Form 4563 - Exclusion Of Income For Bona Fide Residents Of American Samoa Page 2
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Form 4563 (Rev. 12-2011)
Page
Source of income. The rules for determining the source of
Income you must report on Form 1040. You must report on
income are explained in sections 861 through 865 and section
Form 1040 your worldwide income for the tax year that does not
937, Regulations section 1.937-2, and chapter 2 of Pub. 570.
qualify for the exclusion. The source of that income does not
Some general rules are:
matter.
• The source of wages, salaries, or tips is generally where the
Deduction and credits you cannot take on Form 1040. If you
services are performed. If you worked both in and outside
claim the exclusion, you cannot take any deduction or credit on
American Samoa, include on line 7 only wages, salaries, or tips
Form 1040 that is definitely related to the excluded income,
earned while you were in American Samoa.
such as employee business expenses.
Military spouses. If you are the civilian spouse of a member
Deductions and credits that are not definitely related to a
of the U.S. Armed Forces, work in American Samoa, and retain
particular type of income must be allocated between your
a residence or domicile in one of the 50 states or the District of
excluded income and your other income to find the amount you
Columbia under the Military Spouses Residency Relief Act
can take on Form 1040. Examples of deductions that are not
(MSRRA), your wages, salaries, tips, and self-employment
definitely related to a particular type of income are:
income will not be considered income from American Samoa.
• The standard deduction, and
Under MSRRA, the military spouse must be in American Samoa
• Certain itemized deductions such as medical and dental
solely to be with his/her service member spouse who is serving
expenses, gifts to charity, and real estate taxes and mortgage
in compliance with military orders. MSRRA applies to qualified
interest on your personal residence.
individuals for the 2009 calendar year or subsequent years. For
For more details, including how to figure the amount allocable
details on MSRRA, see Pub. 570.
to the excluded income, see chapter 4 of Pub. 570.
• The source of interest income is generally where the payer is
Note. Generally, you can take a deduction for each
located. For example, American Samoan source income
exemption you are entitled to claim. This deduction is not
includes interest from a certificate of deposit issued by a bank
considered allocable to the excluded income.
or branch of a U.S. bank in American Samoa.
If you were a bona fide resident of American Samoa
• Generally, dividends are sourced where the paying
!
for the entire tax year, or were considered a bona fide
corporation is created or organized.
resident of American Samoa for the entire tax year
• Alimony received from a person who is a bona fide resident of
CAUTION
under the special rules for the year of a move (see
American Samoa is sourced in American Samoa.
Pub. 570, chapter 1), but not a U.S. citizen or resident, certain
• Except as provided in regulations, income earned after
credits and deductions may not be available to you. See
December 31, 2004, that is from sources within the United
Nonresident alien under Bona Fide Resident of American Samoa
States or effectively connected with the conduct of a trade or
in Pub. 570, chapter 3, for specific information.
business in the United States is not income from American
Self-employed individuals. If you were self-employed and
Samoa.
your net earnings from self-employment were $400 or more,
• The source of gains, profits, or income from the sale or
generally you will have to pay self-employment tax on those
disposition of real property (and any interest in real property) is
earnings even though you can exclude the earnings from your
generally where the real property is located.
gross income. Use Schedule SE (Form 1040) to figure any
Personal property. The source of income from the sale of
self-employment tax due.
nondepreciable personal property is generally the seller’s
Penalty for Failure To Furnish Information
residence. For example, if you are a bona fide resident of
If, in tax year 2001 or later, you became or ceased to be a bona
American Samoa, gain from the sale or disposition of personal
property is generally from sources within American Samoa.
fide resident of a U.S. possession, you may be required to file
Income from the sale of inventory is generally sourced where
Form 8898, Statement for Individuals Who Begin or End Bona
the title to the property passes. See section 865 for details.
Fide Residence in a U.S. Possession. The penalty for failure to
provide the required information is $1,000 for each failure unless
De minimis exception. This is an exception to the general
you can show the failure was due to reasonable cause and not
rule for determining the source of income earned in American
willful neglect. This penalty is in addition to any criminal penalty
Samoa. Generally, income from American Samoa does not
provided by law. For details, see the Instructions for Form 8898.
include compensation for services performed in American
Samoa if during 2011 you:
Paperwork Reduction Act Notice. We ask for the information
• Were a U.S. citizen or resident,
on this form to carry out the Internal Revenue laws of the United
• Were not a bona fide resident of American Samoa,
States. You are required to give us the information. We need it
• Were not employed by or under contract with an individual,
to ensure that you are complying with these laws and to allow
partnership, or corporation that is engaged in a trade or
us to figure and collect the right amount of tax.
business in American Samoa,
You are not required to provide the information requested on
• Temporarily performed services in American Samoa for 90
a form that is subject to the Paperwork Reduction Act unless
days or less, and
the form displays a valid OMB control number. Books or
records relating to a form or its instructions must be retained as
• Earned $3,000 or less from such services.
long as their contents may become material in the
Special rules may apply to bona fide residents of U.S.
!
administration of any Internal Revenue law. Generally, tax
possessions who have gain from dispositions of
returns and return information are confidential, as required by
certain investment property within the 10-year period
section 6103.
CAUTION
beginning when they became a bona fide resident.
The average time and expenses required to complete and file
For details, see Special Rules for Gains From Dispositions of
this form will vary depending on individual circumstances. For
Certain Property, in chapter 2 of Pub. 570, Regulations section
the estimated averages, see the instructions for your income tax
1.937-2(f)(1), and Examples 1 and 2 of section 1.937-2(k).
return.
Filing Form 1040
If you have suggestions for making this form simpler, we
would be happy to hear from you. See the instructions for your
To exclude your qualifying income from American Samoa,
income tax return.
complete Form 4563 and attach it to your Form 1040.
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