Foreign Nationals in the U.S.

You're a U.S. tax resident for any year in which you meet either the Green Card Test (you're a lawful permanent resident) or the Substantial Presence Test — generally 183 days in the U.S. counted across the current year and the two prior years on a weighted basis. Tax residency is different from immigration residency and different from residency for state tax purposes. The first step in any engagement is confirming which test applies and for which years.

U.S. tax residents file Form 1040 (the same form U.S. citizens file) and report worldwide income. Nonresident aliens file Form 1040-NR and report only U.S.-source income and certain U.S.-connected income. Dual-status years — when you become or cease being a resident partway through the year — require both forms for different parts of the year and need careful handling.

The U.S. has income tax treaties with about 70 countries. Treaties can reduce U.S. tax on specific types of income (dividends, interest, royalties, pensions, scholarships) and can sometimes eliminate U.S. residency for tax purposes under a "tie-breaker" rule even when the Substantial Presence Test is met. Claiming treaty benefits usually requires filing Form 8833 along with your return. I analyze treaty position as part of every engagement involving a foreign national.

Two big things. First, the date your U.S. tax residency starts matters — it affects what portion of the year's worldwide income is reportable to the IRS. Second, your foreign accounts, foreign investments, and foreign entities may trigger reporting obligations (FBAR, Form 8938, Form 5471, Form 8621 for PFICs) starting immediately. Pre-arrival planning — ideally before you move — can materially reduce your U.S. tax exposure in year one. See also the Immigrants and New Residents page.

A Passive Foreign Investment Company (PFIC) is a foreign corporation where most of its income is passive (dividends, interest, rent) or most of its assets produce passive income. Most non-U.S. mutual funds, ETFs, and pension investments qualify as PFICs. PFIC tax treatment under the default Section 1291 method is punitive — interest charges and ordinary-income rates on what would normally be capital gains. Getting the right election (QEF or Mark-to-Market) before holding a PFIC as a U.S. resident can save enormous amounts of tax.

If you're a U.S. tax resident and your aggregate foreign account balances crossed $10,000 at any point during the year, yes — FBAR (FinCEN 114) is required. Form 8938 (FATCA) also applies at higher thresholds. These reports don't add any tax, but missing them carries serious penalties.

If you're married to a U.S. citizen or resident, you have two choices: file as a nonresident alien (typically Married Filing Separately with certain restrictions) or make an election to be treated as a U.S. resident for the full year so you can file Married Filing Jointly. The MFJ election often lowers total tax significantly but it subjects your worldwide income to U.S. tax for the year. Running both calculations is standard during return preparation.

Yes. If you or a family member needs an Individual Taxpayer Identification Number (ITIN) and you don't qualify for a Social Security Number, I can assist with the Form W-7 application, including the certifying acceptance agent coordination that's often required for passport verification.

Yes. F-1 and J-1 students are "exempt individuals" for the Substantial Presence Test for their first 5 years in the U.S., meaning they file as nonresident aliens even if physically in the U.S. most of the year. H-1B, L-1, and other work visa holders count all days and usually become U.S. tax residents in their first full year. Each visa category has its own tax treatment and I factor this in at the start of every engagement.