Anyone who lives and works in the United States has an obligation to report their income to the Internal Revenue Service (IRS), and potentially to pay tax on that income. U.S. tax rules are complicated, especially for foreign nationals, whose specific tax obligations may vary significantly depending on their residency status and occupation.
Smart Services is a professional tax & accounting services firm from Los Angeles with significant experience in tax assistance for foreign nationals.
Studies show a large percentage of foreign nationals–especially nonresident alien students, teachers, or trainees who are working temporarily in the U.S. under F, J, M, or Q Visas–either do not file tax returns, or do so incorrectly. This often results in compliance penalties or overpayment of U.S. taxes. Tax compliance issues can also adversely impact immigration status.
There are many ways the California tax specialists at Smart Services work with foreign nationals tax clients to reduce their tax compliance risk, such as:
- Determining tax residency status – The amount of income tax owed, and how much information is required to be provided about business and personal affairs, depends on whether an individual is considered a resident or a nonresident. That determination requires careful consideration and doesn’t necessarily follow immigration status.
- Understanding and complying with filing requirements and procedures – There are myriad filing requirements for foreign nationals, including filing returns to report income and reporting information on investment interests and bank holdings. We work with our clients to develop an inventory of filing requirements and ensure they are met timely and accurately. We ensure that all relevant tax treaties are considered, we evaluate the sources and types of income, take all proper allowable deductions, and determine that proper tax withholdings are made..
- Other Taxes and Filing Requirements – We help our clients navigate the web of tax requirements, beyond federal income and informational returns. These include state and local income tax returns, social security taxes, gift and estate taxes, expatriation taxes, and foreign bank account reporting requirements.
The first and last years of a foreign resident’s U.S. assignment can be complicated, from a. tax perspective –it is common for someone to be both a U.S. resident and nonresident in those years. These dual-status taxpayers find value in working with us to prepare complex sets of returns, which involve numerous allocations and calculations.
We also work with foreign nationals to obtain the necessary tax compliance certificate–commonly called a “sailing” or “exit” permit–before they leave the U.S.
Our clients work directly with us early to gain a complete understanding of the tax implications of their U.S. assignment. We help clients understand the tax consequences of specific transactions they may undertake during their assignment, including the tax treatment of home sales, moving expenses, rental activities, and U.S. real estate investments.
There is no substitute for the advice and guidance of a professional tax advisor. Contact Smart Services today to discuss how our international tax specialists can help before, during, and after your U.S. assignment to ensure compliance, minimize tax payments, and accomplish your financial goals.