US Dual-Status Tax for people moving to or from the United States (US) Hi there! If you are juggling responsibilities across the US and the UK, you’re likely in a US dual-status tax situation. Guess what? You’ve come to the right place. You may wish to use our free US tax estimator for income tax purposes to see how much you will need to pay the IRS. What Sets Us Apart We offer specialized expertise in dual-status return scenarios. This isn’t your run-of-the-mill tax advice. Our tailor-made solutions are designed to fit your unique financial landscape like a glove. Key Dates and Forms You Should Be Aware Of For Your US Tax Return Please remember to write down these key US tax return deadlines set by the Internal Revenue Service (IRS) April 15: Deadline for filing Form 1040 in the US October 15: Extended deadline for Form 1040 June 15: Deadline for Form 1040-NR for non-resident aliens January 31: Deadline for U.K. Self-Assessment tax returns Why Specialized Tax Services Are a Must Managing responsibilities across international borders is complex enough. Add to that the nuances of a dual-status tax system, and you’ve got a recipe for financial chaos unless you get the right guidance. Dual-Status Criteria: Substantial Presence Test: For the US, you’ll have to pass the Substantial Presence Test to be considered a resident alien for tax purposes. This involves calculating the number of days you’ve been in the US over three years. Green Card Test: A US green card at any point during a calendar year automatically makes you a US tax resident. Non-resident Status: If you don’t meet the above conditions, you may be considered a non-resident alien, requiring you to file a Form 1040-NR. Resident in More Than One Country: For dual status, you should also be a tax resident in another country (like the U.K.) during the same year, based on that country’s laws. Example: Obtaining a US Green Card in November First 10 Months: You’re a UK citizen living and working in the UK. You’re considered a UK tax resident for this period and are responsible for UK taxes on your worldwide income. November: You obtain a US green card and move to the US. You’re considered a US tax resident when you get your green card. Remaining 2 Months: During these two months, you’re working and living in the US and taxed as a US tax resident. You’re responsible for US taxes on your worldwide income for this period. Dual-Status Filing: For the US, you would file a dual-status return. You’d use Form 1040 for the period you were a green card holder (resident alien) and Form 1040-NR for when you were not a US resident. For the resident portion, you would report worldwide income; for the non-resident portion, you would only report US-sourced income, if any. UK Tax Return: For the UK, you’d likely be considered a UK resident for part of the year and non-resident for the rest, potentially qualifying for “split-year” treatment under UK tax rules. Foreign Tax Credit: On your US tax return, you may claim a Foreign Tax Credit for taxes paid to the UK, which can help mitigate double taxation for the overlapping period. Example: Moving from the UK to the US for Work First Half of the Year: You lived and worked in the UK. You pay UK tax on your income for this period. Second Half of the Year: You move to the US for a new job and pass the Substantial Presence Test, becoming a US tax resident. Dual-Status Filing: For the US, you file a dual-status return using Form 1040 for the resident portion and Form 1040-NR for the non-resident portion. You’re taxed on worldwide income for the period you’re considered a resident and only on US-sourced income for the non-resident period. Example: Extended Visit to the UK First Half of the Year: You’re in the US and are considered a resident alien. Second Half of the Year: You travel to the UK for an extended stay but don’t become a resident there for tax purposes. Dual-Status Filing: You’ll file a regular Form 1040 for the US covering the entire year, including income earned in the UK. You may claim a Foreign Tax Credit on the US return for taxes paid in the UK. Example: Student on F-1 Visa First Half of the Year: You are in the US on an F-1 student visa, considered a non-resident alien. Second Half of the Year: You change to H-1B employment status, becoming a resident alien. Dual-Status Filing: You file a dual-status return using Form 1040-NR for the first half of the year as a student and Form 1040 for the second half when you were working. US IRS Tax forms You must file tax Form 1040 for the part you are a US tax resident. You must also file tax Form 1040 NR as a non-US tax resident. You will still need to file an FBAR form. Form 1040 Criteria: US Citizenship or Resident Alien Status: You must be a US citizen or meet the resident alien criteria to file Form 1040. Types of Income: You should have US-sourced income that requires reporting. Deductions and Credits: You’re eligible for certain deductions and tax credits, although some may be limited compared to full-year US residents. Form 1040-NR Criteria: Non-resident Alien Status: This form is for non-resident aliens with US-sourced income. Limited Types of Income: Income should be from specific types that are taxed differently than resident alien income, such as dividends, interest, and royalties. No Standard Deduction: Generally, you can’t claim the standard deduction on Form 1040-NR, but there are specific itemized deductions you can claim. FAQ Dual Status and Forms How do I choose between a 1040 and a 1040-NR? The 1040 vs 1040-NR decision is often dictated by factors like visa status, duration of stay in the US, and other circumstances. We’ll guide you in making the right choice. What exactly is a dual-status return? A dual-status return is for those who've been both a resident and a non-resident in the US within the same tax year. This could be relevant if you've been shuttling between the US and the UK. What are the key U.K. tax deadlines? The Self-Assessment tax return deadline in the U.K. is January 31, following the end of the tax year. How can I maximize my 1040 deductions? We delve deep into your financial history to identify every potential deduction and tax credit, ensuring you maximize your return. Is my personal data safe? Absolutely. 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