What Form 1040-C (2013) Is For
Form 1040-C is used by certain foreign nationals who plan to leave the United States and must confirm they are up to date on their tax responsibilities for the 2013 tax year. It requires you to report all income earned or expected for the whole year and pay any tax due before departing. After reviewing your information, the IRS issues a Certificate of Compliance, also known as a sailing permit. This document confirms that you have met the tax requirements necessary to leave the country.
When You’d Use Form 1040-C (2013)
You use Form 1040-C when you are a foreign national who must demonstrate tax compliance before leaving the United States. The filing window is strict. You may file no earlier than 30 days before your departure, and you must file at least two weeks before the date you plan to leave. You are also required to file in person at a Taxpayer Assistance Center, and an appointment is necessary.
Form 1040-C applies when the IRS needs to confirm you reported all income for 2013 and paid any tax that may be due.
You do not need it if you fall into an exempt group, such as:
- Diplomats
- Students or exchange visitors on F, J, M, or Q visas with limited income
- Short-term visitors staying less than 90 days
- Canadian or Mexican residents who commute to the U.S. for work with proper withholding
You cannot file it late or amend it, because the sailing permit is tied to your expected departure. Leaving without it may affect future travel or tax compliance.
Key Rules or Details for Tax Year 2013
- Residency Status: Your tax treatment depends on whether you are a resident alien or a nonresident alien for the 2013 tax year. Resident aliens report worldwide income, while nonresident aliens report only U.S.-source income and income connected to a U.S. trade or business.
- Full-Year Income Reporting: You must report all income earned or expected for the entire 2013 tax year, even if you leave before December. This includes wages, self-employment income, rental income, and investment earnings.
- Tax Payment Requirement: Most filers are required to pay any tax due when submitting Form 1040-C. In limited cases, the IRS may allow a bond instead of immediate payment.
- Joint Filing Rules: Nonresident spouses are not eligible to file jointly. Resident spouses may file jointly only if both expect to qualify for joint filing at year-end.
- Social Security and Medicare: Students on F, J, M, or Q visas may request refunds of withholding errors by filing Form 843.
- Green Card Holders: Permanent residents leaving the United States may need to take additional filing steps, especially if they are departing the country permanently.
Step-by-Step Filing Process (High Level)
Step 1 — Determine Whether You Need the Form
Review the exemption categories to see whether Form 1040-C applies to you. Some departing aliens may use Form 2063 instead if they meet the criteria for simplified clearance.
Step 2 — Gather Your Documents
Collect all records needed for review. This includes your passport, visa details, wage statements, past tax returns, proof of estimated tax payments, property sale documents, travel information, and your Social Security Number or ITIN.
Step 3 — Schedule Your Appointment
Contact a Taxpayer Assistance Center and request an appointment. Walk-ins are not allowed, and the form cannot be mailed. Both spouses must attend if each is required to file.
Step 4 — Complete Form 1040-C (2013)
Fill out all required sections, including your residency explanation, income details, dependents, deductions, and tax calculation. Attach schedules if you have capital gains, itemized deductions, or business income.
Step 5 — File and Pay
Bring the completed form and documentation to your appointment. Pay any tax due or ask about posting a bond if eligible. The IRS will issue your sailing permit if everything is in order.
Step 6 — File Your Final Return
After the year ends, submit your regular Form 1040 or 1040-NR and claim the payment made with Form 1040-C as a credit.
Common Mistakes and How to Avoid Them
- Waiting Too Long to Schedule an Appointment: IRS visits must be booked in advance, and delays can affect your tax obligations. Schedule your appointment early at the IRS office to stay on track.
- Confusing Form 1040-C with the Annual Return: Form 1040-C does not replace your income tax return. You still need to file your final income tax return for the year, along with any income tax returns filed in the preceding tax year.
- Reporting Only Income Earned Before Leaving: Form 1040-C requires you to report income for the whole year, including any received taxable income or business expenses through December. Proper reporting helps the IRS confirm income taxes paid, tax withheld, and your expected tax liability.
- Misunderstanding Residency Status: Your residency affects how income tax laws apply and whether you qualify for special tax treaty benefits with a foreign government. Review the residency tests carefully.
- Missing Important Documents: Missing paperwork slows the process. Bring past returns, proof of income tax withholding, and your taxpayer identification number, along with documents showing tax paid or a bond guaranteeing payment if required.
- Overlooking Spouse Information: In community property states, the IRS may need details for both spouses, even if only one is departing. Accurate departure alien income tax information helps ensure your sailing or departure permit is issued promptly.
What Happens After You File
After you submit Form 1040-C, the IRS reviews your taxable income, income tax, and any withholding tax to confirm everything is accurate. The local office signs your sailing permit if your documents, including dependents claimed, are complete. As a departing nonresident alien, you should keep the permit with your travel papers, such as border crossing identification cards or your airline ticket. This applies whether you are self-employed, a military trainee, or traveling for work or pleasure using any transportation line or accommodations furnished incident to travel.
FAQs
What income tax rules should I understand before I leave the United States?
You must know how your income tax is calculated based on your residency and full-year income.
Do I still need to file income tax returns after I leave the country?
Yes, you must still file your year-end income tax returns, even if you have already received a sailing permit.
Is Form 1040-C considered my income tax return for the year?
No, it does not replace your income tax return, which is filed after the tax year ends.
How does the IRS determine my departing alien income tax?
The IRS reviews your yearly income, deductions, and payments to calculate your departing alien income tax.
Do I need a departure permit if I’m leaving the U.S. temporarily?
You may need a departure permit depending on your visa category and income.
