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Current Year Tax Map
Publication 54
taxmap/pubs/p54-001.htm#en_us_publink100047317

Chapter 1
Filing Information(p3)


taxmap/pubs/p54-001.htm#TXMP1a234539

Useful 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_publink100047318

Filing Requirements(p3)

rule
If 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 2012 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$ 9,750
65 or older$11,200
Head of household$12,500
65 or older$13,950
Qualifying widow(er)$15,700
65 or older$16,850
Married filing jointly$19,500
Not living with spouse at end of year$ 3,800
One spouse 65 or older$20,650
Both spouses 65 or older$21,800
Married filing separately$ 3,800
*If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return.
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Gross income.(p3)

rule
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 1d of Schedule C-EZ (Form 1040), Net Profit From Business.
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Self-employed individuals.(p3)

rule
If 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_publink100047321

65 or older.(p3)

rule
You are considered to be age 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2013, you are considered 65 for 2012.
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Residents of U.S. possessions.(p3)

rule
If 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 for the form for more information.
taxmap/pubs/p54-001.htm#en_us_publink100047323

When To File and Pay(p3)

rule
If 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.
EIC
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.
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Foreign wire transfers. (p3)

rule
If you have a U.S. bank account, you can use: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.
For more information, visit www.eftps.gov.
taxmap/pubs/p54-001.htm#en_us_publink100047325

Extensions(p4)

rule
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.
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Automatic 2-month extension.(p4)

rule
You 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:
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.
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Married taxpayers.(p4)
If 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.
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How to get the extension.(p4)
To 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.
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Automatic 6-month extension.(p4)

rule
If 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.
EIC
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.
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E-file options.(p4)
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.
  1. 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 2011. 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.
  2. 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.
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When to file.(p4)
Generally, you must request the 6-month extension by the regular due date of your return.
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Previous 2-month extension.(p4)
If 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).
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Additional extension of time for taxpayers out of the country.(p4)

rule
In 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 73301-0045


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_publink100047335

Extension of time to meet tests.(p4)

rule
You 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.
  1. You are a U.S. citizen or resident alien.
  2. You expect to meet either the bona fide residence test or the physical presence test, but not until after your tax return is due.
  3. 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.
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How to get an extension.(p4)
To 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 73301-0045


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_publink100047337
What if tests are not met.(p4)
If 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).
EIC
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_publink100047339
Return filed before test is met.(p5)
If 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_publink100047340

Foreign Currency(p5)

rule
You 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.
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_publink100047341

Blocked Income(p5)

rule
You 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:
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.
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Fulbright Grant(p5)

rule
All 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.
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Paying U.S. tax in foreign currency.(p5)

rule
To qualify for this method of payment, you must prepare a statement that shows the following information. 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_publink100047344
Figuring actual tax.(p5)
When 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.
taxmap/pubs/p54-001.htm#en_us_publink100047345
Figuring estimated tax on nonconvertible foreign currency.(p5)
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_publink100047346

Deposit of foreign currency with disbursing officer.(p6)

rule
Once 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_publink100047347
Estimated tax installments.(p6)
You 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.
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Deposit receipt.(p6)
Upon 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.
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Does My Return
Have To Be On Paper?(p6)

rule
IRS 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!
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How to e-file.(p6)

rule
There are three ways you can e-file.
  1. Use your personal computer.
  2. Use a volunteer. Many programs offering free tax help can e-file your return.
  3. 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.
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Where To File(p6)

rule
If any of the following situations apply to you, do not file your return with the service center listed for your home state.
Instead, use one of the following special addresses. If you are not enclosing a check or money order, file your return with the:

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215 USA


If you are enclosing a check or money order, file your return with:

Internal Revenue Service Center
P.O. Box 1303
Charlotte, NC 28201-1303 USA


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 appropriate address listed above.
However, you should not file with the addresses 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.
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Resident of U.S. Virgin Islands (USVI).(p6)

rule
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.
Due date
Send your return to the:




Virgin Islands Bureau of Internal Revenue
6115 Estate Smith Bay
Suite 225
St. Thomas, Virgin Islands 00802


taxmap/pubs/p54-001.htm#en_us_publink100047354

Non-USVI resident with USVI income.(p6)

rule
If 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 signed 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.
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Resident of Guam.(p6)

rule
If you are a bona fide resident of Guam during your entire tax year, you should file a return with Guam.
Due date
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

Resident of the Commonwealth of the Northern Mariana Islands.(p6)

rule
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.
Due date
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.