Form 1040-NR is a version of the IRS income tax return for nonresident aliens to file if they engaged in business in the United States during the tax year or otherwise earned income from U.S. sources throughout the year. The form is also filled out by representatives of a deceased person who would have filed and for an estate or trust that needs to file the form. As with the regular Form 1040, those who fill out Form 1040-NR may either owe more money or be entitled to a refund.
Before considering whether you need to fill out the form, you have to make sure you're clear on who a nonresident alien is. Usually, if you're not a U.S. citizen, you're considered a nonresident alien if you do not meet either the "green card" test or the "substantial presence" test for the year in question. The substantial presence test bases your residency status on the length of your stay in the United States during the tax year in question and the preceding two years — you have to meet certain residency goals. You pass the green card test — and are thus a resident alien — if you were a lawful permanent resident of the United States at any time during the tax year.
Completing Form 1040-NR is key if you're a nonresident who plans to reenter the United States. To modify your visa terms, you'll likely have to show that you submitted any required tax forms.
You need Form 1040-NR if:
You may be eligible to file the shorter Form 1040-NR-EZ if your only U.S. income comes from wages, salaries, tips, refunds of state and local taxes, scholarships or fellowship grants, and nontaxable interest or dividends. But you can't use the EZ version if you're claiming the qualified business deduction or received taxable interest or dividend income.
Finally, note that you may have to file both Form 1040 and Form 1040-NR if your status changes during the course of the year.
This is just a summary; there are many more provisions. And the rules are complex, so be sure to get professional advice, especially as laws and tax regulations can change with little notice. Keep records throughout the year, and consult your tax advisor with any questions.
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