Nonresident aliens can claim some of the same itemized deductions that resident aliens can claim. However, nonresident aliens can claim itemized deductions only if they have income effectively connected with their U.S. trade or business.
Resident and nonresident aliens may not be able to claim all of their itemized deductions. If your adjusted gross income is more than $166,800 ($83,400 if married filing separately), use the worksheet in your income tax return instructions to figure the amount you can deduct. taxmap/pubs/p519-023.htm#en_us_publink1000222455
You can claim the same itemized deductions as U.S. citizens, using Schedule A of Form 1040. These deductions include certain medical and dental expenses, state and local income taxes, real estate taxes, interest you paid on a home mortgage, charitable contributions, casualty and theft losses, and miscellaneous deductions.
If you do not itemize your deductions, you can claim the standard deduction for your particular filing status. For further information, see Form 1040 and instructions. taxmap/pubs/p519-023.htm#en_us_publink1000222456
You can deduct certain itemized deductions if you receive income effectively connected with your U.S. trade or business. These deductions include state and local income taxes, charitable contributions to U.S. organizations, casualty and theft losses, and miscellaneous deductions. Use Schedule A of Form 1040NR to claim itemized deductions.
If you are filing Form 1040NR-EZ, you can only claim a deduction for state or local income taxes. If you are claiming any other itemized deduction, you must file Form 1040NR. taxmap/pubs/p519-023.htm#en_us_publink1000222457taxmap/pubs/p519-023.htm#en_us_publink1000222458
A special rule applies to students and business apprentices who are eligible for the benefits of Article 21(2) of the United States–India Income Tax Treaty. You can claim the standard deduction provided you do not claim itemized deductions.
Use Worksheet 5-1 to figure your standard deduction. If you are married and your spouse files a return and itemizes deductions, you cannot take the standard deduction. taxmap/pubs/p519-023.htm#en_us_publink1000222459
Worksheet 5-1. 2009 Standard Deduction Worksheet for Students and Business Apprentices From India
| Caution. If you are married filing a separate return and your spouse itemizes deductions, do not complete this worksheet. You cannot take the standard deduction even if you were born before January 2, 1945, are blind, pay real estate taxes, pay new motor vehicle taxes, or have a net disaster loss.|
|1||Enter the amount shown below for your filing status.|| || || || || || |
| || |
- Single or married filing separately—$5,700
- Qualifying widow(er)—$11,400
| || ||1.|| || || |
|2||Can you be claimed as a dependent on someone else's U.S. income tax return?|
No. Skip line 3; enter the amount from line 1 on line 4.
Yes. Go to line 3.
| || || || |
|3||Is your earned income* more than $650?|| || || || || || |
| || Yes. Add $300 to your earned income. Enter the total ||3.|| || || |
| || No. Enter $950|| || || || || || |
|4||Enter the smaller of line 1 or line 3||4.|| |
|5||If born before January 2, 1945, OR blind, enter $1,100 ($1,400 if single). If born before January 2, 1945, AND blind, enter $2,200 ($2,800 if single). Otherwise, enter -0-||5.|| |
|6||Enter any net disaster loss from Form 4684, line 18. **||6.|| |
|7||Enter the state and local real estate taxes you paid. Do not include foreign real estate taxes. See Instructions for line 7 of Worksheet 5-1. ||7.|| || || |
|8||Maximum real estate tax deduction||8.|| 500.00 || || |
|9||Enter the smaller of line 7 or line 8.|| 9.|| |
|10||Did you pay any state or local sales or excise taxes in 2009 for the purchase of a new motor vehicle after February 16, 2009 (see Instructions for Line 10 of Worksheet 5-1)?||10.|| |
| || No. Skip lines 10-17, enter -0- on line 18, and go to line 19. |
Yes. If Form 1040NR, line 36, or Form 1040NR-EZ, line 10, is less than $135,000, enter the amount of those taxes paid. Otherwise, skip lines 10 through 17, enter -0- on line 18, and go to line 19.
| || || || || || |
|11||Enter the purchase price (before taxes) of the new motor vehicles) (see Instructions for Line 11 of Worksheet 5-1)||11.|| |
|12||Is the amount on line 11 more than $49,500?||12.|| |
| || No. Enter the amount from line 10. |
Yes. Figure the portion of the tax from line 10 that is attributable to the first $49,500 of the purchase price of each new motor vehicle and enter it here (see Instructions for Line 12 of Worksheet 5-1)
| || || || || || |
|13||Enter the amount from Form 1040NR, line 36, or Form 1040NR-EZ, line 10||13.|| |
|14||Enter $125,000||14.|| |
|15||Is the amount on line 13 more than the amount on line 14?||15.|| |
| || No. Skip lines 15 through 17, enter the amount from line 12 on line 18 and go to line 19.|
Yes. Subtract line 14 from line 13
| || || || || || |
|16||Divide the amount on line 15 by $10,000. Enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000 or more, enter 1.000||16.|| |
|17||Multiply line 12 by line 16||17.|| |
|18||Subtract line 17 from line 12||18.|| |
|19||Add lines 4, 5, 6, 9, and 18. Enter the total here and on Form 1040NR, line 37 (or Form 1040NR-EZ, line 11**). Print "Standard Deduction Allowed Under U.S.–India Income Tax Treaty" in the space to the left of these lines. This is your standard deduction for 2009. ||19.|| |
| *Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your income. Generally, your earned income is the total of the amount(s) you reported on Form 1040NR, lines 8,12,13, and 19 (or Form 1040NR-EZ, lines 3 and 5, minus any amount on line 8).|
**If the amount on line 6 of this worksheet is more than zero, you cannot file Form 1040NR-EZ; you must file Form 1040NR.
Include taxes (state and local) you paid in 2009 on real estate you own that was not used for business, but only if the taxes are based on the assessed value of the property. The assessment must be made uniformly on property throughout the community, and the proceeds must be used for general community or governmental purposes. Publication 530 explains the deductions homeowners can take.
Do not include the following amounts on line 7.
- Foreign real estate taxes.
- Taxes deductible in arriving at adjusted gross income (such as taxes on business real estate).
- Itemized charges for services to specific property or persons (for example, a $20 monthly charge per house for trash collection, a $5 charge for every 1,000 gallons of water consumed, or a flat charge for mowing a lawn that had grown higher than permitted under a local ordinance).
- Charges for improvements that tend to increase the value of your property (for example, an assessment to build a new sidewalk). The cost of a property improvement is added to the basis of the property. However, you can include a charge if it is used only to maintain an existing public facility in service (for example, a charge to repair an existing sidewalk, and any interest included in that charge).
If your mortgage payments include your real estate taxes, you can include only the amount the mortgage company actually paid to the taxing authority in 2009.
If you sold your home in 2009, any real estate tax charged to the buyer should be shown on your settlement statement and in box 5 of any Form 1099-S you received. This amount is considered a refund of real estate taxes. Any real estate taxes you paid at closing should be shown on your settlement statement.
If you received a refund or rebate in 2009 of real estate taxes you paid in 2009, reduce the amount you include by the amount of the refund or rebate. If you received a refund or rebate in 2009 of real estate taxes you paid in an earlier year, do not reduce your deduction by this amount. Instead, you must include the refund or rebate in income, if you deducted the real estate taxes in the earlier year and the deduction reduced your tax. See Recoveries in Publication 525 for details on how to figure the amount to include in income.taxmap/pubs/p519-023.htm#en_us_publink1000245906
If you check the "Yes" box, you may be able to include some or all of the state or local sales and excise taxes you paid for any new motor vehicle(s) (defined below) purchased after February 16, 2009. However, if the amount on Form 1040NR, line 36, or Form 1040NR-EZ, line 10, is equal to or greater than $135,000, you cannot include these taxes. To determine the amount of state or local sales and excise taxes to enter on line 10, refer to the sales invoice(s) for any new motor vehicle(s) you purchased. Taxes deductible in arriving at adjusted gross income, such as taxes on a vehicle used in your business, cannot be used to increase your standard deduction.taxmap/pubs/p519-023.htm#en_us_publink1000245907
The states of Alaska, Delaware, Hawaii, Montana, New Hampshire, and Oregon do not have a sales tax. However, you may be charged other fees or taxes on the purchase of a new motor vehicle in one of these six states that is similar to a sales tax. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle's sales price or as a per unit fee. You can include these fees or taxes on line 10.
One example of a fee you can include on line 10 is the 3.75% document fee when registering a title with the Delaware Division of Motor vehicles. The fee is 3.75% of the purchase price.taxmap/pubs/p519-023.htm#en_us_publink1000245908
A new motor vehicle is any of the following. The original use of the vehicle must begin with you.
- A passenger automobile or light truck that is self propelled, designed to transport people or property on a street or highway, and the gross vehicle weight rating of the vehicle is not more than 8,500 pounds.
- A motorcycle (defined below) with a gross vehicle weight rating of not more than 8,500 pounds.
- A motor home (defined below).
A vehicle with motive power having a seat or saddle for the use of the rider and designed to travel on not more than three wheels in contact with the ground.taxmap/pubs/p519-023.htm#en_us_publink1000245910
A multi-purpose vehicle with motive power that is designed to provide temporary residential accommodations, as evidenced by the presence of at least four of the following facilities.
- Refrigeration or ice box.
- Self-contained toilet.
- Heating and/or air conditioning.
- Potable water supply system including a faucet and sink.
- Separate 110-125 volt electrical power supply and/or propane.
Enter on line 11 the cost of the new motor vehicle(s). Do not include on line 11 any state or local sales or excise taxes you entered on line 10.taxmap/pubs/p519-023.htm#en_us_publink1000245912
If you check the "Yes" box, the amount you can include for state or local sales and excise taxes is limited to the taxes imposed on the first $49,500 of the purchase price of each new motor vehicle. To figure the amount to enter on line 12, you will need to know the rate(s) of tax that apply in the state and locality where you purchased each new motor vehicle. If the state and locality where you purchased the new motor vehicle imposes a fixed rate, multiply the combined state and local rate by the smaller of $49,500 or the purchase price (before taxes) of the new motor vehicle. See Example 1 below.
Some taxing jurisdictions may provide for a sales tax that is limited to a certain dollar amount per purchase. One example is Manatee County, Florida. Manatee County charges an additional 1/2% (.005) discretionary sales tax that is collected on the first $5,000 of a purchase, not to exceed $25. See Example 2 below.taxmap/pubs/p519-023.htm#en_us_publink1000245914
You purchased a new motor vehicle on April 3, 2009, for $56,500 before taxes. The state where you purchased the vehicle imposes a fixed sales tax rate of 5% and the locality also charges a fixed rate of 1%, for a combined sales tax rate of 6%. The amount of sales tax you can include on line 12 is $2,970 ($49,500 × 6% (.06)).taxmap/pubs/p519-023.htm#en_us_publink1000245913
You purchased a new motor vehicle in Manatee, Florida, on April 16, 2009, for $60,000 before taxes. The state of Florida has a fixed sales tax rate of 6%. The amount of sales tax you can include on line 12 is $2,995 ($49,500 × 6% (.06) + $25). In this example, $2,970 represents the 6% Florida sales tax and the $25 is for the Manatee County discretionary sales tax on the first $5,000 of the purchase price.taxmap/pubs/p519-023.htm#en_us_publink1000222462
You can deduct state and local income taxes you paid on income that is effectively connected with a trade or business in the United States. If you received a refund or rebate in 2009 of real estate taxes you paid in an earlier year, do not reduce your deduction by that amount. Instead, you must include the refund or rebate in income if you deducted the real estate taxes in the earlier year and the deduction reduced your tax. See Recoveries in Publication 525 for details on how to figure the amount to include in income.taxmap/pubs/p519-023.htm#en_us_publink1000222463
You can deduct your charitable contributions or gifts to qualified organizations subject to certain limits. Qualified organizations include organizations that are religious, charitable, educational, scientific, or literary in nature, or that work to prevent cruelty to children or animals. Certain organizations that promote national or international amateur sports competition are also qualified organizations. taxmap/pubs/p519-023.htm#en_us_publink1000222464
Contributions made directly to a foreign organization are not deductible. However, you can deduct contributions to a U.S. organization that transfers funds to a charitable foreign organization if the U.S. organization controls the use of the funds or if the foreign organization is only an administrative arm of the U.S. organization.
For more information about organizations that qualify to receive charitable contributions, see Publication 526, Charitable Contributions.taxmap/pubs/p519-023.htm#en_us_publink1000222465
If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive.
If you pay more than the fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. taxmap/pubs/p519-023.htm#en_us_publink1000222466
You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written record from the charity. The written record must include the name of the charity, date of the contribution, and the amount of the contribution.
You may deduct a cash contribution of $250 or more only if you have a written statement from the charitable organization showing:
- The amount of any money contributed,
- Whether the organization gave you any goods or services in return for your contribution, and
- A description and estimate of the value of any goods or services described in (2).
If you received only intangible religious benefits, the organization must state this, but it does not have to describe or value the benefit.
For contributions not made in cash, the records you must keep depend on the amount of your deduction. See Publication 526 for details. For example, if you make a noncash contribution and the amount of your deduction is more than $500, you must complete and attach to your tax return Form 8283, Noncash Charitable Contributions. If you deduct more than $500 for a contribution of a motor vehicle, boat, or airplane, you must also attach a statement from the charitable organization to your return. If your total deduction is over $5,000, you also may have to get appraisals of the values of the property. If the donated property is valued at more than $5,000, you must obtain a qualified appraisal. You generally must attach to your tax return an appraisal of any property if your deduction for the property is more than $500,000. See Form 8283 and its instructions for details. taxmap/pubs/p519-023.htm#en_us_publink1000222468
If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. However, if you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Your basis in the property is generally what you paid for it. If you need more information about basis, get Publication 551, Basis of Assets.
Different rules apply to figuring your deduction, depending on whether the property is:
- Ordinary income property, or
- Capital gain property.
For information about these rules, see Publication 526.
The amount you can deduct in a tax year is limited in the same way it is for a citizen or resident of the United States. For a discussion of limits on charitable contributions and other information, get Publication 526. taxmap/pubs/p519-023.htm#en_us_publink1000222470
You can deduct your loss from fire, storm, shipwreck, or other casualty, or theft of property even though your property is not connected with a U.S. trade or business. The property can be personal use property or income-producing property not connected with a U.S. trade or business. The property must be located in the United States at the time of the casualty or theft. You can deduct theft losses only in the year in which you discover the loss.
The amount of the loss is the fair market value of the property immediately before the casualty or theft less its fair market value immediately after the casualty or theft (but not more than its cost or adjusted basis) less any insurance or other reimbursement. The fair market value of property immediately after a theft is considered zero, because you no longer have the property.
If your property is covered by insurance, you should file a timely insurance claim for reimbursement. If you do not, you cannot deduct this loss as a casualty or theft loss.
Figure your deductible casualty and theft losses on Form 4684, Casualties and Thefts.taxmap/pubs/p519-023.htm#en_us_publink1000222471
You cannot deduct the first $500 of each casualty or theft loss to property held for personal use. You can deduct only the total of these losses for the year (reduced by the $500 limit) that is more than 10% of your adjusted gross income (line 36, Form 1040NR) for the year. These limits do not apply to certain disaster losses as discussed in the Instructions for Form 4684.taxmap/pubs/p519-023.htm#en_us_publink1000222472
These losses are not subject to the limitations that apply to personal use property. Use Section B of Form 4684 to figure your deduction for these losses.taxmap/pubs/p519-023.htm#en_us_publink1000222473
You can deduct job expenses, such as allowable unreimbursed travel expenses (discussed next), and other miscellaneous deductions. Generally, the allowable deductions must be related to effectively connected income. Deductible expenses include:
- Union dues,
- Safety equipment and small tools needed for your job,
- Dues to professional organizations,
- Subscriptions to professional journals,
- Tax return preparation fees, and
- Casualty and theft losses of property used in performing services as an employee (employee property).
Most miscellaneous itemized deductions are deductible only if they are more than 2% of your adjusted gross income (line 36, Form 1040NR). For more information on miscellaneous deductions, see the instructions for Form 1040NR. taxmap/pubs/p519-023.htm#en_us_publink1000222474
You may be able to deduct your ordinary and necessary travel expenses while you are temporarily performing personal services in the United States. Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less. You must be able to show you were present in the United States on an activity that required your temporary absence from your regular place of work.
For example, if you have established a "tax home" through regular employment in a foreign country, and intend to return to similar employment in the same country at the end of your temporary stay in the United States, you can deduct reasonable travel expenses you paid. You cannot deduct travel expenses for other members of your family or party. taxmap/pubs/p519-023.htm#en_us_publink1000222475
If you qualify, you can deduct your expenses for:
- Transportation—airfare, local transportation, including train, bus, etc.,
- Lodging—rent paid, utilities (do not include telephone), hotel or motel room expenses, and
- Meal expenses—actual expenses allowed if you keep records of the amounts, or, if you do not wish to keep detailed records, you are generally allowed a standard meal allowance amount depending on the date and area of your travel. You generally can deduct only 50% of unreimbursed meal expenses. The standard meal allowance rates for high-cost areas are in Publication 1542, Per Diem Rates (For Travel Within the Continental United States), which is available only on the Internet at www.irs.gov/pub/irs-pdf/p1542.pdf. The rates for other areas are in Publication 463.
Use Form 2106 or 2106-EZ to figure your allowable expenses that you claim on line 9 of Schedule A (Form 1040NR).taxmap/pubs/p519-023.htm#en_us_publink1000222476
You cannot deduct an expense, or part of an expense, that is allocable to U.S. tax-exempt income, including income exempt by tax treaty. taxmap/pubs/p519-023.htm#en_us_publink1000222477
Irina Oak, a citizen of Poland, resided in the United States for part of the year to acquire business experience from a U.S. company. During her stay in the United States, she received a salary of $8,000 from her Polish employer. She received no other U.S. source income. She spent $3,000 on travel expenses, of which $1,000 were for meals. None of these expenses were reimbursed. Under the tax treaty with Poland, $5,000 of her salary is exempt from U.S. income tax. In filling out Form 2106-EZ, she must reduce her deductible meal expenses by half ($500). She must reduce the remaining $2,500 of travel expenses by 62.5% ($1,563) because 62.5% ($5,000 ÷ $8,000) of her salary is exempt from tax. She enters the remaining total of $937 on line 9 of Schedule A (Form 1040NR). She completes the remaining lines according to the instructions for Schedule A. taxmap/pubs/p519-023.htm#en_us_publink1000222478
For more information about deductible expenses, reimbursements, and recordkeeping, get Publication 463.