WHO MUST FILE?
See also IRS Publication 17 Your Federal Income Tax
Tax Information for Students Who Take a Summer Job
Many students take a job in the summer after school lets out. If it’s your first job it gives you a chance to learn about the working world. That includes taxes we pay to support the place where we live, our state and our nation. Here are eight things that students who take a summer job should know about taxes:
1. Don’t be surprised when your employer withholds taxes from your paychecks. That’s how you pay your taxes when you’re an employee. If you’re self-employed, you may have to pay estimated taxes directly to the IRS on certain dates during the year. This is how our pay-as-you-go tax system works.
2. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.
3. Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer. And you must report all of your yearly tips on your tax return.
4. Money you earn doing work for others is taxable. Some work you do may count as self-employment. This can include jobs like baby-sitting and lawn mowing. Keep good records of expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction may help lower your taxes.
5. If you’re in ROTC, your active duty pay, such as pay you get for summer camp, is taxable. A subsistence allowance you get while in advanced training isn’t taxable.
6. You may not earn enough from your summer job to owe income tax. But your employer usually must withhold Social Security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count toward your coverage under the Social Security system.
7. If you’re a newspaper carrier or distributor, special rules apply. If you meet certain conditions, you’re considered self-employed. If you don’t meet those conditions and are under age 18, you are usually exempt from Social Security and Medicare taxes.
8. You may not earn enough money from your summer job to be required to file a tax return. Even if that’s true, you may still want to file. For example, if your employer withheld income tax from your pay, you’ll have to file a return to get your taxes refunded. You can prepare and e-file your tax return for free using IRS Free File. It’s available exclusively on IRS.gov.
Visit IRS.gov for more about the tax rules for students.
1. Don’t be surprised when your employer withholds taxes from your paychecks. That’s how you pay your taxes when you’re an employee. If you’re self-employed, you may have to pay estimated taxes directly to the IRS on certain dates during the year. This is how our pay-as-you-go tax system works.
2. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.
3. Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer. And you must report all of your yearly tips on your tax return.
4. Money you earn doing work for others is taxable. Some work you do may count as self-employment. This can include jobs like baby-sitting and lawn mowing. Keep good records of expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction may help lower your taxes.
5. If you’re in ROTC, your active duty pay, such as pay you get for summer camp, is taxable. A subsistence allowance you get while in advanced training isn’t taxable.
6. You may not earn enough from your summer job to owe income tax. But your employer usually must withhold Social Security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count toward your coverage under the Social Security system.
7. If you’re a newspaper carrier or distributor, special rules apply. If you meet certain conditions, you’re considered self-employed. If you don’t meet those conditions and are under age 18, you are usually exempt from Social Security and Medicare taxes.
8. You may not earn enough money from your summer job to be required to file a tax return. Even if that’s true, you may still want to file. For example, if your employer withheld income tax from your pay, you’ll have to file a return to get your taxes refunded. You can prepare and e-file your tax return for free using IRS Free File. It’s available exclusively on IRS.gov.
Visit IRS.gov for more about the tax rules for students.
Who Should File a 2013 Tax Return?
Do you need to file a federal tax return this year? Perhaps. The amount of your income, filing status, age and other factors determine if you must file.
Even if you don’t have to file a tax return, there are times when you should. Here are five good reasons why you should file a return, even if you’re not required to do so:
1. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.
2. Earned Income Tax Credit. Did you work and earn less than $51,567 last year? You could receive EITC as a tax refund if you qualify. Families with qualifying children may be eligible for up to $6,044. Use the EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return and claim it.
3. Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit. To claim it, you need to file Schedule 8812, Child Tax Credit, with your tax return.
4. American Opportunity Credit. Are you a student or do you support a student? If so, you may be eligible for this credit. Students in their first four years of higher education may qualify for as much as $2,500. Even those who owe no tax may get up to $1,000 of the credit refunded per eligible student. You must file Form 8863, Education Credits, with your tax return to claim this credit.
5. Health Coverage Tax Credit. Did you receive Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation? If so, you may qualify for the Health Coverage Tax Credit. The HCTC helps make health insurance more affordable for you and your family. This credit pays 72.5 percent of qualified health insurance premiums. Visit IRS.gov for more on this credit.
To sum it all up, check to see if you would benefit from filing a federal tax return. You may qualify for a tax refund even if you don’t have to file. And remember, if you do qualify for a refund, you must file a return to claim it.
The instructions for Forms 1040, 1040A or 1040EZ list income tax filing requirements. You can also use the Interactive Tax Assistant tool on IRS.gov to see if you need to file. The tool is available 24/7 to answer many tax questions.
Even if you don’t have to file a tax return, there are times when you should. Here are five good reasons why you should file a return, even if you’re not required to do so:
1. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.
2. Earned Income Tax Credit. Did you work and earn less than $51,567 last year? You could receive EITC as a tax refund if you qualify. Families with qualifying children may be eligible for up to $6,044. Use the EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return and claim it.
3. Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit. To claim it, you need to file Schedule 8812, Child Tax Credit, with your tax return.
4. American Opportunity Credit. Are you a student or do you support a student? If so, you may be eligible for this credit. Students in their first four years of higher education may qualify for as much as $2,500. Even those who owe no tax may get up to $1,000 of the credit refunded per eligible student. You must file Form 8863, Education Credits, with your tax return to claim this credit.
5. Health Coverage Tax Credit. Did you receive Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation? If so, you may qualify for the Health Coverage Tax Credit. The HCTC helps make health insurance more affordable for you and your family. This credit pays 72.5 percent of qualified health insurance premiums. Visit IRS.gov for more on this credit.
To sum it all up, check to see if you would benefit from filing a federal tax return. You may qualify for a tax refund even if you don’t have to file. And remember, if you do qualify for a refund, you must file a return to claim it.
The instructions for Forms 1040, 1040A or 1040EZ list income tax filing requirements. You can also use the Interactive Tax Assistant tool on IRS.gov to see if you need to file. The tool is available 24/7 to answer many tax questions.
Determining Your Correct Filing Status
It’s important to use the correct filing status when filing your income tax return. It can impact the tax benefits you receive, the amount of your standard deduction and the amount of taxes you pay. It may even impact whether you must file a federal income tax return.
Are you single, married or the head of your household? There are five filing statuses on a federal tax return. The most common are "Single," "Married Filing Jointly" and "Head of Household." The Head of Household status may be the one most often claimed in error.
The IRS offers these seven facts to help you choose the best filing status for you.
1. Marital Status. Your marital status on the last day of the year is your marital status for the entire year.
2. If You Have a Choice. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes.
3. Single Filing Status. Single filing status generally applies if you are not married, divorced or legally separated according to state law.
4. Married Filing Jointly. A married couple may file a return together using the Married Filing Jointly status. If your spouse died during 2012, you usually may still file a joint return for that year.
5. Married Filing Separately. If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately.
6. Head of Household. The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person.
7. Qualifying Widow(er) with Dependent Child. This status may apply if your spouse died during 2010 or 2011, you have a dependent child and you meet certain other conditions.
IRS e-file is the easiest way to file and will help you determine the correct filing status. If you file a paper return, the Interactive Tax Assistant at IRS.gov is a tool that will help you choose your filing status.
Are you single, married or the head of your household? There are five filing statuses on a federal tax return. The most common are "Single," "Married Filing Jointly" and "Head of Household." The Head of Household status may be the one most often claimed in error.
The IRS offers these seven facts to help you choose the best filing status for you.
1. Marital Status. Your marital status on the last day of the year is your marital status for the entire year.
2. If You Have a Choice. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes.
3. Single Filing Status. Single filing status generally applies if you are not married, divorced or legally separated according to state law.
4. Married Filing Jointly. A married couple may file a return together using the Married Filing Jointly status. If your spouse died during 2012, you usually may still file a joint return for that year.
5. Married Filing Separately. If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately.
6. Head of Household. The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person.
7. Qualifying Widow(er) with Dependent Child. This status may apply if your spouse died during 2010 or 2011, you have a dependent child and you meet certain other conditions.
IRS e-file is the easiest way to file and will help you determine the correct filing status. If you file a paper return, the Interactive Tax Assistant at IRS.gov is a tool that will help you choose your filing status.
Who Should File a 2012 Tax Return?
If you received income during 2012, you may need to file a tax return in 2013. The amount of your income, your filing status, your age and the type of income you received will determine whether you’re required to file. Even if you are not required to file a tax return, you may still want to file. You may get a refund if you’ve had too much federal income tax withheld from your pay or qualify for certain tax credits.
You can find income tax filing requirements on IRS.gov. The instructions for Forms 1040, 1040A or 1040EZ also list filing requirements. The Interactive Tax Assistant tool, also available on the IRS website, is another helpful resource. The ITA tool answers many of your tax law questions including whether you need to file a return.
Even if you’ve determined that you don’t need to file a tax return this year, you may still want to file. Here are five reasons why:
1. Federal Income Tax Withheld. If your employer withheld federal income tax from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax, you could be due a refund. File a return to claim any excess tax you paid during the year.
2. Earned Income Tax Credit. If you worked but earned less than $50,270 last year, you may qualify for EITC. EITC is a refundable tax credit; which means if you qualify you could receive EITC as a tax refund. Families with qualifying children may qualify to get up to $5,891 dollars. You can’t get the credit unless you file a return and claim it. Use the EITC Assistant to find out if you qualify.
3. Additional Child Tax Credit. If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit.
4. American Opportunity Credit. If you or someone you support is a student, you might be eligible for this credit. Students in their first four years of postsecondary education may qualify for as much as $2,500 through this partially refundable credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.
5. Health Coverage Tax Credit. If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.
You can find income tax filing requirements on IRS.gov. The instructions for Forms 1040, 1040A or 1040EZ also list filing requirements. The Interactive Tax Assistant tool, also available on the IRS website, is another helpful resource. The ITA tool answers many of your tax law questions including whether you need to file a return.
Even if you’ve determined that you don’t need to file a tax return this year, you may still want to file. Here are five reasons why:
1. Federal Income Tax Withheld. If your employer withheld federal income tax from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax, you could be due a refund. File a return to claim any excess tax you paid during the year.
2. Earned Income Tax Credit. If you worked but earned less than $50,270 last year, you may qualify for EITC. EITC is a refundable tax credit; which means if you qualify you could receive EITC as a tax refund. Families with qualifying children may qualify to get up to $5,891 dollars. You can’t get the credit unless you file a return and claim it. Use the EITC Assistant to find out if you qualify.
3. Additional Child Tax Credit. If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit.
4. American Opportunity Credit. If you or someone you support is a student, you might be eligible for this credit. Students in their first four years of postsecondary education may qualify for as much as $2,500 through this partially refundable credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.
5. Health Coverage Tax Credit. If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.
Filing Requirements for Most Taxpayers
|
If your filing status is . . .
Single Married filing jointly*** Married filing separately Head of Household Qualifying Widow(er) |
AND at the end of 2011 you were . . . *
Under 65 65 or older under 65 (both spouses) 65 or older (one spouse) 65 or older (both spouses) any age under 65 65 or older with dependent child under 65 65 or older |
THEN file a return if your gross income was at least . . . **
$9,500 $10,950 $19,000 $20,150 $21,300 $3,700 $12,200 $13,650 $15,300 $16,450 |
*If you were born on January 1, 1947, you are considered to be age 65 at the end of 2011.
**Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2011 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9.
***If you did not live with your spouse at the end of 2011 (or on the date your spouse died) and your gross income was at least $3,700, you must file a return regardless of your age.
**Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time during 2011 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for Form 1040 or 1040A or Publication 915 to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9.
***If you did not live with your spouse at the end of 2011 (or on the date your spouse died) and your gross income was at least $3,700, you must file a return regardless of your age.
A Lesson from the IRS for Students Starting a Summer Job
School’s out, but the IRS has another lesson for students who will be starting summer jobs. Summer jobs represent an opportunity for students to learn about the tax system.
Not all of the money they earn will be included in their paychecks because their employer must withhold taxes.
Here are six things the IRS wants students to be aware of when they start a summer job.
1. When you first start a new job you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. If you have multiple summer jobs, make sure all your employers are withholding an adequate amount of taxes to cover your total income tax liability.
2. Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tips you receive are taxable income and are therefore subject to federal income tax.
3. Many students do odd jobs over the summer to make extra cash. Earnings you receive from self-employment – including jobs like baby-sitting and lawn mowing – are subject to income tax.
4. Even if you do not earn enough money to owe income tax, you will probably have to pay employment taxes. Your employer will withhold these taxes from your paycheck. If you earn $400 or more from self-employment, you will have to pay self-employment tax. This pays for benefits under the Social Security system that are available for self-employed individuals the same as they are for employees that have taxes withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE, Self-Employment Tax.
5. Food and lodging allowances paid to ROTC students in advanced training are not taxable. However, active duty pay – such as pay received during summer camp – is taxable.
6. Special rules apply to services you perform as a newspaper carrier or distributor. You are treated as self-employed for federal tax purposes regardless of your age if you meet the following conditions:
More information about income tax withholding and employment taxes can be found at IRS.gov, the official IRS website.
Not all of the money they earn will be included in their paychecks because their employer must withhold taxes.
Here are six things the IRS wants students to be aware of when they start a summer job.
1. When you first start a new job you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. If you have multiple summer jobs, make sure all your employers are withholding an adequate amount of taxes to cover your total income tax liability.
2. Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tips you receive are taxable income and are therefore subject to federal income tax.
3. Many students do odd jobs over the summer to make extra cash. Earnings you receive from self-employment – including jobs like baby-sitting and lawn mowing – are subject to income tax.
4. Even if you do not earn enough money to owe income tax, you will probably have to pay employment taxes. Your employer will withhold these taxes from your paycheck. If you earn $400 or more from self-employment, you will have to pay self-employment tax. This pays for benefits under the Social Security system that are available for self-employed individuals the same as they are for employees that have taxes withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE, Self-Employment Tax.
5. Food and lodging allowances paid to ROTC students in advanced training are not taxable. However, active duty pay – such as pay received during summer camp – is taxable.
6. Special rules apply to services you perform as a newspaper carrier or distributor. You are treated as self-employed for federal tax purposes regardless of your age if you meet the following conditions:
- You are in the business of delivering newspapers.
- All your pay for these services directly relates to sales rather than to the number of hours worked.
- You perform the delivery services under a written contract which states that you will not be treated as an employee for federal tax purposes.
More information about income tax withholding and employment taxes can be found at IRS.gov, the official IRS website.
Do I Need to File a Tax Return This Year?
You are required to file a federal income tax return if your income is above a certain level, which varies depending on your filing status, age and the type of income you receive. However, the Internal Revenue Service reminds taxpayers that some people should file even if they aren't required to because they may get a refund if they had taxes withheld or they may qualify for refundable credits.
To find out if you need to file, check the Individuals section of the IRS website at IRS.gov or consult the instructions for Form 1040, 1040A or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.
Even if you don’t have to file for 2011, here are six reasons why you may want to:
1. Federal Income Tax Withheld You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.
2. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund. To get the credit you must file a return and claim it.
3. Additional Child Tax Credit This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.
5. Adoption Credit You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.
6. Health Coverage Tax Credit Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.
Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.
For more information about filing requirements and your eligibility to receive tax credits, visit IRS.gov.
To find out if you need to file, check the Individuals section of the IRS website at IRS.gov or consult the instructions for Form 1040, 1040A or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.
Even if you don’t have to file for 2011, here are six reasons why you may want to:
1. Federal Income Tax Withheld You should file to get money back if your employer withheld federal income tax from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.
2. Earned Income Tax Credit You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund. To get the credit you must file a return and claim it.
3. Additional Child Tax Credit This refundable credit may be available if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.
5. Adoption Credit You may be able to claim a refundable tax credit for qualified expenses you paid to adopt an eligible child.
6. Health Coverage Tax Credit Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.
Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.
For more information about filing requirements and your eligibility to receive tax credits, visit IRS.gov.
Alien Tax Clearance
If you are either a resident or a nonresident alien departing the United States, you will usually have to show that you have complied with the U.S. income tax laws before departing from the United States. You do this by obtaining a tax clearance document, commonly called a "Departure Permit" or "Sailing Permit" from the IRS.
Certain foreign diplomats, employees of foreign governments, students, trainees and exchange visitors do not need a departure permit. To find out whether you belong in one of these excluded categories, refer to Publication 519, U.S. Tax Guide for Aliens.
Non-Resident Aliens
Nonresident aliens who did not have taxable income for the past year and who do not have taxable income for the tax year up to and including the date of departure, may use Form 2063 (PDF), U.S. Departing Alien Income Tax Statement, to apply for a departure permit. Nonresident aliens who have any U.S. taxable income must complete Form 1040-C (PDF), U.S. Departing Alien Income Tax Return, and pay your U.S. tax liability as shown on the Form 1040-C in order to receive a departure permit. In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due. Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
Resident Aliens
If you are a resident alien and you did not have taxable income for the prior year and do not have taxable income for the tax year up to and including the date of departure, or you are a resident alien who is leaving only temporarily, use Form 2063 (PDF) to apply for a departure permit. Resident aliens who have taxable income may still use Form 2063 to apply for a departure permit if the IRS is satisfied that your departure will not hinder the collection of tax. If you are a resident alien leaving the United States with no definite plans to return for the year, you will have to complete Form 1040-C (PDF), and pay your tax liability as shown on the Form 1040-C in order to get a departure permit. In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due. Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
When and How to Apply for a Departure Permit
You must obtain your departure permit before you leave the United States. You should apply for the departure permit no earlier than 30 days before you plan to leave, but at least two weeks in advance of your departure. To get your departure permit, visit your nearest Taxpayer Assistance Center (walk-in IRS office). If you are married to an alien who is leaving the country with you, both of you must go to the IRS office. For information on the location of the Taxpayer Assistance Center (walk-in IRS office) nearest to you, call 800-829-1040, or visit www.irs.gov.
You must bring with you all the following records and information for the current year that apply to you:
Additional Rules Applicable to Departing Resident Aliens
Departing resident aliens who have been treated as U.S. resident aliens during at least three consecutive calendar years, who will cease to be treated as U.S. residents for a period of less than three years before being treated as U.S. residents again will be covered by section 7701(b)(10). These individuals will be subject to tax under section 877(b) for the period lasting less than three years during which the individual is not treated as a U.S. resident before the individual resumes being treated as a U.S. resident again.
If you are a departing resident alien and you plan to surrender your green card and you have been a lawful permanent resident (green card holder) in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which you surrender your green card, you must file Form 8854 (PDF), Expatriation Information Statement, and notify the Department of Homeland Security of your termination of residency
Certain expatriates that renounced their U.S. citizenship or terminated their long-term resident status before June 17, 2008, might be subject to alternative tax regime under section 877 for 10 years after expatriation if they met certain statutory requirements. Section 877 no longer applies to those individuals who expatriate after June 16, 2008.
If you are a long-term resident and you expatriate after June 16, 2008, you may be subject to the new mark-to-market regime of section 877A, the new expatriation law. Those expatriates subject to the mark-to-market regime of section 877A will be treated as having sold all of their property for fair market value on the day before they expatriate and will be subject to tax on the unrealized gain above $600.000. This $600,000 exclusion amount will be annually adjusted by a cost of living adjustment factor for calendar years after 2008.
Any gains or losses subsequently realized on actual disposition of the property will be adjusted for gains and losses taken into account as a result of the deemed sale, without regard to the $600,000 exclusion amount. Taxpayers may elect to defer payment of tax attributable to property deemed sold under procedures currently set forth in Form 8854.
The mark-to-market regime described above will apply to most types of property interests held by the individual on the date of relinquishment of citizenship or termination of residency, with certain statutory exceptions. Deferred compensation items, specified tax deferred accounts, and interests in non-grantor trusts, are excepted from the mark-to-market regime, but are subject to certain special rules that may require current payment of tax and/or impose additional reporting requirements.
The new mark-to-market regime applies to any U.S. citizen who relinquishes citizenship and any long-term resident who terminates U.S. residency, if such individual is a "covered expatriate." A covered expatriate is an expatriate that (1) has an average annual net income tax liability for the five preceding years ending before the date of the loss of U.S. citizenship or residency termination that exceeds $145,000 (as adjusted for inflation in 2009); (2) has a net worth of $2 million or more on such date; or (3) fails to certify under penalties of perjury, on Form 8854, that he or she has complied with all U.S. Federal tax obligations for the preceding five tax years.
In addition, the new law will impose a transfer tax on certain gifts or bequests (transfers made at death) made to U.S. persons from individuals treated as covered expatriates.
A modified Form 8854 is available in order for taxpayers to comply with the new law. Covered expatriates that had deferred compensation, a specified tax deferred account, or an interest in a non-grantor trust on the day before they expatriated must file new Form W-8CE, Notice of Expatriation and Waiver of Treaty Benefits, with the payer of such income.
Certain foreign diplomats, employees of foreign governments, students, trainees and exchange visitors do not need a departure permit. To find out whether you belong in one of these excluded categories, refer to Publication 519, U.S. Tax Guide for Aliens.
Non-Resident Aliens
Nonresident aliens who did not have taxable income for the past year and who do not have taxable income for the tax year up to and including the date of departure, may use Form 2063 (PDF), U.S. Departing Alien Income Tax Statement, to apply for a departure permit. Nonresident aliens who have any U.S. taxable income must complete Form 1040-C (PDF), U.S. Departing Alien Income Tax Return, and pay your U.S. tax liability as shown on the Form 1040-C in order to receive a departure permit. In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due. Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
Resident Aliens
If you are a resident alien and you did not have taxable income for the prior year and do not have taxable income for the tax year up to and including the date of departure, or you are a resident alien who is leaving only temporarily, use Form 2063 (PDF) to apply for a departure permit. Resident aliens who have taxable income may still use Form 2063 to apply for a departure permit if the IRS is satisfied that your departure will not hinder the collection of tax. If you are a resident alien leaving the United States with no definite plans to return for the year, you will have to complete Form 1040-C (PDF), and pay your tax liability as shown on the Form 1040-C in order to get a departure permit. In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due. Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
When and How to Apply for a Departure Permit
You must obtain your departure permit before you leave the United States. You should apply for the departure permit no earlier than 30 days before you plan to leave, but at least two weeks in advance of your departure. To get your departure permit, visit your nearest Taxpayer Assistance Center (walk-in IRS office). If you are married to an alien who is leaving the country with you, both of you must go to the IRS office. For information on the location of the Taxpayer Assistance Center (walk-in IRS office) nearest to you, call 800-829-1040, or visit www.irs.gov.
You must bring with you all the following records and information for the current year that apply to you:
- A valid passport and your alien registration card or visa,
- Copies of the last two years' U.S. income tax returns with proof of payment of any balances due,
- Proof of any payments of estimated tax for the past year and this year,
- Substantiation of deductions for business expenses and itemized deductions claimed,
- Documentation for dependents claimed.
- A statement from each employer showing the wages paid and tax withheld from January 1st to the date of departure (For this statement you can use a payroll deduction slip for your last paycheck if it shows this information),
- If you are self-employed, you must bring a profit and loss statement for the current year up to the date of departure,
- Documents showing any gain or loss from the sale of personal and/or real property, including capital assets and merchandise,
- Documents concerning scholarships or fellowship grants,
- Documents indicating that you qualify for any special tax treaty benefits,
- Document verifying your date of departure from the United States, such as an airline ticket, and
- Document verifying your U.S. taxpayer identification number, such as a social security card or an IRS issued CP 565 showing your individual taxpayer identification (ITIN) number.
Additional Rules Applicable to Departing Resident Aliens
Departing resident aliens who have been treated as U.S. resident aliens during at least three consecutive calendar years, who will cease to be treated as U.S. residents for a period of less than three years before being treated as U.S. residents again will be covered by section 7701(b)(10). These individuals will be subject to tax under section 877(b) for the period lasting less than three years during which the individual is not treated as a U.S. resident before the individual resumes being treated as a U.S. resident again.
If you are a departing resident alien and you plan to surrender your green card and you have been a lawful permanent resident (green card holder) in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which you surrender your green card, you must file Form 8854 (PDF), Expatriation Information Statement, and notify the Department of Homeland Security of your termination of residency
Certain expatriates that renounced their U.S. citizenship or terminated their long-term resident status before June 17, 2008, might be subject to alternative tax regime under section 877 for 10 years after expatriation if they met certain statutory requirements. Section 877 no longer applies to those individuals who expatriate after June 16, 2008.
If you are a long-term resident and you expatriate after June 16, 2008, you may be subject to the new mark-to-market regime of section 877A, the new expatriation law. Those expatriates subject to the mark-to-market regime of section 877A will be treated as having sold all of their property for fair market value on the day before they expatriate and will be subject to tax on the unrealized gain above $600.000. This $600,000 exclusion amount will be annually adjusted by a cost of living adjustment factor for calendar years after 2008.
Any gains or losses subsequently realized on actual disposition of the property will be adjusted for gains and losses taken into account as a result of the deemed sale, without regard to the $600,000 exclusion amount. Taxpayers may elect to defer payment of tax attributable to property deemed sold under procedures currently set forth in Form 8854.
The mark-to-market regime described above will apply to most types of property interests held by the individual on the date of relinquishment of citizenship or termination of residency, with certain statutory exceptions. Deferred compensation items, specified tax deferred accounts, and interests in non-grantor trusts, are excepted from the mark-to-market regime, but are subject to certain special rules that may require current payment of tax and/or impose additional reporting requirements.
The new mark-to-market regime applies to any U.S. citizen who relinquishes citizenship and any long-term resident who terminates U.S. residency, if such individual is a "covered expatriate." A covered expatriate is an expatriate that (1) has an average annual net income tax liability for the five preceding years ending before the date of the loss of U.S. citizenship or residency termination that exceeds $145,000 (as adjusted for inflation in 2009); (2) has a net worth of $2 million or more on such date; or (3) fails to certify under penalties of perjury, on Form 8854, that he or she has complied with all U.S. Federal tax obligations for the preceding five tax years.
In addition, the new law will impose a transfer tax on certain gifts or bequests (transfers made at death) made to U.S. persons from individuals treated as covered expatriates.
A modified Form 8854 is available in order for taxpayers to comply with the new law. Covered expatriates that had deferred compensation, a specified tax deferred account, or an interest in a non-grantor trust on the day before they expatriated must file new Form W-8CE, Notice of Expatriation and Waiver of Treaty Benefits, with the payer of such income.
Extensions of Time to File Your Tax Return
There are three choices for filing Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; 1) electronically (such as by computer), 2) by paying part of your tax due with a credit card through an outside service provider listed on the form, or 3) by mail. If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868. If you need to pay additional taxes, you may do so through the outside service provider or through e-file. If you were or are serving in a combat zone, a qualified hazardous duty area, or in a contingency operation, refer to Topic 301 for more information about extensions.
You can refer to your tax software or tax professional for ways to file electronically using e-file services. If you wish to make a payment using the electronic funds withdrawal option, be sure to have a copy of last year's tax return. You will be asked to provide the Adjusted Gross Income from the return for taxpayer verification.
Besides filing electronically, you can generally get an extension of time to file if you pay part or all of your estimate of income tax due by credit card. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records.
In addition to filing Form 4868 electronically, or by paying part of your tax by credit card, you can file Form 4868 by filling out the form and mailing it to the place where you will file your return.
Please be aware that an extension of time to file is NOT an extension of time to pay.
For information regarding State Government filing visit the following State Links.
You can refer to your tax software or tax professional for ways to file electronically using e-file services. If you wish to make a payment using the electronic funds withdrawal option, be sure to have a copy of last year's tax return. You will be asked to provide the Adjusted Gross Income from the return for taxpayer verification.
Besides filing electronically, you can generally get an extension of time to file if you pay part or all of your estimate of income tax due by credit card. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records.
In addition to filing Form 4868 electronically, or by paying part of your tax by credit card, you can file Form 4868 by filling out the form and mailing it to the place where you will file your return.
Please be aware that an extension of time to file is NOT an extension of time to pay.
For information regarding State Government filing visit the following State Links.