I was hoping someone here might have some insight into dual-status tax returns. This taxpayer became a US resident on 11/15/15 and they are filing a dual-status return. I understand they need to include a) U.S. source income for the period they were not a resident and b) worldwide income for the period they were a resident on Form 1040. My question is regarding the statement mentioned in Publication 519. This Publication says "Attach a statement to your return to show the income for the part of the year you are a nonresident. You can use Form 1040-NR as the statement".
While a nonresident the taxpayer did not have any U.S. source income. All income earned while a nonresident was from foreign sources. Is the statement attached the Form 1040 supposed to show their worldwide income while a nonresident or only their U.S. source income while a non-resident? Since they don't have any U.S. source income while a nonresident it would be strange to attach a statement with nothing on it. Thoughts? I'd appreciate any help I can get. Thanks.
Dual-Status Tax Return Question
Moderator: Mark T Serbinski CA CPA
Why would they file dual status? Did they become a green card holder on that date?
Otherwise a simple 1040NR for the whole year would work if they don't meet SPT.
And if they are married, it is often better to join their US spouse on a joint fiull year 1040.
Either of these options would seem simpler for you.
To your question: "include a) U.S. source income for the period they were not a resident". I think that answers it. A 1040NR NEVER has foreign income reported on it.
You are submitting it as attestation that you had no US income. The 1040NR also provides info to IRS that proves that you were not resident for the entire year.
Its exactly like all those empty lines on the 1040. You are swearing that you had no income on those lines.
Otherwise a simple 1040NR for the whole year would work if they don't meet SPT.
And if they are married, it is often better to join their US spouse on a joint fiull year 1040.
Either of these options would seem simpler for you.
To your question: "include a) U.S. source income for the period they were not a resident". I think that answers it. A 1040NR NEVER has foreign income reported on it.
You are submitting it as attestation that you had no US income. The 1040NR also provides info to IRS that proves that you were not resident for the entire year.
Its exactly like all those empty lines on the 1040. You are swearing that you had no income on those lines.
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Yes they became green card holders on that date. Because they had such little income for the period of time they were green card holders until the end of the year, it makes more sense to file individual dual-status returns from 11/15/15 - 12/31/15 than to elect to file a joint return claiming all of their income, U.S. and worldwide, for the entire year (around $5,000 tax savings).
Thanks for the insight. The Publication says attach a statement showing income for period they were a nonresident and the 1040NR can be used as such a statement. I just wanted to make sure the IRS only wanted their US source income during the period of nonresidency and not their worldwide income.
Thanks for the insight. The Publication says attach a statement showing income for period they were a nonresident and the 1040NR can be used as such a statement. I just wanted to make sure the IRS only wanted their US source income during the period of nonresidency and not their worldwide income.