Foreign Expats Residing in the U.S.

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If you are a foreign national residing and/or working in the U.S. the extent to which you are obligated to the U.S. tax system depends on your immigration and tax residency status.

What You Need to Know About Expat Taxes

If you meet the substantial presence test or have a U.S. green card, you are a "resident alien" and are subject to tax on your worldwide income. If you are not deemed a resident alien then you are a "nonresident alien" and only subject to U.S. tax on your U.S. sourced income. Nonresident aliens married to a U.S. citizen or resident alien may choose to be treated as a resident alien for certain income tax purposes.

Your Expat Taxes: Breaking Things Down

Nonresident aliens file Form 1040NR, reporting their U.S. sourced income only. Resident aliens are taxed like U.S. citizens, file Form 1040, reporting their worldwide income. In addition, resident aliens have all the additional filing requirements related to foreign investments. In the first year residency is established, a dual-status return may be required, reporting income on both Form 1040 and Form 1040NR.

Other Considerations

Resident aliens also have to concern themself with some additional reporting requirements. The Foreign Bank Account Report, or FBAR, is required of all U.S. citizens and residents who hold accounts outside the U.S. that total more than $10,000. This includes but is not limited to, things like bank accounts, investment accounts, and pensions. 

In addition, you may have additional reporting requirements, depending on the types of foreign assets you hold. Virtually any investment made outside the United States will have a U.S. disclosure and or tax implication. See our foreign investments chart for additional information.

Proactive planning can help you minimize disclosure and income tax obligations. As part of our introductory consultation with you, we perform an inventory of your assets, identifying additional reporting requirements. Then, as investment opportunities arise, we schedule a quick call to discuss the U.S. tax and reporting implications, making sure you have all the information needed to determine the viability of the investment.

At SDC CPA, we understand that moving to the U.S. should be exciting, yet the U.S. tax system can be daunting. We help you plan and manage your U.S. obligations, freeing up your time and giving you peace of mind.

Have investments outside the US?

See our foreign investments chart for potential reporting obligations.

Foreign Investment Chart

Considering a move to the U.S. soon?

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