Residency and Tax Consequences of US Immigration

Foreign citizens who are looking to reside permanently in the USA face strict tax compliance requirements. Because of the diverse rules that apply to the taxation of immigrants, we have developed services facilitating family, employment, and investment-based immigration.  Our services cover

Diversity Visa (Green Card) and E1-E4 Professionals and Employees

EB-5 Investors and Tax Returns for High-Net-Worth Individuals

Family Based Immigration and Tax Returns for IR Status and K Visa Holders

Tax Planning for Immigrants

In an event of immigration, a tax planning is often required to shelter substantial income producing assets, investments, and appreciated property from US federal and state taxation. For example, non-residents are not taxed on foreign source income and are exempt from tax on certain US source capital gains and portfolio interest.

However, once you become a US resident for tax purposes, the disposition of both US and foreign capital gain or income producing property will trigger a federal and state tax liability. Effective your residency starting date, you will also be subject to tax on worldwide income and you must report ownership of substantial foreign financial assets, including holdings in foreign entities and authority over financial accounts.

With a tax planning in place before your residency starting date, you may significantly reduce, defer, or even eliminate your prospective US tax liability. A tax planning strategy is particularly essential for individuals who were residing in low-tax jurisdictions or countries with no tax treaty with the United States.

Tax Returns for Green Card Holders and E Status Professionals

The taxation of US permanent residents is substantially identical to the regime applicable to citizens. A significant difference is the dual status return required for the first and last years of residency in the USA. Also, permanent residents who have resided outside the United States for a prolonged period and applied for a re-entry permit may need to show proof of a US income tax return to receive clearance.

The tax return must be filed as a resident, on Form 1040, reflecting worldwide income. Filing a return as non-resident is considered expatriation and may affect your eligibility for a residency permit. We reflect all income tax compliance requirements for Green Card holders and E status professionals including

  • Preparation of Form 1040, or dual-status returns and all required statements
  • Preparation of Forms 1040-NR and 8854 for long-term residents who expatriate abroad
  • State income tax returns for all 50 states and the DC
  • Various tax planning, compliance and consultancy services
  • Filing of all required information returns, including FATCA and FBAR disclosures
  • Assistance with foreign income exclusion, housing exclusion, and foreign tax credits

Tax Returns for EB-5 Investors and High-Net-Worth Individuals

The Immigrant Investor Program allows foreign citizen investors who meet specific requirements apply for permanent residency. The program induces job creation and economic growth through foreign investments in commercial activities. Investment projects in capital intensive industries may target fund pooling through complex partnership, joint venture, and corporate structures.

Further, various tax incentives are also available to investors in GO Zones, distressed areas, and qualifying small-business entities. These situations provide for a detailed understanding of the domestic tax legislation. We assist EB-5 Investors to select the most tax effective strategy and simultaneously ensure reporting requirements are met. We focus our services on

  • Tax advisory and strategic planning for EB-5 Investors
  • Income tax return preparation and compliance
  • Accounting and bookkeeping
  • Tax planning, wealth preservation, and business consultancy

Tax Returns for IR Status and K Visa Holders

Foreign citizen spouses and minor children of US citizens and residents are subject to relaxed residency application procedures and complex tax related provisions. A foreign citizen spouse may elect to be treated as a resident for any tax year even if the family is residing abroad. The election allows for the filing of a joint return and claiming tax credits and deductions that would be blocked if a separate return was filed. The election is also beneficial when the foreign citizen spouse has low income or substantial deductions.

Minor children and dependents are treated differently for tax purposes, as US citizenship or US residency are required unless an exemption is allowed under a tax treaty. Our tax experts will assist you to select the most beneficial treatment depending on your particular situation. Our services include

  • Preparation and filing of married filing joint or separate returns
  • Dealing with residency elections under Section 6013(g) and (h)
  • Preparation of state tax returns
  • Assistance with tax treaty provisions
  • Tax planning and compliance services
  • ITIN Applications for foreign citizen spouse and qualifying dependents
  • Assistance with foreign income exclusion, housing exclusion, and foreign tax credits

Should you wish to register for our US tax services for immigrants, you may do so at any time. Did not find what you were looking for? Ask your questions and get a free quote with more information about how we can assist you further. You may also contact us directly.