Ever wondered if you should be filing U.S. Tax Return? What actually qualifies you to file your taxes in the USA? Is it the income? The residency? Or the citizenship?
Or all of the above? Find your answers below.
Who is a U.S. Person in term of taxation?
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
Who's required to file U.S. taxes?
U.S. Citizenship rules are complex and can be intimidating.
- 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.