Solved: Should we file 2016 as resident for the entire year or as dual-status aliens
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
oyyfj
New Member

Should we file 2016 as resident for the entire year or as dual-status aliens

Our situation is as below:
My family (my wife, my son and I) entered the U.S. on Sep. 26 2015, and lived there till Sep. 7 2016, and then we moved back to Australia. I was on H-1B, my wife and my son on H4. Deloitte helped me to file the tax return as dual state alien for 2015. For 2016, since we pass the Substantial Presence Test, should we do a joint tax return as resident for the entire year?
If yes, since from Sept. 12, 2016 to Dec. 31 2016, both my wife and I were in Australia working for an Australian company, even we don’t have the W-2 form, we still need to report the salaried earned (gross income before tax) as foreign income? Am I correct?
1 Best answer

Accepted Solutions
bine22
Level 7

Should we file 2016 as resident for the entire year or as dual-status aliens

Since you do meet the Substantial Presence Test and were a resident alien from the start of the year, you are a resident alien for the entire year. That means you need to report worldwide incomer for the entire year, including income earned after leaving the US. You can use the foreign paid tax credit to avoid double taxation.

Another option is to apply for an early residency termination date. You would need to attach a statement to your return. This would make you a dual status alien and for the time after you left the US you would be a nonresident alien and only report US sourced income for that time. However, Turbotax does not support this kind of return and it is not easy to do, so you might end up paying more than you gain to a tax professional.

https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates

https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens

View solution in original post

5 Replies
tmg_1985
New Member

Should we file 2016 as resident for the entire year or as dual-status aliens

Hello. I am in a similar situation. If I am considered a dual-status alien, I cannot fill jointly with my wife, which reduces my refund. Do I have the option to be treated as a full-year resident alien, even though I had a closer connection to another country for a big portion of the year?
In summary: the year of leaving the US, is dual-status filling an option or an obligation?
bine22
Level 7

Should we file 2016 as resident for the entire year or as dual-status aliens

Since you do meet the Substantial Presence Test and were a resident alien from the start of the year, you are a resident alien for the entire year. That means you need to report worldwide incomer for the entire year, including income earned after leaving the US. You can use the foreign paid tax credit to avoid double taxation.

Another option is to apply for an early residency termination date. You would need to attach a statement to your return. This would make you a dual status alien and for the time after you left the US you would be a nonresident alien and only report US sourced income for that time. However, Turbotax does not support this kind of return and it is not easy to do, so you might end up paying more than you gain to a tax professional.

https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates

https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens

View solution in original post

oyyfj
New Member

Should we file 2016 as resident for the entire year or as dual-status aliens

Great, thanks for the answer!
RichardK
New Member

Should we file 2016 as resident for the entire year or as dual-status aliens

You should be able to file as a dual-status for 2016, click here for the 2016 IRS publication 519 U.S Tax Guide for Aliens (on page 8, see Last Year of Residency).

oyyfj
New Member

Should we file 2016 as resident for the entire year or as dual-status aliens

Thanks Richard, as far as I know TurboTax doesn't support the dual-status return. Can I just file a resident return using TurboTax since I passed the Substantial Presence Test? Thanks.
Dynamic AdsDynamic Ads
v
Privacy Settings