Foreign National & Expatriate Tax Filing Services

If you are a U.S. citizen living in a foreign country as an expatriate, you have a U.S. tax filing obligation. When Living in the U.S. as a foreign national of another country, you also have a U.S. income tax filing obligation.

For income tax purposes, your tax obligation to the United States Government is dependent on your type of foreign national status. For instance, the rules and requirements that apply to U.S. citizens also apply to resident aliens, including completing the same forms.

In general, any nonresident alien who has wages or business income earned while in the United States is required to file tax returns.

A separate return must be filed by dual-status aliens.

Those with dual status cannot usually claim exemptions for dependents or take the standard deduction.

Although it is not as simple as it could be, it is in the your best interest to comply with the law and file a return. Recent studies have shown that many nonresidents file incorrectly whenever they do file a return, and this can lead to unnecessary penalties, fines and assessments that otherwise could have been avoided.

Another result of the studies shows that the overpayment of taxes is far greater than the underpayment of U.S. taxes when nonresidents do not file returns, according to J.W.Antenucci in: ‘Widespread Noncompliance and Overpayment of Taxes by Foreign Scholars’. (Tax Notes, 13 May 1996).

An employer withholding taxes from your wages does not guarantee that the proper amount of taxation has been paid. You may have a refund coming which, of course, will not be received until the tax return is filed correctly.

Besides the possibility of a refund, preserving your visa status is another very good reason to file the proper tax return forms. If no tax is owed, and no return is filed, the IRS will not penalize the individual for not filing if he or she owes no taxes.

However, if you are a foreign national living in the U.S. your visa terms require your compliance with all United States laws, including filing income tax forms in a timely manner.

If you leave the United States and want to return, or you want to apply for permanent residency or citizenship, you may have to prove that you filed tax returns as required by law. Failure to comply with U.S. law by filing income tax returns could call your visa status into question.

We can help you with filing an income tax return, Form 1040NR, and meeting the other requirements necessary to accurately and correctly file your IRS tax return.

Status of Residency

The first step is to determine if you are a nonresident of the U.S. or a resident, for tax purposes. If you determine that in the same year you are both a nonresident and a resident, you may be considered a dual status alien and special rules will then apply.

Immigration status and the residency designation for income tax purposes are two completely separate issues. For instance, you may remain a non immigrant alien for the purpose of immigration while still qualifying as a resident for the purpose of taxes.

Resident Alien

Non-United States citizens who meet either the Substantial Presence test, also known as the 183 day test based on the time spent in the country, or the Green Card test—the lawful permanent residence test—is known as a resident alien. Special rules are in effect for a few special occupations such as teachers, and to students and foreign government personnel. You may have a choice to be treated for part of the year as a United States resident even if you meet neither of the residency tests.

The same tax forms must be filed and the same rules followed by a resident alien as a United States citizen. A resident alien must pay taxes on his or her entire worldwide income, no matter from where it was earned or received, and not just on income earned in the United States.

If an individual is exempt from the Substantial Presence test, he or she is required to complete Form 8843 no matter what amount of income he or she received. Continue reading for an exempt individual definition and additional information about the Substantial Presence test and the Green Card test.

Green Card Test

If you have been given the privilege of living in the United States permanently as an immigrant, then according to the laws of immigration, you are a lawful permanent United States resident. Generally, if the INS—Immigration and Naturalization Service—has given an individual a Green Card, which is an alien registration card, he or she has the status of permanent resident.

For tax purposes, you are considered a United States resident starting with the first day you are present in the United States as a permanent lawful resident. As a taxpayer, you must report your worldwide income for United States tax purposes. A permanent resident is eligible to claim all credits and deductions that are available to United States citizens.

If you marry, you and your spouse are permitted to file a joint return. You may file Form 1040EZ, 1040A or 1040, according to the form that applies to your situation. Under the United States tax treaty law with your native country, you may still be able to apply for tax treaty benefits. You can find the Green Card Test on the official IRS website.

Substantial Presence Test

An individual must be present in the United States physically and not holding a J,F,M or Q visa for a period of:

  • 31 days of the current year
  • 183 days within a three-year period including the previous two years and the current year
  • Including each day the individual was present within the current year
  • One-third of the days present in the year immediately preceding it
  • One-sixth of the days present in the second year before it.

Nonresident Alien

If as a non-U.S. citizen you do not quality for either of the two tests for resident alien status, but you have income or assets earned or acquired in the United States, an obligation to file estate or income taxes may apply. As a nonresident you may pay tax only on the income from the U.S., and may qualify for treaty exemptions and special rates by filing the appropriate forms.

Dual Status Alien

As mentioned above, dual-status aliens are required to file separate returns, cannot usually claim dependents and are not eligible for the standard deduction.

Exempt Individual Definition

You can be considered exempt if the days living in the United States do not count toward a substantial presence. It does not mean you are exempt from paying U.S. tax, though. As an exempt individual you are considered a nonresident alien until you receive permanent residency status.

Nonresident Spouse

Both spouses can be treated as residents for the whole year even if one is considered a resident for tax purposes and one is not a resident until year’s end, even if that spouse is a dual-status alien.

United States Gift & Estate Tax

Foreign nationals need to be aware of both these taxes in addition to income taxes:

All gifts over a certain yearly limit are taxed no matter where the property is located.

Following is a brief overview of estate taxes, which can be extremely complicated. At the time of death, an estate tax of up to 55% of the value of the entire worldwide assets of the deceased is imposed. The estate tax starts at $1,500,000 for resident aliens, the same as for U.S. citizens. However, if the person dies while outside the United States, the minimum taxable assets is $60,000. See a Certified Public Accountant to help with taxes in this situation.

Social Security Taxes

Immigrants are generally subject to Social Security Tax if working while in the United States. The only exemptions are for teachers or students on F,J,M or Q visas if the employment relates to their learning or teaching program. This exemption is only for the primary resident, not the spouses and children. They are not exempt from Social Security taxes. These tax rules may be modified under any existing treaty between the immigrant’s home country and the United States.

Tax Return Filing Deadlines

If you earn wages in the United States you are required to file state and federal income tax returns by April 15 of the year after the income is earned. Federal tax returns must be filed by June 15 if an individual received no United States income or only received income from a scholarship.

Avoid Interest and Penalties on Taxes Due

An underpayment penalty and interest will be charged from April 15, even if an extension to October 15 is filed.

In addition, the IRS can charge interest and an underpayment penalty even if taxes are paid by April 15 but no withholding taxes or estimated taxes were paid during the year. To avoid all underpayment penalties, be sure to make sufficient payments on a regular basis throughout the year in which the income is earned.


Hassle Free Filing Help For Internationals,

Contact Us Now for Immediate Foreign National / Expatriate Tax Filing Help :

Click Here

For A Free Initial Tax Savings Evaluation Today.