Publication 54 (2006), Tax Guide for U.S. Citizens and Resident Aliens Abroad

1. Filing Information

This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Whether you have to file a return,
When to file your return and pay any tax due,
How to treat foreign currency,
Where to file your return,
When you can treat your nonresident alien spouse as a resident, and
When you may have to make estimated tax payments.

Publication

3 Armed Forces' Tax Guide
501 Exemptions, Standard Deduction, and Filing Information
505 Tax Withholding and Estimated Tax
519 U.S. Tax Guide for Aliens
970 Tax Benefits for Education

Form (and Instructions)

1040-ES
Estimated Tax for Individuals
1040X
Amended U.S. Individual Income Tax Return
2350
Application for Extension of Time To File U.S. Income Tax Return
2555
Foreign Earned Income
2555-EZ
Foreign Earned Income Exclusion
4868
Application for Automatic Extension of Time To File U.S. Individual Income Tax Return
8822
Change of Address
SS-5
Application for a Social Security Card
W-7
Application for IRS Individual Taxpayer Identification Number

See chapter 7 for information about getting these publications and forms.

Filing Requirements

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad.

Your income, filing status, and age generally determine whether you must file an income tax return. Generally, you must file a return for 2006 if your gross income from worldwide sources is at least the amount shown for your filing status in the following table.

Filing Status*		Amount
Single		$8,450
65 or older		$9,700
Head of household		$10,850
65 or older		$12,100
Qualifying widow(er)		$13,600
65 or older		$14,600
Married filing jointly		$16,900
Not living with spouse at end of year		$3,300
One spouse 65 or older		$17,900
Both spouses 65 or older		$18,900
Married filing separately		$3,300
*If you are the dependent of another taxpayer, see the instructions for Form 1040 for more information on whether you must file a return.

Gross income. This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax.

For purposes of determining whether you must file a return, gross income includes any income that you can exclude as foreign earned income or as a foreign housing amount.

If you are self-employed, your gross income includes the amount on line 7 of Schedule C (Form 1040), Profit or Loss From Business, or line 1 of Schedule C-EZ (Form 1040), Net Profit From Business.

Self-employed individuals. If your net earnings from self-employment are $400 or more, you must file a return even if your gross income is below the amount listed for your filing status in the table shown earlier. Net earnings from self-employment are defined in Publication 334, Tax Guide for Small Business.

65 or older. You are considered to be age 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2007, you are considered 65 for 2006.

Residents of U.S. possessions. If you are (or were) a bona fide resident of a U.S. possession, you may be required to file Form 8898, Statement for Individuals Who Begin or End Residency in a U.S. Possession. See the instructions on the form for more information.

When To File and Pay

If you file on the calendar year basis, the due date for filing your return is April 15 of the following year. If you file on a fiscal year basis (a year ending on the last day of any month except December), the due date is 3 months and 15 days after the close of your fiscal year. In general, the tax shown on your return should be paid by the due date of the return, without regard to any extension of time for filing the return.

When the due date for doing any act for tax purposes—filing a return, paying taxes, etc.— falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

A tax return delivered by the U.S. mail or a designated delivery service that is postmarked or dated by the delivery service on or before the due date is considered to have been filed on or before that date. See your Form 1040 or Form 1040A instructions for a list of designated delivery services.

Extensions

You can get an extension of time to file your return. In some circumstances, you can also get an extension of time to file and pay any tax due.

However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid.

This publication discusses three extensions: an automatic 2-month extension, an automatic 6-month extension, and an extension of time to meet tests. If you served in a combat zone or qualified hazardous duty area, see Publication 3 for a discussion of an extension of time to file.

Automatic 2-month extension. You are allowed an automatic 2-month extension to file your return and pay any federal income tax that is due if you are a U.S. citizen or resident alien, and on the regular due date of your return:

You are living outside of the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or
You are in military or naval service on duty outside the United States and Puerto Rico.

If you use a calendar year, the regular due date of your return is April 15. Even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return.

Married taxpayers. If you file a joint return, either you or your spouse can qualify for the automatic extension. If you and your spouse file separate returns, this automatic extension applies only to the spouse who qualifies for it.

How to get the extension. To use this automatic 2-month extension, you must attach a statement to your return explaining which of the two situations listed earlier qualified you for the extension.

Automatic 6-month extension. If you are not able to file your return by the due date, you generally can get an automatic 6-month extension of time to file (but not of time to pay). To get this automatic extension, you must file a paper Form 4868 or use IRS e-file (electronic filing). For more information about filing electronically, see E-file options, later.

The form must show your properly estimated tax liability based on the information available to you.

You may not be eligible. You cannot use the automatic 6-month extension of time to file if:

You want the IRS to figure your tax, or
You are under a court order to file by the regular due date.

E-file options. There are two ways you can use e-file to get an extension of time to file. Complete Form 4868 to use as a worksheet. If you think you may owe tax when you file your return, use Part II of the form to estimate your balance due. If you e-file Form 4868 to the IRS, do not also send a paper Form 4868.

E-file using your personal computer or a tax professional. You can use a tax software package with your personal computer or a tax professional to file Form 4868 electronically. You will need to provide certain information from your tax return for 2005. If you wish to make a payment by electronic funds withdrawal, see the instructions for Form 4868.
E-file and pay by credit card.You can get an extension by paying part or all of your estimate of tax due by using a credit card. You can do this by phone or over the Internet. You do not File Form 4868. For more information, see the instructions for your tax return.

When to file. Generally, you must request the 6-month extension by the regular due date of your return.

Previous 2-month extension. If you cannot file your return within the automatic 2-month extension period, you generally can get an additional 4 months to file your return, for a total of 6 months. The 2-month period and the 6-month period start at the same time. You do not have to request the additional 4 months until the new due date allowed by the 2-month extension.

The additional 4 months of time to file (unlike the original 2-month extension) is not an extension of time to pay. You must make an accurate estimate of your tax based on the information available to you. If you find you cannot pay the full amount due with Form 4868, you can still get the extension. You will owe interest on the unpaid amount.

You also may be charged a penalty for paying the tax late unless you have reasonable cause for not paying your tax when due. Interest and penalties are assessed (charged) from the original due date of your return.

Additional extension of time for taxpayers out of the country. In addition to the 6-month extension, taxpayers who are out of the country can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers).

To request this extension, you must send the Internal Revenue Service a letter explaining the reasons why you need the additional 2 months. Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:

Internal Revenue Service Center
Austin, TX 73301-0215

You will not receive any notification from the Internal Revenue Service unless your request is denied for being untimely.

The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350, discussed next.

Extension of time to meet tests. You generally cannot get an extension of more than 6 months. However, if you are outside the United States and meet certain requirements, you may be able to get a longer extension.

You can get an extension of more than 6 months to file your tax return if you need the time to meet either the bona fide residence test or the physical presence test to qualify for either the foreign earned income exclusion or the foreign housing exclusion or deduction. The tests, the exclusions, and the deduction are explained in chapter 4.

You should request an extension if all three of the following apply.

You are a U.S. citizen or resident alien.
You expect to meet either the bona fide residence test or the physical presence test, but not until after your tax return is due.
Your tax home is in a foreign country (or countries) throughout your period of bona fide residence or physical presence, whichever applies.

If you are granted an extension, it generally will be to 30 days beyond the date on which you can reasonably expect to qualify under either the bona fide residence test or the physical presence test. However, if you have moving expenses that are for services performed in 2 years, you may be granted an extension to 90 days beyond the close of the year following the year of first arrival in the foreign country.

How to get an extension. To obtain an extension, you should file Form 2350 with the Internal Revenue Service Center, Austin, TX 73301-0215, or the local IRS representative, or other IRS employee.

You must file Form 2350 by the due date for filing your return. Generally, if both your tax home and your abode are outside the United States and Puerto Rico on the regular due date of your return and you file on a calendar year basis, the due date for filing your return is June 15.

What if tests are not met. If you obtain an extension and unforeseen events make it impossible for you to satisfy either the bona fide residence test or the physical presence test, you should file your income tax return as soon as possible because you must pay interest on any tax due after the regular due date of the return (even though an extension was granted).

You should make any request for an extension early, so that if it is denied you still can file your return on time. Otherwise, if you file late and additional tax is due, you may be subject to a penalty.

Return filed before test is met. If you file a return before you meet the bona fide residence test or the physical presence test, you must include all income from both U.S. and foreign sources and pay the tax on that income. If you meet either of the tests later and qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you can file a claim for refund of tax on Form 1040X. The refund will be the difference between the amount of tax already paid and the tax liability as figured after the exclusion or deduction.

Foreign Currency

You must express the amounts you report on your U.S. tax return in U.S. dollars. If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars. How you do this depends on your functional currency. Your functional currency generally is the U.S. dollar unless you are required to use the currency of a foreign country.

You must make all federal income tax determinations in your functional currency. The U.S. dollar is the functional currency for all taxpayers except some qualified business units (QBUs). A QBU is a separate and clearly identified unit of a trade or business that maintains separate books and records.

Even if you have a QBU, your functional currency is the dollar if any of the following apply.

You conduct the business in dollars.
The principal place of business is located in the United States.
You choose to or are required to use the dollar as your functional currency.
The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted.

Make all income tax determinations in your functional currency. If your functional currency is the U.S. dollar, you must immediately translate into dollars all items of income, expense, etc. (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Use the exchange rate prevailing when you receive, pay, or accrue the item. If there is more than one exchange rate, use the one that most properly reflects your income. You can generally get exchange rates from banks and U.S. Embassies.

If your functional currency is not the U.S. dollar, make all income tax determinations in your functional currency. At the end of the year, translate the results, such as income or loss, into U.S. dollars to report on your income tax return.

Blocked Income

You generally must report your foreign income in terms of U.S. dollars and, with one exception (see Fulbright Grant, later), you must pay taxes due on it in U.S. dollars.

If, because of restrictions in a foreign country, your income is not readily convertible into U.S. dollars or into other money or property that is readily convertible into U.S. dollars, your income is “blocked” or “deferrable” income. You can report this income in one of two ways:

Report the income and pay your federal income tax with U.S. dollars that you have in the United States or in some other country, or
Postpone the reporting of the income until it becomes unblocked.

If you choose to postpone the reporting of the income, you must file an information return with your tax return. For this information return, you should use another Form 1040 labeled “Report of Deferrable Foreign Income, pursuant to Rev. Rul. 74-351.” You must declare on the information return that you will include the deferrable income in your taxable income for the year that it becomes unblocked. You also must state that you waive any right to claim that the deferrable income was includible in your income for any earlier year.

You must report your income on your information return using the foreign currency in which you received that income. If you have blocked income from more than one foreign country, include a separate information return for each country.

Income becomes unblocked and reportable for tax purposes when it becomes convertible, or when it is converted, into dollars or into other money or property that is convertible into U.S. currency. Also, if you use blocked income for your personal expenses or dispose of it by gift, bequest, or devise, you must treat it as unblocked and reportable.

If you have received blocked income on which you have not paid tax, you should check to see whether that income is still blocked. If it is not, you should take immediate steps to pay tax on it, file a declaration or amended declaration of estimated tax, and include the income on your tax return for the year in which the income became unblocked.

If you choose to postpone reporting blocked income and in a later tax year you wish to begin including it in gross income although it is still blocked, you must obtain the permission of the IRS to do so. To apply for permission, file Form 3115, Application for Change in Accounting Method. You also must request permission from the IRS on Form 3115 if you have not chosen to defer the reporting of blocked income in the past, but now wish to begin reporting blocked income under the deferred method. See the instructions for Form 3115 for information.

Fulbright Grant

All income must be reported in U.S. dollars. In most cases, the tax must also be paid in U.S. dollars. If, however, at least 70% of your Fulbright grant has been paid in nonconvertible foreign currency (blocked income), you can use the currency of the host country to pay the part of the U.S. tax that is based on the blocked income.

Paying U.S. tax in foreign currency. To qualify for this method of payment, you must prepare a statement that shows the following information.

You were a Fulbright grantee and were paid in nonconvertible foreign currency.
The total grant you received during the year and the amount you received in nonconvertible foreign currency.
At least 70% of the grant was paid in nonconvertible foreign currency.

The statement must be certified by the U.S. educational foundation or commission paying the grant or other person having control of grant payments to you.

You should prepare at least two copies of this statement. Attach one copy to your Form 1040 and keep the other copy for identification purposes when you make a tax deposit of nonconvertible foreign currency.

Figuring actual tax. When you prepare your income tax return, you may owe tax or the entire liability may have been satisfied with your estimated tax payments. If you owe tax, figure the part due to (and payable in) the nonconvertible foreign currency by using the following formula.

	Adjusted gross income that is blocked income	×	Total U.S. tax	=	Tax on blocked income
	Total adjusted gross income

You must attach all of the following to the return.

A copy of the certified statement discussed earlier.
A detailed statement showing the allocation of tax attributable to amounts received in foreign currency and the rates of exchange used in determining your tax liability in U.S. dollars.
The original deposit receipt for any balance of tax due that you paid in nonconvertible foreign currency.

Figuring estimated tax on nonconvertible foreign currency. If you are liable for estimated tax (discussed later), figure the amount you can pay to IRS in nonconvertible foreign currency using the following formula.

	Adjusted gross income that is blocked income	×	Total estimated U.S. tax	=	Estimated tax on blocked income
	Total adjusted gross income

If you must pay your host country income tax on your grant, subtract any estimated foreign tax credit that applies to your grant from the estimated tax on the blocked income.

Deposit of foreign currency with disbursing officer. Once you have determined the amount of the actual tax or estimated tax that you can pay in nonconvertible foreign currency, deposit that amount with the disbursing officer of the Department of State in the foreign country in which the foundation or commission paying the grant is located.

Estimated tax installments. You can either deposit the full estimated tax amount before the first installment due date or make four equal payments before the installment due dates. See Estimated Tax, later.

Deposit receipt. Upon accepting the foreign currency, the disbursing officer will give you a receipt in duplicate. The original of this receipt (showing the amount of foreign currency deposited and its equivalent in U.S. dollars) should be attached to your Form 1040 or payment voucher from Form 1040-ES. Keep the copy for your records.

Does My Return Have To Be On Paper?

IRS e-file (electronic filing) is the fastest, easiest, and most convenient way to file your income tax return electronically. It's so easy, millions of people use it.

IRS e-file offers accurate, safe, and fast alternatives to filing on paper. IRS computers quickly and automatically check for errors or other missing information. Even returns with a foreign address can be e-filed!

How to e-file. There are two ways you can e-file.

Use an Authorized IRS e-file Provider.
1. You can prepare your return, take it to an Authorized IRS e-file Provider, and have the provider transmit it electronically to the IRS, or
2. You can have a tax professional prepare your return and transmit it for you electronically.
Use your personal computer.

These methods are explained in detail in the instructions for your tax return.

Where To File

If any of the following situations apply to you, file your return with the:

Internal Revenue Service Center
Austin, TX 73301-0215

You claim the foreign earned income exclusion.
You claim the foreign housing exclusion or deduction.
You use an APO or FPO address.
You live in a foreign country.

The exclusions and the deduction are explained in chapter 4.

If you do not know where your legal residence is and you do not have a principal place of business in the United States, you can file with the Austin Service Center.

However, you should not file with the Austin Service Center if you are a bona fide resident of the U.S. Virgin Islands, Guam, or the Commonwealth of the Northern Mariana Islands during your entire tax year.

Resident of U.S. Virgin Islands (USVI)

If you are a bona fide resident of the USVI during your entire tax year, you generally are not required to file a U.S. return. However, you must file a return with the USVI. Send your return to the:

Virgin Islands Bureau of Internal Revenue
9601 Estate Thomas
Charlotte Amalie
St. Thomas, Virgin Islands 00802

Non-USVI resident with USVI income. If you are a U.S. citizen or resident alien and you have income from sources in the USVI or income effectively connected with the conduct of a trade or business in the USVI, and you are not a bona fide resident of the USVI during your entire tax year, you must file identical tax returns with the United States and the USVI. File the original return with the United States and file a copy of the U.S. return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue.

You must complete Form 8689, Allocation of Individual Income Tax to the Virgin Islands, and attach a copy to both your U.S. return and your USVI return. You should file your U.S. return with the Internal Revenue Service Center, Austin, TX 73301-0215.

See Publication 570, Tax Guide for Individuals With Income From U.S. Possessions, for information about filing Virgin Islands returns.

Resident of Guam

If you are a bona fide resident of Guam during your entire tax year, you should file a return with Guam. Send your return to the:

Department of Revenue and Taxation
Government of Guam
P.O. Box 23607
GMF, GU 96921

However, if you have income from sources within Guam and you are a U.S. citizen or resident alien, but not a bona fide resident of Guam during the entire tax year, you should file a return with the United States. Send your return to the Internal Revenue Service Center, Austin, TX 73301-0215.

See Publication 570 for information about filing Guam returns.

Resident of the Commonwealth of the Northern Mariana Islands

If you are a bona fide resident of the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you should file a return with the Northern Mariana Islands. Send your return to the:

Division of Revenue and Taxation
Commonwealth of the Northern Mariana Islands
P.O. Box 5234, CHRB
Saipan, MP 96950

However, if you have income from sources within the CNMI and you are a U.S. citizen or resident alien, but not a bona fide resident of the CNMI during the entire tax year, you should file a return with the United States. Send your return to the Internal Revenue Service Center, Austin, TX 73301-0215.

See Publication 570 for information about filing Northern Mariana Islands returns.

Nonresident Alien Spouse Treated as a Resident

If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other is a nonresident alien, you can choose to treat the nonresident as a U.S. resident. This includes situations in which one of you is a nonresident alien at the beginning of the tax year and a resident alien at the end of the year and the other is a nonresident alien at the end of the year.

If you make this choice, the following two rules apply.

You and your spouse are treated, for income tax purposes, as residents for all tax years that the choice is in effect.
You must file a joint income tax return for the year you make the choice.

This means that neither of you can claim tax treaty benefits as a resident of a foreign country for a tax year for which the choice is in effect.

You can file joint or separate returns in years after the year in which you make the choice.

Example 1.

Pat Smith, a U.S. citizen, is married to Norman, a nonresident alien. Pat and Norman make the choice to treat Norman as a resident alien by attaching a statement to their joint return. Pat and Norman must report their worldwide income for the year they make the choice and for all later years unless the choice is ended or suspended. Although Pat and Norman must file a joint return for the year they make the choice, they can file either joint or separate returns for later years.

Example 2.

When Bob and Sharon Williams got married, both were nonresident aliens. In June of last year, Bob became a resident alien and remained a resident for the rest of the year. Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return for last year. Bob and Sharon must report their worldwide income for last year and all later years unless the choice is ended or suspended. Bob and Sharon must file a joint return for last year, but they can file either joint or separate returns for later years.

If you do not choose to treat your nonresident alien spouse as a U.S. resident, you may be able to use head of household filing status. To use this status, you must pay more than half the cost of maintaining a household for certain dependents or relatives other than your nonresident alien spouse. For more information, see Publication 501.

Social Security Number (SSN)

If your spouse is a nonresident alien and you file a joint or separate return, your spouse must have either an SSN or an individual taxpayer identification number (ITIN).

To get an SSN for your spouse, apply at a social security office or U.S. consulate. You must complete Form SS-5. You must also provide original or certified copies of documents to verify your spouse's age, identity, and citizenship.

If your spouse is not eligible to get an SSN, he or she can file Form W-7 with the IRS to apply for an ITIN.

How To Make the Choice

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following:

A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year and that you choose to be treated as U.S. residents for the entire tax year, and
The name, address, and social security number (or individual taxpayer identification number) of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

You generally make this choice when you file your joint return. However, you can also make the choice by filing a joint amended return on Form 1040X. Attach Form 1040, 1040A, or 1040EZ and print “Amended” across the top of the amended return. If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice.

You generally must file the amended joint return within 3 years from the date you filed your original U.S. income tax return or 2 years from the date you paid your income tax for that year, whichever is later.

Suspending the Choice

The choice to be treated as a resident alien does not apply to any later tax year if neither of you is a U.S. citizen or resident alien at any time during the later tax year.

Example.

Dick Brown was a resident alien on December 31, 2003, and married to Judy, a nonresident alien. They chose to treat Judy as a resident alien and filed a joint 2003 income tax return. On January 10, 2005, Dick became a nonresident alien. Judy had remained a nonresident alien. Because both were resident aliens during part of 2005, Dick and Judy can file joint or separate returns for that year. Neither Dick nor Judy was a resident alien at any time during 2006 and their choice is suspended for that year. For 2006, both are treated as nonresident aliens. If Dick becomes a resident alien again in 2007, their choice is no longer suspended and both are treated as resident aliens.

Ending the Choice

Once made, the choice to be treated as a resident applies to all later years unless suspended (as explained earlier) or ended in one of the ways shown in Table 1-1 below.

If the choice is ended for any of the reasons listed in Table 1-1, neither spouse can make a choice in any later tax year.

Estimated Tax

The requirements for determining who must pay estimated tax are the same for a U.S. citizen or resident abroad as for a taxpayer in the United States. For current instructions on making estimated tax payments, see Form 1040-ES.

If you had a tax liability for 2006, you may have to pay estimated tax for 2007. Generally, you must make estimated tax payments for 2007 if you expect to owe at least $1,000 in tax for 2007 after subtracting your withholding and credits and you expect your withholding and credits to be less than the smaller of:

90% of the tax to be shown on your 2007 tax return, or
100% of the tax shown on your 2006 tax return. (The return must cover all 12 months.)

If less than two-thirds of your gross income for 2006 or 2007 is from farming or fishing and your adjusted gross income for 2006 is more than $150,000 ($75,000 if you are married and file separately), substitute 110% for 100% in (2) above. See Publication 505 for more information.

The first installment of estimated tax is due on April 16, 2007.

When figuring your estimated gross income, subtract amounts you expect to exclude under the foreign earned income exclusion and the foreign housing exclusion. In addition, you can reduce your income by your estimated foreign housing deduction. However, if the actual amount of the exclusion or deduction is less than you estimate, you may have to pay a penalty for underpayment of estimated tax.

Table 1-1. Ending the Choice

Revocation	•	Either spouse can revoke the choice for any tax year.
	•	The revocation must be made by the due date for filing the tax return for that tax year.
	•	The spouse who revokes must attach a signed statement declaring that the choice is being revoked. The statement revoking the choice must include the following:
		•	The name, address, and social security number (or taxpayer identification number) of each spouse.
		•	The name and address of any person who is revoking the choice for a deceased spouse.
		•	A list of any states, foreign countries, and possessions that have community property laws in which either spouse is domiciled or where real property is located from which either spouse receives income.
	•	If the spouse revoking the choice does not have to file a return and does not file a claim for refund, send the statement to the Internal Revenue Service Center where the last joint return was filed.
Death	•	The death of either spouse ends the choice, beginning with the first tax year following the year the spouse died.
	•	If the surviving spouse is a U.S. citizen or resident alien and is entitled to the joint tax rates as a surviving spouse, the choice will not end until the close of the last year for which these joint rates may be used.
	•	If both spouses die in the same tax year, the choice ends on the first day after the close of the tax year in which the spouses died.
Divorce or Legal separation	•	A divorce or legal separation ends the choice as of the beginning of the tax year in which the legal separation occurs.
Inadequate records	•	The Internal Revenue Service can end the choice for any tax year that either spouse has failed to keep adequate books, records, and other information necessary to determine the correct income tax liability, or to provide adequate access to those records.

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