Refund

Line 69 - Amount overpaid.   If line 69 is under $1, we will send a refund only on written request.

If the amount you overpaid is large, you may be able to decrease the amount of income tax withheld from your pay by filing a new Form W-4. See Income Tax Withholding and Estimated Tax Payments for Individuals for 2003 on page 25.

Refund Offset.   If you owe past-due Federal tax, state income tax, child support, spousal support, or certain Federal nontax debts, such as student loans, all or part of the overpayment on line 69 may be used (offset) to pay the past-due amount. Offsets for Federal taxes are made by the IRS. All other offsets are made by the Treasury Department's Financial Management Service (FMS). You will receive a notice from FMS showing the amount of the offset and the agency receiving it. To find out if you may have an offset or if you have any questions about it, contact the agency(ies) to which you owe the debt.

Lines 70b through 70d - Direct deposit of refund.   Complete lines 70b through 70d if you want us to directly deposit the amount shown on line 70a into your checking or savings account at a U.S. bank or other financial institution (such as a mutual fund, brokerage firm, or credit union) in the United States instead of sending you a check.

Why Use Direct Deposit?

• You get your refund fast.
• Payment is more secure - there is no check to get lost.
• More convenient. No trip to the bank to deposit your check.
• Saves tax dollars. A refund by direct deposit costs less than a check.

You can check with your financial institution to make sure your deposit will be accepted and to get the correct routing and account numbers. The IRS is not responsible for a lost refund if you enter the wrong account information.

Line 66b sample check

Line 70b. The routing number must be nine digits. The first two digits must be 01 through 12 or 21 through 32. Otherwise, the direct deposit will be rejected and a check sent instead. On the sample check on page 20, the routing number is 250250025.

Your check may state that it is payable through a financial institution different from the one at which you have your checking account. If so, do not use the routing number on that check. Instead, contact your financial institution for the correct routing number to enter on line 70b.

Line 70d. The account number can be up to 17 characters (both numbers and letters). Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. On the sample check above, the account number is 20202086. Be sure not to include the check number.

Line 66b sample check

Line 71 - Applied to 2003 estimated tax.   Enter on line 71 the amount, if any, of the overpayment on line 69 you want applied to your 2003 estimated tax. This election cannot be changed later.

Amount You Owe

Line 72 - Amount you owe.   Include any estimated tax penalty from line 73 in the amount you enter on line 72.

Make your check or money order payable to the United States Treasury for the full amount due. Do not send cash. Do not attach the payment to your return. Write 2002 Form 1040NR and your name, address, and SSN or ITIN on your payment. You do not have to pay if line 72 is under $1.

To help us process your payment paragraph

Do not include any estimated tax payment for 2003 in your check or money order. Instead, make the estimated tax payment separately.

You may need to (a) increase the amount of income tax withheld from your pay by filing a new Form W-4 or (b) make estimated tax payments for 2003. See Income Tax Withholding and Estimated Tax Payments for Individuals for 2003 on page 25.

What if You Cannot Pay? If you cannot pay the full amount shown on line 72 when you file, you may ask to make monthly installment payments. You may have up to 60 months to pay. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by the date due, even if your request to pay in installments is granted. You must also pay a fee. To limit the interest and penalty charges, pay as much of the tax as possible when you file. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan.

To ask for an installment agreement, use Form 9465. You should receive a response to your request for installments within 30 days. But if you file your return after March 31, it may take us longer to reply.

Line 73 - Estimated tax penalty.   You may owe this penalty if:

• Line 72 is at least $1,000 and it is more than 10% of the tax shown on your return or
• You did not pay enough estimated tax by any of the due dates. This is true even if you are due a refund.

For most people, the tax shown on your return is the amount on line 57 minus the total of any amounts shown on line 61 and Forms 8828, 4137, 4136, 5329 (Parts III, IV, V, VI, and VII only), and 8885. When figuring the amount on line 57, include the amount on line 56 only if line 58 is more than zero or you would owe the penalty even if you did not include those taxes. But if you entered an amount on Schedule H (Form 1040), line 7, include the total of that amount plus the amount on Form 1040NR, line 56.

Exception. You will not owe the penalty if your 2001 tax return was for a tax year of 12 full months and the total of lines 58, 59, 60, and 64 through 67b on your 2002 return is at least as much as the tax liability shown on your 2001 return. Your estimated tax payments for 2002 must have been made on time and for the required amount.

If your 2001 adjusted gross income was over $150,000 (over $75,000 if you checked filing status box 3, 4, or 5 for 2002), the exception above applies only if the total of lines 58, 59, 60, and 64 through 67b on your 2002 tax return is at least 112% of the tax liability shown on your 2001 return. This rule does not apply to farmers and fishermen.

Figuring the Penalty. If the Exception above does not apply and you choose to figure the penalty yourself, see Form 2210 (or Form 2210-F for farmers and fishermen) to find out if you owe the penalty. If you do, you can use the form to figure the amount.

Enter the penalty on Form 1040NR, line 73. Add the penalty to any tax due and enter the total on line 72. If you are due a refund, subtract the penalty from the overpayment you show on line 69. Do not file Form 2210 with your return unless Form 2210 indicates that you must do so. Instead, keep it for your records.

Because Form 2210 is complicated, if you want to, you can leave line 73 blank and the IRS will figure the penalty and send you a bill. We will not charge you interest on the penalty if you pay by the date specified on the bill. In certain situations, you may be able to lower your penalty, but only by filing Form 2210. For details, see the Instructions for Form 2210.

Third Party Designee

If you want to allow a friend, family member, or any other person you choose to discuss your 2002 tax return with the IRS, check the Yes box in the Third Party Designee area of your return. Also, enter the designee's name, U.S. phone number, and any five numbers the designee chooses as his or her personal identification number (PIN). But if you want to allow the paid preparer who signed your return to discuss it with the IRS, just enter Preparer in the space for the designee's name. You do not have to provide the other information requested.

If you check the Yes box, you are authorizing the IRS to call the designee to answer any questions that may arise during the processing of your return. You are also authorizing the designee to:

• Give the IRS any information that is missing from your return,
• Call the IRS for information about the processing of your return or the status of your refund or payment(s), and
• Respond to certain IRS notices that you have shared with the designee about math errors, offsets, and return preparation. The notices will not be sent to the designee.

You are not authorizing the designee to receive any refund check, bind you to anything (including any additional tax liability), or otherwise represent you before the IRS. If you want to expand the designee's authorization, see Pub. 947.

The authorization cannot be revoked. However, the authorization will automatically end no later than the due date (without regard to extensions) for filing your 2003 tax return (see When To File on page 3).

Signature

See Reminders on page 25 after you complete pages 3, 4, and 5 of the form.

Instructions for Schedule A, Itemized Deductions

State and Local Income Taxes

Lines 1 Through 3

You can deduct state and local income taxes you paid or that were withheld from your salary during 2002 on income connected with a U.S. trade or business. If, during 2002, you received any refunds of, or credits for, income tax paid in earlier years, do not subtract them from the amount you deduct here. Instead, see the instructions for Form 1040NR, line 11, on page 9.

Gifts to U.S. Charities

Lines 4 Through 7

You may deduct contributions or gifts you gave to U.S. organizations that are religious, charitable, educational, scientific, or literary in purpose. You may also deduct what you gave to organizations that work to prevent cruelty to children or animals.

To verify an organization's charitable status, you can:

• Check with the organization to which you made the donation. The organization should be able to provide you with verification of its charitable status.
• See Pub. 78 for a list of most qualified organizations.
• If in the United States, call our Tax Exempt/Government Entities Customer Account Services at 1-877-829-5500. Assistance is available Monday through Friday from 8:00 a.m. to 6:30 p.m. Eastern time.

Contributions you may deduct.   Contributions may be in cash (keep canceled checks, receipts, or other reliable written records showing the name of the organization and the date and amount given), property, or out-of-pocket expenses you paid to do volunteer work for the kinds of organizations described earlier. If you drove to and from the volunteer work, you may take 14 cents a mile or the actual cost of gas and oil. Add parking and tolls to the amount you claim under either method. But do not deduct any amounts that were repaid to you.

Gifts From Which You Benefit. If you made a gift and received a benefit in return, such as food, entertainment, or merchandise, you may generally only deduct the amount that is more than the value of the benefit. But this rule does not apply to certain membership benefits provided in return for an annual payment of $75 or less. For details, see Pub. 526.

Example.   You paid $70 to a charitable organization to attend a fund-raising dinner and the value of the dinner was $40. You may deduct only $30.

Gifts of $250 or More. You may deduct a gift of $250 or more only if you have a statement from the charitable organization showing the information in 1 and 2 below.

In figuring whether a gift is $250 or more, do not combine separate donations. For example, if you gave your church $25 each week for a total of $1,300, treat each $25 payment as a separate gift. If you made donations through payroll deductions, treat each deduction from each paycheck as a separate gift. See Pub. 526 if you made a separate gift of $250 or more through payroll deduction.

1. The amount of any money contributed and a description (but not value) of any property donated.
2. Whether the organization did or did not give you any goods or services in return for your contribution. If you did receive any goods or services, a description and estimate of the value must be included. If you received only intangible religious benefits (such as admission to a religious ceremony), the organization must state this, but it does not have to describe or value the benefit.

You must get the statement by the date you file your return or the due date (including extensions) for filing your return, whichever is earlier. Do not attach the statement to your return. Instead, keep it for your records.

Limit on the Amount You May Deduct. See Pub. 526 to figure the amount of your deduction if any of the following apply.

• Your cash contributions or contributions of ordinary income property are more than 30% of the amount on Form 1040NR, line 35.
• Your gifts of capital gain property are more than 20% of the amount on Form 1040NR, line 35.
• You gave gifts of property that increased in value or gave gifts of the use of property.

Contributions You May Not Deduct

• Travel expenses (including meals and lodging) while away from home unless there was no significant element of personal pleasure, recreation, or vacation in the travel.
• Political contributions.
• Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups.
• Cost of raffle, bingo, or lottery tickets.
• Cost of tuition. But you may be able to deduct this expense on line 9. See page 22.
• Value of your time or services.
• Value of blood given to a blood bank.
• The transfer of a future interest in tangible personal property (generally, until the entire interest has been transferred).
• Gifts to individuals and groups that are run for personal profit.
• Gifts to foreign organizations. But you may be able to deduct gifts to certain U.S. organizations that transfer funds to foreign charities and certain Canadian, Israeli, and Mexican charities. See Pub. 526 for details.
• Gifts to organizations engaged in certain political activities that are of direct financial interest to your trade or business. See section 170(f)(9).
• Gifts to groups whose purpose is to lobby for changes in the laws.
• Gifts to civic leagues, social and sports clubs, labor unions, and chambers of commerce.
• Value of benefits received in connection with a contribution to a charitable organization. See Pub. 526 for exceptions.

Line 4

Enter the total contributions you made in cash or by check (including out-of-pocket expenses).

Line 5

Enter your contributions of property. If you gave used items, such as clothing or furniture, deduct their fair market value at the time you gave them. Fair market value is what a willing buyer would pay a willing seller when neither has to buy or sell and both are aware of the conditions of the sale. For more details on determining the value of donated property, see Pub. 561.

If the amount of your deduction is more than $500, you must complete and attach Form 8283. For this purpose, the amount of your deduction means your deduction before applying any income limits that could result in a carryover of contributions. If your total deduction is over $5,000, you may also have to get appraisals of the values of the donated property. See Form 8283 and its instructions for details.

Recordkeeping. If you gave property, you should keep a receipt or written statement from the organization you gave the property to, or a reliable written record, that shows the organization's name and address, the date and location of the gift, and a description of the property. For each gift of property, you should also keep reliable written records that include:

• How you figured the property's value at the time you gave it. If the value was determined by an appraisal, keep a signed copy of the appraisal.
• The cost or other basis of the property if you must reduce it by any ordinary income or capital gain that would have resulted if the property had been sold at its fair market value.
• How you figured your deduction if you chose to reduce your deduction for gifts of capital gain property.
• Any conditions attached to the gift.

Note:   If your total deduction for gifts of property is over $500, you gave less than your entire interest in the property, or you made a qualified conservation contribution, your records should contain additional information. See Pub. 526 for details.

Line 6

Enter any carryover of contributions that you could not deduct in an earlier year because they exceeded your adjusted gross income limit. See Pub. 526 for details.

Casualty and Theft Losses

Line 8

Complete and attach Form 4684 to figure the amount of your loss to enter on line 8.

You may be able to deduct part or all of each loss caused by theft, vandalism, fire, storm, or similar causes, and car, boat, and other accidents. You may also be able to deduct money you had in a financial institution but lost because of the insolvency or bankruptcy of the institution.

You may deduct nonbusiness casualty or theft losses only to the extent that -

1. The amount of each separate casualty or theft loss is more than $100 and
2. The total amount of all losses during the year is more than 10% of the amount shown on Form 1040NR, line 35.

Special rules apply if you had both gains and losses from nonbusiness casualties or thefts. See Form 4684 and its instructions for details.

Use line 11 of Schedule A to deduct the costs of proving that you had a property loss. Examples of these costs are appraisal fees and photographs used to establish the amount of your loss.

For information on Federal disaster area losses, see Pub. 547.

Job Expenses and Most Other Miscellaneous Deductions

Note:   Miscellaneous deductions are allowed only if and to the extent they are directly related to your effectively connected income.

Pub. 529 discusses the types of expenses that may and may not be deducted.

Examples of expenses you may not deduct are:

• Political contributions.
• Personal legal expenses.
• Lost or misplaced cash or property.
• Expenses for meals during regular or extra work hours.
• The cost of entertaining friends.
• Commuting expenses. See Pub. 529 for the definition of commuting.
• Travel expenses for employment away from home if that period of employment exceeds 1 year.
• Travel as a form of education.
• Expenses of attending a seminar, convention, or similar meeting unless it is related to your employment.
• Club dues. See Pub. 529 for exceptions.
• Expenses of adopting a child. But you may be able to take a credit for adoption expenses. See Form 8839 for details.
• Fines and penalties.
• Expenses of producing tax-exempt income.

Line 9

Enter the total ordinary and necessary job expenses you paid for which you were not reimbursed. (Amounts your employer included in box 1 of your W-2 form are not considered reimbursements.)

An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.

But you must fill in and attach Form 2106 if either 1 or 2 below applies.

1. You claim any travel, transportation, meal, or entertainment expenses for your job.
2. Your employer paid you for any of your job expenses reportable on line 9.

If you used your own vehicle and item 2 does not apply, you may be able to file Form 2106-EZ instead.

If you do not have to file Form 2106 or 2106-EZ, list the type and amount of each expense on the dotted lines next to line 9. If you need more space, attach a statement showing the type and amount of each expense. Enter one total on line 9.

Do not include on line 9 any educator expenses you deducted on Form 1040NR, line 24.

Examples of other expenses to include on line 9 are:

• Safety equipment, small tools, and supplies you needed for your job.
• Uniforms required by your employer that are not suitable for ordinary wear.
• Protective clothing required in your work, such as hard hats, safety shoes, and glasses.
• Physical examinations required by your employer.
• Dues to professional organizations and chambers of commerce.
• Subscriptions to professional journals.
• Fees to employment agencies and other costs to look for a new job in your present occupation, even if you do not get a new job.
• Certain business use of part of your home. For details, including limits that apply, see Pub. 587.
• Certain educational expenses. For details, see Pub. 508.

Line 10

Enter the fees you paid for preparation of your tax return, including fees paid for filing your return electronically.

Line 11

Enter the total amount you paid to produce or collect taxable income and manage or protect property held for earning income. But do not include any personal expenses. List the type and amount of each expense on the dotted lines next to line 11. If you need more space, attach a statement showing the type and amount of each expense. Enter one total on line 11.

Examples of expenses to include on line 11 are:

• Certain legal and accounting fees.
• Clerical help and office rent.
• Custodial (for example, trust account) fees.
• Your share of the investment expenses of a regulated investment company.
• Certain losses on nonfederally insured deposits in an insolvent or bankrupt financial institution. For details, including limits that apply, see Pub. 529.
• Casualty and theft losses of property used in performing services as an employee from Form 4684, lines 32 and 38b, or Form 4797, line 18b(1).
• Deduction for repayment of amounts under a claim of right if $3,000 or less.

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