Introduction to U.S. Taxation for Non-resident Aliens: Who Needs to File?

Did you just move to the US? If yes, then it's essential to understand your situation and whether you are required to file a U.S. tax return. This overview will help both U.S. citizens living abroad and resident aliens, including recent immigrants, determine their filing obligations.

Who Is Required to File a U.S. Tax Return?

In general, you must file a federal income tax return if your income exceeds certain thresholds, which vary based on your filing status, age, and the type of income you receive. You can review the previous blog post for who needs to file based on status, age, and type of income.

For tax purposes, the IRS classifies individuals as either resident or nonresident aliens. You're considered a resident alien if you meet either the "green card" test or the substantial presence test:

Green Card Test: You're a resident alien if you were a lawful permanent resident of the U.S. at any time during the calendar year.

Substantial Presence Test: You're a resident alien if you've been physically present in the U.S. for at least 31 days during the current year and 183 days over the last three years, calculated using a specific formula.

Resident aliens are generally taxed on their worldwide income, similar to U.S. citizens. This means that if you've recently moved to the U.S. and qualify as a resident alien, you're required to report income from all sources, both domestic and international.

Filing Requirements for Resident Aliens

As a resident alien, you should file Form 1040, U.S. Individual Income Tax Return, by April 15 following the end of the tax year. This form is used to report your worldwide income. Ensure you include all income, deductions, and credits applicable to your situation. If you came to the US part of the year, then you will most likely need to file a dual status tax return. A dual status tax return means you will not be taxed on your worldwide income for part of the year, and only taxed on your worldwide income during the period you became a US tax resident.

Special Considerations for New Immigrants

If you've recently immigrated to the U.S. and become a resident alien, it's crucial to understand your tax responsibilities:

Worldwide Income Reporting: You're required to report income from all sources, including those outside the U.S.

Tax Treaties: The U.S. has tax treaties with various countries that may affect your tax liability. Review these treaties to understand any benefits or obligations.

State Taxes: In addition to federal taxes, you may be subject to state and local taxes, depending on your place of residence.

Navigating U.S. tax laws can be complex, especially for new residents. It's essential to determine your filing requirements to remain compliant and take advantage of any benefits available to you. If you need assistance, consider consulting a tax professional or reaching out to us at info@mkhstaxgroup.com. We're here to help with all your tax needs, ensuring you stay on track.