Publication 54
taxmap/pubs/p54-001.htm#en_us_publink100047317taxmap/pubs/p54-001.htm#TXMP49fcab0aUseful items
You may want to see:
Publication 3 Armed Forces' Tax Guide
501 Exemptions, Standard Deduction, and Filing Information
505 Tax Withholding and Estimated Tax
519 U.S. Tax Guide for Aliens
970 Tax Benefits for Education Form (and Instructions) 1040-ES:
Estimated Tax for Individuals
1040X:
Amended U.S. Individual Income Tax Return
2350:
Application for Extension of Time To File U.S. Income Tax Return
2555:
Foreign Earned Income
2555-EZ:
Foreign Earned Income Exclusion
4868:
Application for Automatic Extension of Time To File U.S. Individual
Income Tax Return
8822:
Change of Address
See chapter 7 for information about getting these publications
and forms.
taxmap/pubs/p54-001.htm#en_us_publink100047318If you are a U.S. citizen or resident alien, the rules for filing
income, estate, and gift tax returns and for paying estimated tax are generally
the same whether you are in the United States or abroad.
Your income, filing status, and age generally determine whether
you must file an income tax return. Generally, you must file a return for 2010
if your gross income from worldwide sources is at least the amount shown for
your filing status in the following table.
| Filing Status* | | Amount |
| Single | $ 9,350 |
| 65 or older | $10,750 |
| Head of household | $12,050 |
| 65 or older | $13,450 |
| Qualifying widow(er) | $15,050 |
| 65 or older | $16,150 |
| Married filing jointly | $18,700 |
| Not living with spouse at end of year | $ 3,650 |
| One spouse 65 or older | $19,800 |
| Both spouses 65 or older | $20,900 |
| Married filing separately | $ 3,650 |
| *If you are the dependent of another taxpayer, see the instructions
for Form 1040 for more information on whether you must file a return.
|
This includes all income you receive in the form of money, goods,
property, and services that is not exempt from tax.
For purposes of determining whether you must file a return, gross
income includes any income that you can exclude as foreign earned income or as a
foreign housing amount.
If you are self-employed, your gross income includes the amount
on Part I, line 7 of Schedule C (Form 1040), Profit or Loss From Business, or
line 1 of Schedule C-EZ (Form 1040), Net Profit From Business.
taxmap/pubs/p54-001.htm#en_us_publink100047320If your net earnings from self-employment are $400 or more, you
must file a return even if your gross income is below the amount listed for your
filing status in the table shown earlier. Net earnings from self-employment are
defined in Publication 334, Tax Guide for Small Business.
taxmap/pubs/p54-001.htm#en_us_publink100047321You are considered to be age 65 on the day before your 65th birthday.
For example, if your 65th birthday is on January 1, 2011, you are considered 65
for 2010.
taxmap/pubs/p54-001.htm#en_us_publink100047322If you are (or were) a bona fide resident of a U.S. possession,
you may be required to file Form 8898, Statement for Individuals Who Begin or
End Bona Fide Residence in a U.S. Possession. See the instructions on the form
for more information.
taxmap/pubs/p54-001.htm#en_us_publink100047323If you file on a calendar year basis, the due date for filing
your return is April 15 of the following year. If you file on a fiscal year
basis (a year ending on the last day of any month except December), the due date
is 3 months and 15 days after the close of your fiscal year. In general, the tax
shown on your return should be paid by the due date of the return, without
regard to any extension of time for filing the return.
When the due date for doing any act for tax purposes—filing
a return, paying taxes, etc.— falls on a Saturday, Sunday, or legal
holiday, the due date is delayed until the next business day.
 | A tax return delivered by the U.S. mail or a designated delivery
service that is postmarked or dated by the delivery service on or before the due
date is considered to have been filed on or before that date. See your Form 1040
or Form 1040A instructions for a list of designated delivery services. |
taxmap/pubs/p54-001.htm#en_us_publink1000252886If you have a U.S. bank account, you can use:
- EFTPS (Electronic Federal Tax Payment System), or
- Federal Tax Application (same-day wire transfer).
If you do not have a U.S. bank account, ask if your financial
institution has a U.S. affiliate that can help you make same-day wire transfers.
You can get an extension of time to file your return. In some
circumstances, you also can get an extension of time to file and pay any tax
due.
However, if you pay the tax due after the regular due date, interest
will be charged from the regular due date until the date the tax is paid.
This publication discusses four extensions: an automatic 2-month
extension, an automatic 6-month extension, an additional extension for taxpayers
out of the country, and an extension of time to meet tests. If you served in a
combat zone or qualified hazardous duty area, see Publication 3 for a discussion
of extensions of deadlines.
taxmap/pubs/p54-001.htm#en_us_publink100047326You are allowed an automatic 2-month extension to file your return
and pay federal income tax if you are a U.S. citizen or resident alien, and on
the regular due date of your return:
- You are living outside the United States and Puerto Rico and
your main place of business or post of duty is outside the United States and
Puerto Rico, or
- You are in military or naval service on duty outside the United
States and Puerto Rico.
If you use a calendar year, the regular due date of your return
is April 15. Even if you are allowed an extension, you will have to pay interest
on any tax not paid by the regular due date of your return.
taxmap/pubs/p54-001.htm#en_us_publink100047327If you file a joint return, either you or your spouse can qualify
for the automatic extension. If you and your spouse file separate returns, this
automatic extension applies only to the spouse who qualifies for it.
taxmap/pubs/p54-001.htm#en_us_publink100047328To use this automatic 2-month extension, you must attach a statement
to your return explaining which of the two situations listed earlier qualified
you for the extension.
taxmap/pubs/p54-001.htm#en_us_publink100047329If you are not able to file your return by the due date, you
generally can get an automatic 6-month extension of time to file (but not of
time to pay). To get this automatic extension, you must file a paper Form 4868
or use IRS
e-file
(electronic filing). For more information about filing electronically, see
E-file options, later.
The form must show your properly estimated tax liability based
on the information available to you.
| You may not be eligible.
You cannot use the automatic 6-month extension of time to
file if:
- You want the IRS to figure your tax, or
- You are under a court order to file by the regular due
date.
|
taxmap/pubs/p54-001.htm#en_us_publink100047331 You can use
e-file
to get an extension of time to file. You can either file Form 4868
electronically or you can pay part or all of your estimate of tax due using a
credit or debit card.
First, complete Form 4868 to use as a worksheet. If you think
you may owe tax when you file your return, use
Part II of the form to estimate your balance due.
Then, do one of the following.
- E-file Form 4868.
You can use a tax software package with your personal computer or a tax
professional to file Form 4868 electronically. You will need to provide certain
information from your tax return for 2009. If you wish to make a payment by
electronic funds withdrawal, see the instructions for Form 4868. If you
e-file Form 4868, do not also send a paper Form 4868.
- E-file and pay by credit or debit card.
You can get an extension by paying part or all of your estimate of tax due by
using a credit or debit card. You can do this by phone or over the Internet. If
you do this, you do not file Form 4868. For more information, see the
instructions for your tax return.
Generally, you must request the 6-month extension by the regular
due date of your return.
taxmap/pubs/p54-001.htm#en_us_publink100047333If you cannot file your return within the automatic 2-month extension
period, you generally can get an additional 4 months to file your return, for a
total of 6 months. The 2-month period and the 6-month period start at the same
time. You have to request the additional 4 months by the new due date allowed by
the 2-month extension.
The additional 4 months of time to file (unlike the original
2-month extension) is not an extension of time to pay. You must make an accurate
estimate of your tax based on the information available to you. If you find you
cannot pay the full amount due with Form 4868, you can still get the extension.
You will owe interest on the unpaid amount from the original due date of the
return.
You also may be charged a penalty for paying the tax late unless
you have reasonable cause for not paying your tax when due. Penalties for paying
the tax late are assessed from the original due date of your return, unless you
qualify for the automatic 2-month extension. In that situation, penalties for
paying late are assessed from the extended due date of the payment (June 15 for
calendar year taxpayers).
taxmap/pubs/p54-001.htm#en_us_publink100047334In addition to the 6-month extension, taxpayers who are out of
the country can request a discretionary 2-month additional extension of time to
file their returns (to December 15 for calendar year taxpayers).
To request this extension, you must send the Internal Revenue
Service a letter explaining the reasons why you need the additional 2 months.
Send the letter by the extended due date (October 15 for calendar year
taxpayers) to the following address:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You will not receive any notification from the Internal Revenue
Service unless your request is denied.
The discretionary 2-month additional extension is not available
to taxpayers who have an approved extension of time to file on Form 2350,
discussed next.
taxmap/pubs/p54-001.htm#en_us_publink100047335You generally cannot get an extension of more than 6 months.
However, if you are outside the United States and meet certain requirements, you
may be able to get a longer extension.
You can get an extension of more than 6 months to file your tax
return if you need the time to meet either the bona fide residence test or the
physical presence test to qualify for either the foreign earned income exclusion
or the foreign housing exclusion or deduction. The tests, the exclusions, and
the deduction are explained in chapter 4.
You should request an extension if all three of the following
apply.
- You are a U.S. citizen or resident alien.
- You expect to meet either the bona fide residence test or
the physical presence test, but not until after your tax return is due.
- Your tax home is in a foreign country (or countries) throughout
your period of bona fide residence or physical presence, whichever applies.
If you are granted an extension, it generally will be to 30 days
beyond the date on which you can reasonably expect to qualify for an exclusion
or deduction under either the bona fide residence test or the physical presence
test. However, if you have moving expenses that are for services performed in 2
years, you may be granted an extension until after the end of the second year.
taxmap/pubs/p54-001.htm#en_us_publink100047336To obtain an extension, file Form 2350 either by giving it to
a local IRS representative or other IRS employee or by mailing it to the:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You must file Form 2350 by the due date for filing your return.
Generally, if both your tax home and your abode are outside the United States
and Puerto Rico on the regular due date of your return and you file on a
calendar year basis, the due date for filing your return is June 15.
taxmap/pubs/p54-001.htm#en_us_publink100047337If you obtain an extension and unforeseen events make it impossible
for you to meet either the bona fide residence test or the physical presence
test, you should file your income tax return as soon as possible because you
must pay interest on any tax due after the regular due date of the return (even
though an extension was granted).
| You should make any request for an extension early, so that
if it is denied you still can file your return on time. Otherwise, if you file
late and additional tax is due, you may be subject to a penalty.
|
taxmap/pubs/p54-001.htm#en_us_publink100047339If you file a return before you meet the bona fide residence
test or the physical presence test, you must include all income from both U.S.
and foreign sources and pay the tax on that income. If you later meet either of
the tests, you can claim the foreign earned income exclusion, the foreign
housing exclusion, or the foreign housing deduction on Form 1040X.
taxmap/pubs/p54-001.htm#en_us_publink100047340You must express the amounts you report on your U.S. tax return
in U.S. dollars. If you receive all or part of your income or pay some or all of
your expenses in foreign currency, you must translate the foreign currency into
U.S. dollars. How you do this depends on your functional currency. Your
functional currency generally is the U.S. dollar unless you are required to use
the currency of a foreign country.
You must make all federal income tax determinations in your functional
currency. The U.S. dollar is the functional currency for all taxpayers except
some qualified business units (QBUs). A QBU is a separate and clearly identified
unit of a trade or business that maintains separate books and records.
Even if you have a QBU, your functional currency is the dollar
if any of the following apply.
- You conduct the business in U.S. dollars.
- The principal place of business is located in the United States.
- You choose to or are required to use the U.S. dollar as your
functional currency.
- The business books and records are not kept in the currency
of the economic environment in which a significant part of the business
activities is conducted.
Make all income tax determinations in your functional currency.
If your functional currency is the U.S. dollar, you must immediately translate
into U.S. dollars all items of income, expense, etc. (including taxes), that you
receive, pay, or accrue in a foreign currency and that will affect computation
of your income tax. Use the exchange rate prevailing when you receive, pay, or
accrue the item. If there is more than one exchange rate, use the one that most
properly reflects your income. You can generally get exchange rates from banks
and U.S. Embassies.
If your functional currency is not the U.S. dollar, make all income tax
determinations in your functional currency. At the end of the year, translate
the results, such as income or loss, into U.S. dollars to report on your income
tax return.
taxmap/pubs/p54-001.htm#en_us_publink100047341You generally must report your foreign income in terms of U.S.
dollars and, with one exception (see
Fulbright Grant,
later), you must pay taxes due on it in U.S. dollars.
If, because of restrictions in a foreign country, your income
is not readily convertible into U.S. dollars or into other money or property
that is readily convertible into U.S. dollars, your income is "blocked" or
"deferrable" income. You can report this income in one of two ways:
- Report the income and pay your federal income tax with U.S.
dollars that you have in the United States or in some other country, or
- Postpone the reporting of the income until it becomes unblocked.
If you choose to postpone the reporting of the income, you must
file an information return with your tax return. For this information return,
you should use another Form 1040 labeled "Report of Deferrable Foreign Income,
pursuant to Rev. Rul. 74-351." You must declare on the information return that
you will include the deferrable income in your taxable income for the year that
it becomes unblocked. You also must state that you waive any right to claim that
the deferrable income was includible in your income for any earlier year.
You must report your income on your information return using
the foreign currency in which you received that income. If you have blocked
income from more than one foreign country, include a separate information return
for each country.
Income becomes unblocked and reportable for tax purposes when
it becomes convertible, or when it is converted, into U.S. dollars or into other
money or property that is convertible into U.S. currency. Also, if you use
blocked income for your personal expenses or dispose of it by gift, bequest, or
devise, you must treat it as unblocked and reportable.
If you have received blocked income on which you have not paid
tax, you should check to see whether that income is still blocked. If it is not,
you should take immediate steps to pay tax on it, file a declaration or amended
declaration of estimated tax, and include the income on your tax return for the
year in which the income became unblocked.
If you choose to postpone reporting blocked income and in a later
tax year you wish to begin including it in gross income although it is still
blocked, you must obtain the permission of the IRS to do so. To apply for
permission, file Form 3115, Application for Change in Accounting Method. You
also must request permission from the IRS on Form 3115 if you have not chosen to
defer the reporting of blocked income in the past, but now wish to begin
reporting blocked income under the deferred method. See the instructions for
Form 3115 for information on changing your accounting method.
taxmap/pubs/p54-001.htm#en_us_publink100047342All income must be reported in U.S. dollars. In most cases, the
tax also must be paid in U.S. dollars. If, however, at least 70% of your
Fulbright grant has been paid in nonconvertible foreign currency (blocked
income), you can use the currency of the host country to pay the part of the
U.S. tax that is based on the blocked income.
taxmap/pubs/p54-001.htm#en_us_publink100047343To qualify for this method of payment, you must prepare a statement
that shows the following information.
- You were a Fulbright grantee and were paid in nonconvertible
foreign currency.
- The total grant you received during the year and the amount
you received in nonconvertible foreign currency.
- At least 70% of the grant was paid in nonconvertible foreign
currency.
The statement must be certified by the U.S. educational foundation
or commission paying the grant or other person having control of grant payments
to you.
You should prepare at least two copies of this statement. Attach
one copy to your Form 1040 and keep the other copy for identification purposes
when you make a tax deposit of nonconvertible foreign currency.
taxmap/pubs/p54-001.htm#en_us_publink100047344When you prepare your income tax return, you may owe tax or the
entire liability may have been satisfied with your estimated tax payments. If
you owe tax, figure the part due to (and payable in) the nonconvertible foreign
currency by using the following formula.
| | Adjusted gross income that is blocked income | × | Total U.S. tax | = | Tax on blocked income | |
| | Total adjusted
gross income
| |
You must attach all of the following to the return.
- A copy of the certified statement discussed earlier.
- A detailed statement showing the allocation of tax attributable
to amounts received in foreign currency and the rates of exchange used in
determining your tax liability in U.S. dollars.
- The original deposit receipt for any balance of tax due that
you paid in nonconvertible foreign currency.
If you are liable for estimated tax (discussed later), figure
the amount you can pay to the IRS in nonconvertible foreign currency using the
following formula.
| | Adjusted gross income that is blocked income | × | Total estimated U.S. tax | = | Estimated tax on blocked income | |
| | Total adjusted
gross income
| |
If you must pay your host country income tax on your grant, subtract
any estimated foreign tax credit that applies to your grant from the estimated
tax on the blocked income.
taxmap/pubs/p54-001.htm#en_us_publink100047346Once you have determined the amount of the actual tax or estimated
tax that you can pay in nonconvertible foreign currency, deposit that amount
with the disbursing officer of the Department of State in the foreign country in
which the foundation or commission paying the grant is located.
taxmap/pubs/p54-001.htm#en_us_publink100047347You can either deposit the full estimated tax amount before the
first installment due date or make four equal payments before the installment
due dates. See
Estimated Tax,
later.
taxmap/pubs/p54-001.htm#en_us_publink100047348Upon accepting the foreign currency, the disbursing officer will
give you a receipt in duplicate. The original of this receipt (showing the
amount of foreign currency deposited and its equivalent in U.S. dollars) should
be attached to your Form 1040 or payment voucher from Form 1040-ES. Keep the
copy for your records.
taxmap/pubs/p54-001.htm#en_us_publink100047349IRS
e-file
(electronic filing) is the fastest, easiest, and most convenient
way to file your income tax return electronically.
IRS
e-file
offers accurate, safe, and fast alternatives to filing on paper.
IRS computers quickly and automatically check for errors or other missing
information. Even returns with a foreign address can be e-filed!
taxmap/pubs/p54-001.htm#en_us_publink100047350There are three ways you can
e-file.
- Use your personal computer.
- Use a volunteer. Many programs offering free tax help can
e-file your return.
- Use a tax professional. Most tax professionals can
e-file your return.
These methods are explained in detail in the instructions for
your tax return.
If any of the following situations apply to you, file your return
with the:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
- You claim the foreign earned income exclusion.
- You claim the foreign housing exclusion or deduction.
- You live in a foreign country.
The exclusions and the deduction are explained in chapter 4.
If you do not know where your legal residence is and you do not
have a principal place of business in the United States, you can file with the
address listed above.
However, you should not file with the address listed above if
you are a bona fide resident of the U.S. Virgin Islands, Guam, or the
Commonwealth of the Northern Mariana Islands during your entire tax year.
taxmap/pubs/p54-001.htm#en_us_publink100047352 | If you are a bona fide resident of the USVI during your entire
tax year, you generally are not required to file a U.S. return. However, you
must file a return with the USVI. Send your return to the:
Virgin Islands Bureau of Internal Revenue
9601 Estate Thomas
Charlotte Amalie
St. Thomas, Virgin Islands 00802
|
taxmap/pubs/p54-001.htm#en_us_publink100047354If you are a U.S. citizen or resident alien and you have income
from sources in the USVI or income effectively connected with the conduct of a
trade or business in the USVI, and you are not a bona fide resident of the USVI
during your entire tax year, you must file identical tax returns with the United
States and the USVI. File the original return with the United States and file a
copy of the U.S. return (including all attachments, forms, and schedules) with
the Virgin Islands Bureau of Internal Revenue.
You must complete Form 8689, Allocation of Individual Income
Tax to the U.S. Virgin Islands, and attach a copy to both your U.S. return and
your USVI return. You should file your U.S. return with the address listed under
Where To File.
See Publication 570, Tax Guide for Individuals With Income From
U.S. Possessions, for information about filing Virgin Islands returns.
taxmap/pubs/p54-001.htm#en_us_publink100047355 | If you are a bona fide resident of Guam during your entire
tax year, you should file a return with Guam. Send your return to the:
Department of Revenue and Taxation
Government of Guam
P.O. Box 23607
GMF, GU 96921
|
However, if you have income from sources within Guam and you
are a U.S. citizen or resident alien, but not a bona fide resident of Guam
during the entire tax year, you should file a return with the United States.
Send your return to the address listed under
Where To File.
See Publication 570 for information about filing Guam returns.
taxmap/pubs/p54-001.htm#en_us_publink100047357 | If you are a bona fide resident of the Commonwealth of the
Northern Mariana Islands (CNMI) during your entire tax year, you should file a
return with the Northern Mariana Islands. Send your return to the:
Division of Revenue and Taxation
Commonwealth of the Northern Mariana Islands
P.O. Box 5234, CHRB
Saipan, MP 96950
|
However, if you have income from sources within the CNMI and
you are a U.S. citizen or resident alien, but not a bona fide resident of the
CNMI during the entire tax year, you should file a return with the United
States. Send your return to the address listed under
Where To File.
See Publication 570 for information about filing Northern Mariana
Islands returns.
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