What Is Form 8689: Allocation of Particular person Income Tax to the U.S. Virgin Islands?
Form 8689 is a tax form dispensed during the Inside Source of revenue Supplier (IRS) for use thru U.S. citizens and resident aliens who earned income from sources inside the U.S. Virgin Islands (USVI) then again aren’t bona fide electorate. The U.S. Virgin Islands are regarded as an unincorporated territory of the United States.
Typically, bona fide electorate of the islands most efficient pay taxes on USVI income to the local tax jurisdiction. For those who aren’t a bona fide resident, and you have got income from the Virgin Islands, then you would need to pay taxes to the Virgin Islands and the IRS.
Key Takeaways
- U.S. Taxpayers who aren’t bona fide electorate of the U.S. Virgin Islands then again earned income there should report Form 8689.
- Form 8689 determines how so much income tax should be allocated to the U.S. Virgin Islands.
- To qualify as a bona fide resident of the united statesVirgin Islands, a person should meet the physically presence take a look at.
Who Should File Form 8689: Allocation of Particular person Income Tax to the U.S. Virgin Islands?
If a person does not qualify as a bona fide resident of the Virgin Islands, they’re going to must report form 8689. That is appropriate to each and every U.S. citizens and resident aliens. The ones taxpayers should report two an identical Form 1040 bureaucracy. They report one with the U.S. Virgin Islands and one with the United States. The original Form 1040, together with Form 8689, is sent to the IRS.
To qualify as a bona fide resident of the united statesVirgin Islands, a person should meet the physically presence take a look at. They may be able to’t have a tax area outside of the Virgin Islands or have a greater connection to the mainland U.S. or another country than they do with the U.S. Virgin Islands.
For {{couples}} filing jointly, the person with the following adjustable gross income (AGI) could have to be able to qualify as a bona fide resident of the Virgin Islands for the couple to be regarded as bona fide electorate when filing.
Form 8689 stipulates that taxpayers who qualify as bona fide electorate of the Virgin Islands do not need to report form 8689.
What Is Form 8689 Used for?
Form 8689 determines what portion of income tax should be allocated to the U.S. Virgin Islands. Taxes paid to the Virgin Islands pass to the U.S. Virgin Islands Treasury, fairly than to the U.S. Treasury. Taxpayers would in all probability qualify for a tax credit score ranking on their U.S. tax returns for any tax that used to be as soon as allocated to the Virgin Islands, as long as those taxes were actually paid to the Virgin Islands.
Typically, any amount of tax overpaid to the United States might not be performed to the amount owed to the Virgin Islands. Similarly, amounts overpaid to the Virgin Islands might not be performed to the amount a taxpayer owes to the United States. The amount of tax paid to the Virgin Islands is reported on Line 46. This amount is then reported on Line 33 of your Form 1040 and taken as a credit score ranking.
All pages of Form 8689 are available on the IRS internet web page.
How you’ll be able to File Form 8689: Allocation of Particular person Income Tax to the U.S. Virgin Islands
A taxpayer should report an identical tax returns with the United States and the USVI. If they’re not enclosing a check out or money order, they’re going to must report the original Form 1040 (in conjunction with Form 8689) with the Department of the Treasury, Inside Source of revenue Supplier Center, Austin, TX 73301-0215 USA. If they are in conjunction with a check out or money order, report the original return with the Inside Source of revenue Supplier, P.O. Box 1303, Charlotte, NC 28201-1303 USA.
File a signed copy of Form 1040 (with all attachments, forms, and schedules, in conjunction with Form 8689) with the Virgin Islands Bureau of Inside Source of revenue, 6115 Belongings Smith Bay, Suite 225, St. Thomas, VI 00802. They’re going to accept a signed copy of your U.S. return and process it as an distinctive return.
