Tax services for Nonresident Aliens

Due to global transfer of  employees and services,  nature of hiring in or to the U.S. from a foreign country, determination of your optimal tax filing status in U.S. is usually never straightforward and can be quite complex.

There are a multitude of unique and highly complex U.S. domestic tax laws and regulations affecting the U.S. tax residency of Foreign Nationals-Nonresident and/ or Resident Aliens, in addition to income tax and social security tax treaties or Agreements. These U.S. domestic tax laws and regulations are very specialized and their tax ramifications for Foreign Nationals-Nonresident and/ or Resident Aliens are very different than that for U.S. citizens or U.S. green card holders. Additionally, in many cases Foreign Nationals-Nonresident and/ or Resident Aliens may not be subject to certain U.S. and State taxes that they may have been paying for many years. We specialize in helping our clients recover such improperly paid income taxes.

As a Foreign National-Nonresident Alien here in the U.S., if you breach the Substantial Presence Test (SPT) – in any calendar tax year through U.S. presence that is in excess of 183 days, with a two year look back test that adds days to the days of the current year on a fractional basis, then you become a U.S. resident alien taxable in the U.S. on your worldwide income as is any U.S. citizen or green card holder. There are exceptions to this test if on certain visa’s or meeting certain conditions. The tax rates are the applicable U.S. graduated tax rates.

You will also be subject to nonrecoverable U.S. social security taxes depending on your visa type.

In cases where a Foreign National-Nonresident and/ or Resident Alien is here in the U.S. has two statuses in a single tax year, example when they go from a Nonresident Alien to Resident Alien status or vice-versa in the same U.S. tax calendar year, they are called dual-status filers in recognition of these two statuses. Dual Status filers if married must file separately and NOT jointly. They may not use the Head of Household filing status or the Standard deduction.

Additionally there are opportunities for individual taxpayers entering the U.S. at some point in the tax year and whom do not meet the SPT test in that U.S. tax year, to elect to be treated as U.S. resident aliens from the date of entry forward. This election to be treated as a U.S. Resident Alien from the date of entry forward may benefit taxpayers with mortgage interest or other itemized deductions not allowed to U.S. nonresident aliens, or if they have foreign losses, e.g.: foreign rental losses. Also in some cases it may facilitate breaking residence in the former country.

Likewise their exists an election for married persons to make them both full year US resident aliens that may benefit taxpayers by using the married filing joint graduated tax brackets, as opposed to the married filing separate brackets which are halved. This is particularly useful where the spouse is not working, earning no income.

Ways out of U.S. tax residency include domestically the Closer Connection Exception available on Form 8840- Closer Connection Exception Statement- and U.S. federally negotiated income tax treaties and social security treaties or Totalization Agreements that override U.S. domestic tax legislation.

Accounting Tree offers a broad range of services to US & Overseas Expats and Inpats which includes Tax Preparation, Financial Planning, Consultation and Advisory Services, Company caters to both Individuals and Corporates across global locations. The firm consists of a team of experienced CPAs, with a extensive tax, industry and business expertise. The team has vast knowledge and experience in serving US residents, Non-resident, US visitors, corporations, and NRI’s tax filing services. We work with clients all over the globe, for consulting and servicing their tax filing obligations in US.  Our customer includes individual and corporation from diverse background and industries.