U.S. Tax Essentials for Nonresidents: Residency, Reporting & Planning for Global Individuals

Fan Chen | The Wolf Group, P.C.

Fan is a CPA and Tax Director at The Wolf Group, with seven years of experience in the tax and accounting industry.

A member of The Wolf Group team since 2015, Fan provides specialized U.S. tax services to clients with international concerns, including expatriates, inpatriates, and high-net-worth individuals with global assets, as well as international organization employees and retirees, and entrepreneurs with foreign interests.

In her day-to-day practice, Fan provides advice and assistance to:

• Individuals with complex, cross-border situations, including U.S. citizens, green card holders, international organization employees, various visa holders, and U.S. nonresidents
• Companies with globally mobile staff
• Individuals coming into U.S. tax compliance via IRS amnesty programs (Offshore Voluntary Disclosure and Streamlined Programs)
• Individuals relinquishing their U.S. citizenship or green cards
• Individuals who have received tax notices and audits from the IRS or state taxing authorities

Before joining The Wolf Group in 2015, Fan worked at a US “Big 4” accounting firm, preparing individual, corporate, and expatriate tax returns.

Outside of work, Fan loves listening to music, going to concerts, traveling, and snowboarding in the winter.

Mishkin Santa | The Wolf Group, P.C.

Mishkin is a Principal of The Wolf Group and oversees the firm’s international tax services in the areas of Offshore Voluntary Disclosure, US Exit Tax, foreign grantor and non-grantor trusts, nonresident alien taxation, international organization employee taxation, pre-immigration tax planning, and cryptocurrency.

He assists individuals and businesses with highly specialized and complex tax issues related to offshore corporations, family businesses, trusts, and retirement plans. As a former Attorney with the IRS Chief Counsel, Mishkin is well-positioned to guide clients on a range of reporting and disclosure issues. In addition, he speaks regularly at professional events sponsored by attorney and CPA groups in the US and abroad.

Before joining The Wolf Group, Mishkin was a Partner of the International Tax Division at the Krueger CPA Group. He split his time between the main office in Austin, Texas and the sister office in Zurich, Switzerland.

Outside of work, Mishkin’s favorite activity is to spend time with his wife and two children. He also enjoys all things related to history, specifically Greek Mythology and the Argead Dynasty (Alexander the Great), Old Testament Bible, the rise and fall of the Roman Republic, the British Empire, and the Republic of the United States. He is also a big movie buff and fan of 80s and 90s pop culture.

I. US tax residency rules | 1:00pm – 1:10pm

• Substantial presence test
• Green card test
• Residency start date
• First year election
• IRC 6013(g) election
• IRC 6013(h) election
• Closer connection exception
• NEW – Trump (Gold) card

II. US non-resident alien visa types | 1:10pm – 1:20pm

• A1/A2
• G1/G4
• F1/F2
• J1/J2
• M1/M2
• Form 8843

III. IRS tax forms and schedules | 1:20pm – 1:30pm

• Form 1040 vs. Form 1040NR
  • Due date differences
• Form W9 vs. Form W8-BEN
• Form 1099 vs. Form 1042-S
  • Dealing with US and foreign financial institutions

IV. US tax treaties | 1:30pm – 1:40pm

• Treaty tie-breaker and Form 8833

V. US non-resident Effectively Connected Income (ECI) | 1:40pm – 1:50pm

• US source of income rules (earned income)
• Wages
• Consulting income
  • Schedules C and SE
  • Qualified business income deduction and Form 8995-A
  • Home office deduction – Form 8829
• Rental income and the net election
  • Schedule OI and questions M1/M2
  • 30% withholding tax on gross rental income
• IRC 1445 – Sale of US real property and FIRPTA
  • Form 8288
  • Form 8288-A vs. 8288-B
  • US LLC treated as a disregarded entity
    • 1120 page 1 and Form 5472

VI. US non-resident Non-Effectively Connected Income | 1:50pm – 2:00pm

• US source of income rules (passive income or FDAP)
• US interest income
• US dividend income
• US capital gains from the sale of personal property
  • IRC 871A for tax exempt visa holders

Break | 2:00pm – 2:10pm

VII. Deductions and federal credits | 2:10pm – 2:20pm

• Schedule A (Form 1040NR)
  • SALT deduction
  • Charitable contributions
• US-India tax treaty and the standard deduction
• IRC 25C – Energy efficient home improvement credit
• IRC 25D – Residential clean energy credit
• Form 5695

VIII. Investments in US partnerships | 2:20pm – 2:25pm

• ECI vs. NECI determinations and schedules K-1/K-3
• IRC 1446 – Withholding tax forms 8804/8805/8813

IX. US gift and estate tax | 2:25pm – 2:30pm

• Domicile rules (Generally)
• NEW- Form 709-NA
• Form 706-NA
• Use of foreign blocker corporations
  • Form 1120-F and the branch profits tax

X. State and local tax implications | 2:30pm – 2:35pm

XI. Pre-immigration income tax planning (converting from non-resident to resident) | 2:35pm – 2:40pm

• Worldwide income taxation
• Worldwide international informational reporting (FBAR/FATCA)