Small Changes on Draft 2018 Forms 1040NR-EZ and 1040NR, by Jean Mammen, EA

 
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There are few changes in the IRS draft forms 1040NR-EZ and 1040NR published on August 22, 2018.

The most important changes reflect the suspension of the personal exemptions  for tax years 2018-2025, in TCJA (Tax Cuts and Jobs Act), and the changes in filing status available and the new “credit for other dependent” (Form 1040NR only),

Schedule OI of Form 1040NR has a new question, Item M, about the 871(d) election. A filer declaring income from real property can treat that income in the usual manner, as investment income that is Not Effectively Connected to the taxpayer’s own U.S. trade or business, or elect to declare it as ECI, effectively connected income. Item M has two check boxes, which state in (1) that this is the first year you are making this election, or, (2) you have made this election in the past and not revoked it.

Dependents: The remaining … Continue reading →

Au Pair Income Tax Filing, by Jean Mammen, EA

 
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An au pair in the U.S. on a J1 visa is participating in a cultural exchange program sponsored by an organization authorized by the State Department Bureau of Educational and Cultural Affairs. The au pair experiences life in an American family while providing child care for up to ten hours a day, not to exceed 45 hours a week.

The au pair must be enrolled in at least six semester hours of classes at a post-secondary institution. The au pair is not a full-time student. The DS 2019 issued by the sponsor is for a cultural exchange program participant (or trainee), not a student.

The au pair must receive a cash stipend.

The au pair will need to file a U.S. income tax return reporting the stipend, even if they do not receive a W-2 reporting the stipend amount. The tax and filing rules are the same for all J … Continue reading →

Dual-Status Aliens and Draft 2018 Form 1040, By Jean Mammen, EA

Link

 
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https://www.irs.gov/pub/irs-dft/f1040–dft.pdf

The draft postcard-size 2018 Form 1040 and six draft Schedules released June 29, 2018, give a look at the 1040 half of a dual-status return. This is filed by someone who is a tax resident and a tax non-resident of the U.S. for different portions of the same tax year and must use both Form 1040 and Form 1040NR.

Form 1040NR will remain unchanged, according to the IRS.

June 2018 draft Form 1040:

There are two areas for “Standard Deduction” on the first side of the page. The first Standard Deduction line appears under the line for “your” name and Social Security Number. It has three choices.

The second standard deduction line appears under the line below for ‘Spouse or Qualifying Person’. It has four choices.

The fourth choice is titled: Your spouse itemizes on a separate return or you were a dual-status alien.
Continue reading →

Not a U.S. Citizen? Leaving the U.S.? Returning Before Filing a Current Year U.S. Tax Return? Not Planning to Return?, by Jean Mammen, EA

 
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What could go wrong?

You might be unable to depart, or, refused re-entry into, the U.S. if:

You were required to obtain a sailing/departure permit before you left, and did not do so.

You were not required to obtain a sailing/departure permit, but you are not carrying convincing documentation on you, perhaps including your most recent income tax returns, that proves this.

Many non-citizens are not required to obtain a sailing or departure permit, (certificate of compliance with tax obligations), but some are. Do you know whether or not you need a sailing or departure permit?

Or maybe in the past you went to an IRS Taxpayer Assistance Center and tried to apply for a sailing or departure permit, but were met by blank looks and sent away. And you had no problem leaving or re-entering the U.S.

What is different today?

With today’s work … Continue reading →

Why the 7th is Classic, by Jean Mammen, EA

 
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The 7th edition of “1040NR? or 1040?    +   International Organization and Foreign Embassy Employees” is Classic because:

There will always be people living and working outside their home country

Formats or laws may change, but they don’t all change at once

The 7th Classic introduces the tax law changes TCJA (Tax Cuts and Jobs Act) puts into effect for 2018 U.S. income tax returns.

Personal exemptions are “suspended”.  The 7th Classic is annotated (2018 n/a) where personal exemptions are mentioned.

Will this suspension of personal exemptions mean the 2018 Form 1040NR will no longer have boxes for qualifying dependents and spouses for residents of Canada, Mexico, South Korea, and Indian students and business apprentices? We won’t know until later. Maybe much later. But we do know that for 2018 and on, NR filers, like 1040 filers, will not be able to subtract the personal exemption amount from their gross income … Continue reading →

ITIN’s Expiring December 31, 2017, Announced June, 2017, by Jean Mammen, EA

 
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See the link at the end for the complete IRS FAQ on which ITIN expire and how and when to renew.

IRS has annouced that ITIN’s that will expire on December 31, 2017, are ITIN’s that:

-were not used on an income tax return filed for 2014, or 2015 or 2016, or,

-whose middle two numbers are 70, 71, 72, or 80

If an expiring ITIN will be used on a tax return you will file for 2017, IRS advises you to begin the renewal process “immediately” and not wait for the CP-48 notice that you will be mailed over the summer. IRS estimates 7 weeks as the time it would take to process an ITIN renewal request.

If an ITIN for one person shown on a tax return will expire, then all individuals shown on that tax return may apply for a renewal.  Yes, it could be a good … Continue reading →

Successful 1040NR efiling, by Jean Mammen, EA

 
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Efiling Form 1040NR is a success story for the IRS! Since late February, 2017, filers around the world have been successfully efiling Form 1040NR. If you need to file this form and you are not living in the U.S., with efiling you will quickly know if the IRS has received and accepted your U.S. 1040NR tax return. No more waiting for mail delivery receipts, no more waiting to see if there is a reaction from the IRS!

Non-U.S. citizens and non-residents with U.S. source income, such as those who rent out U.S. real property, are happy to speed up their U.S, tax filing.

If successful efiling of Form 1040NR has not been your experience, then  call on the technical support staff of the software developer.

Professional level tax software that is well-designed to address international tax provisions is successfully efiling a variety of situations that arise for Form 1040NR efilers.

… Continue reading →

6th Edition – Available Now

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The 6th edition of 1040NR? or 1040?  U.S. Income Tax Returns for Visa Holders   +   International Organization and Foreign Embassy Employees is available for ordering now.

The Sixth presents   new information on

-things to check for when deciding if a treaty provision applies in a specific situation, especially for those consulting Table 2

-Competent Authority Agreements

-Competent Authority determinations and ruling letters

And the new updated charts on:

-1042-S codes.

-Comparison of Form 8938 and FBAR requirements

-and more…

Ordering sites:

On the Amazon website, US and Europe

http://https//www.amazon.com/dp/1543050948,

on the CreateSpace estore at

https://www.createspace.com/6926188

When ordering on Amazon, choose carefully so that you order the 6th edition. It is now the first edition listed among the various editions.

The rosette is in the upper left-hand corner. Its color is like the sky when the sun is near the horizon, at dawn or dusk.

… Continue reading →

Determining Treaty Benefits, by Jean Mammen, EA

 
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In September, 2016, the IRS issued an updated Publication 901, U.S. Tax Treaties.

It contains the narrative information traditionally present in this publication, but not the list of countries with which the U.S. has tax treaties, nor the usual tables.

That list of income tax treaty countries, the traditional tables, and a new Table 4 on Limitation on Benefits (LOB) are now best reached through clicking in a new, extensive article titled ‘Tax Treaty Tables’.

On the www.irs.gov website, enter the search term: Tax Treaty Tables. This will take you to the article.

NOTE: The links in this blogpost are not live. Please do this by hand on your own computer. I am showing the links for information purposes only. Right now, hackers are just too active!

https://www.irs.gov/individuals/international-taxpayers/tax-treaty-tables?_ga=1.241664642.1464907806.1433460939

The article states that the tables were moved out of Publication 901 in order to make it easier … Continue reading →

Form 1040NR Might Be E-filed in 2016, by Jean Mammen, EA

 
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The IRS is working towards filing 2016 forms 1040NR and related forms by Modernized efile (MeF). Testing has begun. And they have six months before e-filing would begin.

The draft instructions for 2016 Form 8453 begin: What’s New. Beginning in 2017, you will be able to electronically file Form 1040NR, U.S. Nonresident Alien Income Tax Return, and will be able to attach any related documents listed on page 1 to Form 8453.

The listed forms include Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities. The complete list of forms that may be attached to the Form 8453 shows: 1098-C, 2848, 3115, 3468, 4136, 5713, 8283, 8332, 8858, 8864, 8885, and 8949.

The IRS has begun making Assurance Testing System (ATS), materials available for comment.  The July 1, 2016, post on the ‘Coming Soon to the Modernized e-file (MeF) Program’ article about the five 1040NR  Early … Continue reading →