IN part 1: we defined 1) who are resident aliens, nonresident aliens or both, 2) who are exempt individuals, and 3) closer connection exception.
In part 2: we defined 1) how resident aliens and nonresident aliens are taxed, 2) when is income considered U.S. sourced, 3) withholding requirement and employee issues.
In part 3: we discussed the taxation and withholding rates of nonresident aliens.
In part 4: we discussed the taxation of dual-status alien if for the same year you are both a resident and nonresident alien.
If you are a U.S. citizen and is married to a nonresident alien spouse at the end of the year what are your options?
• You may choose to elect to treat nonresident alien spouse as US resident.
• If you qualify and choose not to elect treatment of nonresident alien spouse as U.S. resident, you may be able to choose head of household filing status.
• Election to file a joint return: You and your spouse are considered residents if you choose to elect a joint return for federal income tax purposes for that year/s until the election are suspended. You will report worldwide income for the year/s the election is in effect.
• To make the election: You will need to attach a signed statement by both spouses to the joint return for that year/s elected. The statement will include: 1) declaration that one spouse is a nonresident alien and other spouse is a U.S. citizen or resident alien at end of tax year and you choose to be treated as U.S. residents for that tax year/s; 2) Complete name, address, and identification of each spouse; 3) If the other spouse died, include the complete name, address, and identification of the person making the election for the deceased spouse.
• Suspended election: If neither of you is a U.S. citizen or resident alien during the later tax year/s, the election to treat as U.S. residents are suspended.
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Disclaimer: Any accounting, business or tax advice contained in this communication is neither intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.
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Al-os & Associates Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies.