Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abroad - 2006 Page 30
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44You can also claim exemptions for individu-
Items Related to
als who qualify as your dependents. To be your
dependent, the individual must be a U.S. citizen,
5.
Excluded Income
U.S. national, U.S. resident alien, or a resident
of Canada or Mexico for some part of the calen-
dar year in which your tax year begins.
U.S. citizens and resident aliens living outside
the United States generally are allowed the
Exemptions,
Children. Children usually are citizens or re-
same deductions as citizens and residents living
sidents of the same country as their parents. If
in the United States.
you were a U.S. citizen when your child was
Deductions, and
If you choose to exclude foreign earned in-
born, your child generally is a U.S. citizen. This
come or housing amounts, you cannot deduct,
is true even if the child’s other parent is a non-
exclude, or claim a credit for any item that can
resident alien, the child was born in a foreign
Credits
be allocated to or charged against the excluded
country, and the child lives abroad with the other
amounts. This includes any expenses, losses,
parent.
and other normally deductible items that are
If you have a legally adopted child who is not
allocable to the excluded income. You can de-
Topics
a U.S. citizen, U.S. resident, or U.S. national, the
duct only those expenses connected with earn-
child meets the citizen requirement if you are a
This chapter discusses:
ing includible income.
U.S. citizen or U.S. national and the child lived
These rules apply only to items definitely
with you as a member of your household all
•
The rules concerning items related to ex-
related to the excluded earned income and they
year.
cluded income,
do not apply to other items that are not definitely
•
Social security number. You must include on
Exemptions,
related to any particular type of gross income.
your return the social security number (SSN) of
•
These rules do not apply to items such as:
Contributions to foreign charitable organi-
each dependent for whom you claim an exemp-
•
zations,
Personal exemptions,
tion. To get a social security number for a de-
•
•
pendent, apply at a Social Security office or U.S.
Moving expenses,
Qualified retirement contributions,
consulate. You must provide original or certified
•
•
Contributions to individual retirement ar-
Alimony payments,
copies of documents to verify the dependent’s
rangements (IRAs),
•
age, identity, and citizenship, and complete
Charitable contributions,
•
Form SS-5.
Taxes of foreign countries and U.S. pos-
•
Medical expenses,
You do not need an SSN for a child who was
sessions, and
•
born in 2006 and died in 2006. Attach a copy of
•
Mortgage interest, or
How to report deductions.
the child’s birth certificate to your tax return.
•
Real estate taxes on your personal resi-
Print “Died” in column (2) of line 6c of your Form
dence.
1040 or Form 1040A.
Useful Items
If your dependent is a nonresident alien who
You may want to see:
For purposes of these rules, your housing
is not eligible to get a social security number,
deduction is not treated as allocable to your
you must list the dependent’s individual tax-
Publication
excluded income, but the deduction for self-
payer identification number (ITIN) instead of an
employment tax is.
SSN. To apply for an ITIN, file Form W-7 with the
501
Exemptions, Standard Deduction,
If you receive foreign earned income in a tax
IRS. It usually takes 4 to 6 weeks to get an ITIN.
and Filing Information
year after the year in which you earned it, you
Enter your dependent’s ITIN wherever an SSN
514
Foreign Tax Credit for Individuals
may have to file an amended return for the
is requested on your tax return.
earlier year to properly adjust the amounts of
521
Moving Expenses
More information. For more information
deductions, credits, or exclusions allocable to
523
Selling Your Home
about exemptions, see Publication 501.
your foreign earned income and housing exclu-
sions.
590
Individual Retirement Arrangements
(IRAs)
Example. In 2005, you had $7,500 of de-
Contributions to
597
Information on the United
ductions allocable to foreign earned income. If
States-Canada Income Tax Treaty
you excluded all of your $80,000 foreign earned
Foreign Charitable
income in 2005, you would not have been able
Form (and Instructions)
to claim any of the $7,500 of deductions alloca-
Organizations
ble to that excluded income. If you then receive
1116 Foreign Tax Credit
a bonus of $10,000 in 2006 for work you did
If you make contributions directly to a foreign
2106 Employee Business Expenses
abroad in 2005, you cannot exclude it because it
church or other foreign charitable organization,
exceeds the foreign earned income exclusion
2555 Foreign Earned Income
you generally cannot deduct them. Exceptions
limit in effect for 2005. (You have no housing
are explained under Canadian, Israeli, and Mex-
2555-EZ Foreign Earned Income
exclusion.) But, you can file an amended return
ican organizations, later.
Exclusion
for 2005 to claim $833 of allocable deductions
You can deduct contributions to a U.S. or-
that are now allowable ($7,500 allocable deduc-
3903 Moving Expenses
ganization that transfers funds to a charitable
tions multiplied by $10,000 included foreign
foreign organization if the U.S. organization con-
Schedule A (Form 1040) Itemized
earned income over $90,000 total foreign
trols the use of the funds by the foreign organi-
Deductions
earned income).
zation, or if the foreign organization is just an
Schedule C (Form 1040) Profit or Loss
administrative arm of the U.S. organization.
From Business
Canadian, Israeli, and Mexican organiza-
Exemptions
SS-5 Application for a Social Security
tions. Under income tax treaties, you can de-
Card
duct contributions to certain Canadian, Israeli,
You can claim an exemption for your nonresi-
W-7 Application for IRS Individual
and Mexican charitable organizations. These or-
dent alien spouse on your separate return, pro-
Taxpayer Identification Number
ganizations must meet the qualifications that a
vided your spouse has no gross income for U.S.
U.S. charitable organization must meet under
See chapter 7 for information about getting
tax purposes and is not the dependent of an-
U.S. tax law. The organization can tell you
these publications and forms.
other U.S. taxpayer.
whether it qualifies. If you are unable to get this
Page 30
Chapter 5 Exemptions, Deductions, and Credits
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