A Guide to Dual-Status Tax Returns for U.S Expat

Ultimate Guide to Dual-Status Tax Returns for U.S Expats:

The United States is one of two countries that uses a citizenship-based tax system other than a territorial one. This means that the Internal Revenue taxes U.S citizens, including dual citizens and American Expats. You can get quote for EIN number in Maryland.

In case, you already paid taxes in the country where you live abroad and you are a U.S citizen, you are responsible for filing a U.S tax return too. However, many countries use a territorial tax system. Whereas, you are only taxed when you live and do work in that country.

All Non-Americans who are U.S residents have to file U.S taxes by using their EIN Number in Marryland. So, they all must have an EIN Number in Maryland. Similarly, those who move from the U.S in a year, or who spend part of the year in the U.S. They need to file a dual-status U.S tax return after the end of each year.

What is a dual-status tax return?

According to the IRS in the United States, anyone who has both a U.S resident and a non-resident in the same tax year has to file a dual-status tax return against their EIN Number. However, Citizenship has nothing to do with it. In this case, the requirement to file a dual-status U.S tax return just relates to U.S tax residency.

Does a dual-status tax return relate to dual citizenship?

The answer is NO. Dual citizenship means a person has citizenship in both countries.

Moreover, the IRS refers to dual-status aliens, meaning non-Americans who are U.S residents for part of the year.

The non-US citizens are taxed on their worldwide income for part of the year. While there are U.S residents that are just on income from U.S sources for part of the year. This is when they are non-U. S residents.

Do dual-status citizens have to submit two tax returns?

Do dual-status or non-US citizens have to submit two tax returns? Yes, but it is much more complicated. For that, you need to qualify as a U.S resident and a U.S non-resident in the same year. However, you will have to report your income earned when you were a resident on Form 1040 and sourced income you received when you are not a U.S resident.

EIN Number in Maryland

However, in practice, you only need to submit one tax return by using your EIN Number in Maryland. That can be Form 1040 or Form 1040NR depending on your status.  Additionally, this will include a statement for the other part of the return.

Whether you’re a US resident or not?

An American Expat is considered a U.S resident if they meet either the Substantial Presence Test or the Green Card Test.

The SPT (Substantial Presence Test) is met if you are living for more than 31 days in the United States in a year. Moreover, 183 days are also included during a 3-year period and the 2 years immediately before that.

  • All the days you were living in the current year
  • 1/3 of the days you were living in the 1st year before the current year.
  • 1/6 of the days you were present in the second year before the current year.

Otherwise, you are considered a U.S resident for tax purposes if you are a permanent resident of the United States.

On the other hand, all U.S Citizens need to file Form 1040 regardless of whether they are physically present in the United States or not. Although, this is the amount of time they spend in the United States. This can affect their ability to claim the FEIE (Foreign Earned Income Exclusion).

What about offshore account filing?

In case, you are resident in the United States, if you reside outside the U.S but are a U.S citizen. Moreover, Green Cardholder or dual-status U.S Expat. In that case, you may have to report any financial accounts that you have abroad by filing a Foreign Bank Account Report. This is commonly known as an FBAR.

What If You Have Not Filed US Taxes? 

However, if you fall behind in your U.S tax preparation filing. For instance, you are being misinformed, that there is an amnesty program that is known as the Streamlined Procedures. Additionally, it is a mouth full, but this will certify that your tax delinquency was not a willful act.

Moreover, this allows you to get caught up with your U.S taxes without penalties.

Leave a Comment

Your email address will not be published. Required fields are marked *