Posted by Fletcher Accounting and Tax Service Inc.

First Time International Tax Payer: Your Quick Guide To Filing Taxes

First Time International Tax Payer: Your Quick Guide To Filing Taxes

You are probably wondering what the filing process looks like for you if you are a non-citizen filing a U.S tax return for the first time or a U.S citizen who has moved abroad. We will help you figure out your filing requirements, how to obtain an identifying number and explain some preliminary issues you may possibly encounter. 

Expats’ Filing Requirements

U.S. citizens or green card holders who have moved abroad and/or working abroad are called Expats. You have the responsibility to file a U.S return (Form 1040) every year you meet the filing threshold applicable to you together with the report of your worldwide income. FBAR and Form 8938 that consists of foreign informational returns may also be required. 

You will likely fall into one these three groups for tax purposes if you are not a U.S citizen- resident alien, non-resident alien and dual-status taxpayer. You will be called an Inpat generally if you are a visa holder in the U.S. Take note that your immigration status will not be affected with your tax filing status. 

Determining Which Group An Inpat Falls Into

If you are a green card holder, then you’re a resident alien. But, if you don’t have one and you want to determine your tax filing status, you will need to use the substantial presence test. 

You should know the following:

  • The date you first arrived in the United States.
  •  In the current year, the number of days you have been staying in the United States
  • During each of the two consecutive years, the number of days you have been staying in the United States.
  • Visa status type that you have.
  • What type of visa status your spouse and dependents have. 

Certain visa categories must be treated as a nonresident alien for a specific period of time that’s why your visa status can help in determining your filing status. For tax residency purposes, presence in the U.S. under specific exempt categories will not be counted as days of presence. Let’s take a look at an example, “J” visa holder like a teacher or trainee- for the first two years they are on that visa, the days they are present in the US will not be counted. That means for those first two years, they are considered as a nonresident alien and they have to file Form 1040NR.

Dual-status alien is the final category. During the years you either move into or move out of the US, you usually file as a dual-status taxpayer. 

Regardless of where you live in the world, as long as you are a U.S citizen or resident alien, then you must report your worldwide income and file a US tax return each year you meet the applicable filing threshold. 

Proceeds from the sale of property located in the U.S., source of income-wages earned from work performed in the U.S. are the only taxable income for a nonresident alien. As a nonresident, you are dependent on a number of factors whether you are required to file a return (Form 1040NR). But, you must file a return if you are earning wages as an employee. 

In order to file a U.S. tax return, you need to have a Taxpayer Identification Number (TIN). Social Security Numbers (SSNs) are what U.S. citizens or green card holders possess. Use your SSN as your TIN if you have even if it will not allow you to work in the U.S. You should stick to one- if you have applied for an SSN, you shouldn’t apply for TIN. 

Filing a U.S Tax Return for the First Time

You will need to apply for an individual taxpayer identification card (ITIN) if you don’t have an SSN and you are not eligible for one. Your spouse and children will also need ITINs if you are able to claim a spousal exemption and/or claim dependents. The ITIN does not change your immigration status, your right to work in the US and will not entitle you to social security benefits. Using an ITIN for individuals filing tax returns are not eligible for the earned income tax credit (EITC). 

How To Apply For an ITIN

To apply for an ITIN, there are two methods that you can consider. First, you can apply for an ITIN by filling out completely the Form W-7 and attach it to the tax return. The second method is to attach certified identification documents that consist of the original documents certified by a certified acceptance agent (CAA) to the W-7 application. 

Fletcher Accounting and Tax Service Inc.
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