Instructions for IRS Form 1040 Instructions for IRS Form 1040 Schedule J - Income Averaging for Farmers and Fishermen 2018

October 10, 2018 "Instructions For Irs Form 1040 Schedule J - Income Averaging For Farmers And Fishermen" contain the latest filing requirements for the IRS-issued Form 1040. Download your copy of the instructions by clicking the link below.

IRS Form 1040 is tax form released and collected by the Internal Revenue Service of the United States.

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Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule J
Income
Use Schedule J (Form 1040) to elect to figure your 2018 income tax by averaging,
over the previous 3 years (base years), all or part of your 2018 taxable income from
Averaging for
your trade or business of farming or fishing. This election may give you a lower tax if
your 2018 income from farming or fishing is high and your taxable income for 1or
Farmers and
more of the 3 prior years was low.
In order to qualify for this election, you aren't required to have been in the business
Fishermen
of farming or fishing during any of the base years.
You may elect to average farming or fishing income even if your filing status
wasn't the same in the election year and the base years.
This election doesn't apply when figuring your alternative minimum tax on Form
6251. Also, you don't have to refigure, because of this election, the tax liability of any
minor child who was required to use your tax rates in the prior years.
Section references are to the Internal
tural or horticultural commodity. This
3. Any other activity which can rea-
Revenue Code unless otherwise noted.
includes:
sonably be expected to result in the
catching, taking, or harvesting of fish;
1. Operating a nursery or sod farm;
Future Developments
4. Any operations at sea in support
2. Raising or harvesting of trees
of, or in preparation for, any activity de-
For the latest information about devel-
bearing fruits, nuts, or other crops;
opments related to Schedule J (Form
scribed in (1) through (3) above;
3. Raising ornamental trees (but not
1040) and its instructions, such as legis-
5. Leasing a fishing vessel, but only
evergreen trees that are more than 6
lation enacted after they were published,
if the lease payments are (a) based on a
years old when severed from the roots);
go to IRS.gov/ScheduleJ.
share of the catch (or a share of the pro-
4. Raising, shearing, feeding, caring
ceeds from the sale of the catch) from
General
for, training, and managing animals; and
the lessee's use of the vessel in a fishing
Instructions
5. Leasing land to a tenant engaged
business (not a fixed payment), and (b)
in a farming business, but only if the
determined under a written lease entered
lease payments are (a) based on a share
into before the lessee begins any signifi-
Prior Year Tax Returns
of the tenant's production (not a fixed
cant fishing activities resulting in the
amount), and (b) determined under a
catch; and
You may need copies of your original or
written agreement entered into before
6. Compensation as a crew member
amended income tax returns for 2015,
the tenant begins significant activities on
on a vessel engaged in a fishing busi-
2016, and 2017 to figure your tax on
the land.
ness, but only if the compensation is
Schedule J.
A farming business doesn't include:
based on a share of the catch (or a share
If you need copies of your tax re-
of the proceeds from the sale of the
Contract harvesting of an agricul-
turns, use Form 4506. There is a fee for
catch).
tural or horticultural commodity grown
each return requested. See Form 4506
or raised by someone else, or
for the fee amount. If your main home,
The word “fish” means finfish, mol-
Merely buying or reselling plants
principal place of business, or tax re-
lusks, crustaceans, and all other forms of
or animals grown or raised by someone
cords are located in a federally declared
marine animal and plant life other than
else.
disaster area, this fee will be waived. If
marine mammals and birds.
you want a free transcript of your tax re-
A fishing business doesn't include
turn or account, use Form 4506-T. See
Fishing business. A fishing business is
any scientific research activity conduc-
your Form 1040 instructions to find out
the trade or business of fishing in which
ted by a scientific research vessel.
how to get these forms.
the fish harvested, either in whole or in
Settlement from Exxon Valdez liti­
part, are intended to enter commerce or
Keep a copy of your 2018 income tax
gation. You will be treated as engaged
enter commerce through sale, barter, or
return to use for income averaging in
in a fishing business with respect to any
trade. This includes:
2019, 2020, or 2021.
qualified settlement income you re-
1. The catching, taking, or harvest-
Definitions
ceived if either of the following applies.
ing of fish;
1. You were a plaintiff in the civil
2. The attempted catching, taking,
Farming business. A farming business
action
In
re
Exxon
Valdez,
No.
or harvesting of fish;
is the trade or business of cultivating
land or raising or harvesting any agricul-
J-1
Oct 10, 2018
Cat. No. 25514J
Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule J
Income
Use Schedule J (Form 1040) to elect to figure your 2018 income tax by averaging,
over the previous 3 years (base years), all or part of your 2018 taxable income from
Averaging for
your trade or business of farming or fishing. This election may give you a lower tax if
your 2018 income from farming or fishing is high and your taxable income for 1or
Farmers and
more of the 3 prior years was low.
In order to qualify for this election, you aren't required to have been in the business
Fishermen
of farming or fishing during any of the base years.
You may elect to average farming or fishing income even if your filing status
wasn't the same in the election year and the base years.
This election doesn't apply when figuring your alternative minimum tax on Form
6251. Also, you don't have to refigure, because of this election, the tax liability of any
minor child who was required to use your tax rates in the prior years.
Section references are to the Internal
tural or horticultural commodity. This
3. Any other activity which can rea-
Revenue Code unless otherwise noted.
includes:
sonably be expected to result in the
catching, taking, or harvesting of fish;
1. Operating a nursery or sod farm;
Future Developments
4. Any operations at sea in support
2. Raising or harvesting of trees
of, or in preparation for, any activity de-
For the latest information about devel-
bearing fruits, nuts, or other crops;
opments related to Schedule J (Form
scribed in (1) through (3) above;
3. Raising ornamental trees (but not
1040) and its instructions, such as legis-
5. Leasing a fishing vessel, but only
evergreen trees that are more than 6
lation enacted after they were published,
if the lease payments are (a) based on a
years old when severed from the roots);
go to IRS.gov/ScheduleJ.
share of the catch (or a share of the pro-
4. Raising, shearing, feeding, caring
ceeds from the sale of the catch) from
General
for, training, and managing animals; and
the lessee's use of the vessel in a fishing
Instructions
5. Leasing land to a tenant engaged
business (not a fixed payment), and (b)
in a farming business, but only if the
determined under a written lease entered
lease payments are (a) based on a share
into before the lessee begins any signifi-
Prior Year Tax Returns
of the tenant's production (not a fixed
cant fishing activities resulting in the
amount), and (b) determined under a
catch; and
You may need copies of your original or
written agreement entered into before
6. Compensation as a crew member
amended income tax returns for 2015,
the tenant begins significant activities on
on a vessel engaged in a fishing busi-
2016, and 2017 to figure your tax on
the land.
ness, but only if the compensation is
Schedule J.
A farming business doesn't include:
based on a share of the catch (or a share
If you need copies of your tax re-
of the proceeds from the sale of the
Contract harvesting of an agricul-
turns, use Form 4506. There is a fee for
catch).
tural or horticultural commodity grown
each return requested. See Form 4506
or raised by someone else, or
for the fee amount. If your main home,
The word “fish” means finfish, mol-
Merely buying or reselling plants
principal place of business, or tax re-
lusks, crustaceans, and all other forms of
or animals grown or raised by someone
cords are located in a federally declared
marine animal and plant life other than
else.
disaster area, this fee will be waived. If
marine mammals and birds.
you want a free transcript of your tax re-
A fishing business doesn't include
turn or account, use Form 4506-T. See
Fishing business. A fishing business is
any scientific research activity conduc-
your Form 1040 instructions to find out
the trade or business of fishing in which
ted by a scientific research vessel.
how to get these forms.
the fish harvested, either in whole or in
Settlement from Exxon Valdez liti­
part, are intended to enter commerce or
Keep a copy of your 2018 income tax
gation. You will be treated as engaged
enter commerce through sale, barter, or
return to use for income averaging in
in a fishing business with respect to any
trade. This includes:
2019, 2020, or 2021.
qualified settlement income you re-
1. The catching, taking, or harvest-
Definitions
ceived if either of the following applies.
ing of fish;
1. You were a plaintiff in the civil
2. The attempted catching, taking,
Farming business. A farming business
action
In
re
Exxon
Valdez,
No.
or harvesting of fish;
is the trade or business of cultivating
land or raising or harvesting any agricul-
J-1
Oct 10, 2018
Cat. No. 25514J
89-095-CV (HRH) (Consolidated) (D.
considered to be within a reasonable
You don't have to include all of
Alaska); or
time.
your taxable income from farm-
TIP
ing or fishing on line 2a. It may
2. All of the following apply.
Elected farm income doesn't include
be to your advantage to include less
a. You were a beneficiary of a
income, gain, or loss from the sale or
than the entire amount, depending on
plaintiff described in (1) above.
other disposition of land or from the sale
how the amount you include on line 2a
of development rights, grazing rights,
b. You acquired the right to receive
affects your tax bracket for the current
and other similar rights.
qualified settlement income from that
and prior 3 tax years.
plaintiff.
You should find your income, gains,
c. You were the spouse or an imme-
losses, and deductions from farming or
The excess farm loss rules don't ap-
diate relative of that plaintiff.
fishing reported on different tax forms,
ply in 2018. The excess business loss
such as:
disallowance rule replaces the limitation
Qualified settlement income is any
2018 Form 1040, line 1, or Form
on excess farm loss. Your elected farm
taxable interest and punitive damage
1040NR, line 8, income from wages and
income can’t include excess business
awards you received (whether as lump
other compensation you received (a) as a
losses. See the Instructions for Sched-
sums or periodic payments) in connec-
shareholder in an S corporation engaged
ule F (Form 1040) and Form 461.
tion with the Exxon Valdez civil action
in a farming or fishing business, or (b)
described above. Qualified settlement
Your elected farm income can't ex-
as a crew member on a vessel engaged
income includes all such awards, wheth-
ceed your taxable income.
in a fishing business (but see Fishing
er received before or after the judgment
business, earlier);
and whether related to a settlement or a
Lines 2b and 2c
2018 Schedule 1 (Form 1040),
judgment.
line 21, or Form 1040NR, line 21, in-
Complete lines 2b and 2c if the amount
Additional Information
come from Exxon Valdez litigation;
of your elected farm income on line 2a
2018 Schedule 1 (Form 1040),
See Pub. 225 and Regulations section
includes net capital gain. Net capital
line 27, or Form 1040NR, line 27, de-
1.1301-1 for more information.
gain is the excess, if any, of net
ductible part of self-employment tax, but
long-term
capital
gain
over
net
only to the extent that deduction is at-
short-term capital loss.
tributable to your farming or fishing
Specific
Line 2b. Enter on line 2b the portion of
business;
Instructions
your elected farm income on line 2a
2018 Form 1040, line 10, or Form
treated as a net capital gain. The amount
1040NR, line 41, CCF reduction, except
you enter on line 2b can't exceed the
to the extent that any earnings (without
Line 2a
smaller of your total net capital gain or
regard to the carryback of any net oper-
the net capital gain attributable to your
ating or net capital loss) from the opera-
Elected Farm Income
farming or fishing business.
tion of agreement vessels in the fisheries
of the United States or in the foreign or
To figure your elected farm income, first
Line 2c. Enter on line 2c the smaller of
domestic commerce of the United States
figure your taxable income from farm-
line 2b or the unrecaptured section 1250
ing or fishing. This includes all income,
aren't attributable to your fishing busi-
gain attributable to your farming or fish-
ness;
gains, losses, and deductions attributable
ing business, if any.
Schedule C or C-EZ;
to your farming or fishing business. If
Line 4
Schedule D;
you conduct both farming and fishing
Schedule E, Part II;
businesses, you must figure your elected
Figure the tax on the amount on line 3
Schedule F;
farm income by combining income,
using:
gains, losses, and deductions attributable
Form 4797;
The 2018 Tax Table, Tax Compu-
Form 4835;
to your farming and fishing businesses.
tation Worksheet, or Qualified Divi-
Form 8903, Domestic Production
Elected farm income also includes
dends and Capital Gain Tax Worksheet
Activities Deduction, but only to the ex-
any gain or loss from the sale or other
from the 2018 Instructions for Form
tent that deduction is attributable to your
disposition of property regularly used in
1040 or Form 1040NR;
farming or fishing business; and
your farming or fishing business for a
The 2018 Foreign Earned Income
Form 8949.
substantial period of time. However, if
Tax Worksheet from the 2018 Instruc-
Your elected farm income is the
such gain or loss is realized after cessa-
tions for Form 1040; or
amount of your taxable income from
tion of the farming or fishing business,
The Schedule D Tax Worksheet in
farming or fishing that you elect to in-
the gain or loss is treated as attributable
the 2018 Instructions for Schedule D.
clude on line 2a.
to a farming or fishing business only if
Enter the tax on line 4.
the property is sold within a reasonable
time after cessation of the farming or
Line 5
fishing business. A sale or other disposi-
tion within 1 year of the cessation is
If you used Schedule J to figure your tax
for:
J-2
2017 (that is, you entered the
$1,150) was available to carry to 2017
Line 3. If you had an NOL for 2015,
amount from the 2017 Schedule J,
and later years, as shown on his 2016
enter the amount of that NOL from the
line 23; on your 2017 Form 1040,
Form 1045, Schedule B, line 10. John
2015 Form 1045, Schedule A, line 25,
line 44; on your 2017 Form 1040NR,
enters the $1,150 on line 3 of the work-
you filed with Form 1045 or Form
line 42; or on Form 1040X for 2017),
sheet, and $4,150 ($1,150 plus the
1040X. If you didn't have an NOL for
enter on line 5 the amount from your
$3,000 line 2 amount) on line 4. He then
2015, enter the portion, if any, of the
2017 Schedule J, line 11.
subtracts the $4,150 from the $8,150 on
NOL carryovers and carrybacks to 2015
2016 but not 2017, enter on line 5
line 1 and enters the result, $4,000, on
that weren't used in 2015 and were car-
the amount from your 2016 Schedule J,
line 5 of the worksheet. He enters a neg-
ried to years after 2015.
line 15.
ative $4,000 on Schedule J, line 5. He
Example. John Farmington, who is
2015 but not 2016 or 2017, enter
combines that amount with the $6,000
single, didn't use income averaging for
on line 5 the amount from your 2015
on Schedule J, line 6, and enters $2,000
2015, 2016, or 2017. For 2018, John has
Schedule J, line 3.
on Schedule J, line 7.
$18,000 of elected farm income on
If you figured your tax for 2015,
Line 8
Schedule J, line 2a. The taxable income
2016, and 2017 without using Sched-
before subtracting exemptions on his
ule J, enter on line 5 the taxable income
If line 7 is zero, enter -0- on line 8. Oth-
2015 Form 1040, line 41, is $4,850. A
from your 2015 tax return (or as previ-
erwise, figure the tax on the amount on
deduction for exemptions of $4,000 is
ously adjusted by the IRS, or corrected
line 7 using:
shown on line 42, and line 43, taxable
on an amended return). But if that
The 2015 Tax Rate Schedules be-
income, is $850. However, John had a
amount is zero or less, complete the
low;
$20,600 NOL for 2016, $9,000 of which
2015 Taxable Income Worksheet to fig-
The 2015 Qualified Dividends and
was remaining to carry to 2015 after the
ure the amount to enter on line 5.
Capital Gain Tax Worksheet, later;
NOL was carried back to 2014. To com-
If you didn't file a tax return for
The 2015 Schedule D Tax Work-
plete line 1 of the 2015 Taxable Income
2015, use the amount you would have
sheet in the 2015 Schedule D instruc-
Worksheet, John combines the $9,000
reported as your taxable income had you
tions (but use the 2015 Tax Rate Sched-
NOL deduction with the $850 from his
been required to file a tax return. Be
ules below when figuring the tax on
2015 Form 1040, line 43. The result is a
sure to keep all your records for 2015
lines 34 and 36 of the Schedule D Tax
negative $8,150, John's 2015 taxable in-
for at least 3 years after April 16, 2019
Worksheet); or
come, which he enters as a positive
(or the date you file your 2018 tax re-
The 2015 Foreign Earned Income
amount on line 1 of the 2015 Taxable
turn, if later).
Tax Worksheet, later.
Income Worksheet.
When John filed his 2015 tax return,
If your elected farm income includes
Instructions for 2015 Taxable
he had a $3,000 net capital loss deduc-
net capital gain, you must use the 2015
Income Worksheet
tion on Schedule D, line 21 (which was
Schedule D Tax Worksheet to figure the
also entered on Form 1040, line 13), a
tax on the amount on line 7. However, if
Line 2. Any net capital loss deduction
$7,000 loss on Schedule D, line 16, and
you filed Form 2555 or 2555-EZ for
on your 2015 Schedule D, line 21, isn't
a $4,000 capital loss carryover to 2016.
2015, you must first complete the 2015
allowed for income averaging purposes
However, when John carried back the
Foreign Earned Income Tax Worksheet,
to the extent it didn't reduce your capital
2016 NOL ($9,000 of which was carried
and then use the 2015 Schedule D Tax
loss carryover to 2016. This could hap-
to 2015), he refigured his 2015 capital
Worksheet to figure the tax on the
pen if the taxable income before sub-
loss carryover to 2016 as $7,000. John
amount on line 3 of the Foreign Earned
tracting exemptions—shown on your
adds the $3,000 from Schedule D,
Income Tax Worksheet.
2015 Form 1040, line 41, or your 2015
line 21, and the $7,000 capital loss car-
Form 1040NR, line 39 (or as previously
When completing the Schedule D
ryover. He subtracts from the $10,000
adjusted)—was less than zero. Enter on
Tax Worksheet, you must allocate 1/3 of
result the $7,000 loss on his Schedule D,
line 2 the amount by which your 2015
the amount on Schedule J, line 2b (and
line 16, and enters $3,000 on line 2 of
capital loss carryover to 2016 (the sum
1/3 of the amount on line 2c, if any) to
the worksheet.
of your short- and long-term capital loss
2015. If for 2015 you had a capital loss
John had $850 of taxable income in
carryovers) exceeds the excess of the
that resulted in a capital loss carryover
2015 that reduced the 2016 NOL carry-
loss on your 2015 Schedule D, line 16,
to 2016, don't reduce the elected farm
back. The $4,000 exemption deduction
over the loss on your 2015 Schedule D,
income allocated to 2015 by any part of
and $3,000 net capital loss deduction al-
line 21. If you had any Net Operating
the carryover.
so reduced the amount of the 2016 NOL
Loss (NOL) carrybacks to 2015, be sure
carryback. As a result, only $1,150
you refigured your 2015 capital loss car-
($9,000 – $850 – $4,000 – $3,000 =
ryover to 2016.
J-3
2015 Taxable Income Worksheet—Line 5
Keep for Your Records
Complete this worksheet if you didn't use Schedule J to figure your tax for 2016 and 2017 and your 2015 taxable income was zero or
less. See the instructions above before completing this worksheet for line 5.
1. Figure the taxable income from your 2015 tax return (or as previously adjusted) without limiting it to
zero. If you had an NOL for 2015, don't include any NOL carryovers or carrybacks to 2015. Enter the
result as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
2. If there is a loss on your 2015 Schedule D, line 21, add that loss (as a positive
amount) and your 2015 capital loss carryover to 2016. Subtract from that sum the
amount of the loss on your 2015 Schedule D, line 16, and enter the result . . . . . . . .
2.
3. If you had an NOL for 2015, enter it as a positive amount. Otherwise, enter as a
positive amount the portion, if any, of the NOL carryovers and carrybacks to 2015
that weren't used in 2015 and were carried to years after 2015 . . . . . . . . . . . . . . . . .
3.
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 5 . . . . . . . . . . . . . . .
5.
2015 Tax Rate Schedules—Line 8
Schedule X—Use if your 2015 filing status was Single or you
Schedule Y-2—Use if your 2015 filing status was Married filing separately
checked filing status box 1 or 2 on Form 1040NR
or you checked filing status box 3, 4, or 5 on Form 1040NR
If
Enter on
If
Enter on
Schedule J,
Schedule J,
of the
Schedule J,
Schedule J,
line 7, is:
But not
line 8
amount
line 7, is:
But not
line 8
of the amount
Over—
over—
over—
Over—
over—
over—
$0 $9,225
...........
10%
$0
$0 $9,225
...........
10%
$0
9,225 37,450
$922.50
+
15%
9,225
9,225 37,450
$922.50
+
15%
9,225
37,450 90,750
5,156.25
+
25%
37,450
37,450 75,600
5,156.25
+
25%
37,450
90,750 189,300
18,481.25
+
28%
90,750
75,600 115,225
14,693.75
+
28%
75,600
189,300 411,500
46,075.25
+
33%
189,300
115,225 205,750
25,788.75
+
33%
115,225
411,500 413,200
119,401.25 +
35%
411,500
205,750 232,425
55,662.00
+
35%
205,750
413,200 .............
119,996.25 +
39.6% 413,200
232,425
..........
64,998.25
+
39.6%
232,425
Schedule Y-1—Use if your 2015 filing status was Married
Schedule Z—Use if your 2015 filing status was Head of household
filing jointly or Qualifying widow(er) or you checked filing
status box 6 on Form 1040NR
If
Enter on
If
Enter on
Schedule J,
Schedule J,
of the
Schedule J,
Schedule J,
line 7, is:
But not
line 8
amount
line 7, is:
But not
line 8
of the amount
Over—
over—
over—
Over—
over—
over—
$0 $18,450
...........
10%
$0
$0 $13,150
...........
10%
$0
18,450 74,900
$1,845.00
+
15%
18,450
13,150 50,200
$1,315.00
+
15%
13,150
74,900 151,200
10,312.50
+
25%
74,900
50,200 129,600
6,872.50
+
25%
50,200
151,200 230,450
29,387.50
+
28%
151,200
129,600 209,850
26,772.50
+
28%
129,600
230,450 411,500
51,577.50
+
33%
230,450
209,850 411,500
49,192.50
+
33%
209,850
411,500 464,850
111,324.00 +
35%
411,500
411,500 439,000
115,737.00
+
35%
411,500
464,850 ............
129,996.50 +
39.6% 464,850
439,000 ...........
125,362.00
+
39.6%
439,000
J-4
Keep for Your Records
2015 Qualified Dividends and Capital Gain Tax Worksheet—Line 8
Use this worksheet only if both of the following apply.
Your elected farm income on your 2018 Schedule J, line 2a, doesn't include any net capital gain.
You (a) entered qualified dividends on your 2015 Form 1040, line 9b (or your 2015 Form 1040A, line 9b, or 2015 Form 1040NR,
line 10b); (b) entered capital gain distributions directly on your 2015 Form 1040, line 13 (or your 2015 Form 1040A, line 10, or 2015 Form
1040NR, line 14) and weren't required to file Schedule D; or (c) filed Schedule D in 2015 and you answered “Yes” on lines 17 and 20 of that
Schedule D.
1.
Amount from your 2018 Schedule J, line 7. If for 2015 you filed Form 2555 or 2555-EZ, enter the
amount from line 3 of the 2015 Foreign Earned Income Tax Worksheet . . . . . . . . . . . . . . . . . .
1.
2.
Amount from your 2015 Form 1040, line 9b* (or your 2015 Form 1040A,
line 9b, or 2015 Form 1040NR, line 10b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3.
Did you file Schedule D in 2015?*
Enter the smaller of line 15 or 16 of your 2015 Schedule D,
Yes.
but don't enter less than -0-
3.
Enter the amount from your 2015 Form 1040, line 13 (or your
No.
2015 Form 1040A, line 10, or 2015 Form 1040NR, line 14)
4.
Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5.
Amount, if any, from your 2015 Form 4952, line 4g . . . . . . . . . . . . . . . . . 5.
6.
Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7.
Subtract line 6 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
8.
Enter one of the following three amounts depending on your
filing status:
$37,450 if single or married filing separately, or if you checked filing
status box 1, 2, 3, 4, or 5 on Form 1040NR;
. . . . . . . . .
8.
$74,900 if married filing jointly or qualifying widow(er) or if you
checked filing status box 6 on Form 1040NR;
$50,200 if head of household.
9.
Enter the smaller of line 1 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.
10.
Enter the smaller of line 7 or line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11.
Subtract line 10 from line 9. This amount is taxed at 0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12.
Enter the smaller of line 1 or line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13.
Enter the amount from line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14.
Subtract line 13 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15.
Enter one of the following amounts depending on your filing status:
$413,200 if single, or if you checked filing status box 1 or 2 on Form
1040NR;
$232,425 if married filing separately, or if you checked filing status
box 3, 4, or 5 on Form 1040NR;
. . . . . . . . . 15.
$464,850 if married filing jointly or qualifying widow(er), or if you
checked filing status box 6 on Form 1040NR;
$439,000 if head of household.
.
16.
Enter the smaller of line 1 or line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
17.
Add lines 7 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
18.
Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
19.
Enter the smaller of line 14 or line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.
20.
Multiply line 19 by 15% (0.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.
21.
Add lines 11 and 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.
22.
Subtract line 21 from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.
23.
Multiply line 22 by 20% (0.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
24.
Figure the tax on the amount on line 7. Use the 2015 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.
25.
Add lines 20, 23, and 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.
26.
Figure the tax on the amount on line 1. Use the 2015 Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.
27.
Tax. Enter the smaller of line 25 or line 26 here and on your 2018 Schedule J, line 12. If for 2015 you filed Form 2555
or 2555-EZ, don't enter this amount on Schedule J, line 12. Instead, enter it on line 4 of the 2015 Foreign Earned
Income Tax Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.
*If for 2015 you filed Form 2555 or 2555-EZ, see the footnote in the 2015 Foreign Earned Income Tax Worksheet before completing this line.
J-5
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