Non resident Alien Vs Resident Alien
 

Hello Everyone

I'm a British passport holder currently working for a US company base in Shanghai for the past 2 years. My family now have a good opportunity to relocate to our US office in Denver Co. But before we make this step I must be sure how much tax I need to pay as the difference between Non resident Alien Vs Resident Alien is so big.

My company will help me apply for L1B visa and my question is will I qualify to be a 'resident alien'?

Any help on this topic will be hugely appreciated.

Many thanks in advance.

Brds
Pooney

Re: Non resident Alien Vs Resident Alien
 

Yes, to the IRS you will be a 'resident' alien.

Re: Non resident Alien Vs Resident Alien
 

+1.

Ian

Re: Non resident Alien Vs Resident Alien
 

And they will want a slice of your global income and asset reporting.

Re: Non resident Alien Vs Resident Alien
 

Here's where the IRS explains it http://www.irs.gov/taxtopics/tc851.html

You are resident alien if you have a greencard or "substantial presence" in the US.
There's a lot more detail than that bit, so read the IRS page.

Re: Non resident Alien Vs Resident Alien
 

However you can opt to be treated as a resident alien for tax purposes.

Re: Non resident Alien Vs Resident Alien
 

AND it doesn't mean you can go in the US Citizens & Residents queue when coming in to the US from overseas...

Re: Non resident Alien Vs Resident Alien
 

If you're coming from China you would be resident for tax purposes in the US after you move your principal residence to the US.

It is possible under various tax treaties to remain non-resident for tax purposes if you want to, but there isn't really any benefit if you're staying for a lengthy period of time. There are rare situations where it can make sense but usually those situations only apply to cross border commuters.

Your first tax return will be dual-status, which basically means a pro-rated return for the portion of the year you were in the US, read IRS Publication 519. As far as I'm aware there is no software that can do a dual-status return. Also if you leave the US on L-1B, your last return will also be dual-status unless you leave on December 31st.

Re: Non resident Alien Vs Resident Alien
 

This depends when you arrive. If you don't meet Substantial Presence (as outlined in the 519 publication), then you can instead be taxed as a non-resident for your first year. We arrived late in 2011, and our tax preparers ran the numbers 3 ways - dual, non-res or fully res for the whole of 2011 - and we chose which gave us the best number (non-res, in our case).

Re: Non resident Alien Vs Resident Alien
 

Your company should provide you with tax advice as part of your relocation package. The biggest issue I see is if you have non-US pensions and investments as these will complicate your US taxes. But I'd ask tour company to pay for the services of professional tax advisors while you have any US tax obligations.