IRS Form 1040NR Explained

If you’re a nonresident alien who has recently begun working for an American company, you may have heard of IRS Form 1040NR. But what is it, and what does it mean for you?

IRS Form 1040NR is a variation of IRS Form 1040, which American residents and citizens use to complete their Annual Tax Returns. IRS Form 1040NR is specifically for nonresident aliens who earn income from an American source. These individuals are taxed on their income and must file Form 1040NR with the IRS just like any other taxpayer would file Form 1040. The deadline is the same, Tax Day, and the penalties are the same for individuals who fail to file IRS Form 1040NR on time.

US Tax Help knows that navigating American taxes can be confusing for nonresident aliens. If you’re a nonresident alien who needs to file IRS Form 1040NR, call the CPAs at US Tax Help today at (541) 362-9127.

Understanding IRS Form 1040NR

IRS Form 1040NR is also known as the U.S. Nonresident Alien Income Tax Return. It’s how nonresident aliens report their earned income to the IRS and receive a tax refund.

To explain it simply, IRS Form 1040NR is a version of a tax return for nonresident aliens with an American earned income. So, if you work in the United States but are neither a resident nor a citizen, you may have to complete IRS Form 1040NR.

Although you may have to file IRS Form 1040NR, you do not have to report your foreign-earned income if you are not an American citizen or resident. That means that any income earned in your country of residence, or any other countries, cannot be taxed by the IRS.

Filing IRS Form 1040NR

When it comes to filing IRS Form 1040NR as a nonresident alien, you may be at a loss. Completing IRS forms can be difficult for anyone, especially someone new to the process. You should know some things about the filing process before it begins.

In some instances, filing IRS Form 1040NR can be a quick process. When you have no dependents or deductions and only have income from one American company, you’ll likely be able to complete IRS Form 1040NR fast. However, things can get complicated when the process is more involved.

When filing IRS Form 1040NR as a nonresident alien, it can make sense to seek help from an experienced CPA, like the ones at US Tax Help. IRS forms can be complicated, and you want to be sure you’re claiming each deduction you qualify for.

It’s important that nonresidents know that they cannot file Form 1040NR jointly. So, if you and your spouse are both nonresident aliens and are each employed by an American business, you must file IRS Form 1040NR individually.

Filing IRS Form 1040NR is important for nonresidents, lest they lose their refund. If you get paychecks from an American company, taxes are taken out. By filing IRS Form 1040NR, you can receive a tax refund that returns a portion of the funds initially taken from your income.

Deadline for IRS Form 1040NR

It’s very important to know the deadline for filing IRS Form 1040NR. If you don’t file on time, you can face unnecessary penalties. So, what’s the deadline for filing IRS Form 1040NR?

If you’re a nonresident alien responsible for filing IRS Form 1040NR, you have the same deadline as any American resident: Tax Day. This is the end of the tax year in the United States and when all necessary forms are due. Tax Day is usually on April 15th, but holidays and weekends may move this date (and some states may receive other extensions that effect the deadline).  In 2022, the deadline is actually April 18th for most taxpayers.

In some instances, nonresident aliens can ask for an extension. Nonresident aliens can file Form 4868 to request a six-month extension to allow them time to file IRS Form 1040NR. However, there is clearly still paperwork involved. If you need to file for an extension because you cannot complete IRS Form 1040NR, an accountant, like the CPAs at US Tax Help, can simplify the process.

That being said, you will still need to complete IRS Form 1040NR eventually. If you’re a nonresident alien and opt for an extension, you must inform the IRS by the original due date in April. If you don’t, you can be subject to fines and penalties from the IRS. You will also incur fines if you don’t complete Form 1040NR by the new due date.

Penalties for Failure to File IRS Form 1040NR

If nonresident aliens fail to file IRS Form 1040NR, they can be subject to the same fines as any American taxpayer. These penalties can get overwhelming quickly, so it’s important to know what to expect.

The IRS will impose penalties on anyone liable for taxation who fails to complete their forms on time, including nonresident aliens. You may be subject to the failure to file penalty and the failure to pay penalty. Both penalties impose a fine that’s 5% of your unpaid taxes, up to 25%. That means that nonresident aliens may have to pay fines equal to 50% of their unpaid taxes. If you realize your mistake quickly, you can reduce the damage. However, the IRS charges interest on penalties, so the longer you wait to file IRS Form 1040NR, the steeper your fines can become.

It’s best that nonresident aliens work with a professional accountant, like the CPAs at American expatriates, to avoid unnecessary fines. As long as you conduct business in the United States, you’ll have to pay income taxes to the IRS. However, not all nonresident aliens with American employers are aware of this. Because of that, they may fail to file IRS Form 1040NR and face serious penalties from the IRS.

Our CPAs Help You File IRS Form 1040NR

If you need help filing IRS Form 1040NR, and understanding the ins and outs, reach out to our experienced accountants. Nonresident aliens can call the CPAs at US Tax Help today at (541) 362-9127 for more information about IRS Form 1040NR.