Table of Contents
- Topics - This chapter discusses:
- Useful Items - You may want to see:
- Filing Requirements
- Nonresident Alien Spouse Treated as a Resident
- Estimated Tax
- Other Forms You May Have To File
Whether you have to file a return,
When to file your return and pay any tax due,
How to treat foreign currency,
How to file electronically,
Where to file your return,
When you can treat your nonresident alien spouse as a resident, and
When you may have to make estimated tax payments.
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.
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 2014 if your gross income from worldwide sources is at least the amount shown for your filing status in the following table.
|65 or older||$11,700|
|Head of household||$13,050|
|65 or older||$14,600|
|65 or older||$17,550|
|Married filing jointly||$20,300|
|Not living with spouse at end of year||$3,950|
|One spouse 65 or older||$21,500|
|Both spouses 65 or older||$22,700|
|Married filing separately||$3,950|
|*If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return.|
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.
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.
EFTPS (Electronic Federal Tax Payment System), or
Federal Tax Application (same-day wire transfer).
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.
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.
You want the IRS to figure your tax, or
You are under a court order to file by the regular due date.
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 2013. 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.
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0045
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.
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0045
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.
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.
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:
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.
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.
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.
|Adjusted gross income that is blocked income||×||Total U.S. tax||=||Tax on blocked income|
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.
|Adjusted gross income that is blocked income||×||Total estimated U.S. tax||=||Estimated tax on blocked income|
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!
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.
If any of the following situations apply to you, do not file your return with the service center listed for your home state.
You claim the foreign earned income exclusion.
You claim the foreign housing exclusion or deduction.
You live in a foreign country.
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.
Virgin Islands Bureau of Internal Revenue
6115 Estate Smith Bay
St. Thomas, Virgin Islands 00802
Department of Revenue and Taxation
Government of Guam
P.O. Box 23607
GMF, GU 96921
Division of Revenue and Taxation
Commonwealth of the Northern Mariana Islands
P.O. Box 5234, CHRB
Saipan, MP 96950
If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other is a nonresident alien, you can choose to treat the nonresident as a U.S. resident. This includes situations in which one of you is a nonresident alien at the beginning of the tax year and a resident alien at the end of the year and the other is a nonresident alien at the end of the year.
If you make this choice, the following two rules apply.
You and your spouse are treated, for income tax purposes, as residents for all tax years that the choice is in effect.
You must file a joint income tax return for the year you make the choice.
This means that neither of you can claim under any tax treaty not to be a U.S. resident for a tax year for which the choice is in effect.
You can file joint or separate returns in years after the year in which you make the choice.
Pat Smith, a U.S. citizen, is married to Norman, a nonresident alien. Pat and Norman make the choice to treat Norman as a resident alien by attaching a statement to their joint return. Pat and Norman must report their worldwide income for the year they make the choice and for all later years unless the choice is ended or suspended. Although Pat and Norman must file a joint return for the year they make the choice, they can file either joint or separate returns for later years.
When Bob and Sharon Williams got married, both were nonresident aliens. In June of last year, Bob became a resident alien and remained a resident for the rest of the year. Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return for last year. Bob and Sharon must report their worldwide income for last year and all later years unless the choice is ended or suspended. Bob and Sharon must file a joint return for last year, but they can file either joint or separate returns for later years.
If you choose to treat your nonresident alien spouse as a U.S. resident, your spouse must have either an SSN or an individual taxpayer identification number (ITIN).
To get an SSN for a nonresident alien spouse, apply at an office of the U.S. Social Security Administration (SSA) or U.S. consulate. You must complete Form SS-5, Application for a Social Security Card, available at www.socialsecurity.gov or by calling 1-800-772-1213. You must also provide original or certified copies of documents to verify that spouse's age, identity, and citizenship.
If the nonresident alien spouse is not eligible to get an SSN, he or she can file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS to apply for an ITIN.
Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following:
A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year and that you choose to be treated as U.S. residents for the entire tax year, and
The name, address, and social security number (or individual taxpayer identification number) of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)
You generally make this choice when you file your joint return. However, you also can make the choice by filing a joint amended return on Form 1040X. Attach Form 1040, 1040A, or 1040EZ and print “Amended” across the top of the amended return. If you make the choice with an amended return, you and your spouse also must amend any returns that you may have filed after the year for which you made the choice.
You generally must file the amended joint return within 3 years from the date you filed your original U.S. income tax return or 2 years from the date you paid your income tax for that year, whichever is later.
|Revocation||Either spouse can revoke the choice for any tax year.|
|•||The revocation must be made by the due date for filing the tax return for that tax year.|
|•||The spouse who revokes the choice must attach a signed statement declaring that the choice is being revoked. The statement revoking the choice must include the following:|
|•||The name, address, and social security number (or taxpayer identification number) of each spouse.|
|•||The name and address of any person who is revoking the choice for a deceased spouse.|
|•||A list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income.|
|•||If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where the last joint return was filed.|
|Death||The death of either spouse ends the choice, beginning with the first tax year following the year in which the spouse died.|
|•||If the surviving spouse is a U.S. citizen or resident alien and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used.|
|•||If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died.|
|A divorce or legal separation ends the choice as of the beginning of the tax year in which the legal separation occurs.|
|Inadequate records||The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records.|
The choice to be treated as a resident alien does not apply to any later tax year if neither of you is a U.S. citizen or resident alien at any time during the later tax year.
Dick Brown was a resident alien on December 31, 2011, and married to Judy, a nonresident alien. They chose to treat Judy as a resident alien and filed joint income tax returns for 2011 and 2012. On January 10, 2013, Dick became a nonresident alien. Judy had remained a nonresident alien. Because Dick was a resident alien during part of 2013, Dick and Judy can file joint or separate returns for that year. Neither Dick nor Judy was a resident alien at any time during 2014 and their choice is suspended for that year. For 2014, both are treated as nonresident aliens. If Dick becomes a resident alien again in 2015, their choice is no longer suspended and both are treated as resident aliens.
Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier) or ended in one of the ways shown in Table 1-1.
If the choice is ended for any of the reasons listed in Table 1-1, neither spouse can make a choice in any later tax year.
The requirements for determining who must pay estimated tax are the same for a U.S. citizen or resident abroad as for a taxpayer in the United States. For current instructions on making estimated tax payments, see Form 1040-ES.
If you had a tax liability for 2014, you may have to pay estimated tax for 2015. Generally, you must make estimated tax payments for 2015 if you expect to owe at least $1,000 in tax for 2015 after subtracting your withholding and credits and you expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your 2015 tax return, or
100% of the tax shown on your 2014 tax return. (The return must cover all 12 months.)
If less than two-thirds of your gross income for 2014 and 2015 is from farming or fishing and your adjusted gross income for 2014 is more than $150,000 ($75,000 if you are married and file separately), substitute 110% for 100% in (2). See Publication 505 for more information.
The first installment of estimated tax is due on April 15, 2015.
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