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As opposed to other tax systems, American immigration factors may lead to tax consequences. In most of countries, your tax home is the place where you are permanently or indefinitely engaged to work. In the United States of America, this is partially true.
Being a US tax resident means that you are taxable on a worldwide basis. If you are a US citizen, or have a green card or spent more than 183 days during the last three years in the US, you are going to be considered as a US tax resident. There are two tests to determine your tax residency in the US: the substantial presence test and the green card test.
In order to better understand your tax requirements, we are going to review the three following situations: being an American citizen, having a green card and having a visa.
Being a US citizen
If you are a US citizen, you are automatically considered as a US resident for tax purposes. You will have to file an annual tax return even if you are not living in the US.
You won’t escape from the US taxes by living outside the country. Depending on the country where you live, you will benefit from a tax treaty signed with the US. This agreement may limit or suppress the double taxation of your incomes. Moreover, you may be entitled to the status of bona fide resident and benefit from a partial exemption of your revenues up to $96,700 for 2013.
As a US tax resident, living or not in the US, you will have to file specific returns regarding your foreign bank accounts and foreign financial assets. The threshold may be different if you are living in the US or outside the country.
Having a green card
As a green card holder, you are automatically a US resident for tax purposes. The tax consequences are exactly the same as the ones for US citizens. You will have to file a tax return by mentioning your worldwide incomes even if you live outside the US.
You will have to report your foreign bank accounts and foreign financial assets if you meet the thresholds.
If you are willing to abandon your green card, your tax requirements will end. For the last year, you will have to respect a specific formalism and file a last tax return.
Having a visa
The applicable rules for a visa holder are different and the test to determine the US tax residency is taking into consideration the days spent in the US. As per the substantial presence test, you are considered as US tax resident if you spent more than 183 days in the country. The computation is done based on the following coefficients:
100% of the days spent in the current tax year (N)
331/3% of the days spent in the preceding year (N-1)
162/3% of the days spent in the year N-2
In order to be treated as a US tax resident, you need to have spent at least 31 days during the current year (N). Please be aware that some visas are not taken into account while computing the days spent in the country. It is the case of the J-1 visa. Other exceptions may exist and some days may be excluded from the computation.
In other words, depending on your visa, you can live and work in the US and become a US resident after 183 days or without becoming a resident. The tax consequences of your residence are important since a US tax resident is taxable on his/her worldwide incomes and a non-resident is only taxable on his/her US source incomes.
Moreover, only the US residents will have to file specific reports regarding foreign bank accounts and foreign financial assets.
In most cases, the deadline to file American tax returns is April 15 of the year following the tax year. Some will benefit from two additional months to respect their tax requirements (June 15). If you are not able to file your tax returns by these due dates, you will have to file an extension. Please note that this filing will not postpone the due date of your tax payments.
You have US source incomes, being a US tax resident or a non-resident, we can help you to respect your American tax requirements by preparing all the forms you have to file. Do not hesitate to contact us (+33 781 611 140, +1 646 783 1140, firstname.lastname@example.org), should you want us to analyze your situation. You can also request a quote online. Do not forget to provide us with a maximum of information, so we can better understand your situation.