Ash14297

There is just one thing I'm still stuck on. What is my official date for becoming a resident alien? My scenario,

Arrival into US on L1A on March 5th 2014. 183 days for the substantial presence test is September 4th. Am I;

1) Classed as resident alien for tax purposes for the whole time I have been in the US? (Since March 5th) and non resident for January 1st to March 4th?

or

2) Classed as resident alien for tax purposes ONLY from the date I first satisfied the substantial presence test (September 4th to December 31st) and non resident from January 1st to September 4th?

Michael

Since March 5th you were a resident for tax purposes.

JAJ

TaxACT say the software supports the preparation of a dual status return. However, it may not be possible to efile. You may still have to print out the return and mail it in (always use certified mail, return receipt).

It normally would be recommended to use the service provided by Deloitte, although the more you learn about the U.S. tax system the better it will be for you long term. You could still buy the software to develop your return and use it to check against what they come up with.

At state level, it's generally called Part-year resident, and (unlike for federal tax) it's a common situation for U.S. citizens/residents who move across state lines. Every state has its own rules. Most apportion out deductions in some way (so you don't get full year deductions against part year income). Most follow federal rules in determining income, but with state-specific adjustments. California is one of the states that departs furthest from federal rules, so you will have one set of learning for federal and another for California.

Ash14297

I love taxes!!

Thanks for your information, much appreciated!

Michael

This may have changed since I had to do it, but basically income from both states were used to determine the tax owed in each state and then each state prorated the amount of tax owed for that state depending on the percentage of income made in that state. This allowed each state to calculate taxes based on the higher marginal tax brackets of the combined income from both states.

hoffage123

UPDATE on e-filing and sorry for resurrecting this January thread, but I thought it relevant as it is still tax season ...

My wife e-filed her tax return (she is a US citizen) - she filed a part-year resident tax form as she returned to NYS from the UK ... when she got to the end on TaxAct, it asks for supporting documents (and gives you a list of acceptable formats including PDF).

This is interesting because in Adobe you can 'comment' on PDF documents ... so if you had to add a supplementary info sheet as a Dual-Status Alien, you can do so in theory and e-file it with the necessary annotations (you would need to download the 1040-NR from the IRS website, mark on it the &quot Dual Status& bit though), thus avoiding the need to mail it to the IRS.

Has anyone else noticed this?

Also, TaxAct claim they support the creation of dual status returns in this link: http://www.taxact.com/support/22211/...atus-taxpayer/


Hoffage

Ash14297

I was advised by Deloitte that you are not allowed to efile as a Dual Status Alien... while some tax preperaton softwares offer the help required to file as Dual Status, I believe you are still required to print out and mail it to the IRS for both State and Federal taxes.

I had Deloitte prepare everything for me, it was pretty simple... one pack was mailed off for State return (this included the state return forms and you also have to provide a copy of the 1040/1040NR attached), the second was a 1040/1040NR mailed to the IRS for federal taxes

hoffage123

Hmm that is interesting, as I was reading on the restrictions for Dual Status Aliens on the IRS website itself, and it doesn't mention that you can't efile in the list of restrictions Taxation of Dual-Status Aliens . I don't mind mailing it, once it is printed out, but if it is possible to efile it, I would prefer that.

Ash14297

I don't necessarily believe that you are not "allowed" to, It seems more that most tax preperaton services just do not support Dual Status E-File.

I did however find a "What and Where to File" section on the IRS website for dual status 1040NR or 1040NR-EZ and it only gives information how to mail it, it does not specifically say whether it can be done online.

http://www.irs.gov/instructions/i1040nre/ch01.html#d0e597

I completely agree that it would be much easier to e-file... it takes forever to get a refund when it's been mailed. I'm just glad next year, I can file online normally as I will be considered resident for tax purposes!

LondonSquirrel

US tax sounds waaay complicated! I don't understand a word of it!

Steve_

Oooh, I've just been dealing with this very issue with a friend of mine.

If you arrived on any day other January 1st, you are dual-status basically. The main exceptions to this rule are if the tax treaty has a non-discrimination clause (which is rare, I think only the Canadian, Mexican and S Korean treaties do - and you have to claim it on form 8833) or if you elect to be treated as resident for the whole year, which is explained on page 8 of IRS publication 519. http://www.irs.gov/pub/irs-pdf/p519.pdf

The 2011 version of 519 has a step-by-step example of how to do one.

If you elect to be treated as a resident for the whole year, then any income you earn in the year prior to moving would be subject to US income taxes, which is why usually you would be better off filing dual-status. You might not be though, depends on your circumstances.

Steve_

It can be simpler than UK tax imx. For example, the weird UK tax year. Or the varying types of National Insurance. Or the various types of residency for tax purposes in the UK.

Pulaski

Weird? I think the history about how the British tax year came to be April 5 is fascinating, not least because it makes complete sense of some apparently unrelated protests which are well known and documented, but make no logical sense unless you understand why the protesters were protesting.

hoffage123

Well - TaxAct wouldn't let me efile after all that palaver. It came up with a message that I wasn't allowed. Bah.

But I am glad because there was a potential error with the State Calculations it was making (saying that NY state owed me a refund of $38). Actually I owe them $8. I just spent the last hour or two painstakingly going through line by line on the NY state tax forms, ensuring that I followed the ready reckoner tables and calculations to the letter.

So, I have the following forms prepared now (Taxact did the Federal ones for me at least, which I have saved as a PDF and checked also):

Married, Filing Separate for both.

NYState

IT-203 (NY/Part-Year Resident)
IT-203D (Deduction Schedule)

FEDERAL

1040 (with Dual Status Notation)
1040 Schedule A
1040 Schedule C (I made $105 as a contractor doing data entry)
8812 Child Tax Credit
8889 Health Savings Account
1040NR (with Dual Status Statement as supporting statement unsigned)

Hopefully next years will be smoother!

Hoffage