tax residency – Internal Revenue Code Simplified

What are Closer Connection Exceptions for Substantial Presence Test?

July 15, 2020 by Prashant Thakur

Closer connection exception provides a relief to a person who fulfills three years presence condition as provided under the substantial presence test but was not present in USA for 183 days . In such case, on account of Closer Connection Exception, he can claim to be non-resident alien in current year. in other words, even …

How to Determine Starting Date & Ending Date for Residency ?

July 1, 2020 by Prashant Thakur

The US tax laws requires determination of period of residency of an alien in the United States. The rules for determining official starting date and ending date are different in various situations . These situations of Green Card Test , Substantial Presence Test ,First Year Choice ,Income Tax Treaty and Residency Starting Date Under the …

Substantial Presence Test Calculator : Test if You are US Tax Resident

March 4, 2020December 27, 2018 by Prashant Thakur

Substantial presence test calculator is here to let you test if you are tax resident or not. As you know ,your tax liability under US code 26 i.e Internal Revenue Code is dependent primarily on one fact. That is whether you are resident of USA for tax purpose. There are many tests to determine US …

8 FAQs on Exempted Days That are not Counted for Tax Residency ?

October 26, 2017October 26, 2017 by Prashant Thakur

Exempted days are days of your physical presence in USA , but still those days are out of counting of number of days present in USA for the purpose of tax residency. As readers are already know that tax residency of a person is found out by a test called substantial presence test . But it is equally important to know that while counting your physical presence in USA ,you can actually reduce certain days of visit to USA undertaken in special circumstance. These days are called Exempted Days .Here are eight FAQs on exempted days

First Year Choice for tax residency under US Tax Law Simplified !

July 15, 2020October 20, 2017 by Prashant Thakur

First-year choice is a great option for a nonresident alien! The tax residency law under the Internal Revenue Code ( US Code 26 ) is provided in I.R.C. § 7701(b). A non-US citizen is called an alien. Every alien will have to take substantial presence test in order to determine if he/she is tax resident of USA . In general, a nonresident alien individual who do not meet either the Substantial Presence Test or the Green Card Test, is ordinarily not considered U.S. resident. However, by an election under IRC
§ 7701(b)(4), commonly referred to as the “First-Year Election”. however, an individual can be considered U.S. tax resident aliens for at least part of the tax year, as opposed to being considered a nonresident alien for the entire taxable year.

Tax Effect of Nonresident Alien Spouse Chosen As Tax Resident of US Simplified !

February 6, 2016 by Prashant Thakur

Internal Revenue Code allows a US citizen or a resident alien to treat his/her spouse as tax resident of US . This is an option granted to him/her. There maybe various situation in which during a tax year, one spouse is nonresident alien and one is resident alien . Choosing your partner (spouse ) who is nonresident as tax resident of USA may effect your taxation and also certain other legal obligation arise.

How to Find if You Are Tax Resident of USA ?

July 26, 2018February 2, 2016 by Prashant Thakur

In order to determine the tax laibility of a persons who visits USA or stays in USA or works in USA or earns any income connected to USA , the first and foremost creteria is to find out the residential status of the person as per Internal Revenue Code . This is so , because the law for residents anbd non -residents are quite different. So , how do you determine if you are resident as per US tax laws ? Well the Internal Revenue Code (26 US Code ) 7701