Filing Requirements If you are a U.S. citizen or resident alien living or travelingoutside the United States, you generally are required to file incometax returns, estate tax returns, and gift tax returns and payestimated tax in the same way as those residing in the United States. Your income, filing status, and age generally determine whether youmust file a return. Generally, you must file a return for 1999 if yourgross income is at least the amount shown for your filing status inthe following table: Filing Status Amount Single $7,050  65 or older $8,100 Head of household $9,100  65 or older $10,150 Qualifying widow(er) $9,950  65 or older $10,800 Married filing jointly $12,700  Not living with spouse at end ofyear $2,750  One spouse 65 or older $13,550  Both spouses 65 or older $14,400 Married filing separately $2,750 If you are the dependent of another taxpayer,see the instructions for Form 1040 for more information on whether youmust file a return. Gross income.This includes all income you receive in the form of money, goods,property, and services that is not exempt from tax. In determining whether you must file a return, you must consider asgross income any income that you exclude as foreign earned income oras a foreign housing amount. If you must file a return and you excludeall or part of your income under these rules, you must prepare Form2555, discussed later. You may be able to file Form 2555-EZ ifyou are claiming only the foreign earned income exclusion. Self-employed individuals.If you are self-employed, your gross income includes the amount online 7 of Schedule C (Form 1040), Profit or Loss From Business,or line 1 of Schedule C-EZ (Form 1040), Net Profit FromBusiness. Caution: If your net self-employment income is $400 or more, you must file areturn even if your gross income is below the amount for filingpurposes listed above. 65 or older.You are 65 on the day before your 65th birthday. If your 65thbirthday is on January 1, you would be 65 on December 31 of theprevious year. When To File and Pay If you file on the calendar year basis, the due date for filingyour return is April 15 of the following year. (Because April 15,2000, falls on Saturday, the due date for your 1999 return will beApril 17.) If you file on a fiscal year basis (a year ending on thelast day of any month except December), the due date is 3 months and15 days after the close of your fiscal year. In general, the tax shownon your return should be paid by the due date of the return, withoutregard to any extension of time for filing the return. Caution: A tax return delivered by the U.S. mail or a designated deliveryservice that is postmarked or dated by the delivery service on orbefore the due date is considered to have been filed on or before thatdate. This rule does not apply if a return is filed late. A returnpostmarked or date marked after the due date is not considered fileduntil it is received by Internal Revenue Service (IRS). You can use certain private delivery services designated by the IRSto meet the "timely mailing as timely filing/paying" rule fortax returns and payments. The IRS publishes a list of the designatedprivate delivery services in September of each year. Extensions You can be granted an extension of time to file your return. Insome circumstances, you can also be granted an extension of time tofile 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 thetax is paid. Automatic 2-month extension.You may be allowed an automatic 2-month extension to fileyour return and pay any federal income tax that is due. You will beallowed the extension if you are a U.S. citizen or resident and on theregular due date of your return: hotels HamburgYou are living outside of the United States and Puerto Ricoand your main place of business or post of duty is outside the UnitedStates and Puerto Rico, or You are in military or naval service on duty outside theUnited States and Puerto Rico. If you use a calendar year, the regular due date of your return isApril 15. Service in a combat zone.If you served in a combat zone or qualified hazardous duty area,see Extension of deadline in Publication 3. Married taxpayers.If you file a joint return, either you or your spouse can qualifyfor the automatic extension. If you and your spouse file separatereturns, this automatic extension applies only to the spouse whoqualifies. How to get the extension.To use this automatic 2-month extension, you must attach astatement to your return explaining which of the two situations listedearlier qualified you for the extension. Extensions beyond 2 months.If you are unable to file your return within the automatic 2-monthextension period, you may be able to get an additional 2-monthextension of time to file your return, for a total of 4 months. This additional 2-month extension of time to file is notan extension of time to pay. See Time to pay not extended,later. 4-month extension.If you are not able to file your 1999 return by the due date, youmay be able to get an automatic 4-month extension of time to file. Toget this automatic extension, you must file Form 4868 or pay the taxdue by credit card (see the form instructions). Caution: You may not be eligible. You cannot use the automatic4-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 duedate. When to file.Generally, you must request the 4-month extension by the regulardue date for your return. 2-month extension.ERROR MSGIf you qualify for the 2-month extension discussed above becauseyour tax home and abode are outside the United States and Puerto Rico,that extension and the 4-month extension start at the same time. Youdo not have to request the 4-month extension until the new due dateallowed by the first extension, but the total combined extension willstill only be 4 months from the regular due date. Time to pay not extended.A 4-month extension of time to file is not an extension of time topay. You must make an accurate estimate of your tax and send anynecessary payment with your Form 4868 or pay the tax due by creditcard. 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 unpaidamount. You also may be charged a penalty for paying the tax late unlessyou have reasonable cause for not paying your tax when due. Interestand penalties are assessed (charged) from the original due date ofyour return. Extension beyond the 4 months.If you qualify for the 4-month extension and you later find thatyou are not able to file within the 4-month extension period, you maybe able to get 2 more months to file, for a total of 6 months. hotel rooms Frankfurt am MainYou can apply for an extension beyond the 4-month extension eitherby sending a letter to the IRS or by filing Form 2688. Youshould request the extension early so that, if refused, you still willbe able to file on time. Except in cases of undue hardship, Form 2688or a request by letter will not be accepted until you have first usedthe 4-month extension. Form 2688 or your letter will not be consideredif you send it after the extended due date. To get an extension beyond the automatic 4-month extension, youmust give all the following information. The reason for requesting the extension. The tax year to which the extension applies. The length of time needed for the extension. Whether another extension for time to file has already beenrequested for this tax year. You can sign the request for this extension, or it can besigned by your attorney, CPA, enrolled agent, or a person with a powerof attorney. If you are unable to sign the request because of illnessor for another good reason, a person in close personal or businessrelationship to you can sign the request. Extension granted.If your application for this extension is approved, you will benotified by the IRS. Attach the notice to your return when you fileit. If an extension is granted and the IRS later determines that thestatements made on your request for this extension are false ormisleading and an extension would not have been granted based on thetrue facts, the extension is null and void. You may have to pay thefailure-to-file penalty if you file after the regular due date. Extension not granted.If your application for this extension is not approved, you mustfile your return by the extended due date of the automatic extension.You may be allowed to file within 10 days of the date of the noticeyou get from the IRS if the end of the 10-day period is later than thedue date. The notice will tell you if the 10-day grace period isgranted. Further extensions.You generally cannot get an extension of more than 6 months.However, if you are outside the United States and meet certain tests,you may be able to get a longer extension. See Bona fideresidence or physical presence test not yet met, next. Bona fide residence or physical presence test not yet met.You can get an extension of time to file your tax return if youneed the time to meet either the bona fide residence test or thephysical presence test to qualify for either the foreign earned incomeexclusion 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 followingapply. You are a U.S. citizen or resident. You expect to meet either the bona fide residence test orthe physical presence test, but not until after your tax return isdue. Your tax home is in a foreign country (or countries)throughout your period of bona fide residence or physical presence,whichever applies. chambres d'hotel de luxe WaterfordGenerally, if you are granted an extension, it will be to 30 daysbeyond the date on which you can reasonably expect to qualify undereither the bona fide residence test or the physical presence test.However, if you have moving expenses that are for services performedin 2 years, you may be granted an extension to 90 days beyond theclose of the year following the year of first arrival in the foreigncountry. How to get extension.To obtain an extension, you should file Form 2350 with the InternalRevenue Service Center, Philadelphia, PA 19255-0002, the localIRS representative, or other IRS employee. 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 UnitedStates and Puerto Rico on the regular due date of your return and youfile on a calendar year basis, the due date for filing your return isJune 15. What if tests not met.If you obtain an extension of time and unforeseen events make itimpossible for you to satisfy either the bona fide residence test orthe physical presence test, you should file your income tax return assoon as possible because you must pay interest on any tax due afterthe regular due date of the return (even though an extension wasgranted). Caution: You should make any request for an extension early, so that if itis denied you still can file your return on time. Otherwise, if youfile late and additional tax is due, you may be subject to a penalty. Return filed before test met.If you file a return before you meet the bona fide residence testor the physical presence test, you must include all income from bothU.S. and foreign sources and pay the tax on that income. If you laterqualify for the foreign earned income exclusion, the foreign housingexclusion, or the foreign housing deduction under the bona fideresidence or physical presence rules, you can file a claim for refundof tax on Form 1040X. The refund will be the difference between theamount of tax already paid and the tax liability as figured after theexclusion or deduction. Foreign Currency You must express the amounts you report on your U.S. tax return inU.S. dollars. If you receive all or part of your income or pay some orall of your expenses in foreign currency, you must translate theforeign currency into U.S. dollars. How you do this depends on yourfunctional currency. Your functional currency generally isthe U.S. dollar unless you are required to use the currency of aforeign country. You must make all federal income tax determinations in yourfunctional currency. The U.S. dollar is the functional currency forall taxpayers except some qualified business units. A qualifiedbusiness unit is a separate and clearly identified unit of a trade orbusiness that maintains separate books and records. Unless you areself-employed, your functional currency is the U.S. dollar. Even if you are self-employed and have a qualified business unit,your functional currency is the dollar if any of the following apply. You conduct the business in dollars. The principal place of business is located in the UnitedStates. You choose to or are required to use the dollar as yourfunctional currency. The business books and records are not kept in the currencyof the economic environment in which a significant part of thebusiness activities is conducted. If your functional currency is the U.S. dollar, you mustimmediately translate into dollars all items of income, expense, etc.(including taxes), that you receive, pay, or accrue in a foreigncurrency and that will affect computation of your income tax. Use theexchange rate prevailing when you receive, pay, or accrue the item. Ifthere is more than one exchange rate, use the one that most properlyreflects your income. You can generally get exchange rates from banksand U.S. Embassies. If your functional currency is not the U.S. dollar, make all incometax determinations in your functional currency. At the end of theyear, translate the results, such as income or loss, into U.S. dollarsto report on your income tax return. Blocked Income You generally must report your foreign income in terms of U.S.dollars and, with one exception (see Fulbright grantslater), you must pay taxes due on it in U.S. dollars. If, because of restrictions in a foreign country, your income isnot readily convertible into U.S. dollars or into other money orproperty that is readily convertible into U.S. dollars, your income is"blocked" or "deferrable" income. You can report this incomein 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 becomesunblocked. If you choose to postpone the reporting of the income, you mustfile an information return with your tax return. For this informationreturn, you should use another Form 1040 labeled "Report ofDeferrable Foreign Income, pursuant to Rev. Rul. 74-351." Youmust declare on the information return that the deferrable income willbe included in taxable income in the year that it becomes unblocked.You also must state that you waive any right to claim that thedeferrable income was includible in income for any earlier year. You must report your income on your information return using theforeign currency in which you received that income. If you haveblocked income from more than one foreign country, include a separateinformation return for each country. Income becomes unblocked and reportable for tax purposes when itbecomes convertible, or when it is converted, into dollars or intoother money or property that is convertible into U.S. currency. Also,if you use blocked income for your personal expenses or dispose of itby gift, bequest, or devise, you must treat it as unblocked andreportable. If you have received blocked income on which you have not paid thetax, you should check to see whether that income is still blocked. Ifit is not, you should take immediate steps to pay the tax on it, filea declaration or amended declaration of estimated tax, and include theincome on your tax return for the year in which the income becameunblocked. If you choose to postpone reporting blocked income and in a latertax year you wish to begin including it in gross income although it isstill blocked, you must obtain the permission of the IRS to do so. Toapply for permission, file Form 3115, Application for Change inAccounting Method. You also must request permission fromthe IRS on Form 3115 if you have not chosen to defer the reporting ofblocked income in the past, but now wish to begin reporting blockedincome under the deferred method. See the instructions for Form 3115for information. Fulbright grants.All income must be reported in U.S. dollars. In most cases, the taxmust also be paid in U.S. dollars. If, however, at least 70% of yourFulbright grant has been paid in nonconvertible foreign currency(blocked income), you can use the currency of the host country to paypart of the U.S. tax that is based on the blocked income. To determinethe amount of the tax that you can pay in foreign currency getPublication 520. Details of these arrangements may also be obtainedfrom the U.S. Educational Foundations or Commissions in foreigncountries. Where To File If any of the following situations apply to you, you should fileyour return with the: Internal Revenue Service Center Philadelphia, PA 19255-0215. You claim the foreign earned income exclusion. You claim the foreign housing exclusion or deduction. You claim the exclusion of income for bona fide residents ofAmerican Samoa. You live in a foreign country or U.S. possession and have nolegal residence or principal place of business in the UnitedStates. The exclusions and the deduction are explained in chapter 4. If you do not know where your legal residence is and you do nothave a principal place of business in the United States, you can filewith the Philadelphia Service Center. The address for the PhiladelphiaService Center is shown above. However, you should not file with the Philadelphia Service Centerif you are a bona fide resident of the Virgin Islands or a resident ofGuam or the Commonwealth of the Northern Mariana Islands on the lastday of your tax year. Resident of Virgin Islands Envelope: If you are a bona fide resident of the Virgin Islands on the lastday of your tax year (even if your legal residence or principal placeof business is in the United States), you must file your return withthe Virgin Islands and pay your tax on income you have from allsources to the: Virgin Islands Bureau of Internal Revenue 9601 Estate Thomas Charlotte Amalie St. Thomas, Virgin Islands 00802. Non-Virgin Islands resident with Virgin Islands Income.If you are a U.S. citizen or resident and you have income fromsources in the Virgin Islands or income effectively connected with theconduct of a trade or business in the Virgin Islands, and you are nota bona fide resident of the Virgin Islands on the last day of your taxyear, you must file identical tax returns with the United States andthe Virgin Islands. File the original return with the United Statesand file a copy of the U.S. return (including all attachments, forms,and schedules) with the Virgin Islands Bureau of Internal Revenue. The amount of tax you must pay to the Virgin Islands is figured bythe following computation: Formula Form 8689, Allocation ofIndividual Income Tax to the Virgin Islands, is used for thiscomputation. You must complete this form and attach it to yourreturn. You should pay any tax due to the Virgin Islands whenyou file your return with the Virgin Islands Bureau of InternalRevenue. You should file your U.S. return with the Internal Revenue ServiceCenter, Philadelphia, PA 19255-0215. Resident of Guam Envelope: If you are a resident of Guam on the last day of your tax year, youshould file a return with Guam and pay your tax on income you havefrom all sources to the: Department of Revenue and Taxation Government of Guam P.O. Box 23607 GMF, GU 96921. However, if you are a resident of the United States on the last dayof your tax year, you should file a return with the United States andpay your tax on income you have from all sources to the InternalRevenue Service Center, Philadelphia, PA 19255-0215. See Publication 570,Tax Guide for Individuals With IncomeFrom U.S. Possessions, for information about the filingrequirements for residents of Guam. Resident of the Commonwealth of the Northern Mariana Islands Envelope: If you are a resident of the Commonwealth of the Northern MarianaIslands on the last day of your tax year, you should file a returnwith the Northern Mariana Islands and pay your tax on income you havefrom all sources to the: Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P.O. Box 5234, CHRB Saipan, MP 96950. However, if you are a resident of the United States on the last dayof your tax year, you should file a return with the United States andpay your tax on income you have from all sources to the InternalRevenue Service Center, Philadelphia, PA 19255-0215. See Publication 570for information about the filing requirementsfor residents of the Commonwealth of the Northern Mariana Islands. Terrorist or Military Action U.S. income taxes are forgiven for U.S. Government military orcivilian employees who die as a result of wounds or injuries sustainedoutside the United States in a terrorist or military action directedagainst the United States or its allies. The taxes are forgiven forthe deceased employee's tax years beginning with the year immediatelybefore the year in which the injury or wounds were incurred and endingwith the year of death. If the deceased government employee and the employee's spouse had ajoint income tax liability for those years, the tax must be dividedbetween the spouses to determine the amount forgiven. For more information on how to have the tax forgiven or how toclaim a refund of tax already paid, see Publication 559,Survivors, Executors, and Administrators.