To get started with your individual tax
return preparation, please fill out a
completing the main page, please also fill in the Foreigner worksheet,
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 and/or property tax). 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).
If you can file as a federal nonresident, generally you can also file as
a state nonresident. This can sometimes be quite beneficial, because in
this case you are normally not taxed in the state on interest, dividends
and capital gains, or on earned income sourced outside the state. Also,
in New York, there is no New York City tax if you are a New York State
nonresident, even if you reside or work in the city. 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. 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.
For tax purposes, a resident alien is an individual that is not a
citizen or national of the United States and who meets either the green
card test or the substantial presence test. A nonresident alien is
an individual who is not a U.S. citizen or a resident alien.
Certain foreign nationals may also qualify
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. You'll also find information on federal and state
residency, living expense deductions, education, and many more topics.
When preparing your tax return, I always try to find the most benefits
A foreign national may also need to apply
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.