Department of the Treasury

Internal Revenue Service

Instructions for Form 1040-C

U.S. Departing Alien Income Tax Return

General Instructions Self-Employment Tax.—The limit on the

amount of self-employment income
Rental Real Estate Losses and Credits
of Real Estate Professionals.—Certain
subject to the 2.9% Medicare tax has individuals who materially participate in
Privacy Act and Paperwork been repealed. real property trades or businesses, and
Reduction Act Notice Business Meals and Entertainment.— who perform more than one-half of their
We ask for the information on this form The deductible portion of business meal personal services and more than 750
to carry out the Internal Revenue laws of costs and entertainment expenses has hours of services during the year in
the United States. Internal Revenue been reduced from 80% to 50%. those trades or businesses, are not
Code sections 6001, 6011, 6012(a), Club Dues.—No deduction is allowed subject to the passive activity limitations
6851, and their regulations require that for amounts paid or incurred after 1993 on losses and credits from rental real
you give us the information. We need it for membership dues in any club estate activities in which they materially
to ensure that you are complying with organized for business, pleasure, participate. Services performed as an
these laws and to allow us to figure and recreation, or other social purpose. employee are generally not treated as
collect the right amount of tax. Travel Expenses.—No deduction is performed in a real property trade or
Routine uses of this information allowed for travel expenses paid or business. For more details, including the
include giving it to the Department of incurred after 1993 for a spouse, definition of a real property trade or
Justice for civil and criminal litigation dependent, or other individual business, see Pub. 553.
and to cities, states, and the District of accompanying you on business travel,
Columbia to carry out their tax laws. If unless that spouse, dependent, or other Purpose of Form
you do not give the information asked individual is your employee and the Form 1040-C is used by aliens who
for, you may be charged penalties and, travel is for a bona fide business intend to leave the United States to
in certain cases, you may be subject to purpose and would otherwise be report income they received or expect to
criminal prosecution. deductible by that person. receive for the entire year.
The time needed to complete and file Social Security Benefits.—If your 1994 If you are a nonresident alien, use the
this form will vary depending on income, including one-half of your social 1993 Instructions for Form 1040NR,
individual circumstances. The estimated security benefits, is over $34,000 if U.S. Nonresident Alien Income Tax
average time is: Recordkeeping, 2 hr., 5 single (over $44,000 if married filing Return. Also, Pub. 519, U.S. Tax Guide
min.; Learning about the law or the jointly), more of your benefits may be for Aliens, and Pub. 901, U.S. Tax
form, 44 min.; Preparing the form, 2 taxable. For some people, up to 85% Treaties, will be helpful in filling in Form
hr., 19 min.; and Copying, assembling, will be taxable. For details, including 1040-C.
and sending the form to the IRS, 1 hr., rules for married persons filing If you are a resident alien, the 1993
13 min. separately and a worksheet to figure Instructions for Form 1040, U.S.
If you have comments concerning the your taxable benefits, see Pub. 553. This Individual Income Tax Return, will help
accuracy of these time estimates or change does not apply to nonresident you complete Form 1040-C.
suggestions for making this form more aliens.
You can get copies of tax forms,
simple, we would be happy to hear from Earned Income Credit.—The maximum instructions, and publications from the
you. You can write to both the Internal credit and the income limit have been Internal Revenue Service. If you have a
Revenue Service, Attention: Reports increased. But the health insurance foreign address, send your order to
Clearance Officer, PC:FP, Washington, credit and the extra credit for a child either: Eastern Area Distribution Center,
DC 20224; and the Office of born during the year are no longer P.O. Box 25866, Richmond, VA
Management and Budget, Paperwork allowed. Also, new rules allow certain 23286-8107, USA; or Western Area
Reduction Project (1545-0086), individuals without qualifying children to Distribution Center, Rancho Cordova, CA
Washington, DC 20503. DO NOT send take the credit. 95743-0001, USA, whichever is closer.
the tax form to either of these offices. Charitable Contributions.—Generally, Please order by publication or form
Instead, see How To Obtain the no deduction is allowed for any number.
Certificate on page 2. contribution of $250 or more, unless you Alien Status Rules.—If you are not a
obtain a written acknowledgement from citizen of the United States, specific
Tax Law Changes for 1994 the charitable organization. rules apply to determine if you are a
Use your 1993 tax return as a guide for Moving Expenses.—New rules apply to resident alien or nonresident alien. Intent
figuring your tax liability, but be sure to expenses incurred after 1993. Under the is not important in determining your
consider the changes noted in this new rules, the distance test has been residency status. You are considered a
section. For more information on these increased from 35 miles to 50 miles. The resident alien if you meet either the
changes and other provisions that may cost of meals, pre-move househunting green card test or the substantial
affect your 1994 tax liability, get Pub. expenses, temporary quarters expenses, presence test. Even though you may
553, Highlights of 1993 Tax Changes. and qualified real estate expenses are otherwise meet the substantial presence
no longer deductible. In addition, the test, you will not be considered a U.S.
Expiration of Self-Employed Health
deduction is allowed in figuring adjusted resident if you qualify for the closer
Insurance Deduction.—At the time
gross income (i.e., you no longer need to connection to a foreign country
these instructions went to print, this
itemize deductions to claim moving exception or you are able to qualify as a
deduction was scheduled to expire
expenses). For more details, see Pub. nonresident by reason of a tax treaty.
December 31, 1993.
553. These tests and the exception are
discussed in the instructions for Part I.
Cat. No. 11311Q
Treaty Benefits immigrant, the exception does not apply, and any other tax returns that have not
and you must get a certificate. been filed as required. The certificate,
If you take the position that a treaty of
the United States overrides or modifies ● You are a student, industrial trainee, however, may not be issued more than
exchange visitor, or the spouse or child 30 days before you leave. If both you
any provision of the Internal Revenue and your spouse are aliens and are
Code and that position reduces (or of such an individual with an F, H-3, H-4,
or J visa. To qualify, you must not have leaving together, both of you must go to
potentially reduces) your tax, you must the IRS office.
file Form 8833, Treaty-Based Return received any income from sources in the
Position Disclosure Under Section 6114 United States during your stay under Please be prepared to furnish your
or 7701(b), or similar statement, with that visa other than (1) allowances anticipated date of departure and bring
your final U.S. income tax return. For covering expenses incident to your the following records with you if they
more details, see Pub. 519. study in the United States (including apply.
expenses for travel, maintenance, and 1. A valid passport with your alien
tuition), (2) the value of any services or registration card or visa.
Final Return Required accommodations furnished incident to 2. Copies of your U.S. income tax
A Form 1040-C is not a final return. such study, or (3) income from returns filed for the past 2 years. If you
Therefore, you must file a final income employment authorized by the U.S. were in the United States for less than 2
tax return after your tax year ends. If immigration laws. years, bring copies of the income tax
you are not a U.S. citizen or resident on ● You are a student or the spouse or returns you filed in that period.
the last day of the year, file Form child of a student with an M-1 or M-2 3. Receipts for income taxes paid on
1040NR. If you are a U.S. citizen or visa. To qualify, you must not have these returns.
resident on the last day of the year, you received any income from sources in the 4. Receipts, bank records, canceled
should file Form 1040. Any tax you pay United States during your stay under checks, and other documents that prove
with Form 1040-C counts as a credit that visa other than income from your deductions, business expenses,
against tax on your final return. Any employment authorized by the U.S. and dependents claimed on the returns.
overpayment shown on Form 1040-C immigration laws.
will be refunded only if and to the extent 5. A statement from each employer
● Any of the following applies, unless you worked for this year showing wages
your final return for the tax year shows the District Director believes you had
an overpayment. paid and tax withheld. If you are
taxable income during the tax year, up self-employed, you must bring a
through your departure date, or during statement of income and expenses up
Certificate of Compliance the preceding tax year and that your to the date you plan to leave.
Note: The issuance of a certificate of leaving the United States would hinder
6. Proof of any payments of estimated
compliance is not a final determination collecting the tax.
tax for the past year and the current
of your tax liability. If it is later 1. You are on a pleasure trip and have year.
deter mined that there is a tax deficiency, a B-2 visa.
7. Documents showing any gain or
you will have to pay the additional tax 2. You are on a business trip and have loss from the sale of personal property,
due. a B-1 visa or a combined B-1 and B-2 including capital assets and
Form 1040-C or Form 2063.—If you are visa and do not stay in the United merchandise.
an alien, you should not leave the United States or any of its possessions for
8. Documents concerning scholarships
States or any of its possessions without more than 90 days during the tax year.
or fellowship grants such as: (a)
getting a certificate of compliance from 3. You are an alien passing through verification of the grantor, source, and
your IRS District Director on Form the United States or any of its purpose of the grant, (b) copies of the
1040-C or Form 2063, U.S. Departing possessions on a C-1 visa or under a application for, and approval of, the
Alien Income Tax Statement. But see contract, such as a bond agreement, grant, (c) a statement of the amount
Exceptions later. You may file the between a transportation line and the paid, and the duties and obligations
shorter Form 2063 if you filed all U.S. Attorney General. under the grant, and (d) a list of any
income tax returns you were required to 4. You are an alien admitted on a previous grants.
file, you paid any tax due, and EITHER border-crossing identification card. 9. Documents indicating qualification
1 or 2 below applies to you. 5. You do not need to carry passports, for special tax treaty benefits.
1. You have no taxable income for the visas, or border-crossing identification If you are filing Form 1040-C, file an
year of departure and for the preceding cards because you are visiting for original and one copy for the tax year in
year if the time for filing the earlier year’s business or pleasure and do not stay in which you plan to leave. If the District
return has not passed. the United States or any of its Director has made a termination
2. You are a resident alien with taxable possessions for more than 90 days assessment against you, include on your
income for the preceding year or for the during the tax year. Form 1040-C any income you expect to
year of departure, but the District 6. You are passing through the United get through the departure date during
Director has decided that your leaving States or any of its possessions. the tax year. If you received a
will not hinder collecting the tax. 7. You are a military trainee admitted termination assessment and you
Exceptions. You do not need a for instruction under the Department of received additional income within the
certificate of compliance if: Defense and you will leave the United current tax year, the District Director
● You are a representative of a foreign States on official military travel orders. may make additional assessments. If the
government who holds a diplomatic 8. You are a resident of Canada or District Director has not made a
passport; a member of the Mexico who commutes frequently to the termination assessment against you,
representative’s household; a servant United States to work and your wages include on your Form 1040-C any
who accompanies the representative; an are subject to income tax withholding. income you have received and expect to
employee of an international receive during the entire tax year of
organization or foreign government How To Obtain the departure.
whose pay is exempt from U.S. taxes; or Generally, a compliance certificate on
a member of the employee’s household Certificate Form 1040-C will be issued without your
who was not paid by U.S. sources. If To get a compliance certificate, go to paying tax or posting bond if you have
you signed a waiver of nonimmigrants’ your local IRS office at least 2 weeks not received a termination assessment.
privileges as a condition of holding both before you leave the United States and This certificate applies to all your
your job and your status as an file either Form 2063 or Form 1040-C departures during the current tax year,
Page 2
subject to revocation on any later if you have been given the privilege, closer connection to that country than to
departure if the District Director believes according to the immigration laws, of the United States.
your leaving would hinder collecting the residing permanently in the United Note: If you meet this exception, file
tax. States as an immigrant. You generally Form 8840, Closer Connection
If you owe income tax and the District have this status if the Immigration and Exception Statement, or a similar
Director determines that your departure Naturalization Service (INS) has issued statement, with your final income tax
will jeopardize the collection of the tax, a you an alien registration card also known retur n.
compliance certificate on Form 1040-C as a “green card.” Dual-Status Tax Year.—Generally, if you
will be issued when you pay the tax due Substantial Presence Test.—You are leave the United States during the year
or post bond. This certificate applies considered a U.S. resident if you meet with no intent to return, you have a
only to the departure for which it is the substantial presence test for 1994. dual-status tax year and are subject to
issued. You meet this test if you were physically dual-status restrictions in completing
If you go to the departure point present in the United States for at least: Form 1040-C. A dual-status tax year is
without a certificate or proof that you do (a) 31 days during 1994, and (b) 183 one in which you have been both a
not need one, you may be subject to an days during the period 1994, 1993, and resident alien and a nonresident alien. In
income tax examination by an IRS 1992, counting all the days of physical figuring your income tax liability, different
employee. You will then have to presence in 1994 but only 1⁄3 the number U.S. income tax rules apply to each
complete the returns and any other of days of presence in 1993 and only 1⁄6 status. See Pub. 519.
required documents and either pay any the number of days in 1992. Income Effectively Connected With a
income tax due or post bond. Days of presence in the United U.S. Trade or Business—Nonresident
States. Generally, you are treated as Aliens.—If you are a nonresident alien,
present in the United States on any day the tax on your income depends on
Specific Instructions that you are physically present in the whether the income is or is not
If your employer is willing to furnish a country at any time during the day. effectively connected with a U.S. trade
letter guaranteeing that the tax will be However, you do not count the following or business.
paid, check the “Yes” box. You only days of presence in the United States Income effectively connected with a
need to sign the form and leave the for purposes of the substantial presence U.S. trade or business (including wages
remainder blank. Be sure to attach the test. earned by an employee) is taxed at the
letter from your employer to Form ● Days you regularly commuted to work graduated rates that apply to U.S.
1040-C. The letter should state in the United States from a residence in citizens and resident aliens. Income you
specifically the period and type of tax Canada or Mexico. receive as a partner in a partnership or
covered. ● Days you were in the United States for as a beneficiary of an estate or trust is
Joint Return.—Nonresident aliens may less than 24 hours when you were in considered effectively connected with a
not file a joint return. Resident aliens transit between two places outside the U.S. trade or business if the partnership,
may file a joint return on Form 1040-C United States. estate, or trust conducts a U.S. trade or
only if both of the following apply. ● Days you were unable to leave the business.
1. The alien and his or her spouse can United States because of a medical Income from U.S. sources that is not
reasonably expect to be eligible to file a condition or medical problem that effectively connected with a U.S. trade
joint return at the normal close of the developed while you were in the United or business is generally taxed at 30%.
tax period for which the return is made. States. Your rate may be lower if the country of
2. If the tax period of the alien is ● Days you were an exempt individual. which you are a citizen or resident and
terminated, the tax periods of both In general, an exempt individual is an the United States have a treaty setting
spouses are terminated at the same individual who is a: (a) foreign lower rates. See Pub. 901 for more
time. government or international details.
If a joint return is filed on Form organization-related individual, For a listing of the kinds of income not
1040-C, both spouses should enter their (b) teacher or trainee, (c) student, or considered effectively connected with a
names, social security numbers, and (d) professional athlete who is U.S. trade or business, see the
passport or alien registration card temporarily in the United States to instructions for Schedules A and B. If
numbers in the space provided on page compete in a charitable sports event. you are a nonresident alien in the United
1 of the form. Also, both spouses should Note: If you qualify to exclude days of States for study or training, see Pub.
include their income and furnish the presence in the United States because 519.
information requested in Part I of the you are an exempt individual or because
form. If necessary, a separate Part I of a medical condition or problem, file Part II—Exemptions
should be completed for each spouse. Form 8843, Statement for Exempt If you are a resident alien, you may
Individuals and Individuals With a claim the same exemptions allowed U.S.
Part I—Explanation of Medical Condition, or similar statement, citizens on Form 1040.
Status—Resident or with your final income tax retur n. This
Nonresident aliens of Canada, India,
rule does not apply to foreign
Nonresident Alien government or inter national
Mexico, Japan, the Republic of Korea,
Generally, you are considered a resident or U.S. nationals (American Samoans)
organization-related individuals who
alien if you meet either the green card engaged in a trade or business in the
exclude days of presence in the United
test or the substantial presence test for United States may claim the same
States.
1994. You are considered a nonresident number of exemptions they are entitled
Closer connection to a foreign to on Form 1040NR. All other
alien for the year if you do not meet country exception. Even though you
either of these tests. For more details on nonresident aliens engaged in a U.S.
would otherwise meet the substantial trade or business may claim only one
resident and nonresident status, see presence test, you are not treated as a
Pub. 519. exemption. For more details, see Pub.
U.S. resident for 1994 if you: (a) were 519 or the Form 1040NR instructions.
Green Card Test.—You are a resident present in the United States for fewer
for tax purposes if you are a lawful If you are a nonresident alien not
than 183 days during 1994, and (b)
permanent resident of the United States engaged in a trade or business in the
establish that during 1994 you had a tax
at any time during 1994. You are a lawful United States, you cannot take any
home in a foreign country and had a
permanent resident of the United States personal exemptions on income that is

Page 3
not effectively connected with a U.S. ● Tax from recapture of qualified If you have questions about whether a
trade or business. electric vehicle credit. For details on preparer is required to sign your return,
how to figure the tax, get Pub. 535, please contact an IRS office.
Part III—Figuring Your Business Expenses.
Income Tax Line 26—Tax.—Enter 30% of the Schedule A—Schedule of
amount on line 25. If you are entitled to
Read the descriptions on line 1 of Form a lower rate because of a treaty
Income
1040-C for Groups I, II, and III to see between your country and the United Line 1, Column (d).—Resident aliens
which group you fall into. If you fall into States, attach a statement showing your should include income that would be
Group I or II, use lines 15–24 to figure computation. included on Form 1040, such as
your tax. If you fall into Group III, use Line 28—U.S. Income Tax Paid or salaries, wages, interest, dividends,
lines 25 and 26 to figure your tax. If you Withheld at Source.—Enter the amount rents, alimony, etc.
are a nonresident alien and fall into both from Schedule A, line 4, column (c), or Line 1, Column (e).—Enter nonresident
Groups II and III, use lines 15–26 to amounts withheld as shown on Forms alien income effectively connected with
figure your tax. W-2, W-2G, 8288-A, 1099-R, 1042-S, a U.S. trade or business.
Line 16—Adjustments.—If you are a 8805, etc. Line 1, Column (f).—Enter nonresident
resident alien, you can take the Line 30—Other Payments.—Include on alien income not effectively connected
adjustments allowed on Form 1040. The line 30 any of the following payments. with a U.S. trade or business, including:
Form 1040 instructions have information ● Earned income credit. Enter any ● Interest, dividends, rents, salaries,
on adjustments you may take. earned income credit that is due you. wages, premiums, annuities,
If you are a nonresident alien and ● U.S. income tax paid at previous compensation, remuneration, and other
have income effectively connected with departure during the tax period. Enter fixed or determinable annual or periodic
a U.S. trade or business, you may take any tax you paid during the tax period gains, profits, and income.
the adjustments allowed on Form when you previously departed the ● Prizes, awards, and certain gambling
1040NR. See the Form 1040NR United States. winnings. Proceeds from lotteries,
instructions. raffles, etc., are gambling winnings. You
● Excess social security and RRTA tax
If you are a nonresident alien with withheld. If you had two or more must report the full amount of your
income not effectively connected with a employers in 1994 who together paid winnings. You cannot offset losses
U.S. trade or business, you cannot take you more than $60,600 in wages, too against winnings and report the
any adjustments. much social security tax and tier 1 difference.
Line 19—Additional Taxes.—Enter on railroad retirement (RRTA) tax may have ● One-half of the U.S. social security
line 19 any additional taxes from Form been withheld from your wages. See the benefits you receive are taxable. This
4970, Tax on Accumulation Distribution instructions for Form 1040 or Form amount is treated as U.S. source income
of Trusts, or Form 4972, Tax on 1040NR. For 1994, the maximum social not effectively connected with a U.S.
Lump-Sum Distributions. security tax and tier 1 RRTA tax is trade or business and is subject to the
Line 21—Credits.—If you are a resident $3,757.20. 30% tax rate, unless exempt or taxed at
alien, you may claim the same credits as ● Credit for Federal tax paid on fuels. a reduced rate under a U.S. tax treaty.
on Form 1040. If you are a nonresident Enter any credit from Form 4136 for tax Social security benefits include any
alien with income effectively connected on gasoline, diesel fuel, and other fuels monthly benefit under title II of the
with a U.S. trade or business, you may used in your business, or for certain Social Security Act or part of a tier 1
generally deduct the same credits as on diesel-powered cars, vans, and light railroad retirement benefit treated as a
Form 1040NR. trucks. social security benefit. Social security
Line 23—Other Taxes.—Enter on line See the instructions for Forms 1040 or benefits do not include any
23 any other taxes such as those listed 1040NR for details on other payments. Supplemental Security Income (SSI)
below. See the instructions for Forms payments.
1040 or 1040NR for information on the Exempt Income for Nonresident
additional taxes to include on this line. Signature Aliens.—The following income received
● Self-employment tax. Use Schedule Form 1040-C is not considered a valid by a nonresident alien is exempt from
SE (Form 1040), Form 1040-PR, or Form return unless you sign it. If an agent U.S. tax:
1040-SS to figure your self-employment (including your spouse) signs for you, 1. Interest on bank deposits or
tax. This tax applies only to resident your authorization of the signature must withdrawable accounts with savings and
aliens. The self-employment tax rate for be filed with the return. You may have loan associations or credit unions that
1994 is 15.3%. This includes a 2.9% an agent in the United States prepare are chartered and supervised under
Medicare tax and a 12.4% social and sign your return if you were sick or Federal or state law, or amounts held by
security tax. For 1994, the maximum otherwise unable to sign. However, you an insurance company under an
amount of self-employment income must have IRS approval to use an agent. agreement to pay interest on them, if the
subject to social security tax is $60,600. To obtain approval, file a statement with income is not effectively connected with
There is no limit on the amount of the IRS office where you file Form a U.S. trade or business. Also, certain
self-employment income subject to the 1040-C explaining why you cannot sign. portfolio interest on obligations issued
Medicare tax. If you fill in your own return, the Paid after July 18, 1984.
● Alternative minimum tax. Use Form Preparer’s space should remain blank. 2. Your personal service income if you:
6251, Alternative Minimum Tax— Generally, anyone you pay to prepare a. Were in the United States 90 days
Individuals, to figure the tax. your return must sign it. A preparer who or less during the tax year,
● Tax from recapture of investment signs your return must sign it by hand in b. Received $3,000 or less for your
credit. Use Form 4255 to figure the tax. the space provided. Signature stamps or services, and
● Tax from recapture of low-income labels cannot be used. The preparer
must also give you a copy of the return c. Performed the services as an
housing credit. Use Form 8611 to employee of or under contract with a
figure the tax. for your records in addition to the copies
to be filed with the IRS. Someone who nonresident alien individual, foreign
● Tax from recapture of Federal prepares your return but does not partnership, or foreign corporation, not
mortgage subsidy. Use Form 8828 to charge you should not sign your return. engaged in a U.S. trade or business; or
figure the tax. for a foreign office of a U.S. partnership,
corporation, citizen, or resident.
Page 4
 3. Capital gains not effectively
connected with a U.S. trade or business Itemized Deductions Worksheet (keep for your records)
if you were in the United States less
than 183 days during the tax year. 1. Add the amounts in columns (b) and (d) of Schedule C,
However, the gain or loss on the line 1 1.
disposition of a U.S. real property
interest is not exempt. 2. Enter the total amount included on line 1 above for medical
4. U.S. bond income. Your income and dental expenses, investment interest expense, casualty
from series E, EE, H, or HH U.S. savings or theft losses of personal use property, and gambling losses 2.
bonds that you bought while a resident 3. Subtract line 2 from line 1. If zero, stop here; enter the amount
of the Ryukyu Islands (including from line 1 above on Schedule C, line 2 3.
Okinawa) or the Trust Territory of the
Pacific Islands (Caroline and Marshall 4. Multiply line 3 above by 80% (.80) 4.
Islands). 5. Enter the amount from Form 1040-C,
5. Qualifying annuities. Annuities you line 17 5.
received from qualifying annuity plans or 6. Enter $111,800 ($55,900 if married filing
trusts under both the following separately) 6.
conditions:
a. The work done that entitles you to 7. Subtract line 6 from line 5. If zero or less,
the annuity was done either in the stop here; enter the amount from line 1
United States for a foreign employer or above on Schedule C, line 2 7.
outside the United States, and 8. Multiply line 7 above by 3% (.03) 8.
b. When the first amount was paid as 9. Enter the smaller of line 4 or line 8 9.
an annuity, at least 90% of the
10. Total itemized deductions. Subtract line 9 from line 1. Enter
employees covered by the plan (or plans
the result here and on Schedule C, line 2 10.
that included the trust) were U.S.
citizens or residents.
Certain items of income may be
Capital Gains.—Capital gains in excess
exempt from Federal tax by a tax treaty.
of capital losses if you were in the
Schedule D—Tax
For more details, see Pub. 901. Computation
United States at least 183 days during
the year. However, the gain or loss on
Schedule B—Gains and the disposition of a U.S. real property Standard Deduction (Group I only)
Losses From Sales or interest is considered effectively If you do not itemize your deductions,
Exchanges of Nonresidents’ connected and should be shown on you may take the 1994 standard
Schedule A. deduction listed below:
Property Not Effectively Filing Standard
Connected With a U.S. Trade Schedule C—Itemized Status Deduction
or Business Deductions Married filing jointly or
If you are a nonresident alien, use Qualifying widow(er) $6,350*
If you are a resident alien, you can take
Schedule B to figure your gain or loss the deductions allowed on Schedule A Head of household $5,600*
from the sale or exchange of property of Form 1040. See the Schedule A Single $3,800*
not effectively connected with a U.S. (Form 1040) instructions. Married filing separately $3,175*
trade or business. Include the following If you are a nonresident alien and *To these amounts, add the additional
kinds of income. For more details on have income effectively connected with amount below.
these kinds of income, see Pub. 519 a U.S. trade or business, you can take Additional Amount for the Elderly or
and the Instructions for Form 1040NR. the deductions allowed on Schedule A the Blind.—An additional standard
Income Other Than Capital Gains.— of Form 1040NR. See the Schedule A deduction amount of $750 is allowed for
Gains on the disposal of timber, coal, or (Form 1040NR) instructions. If you do a married individual (whether filing jointly
U.S. iron ore with a retained economic not have income effectively connected or separately) or a qualifying widow(er)
interest. with a U.S. trade or business, you who is age 65 or older or blind ($1,500 if
Gains from the sale or exchange of cannot take any deductions. the individual is both age 65 or older
patents, copyrights, secret processes Note: Nonresident aliens of India who and blind, $3,000 if both spouses are
and formulas, goodwill, trademarks, were students or business apprentices age 65 or older and blind). An additional
trade brands, franchises, and other like may be able to take the standard standard deduction amount of $950 is
property, or of any interest in any such deduction. See Pub. 519 for details. allowed for an unmarried individual
property. The gains must result from Line 2.—If your adjusted gross income (single or head of household) who is age
payments for the productivity, use, or is over $111,800 (over $55,900 if 65 or older or blind ($1,900 if the
disposition of the property or interest. married filing separately), you may not individual is both age 65 or older and
Original issue discount (OID). If you be able to deduct all of your itemized blind).
sold or exchanged the obligation, deductions. Use the worksheet on this Note: If you will be age 65 on January 1,
include only the OID that accrued while page to figure the amount you may 1995, you are considered to be age 65
you held the obligation minus the deduct. for 1994.
amount previously included in income. If Limited Standard Deduction for
you received a payment on the Dependents.—If you can be claimed as
obligation, see Pub. 519. a dependent on another person’s 1994
return, your standard deduction is the
greater of $600 or your earned income,
up to the standard deduction amount. To
this amount add any additional amount
for the elderly or the blind.

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 Deduction for Exemptions Worksheet (keep for your records)
Use this worksheet only if the amount on Schedule D, line 1 or line 7, is more than the dollar
amount shown on line 3 below for your filing status. If the amount on Schedule D, line 1 or line
7, is equal to or less than the amount shown on line 3, multiply $2,450 by the total number of
exemptions claimed on Form 1040-C, line 14e. Enter the result on Schedule D, line 4 or line
10, whichever applies.
1. Multiply $2,450 by the total number of exemptions claimed on Form 1040-C,
line 14e 1.
2. Enter the amount from Schedule D, line 1 or line 7 2.
3. Enter on line 3 the amount shown below for your filing status:

%
● Married filing jointly or Qualifying widow(er), enter
$167,700
● Single, enter $111,800 3.
● Head of household, enter $139,750
● Married filing separately, enter $83,850
4. Subtract line 3 from line 2. If zero or less, stop here; enter
the amount from line 1 above on Schedule D, line 4 or
line 10 4.
Note: If line 4 is over $122,500 (over $61,250 if married
filing separately), stop here; you cannot take a deduction
for exemptions. Enter -0- on Schedule D, line 4 or line
10.
5. Divide line 4 above by $2,500 ($1,250 if married filing
separately). If the result is not a whole number, round to
the next higher whole number (for example, round 0.0004
to 1) 5.
6. Multiply line 5 above by 2% (.02) and enter the result as a
decimal amount 6. .
7. Multiply line 1 above by line 6 7.
8. Deduction for exemptions. Subtract line 7 from line 1. Enter the result here
and on Schedule D, line 4 or line 10, whichever applies 8.

1994 Tax Rate Schedules (Groups I and II)

Caution: Do not use these Tax Rate Schedules to figure your 1993 taxes. Use only to figure your 1994 taxes.

Schedule X—Single Taxpayers (Groups I and II) Schedule Z—Head of Household (Group I only)
If the amount on Schedule If the amount on Schedule
D, line 5 or 11, is: The tax is: D, line 5, is: The tax is:
of the of the
but not amount but not amount
Over— over— over— Over— over— over—
$0 $22,750 ----- 15% $0 $0 $30,500 ----- 15% $0
22,750 55,100 $3,412.50 + 28% 22,750 30,500 78,700 $4,575.00 + 28% 30,500
55,100 115,000 12,470.50 + 31% 55,100 78,700 127,500 18,071.00 + 31% 78,700
115,000 250,000 31,039.50 + 36% 115,000 127,500 250,000 33,199.00 + 36% 127,500
250,000 - - - - - 79,639.50 + 39.6% 250,000 250,000 ----- 77,299.00 + 39.6% 250,000

Schedule Y—Married Taxpayers and Qualifying Widows and Widowers

Married Filing Joint Returns (Group I only) and
Qualifying Widows and Widowers (Groups I and II) Married Filing Separate Returns (Groups I and II)
If the amount on Schedule If the amount on Schedule
D, line 5 or 11, is: The tax is: D, line 5 or 11, is: The tax is:
of the of the
but not amount but not amount
Over— over— over— Over— over— over—
$0 $38,000 ----- 15% $0 $0 $19,000 ----- 15% $0
38,000 91,850 $5,700.00 + 28% 38,000 19,000 45,925 $2,850.00 + 28% 19,000
91,850 140,000 20,778.00 + 31% 91,850 45,925 70,000 10,389.00 + 31% 45,925
140,000 250,000 35,704.50 + 36% 140,000 70,000 125,000 17,852.25 + 36% 70,000
250,000 ----- 75,304.50 + 39.6% 250,000 125,000 ----- 37,652.25 + 39.6% 125,000

Printed on recycled paper

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