1040-NR-EZ: The Complex Truth About The Simple Form 1040-NR for Expats

1040-NR-EZ Isn’t So Easy

Like it or not, U.S. tax law imposes taxes on U.S. source income for individuals even if they are not a U.S. citizen or resident. If you are a nonresident alien, you must pay federal income tax on U.S. sourced income only. In the majority of cases, you are required to file if you are a non-resident alien even if you do not have any income from trade and business within the U.S., if you haven’t any domestic based income, or if your income is considered to be exempt from taxation under some or other tax treaty. The Form 1040-NR-EZ is one such form that you may use to make the income tax declaration based on your qualification to file this simplified version of the Form 1040-NR series.

One exception to this rule is: you do not need to file a return if, as a non-resident alien, the only U.S. trade or business you engaged in for the year was related to personal services resulting in wages under $4,000 (for tax year 2015), and you don’t need to file to claim any refund of withheld taxes, meet the standard of additional withholding or can legally claim to have a partially exempt income. These exceptions apply also if you are a non-resident student alien, a teacher in training or a teacher within the U.S. on a temporary visa, and you have not received any taxable income.

Claiming Your Refund or Benefit

You also must file your income tax return if you expect to:

1. Claim a refund of overpaid tax, or
2. Claim any benefits for deductions or credit. If you have no US business activities, for example, but still have income from any real property which you wish to treat as a connected income, you are required to file an accurate tax return to account for any allowable deductions against it.

Which Type Of Income Can Be Reported On The 1040-NR-EZ?

If your only U.S. source income was from wages, salaries, tips, refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends you can use the Form 1040-NR-EZ. If you had taxable interest or dividend income, you must use Form 1040NR. For additional details on who is qualified to use the Form 1040-NR-EZ, please see page one of the Form 1040-NR-EZ instructions.

Which Form 1040-NR Series Version Should You File?

Nonresident aliens required to file a return must use:

• Form 1040NR or,
• Form 1040NR-EZ

For Departing Aliens

Before you leave the US, all aliens (some exceptions apply) are required to obtain their certificate of compliance to prove that they have followed the rules and have had their process properly examined by a tax professional.

The certificate of compliance, also more commonly referred to as a departure permit or a sailing permit or- must be acquired from the Internal Revenue Service before departing from the country. You will be issued your sailing or departure permit once you have completed and turned in your U.S. Departing Alien Income Tax Statement.

In the instance that you have already departed from the US and properly filed your Form 1040-C upon your departure, you are still required to report on and file for your yearly US income tax. Should you be married, you as well as your spouse will be required to file, and each of you must file separate returns, unless either you or your spouse is a resident alien or a US citizen. In that case, the departing person may file a joint return.

As you can see, the rules can be quite complex. If you have questions about your Form 1040-NR-EZ tax return, the tax professionals at Tax Samaritan can help. Get in touch today to speak with a representative.

Our goal at Tax Samaritan is to provide the best counsel, advocacy, and personal service for our clients. We are not only tax preparation and representation experts but strive to become valued business partners. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.

If you would like a quote, please click on the button below for a free, no-obligation Tax Preparation quote and/or free 30-minute consultation to discuss your situation regarding filing a Form 1040-NR-EZ further:

Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self-prepare, providing specific tips and pitfalls to avoid.

When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).

Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections, and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits, and adhere to a stringent code of ethics.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.