IRS Tax Law Changes
Capital Gains, Interest and Dividends
Education Credits, Scholarships
Foreign Bank Reporting
Social Security, Medicare, Self Employment Tax
Tax Deadlines, Extensions, Late Payments, Estimated Tax
Tax Resident, Nonresident, Dual Status
To get started with your individual tax return preparation, please fill out a tax questionnaire.
Tax compliance for foreign nationals is one of my areas of expertise and I have prepared thousands of tax returns that had foreign issues. The rules are quite complex but I will always look for the optimal way for you to file.
If you meet the substantial presence test, you are a resident alien for tax purposes and are required to file a U.S. resident income tax return (Form 1040). In this case your reporting requirements are the same as for U.S. citizens and green card holders: You are taxable on worldwide income, but foreign source income may be eligible for a foreign tax credit, and/or you may be able to claim foreign deductions (e.g., deducting foreign mortgage interest). You may also be subject to reporting foreign financial accounts and assets.
In some cases, a resident alien can be treated as a nonresident alien for tax purposes by claiming a closer connection to a foreign country. Since U.S. residents are taxed on worldwide income, this is sometimes beneficial for those with a lot of foreign source income, provided you meet the requirements.
If you don't meet the substantial presence test, you are a nonresident alien for tax purposes and will file a nonresident income tax return (Form 1040NR). Unlike tax residents, nonresidents only need to report U.S. source income and do not have to report foreign bank accounts.
In some cases, a nonresident alien may be able to elect to be treated as a U.S. resident alien under the First Year Choice rule. Taxpayers who benefit most from this election are generally married with a non-working spouse and also those with children. That's because the tax rates are better for married filing jointly versus married filing separately (married filing separately is required when filing as a nonresident). Also, as a resident alien, if you have children, you may be entitled to child tax credits which are not available to nonresident aliens, but only if your child has a social security number (as of 2018). If you make this choice and you are married, you'll also have to make an election to treat your nonresident spouse as a tax resident.
In the year of your arrival or departure in the U.S., you may be required to file a dual status tax return. You are a dual status alien when you have been both a U.S. resident alien and a nonresident alien in the same tax year.
Certain foreign nationals may also qualify for tax treaty benefits. For example, if you were a student or trainee with earned income, there may be a tax treaty with your country that allows you to exempt a certain amount of earned income.
My Tax Guide lists many differences in the taxation of U.S. residents versus U.S. nonresidents. When preparing your tax return, I always try to find the most benefits legally possible.
A foreign national may also need to apply for an ITIN (Indlvidual Taxpayer Identification Number) for a spouse and/or child who is not eligible for a social security number. Every person listed on the tax return is required to have a SSN or ITIN.