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A resident alien for tax purposes in the United States is an individual who meets either the green card test or the substantial presence test.
Green Card Test:
Substantial Presence Test:
if he meets either test, he needs either an ITIN or SSN to file his return. As a resident alien he is taxed in the US on his worldwide income.
If your father is a "US person" for income tax purposes, he must file a US tax return and pay US tax on all his world-wide income. If he also pays tax overseas, he can claim a deduction or credit for foreign taxes paid, that will offset some of the US tax. A US person is a US citizen or green card holder anywhere in the world, or an alien who is living in the US and passes the substantial presence test.
@vipergts_david , having read through the thread and agreeing with my colleagues @Mike9241 and @Opus 17 , I would just to add the following:
(a) work that is performed while in the USA is considered US sourced for purposes of US taxes. Thus the income from "remote work" is US sourced for purposes of US taxes ( both federal and State )
(b) because this income is active income ( but without W-2 , i.e. no withholdings ), he will have to recognize this income as "self-employment " -- schedule-C. This will also mean that he will be liable for SECA taxes ( equivalent to FICA --- Social Security and Medicare -- at 15.3% on most of the income ). Depending on the income level, it may be worth considering making estimated tax payments for both Federal and State , just to avoid interest and penalty charges.
(c) depending on the country where he is from ( i.e. a citizen of ), any taxes paid to that taxing authority may be eligible for tax credit / deduction etc. to reduce the double taxation bite. Note that this would mean that the US sourced income may have to be resourced by treaty
(d) Till meeting the SPT ( substantial presence test ) he will be a Non-Resident Alien and therefore taxed only on US sourced in come. Once a US person ( citizen / GreenCard / Resident for Tax purposes ) he will be taxed on his world in come. Note that on passing SPT, he is allowed to file a resident for the whole year. However, because this will not be a 365 day year , he will not be able to use Standard deduction -- must use the itemized deduction which may be a disadvantage.
Is there more one of us can do for you ?
In closing I would say that TurboTax ( I am familiar ONLY with the desktop version ) is able to handle this situation.
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