What is Non Resident?

 L1/H1 Visa Holders - During your first year in US, if by the end of the calendar year, you do not complete 183 days you are a Non Resident.
    - You can file your federal returns as a Non Resident

    - In this return you do not get a standard deduction and you don't have to report global income. You need to report the income that you earned only from US Sources.

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F1 Visa Holders

      - F1 visa holders are considered to be Non Resident for the first five years and they have to file their return as Non Resident. 

         For more details on F1 Visa please click F1 Visa holder Returns.

  

Can I file Non Resident Return Online?

No. This return is a paper file. That is you need to prepare your return and actually post it to  the appropriate address or you can personally submit in the IRS office that is easily accessible to you.

 

IRS also has a provision for you to choose to files as a Resident. (single/married). And you can include your dependents. You can make this choice only if you were present in US during the calendar year for at least 31 days continuously

•  In this type of return  you will need to include your global income that you received in other countries even though   you were not staying in US for that calendar year. Following is a list of possible(not limited to) types of global income

  • Salaries that you/your spouse receive/received in other country

  • Interest income that you/your spouse earn from Savings/FDs

  • Dividends that you/your spouse earn from Mutual funds/Stocks

  • Capital Gains that you/your spouse get when you Buy/Sell Stocks/Mutual funds

  • Rental income that you earn when you/your spouse rent your property.

• In order to make this choice you will first need to file an extension and wait until you turn resident by the IRS rules.

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What is Dual Status?

   You can have a dual status in the following scenario.

• The first year when you arrived into US, wherein you are a Non Resident at the beginning of the year and a Resident(> 183 days) at the end of the year 
• The last year when you leave the country, you are Resident at the beginning of the year but are non Resident at the end of the year.

In both the scenarios above you have to file your return as Dual Status, where you do not get Standard Deduction, nor you can file as Married filing joint. However you can claim exemptions for your dependents. This return is also a paper file.
However in 1st case, if you are Married you can choose to file as a Resident and all the rules of resident applies and then all the rules that of resident are applied.

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Can I file Dual Status Return Online?  

 No. This return also needs to mailed just like for Non Resident Return.

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US Residents and Global Income requirements

Per US Law/IRS Rules all Resident Aliens/Green Card Holders/Citizens need to include their global income when filing their Federal return. This means they have to include income from all sources which they earned in US or any other country even while they were not in US. You may not be double taxed based on the US Treaties with different countries, that means the tax paid in other country is credited back to you in your return based on certain formulas. 

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What is global Income?

• Any interest income that you earn in any country on Savings/FDs

• Any Dividends that you receive from stocks/mutual funds in any foreign country

• Any Rental Income of the Property that you rent in foreign country

• Any Salary Income that you receive from foreign country even though you were not staying the country.

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    All the above income are for the calendar year from Jan to Dec as US Taxes for Individuals are based on the calendar year.

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Why should I include my Income from Other Countries? I have already paid Tax there?

This is the law, and you are bound by the law. There can be a contrary question, as to why should we claim the benefits for the whole year for everyone in the family even though they were  not staying for the whole year in the country.