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Resident and Nonresident Aliens template



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QuestionsAnswers
How are resident aliens taxed?taxed on worldwide income, the same as US Citizens
How are nonresident aliens taxed?taxed only on their income from sources within the US and on certain income connected with the conduct of a trade or business in the US.
Dual Status Alienare both nonresident and resident aliens during the same tax year, with different rules applying for the part of the year a taxpayer is a US resident and part of the year he is not
What are the two residency tests?Green Card Test and Substantial presence test.
Green Card Testa taxpayer is a lawful permanent resident of the US any time during the tax year. They may choose to be treated as a resident alien for an entire calendar year.
Substantial Presence TestWithout a green card a taxpayer must be physically present in the US for at least: 1. 31 days during the current year AND 2. 183 days during the 3 year period that includes the current year and the 2 years immediately preceding the current year
For the purpose of the 183 day requirement, all the days present in the current year are counted along with:1. 1/3 of the days present in the 1st year before the current year AND 2. 1/6 of the days present in the 2nd year before the current year
Can you pass the substantial presence test and still be an undocumented immigrant?YES
Days in the US are not counted if the alien taxpayer:1. regularly commutes to work from Canada or Mexico 2. in the US as a crew member of a foreign vessel 3. is unable to leave due to a medical condition that arose in the US 4. is a professional athlete in the US to compete in a charitable sports event 5. is an exempt individual
What days do professional athletes count for the substantial presence test?athletes exclude only the days in which they actually competed in the sports event, but do not exclude days used for practice, travel or promotional events.
Exempt individuals for the substantial presence test include:1. foreign government related individuals in the US temporarily, such as diplomats 2. teachers on temporary visas. scholars are exempt for 2 years 3. students on temporary visas who do not intent to reside permanently in the US. they are exempt for 5 years
When is a taxpayer considered a nonresident alien for tax purposes?if the taxpayer does not meet the green card test or substantial presence test.
What portion of income is taxable for nonresident aliens?taxed only on their US source income.
When may a nonresident alien who does not meet the substantial presence test or green card test still elect to be treated as a resident for tax purposes?if he is married to a US citizen or resident.
An election to be treated as a resident for tax purposes only may be elected if:1. at the end of the year, 1 spouse is a nonresident alien and the other is a citizen or resident, AND 2. both spouses agree to file a joint return and to treat the nonresident alien as resident alien for the entire tax year.
What is classified as an international student?anyone who is temporarily in the US on a F, J, M or Q visa.
What status do most international students and scholars fall under?nonresident aliens
Who is also considered students for tax purposes?Immediate family members of a student, including spouses and unmarried children under age 21 who reside with the student
When is a taxpayer considered a duel status alien?when he has been a resident alien and a nonresident alien in the same tax year.
What determines a taxpayer status?a taxpayers status on the last day of the year will determine if he is a resident alien or nonresident alien
What part of income is taxed for a nonresident alien?taxed only on his US source income.



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