US Tax And Filings For Non-Residents

When a person is not a U.S. resident or files a tax form to claim their non-residency, they need to pay tax only on the income from U.S. sources. Therefore, the first order of business would be to determine which income is from U.S. sources. The sourcing rules can get extremely complicated and vary depending on the type of income, as discussed very briefly below.

Active Conduct of Trade or Business or Employment

Service income – is sourced to where the services are performed. If the services are performed inside and outside the U.S., the source of income is allocated accordingly, usually based on the number of days worked. A joint venture or partnership can allocate income based on employee and contractor count and hours worked by the owners. For example, if a person spends one month of vacation in the U.S., there is no tax due, but if they come and work for one month, making more than $3,000, that income earned from the performance of services in the U.S. is taxable.

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