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In U.S. taxation practices, compliance with various forms and regulations is critical for both residents and non-residents. One such form that holds particular importance is Form 8840, the Closer Connection Exception Statement for Aliens.
Form 8840 is a document used by non-resident aliens to demonstrate that they have a closer connection to a foreign country than to the United States. This form is crucial for individuals who are physically present in the U.S. for a substantial portion of the year but do not wish to be classified as U.S. residents for tax purposes. The classification as a U.S. resident can lead to a more extensive tax liability, including being taxed on worldwide income.
The regulations governing Form 8840 fall under the Internal Revenue Code (IRC), specifically Section 7701(b). This section defines the criteria for determining whether an individual is a resident or non-resident for tax purposes. By filing Form 8840, individuals can claim an exemption from being classified as a U.S. resident under the substantial presence test, provided they meet the requirements of having a closer connection to another country.
Form 8840 should be filed by any non-resident alien who meets the substantial presence test but wishes to avoid being classified as a U.S. resident for tax purposes. The substantial presence test is a method used to determine whether an individual should be considered a resident based on the number of days they have been physically present in the United States.
To meet the substantial presence test, an individual must be physically present in the U.S. for at least:
If the individual meets these criteria but maintains a closer connection to another country, filing Form 8840 allows them to avoid U.S. resident status, thereby limiting their tax obligations.
The process of filing Form 8840 involves several critical steps that must be carefully followed to ensure compliance. The steps are as follows:
Several important points should be considered when dealing with Form 8840:
We provide several professional services to ensure that Form 8840 is correctly filed and that all related tax obligations are met. Our services include:
Form 8840 plays a very important role for non-resident aliens who wish to avoid being classified as U.S. residents for tax purposes. The professional services we offer related to Form 8840 would provide valuable support in assisting all the aspects of U.S. tax law, ensuring compliance and peace of mind.
With proper guidance and attention to detail, the filing of Form 8840 can be a straightforward process and allow non-resident aliens to effectively manage their tax responsibilities in the United States.
Call us today at (833) 829-1120, email us at info@dimovtax.com, or fill out the form and we’ll get in touch immediately.
Dimov Tax is rated 5 stars on all major review platforms including Google, Yelp, Facebook, Angie’s List, Better Business Bureau, TaxBuzz, Thumbtack, Upwork, Bark, and much more.
Call us today at (866) 554-0148, email us at info@dimovtax.com, or fill out the form and we’ll get in touch immediately.
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