Hi,
We moved from US to India in May 2024 after working for more than 10 years, both of us under H1b status. We had been filing US taxes (1040 MFJ) before the move. We didn’t obtain any sailing clearance from IRS before our departure as I wasn’t aware. We have our 401ks and other investments in US. We will be a resident alien in 2024 and non-resident alien for 2025. Since we have been working in India after our move, I am not sure how to file US taxes for 2024.
I thought I need to file 1040 for 2024 as in the past, report all our Indian income and then claim foreign tax credit when filing Indian taxes. But some have suggested filing under dual status (1040 & 1040-NR) for 2024. Which option is correct? I am not sure how to divide our US investment income between 1040 and 1040-NR if I need to file both and no option of MFJ for 1040-NR. I am planning to call IRS and also talk to my local CA for clarification. Any advice here is appreciated.
You'll need to sign in or create an account to connect with an expert.
@bsp25 ,
assuming that your H-1s have run out and that you told USCIS / Immigration that you are leaving the country for good, till you close the loop with IRS, they would assume that you are an RA. See this --
Departing alien clearance (Sailing permit) | Internal Revenue Service
In general IRS' interest is to make sure that it can collect all taxes due for the work years. And since you will be termed long-term resident, IRS will want to be assured that it can collect on "tax advantaged", delayed tax etc. type of incomes. Thus your 401s / pensions contributions etc. would come into focus.
My suggestion would be ( just to buy time to get things settled & absent any other contravening facts that is not listed in your post ), is to file as Resident for the year 2024, use FEIE to exclude US taxes on your foreign incomes. Then separately file follow the instructions in the ref. above ( form 1040-C etc. ). This has the advantage of 1. use of Standard deduction, only 1040 filing and allowing 2025 to stand alone as NRA ( with earnings from US, if any ).
Is there more I can do for you --- if so please add to your PM.
Namaste ji
Thanks for the response. Filing only 1040 makes sense. I will need to figure out how to get clearance after leaving the US.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
cnhowardcell
Returning Member
Solar Eclipse
Level 3
41marcel41
New Member
KI2024
New Member
Golgotha
Level 1