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Call (866) 681-2140
One question comes before everything else on your return. Are you a US resident for tax purposes this year, or not? The IRS applies two tests, a green card or a day count. Depending on the result, you file a different return and the US taxes different income.
Call (866) 681-2140 to check your residency status.
We work out resident or nonresident, with the day count and the exclusions documented
F-1, J-1 and H-1B filers, from an F-1 student tax return through to H-1B tax filing in the year status changes
Treaty positions and penalty notices, including CP15 and CP215 where filings were missed
We settle your status first and file second, because the form depends on the status. That work has four parts:
The residency determination. The day count, the exclusions, and the documentation to support either position.
The return. Form 1040-NR for nonresidents, Form 1040 for residents, or both in a year the status changes, plus the state return. States run their own residency tests: New York treats a person with a permanent place of abode and 184 or more days in the state as a resident, whatever their federal status.
The treaty position. Where a treaty exempts income, we claim it and document it.
The catch-up. Missed filings, missed information returns, and the penalty notices the IRS sends for them.
Americans living abroad belong with expat tax services, and Canada questions with cross border tax services.
One team here handles foreign nationals only, so the international tax advisor you speak to is an international tax specialist in inbound work.
You have to meet two conditions in the same year. At least 31 days in the US this year, and 183 weighted days across this year and the two before it.
The IRS counts any day of physical presence, including arrival day, departure day and weekends, subject to the IRS exclusions. Meet the test and, unless an exception or treaty applies, the US taxes worldwide income. Fail it and the US still taxes US source income and certain income connected with a US business.
There is a closer connection exception for people here under 183 actual days who kept a tax home abroad for the whole year and have stronger ties to it. You claim it on Form 8840, and you lose it the moment you apply for a green card.
How the weighted day count works
Three years of days. Only this year counts in full.
The IRS excludes days on certain visas from the count, which is why a student here for six years can still be a nonresident.
F, J, M and Q students. Days excluded for the first five calendar years of presence.
J and Q teachers and trainees. Days excluded for two calendar years out of the last six.
Form 8843 documents the exclusion. You file it for each year claimed, including years with no US income and no return otherwise due. Detail for students.
Social Security and Medicare withheld in error. Nonresident F-1, J-1, M-1 and Q-1 students owe neither on wages their visa allows. Ask the employer for the refund first; where the employer refuses, we claim it on Form 843 with Form 8316.
The IRS counts the exclusion in calendar years, so if you arrive in December, December counts as a full year.
Arrive or leave mid-year and you can be a nonresident for part of it and a resident for the rest. That is a dual status tax return: two calculations on one return.
It applies to H-1B holders arriving mid-year and to people leaving permanently. Before the residency start date the US still taxes US source income and certain foreign source income connected with a US business, so we look at timing and source together.
An international tax consultant does the useful work in this year before December, because after year end the decisions are already made.
The IRS also limits the standard deduction and joint filing on a dual status return. If your spouse is a US citizen or resident at year end, you can elect under section 6013(h) to file jointly as residents for the whole year. You then both report worldwide income.
Both are civil penalty notices that can cover a range of assessments, international reporting among them, and neither is a label for one particular form. We read the notice itself to identify the form, the amount and the response route.
The penalty floors differ by form:
$10,000 per form per year on Forms 5471, 8858 and 8938.
The penalty on Forms 3520 and 3520-A is a percentage, the greater of $10,000 or a share of the reportable amount. On a large foreign gift or trust the IRS can assess far more than the flat figures.
$25,000 on a Form 5472, and another $25,000 for each 30 day period, or part of one, that the failure continues after the 90 day window following IRS notice.
10 percent of the value transferred on a Form 926, generally capped at $100,000, with no cap where the IRS finds intentional disregard.
The IRS assesses these whether or not you owed tax, and abatement is hard to win. That is why we write the response properly the first time.
Where filings were missed and the conduct was not willful, the IRS offers two Streamlined programs, and you qualify for one or the other by residency.
Foreign offshore. Noncitizens can qualify by failing substantial presence in one of the three years, while citizens and green card holders use a 330 day physical absence and no US abode test. Three years of returns, six years of FBARs, and no miscellaneous offshore penalty. See the IRS procedure.
Domestic offshore. For taxpayers who fail the non-residency test and previously filed the required US returns. Three years of amended returns, six years of FBARs, plus a 5 percent penalty on the highest aggregate value of covered foreign financial assets. See the IRS FAQ.
The gap between zero and 5 percent is why we answer the residency question carefully.
International tax compliance is priced by what your year actually contains, not by the hour.
What moves the number: whether the year is nonresident, resident or dual status, how many information returns come with it, whether a treaty position has to be researched and documented, and whether prior years need catching up.
You get the number in writing before anything starts, and nothing is billed that was not quoted first.
Sometimes a client will think that there has to be somebody that knows. There’s cases where nobody knows the answer exactly. There’s multiple levels of court for that reason, because not everything’s spelled out. Sometimes you just have to use your best judgment.
Had a very complicated tax return as a non-resident alien, but George did some awesome work and it all went smooth. I highly recommend this service. They are very good professionals and get the work done.
Our team includes CPAs and Enrolled Agents who work on individual returns, business taxes and tax planning. Tell us what you need help with when you get in touch.
Tell us your visa, the dates you entered and left, and roughly what you earned. That is enough to say whether you are a resident for tax this year and what an international tax consultant would charge for the return that follows.
General information, not advice for your circumstances. Speak to a CPA before filing on either basis, because residency depends on your own dates and documents.
