the loss of your visa status. Where to file 2012 form 1040   Also included are immediate family members of exempt teachers and trainees. Where to file 2012 form 1040 See the definition of immediate family, earlier, under Foreign government-related individuals . Where to file 2012 form 1040   You will not be an exempt individual as a teacher or trainee in 2013 if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years. Where to file 2012 form 1040 However, you will be an exempt individual if all of the following conditions are met. Where to file 2012 form 1040 You were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years, A foreign employer paid all of your compensation during 2013, and A foreign employer paid all of your compensation during each of the preceding 6 years you were present in the United States as a teacher or trainee. Where to file 2012 form 1040 A foreign employer includes an office or place of business of an American entity in a foreign country or a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 possession. Where to file 2012 form 1040   If you qualify to exclude days of presence as a teacher or trainee, you must file a fully completed Form 8843 with the IRS. Where to file 2012 form 1040 See Form 8843 , later. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Carla was temporarily in the United States during the year as a teacher on a “J” visa. Where to file 2012 form 1040 Her compensation for the year was paid by a foreign employer. Where to file 2012 form 1040 Carla was treated as an exempt teacher for the previous 2 years but her compensation was not paid by a foreign employer. Where to file 2012 form 1040 She will not be considered an exempt individual for the current year because she was exempt as a teacher for at least 2 of the past 6 years. Where to file 2012 form 1040 If her compensation for the past 2 years had been paid by a foreign employer, she would be an exempt individual for the current year. Where to file 2012 form 1040 Students. Where to file 2012 form 1040   A student is any individual who is temporarily in the United States on an “F,” “J,” “M,” or “Q” visa and who substantially complies with the requirements of that visa. Where to file 2012 form 1040 You are considered to have substantially complied with the visa requirements if you have not engaged in activities that are prohibited by U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 immigration laws and could result in the loss of your visa status. Where to file 2012 form 1040   Also included are immediate family members of exempt students. Where to file 2012 form 1040 See the definition of immediate family, earlier, under Foreign government-related individuals . Where to file 2012 form 1040   You will not be an exempt individual as a student in 2013 if you have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless you meet both of the following requirements. Where to file 2012 form 1040 You establish that you do not intend to reside permanently in the United States. Where to file 2012 form 1040 You have substantially complied with the requirements of your visa. Where to file 2012 form 1040 The facts and circumstances to be considered in determining if you have demonstrated an intent to reside permanently in the United States include, but are not limited to, the following. Where to file 2012 form 1040 Whether you have maintained a closer connection to a foreign country (discussed later). Where to file 2012 form 1040 Whether you have taken affirmative steps to change your status from nonimmigrant to lawful permanent resident as discussed later under Closer Connection to a Foreign Country . Where to file 2012 form 1040   If you qualify to exclude days of presence as a student, you must file a fully completed Form 8843 with the IRS. Where to file 2012 form 1040 See Form 8843 , later. Where to file 2012 form 1040 Professional athletes. Where to file 2012 form 1040   A professional athlete who is temporarily in the United States to compete in a charitable sports event is an exempt individual. Where to file 2012 form 1040 A charitable sports event is one that meets the following conditions. Where to file 2012 form 1040 The main purpose is to benefit a qualified charitable organization. Where to file 2012 form 1040 The entire net proceeds go to charity. Where to file 2012 form 1040 Volunteers perform substantially all the work. Where to file 2012 form 1040   In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in a sports event. Where to file 2012 form 1040 You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. Where to file 2012 form 1040   If you qualify to exclude days of presence as a professional athlete, you must file a fully completed Form 8843 with the IRS. Where to file 2012 form 1040 See Form 8843 , next. Where to file 2012 form 1040 Form 8843. Where to file 2012 form 1040   If you exclude days of presence in the United States because you fall into any of the following categories, you must file a fully completed Form 8843. Where to file 2012 form 1040 You were unable to leave the United States as planned because of a medical condition or problem. Where to file 2012 form 1040 You were temporarily in the United States as a teacher or trainee on a “J” or “Q” visa. Where to file 2012 form 1040 You were temporarily in the United States as a student on an “F,” “J,” “M,” or “Q” visa. Where to file 2012 form 1040 You were a professional athlete competing in a charitable sports event. Where to file 2012 form 1040 Attach Form 8843 to your 2013 income tax return. Where to file 2012 form 1040 If you do not have to file a return, send Form 8843 to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, by the due date for filing Form 1040NR or Form 1040NR-EZ. Where to file 2012 form 1040 The due date for filing is discussed in chapter 7. Where to file 2012 form 1040 If you do not timely file Form 8843, you cannot exclude the days you were present in the United States as a professional athlete or because of a medical condition that arose while you were in the United States. Where to file 2012 form 1040 This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements. Where to file 2012 form 1040 Closer Connection to a Foreign Country Even if you meet the substantial presence test, you can be treated as a nonresident alien if you: Are present in the United States for less than 183 days during the year, Maintain a tax home in a foreign country during the year, and Have a closer connection during the year to one foreign country in which you have a tax home than to the United States (unless you have a closer connection to two foreign countries, discussed next). Where to file 2012 form 1040 Closer connection to two foreign countries. Where to file 2012 form 1040   You can demonstrate that you have a closer connection to two foreign countries (but not more than two) if you meet all of the following conditions. Where to file 2012 form 1040 You maintained a tax home beginning on the first day of the year in one foreign country. Where to file 2012 form 1040 You changed your tax home during the year to a second foreign country. Where to file 2012 form 1040 You continued to maintain your tax home in the second foreign country for the rest of the year. Where to file 2012 form 1040 You had a closer connection to each foreign country than to the United States for the period during which you maintained a tax home in that foreign country. Where to file 2012 form 1040 You are subject to tax as a resident under the tax laws of either foreign country for the entire year or subject to tax as a resident in both foreign countries for the period during which you maintained a tax home in each foreign country. Where to file 2012 form 1040 Tax home. Where to file 2012 form 1040   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Where to file 2012 form 1040 Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. Where to file 2012 form 1040 If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Where to file 2012 form 1040 If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Where to file 2012 form 1040   For determining whether you have a closer connection to a foreign country, your tax home must also be in existence for the entire current year, and must be located in the same foreign country to which you are claiming to have a closer connection. Where to file 2012 form 1040 Foreign country. Where to file 2012 form 1040   In determining whether you have a closer connection to a foreign country, the term “foreign country” means: Any territory under the sovereignty of the United Nations or a government other than that of the United States, The territorial waters of the foreign country (determined under U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 law), The seabed and subsoil of those submarine areas which are adjacent to the territorial waters of the foreign country and over which the foreign country has exclusive rights under international law to explore and exploit natural resources, and Possessions and territories of the United States. Where to file 2012 form 1040 Establishing a closer connection. Where to file 2012 form 1040   You will be considered to have a closer connection to a foreign country than the United States if you or the IRS establishes that you have maintained more significant contacts with the foreign country than with the United States. Where to file 2012 form 1040 In determining whether you have maintained more significant contacts with the foreign country than with the United States, the facts and circumstances to be considered include, but are not limited to, the following. Where to file 2012 form 1040 The country of residence you designate on forms and documents. Where to file 2012 form 1040 The types of official forms and documents you file, such as Form W-9, Form W-8BEN, or Form W-8ECI. Where to file 2012 form 1040 The location of: Your permanent home, Your family, Your personal belongings, such as cars, furniture, clothing, and jewelry, Your current social, political, cultural, professional, or religious affiliations, Your business activities (other than those that constitute your tax home), The jurisdiction in which you hold a driver's license, The jurisdiction in which you vote, and Charitable organizations to which you contribute. Where to file 2012 form 1040 It does not matter whether your permanent home is a house, an apartment, or a furnished room. Where to file 2012 form 1040 It also does not matter whether you rent or own it. Where to file 2012 form 1040 It is important, however, that your home be available at all times, continuously, and not solely for short stays. Where to file 2012 form 1040 When you cannot have a closer connection. Where to file 2012 form 1040   You cannot claim you have a closer connection to a foreign country if either of the following applies: You personally applied, or took other steps during the year, to change your status to that of a permanent resident, or You had an application pending for adjustment of status during the current year. Where to file 2012 form 1040 Steps to change your status to that of a permanent resident include, but are not limited to, the filing of the following forms. Where to file 2012 form 1040 Form I-508, Waiver of Rights, Privileges, Exemptions and Immunities Form I-485, Application to Register Permanent Residence or Adjust Status Form I-130, Petition for Alien Relative, on your behalf Form I-140, Immigrant Petition for Alien Worker, on your behalf Form ETA-750, Application for Alien Employment Certification, on your behalf Form DS-230, Application for Immigrant Visa and Alien Registration Form 8840. Where to file 2012 form 1040   You must attach a fully completed Form 8840 to your income tax return to claim you have a closer connection to a foreign country or countries. Where to file 2012 form 1040   If you do not have to file a return, send the form to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, by the due date for filing Form 1040NR or Form 1040NR-EZ. Where to file 2012 form 1040 The due date for filing is discussed later in chapter 7. Where to file 2012 form 1040   If you do not timely file Form 8840, you cannot claim a closer connection to a foreign country or countries. Where to file 2012 form 1040 This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant steps to comply with those requirements. Where to file 2012 form 1040 Effect of Tax Treaties The rules given here to determine if you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident do not override tax treaty definitions of residency. Where to file 2012 form 1040 If you are a dual-resident taxpayer, you can still claim the benefits under an income tax treaty. Where to file 2012 form 1040 A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Where to file 2012 form 1040 The income tax treaty between the two countries must contain a provision that provides for resolution of conflicting claims of residence (tie-breaker rule). Where to file 2012 form 1040 If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 income tax. Where to file 2012 form 1040 For purposes other than figuring your tax, you will be treated as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident. Where to file 2012 form 1040 For example, the rules discussed here do not affect your residency time periods as discussed later under Dual-Status Aliens . Where to file 2012 form 1040 Information to be reported. Where to file 2012 form 1040   If you are a dual-resident taxpayer and you claim treaty benefits, you must file a return by the due date (including extensions) using Form 1040NR or Form 1040NR-EZ, and compute your tax as a nonresident alien. Where to file 2012 form 1040 You must also attach a fully completed Form 8833 if you determine your residency under a tax treaty and receive payments or income items totaling more than $100,000. Where to file 2012 form 1040 You may also have to attach Form 8938 (discussed in chapter 7). Where to file 2012 form 1040 See Reporting Treaty Benefits Claimed in chapter 9 for more information on reporting treaty benefits. Where to file 2012 form 1040 Dual-Status Aliens You can be both a nonresident alien and a resident alien during the same tax year. Where to file 2012 form 1040 This usually occurs in the year you arrive in or depart from the United States. Where to file 2012 form 1040 Aliens who have dual status should see chapter 6 for information on filing a return for a dual-status tax year. Where to file 2012 form 1040 First Year of Residency If you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for the calendar year, but you were not a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident at any time during the preceding calendar year, you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident only for the part of the calendar year that begins on the residency starting date. Where to file 2012 form 1040 You are a nonresident alien for the part of the year before that date. Where to file 2012 form 1040 Residency starting date under substantial presence test. Where to file 2012 form 1040   If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year. Where to file 2012 form 1040 However, you do not have to count up to 10 days of actual presence in the United States if on those days you establish that: You had a closer connection to a foreign country than to the United States, and Your tax home was in that foreign country. Where to file 2012 form 1040 See Closer Connection to a Foreign Country , earlier. Where to file 2012 form 1040   In determining whether you can exclude up to 10 days, the following rules apply. Where to file 2012 form 1040 You can exclude days from more than one period of presence as long as the total days in all periods are not more than 10. Where to file 2012 form 1040 You cannot exclude any days in a period of consecutive days of presence if all the days in that period cannot be excluded. Where to file 2012 form 1040 Although you can exclude up to 10 days of presence in determining your residency starting date, you must include those days when determining whether you meet the substantial presence test. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Ivan Ivanovich is a citizen of Russia. Where to file 2012 form 1040 He came to the United States for the first time on January 6, 2013, to attend a business meeting and returned to Russia on January 10, 2013. Where to file 2012 form 1040 His tax home remained in Russia. Where to file 2012 form 1040 On March 1, 2013, he moved to the United States and resided here for the rest of the year. Where to file 2012 form 1040 Ivan is able to establish a closer connection to Russia for the period January 6–10. Where to file 2012 form 1040 Thus, his residency starting date is March 1. Where to file 2012 form 1040 Statement required to exclude up to 10 days of presence. Where to file 2012 form 1040   You must file a statement with the IRS if you are excluding up to 10 days of presence in the United States for purposes of your residency starting date. Where to file 2012 form 1040 You must sign and date this statement and include a declaration that it is made under penalties of perjury. Where to file 2012 form 1040 The statement must contain the following information (as applicable). Where to file 2012 form 1040 Your name, address, U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 taxpayer identification number (if any), and U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 visa number (if any). Where to file 2012 form 1040 Your passport number and the name of the country that issued your passport. Where to file 2012 form 1040 The tax year for which the statement applies. Where to file 2012 form 1040 The first day that you were present in the United States during the year. Where to file 2012 form 1040 The dates of the days you are excluding in figuring your first day of residency. Where to file 2012 form 1040 Sufficient facts to establish that you have maintained your tax home in and a closer connection to a foreign country during the period you are excluding. Where to file 2012 form 1040   Attach the required statement to your income tax return. Where to file 2012 form 1040 If you are not required to file a return, send the statement to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, on or before the due date for filing Form 1040NR or Form 1040NR-EZ. Where to file 2012 form 1040 The due date for filing is discussed in chapter 7. Where to file 2012 form 1040   If you do not file the required statement as explained above, you cannot claim that you have a closer connection to a foreign country or countries. Where to file 2012 form 1040 Therefore, your first day of residency will be the first day you are present in the United States. Where to file 2012 form 1040 This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements. Where to file 2012 form 1040 Residency starting date under green card test. Where to file 2012 form 1040   If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident. Where to file 2012 form 1040   If you meet both the substantial presence test and the green card test, your residency starting date is the earlier of the first day during the year you are present in the United States under the substantial presence test or as a lawful permanent resident. Where to file 2012 form 1040 Residency during the preceding year. Where to file 2012 form 1040   If you were a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident during any part of the preceding calendar year and you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for any part of the current year, you will be considered a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident at the beginning of the current year. Where to file 2012 form 1040 This applies whether you are a resident under the substantial presence test or green card test. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Robert Bach is a citizen of Switzerland. Where to file 2012 form 1040 He came to the United States as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for the first time on May 1, 2012, and remained until November 5, 2012, when he returned to Switzerland. Where to file 2012 form 1040 Robert came back to the United States on March 5, 2013, as a lawful permanent resident and still resides here. Where to file 2012 form 1040 In calendar year 2013, Robert's U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 residency is deemed to begin on January 1, 2013, because he qualified as a resident in calendar year 2012. Where to file 2012 form 1040 First-Year Choice If you do not meet either the green card test or the substantial presence test for 2012 or 2013 and you did not choose to be treated as a resident for part of 2012, but you meet the substantial presence test for 2014, you can choose to be treated as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for part of 2013. Where to file 2012 form 1040 To make this choice, you must: Be present in the United States for at least 31 days in a row in 2013, and Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of 2013. Where to file 2012 form 1040 For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States. Where to file 2012 form 1040 When counting the days of presence in (1) and (2) above, do not count the days you were in the United States under any of the exceptions discussed earlier under Days of Presence in the United States. Where to file 2012 form 1040 If you make the first-year choice, your residency starting date for 2013 is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. Where to file 2012 form 1040 You are treated as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for the rest of the year. Where to file 2012 form 1040 If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. Where to file 2012 form 1040 If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 You do not have to be married to make this choice. Where to file 2012 form 1040 Example 1. Where to file 2012 form 1040 Juan DaSilva is a citizen of the Philippines. Where to file 2012 form 1040 He came to the United States for the first time on November 1, 2013, and was here on 31 consecutive days (from November 1 through December 1, 2013). Where to file 2012 form 1040 Juan returned to the Philippines on December 1 and came back to the United States on December 17, 2013. Where to file 2012 form 1040 He stayed in the United States for the rest of the year. Where to file 2012 form 1040 During 2014, Juan was a resident of the United States under the substantial presence test. Where to file 2012 form 1040 Juan can make the first-year choice for 2013 because he was in the United States in 2013 for a period of 31 days in a row (November 1 through December 1) and for at least 75% of the days following (and including) the first day of his 31-day period (46 total days of presence in the United States divided by 61 days in the period from November 1 through December 31 equals 75. Where to file 2012 form 1040 4%). Where to file 2012 form 1040 If Juan makes the first-year choice, his residency starting date will be November 1, 2013. Where to file 2012 form 1040 Example 2. Where to file 2012 form 1040 The facts are the same as in Example 1, except that Juan was also absent from the United States on December 24, 25, 29, 30, and 31. Where to file 2012 form 1040 He can make the first-year choice for 2013 because up to 5 days of absence are considered days of presence for purposes of the 75% requirement. Where to file 2012 form 1040 Statement required to make the first-year choice for 2013. Where to file 2012 form 1040   You must attach a statement to Form 1040 to make the first-year choice for 2013. Where to file 2012 form 1040 The statement must contain your name and address and specify the following. Where to file 2012 form 1040 That you are making the first-year choice for 2013. Where to file 2012 form 1040 That you were not a resident in 2012. Where to file 2012 form 1040 That you are a resident under the substantial presence test in 2014. Where to file 2012 form 1040 The number of days of presence in the United States during 2014. Where to file 2012 form 1040 The date or dates of your 31-day period of presence and the period of continuous presence in the United States during 2013. Where to file 2012 form 1040 The date or dates of absence from the United States during 2013 that you are treating as days of presence. Where to file 2012 form 1040 You cannot file Form 1040 or the statement until you meet the substantial presence test for 2014. Where to file 2012 form 1040 If you have not met the test for 2014 as of April 15, 2014, you can request an extension of time for filing your 2013 Form 1040 until a reasonable period after you have met that test. Where to file 2012 form 1040 To request an extension to file until October 15, 2014, use Form 4868, Application for Automatic Extension of Time To File U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 Individual Income Tax Return. Where to file 2012 form 1040 You can file the paper form or use one of the electronic filing options explained in the Form 4868 instructions. Where to file 2012 form 1040 You should pay with this extension the amount of tax you expect to owe for 2013 figured as if you were a nonresident alien the entire year. Where to file 2012 form 1040 You can use Form 1040NR or Form 1040NR-EZ to figure the tax. Where to file 2012 form 1040 Enter the tax on Form 4868. Where to file 2012 form 1040 If you do not pay the tax due, you will be charged interest on any tax not paid by the regular due date of your return, and you may be charged a penalty on the late payment. Where to file 2012 form 1040   Once you make the first-year choice, you may not revoke it without the approval of the Internal Revenue Service. Where to file 2012 form 1040   If you do not follow the procedures discussed here for making the first-year choice, you will be treated as a nonresident alien for all of 2013. Where to file 2012 form 1040 However, this does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing procedures and significant steps to comply with the procedures. Where to file 2012 form 1040 Choosing Resident Alien Status If you are a dual-status alien, you can choose to be treated as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for the entire year if all of the following apply. Where to file 2012 form 1040 You were a nonresident alien at the beginning of the year. Where to file 2012 form 1040 You are a resident alien or U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen at the end of the year. Where to file 2012 form 1040 You are married to a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or resident alien at the end of the year. Where to file 2012 form 1040 Your spouse joins you in making the choice. Where to file 2012 form 1040 This includes situations in which both you and your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 If you are single at the end of the year, you cannot make this choice. Where to file 2012 form 1040 If you make this choice, the following rules apply. Where to file 2012 form 1040 You and your spouse are treated as U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 residents for the entire year for income tax purposes. Where to file 2012 form 1040 You and your spouse are taxed on worldwide income. Where to file 2012 form 1040 You and your spouse must file a joint return for the year of the choice. Where to file 2012 form 1040 Neither you nor your spouse can make this choice for any later tax year, even if you are separated, divorced, or remarried. Where to file 2012 form 1040 The special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 A similar choice is available if, at the end of the tax year, one spouse is a nonresident alien and the other spouse is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or resident. Where to file 2012 form 1040 See Nonresident Spouse Treated as a Resident , later. Where to file 2012 form 1040 If you previously made that choice and it is still in effect, you do not need to make the choice explained here. Where to file 2012 form 1040 Making the choice. Where to file 2012 form 1040   You should attach a statement signed by both spouses to your joint return for the year of the choice. Where to file 2012 form 1040 The statement must contain the following information. Where to file 2012 form 1040 A declaration that you both qualify to make the choice and that you choose to be treated as U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 residents for the entire tax year. Where to file 2012 form 1040 The name, address, and taxpayer identification number (SSN or ITIN) of each spouse. Where to file 2012 form 1040 (If one spouse died, include the name and address of the person who makes the choice for the deceased spouse. Where to file 2012 form 1040 )   You generally make this choice when you file your joint return. Where to file 2012 form 1040 However, you also can make the choice by filing Form 1040X, Amended U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 Individual Income Tax Return. Where to file 2012 form 1040 Attach Form 1040, Form 1040A, or Form 1040EZ and print “Amended” across the top of the corrected return. Where to file 2012 form 1040 If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. Where to file 2012 form 1040   You generally must file the amended joint return within 3 years from the date you filed your original U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 income tax return or 2 years from the date you paid your income tax for that year, whichever is later. Where to file 2012 form 1040 Last Year of Residency If you were a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident in 2013 but are not a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident during any part of 2014, you cease to be a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident on your residency termination date. Where to file 2012 form 1040 Your residency termination date is December 31, 2013, unless you qualify for an earlier date as discussed next. Where to file 2012 form 1040 Earlier residency termination date. Where to file 2012 form 1040   You may qualify for a residency termination date that is earlier than December 31. Where to file 2012 form 1040 This date is: The last day in 2013 that you are physically present in the United States, if you met the substantial presence test, The first day in 2013 that you are no longer a lawful permanent resident of the United States, if you met the green card test, or The later of (1) or (2), if you met both tests. Where to file 2012 form 1040 You can use this date only if, for the remainder of 2013, your tax home was in a foreign country and you had a closer connection to that foreign country. Where to file 2012 form 1040 See Closer Connection to a Foreign Country , earlier. Where to file 2012 form 1040    A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. Where to file 2012 form 1040 See Expatriation Tax in chapter 4. Where to file 2012 form 1040 Termination of residency. Where to file 2012 form 1040   For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4. Where to file 2012 form 1040 De minimis presence. Where to file 2012 form 1040   If you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident because of the substantial presence test and you qualify to use the earlier residency termination date, you can exclude up to 10 days of actual presence in the United States in determining your residency termination date. Where to file 2012 form 1040 In determining whether you can exclude up to 10 days, the following rules apply. Where to file 2012 form 1040 You can exclude days from more than one period of presence as long as the total days in all periods are not more than 10. Where to file 2012 form 1040 You cannot exclude any days in a period of consecutive days of presence if all the days in that period cannot be excluded. Where to file 2012 form 1040 Although you can exclude up to 10 days of presence in determining your residency termination date, you must include those days when determining whether you meet the substantial presence test. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Lola Bovary is a citizen of Malta. Where to file 2012 form 1040 She came to the United States for the first time on March 1, 2013, and resided here until August 25, 2013. Where to file 2012 form 1040 On December 12, 2013, Lola came to the United States for vacation and stayed here until December 16, 2013, when she returned to Malta. Where to file 2012 form 1040 She is able to establish a closer connection to Malta for the period December 12–16. Where to file 2012 form 1040 Lola is not a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident for tax purposes during 2014 and can establish a closer connection to Malta for the rest of calendar year 2013. Where to file 2012 form 1040 Lola is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident under the substantial presence test for 2013 because she was present in the United States for 183 days (178 days for the period March 1 to August 25 plus 5 days in December). Where to file 2012 form 1040 Lola's residency termination date is August 25, 2013. Where to file 2012 form 1040 Residency during the next year. Where to file 2012 form 1040   If you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident during any part of 2014 and you are a resident during any part of 2013, you will be treated as a resident through the end of 2013. Where to file 2012 form 1040 This applies whether you have a closer connection to a foreign country than the United States during 2013, and whether you are a resident under the substantial presence test or green card test. Where to file 2012 form 1040 Statement required to establish your residency termination date. Where to file 2012 form 1040   You must file a statement with the IRS to establish your residency termination date. Where to file 2012 form 1040 You must sign and date this statement and include a declaration that it is made under penalties of perjury. Where to file 2012 form 1040 The statement must contain the following information (as applicable). Where to file 2012 form 1040 Your name, address, U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 taxpayer identification number (if any), and U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 visa number (if any). Where to file 2012 form 1040 Your passport number and the name of the country that issued your passport. Where to file 2012 form 1040 The tax year for which the statement applies. Where to file 2012 form 1040 The last day that you were present in the United States during the year. Where to file 2012 form 1040 Sufficient facts to establish that you have maintained your tax home in, and that you have a closer connection to, a foreign country following your last day of presence in the United States during the year or following the abandonment or rescission of your status as a lawful permanent resident during the year. Where to file 2012 form 1040 The date that your status as a lawful permanent resident was abandoned or rescinded. Where to file 2012 form 1040 Sufficient facts (including copies of relevant documents) to establish that your status as a lawful permanent resident has been abandoned or rescinded. Where to file 2012 form 1040 If you can exclude days under the de minimis presence rule, discussed earlier, include the dates of the days you are excluding and sufficient facts to establish that you have maintained your tax home in and that you have a closer connection to a foreign country during the period you are excluding. Where to file 2012 form 1040   Attach the required statement to your income tax return. Where to file 2012 form 1040 If you are not required to file a return, send the statement to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215, on or before the due date for filing Form 1040NR or Form 1040NR-EZ. Where to file 2012 form 1040 The due date for filing is discussed in chapter 7. Where to file 2012 form 1040   If you do not file the required statement as explained above, you cannot claim that you have a closer connection to a foreign country or countries. Where to file 2012 form 1040 This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements. Where to file 2012 form 1040 Nonresident Spouse Treated as a Resident If, at the end of your tax year, you are married and one spouse is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident. Where to file 2012 form 1040 This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year. Where to file 2012 form 1040 If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. Where to file 2012 form 1040 Neither you nor your spouse can claim under any tax treaty not to be a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident. Where to file 2012 form 1040 You are both taxed on worldwide income. Where to file 2012 form 1040 You must file a joint income tax return for the year you make the choice, but you and your spouse can file joint or separate returns in later years. Where to file 2012 form 1040 If you file a joint return under this provision, the special instructions and restrictions for dual-status taxpayers in chapter 6 do not apply to you. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Bob and Sharon Williams are married and both are nonresident aliens at the beginning of the year. Where to file 2012 form 1040 In June, Bob became a resident alien and remained a resident for the rest of the year. Where to file 2012 form 1040 Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return. Where to file 2012 form 1040 Bob and Sharon must file a joint return for the year they make the choice, but they can file either joint or separate returns for later years. Where to file 2012 form 1040 How To Make the Choice Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. Where to file 2012 form 1040 It should contain the following information. Where to file 2012 form 1040 A declaration that one spouse was a nonresident alien and the other spouse a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or resident alien on the last day of your tax year, and that you choose to be treated as U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 residents for the entire tax year. Where to file 2012 form 1040 The name, address, and identification number of each spouse. Where to file 2012 form 1040 (If one spouse died, include the name and address of the person making the choice for the deceased spouse. Where to file 2012 form 1040 ) Amended return. Where to file 2012 form 1040   You generally make this choice when you file your joint return. Where to file 2012 form 1040 However, you can also make the choice by filing a joint amended return on Form 1040X. Where to file 2012 form 1040 Attach Form 1040, Form 1040A, or Form 1040EZ and print “Amended” across the top of the corrected return. Where to file 2012 form 1040 If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. Where to file 2012 form 1040   You generally must file the amended joint return within 3 years from the date you filed your original U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 income tax return or 2 years from the date you paid your income tax for that year, whichever is later. Where to file 2012 form 1040 Suspending the Choice The choice to be treated as a resident alien is suspended for any tax year (after the tax year you made the choice) if neither spouse is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or resident alien at any time during the tax year. Where to file 2012 form 1040 This means each spouse must file a separate return as a nonresident alien for that year if either meets the filing requirements for nonresident aliens discussed in chapter 7. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Dick Brown was a resident alien on December 31, 2010, and married to Judy, a nonresident alien. Where to file 2012 form 1040 They chose to treat Judy as a resident alien and filed joint 2010 and 2011 income tax returns. Where to file 2012 form 1040 On January 10, 2012, Dick became a nonresident alien. Where to file 2012 form 1040 Judy had remained a nonresident alien throughout the period. Where to file 2012 form 1040 Dick and Judy could have filed joint or separate returns for 2012 because Dick was a resident alien for part of that year. Where to file 2012 form 1040 However, because neither Dick nor Judy is a resident alien at any time during 2013, their choice is suspended for that year. Where to file 2012 form 1040 If either meets the filing requirements for nonresident aliens discussed in chapter 7, they must file separate returns as nonresident aliens for 2013. Where to file 2012 form 1040 If Dick becomes a resident alien again in 2014, their choice is no longer suspended. Where to file 2012 form 1040 Ending the Choice Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier under Suspending the Choice ) or ended in one of the following ways. Where to file 2012 form 1040 If the choice is ended in one of the following ways, neither spouse can make this choice in any later tax year. Where to file 2012 form 1040 Revocation. Where to file 2012 form 1040 Either spouse can revoke the choice for any tax year, provided he or she makes the revocation by the due date for filing the tax return for that tax year. Where to file 2012 form 1040 The spouse who revokes the choice must attach a signed statement declaring that the choice is being revoked. Where to file 2012 form 1040 The statement must include the name, address, and identification number of each spouse. Where to file 2012 form 1040 (If one spouse dies, include the name and address of the person who is revoking the choice for the deceased spouse. Where to file 2012 form 1040 ) The statement also must include a list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income. Where to file 2012 form 1040 File the statement as follows. Where to file 2012 form 1040 If the spouse revoking the choice must file a return, attach the statement to the return for the first year the revocation applies. Where to file 2012 form 1040 If the spouse revoking the choice does not have to file a return, but does file a return (for example, to obtain a refund), attach the statement to the return. Where to file 2012 form 1040 If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where you filed the last joint return. Where to file 2012 form 1040 Death. Where to file 2012 form 1040 The death of either spouse ends the choice, beginning with the first tax year following the year the spouse died. Where to file 2012 form 1040 However, if the surviving spouse is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or resident and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used. Where to file 2012 form 1040 If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died. Where to file 2012 form 1040 Legal separation. Where to file 2012 form 1040 A legal separation under a decree of divorce or separate maintenance ends the choice as of the beginning of the tax year in which the legal separation occurs. Where to file 2012 form 1040 Inadequate records. Where to file 2012 form 1040 The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records. Where to file 2012 form 1040 Aliens From American Samoa or Puerto Rico If you are a nonresident alien in the United States and a bona fide resident of American Samoa or Puerto Rico during the entire tax year, you are taxed, with certain exceptions, according to the rules for resident aliens of the United States. Where to file 2012 form 1040 For more information, see Bona Fide Residents of American Samoa or Puerto Rico in chapter 5. Where to file 2012 form 1040 If you are a nonresident alien from American Samoa or Puerto Rico who does not qualify as a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you are taxed as a nonresident alien. Where to file 2012 form 1040 Resident aliens who formerly were bona fide residents of American Samoa or Puerto Rico are taxed according to the rules for resident aliens. Where to file 2012 form 1040 Prev  Up  Next   Home   More Online Publications
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IRS Virtual Currency Guidance : Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply

IR-2014-36, March. 25, 2014

WASHINGTON — The Internal Revenue Service today issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.

In some environments, virtual currency operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance -- but it does not have legal tender status in any jurisdiction.

The notice provides that virtual currency is treated as property for U.S. federal tax purposes.  General tax principles that apply to property transactions apply to transactions using virtual currency.  Among other things, this means that:

  • Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
  • Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply.  Normally, payers must issue Form 1099.
  • The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
  • A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property. 

Further details, including a set of 16 questions and answers, are in Notice 2014-21, posted today on IRS.gov.

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Page Last Reviewed or Updated: 25-Mar-2014

The Where To File 2012 Form 1040

Where to file 2012 form 1040 1. Where to file 2012 form 1040   Tax Withholding for 2014 Table of Contents Introduction Useful Items - You may want to see: Salaries and WagesDetermining Amount of Tax Withheld Using Form W-4 Completing Form W-4 and Worksheets Getting the Right Amount of Tax Withheld Rules Your Employer Must Follow Exemption From Withholding Supplemental Wages Penalties Tips Taxable Fringe BenefitsSpecial rule. Where to file 2012 form 1040 Exceptions. Where to file 2012 form 1040 Sick Pay Pensions and AnnuitiesPeriodic Payments Nonperiodic Payments Eligible Rollover Distributions Choosing Not To Have Income Tax Withheld Gambling WinningsException. Where to file 2012 form 1040 Identical wagers. Where to file 2012 form 1040 Unemployment Compensation Federal Payments Backup WithholdingTaxpayer identification number. Where to file 2012 form 1040 Underreported interest or dividends. Where to file 2012 form 1040 Introduction This chapter discusses income tax withholding on: Salaries and wages, Tips, Taxable fringe benefits, Sick pay, Pensions and annuities, Gambling winnings, Unemployment compensation, and Certain federal payments. Where to file 2012 form 1040 This chapter explains in detail the rules for withholding tax from each of these types of income. Where to file 2012 form 1040 The discussion of salaries and wages includes an explanation of how to complete Form W-4. Where to file 2012 form 1040 This chapter also covers backup withholding on interest, dividends, and other payments. Where to file 2012 form 1040 Useful Items - You may want to see: Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-4P Withholding Certificate for Pension or Annuity Payments W-4S Request for Federal Income Tax Withholding From Sick Pay W-4V Voluntary Withholding Request See chapter 5 of this publication for information about getting these publications and forms. Where to file 2012 form 1040 Salaries and Wages Income tax is withheld from the pay of most employees. Where to file 2012 form 1040 Your pay includes your regular pay, bonuses, commissions, and vacation allowances. Where to file 2012 form 1040 It also includes reimbursements and other expense allowances paid under a nonaccountable plan. Where to file 2012 form 1040 See Supplemental Wages , later, for definitions of accountable and nonaccountable plans. Where to file 2012 form 1040 If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. Where to file 2012 form 1040 This is explained under Exemption From Withholding , later. Where to file 2012 form 1040 You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. Where to file 2012 form 1040 If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed in chapter 2. Where to file 2012 form 1040 Military retirees. Where to file 2012 form 1040   Military retirement pay is treated in the same manner as regular pay for income tax withholding purposes, even though it is treated as a pension or annuity for other tax purposes. Where to file 2012 form 1040 Household workers. Where to file 2012 form 1040   If you are a household worker, you can ask your employer to withhold income tax from your pay. Where to file 2012 form 1040 A household worker is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter. Where to file 2012 form 1040   Tax is withheld only if you want it withheld and your employer agrees to withhold it. Where to file 2012 form 1040 If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed in chapter 2. Where to file 2012 form 1040 Farmworkers. Where to file 2012 form 1040   Generally, income tax is withheld from your cash wages for work on a farm unless your employer both: Pays you cash wages of less than $150 during the year, and Has expenditures for agricultural labor totaling less than $2,500 during the year. Where to file 2012 form 1040 Differential wage payments. Where to file 2012 form 1040   When employees are on leave from employment for military duty, some employers make up the difference between the military pay and civilian pay. Where to file 2012 form 1040 Payments to an employee who is on active duty for a period of more than 30 days will be subject to income tax withholding, but not subject to social security or Medicare taxes. Where to file 2012 form 1040 The wages and withholding will be reported on Form W-2, Wage and Tax Statement. Where to file 2012 form 1040 Determining Amount of Tax Withheld Using Form W-4 The amount of income tax your employer withholds from your regular pay depends on two things. Where to file 2012 form 1040 The amount you earn in each payroll period. Where to file 2012 form 1040 The information you give your employer on Form W-4. Where to file 2012 form 1040 Form W-4 includes four types of information that your employer will use to figure your withholding. Where to file 2012 form 1040 Whether to withhold at the single rate or at the lower married rate. Where to file 2012 form 1040 How many withholding allowances you claim (each allowance reduces the amount withheld). Where to file 2012 form 1040 Whether you want an additional amount withheld. Where to file 2012 form 1040 Whether you are claiming an exemption from withholding in 2014. Where to file 2012 form 1040 See Exemption From Withholding , later. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 You must specify a filing status and a number of withholding allowances on Form W-4. Where to file 2012 form 1040 You cannot specify only a dollar amount of withholding. Where to file 2012 form 1040 New Job When you start a new job, you must fill out a Form W-4 and give it to your employer. Where to file 2012 form 1040 Your employer should have copies of the form. Where to file 2012 form 1040 If you need to change the information later, you must fill out a new form. Where to file 2012 form 1040 If you work only part of the year (for example, you start working after the beginning of the year), too much tax may be withheld. Where to file 2012 form 1040 You may be able to avoid overwithholding if your employer agrees to use the part-year method. Where to file 2012 form 1040 See Part-Year Method , later, for more information. Where to file 2012 form 1040 Employee also receiving pension income. Where to file 2012 form 1040   If you receive pension or annuity income and begin a new job, you will need to file Form W-4 with your new employer. Where to file 2012 form 1040 However, you can choose to split your withholding allowances between your pension and job in any manner. Where to file 2012 form 1040 Changing Your Withholding During the year changes may occur to your marital status, exemptions, adjustments, deductions, or credits you expect to claim on your tax return. Where to file 2012 form 1040 When this happens, you may need to give your employer a new Form W-4 to change your withholding status or number of allowances. Where to file 2012 form 1040 If the changes reduce the number of allowances you are allowed to claim or changes your marital status from married to single, you must give your employer a new Form W-4 within 10 days. Where to file 2012 form 1040 See Marital Status (Line 3 of Form W-4) and Withholding Allowances (Line 5 of Form W-4) , later. Where to file 2012 form 1040 Generally, you can submit a new Form W-4 whenever you wish to change your withholding allowances for any other reason. Where to file 2012 form 1040 See Table 1-1 for examples of personal and financial changes you should consider. Where to file 2012 form 1040 Table 1-1. Where to file 2012 form 1040 Personal and Financial Changes Factor Examples Lifestyle change Marriage Divorce Birth or adoption of child Loss of an exemption Purchase of a new home Retirement Filing chapter 11 bankruptcy Wage income You or your spouse start or stop working, or start or stop a second job Change in the amount of taxable income not subject to withholding Interest income Dividends Capital gains Self-employment income IRA (including certain Roth  IRA) distributions Change in the amount of adjustments to income IRA deduction Student loan interest deduction Alimony expense Change in the amount of itemized deductions or tax credits Medical expenses Taxes Interest expense Gifts to charity Job expenses Dependent care expenses Education credit Child tax credit Earned income credit If you change the number of your withholding allowances, you can request that your employer withhold using the Cumulative Wage Method , explained later. Where to file 2012 form 1040 Checking Your Withholding After you have given your employer a Form W-4, you can check to see whether the amount of tax withheld from your pay is too much or too little. Where to file 2012 form 1040 If too much or too little tax is being withheld, you should give your employer a new Form W-4 to change your withholding. Where to file 2012 form 1040 You can get a blank Form W-4 from your employer or print the form from IRS. Where to file 2012 form 1040 gov. Where to file 2012 form 1040 You should try to have your withholding match your actual tax liability. Where to file 2012 form 1040 If not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty. Where to file 2012 form 1040 If too much tax is withheld, you will lose the use of that money until you get your refund. Where to file 2012 form 1040 Always check your withholding if there are personal or financial changes in your life or changes in the law that might change your tax liability. Where to file 2012 form 1040 See Table 1-1 for examples. Where to file 2012 form 1040 Note. Where to file 2012 form 1040 You cannot give your employer a payment to cover federal income tax withholding on salaries and wages for past pay periods or a payment for estimated tax. Where to file 2012 form 1040 When Should You Check Your Withholding? The earlier in the year you check your withholding, the easier it is to get the right amount of tax withheld. Where to file 2012 form 1040 You should check your withholding when any of the following situations occur. Where to file 2012 form 1040 You receive a paycheck stub (statement) covering a full pay period in 2014, showing tax withheld based on 2014 tax rates. Where to file 2012 form 1040 You prepare your 2013 tax return and get a: Big refund, or Balance due that is: More than you can comfortably pay, or Subject to a penalty. Where to file 2012 form 1040 There are changes in your life or financial situation that affect your tax liability. Where to file 2012 form 1040 See Table 1-1. Where to file 2012 form 1040 There are changes in the tax law that affect your tax liability. Where to file 2012 form 1040 How Do You Check Your Withholding? You can use the worksheets and tables in this publication to see if you are having the right amount of tax withheld. Where to file 2012 form 1040 You can also use the IRS Withholding calculator at www. Where to file 2012 form 1040 irs. Where to file 2012 form 1040 gov/individuals. Where to file 2012 form 1040 If you use the worksheets and tables in this publication, follow these steps. Where to file 2012 form 1040 Fill out Worksheet 1-5 to project your total federal income tax liability for 2014. Where to file 2012 form 1040 Fill out Worksheet 1-7 to project your total federal withholding for 2014 and compare that with your projected tax liability from Worksheet 1-5. Where to file 2012 form 1040 If you are not having enough tax withheld, line 6 of Worksheet 1-7 will show you how much more to have withheld each payday. Where to file 2012 form 1040 For ways to increase the amount of tax withheld, see How Do You Increase Your Withholding? If line 5 of Worksheet 1-7 shows that you are having more tax withheld than necessary, see How Do You Decrease Your Withholding, for ways to decrease the amount of tax you have withheld each payday. Where to file 2012 form 1040 How Do You Increase Your Withholding? There are two ways to increase your withholding. Where to file 2012 form 1040 You can: Decrease the number of allowances you claim on Form W-4, or Enter an additional amount that you want withheld from each paycheck on Form W-4. Where to file 2012 form 1040 Requesting an additional amount withheld. Where to file 2012 form 1040   You can request that an additional amount be withheld from each paycheck by following these steps. Where to file 2012 form 1040 Complete Worksheets 1-5 and 1-7. Where to file 2012 form 1040 Complete a new Form W-4 if the amount on Worksheet 1-7, line 5: Is more than you want to pay with your tax return or in estimated tax payments throughout the year, or Would cause you to pay a penalty when you file your tax return for 2014. Where to file 2012 form 1040 Enter on your new Form W-4, the same number of withholding allowances your employer now uses for your withholding. Where to file 2012 form 1040 This is the number of allowances you entered on the last Form W-4 you gave your employer. Where to file 2012 form 1040 Enter on your new Form W-4, the amount from Worksheet 1-7, line 6. Where to file 2012 form 1040 Give your newly completed Form W-4 to your employer. Where to file 2012 form 1040   If you have this additional amount withheld from your pay each payday, you should avoid owing a large amount at the end of the year. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Early in 2014, Steve Miller used Worksheets 1-5, 1-6, and 1-7 to project his 2014 tax liability ($4,316) and his withholding for the year ($3,516). Where to file 2012 form 1040 Steve's tax will be underwithheld by $800 ($4,316 − $3,516). Where to file 2012 form 1040 His choices are to pay this amount when he files his 2014 tax return, make estimated tax payments, or increase his withholding now. Where to file 2012 form 1040 Steve gets a new Form W-4 from his employer, who tells him that there are 50 paydays remaining in 2014. Where to file 2012 form 1040 Steve completes the new Form W-4 as before, entering the same number of withholding allowances as before, but, in addition, entering $16 ($800 ÷ 50) on the form as the additional amount to be withheld from his pay each payday. Where to file 2012 form 1040 He gives the completed form to his employer. Where to file 2012 form 1040 What if I have more than one job or my spouse also has a job?   You are more likely to need to increase your withholding if you have more than one job or if you are married filing jointly and your spouse also works. Where to file 2012 form 1040 If this is the case, you can increase your withholding for one or more of the jobs. Where to file 2012 form 1040   You can apply the amount on Worksheet 1-7, line 5, to only one job or divide it between the jobs any way you wish. Where to file 2012 form 1040 For each job, determine the extra amount that you want to apply to that job and divide that amount by the number of paydays remaining in 2014 for that job. Where to file 2012 form 1040 This will give you the additional amount to enter on the Form W-4 you will file for that job. Where to file 2012 form 1040 You need to give your employer a new Form W-4 for each job for which you are changing your withholding. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Meg Green works in a store and earns $46,000 a year. Where to file 2012 form 1040 Her husband, John, works full-time in manufacturing and earns $68,000 a year. Where to file 2012 form 1040 In 2014, they will also have $184 in taxable interest and $1,000 of other taxable income. Where to file 2012 form 1040 They expect to file a joint income tax return. Where to file 2012 form 1040 Meg and John complete Worksheets 1-5, 1-6, and 1-7. Where to file 2012 form 1040 Line 5 of Worksheet 1-7 shows that they will owe an additional $4,459 after subtracting their withholding for the year. Where to file 2012 form 1040 They can divide the $4,459 any way they want. Where to file 2012 form 1040 They can enter an additional amount on either of their Forms W-4, or divide it between them. Where to file 2012 form 1040 They decide to have the additional amount withheld from John's wages, so they enter $91 ($4,459 ÷ 49 remaining paydays) on his Form W-4. Where to file 2012 form 1040 Both claim the same number of allowances as before. Where to file 2012 form 1040 How Do You Decrease Your Withholding? If your completed Worksheets 1-5 and 1-7 show that you may have more tax withheld than your projected tax liability for 2014, you may be able to decrease your withholding. Where to file 2012 form 1040 There are two ways to do this. Where to file 2012 form 1040 You can: Decrease any additional amount you are having withheld, or Increase the number of allowances you claim on Form W-4. Where to file 2012 form 1040 You can claim only the number of allowances to which you are entitled. Where to file 2012 form 1040 To see if you can decrease your withholding by increasing your allowances, see the Form W-4 instructions and the rest of this publication. Where to file 2012 form 1040 Increasing the number of allowances. Where to file 2012 form 1040   Figure and increase the number of withholding allowances you can claim as follows. Where to file 2012 form 1040 On a new Form W-4, complete the Personal Allowances Worksheet. Where to file 2012 form 1040 If you plan to itemize deductions, claim adjustments to income, or claim tax credits, complete a new Deductions and Adjustments Worksheet. Where to file 2012 form 1040 If you plan to claim tax credits, see Converting Credits to Withholding Allowances, later. Where to file 2012 form 1040 If you meet the criteria on line H of the Form W-4 Personal Allowances Worksheet, complete a new Two-Earners/Multiple Jobs Worksheet. Where to file 2012 form 1040 If the number of allowances you can claim on Form W-4, is different from the number you already are claiming, give the newly completed Form W-4 to your employer. Where to file 2012 form 1040 Converting Credits to Withholding Allowances Table 1-2 , later, shows many of the tax credits you may be able to use to decrease your withholding. Where to file 2012 form 1040 The Form W-4 Personal Allowances Worksheet provides only rough adjustments for the child and dependent care credit and the child tax credit. Where to file 2012 form 1040 Complete Worksheet 1-8 to figure these credits more accurately and also take other credits into account. Where to file 2012 form 1040 Include the amount from line 12 of Worksheet 1-8 in the total on line 5 of the Deductions and Adjustments Worksheet. Where to file 2012 form 1040 Then complete the Deductions and Adjustments Worksheet and the rest of Form W-4. Where to file 2012 form 1040 If you take the child and dependent care credit into account on Worksheet 1-8, enter -0- on line F of the Personal Allowances Worksheet. Where to file 2012 form 1040 If you take the child tax credit into account on Worksheet 1-8, enter -0- on line G of the Personal Allowances Worksheet. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 Brett and Alyssa Davis are married and expect to file a joint return for 2014. Where to file 2012 form 1040 Their expected taxable income from all sources is $68,000. Where to file 2012 form 1040 They expect to have $15,900 of itemized deductions. Where to file 2012 form 1040 Their projected tax credits include a child and dependent care credit of $960 and an adoption credit of $1,500. Where to file 2012 form 1040 The Davis' complete Worksheet 1-8, as follows, to see whether they can convert their tax credits into additional withholding allowances. Where to file 2012 form 1040 Line 1, expected child and dependent care credit—$960. Where to file 2012 form 1040 Line 9, expected adoption credit—$1,500. Where to file 2012 form 1040 Line 10, total estimated tax credits—$2,460. Where to file 2012 form 1040 Line 11. Where to file 2012 form 1040 Their combined total income from all sources, $68,000, falls between $42,001 and $98,000 on the table for married filing jointly or qualifying widow(er). Where to file 2012 form 1040 The number to the right of this range is 6. Where to file 2012 form 1040 7. Where to file 2012 form 1040 Line 12, multiply line 10 by line 11—$16,482. Where to file 2012 form 1040 Then the Davis' complete the Form W-4 worksheets. Where to file 2012 form 1040 Because they choose to account for their child and dependent care credit on the Deductions and Adjustments Worksheet, they enter -0- on line F of the Personal Allowances Worksheet and figure a new total for line H. Where to file 2012 form 1040 They take the result on line 12 of Worksheet 1-8, add it to their other adjustments on line 5 of the Form W-4 Deductions and Adjustments Worksheet, and complete the Form W-4 worksheets. Where to file 2012 form 1040 When Will Your New Form W-4 Go Into Effect? If the change is for the current year, your employer must put your new Form W-4 into effect no later than the start of the first payroll period ending on or after the 30th day after the day on which you give your employer your revised Form W-4. Where to file 2012 form 1040 If the change is for next year, your new Form W-4 will not take effect until next year. Where to file 2012 form 1040 Retirees Returning to the Workforce When you first began receiving your pension, you told the payer how much tax to withhold, if any, by completing Form W-4P, Withholding Certificate for Pension or Annuity Payments (or similar form). Where to file 2012 form 1040 However, if your retirement pay is from the military or certain deferred compensation plans, you completed Form W-4 instead of Form W-4P. Where to file 2012 form 1040 You completed either form based on your projected income at that time. Where to file 2012 form 1040 Now that you are returning to the workforce, your new Form W-4 (given to your employer) and your Form W-4 or W-4P (on file with your pension plan) must work together to determine the correct amount of withholding for your new amount of income. Where to file 2012 form 1040 The worksheets that come with Forms W-4 and W-4P are basically the same, so you can use either set of worksheets to figure out how many withholding allowances you are entitled to claim. Where to file 2012 form 1040 Start off with the Personal Allowances Worksheet. Where to file 2012 form 1040 Then, if you will be itemizing your deductions, claiming adjustments to income, or claiming tax credits when you file your tax return, complete the Deductions and Adjustments Worksheet. Where to file 2012 form 1040 The third worksheet is the most important for this situation. Where to file 2012 form 1040 Form W-4 calls it the Two-Earners/Multiple Jobs Worksheet, Form W-4P calls it the Multiple Pensions/More-Than-One-Income Worksheet—both are the same. Where to file 2012 form 1040 If you have more than one source of income, in order to have enough withholding to cover the tax on your higher income, you may need to claim fewer withholding allowances or request your employer to withhold an additional amount from each paycheck. Where to file 2012 form 1040 Once you have figured out how many allowances you are entitled to claim, look at the income from both your pension and your new job, and how often you receive payments. Where to file 2012 form 1040 It is your decision how to divide up your withholding allowances between these sources of income. Where to file 2012 form 1040 For example, you may want to “take home” most of your weekly paycheck to use as spending money and use your monthly pension to “pay the bills. Where to file 2012 form 1040 ” In that case, change your Form W-4P to zero allowances and claim all that you are entitled to on your Form W-4. Where to file 2012 form 1040 There are a couple of ways you can get a better idea of how much tax will be withheld when claiming a certain number of allowances. Where to file 2012 form 1040 Use the withholding tables in Publication 15 (Circular E), Employer's Tax Guide. Where to file 2012 form 1040 Contact your pension provider and your employer's payroll department. Where to file 2012 form 1040 And remember, this is not a final decision. Where to file 2012 form 1040 If you do not get the correct amount of withholding with the first Forms W-4 and W-4P you submit, you should refigure your allowances (or divide them differently) using the information and worksheets in this publication, or the resources mentioned above. Where to file 2012 form 1040 You should go through this same process each time your life situation changes, whether it be for personal or financial reasons. Where to file 2012 form 1040 You may need more tax withheld, or you may need less. Where to file 2012 form 1040 Table 1-2. Where to file 2012 form 1040 Tax Credits for 2014 For more information about the . Where to file 2012 form 1040 . Where to file 2012 form 1040 . Where to file 2012 form 1040 See . Where to file 2012 form 1040 . Where to file 2012 form 1040 . Where to file 2012 form 1040 Adoption credit Form 8839 instructions Child and dependent care expenses, credit for Publication 503, Child and Dependent Care Expenses Child tax credit (including the additional child tax credit) Instructions for Form 1040 or Form 1040A Earned income credit Publication 596, Earned Income Credit Education credits Publication 970, Tax Benefits for Education Elderly or the disabled, credit for the Publication 524, Credit for the Elderly or the Disabled Foreign tax credit (except any credit that applies to wages not subject to U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 income tax withholding because they are subject to income tax withholding by a foreign country) Publication 514, Foreign Tax Credit for Individuals General business credit Form 3800, General Business Credit Mortgage interest credit Publication 530, Tax Information for First-Time Homeowners Qualified electric vehicle passive activity credit Form 8834 Prior year minimum tax, credit for (if you paid alternative minimum tax in an earlier year) Form 8801 instructions Retirement savings contributions credit (saver's credit) Publication 590, Individual Retirement Arrangements (IRAs) Tax credit bonds, credit to holders of Form 8912 instructions Completing Form W-4 and Worksheets When reading the following discussion, you may find it helpful to refer to Form W-4. Where to file 2012 form 1040 Marital Status There is a lower withholding rate for people who qualify to check the “Married” box on line 3 of Form W-4. Where to file 2012 form 1040 Everyone else must have tax withheld at the higher single rate. Where to file 2012 form 1040 Single. Where to file 2012 form 1040   You must check the “Single” box if any of the following applies. Where to file 2012 form 1040 You are single. Where to file 2012 form 1040 If you are divorced, or separated from your spouse under a court decree of separate maintenance, you are considered single. Where to file 2012 form 1040 You are married, but neither you nor your spouse is a citizen or resident of the United States. Where to file 2012 form 1040 You are married, either you or your spouse is a nonresident alien, and you have not chosen to have that person treated as a resident alien for tax purposes. Where to file 2012 form 1040 For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Publication 519. Where to file 2012 form 1040 Married. Where to file 2012 form 1040   You qualify to check the “Married” box if any of the following applies. Where to file 2012 form 1040 You are married and neither you nor your spouse is a nonresident alien. Where to file 2012 form 1040 You are considered married for the whole year even if your spouse died during the year. Where to file 2012 form 1040 You are married and either you or your spouse is a nonresident alien who has chosen to be treated as a resident alien for tax purposes. Where to file 2012 form 1040 For more information, see Nonresident Spouse Treated as a Resident in chapter 1 of Publication 519. Where to file 2012 form 1040 You expect to be able to file your return as a qualifying widow or widower. Where to file 2012 form 1040 You usually can use this filing status if your spouse died within the previous 2 years and you provide more than half the cost of keeping up a home for the entire year that was the main home for you and your child whom you can claim as a dependent. Where to file 2012 form 1040 However, you must file a new Form W-4 showing your filing status as single by December 1 of the last year you are eligible to file as a qualifying widow or widower. Where to file 2012 form 1040 For more information on this filing status, see Qualifying Widow(er) With Dependent Child under Filing Status in Publication 501, Exemptions, Standard Deduction, and Filing Information. Where to file 2012 form 1040 Married, but withhold at higher single rate. Where to file 2012 form 1040   Some married people find that they do not have enough tax withheld at the married rate. Where to file 2012 form 1040 This can happen, for example, when both spouses work. Where to file 2012 form 1040 To avoid this, you can check the “Married, but withhold at higher Single rate” box (even if you qualify for the married rate). Where to file 2012 form 1040 Also, you may find that more tax is withheld if you fill out the Two-Earners/Multiple Jobs Worksheet, explained later. Where to file 2012 form 1040 Withholding Allowances The more allowances you claim on Form W-4, the less income tax your employer will withhold. Where to file 2012 form 1040 You will have the most tax withheld if you claim “0” allowances. Where to file 2012 form 1040 The number of allowances you can claim depends on the following factors. Where to file 2012 form 1040 How many exemptions you can take on your tax return. Where to file 2012 form 1040 Whether you have income from more than one job. Where to file 2012 form 1040 What deductions, adjustments to income, and credits you expect to have for the year. Where to file 2012 form 1040 Whether you will file as head of household. Where to file 2012 form 1040 If you are married (filing jointly), it also depends on whether your spouse also works and claims any allowances on his or her own Form W-4. Where to file 2012 form 1040 Or, if married filing separately, whether or not your spouse also works. Where to file 2012 form 1040 Form W-4 worksheets. Where to file 2012 form 1040    Form W-4 has worksheets to help you figure how many withholding allowances you can claim. Where to file 2012 form 1040 The worksheets are for your own records. Where to file 2012 form 1040 Do not give them to your employer. Where to file 2012 form 1040   Complete only one set of Form W-4 worksheets, no matter how many jobs you have. Where to file 2012 form 1040 If you are married and will file a joint return, complete only one set of worksheets for you and your spouse, even if you both earn wages and each must give Form W-4 to your employers. Where to file 2012 form 1040 Complete separate sets of worksheets only if you and your spouse will file separate returns. Where to file 2012 form 1040   If you are not exempt from withholding (see Exemption From Withholding , later), complete the Personal Allowances Worksheet on page 1 of the form. Where to file 2012 form 1040 Also, use the worksheets on page 2 of the form to adjust the number of your withholding allowances for itemized deductions and adjustments to income, and for two-earner or multiple-job situations. Where to file 2012 form 1040 If you want to adjust the number of your withholding allowances for certain tax credits, use the Deductions and Adjustments Worksheet on page 2 of Form W-4, even if you do not have any deductions or adjustments. Where to file 2012 form 1040   Complete all worksheets that apply to your situation. Where to file 2012 form 1040 The worksheets will help you figure the maximum number of withholding allowances you are entitled to claim so that the amount of income tax withheld from your wages will match, as closely as possible, the amount of income tax you will owe at the end of the year. Where to file 2012 form 1040 Multiple jobs. Where to file 2012 form 1040   If you have income from more than one job at the same time, complete only one set of Form W-4 worksheets. Where to file 2012 form 1040 Then split your allowances between the Forms W-4 for each job. Where to file 2012 form 1040 You cannot claim the same allowances with more than one employer at the same time. Where to file 2012 form 1040 You can claim all your allowances with one employer and none with the other(s), or divide them any other way. Where to file 2012 form 1040 Married individuals. Where to file 2012 form 1040   If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Where to file 2012 form 1040 Use only one set of worksheets. Where to file 2012 form 1040 You can divide your total allowances any way, but you cannot claim an allowance that your spouse also claims. Where to file 2012 form 1040   If you and your spouse expect to file separate returns, figure your allowances using separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits. Where to file 2012 form 1040 Alternative method of figuring withholding allowances. Where to file 2012 form 1040   You do not have to use the Form W-4 worksheets if you use a more accurate method of figuring the number of withholding allowances. Where to file 2012 form 1040   The method you use must be based on withholding schedules, the tax rate schedules, and the 2014 Estimated Tax Worksheet in chapter 2. Where to file 2012 form 1040 It must take into account only the items of income, adjustments to income, deductions, and tax credits that are taken into account on Form W-4. Where to file 2012 form 1040   You can use the number of withholding allowances determined under an alternative method rather than the number determined using the Form W-4 worksheets. Where to file 2012 form 1040 You still must give your employer a Form W-4 claiming your withholding allowances. Where to file 2012 form 1040 Employees who are not citizens or residents. Where to file 2012 form 1040   If you are neither a citizen nor a resident of the United States, you usually can claim only one withholding allowance. Where to file 2012 form 1040 However, this rule does not apply if you are a resident of Canada or Mexico, or if you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 national. Where to file 2012 form 1040 It also does not apply if your spouse is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or resident and you have chosen to be treated as a resident of the United States for tax purposes. Where to file 2012 form 1040 Special rules apply to residents of South Korea and India. Where to file 2012 form 1040 For more information, see Withholding From Compensation in chapter 8 of Publication 519. Where to file 2012 form 1040 Personal Allowances Worksheet Use the Personal Allowances Worksheet on page 1 of Form W-4 to figure your withholding allowances based on all of the following that apply. Where to file 2012 form 1040 Exemptions. Where to file 2012 form 1040 Only one job. Where to file 2012 form 1040 Head of household filing status. Where to file 2012 form 1040 Child and dependent care credit. Where to file 2012 form 1040 Child tax credit. Where to file 2012 form 1040 Exemptions (worksheet lines A, C, and D). Where to file 2012 form 1040   You can claim one withholding allowance for each exemption you expect to claim on your tax return. Where to file 2012 form 1040 Self. Where to file 2012 form 1040   You can claim an allowance for your exemption on line A unless another person can claim an exemption for you on his or her tax return. Where to file 2012 form 1040 If another person is entitled to claim an exemption for you, you cannot claim an allowance for your exemption even if the other person will not claim your exemption. Where to file 2012 form 1040 Spouse. Where to file 2012 form 1040   You can claim an allowance for your spouse's exemption on line C unless your spouse is claiming his or her own exemption or another person can claim an exemption for your spouse. Where to file 2012 form 1040 Do not claim this allowance if you and your spouse expect to file separate returns. Where to file 2012 form 1040 Dependents. Where to file 2012 form 1040   You can claim one allowance on line D for each exemption you will claim for a dependent on your tax return. Where to file 2012 form 1040 Only one job (worksheet line B). Where to file 2012 form 1040    You can claim an additional withholding allowance if any of the following apply for 2014. Where to file 2012 form 1040 You are single and you have only one job at a time. Where to file 2012 form 1040 You are married, you have only one job at a time, and your spouse does not work. Where to file 2012 form 1040 Your wages from a second job or your spouse's wages (or the total of both) are $1,500 or less. Where to file 2012 form 1040 If you qualify for this allowance, enter “1” on line B of the worksheet. Where to file 2012 form 1040 Head of household filing status (worksheet line E). Where to file 2012 form 1040   Generally, you can file as head of household if you are unmarried and pay more than half the cost of keeping up a home that: Was the main home for all of 2014 of your parent whom you can claim as a dependent, or You lived in for more than half the year with your qualifying child or any other person you can claim as a dependent. Where to file 2012 form 1040 For more information, see Publication 501. Where to file 2012 form 1040   If you expect to file as head of household on your 2014 tax return, enter “1” on line E of the worksheet. Where to file 2012 form 1040 Reduction of personal allowances. Where to file 2012 form 1040   For 2014, your deduction for personal exemptions on your tax return is reduced if your adjusted gross income (AGI) is more than the AGI shown next for your filing status. Where to file 2012 form 1040 Personal Allowance Phaseout Threshold Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than the amount listed, use Worksheet 1-1 to figure your reduced number of personal allowances on lines A, C, and D of the Personal Allowances Worksheet. Where to file 2012 form 1040 Worksheet 1-1. Where to file 2012 form 1040 Personal Allowances Worksheet (Form W-4) Reduction of Personal Allowances if AGI Above Phaseout Threshold 1. Where to file 2012 form 1040 Enter the total amount of allowances on lines A, C, and D of the Personal Allowance Worksheet without regard to the phaseout rule 1. Where to file 2012 form 1040   2. Where to file 2012 form 1040 Enter your expected AGI 2. Where to file 2012 form 1040       3. Where to file 2012 form 1040 Enter $254,200 if single $305,050 if married filing jointly or qualifying widow(er) $152,525 if married filing separately $279,650 if head of household 3. Where to file 2012 form 1040       4. Where to file 2012 form 1040 Subtract line 3 from line 2 4. Where to file 2012 form 1040       5. Where to file 2012 form 1040 Divide line 4 by $125,000 ($62,500 if married filing separately). Where to file 2012 form 1040 Enter the result as a decimal 5. Where to file 2012 form 1040   6. Where to file 2012 form 1040 Multiply line 1 by line 5. Where to file 2012 form 1040 If the result is not a whole number, increase it to the next higher whole number 6. Where to file 2012 form 1040   7. Where to file 2012 form 1040 Subtract line 6 from line 1. Where to file 2012 form 1040 The total of the numbers you enter on A, C, and D of the Personal Allowances Worksheet can not be more than this amount 7. Where to file 2012 form 1040     Child and dependent care credit (worksheet line F). Where to file 2012 form 1040   Enter “1” on line F if you expect to claim a credit for at least $2,000 of qualifying child or dependent care expenses on your 2014 return. Where to file 2012 form 1040 Generally, qualifying expenses are those you pay for the care of your dependent who is your qualifying child under age 13 or for your spouse or dependent who is not able to care for himself or herself so that you can work or look for work. Where to file 2012 form 1040 For more information, see Publication 503, Child and Dependent Care Expenses. Where to file 2012 form 1040   Instead of using line F, you can choose to take the credit into account on line 5 of the Deductions and Adjustments Worksheet, as explained under Tax credits , later. Where to file 2012 form 1040 Child tax credit (worksheet line G). Where to file 2012 form 1040   If your total income will be less than $65,000 ($95,000 if married), enter “2” on line G for each eligible child. Where to file 2012 form 1040 Subtract “1” from that amount if you have three to six eligible children. Where to file 2012 form 1040 Subtract “2” from that amount if you have seven or more eligible children. Where to file 2012 form 1040   If your total income will be between $65,000 and $84,000 ($95,000 and $119,000 if married), enter “1” on line G for each eligible child. Where to file 2012 form 1040   An eligible child is any child: Who is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Who will be under age 17 at the end of 2014, Who is younger than you (or your spouse if filing jointly) or permanently and totally disabled, Who will not provide over half of his or her own support for 2014, Who will not file a joint return, unless the return is filed only as a claim for refund, Who will live with you for more than half of 2014, Who is a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen, U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 national, or U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 resident alien, and Who will be claimed as a dependent on your return. Where to file 2012 form 1040 If you are a U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 citizen or U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 national and your adopted child lived with you all year as a member of your household, that child meets the citizenship test. Where to file 2012 form 1040   Also, if any other person can claim the child as an eligible child, see Qualifying child of more than one person in the 2013 instructions for Form 1040 or 1040A, line 6c. Where to file 2012 form 1040   For more information about the child tax credit, see the instructions for Form 1040 or Form 1040A. Where to file 2012 form 1040   Instead of using line G, you can choose to take the credit into account on line 5 of the Deductions and Adjustments Worksheet, as explained under Tax credits , later. Where to file 2012 form 1040 Total personal allowances (worksheet line H). Where to file 2012 form 1040    Add lines A through G and enter the total on line H. Where to file 2012 form 1040 If you do not use either of the worksheets on the back of Form W-4, enter the number from line H on line 5 of Form W-4. Where to file 2012 form 1040 Deductions and Adjustments Worksheet Use the Deductions and Adjustments Worksheet on page 2 of Form W-4 if you plan to itemize your deductions, claim certain credits, or claim adjustments to the income on your 2014 tax return and you want to reduce your withholding. Where to file 2012 form 1040 Also, complete this worksheet when you have changes to those items to see if you need to change your withholding. Where to file 2012 form 1040 Use the amount of each item you reasonably can expect to show on your return. Where to file 2012 form 1040 However, do not use more than: The amount shown for that item on your 2013 return (or your 2012 return if you have not yet filed your 2013 return), plus Any additional amount related to a transaction or occurrence (such as payments already made, the signing of an agreement, or the sale of property) that you can prove has happened or will happen during 2013 or 2014. Where to file 2012 form 1040 Do not include any amount shown on your last tax return that has been disallowed by the IRS. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 On June 30, 2013, you bought your first home. Where to file 2012 form 1040 On your 2013 tax return, you claimed itemized deductions of $6,600, the total mortgage interest and real estate tax you paid during the 6 months you owned your home. Where to file 2012 form 1040 Based on your mortgage payment schedule and your real estate tax assessment, you reasonably can expect to claim deductions of $13,200 for those items on your 2014 return. Where to file 2012 form 1040 You can use $13,200 to figure the number of your withholding allowances for itemized deductions. Where to file 2012 form 1040 Not itemizing deductions. Where to file 2012 form 1040   If you expect to claim the standard deduction on your tax return, skip lines 1 and 2, and enter “0” on line 3 of the worksheet. Where to file 2012 form 1040 Itemized deductions (worksheet line 1). Where to file 2012 form 1040   Enter your estimated total itemized deductions on line 1 of the worksheet. Where to file 2012 form 1040   Listed below are some of the deductions you can take into account when figuring additional withholding allowances for 2014. Where to file 2012 form 1040 You normally claim these deductions on Schedule A of Form 1040. Where to file 2012 form 1040 Medical and dental expenses that are more than 10% (7. Where to file 2012 form 1040 5% if either you or your spouse was born before January 2, 1950) of your 2014 AGI (defined under AGI , later). Where to file 2012 form 1040 State and local income or property taxes. Where to file 2012 form 1040 Deductible home mortgage interest. Where to file 2012 form 1040 Investment interest up to net investment income. Where to file 2012 form 1040 Charitable contributions. Where to file 2012 form 1040 Casualty and theft losses that are more than $100 and 10% of your AGI. Where to file 2012 form 1040 Fully deductible miscellaneous itemized deductions, including: Impairment-related work expenses of persons with disabilities, Federal estate tax on income in respect of a decedent, Repayment of more than $3,000 of income held under a claim of right that you included in income in an earlier year because at the time you thought you had an unrestricted right to it, Unrecovered investments in an annuity contract under which payments have ceased because of the annuitant's death, Gambling losses up to the amount of gambling winnings reported on your return, and Casualty and theft losses from  income-producing property. Where to file 2012 form 1040 Other miscellaneous itemized deductions that are more than 2% of your AGI, including: Unreimbursed employee business expenses, such as education expenses, work clothes and uniforms, union dues and fees, and the cost of work-related small tools and supplies, Safe deposit box rental, Tax counsel and assistance, and Certain fees paid to an IRA trustee or custodian. Where to file 2012 form 1040 AGI. Where to file 2012 form 1040   For the purpose of estimating your itemized deductions, your AGI is your estimated total income for 2014 minus any estimated adjustments to income (discussed later) that you include on line 4 of the Deductions and Adjustments Worksheet. Where to file 2012 form 1040 Phaseout of itemized deductions. Where to file 2012 form 1040   For 2014, your total itemized deductions may be phased out (reduced) if your AGI is more than the following thresholds. Where to file 2012 form 1040    Itemized Deduction Phaseout Threshold Single $254,200 Married filing jointly or qualifying widow(er) $305,050 Married filing separately $152,525 Head of household $279,650   If you expect your AGI to be more than the amount listed, use Worksheet 1–2 to figure your reduction in itemized deductions. Where to file 2012 form 1040 Worksheet 1-2. Where to file 2012 form 1040 Deductions and Adjustments Worksheet (Form W-4)—Line 1 Phaseout of Itemized Deductions 1. Where to file 2012 form 1040 Enter the estimated total of your itemized deductions 1. Where to file 2012 form 1040   2. Where to file 2012 form 1040 Enter the amount included in line 1 for medical and dental expenses, investment interest, casualty or theft losses, and gambling losses 2. Where to file 2012 form 1040   3. Where to file 2012 form 1040 Is the amount on line 2 less than the amount on line 1? ❑ No. Where to file 2012 form 1040 Stop here. Where to file 2012 form 1040 Your deduction is not limited. Where to file 2012 form 1040 Enter the amount from line 1 above on line 1 of the Deductions and Adjustments Worksheet. Where to file 2012 form 1040  ❑ Yes. Where to file 2012 form 1040 Subtract line 2 from line 1. Where to file 2012 form 1040 3. Where to file 2012 form 1040       4. Where to file 2012 form 1040 Multiply line 3 by 80% (. Where to file 2012 form 1040 80) 4. Where to file 2012 form 1040       5. Where to file 2012 form 1040 Enter your expected AGI 5. Where to file 2012 form 1040       6. Where to file 2012 form 1040 Enter $305,050 If married filing jointly or qualifying widow(er), $279,650 if head of household, $254,200 if single, or $152,525 if married filing separately 6. Where to file 2012 form 1040   7. Where to file 2012 form 1040 Is the amount on line 6 less than the amount on line 5? ❑ No. Where to file 2012 form 1040 Stop here. Where to file 2012 form 1040 Your deduction is not limited. Where to file 2012 form 1040 Enter the amount from line 1 above on line 1 of the Deductions and Adjustments Worksheet. Where to file 2012 form 1040  ❑ Yes. Where to file 2012 form 1040 Subtract line 6 from line 5. Where to file 2012 form 1040 7. Where to file 2012 form 1040       8. Where to file 2012 form 1040 Multiply line 7 by 3% (. Where to file 2012 form 1040 03) 8. Where to file 2012 form 1040       9. Where to file 2012 form 1040 Enter the smaller of line 4 or line 8 9. Where to file 2012 form 1040     10. Where to file 2012 form 1040 Subtract line 9 from line 1. Where to file 2012 form 1040 Enter the result here and on line 1 of the Deductions and Adjustments Worksheet 10. Where to file 2012 form 1040     Adjustments to income (worksheet line 4). Where to file 2012 form 1040   Enter your estimated total adjustments to income on line 4 of the Deductions and Adjustments Worksheet. Where to file 2012 form 1040   You can take the following adjustments to income into account when figuring additional withholding allowances for 2014. Where to file 2012 form 1040 These adjustments appear on page 1 of your Form 1040 or 1040A. Where to file 2012 form 1040 Net losses from Schedules C, D, E, and F of Form 1040 and from Part II of Form 4797, line 18b. Where to file 2012 form 1040 Net operating loss carryovers. Where to file 2012 form 1040 Certain business expenses of reservists, performing artists, and fee-based government officials. Where to file 2012 form 1040 Health savings account or medical savings account deduction. Where to file 2012 form 1040 Certain moving expenses. Where to file 2012 form 1040 Deduction for self-employment tax. Where to file 2012 form 1040 Deduction for contributions to self-employed SEP, and qualified SIMPLE plans. Where to file 2012 form 1040 Self-employed health insurance deduction. Where to file 2012 form 1040 Penalty on early withdrawal of savings. Where to file 2012 form 1040 Alimony paid. Where to file 2012 form 1040 IRA deduction. Where to file 2012 form 1040 Student loan interest deduction. Where to file 2012 form 1040 Jury duty pay given to your employer. Where to file 2012 form 1040 Reforestation amortization and expenses. Where to file 2012 form 1040 Deductible expenses related to income reported on line 21 from the rental of personal property engaged in for profit. Where to file 2012 form 1040 Repayment of certain supplemental unemployment benefits. Where to file 2012 form 1040 Contributions to IRC 501(c)(18)(D) pension plans. Where to file 2012 form 1040 Contributions by certain chaplains to IRC 403(b) plans. Where to file 2012 form 1040 Attorney fees and court costs for certain unlawful discrimination claims. Where to file 2012 form 1040 Attorney fees and court costs for certain whistleblower awards. Where to file 2012 form 1040 Estimated amount of decrease in tax attributable to income averaging using Schedule J (Form 1040). Where to file 2012 form 1040 Tax credits (worksheet line 5). Where to file 2012 form 1040   Although you can take most tax credits into account when figuring withholding allowances, the Personal Allowances Worksheet uses only the child and dependent care credit (line F) and the child tax credit (line G). Where to file 2012 form 1040 But you can take these credits and others into account by adding an extra amount on line 5 of the Deductions and Adjustments Worksheet. Where to file 2012 form 1040   If you take the child and dependent care credit into account on line 5, do not use line F. Where to file 2012 form 1040 If you take the child tax credit into account on line 5, do not use line G. Where to file 2012 form 1040   In addition to the child and dependent care credit and the child tax credit, you can generally take into account the following credits. Where to file 2012 form 1040 See the individual tax form instructions for more details. Where to file 2012 form 1040 Foreign tax credit, except any credit that applies to wages not subject to U. Where to file 2012 form 1040 S. Where to file 2012 form 1040 income tax withholding because they are subject to income tax withholding by a foreign country. Where to file 2012 form 1040 See Publication 514, Foreign Tax Credit for Individuals. Where to file 2012 form 1040 Credit for the elderly or the disabled. Where to file 2012 form 1040 See Publication 524, Credit for the Elderly or the Disabled. Where to file 2012 form 1040 Education credits. Where to file 2012 form 1040 See Publication 970, Tax Benefits for Education. Where to file 2012 form 1040 Retirement savings contributions credit (saver's credit). Where to file 2012 form 1040 See Publication 590. Where to file 2012 form 1040 Mortgage interest credit. Where to file 2012 form 1040 See Publication 530, Tax Information for Homeowners. Where to file 2012 form 1040 Adoption credit. Where to file 2012 form 1040 See the Instructions for Form 8839. Where to file 2012 form 1040 Credit for nonrefundable portion of prior year minimum tax if you paid alternative minimum tax in an earlier year. Where to file 2012 form 1040 See the Instructions for Form 8801. Where to file 2012 form 1040 General business credit. Where to file 2012 form 1040 See the Instructions for Form 3800. Where to file 2012 form 1040 Earned income credit. Where to file 2012 form 1040 See Publication 596. Where to file 2012 form 1040 Figuring line 5 entry. Where to file 2012 form 1040   To figure the amount to add on line 5 for tax credits, multiply your estimated total credits by the appropriate number from Table 1-3 . Where to file 2012 form 1040 Example. Where to file 2012 form 1040 You are married and expect to file a joint return for 2014. Where to file 2012 form 1040 Your combined estimated wages are $68,000. Where to file 2012 form 1040 Your estimated tax credits include a child and dependent care credit of $960 and a mortgage interest credit of $1,700 (total credits = $2,660). Where to file 2012 form 1040 In Table 1-3, the number corresponding to your combined estimated wages ($42,001 – $98,000) is 6. Where to file 2012 form 1040 7. Where to file 2012 form 1040 Multiply your total estimated tax credits of $2,660 by 6. Where to file 2012 form 1040 7. Where to file 2012 form 1040 Add the result, $17,822, to the amount you otherwise would show on line 5 of the Deductions and Adjustments Worksheet and enter the total on line 5. Where to file 2012 form 1040 Because you choose to account for your child and dependent care credit this way, do not make an entry on line F of the Personal Allowances Worksheet. Where to file 2012 form 1040 Nonwage income (worksheet line 6). Where to file 2012 form 1040   Enter on line 6 your estimated total nonwage income (other than tax-exempt income). Where to file 2012 form 1040 Nonwage income includes interest, dividends, net rental income, unemployment compensation, alimony, gambling winnings, prizes and awards, hobby income, capital gains, royalties, and partnership income. Where to file 2012 form 1040   If line 6 is more than line 5, you may not have enough income tax withheld from your wages. Where to file 2012 form 1040 See Getting the Right Amount of Tax Withheld , later. Where to file 2012 form 1040 Net deductions and adjustments (worksheet line 8). Where to file 2012 form 1040    If line 7 is less than $3,950, enter “0” on line 8. Where to file 2012 form 1040 If line 7 is $3,950 or more, divide it by $3,950, drop any fraction, and enter the result on line 8. Where to file 2012 form 1040 Example. Where to file 2012 form 1040 If line 7 is $5,200, $5,200 ÷ $3,950 = 1. Where to file 2012 form 1040 32. Where to file 2012 form 1040 Drop the fraction (. Where to file 2012 form 1040 32) and enter “1” on line 8. Where to file 2012 form 1040 Two-Earners/Multiple Jobs Worksheet Complete the Two-Earners/Multiple Jobs Worksheet on page 2 of Form W-4 if you have more than one job or are married and you and your spouse both work and the combined earnings from all jobs are more than $50,000 ($20,000 if married). Where to file 2012 form 1040 Reducing your allowances (worksheet lines 1-3). Where to file 2012 form 1040   On line 1 of the worksheet, enter the number from line H of the Personal Allowances Worksheet (or line 10 of the Deductions and Adjustments Worksheet, if used). Where to file 2012 form 1040 Using Table 1 in the Two-Earners/Multiple Jobs Worksheet, find the number listed beside the amount of your estimated wages for the year from your lowest paying job (or if lower and you are filing jointly, your spouse's job). Where to file 2012 form 1040 Enter that number on line 2. Where to file 2012 form 1040 However, if you are married filing jointly and estimated wages from the highest paying job are $65,000 or less, do not enter more than “3. Where to file 2012 form 1040 ”    Table 1-3. Where to file 2012 form 1040 Deductions and Adjustments Worksheet (Form W-4)—Line 5 a. Where to file 2012 form 1040  Married Filing Jointly or Qualifying Widow(er) If combined income from all sources is:   Multiply credits by: $0 – 42,000 10. Where to file 2012 form 1040 0 $42,001 – 98,000 6. Where to file 2012 form 1040 7 $98,001 – 180,000 4. Where to file 2012 form 1040 0 $180,001 – 270,000 3. Where to file 2012 form 1040 6 $270,001 – 440,000 3. Where to file 2012 form 1040 0 $440,001 – 490,000. Where to file 2012 form 1040 . Where to file 2012 form 1040 . Where to file 2012 form 1040 . Where to file 2012 form 1040 2. Where to file 2012 form 1040 9 $490,001 and over 2. Where to file 2012 form 1040 5 b. Where to file 2012 form 1040  Single If combined income from all sources is:   Multiply credits by: $0 – 19,000 10. Where to file 2012 form 1040 0 $19,001 – 47,000 6. Where to file 2012 form 1040 7 $47,001 – 104,000 4. Where to file 2012 form 1040 0 $104,001 – 205,000 3. Where to file 2012 form 1040 6 $205,001 – 430,000 3. Where to file 2012 form 1040 0 $430,001 and over 2. Where to file 2012 form 1040 5 c. Where to file 2012 form 1040  Head of Household If combined income from all sources is:   Multiply credits by: $0 – 30,000 10. Where to file 2012 form 1040 0 $30,001 – 66,000 6. Where to file 2012 form 1040 7 $66,001 – 150,000 4. Where to file 2012 form 1040 0 $150,001 – 235,000 3. Where to file 2012 form 1040 6 $235,001 – 430,000 3. Where to file 2012 form 1040 0 $430,001 – 460,000 2. Where to file 2012 form 1040 9 $460,001 and over 2. Where to file 2012 form 1040 5 d. Where to file 2012 form 1040  Married Filing Separately   If combined income from all sources is:   Multiply credits by: $0 – 21,000 10. Where to file 2012 form 1040 0 $21,001 – 49,000 6. Where to file 2012 form 1040 7 $49,001 – 90,000 4. Where to file 2012 form 1040 0 $90,001 – 135,000 3. Where to file 2012 form 1040 6 $135,001 – 220,000 3. Where to file 2012 form 1040 0 $220,001 – 245,000 2. Where to file 2012 form 1040 9 $245,001 and over 2. Where to file 2012 form 1040 5   Subtract line 2 from line 1 and enter the result (but not less than zero) on line 3 and on Form W-4, line 5. Where to file 2012 form 1040 If line 1 is more than or equal to line 2, do not use the rest of the worksheet. Where to file 2012 form 1040   If line 1 is less than line 2, enter “0” on Form W-4, line 5. Where to file 2012 form 1040 Then complete lines 4 through 9 of the worksheet to figure the additional withholding needed to avoid underwithholding. Where to file 2012 form 1040 Other amounts owed. Where to file 2012 form 1040   If you expect to owe amounts other than income tax, such as self-employment tax, include them on line 8. Where to file 2012 form 1040 The total is the additional withholding needed for the year. Where to file 2012 form 1040 Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules. Where to file 2012 form 1040 You accurately complete all the Form W-4 worksheets that apply to you. Where to file 2012 form 1040 You give your employer a new Form W-4 when changes occur. Where to file 2012 form 1040 But because the worksheets and withholding methods do not account for all possible situations, you may not be getting the right amount withheld. Where to file 2012 form 1040 This is most likely to happen in the following situations. Where to file 2012 form 1040 You are married and both you and your spouse work. Where to file 2012 form 1040 You have more than one job at a time. Where to file 2012 form 1040 You have nonwage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income. Where to file 2012 form 1040 You will owe additional amounts with your return, such as self-employment tax. Where to file 2012 form 1040 Your withholding is based on obsolete Form W-4 information for a substantial part of the year. Where to file 2012 form 1040 Your earnings are more than $130,000 if you are single or $180,000 if you are married. Where to file 2012 form 1040 You work only part of the year. Where to file 2012 form 1040 You change the number of your withholding allowances during the year. Where to file 2012 form 1040 You are subject to Additional Medicare Tax or Net Investment Income Tax. Where to file 2012 form 1040 If you anticipate liability for Additional Medicare Tax or Net Investment Income Tax, you may request that your employer withhold an additional amount of income tax withholding on Form W-4. Where to file 2012 form 1040 Part-Year Method If you work only part of the year and your employer agrees to use the part-year withholding method, less tax will be withheld from each wage payment than would be withheld if you worked all year. Where to file 2012 form 1040 To be eligible for the part-year method, you must meet both of the following requirements. Where to file 2012 form 1040 You must use the calendar year (the 12 months from January 1 through December 31) as your tax year. Where to file 2012 form 1040 You cannot use a fiscal year. Where to file 2012 form 1040 You must not expect to be employed for more than 245 days during the year. Where to file 2012 form 1040 To figure this limit, count all calendar days that you are employed (including weekends, vacations, and sick days) beginning with the first day you are on the job for pay and ending with your last day of work. Where to file 2012 form 1040 If you are temporarily laid off for 30 days or less, count those days too. Where to file 2012 form 1040 If you are laid off for more than 30 days, do not count those days. Where to file 2012 form 1040 You will not meet this requirement if you begin working before May 1 and expect to work for the rest of the year. Where to file 2012 form 1040 How to apply for the part-year method. Where to file 2012 form 1040   You must ask your employer in writing to use this method. Where to file 2012 form 1040 The request must state all three of the following. Where to file 2012 form 1040 The date of your last day of work for any prior employer during the current calendar year. Where to file 2012 form 1040 That you do not expect to be employed more than 245 days during the current calendar year. Where to file 2012 form 1040 That you use the calendar year as your tax year. Where to file 2012 form 1040 Cumulative Wage Method If you change the number of your withholding allowances during the year, too much or too little tax may have been withheld for the period before you made the change. Where to file 2012 form 1040 You may be able to compensate for this if your employer agrees to use the cumulative wage withholding method for the rest of the year. Where to file 2012 form 1040 You must ask your employer in writing to use this method. Where to file 2012 form 1040 To be eligible, you must have been paid for the same kind of payroll period (weekly, biweekly, etc. Where to file 2012 form 1040 ) since the beginning of the year. Where to file 2012 form 1040 Aids for Figuring Your Withholding IRS Withholding Calculator. Where to file 2012 form 1040   If you had too much or too little income tax withheld from your pay, the IRS provides a withholding calculator on its website. Where to file 2012 form 1040 Go to www. Where to file 2012 form 1040 irs. Where to file 2012 form 1040 gov/Individuals/IRS-Withholding-Calculator. Where to file 2012 form 1040 It can help you determine the correct amount to be withheld any time during the year. Where to file 2012 form 1040 Rules Your Employer Must Follow It may be helpful for you to know some of the withholding rules your employer must follow. Where to file 2012 form 1040 These rules can affect how to fill out your Form W-4 and how to handle problems that may arise. Where to file 2012 form 1040 New Form W-4. Where to file 2012 form 1040   When you start a new job, your employer should give you a Form W-4 to fill out. Where to file 2012 form 1040 Beginning with your first payday, your employer will use the information you give on the form to figure your withholding. Where to file 2012 form 1040   If you later fill out a new Form W-4, your employer can put it into effect as soon as possible. Where to file 2012 form 1040 The deadline for putting it into effect is the start of the first payroll period ending 30 or more days after you turn it in. Where to file 2012 form 1040 No Form W-4. Where to file 2012 form 1040   If you do not give your employer a completed Form W-4, your employer must withhold at the highest rate, as if you were single and claimed no withholding allowances. Where to file 2012 form 1040 Repaying withheld tax. Where to file 2012 form 1040   If you find you are having too much tax withheld because you did not claim all the withholding allowances you are entitled to, you should give your employer a new Form W-4. Where to file 2012 form 1040 Your employer cannot repay any of the tax previously withheld. Where to file 2012 form 1040 Instead, claim the full amount withheld when you file your tax return. Where to file 2012 form 1040   However, if your employer has withheld more than the correct amount of tax for the Form W-4 you have in effect, you do not have to fill out a new Form W-4 to have your withholding lowered to the correct amount. Where to file 2012 form 1040 Your employer can repay the amount that was withheld incorrectly. Where to file 2012 form 1040 If you are not repaid, your Form W-2 will reflect the full amount actually withheld, which you would claim when you file your tax return. Where to file 2012 form 1040 IRS review of your withholding. Where to file 2012 form 1040   Whether you are entitled to claim a certain number of allowances or a complete exemption from withholding is subject to review by the IRS. Where to file 2012 form 1040 Your employer may be required to send a copy of the Form W-4 to the IRS. Where to file 2012 form 1040 There is a penalty for supplying false information on Form W-4. Where to file 2012 form 1040 See Penalties , later. Where to file 2012 form 1040   If the IRS determines that you cannot claim more than a specified number of withholding allowances or claim a complete exemption from withholding, the IRS will issue a notice of the maximum number of withholding allowances permitted (commonly referred to as a “lock-in letter”) to both you and your employer. Where to file 2012 form 1040   The IRS will provide a period of time during which you can dispute the determination before your employer adjusts your withholding. Where to file 2012 form 1040 If you believe that you are entitled to claim complete exemption from withholding or claim more withholding allowances than the maximum number specified by the IRS in the lock-in letter, you must submit a new Form W-4 and a written statement to support your claims to the IRS. Where to file 2012 form 1040 Contact information (a toll-free number and an IRS office address) will be provided in the lock-in letter. Where to file 2012 form 1040 At the end of this period, if you have not responded or if your response is not adequate, your employer will be required to withhold based on the original lock-in letter. Where to file 2012 form 1040   After the lock-in letter takes effect, your employer must withhold tax on the basis of the withholding rate (marital status) and maximum number of withholding allowances specified in that letter. Where to file 2012 form 1040   If you later believe that you are entitled to claim exemption from withholding or more allowances than the IRS determined, you can complete a new Form W-4 and a written statement to support the claims made on the Form W-4 and send them directly to the IRS address shown on the lock-in letter. Where to file 2012 form 1040 Your employer must continue to figure your withholding on the basis of the number of allowances previously determined by the IRS until the IRS advises your employer otherwise. Where to file 2012 form 1040   At any time, either before or after the lock-in letter becomes effective, you may give your employer a new Form W-4 that does not claim complete exemption from withholding and results in more income tax withheld than specified in the lock-in letter. Where to file 2012 form 1040 Your employer must then withhold tax based on this new Form W-4. Where to file 2012 form 1040   Additional information is available at IRS. Where to file 2012 form 1040 gov. Where to file 2012 form 1040 Enter “withholding compliance questions” in the search box. Where to file 2012 form 1040 Exemption From Withholding If you claim exemption from withholding, your employer will not withhold federal income tax from your wages. Where to file 2012 form 1040 The exemption applies only to income tax, not to social security or Medicare tax. Where to file 2012 form 1040 You can claim exemption from withholding for 2014 only if both of the following situations apply. Where to file 2012 form 1040 For 2013 you had a right to a refund of all federal income tax withheld because you had no tax liability. Where to file 2012 form 1040 For 2014 you expect a refund of all federal income tax withheld because you expect to have no tax liability. Where to file 2012 form 1040 Use Figure 1-A to help you decide whether you can claim exemption from withholding. Where to file 2012 form 1040 Do not use Figure 1-A if you: Are 65 or older, Are blind, Will itemize deductions on your 2014 return, Will claim an exemption for a dependent on your 2014 return, or Will claim any tax credits on your 2014 return. Where to file 2012 form 1040 These situations are discussed later. Where to file 2012 form 1040 Students. Where to file 2012 form 1040   If you are a student, you are not automatically exempt. Where to file 2012 form 1040 If you work only part time or during the summer, you may qualify for exemption from withholding. Where to file 2012 form 1040 Example 1. Where to file 2012 form 1040 You are a high school student and expect to earn $2,500 from a summer job. Where to file 2012 form 1040 You do not expect to have any other income during the year, and your parents will be able to claim an exemption for you on their tax return. Where to file 2012 form 1040 You worked last summer and had $375 federal income tax withheld from your pay. Where to file 2012 form 1040 The entire $375 was refunded when you filed your 2013 return. Where to file 2012 form 1040 Using Figure 1-A, you find that you can claim exemption from withholding. Where to file 2012 form 1040 Please click here for the text description of the image. Where to file 2012 form 1040 Figure 1-A: Exemption From Withholding on Form W-4 Example 2. Where to file 2012 form 1040 The facts are the same as in Example 1, except that you also have a savings account and expect to have $400 interest income during the year. Where to file 2012 form 1040 Using Figure 1-A, you find that you cannot claim exemption from withholding because your unearned income will be more than $350 and your total income will be more than $1,000. Where to file 2012 form 1040    You may have to file a tax return, even if you are exempt from withholding. Where to file 2012 form 1040 See Publication 501 to see whether you must file a return. Where to file 2012 form 1040    Age 65 or older or blind. Where to file 2012 form 1040 If you are 65 or older or blind, use Worksheet 1-3 or Worksheet 1-4, to help you decide whether you can claim exemption from withholding. Where to file 2012 form 1040 Do not use either worksheet if you will itemize deductions, claim exemptions for dependents, or claim tax credits on your 2014 return. Where to file 2012 form 1040 Instead, see Itemizing deductions or claiming exemptions or credits, next. Where to file 2012 form 1040 Itemizing deductions or claiming exemptions or credits. Where to file 2012 form 1040   If you had no tax liability for 2013, and you will: Itemize deductions, Claim an exemption for a dependent, or Claim a tax credit, use the 2014 Estimated Tax Worksheet (also see chapter 2), to figure your 2014 expected tax liability. Where to file 2012 form 1040 You can claim exemption from withholding only if your total expected tax liability (line 13c of the worksheet) is zero. Where to file 2012 form 1040 Claiming exemption from withholding. Where to file 2012 form 1040   To claim exemption, you must give your employer a Form W-4. Where to file 2012 form 1040 Do not complete lines 5 and 6. Where to file 2012 form 1040 Enter “Exempt” on line 7. Where to file 2012 form 1040   If you claim exemption, but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. Where to file 2012 form 1040 If you claim exemption in 2014 but you expect to owe income tax for 2015, you must file a new Form W-4 by December 1, 2014. Where to file 2012 form 1040   Your claim of exempt status may be reviewed by the IRS. Where to file 2012 form 1040 See IRS review of your withholding , earlier. Where to file 2012 form 1040 An exemption is good for only 1 year. Where to file 2012 form 1040   You must give your employer a new Form W-4 by February 15 each year to continue your exemption. Where to file 2012 form 1040 Supplemental Wages Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under certain plans. Where to file 2012 form 1040 The payer can figure withholding on supplemental wages using the same method used for your regular wages. Where to file 2012 form 1040 However, if these payments are identified separately from regular wages, your employer or other payer of supplemental wages can withhold income tax from these wages at a flat rate. Where to file 2012 form 1040 Expense allowances. Where to file 2012 form 1040   Reimbursements or other expense allowances paid by your employer under a nonaccountable plan are treated as supplemental wages. Where to file 2012 form 1040 A nonaccountable plan is a reimbursement arrangement that does not require you to account for, or prove, your business expenses to your employer or does not require you to return your employer's payments that are more than your proven expenses. Where to file 2012 form 1040   Reimbursements or other expense allowances paid under an accountable plan that are more than your proven expenses are treated as paid under a nonaccountable plan if you do not return the excess payments within a reasonable period of time. Where to file 2012 form 1040 Accountable plan. Where to file 2012 form 1040   To be an accountable plan, your employer's reimbursement or allowance arrangement must include all three of the following rules. Where to file 2012 form 1040 Your expenses must have a business connection. Where to file 2012 form 1040 That is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Where to file 2012 form 1040 You must adequately account to your employer for these expenses within a reasonable period of time. Where to file 2012 form 1040 You must return any excess reimbursement or allowance within a reasonable period of time. Where to file 2012 form 1040    An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer. Where to file 2012 form 1040   The definition of reasonable period of time depends on the facts and circumstances of your situation. Where to file 2012 form 1040 However, regardless of those facts and circumstances, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Where to file 2012 form 1040 You receive an advance within 30 days of the time you have an expense. Where to file 2012 form 1040 You adequately account for your expenses within 60 days after they were paid or incurred. Where to file 2012 form 1040 You return any excess reimbursement within 120 days after the expense was paid or incurred. Where to file 2012 form 1040 You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. Where to file 2012 form 1040 Nonaccountable plan. Where to file 2012 form 1040   Any plan that does not meet the definition of an accountable plan is considered a nonaccountable plan. Where to file 2012 form 1040 For more information about accountable and nonaccountable plans, see chapter 6 of Publication 463, Travel, Entertainment, Gift, and Car Expenses. Where to file 2012 form 1040 Penalties You may have to pay a penalty of $500 if both of the following apply. Where to file 2012 form 1040 You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld. Where to file 2012 form 1040 You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4. Where to file 2012 form 1040 There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. Where to file 2012 form 1040 The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both. Where to file 2012 form 1040 These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. Where to file 2012 form 1040 A simple error or an honest mistake will not result in one of these penalties. Where to file 2012 form 1040 For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a Form W-4 penalty. Where to file 2012 form 1040 However, see chapter 4 for information on the penalty for underpaying your tax. Where to file 2012 form 1040 Tips The tips you receive while working on your job are considered part of your pay. Where to file 2012 form 1040 You must include your tips on your tax return on the same line as your regular pay. Where to file 2012 form 1040 However, tax is not withheld directly from tip income, as it is from your regular pay. Where to file 2012 form 1040 Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay. Where to file 2012 form 1040 Reporting tips to your employer. Where to file 2012 form 1040   If you receive tips of $20 or more in a month while working for any one employer, you must report to your employer the total amount of tips you receive on the job during the month. Where to file 2012 form 1040 The report is due by the 10th day of the following month. Where to file 2012 form 1040   If you have more than one job, make a separate report to each employer. Where to file 2012 form 1040 Report only the tips you received while working for that employer, and only if they total $20 or more for the month. Where to file 2012 form 1040 How employer figures amount to withhold. Where to file 2012 form 1040   The tips you report to your employer are counted as part of your income for the month you report them. Where to file 2012 form 1040 Your employer can figure your withholding in either of two ways. Where to file 2012 form 1040 By withholding at the regular rate on the sum of your pay plus your reported tips. Where to file 2012 form 1040 By withholding at the regular rate on your pay plus a percentage of your reported tips. Where to file 2012 form 1040 Not enough pay to cover taxes. Where to file 2012 form 1040   If your regular pay is not enough for your employer to withhold all the tax (including income tax and social security and Medicare taxes (or the equivalent railroad retirement tax)) due on your pay plus your tips, you can give your employer money to cover the shortage. Where to file 2012 form 1040   If you do not give your employer money to cover the shortage, your employer first withholds as much Medicare tax and social security or railroad retirement tax as possible, up to the proper amount, and then withholds income tax up to the full amount of your pay. Where to file 2012 form 1040 If not enough tax is withheld, you may have to pay estimated tax. Where to file 2012 form 1040 When you file your return, you also may have to pay any Medicare and social security tax or railroad retirement tax your employer could not withhold. Where to file 2012 form 1040 Tips not reported to your employer. Where to file 2012 form 1040   On your tax return, you must report all the tips you receive during the year, even tips you do not report to your employer (this includes the value of any noncash tips you received, such as tickets, passes, or other items of value). Where to file 2012 form 1040 Make sure you are having enough tax withheld, or are paying enough estimated tax (see chapter 2), to cover all your tip income. Where to file 2012 form 1040 Allocated tips. Where to file 2012 form 1040   If you work in a large food or beverage establishment, your employer may have to report an allocated amount of tips on your Form W-2. Where to file 2012 form 1040   Your employer should not withhold income tax, Medicare tax, and social security or railroad retirement tax on the allocated amount. Where to file 2012 form 1040 Withholding is based only on your pay plus your reported tips. Where to file 2012 form 1040 Your employer should refund to you any incorrectly withheld tax. Where to file 2012 form 1040 More information. Where to file 2012 form 1040   For more information on the reporting and withholding rules for tip income and on tip allocation, see Publi