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@sabya33 , if your visa is valid at least till the end of the year, then there is no reason for you to recognize that you have terminated your resident status --- IRS will never complain if they can continue to tax your world income, even if you are absent for a quarter from the country. Even if the visa expires by end of September ( say), there is no requirement for the IRS to get involved , force you to terminate your tax residency---- so I would say you can always file a form 1040 for the whole year, recognize your world income for the full year, get all the deductions and credits ( including foreign tax credit for taxes paid to India in 2023 April ). You may want to compute the relative advantage by doing a dummy tax run for tax year 2022, allowing for taxes paid/to be paid to India.
If you need more discussion on this , you may have to provide approx figures to be more specific -- this is public board and everything viewable -- PM is safer
Namaste ji
pk
I am going to page @pk for this question.
@sabya33 , having read through your post , I have the following questions:
(a) When did you enter the USA and with Visa type?
(b) What type of income did you have for 2022?
(c) Which country are you from ( citizenship ) and is this the country where you are moving to ?
(d) Did you file a return for tax year 2021 ( or earlier) and which form did you use ?
I ask these questions because as you saw in pub 519, the requirement for "sailing permit" or forms 2063 or 1040C are significantly influenced by these. So please answer my questions.
Generally for most wage earners (i.e. with federal and State withholding in effect) with records of filing previous returns the risk of not being able to collect is minimal and hence sailing permit is not mandatory and/or enforced. Aliens Resident do it for purposes of establishing end-date of "resident" tax ( world income ). Therefore I am assuming you want to keep your resident status to be able to take advantage of standard deduction and credits available ONLY to residents ( citizen or otherwise). You also need to consider that absent your being able to establish resident status again, your foreign income for 2022 would be taxed by both USA and the foreign country ( if that country has income tax ) and tax credit claw back may not be 100%.
We can discuss these in more detail once you answer my questions, please
pk
@pk Thank you very much for your reply. Please see below for the answers:
a. I entered USA in mid-2018, on J-1 visa (Research Scholar). I was a non-resident alien for 2018 and 2019 (filed 1040NR-EZ), and then resident alien for 2020 and 2021.
b. I had salaried income, (W2) as well as capital gains from investing in US stock market.
c. I am citizen of India and moving back there.
d. I have been using 1040 form for the tax years 2020 and 2021.
Please let me know if you need any more information and do I need to file as dual status alien? I want to take advantages of different credits and standard deduction that are applicable to resident alien. I understand I need to investigate more on tax obligation in India and tax-treaty, if any.
@sabya33 , if your visa is valid at least till the end of the year, then there is no reason for you to recognize that you have terminated your resident status --- IRS will never complain if they can continue to tax your world income, even if you are absent for a quarter from the country. Even if the visa expires by end of September ( say), there is no requirement for the IRS to get involved , force you to terminate your tax residency---- so I would say you can always file a form 1040 for the whole year, recognize your world income for the full year, get all the deductions and credits ( including foreign tax credit for taxes paid to India in 2023 April ). You may want to compute the relative advantage by doing a dummy tax run for tax year 2022, allowing for taxes paid/to be paid to India.
If you need more discussion on this , you may have to provide approx figures to be more specific -- this is public board and everything viewable -- PM is safer
Namaste ji
pk
Thank you very much for the help. 🙂 Namaste @pk
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