Foreign Nationals

When you are a foreign citizen in the U.S., you could fall under one of the following categories:

While non-resident aliens are taxed on the income earned within the U.S., resident aliens, like U.S. citizens, are taxed on their worldwide income.

Resident aliens are treated as U.S. citizens for tax purposes. This means they are taxed on their worldwide income from sources within and outside the U.S. For example, interest income from a foreign bank account would be taxable.

You are a resident alien of the U.S. for tax purposes if you meet either the green card test or the substantial presence test for the calendar year:

Green card test

You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) issued you an alien registration card, Form I-551, also known as a "green card."

Substantial presence test link

To meet this test, you must be physically present* in the U.S. for at least:

  1. 31 days during the current year (the year you are filing for), and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

* Do not count days for which you are an exempt individual such as foreign students, teachers, and professional athletes.

Residency starting and ending dates

While resident aliens are taxed on their worldwide income, non-resident aliens are taxed on income earned from sources within the U.S.

You would be considered a non-resident alien if you don't fit the criteria for a resident alien. Deductions for non-residents

First-year choice link

If you meet the substantial presense test for the following year, you can make the first-year choice election to be treated as a resident for the current year if you meet the following requirements:

  1. Be present in the United States for at least 31 days in a row in the current year (the year you are filing for), and
  2. Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of the current year. For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States.

If you make the first-year choice election then your residency starting date will be the first day of the 31-day period. Partial year residents cannot claim the standard deduction, but can still claim itemized deductions. link

Every international student and their dependents (including spouses and children of all ages) are required to file a tax return.

Even though foreign students reside in the U.S. they are not considered residents for tax purposes and don't need to pay taxes on their worldwide income. They are treated as non-residents and only pay tax on income earned in the U.S. They can still deduct interest paid on student loans. link

Why should you file a tax return?
  • You fulfill your visa obligations - even if you didn't earn any money in the US in order to remain legal under F, J, M and Q visas all international students must at least file Form 8843.
  • You might get a refund - some international students will qualify for a refund due to tax treaties between their home country and the US.
  • Protect taxation of your worldwide income.

You are a dual status alien when you have been both a U.S. resident alien and a non-resident alien in the same tax year. Dual status does not refer to your citizenship, only to your resident status for tax purposes in the United States. The most common dual status tax years are the years of arrival and departure.

For The Part of the Year You are a U.S. Resident Alien

For the part of the year you are a U.S. resident alien, you are taxed on income from all sources. Income from sources outside the U.S. is taxable if you receive it while you are a resident alien.

For The Part of The Year You are a Nonresident Alien

For the part of the year you are a nonresident alien, you are taxed on income from U.S. sources only.

Dual-status residents cannot claim the standard deduction, but can still claim itemized deductions. link


Why should you file a tax return?
There are serious civil and criminal consequences for willful non-compliance. For example for FBAR alone the civil penalty is the highest of $100,000 or 50% of the value of the bank accounts. One of the most recent cases that stands out is from Oct. 2017 in which a South Korean national who was a US resident had to pay a penalty of $14 million for willfully withholding information from the authorities. More detail here

We have over 15 years of experience in tax preparation. Our tax preparation experience includes personal, partnership, and corporate returns and amendments, estates and trusts, business licensing, general ledger and financial statement preparation, tax planning, expatriate returns, FBAR and foreign information reporting, and more.

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