Ever thought about what qualifies you to file a U.S. Tax Return? Is it the income, the residency or the citizenship or all of the above?
Who is a U.S. Person?
The U.S. Government levies income taxes on U.S. individuals based on their worldwide income. The following individuals would be considered a U.S. person for tax purposes:
- A U.S. (naturalized) Citizen
- A Green card Holder
- A citizen born in the United States or outside with at least one parent who is a U.S. citizen
- An individual who meets the U.S. Substantial Presence Test (SPT) test
- Any other person who is not a foreign person
U.S. Citizenship rules are intimidating and complex. Individuals born as U.S. Citizens or considered to be one under the U.S. nationality law are required to file their U.S. taxes unless the individual has renounced their U.S. Citizenship. On a side note – you are not required to have an American passport to be considered to be a U.S. Citizen.
Secondly, if you were born outside the U.S. and have dual citizenship, however, you have never lived in the U.S. you will still be considered a U.S. person for tax purposes and are still required to report and pay U.S. taxes until you renounce your Citizenship.
Thirdly, Green card holders and tax residents are required to file their U.S. taxes on their worldwide income. If as an individual you decided to move back to your country of origin or elsewhere, however, you did not surrender your Green card (even if it is expired), you will still be required to file your U.S. tax return.
Unsure about whether you should be filing your U.S. tax return? Book an appointment with our U.S. Tax team and they will be more than happy to assist you in establishing whether you need to file your taxes with the IRS and to file your taxes with the IRS.