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Important
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For information call now:
(347) 989-4566
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Additional information
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Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
IN
1-800-829-1040
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Deductions
You can claim deductions to figure your
effectively connected taxable income. You generally cannot claim deductions
related to income that is not connected with your U.S. business activities.
Except for personal exemptions, and certain itemized deductions, discussed
later, you can claim deductions only to the extent they are connected with your
effectively connected income.
1. You can deduct all ordinary and necessary expenses
in the operation of your U.S. trade or business to the extent they relate to
income
effectively connected with a
trade or business in the United States. .
2. You can deduct losses resulting from transactions that you
entered into for profit and that you were not reimbursed for by insurance, etc.
to the extent that they relate to income that is
effectively connected with a
trade or business in the United States.
3. Educator expenses. See your tax form instructions.
4. Individual retirement arrangement (IRA). See Publication
590.
5. If you are a nonresident alien temporarily in the United
States earning taxable income for performing personal services, you can deduct
moving expenses to the United States if you meet both of the following tests.
� You are a full-time employee for at least 39 weeks during the 12 months right
after you move, or if you are self-employed, you work full time for at least 39
weeks during the first 12 months and 78 weeks during the first 24 months right
after you move.
� Your new job location is at least 50 miles farther (by the shortest commonly
traveled route) from your former home than your former job location was. If you
had no former job location, the new job location must be at least 50 miles from
your former home.
You cannot deduct the moving expense you have when returning to your home abroad
or moving to a foreign job site. Figure your deductible moving expenses to the
United States on Form 3903, and deduct them on line 26 of Form 1040NR.
6. If your employer reimbursed you for
allowable moving expenses under an accountable plan, your employer should have
excluded these reimbursements from your income. You can only deduct allowable
moving expenses that were not reimbursed by your employer or that were
reimbursed but the reimbursement was included in your income.
7. If you deduct moving expenses to the United States, you
cannot also deduct travel expenses while temporarily away from your tax home in a
foreign country. Moving expenses are based on a change in your principal place
of business while travel expenses are based on your temporary absence from your
principal place of business.
8. If you are self-employed, you may be able to deduct
contributions to a SEP, SIMPLE, or qualified
retirement plan that provides retirement benefits for yourself and your
common-law employees, if any. To make deductible contributions for yourself, you
must have net earnings from self-employment that are effectively connected with
your U.S. trade or business.
9. Student loan interest expense.Generally, you can claim the
deduction if all of the following requirements are met.
1. Your filing status is any filing status except married filing separately.
2. Your modified adjusted gross income is less than $75,000.
3. No one else is claiming an exemption for you on his or her tax return.
4. You paid interest on a loan taken out only to pay tuition and other qualified higher education expenses for yourself, your spouse,
someone who was your dependent when the loan was taken out, or someone you could
have claimed as a dependent for the year the loan was taken out except that:
a. The person filed a joint return,
b. The person had gross income that was equal to or more than the exemption amount for that year ($3,650
for 2010), or
c. You could be claimed as a dependent on someone else�s return.
5. The loan is not from a related person or a person who borrowed the proceeds under a qualified employer plan or a contract
purchased under such a plan.
6. The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out.
7. The person for whom the expenses were paid or incurred was an eligible student.
Use the worksheet in the Form 1040NR or Form 1040NR-EZ instructions to figure
the deduction. For more information, see Publication 970, Tax Benefits for
Education. .
10. You must include in income all effectively connected interest income you
receive or that is credited to your account during the year. Do not reduce it by
any penalty you must pay on an early withdrawal from a time savings account.
However, if the interest income is
effectively connected with your
U.S. trade or business during the year, you can deduct on line 30 of Form
1040NR the amount of the early withdrawal penalty that the
banking institution charged.
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