Form 8689

What Is Form 8689: Allocation of Individual Income Tax to the U.S. Virgin Islands?

Form 8689 is a tax form distributed by the Internal Revenue Service (IRS) for use by U.S. residents and resident aliens who earned income from sources in the U.S. Virgin Islands (USVI) yet are not [bona fide residents](/bona-fide-unfamiliar resident). The U.S. Virgin Islands are a viewed as a unincorporated area of the United States.

As a rule, bona fide residents of the islands just pay taxes on USVI income to the nearby tax jurisdiction. On the off chance that you are not a bona fide resident, and you have income from the Virgin Islands, then you would have to pay taxes to the Virgin Islands and the IRS.

Who Must File Form 8689: Allocation of Individual Income Tax to the U.S. Virgin Islands?

On the off chance that a person doesn't qualify as a bona fide resident of the Virgin Islands, they must file form 8689. This applies to both U.S. residents and resident outsiders. These taxpayers must file two indistinguishable Form 1040 records. They file one with the U.S. Virgin Islands and one with the United States. The original Form 1040, along with Form 8689, is shipped off the IRS.

To qualify as a bona fide resident of the U.S Virgin Islands, a person must meet the physical presence test. They can't have a tax home outside of the Virgin Islands or have a nearer association with the central area U.S. or on the other hand one more country than they do with the U.S. Virgin Islands.

For couples filing jointly, the person with a higher adjustable gross income (AGI) must have the option to qualify as a bona fide resident of the Virgin Islands for the couple to be viewed as bona fide residents while filing.

Form 8689 specifies that taxpayers who qualify as bona fide residents of the Virgin Islands don't have to file form 8689.

What Is Form 8689 Used for?

Form 8689 figures out which portion of income tax ought to be allocated to the U.S. Virgin Islands. Taxes paid to the Virgin Islands go to the U.S. Virgin Islands Treasury, as opposed to the U.S. Treasury. Taxpayers might meet all requirements for a tax credit on their U.S. tax returns for any tax that was allocated to the Virgin Islands, as long as those taxes were really paid to the Virgin Islands.

Generally, any amount of tax overpaid to the United States won't be applied to the amount owed to the Virgin Islands. Likewise, amounts overpaid to the Virgin Islands won't be applied 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 assumed as a praise.

All pages of Form 8689 are available on the IRS website.

The most effective method to File Form 8689: Allocation of Individual Income Tax to the U.S. Virgin Islands

A taxpayer must file indistinguishable tax returns with the United States and the USVI. In the event that they're not encasing a check or money order, they ought to file the original Form 1040 (counting Form 8689) with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215 USA. In the event that they are including a check or money order, file the original return with the Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303 USA.

File a marked copy of Form 1040 (with all connections, forms, and timetables, including Form 8689) with the Virgin Islands Bureau of Internal Revenue, 6115 Estate Smith Bay, Suite 225, St. Thomas, VI 00802. They will acknowledge a marked copy of your U.S. return and cycle it as an original return.

Features

U.S. Taxpayers who are not bona fide residents of the U.S. Virgin Islands however earned income there must file Form 8689.
Form 8689 decides how much income tax ought to be allocated to the U.S. Virgin Islands.
To qualify as a bona fide resident of the U.S Virgin Islands, a person must meet the physical presence test.