Last Updated : January 14, 2009
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4563

Form 4563

Exclusion of Income for Bonafide Residents of American Samoa

Purpose of the Form:

If you Qualify, Form 4563 is used to figure the amount of income you may exclude from your gross income.

Who Qualifies:
Taxpayer qualifies for the exclusion if she/he were a Bonafide Resident of American Samoa for the entire tax year (January 1 through December 31 if you file a calendar year return).

If , in tax year 2001 or later, you become or ceased to be a bonafide resident of a U.S. possession , you may be required to file Form 8898, Statement for Individuals Who begin or End Bonafide residence in a U.S. possession . The penalty for failure to provide the required information is $1000. For details, see the instructions for Form 8898.

Bonafide Residence Test:
To qualify under this test, you must be a bonafide resident of American Samoa for the entire tax year (January 1 through December 31 if you file a calendar year return).

In general, for tax years beginning after October 22, 2004, you are a bonafide resident of American Samoa if, during the tax year, you:
Are present in American Samoa for at least 183 days,
Do not have a tax home outside of American Samoa, and
Do not have a closer connection to the United States or a foreign country than to American Samoa.

Your tax home is your regular or principle place of business or employment, regardless of where you maintain your family residence. If you do not have a regular or principle place of business because of the nature of your work, your tax home is the place where you live on a regular basis.

For more information about bonafide residence, including special rules for meeting the 183-day test, see publication 570, Tax Guide for Individuals With income from U.S.Possessions.

Deductions and Credits you May Not Take On Form 1040:
If you claim the exclusion, you may not take any deduction or credit on Form 1040 that is definitely related to the excluded income.
       
Deductions and credits that are not definitely related to any particular type of income must be allocated between your excludable income and your other income to find the amount you make on Form 1040.Examples are:
The standard deduction, and
Certain itemized deductions such as medical and dental expenses, Gifts to charity, and real estate taxes and mortgage interest on your personal residence.

For more details, including how to figure the amount allocable to the excluded income, see publication 570.

Self-Employed Individuals:
If you were self-employed and your net earnings from Self-employment were $400 or more, you will generally have to pay self-employment tax on those earnings even though you may exclude them from your gross income. Use Schedule SE (Form 1040) to figure any self-employment tax due.

PART-I GENERAL INFORMATION

Line 1:
Enter the DATE bonafide residence began and ended. If you still continue to remain as a Bonafide Resident then check the checkbox “continues” and do not write the date bonafide residence ended.

Line 2:
If you entered the date of Bonafide residence began then checks the applicable checkbox out of the Four on line 2.

Line 3:
Check the appropriate checkbox YES or NO on line 3a. If you checked the yes checkbox then select the appropriate relation of the person of family who lived with you from the combo box on line 3b otherwise keep it blank. Also enter the period of residence of the person who lived with you. If you checked the No checkbox on line 3a then leave line 3b blank.

Line 4:
Check the appropriate checkbox YES or NO on line 4a. If you checked the yes checkbox on line 4a then enter the address of that other home. Whether it was rented , name of the occupant and his or her relation with you on the appropriate lines on line 4b. If you checked the No checkbox then there is no need of line 4b to be entered.

Line 5:
Enter the name and Address of the employer if self employed.

Line 6:
Enter the details on line 6 for calculation of days absent and reason for their absence.
 
Line 6a:
Enter on line 6a the date on which you left from American Samoa during the tax year.

Line 6b:
Enter on line 6b the date on which he/she returned to American Samoa during the tax year.

Line 6c:
This line is automatically calculated in our package. Here the package calculates the difference of days between the dates entered on line 6a and line 6b which gives the no of absent days for resident test of American Samoa. If difference of days comes to be more than 365 days then maximum absent days allowed will be 365 days only.

Line 6d:
On this line the user needs to enter manually the reason of his absence from American Samoa for the period in between the dates entered on line 6a & line 6b.

PART-II: FIGURE YOUR EXCLUSION. INCLUDE ONLY INCOME THAT QUALIFIES FOR EXCLUSION

Line 7:
Enter the Wages, salaries, tips etc. received from sources in American Samoa.
 
Line 8:
Enter the Taxable Interest received from sources in American Samoa.

Line 9:
Enter the Ordinary dividends received from sources in American Samoa.

Line 10:
Enter the income effectively connected with the conduct of Trade or business in American Samoa.

Line 11:
Enter the capital gain is any earned from sources in American Samoa.

Line 12:
Enter the income effectively connected with the renting of  any property  or any royalty received from sources in American Samoa.

Line 13:
Enter the income effectively connected with the conduct of farm  in American Samoa.

Line 14:
Enter the type of income and income earned from that source other than mentioned in line 7 to line 13 of the form.

Line 15:
This Line is automatically calculated in our package. Here the sum of line 7 to line 14 is done which shows the total amount a person can exclude from his gross income if he qualifies for Bonafide Residency Test.

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