US 1040 form. Do I have to file as a nonresident if I live abroad but have no foreign income?

[T1000]

I live overseas on my investments and I do not have any foreign income to report. I move every few months, therefore I do not have a steady foreign address to report on my 1040. Last year I used my US mailing address to file my US capital gain income. I have checked with the TurboTax software and found out the residence status would make no difference in terms of the tax. Is it safe to continue to file as a US resident, or should I file as a non-resident?

[Jingthing]

Yes you should file. Because you are selling investments you don't want the US to think the gross sale is the income rather than the actual profit or loss! taxact.com supports foreign addresses to file online but it will probably not be free because of investment sales and dividends.

 

As far as residence it's OK to file with U.S. residence I suppose but if your state has income tax of course that could be a factor. If you're really going to live abroad long term I would file with a foreign address.

 

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[Pib]

Use below IRS webpage to determine if you need to file.  I will ask you some questions...takes around 10 minutes to complete...then you will know for sure whether you need to file or not....straight from the mouth of the IRS.

 

https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

Quote

 

This interview will help you determine if you're required to file a federal tax return or if you should file to receive a refund.

Information You'll Need

• Filing status.
• Federal income tax withheld.
• Basic information to help you determine your gross income.

The tool is designed for taxpayers that were U.S. citizens or resident aliens for the entire tax year for which they're inquiring. If married, the spouse must also have been a U.S. citizen or resident alien for the entire tax year. For information regarding nonresidents or dual-status aliens, please see International Taxpayers and Publication 519, U.S. Tax Guide for Aliens.

Disclaimer

Conclusions are based on information provided by you in response to the questions you answered. Answers do not constitute written advice in response to a specific written request of the taxpayer within the meaning of section 6404(f) of the Internal Revenue Code.

---

Estimated Completion Time: 12 minutes

Please Note: After 15 minutes of inactivity, you'll be forced to start over.

Caution: Using the "Back" button within the ITA tool could cause an application error.

Begin

 

 

Quote

 

 

[stud858]

In oz, as far as resident status for taxation is concerned ,  the tax office want to know your 'usual abode'. and give the applicant a chance to give their own selection. Then the tax department will dispute you about it if they find discrepancies with your claim such as if you are working with your family in another country. Then you' may be classed as having your usual abode o.s. and therefore a non resident.

 

In America Is it much the same requirement? I.e determining your usual abode that determines your status?

 

 

Edited August 19, 2018 by stud858

[Jingthing]

Use below IRS webpage to determine if you need to file.  I will ask you some questions...takes around 10 minutes to complete...then you will know for sure whether you need to file or not....straight from the mouth of the IRS.
 
https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

 

This interview will help you determine if you're required to file a federal tax return or if you should file to receive a refund.

Information You'll Need

• Filing status.
• Federal income tax withheld.
• Basic information to help you determine your gross income.

The tool is designed for taxpayers that were U.S. citizens or resident aliens for the entire tax year for which they're inquiring. If married, the spouse must also have been a U.S. citizen or resident alien for the entire tax year. For information regarding nonresidents or dual-status aliens, please see International Taxpayers and Publication 519, U.S. Tax Guide for Aliens.

Disclaimer

Conclusions are based on information provided by you in response to the questions you answered. Answers do not constitute written advice in response to a specific written request of the taxpayer within the meaning of section 6404(f) of the Internal Revenue Code.

---

Estimated Completion Time: 12 minutes
Please Note: After 15 minutes of inactivity, you'll be forced to start over.
Caution: Using the "Back" button within the ITA tool could cause an application error.

Begin

 

 

 

 
Yes but I think that test doesn't consider all investment scenarios.

For example suppose you sell 30k in stocks but have a 5k long term capital gain. If you don't file IRS sees 30k not 5k. There is a lot to be said for filing to avoid red flags later when you do file.

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[T1000]

I guess,  I wasn't clear enough. My question is NOT whether I should or shouldn't file. I know I have to file Federal and no State (my mailing address is in WA = no state income tax) return. 

I know there will be no difference in my final tax. Capital gain = gain - loss, regardless of my residence, since IRS views me as a "US person" no matter where I live. I have no foreign income and have nothing to hide from IRS. It's just much more convenient to use my US mailing address instead of temporary and unreliable foreign addresses. I am just wondering if I am violating any tax law here providing my US address on my tax forms = claiming to be a US resident when I am actually not.

 

[mogandave]

I guess,  I wasn't clear enough. My question is NOT whether I should or shouldn't file. I know I have to file Federal and no State (my mailing address is in WA = no state income tax) return. 
I know there will be no difference in my final tax. Capital gain = gain - loss, regardless of my residence, since IRS views me as a "US person" no matter where I live. I have no foreign income and have nothing to hide from IRS. It's just much more convenient to use my US mailing address instead of temporary and unreliable foreign addresses. I am just wondering if I am violating any tax law here providing my US address on my tax forms = claiming to be a US resident when I am actually not.
 

As long as you file you should be okay.

Do you have foreign bank account(s)?

[Jingthing]

36 minutes ago, T1000 said:

I guess,  I wasn't clear enough. My question is NOT whether I should or shouldn't file. I know I have to file Federal and no State (my mailing address is in WA = no state income tax) return. 

I know there will be no difference in my final tax. Capital gain = gain - loss, regardless of my residence, since IRS views me as a "US person" no matter where I live. I have no foreign income and have nothing to hide from IRS. It's just much more convenient to use my US mailing address instead of temporary and unreliable foreign addresses. I am just wondering if I am violating any tax law here providing my US address on my tax forms = claiming to be a US resident when I am actually not.

 

I think you're OK filing with the Washington state address. 

[ChouDoufu]

i believe resident and non-resident filing only applies to aliens.  as you are a us citizen you would file the normal 1040 form.

 

use the address where you receive mail.  us address is fine.

[T1000]

35 minutes ago, mogandave said:

Do you have foreign bank account(s)?

 

 

Under $10K combined ? Don't need to report.

P.S. Debit/Credit cards from Capital One (good exchange rate, no maintenance/annual fee, no foreign transaction fee, foreign ATM fee reimbursement, 1.5% cashback on every purchase) make large foreign accounts unnecessary (in my case).

Edited August 19, 2018 by T1000

[T1000]

14 minutes ago, ChouDoufu said:

i believe resident and non-resident filing only applies to aliens.  as you are a us citizen you would file the normal 1040 form.

 

 

~10 years ago I worked in EU for a US company as a US citizen. I was filing as a nonresident. Form 1040NR if I remember correctly. 

[ChouDoufu]

12 minutes ago, T1000 said:

 

~10 years ago I worked in EU for a US company as a US citizen. I was filing as a nonresident. Form 1040NR if I remember correctly. 

was that on advice from hr department or irs office, or did you choose the form yourself because you were not currently residing in the us?

 

pretty sure the "resident" part of the title of the tax form refers to whether an alien has a green card or significant portion of the year within the usa.  i think resident aliens pay tax on worldwide income, nonresident pay only on us sourced income......but i could be worng.

[mogandave]

If you have income and are filing in Thailand you’d want to file NR in the US to get the double-tax deduction, which is about $125k this year (I think)

[mogandave]

Also, if you have no Thai income and are not filing in Thailand there is no benefit in filing NR.

[T1000]

3 minutes ago, ChouDoufu said:

was that on advice from hr department or irs office, or did you choose the form yourself because you were not currently residing in the us?

 

pretty sure the "resident" part of the title of the tax form refers to whether an alien has a green card or significant portion of the year within the usa.  i think resident aliens pay tax on worldwide income, nonresident pay only on us sourced income......but i could be worng.

 

If you have a foreign income the question of your residence will inevitably pop up. If you can claim yourself a nonresident you can take advantage of 'foreign income exclusion' to avoid overpaying.  And I had to make sure I was accurately reporting my income (in case of being audited by IRS) since I was planning on wiring that money back into US.

[ChouDoufu]

29 minutes ago, T1000 said:

 

If you have a foreign income the question of your residence will inevitably pop up. If you can claim yourself a nonresident you can take advantage of 'foreign income exclusion' to avoid overpaying.  And I had to make sure I was accurately reporting my income (in case of being audited by IRS) since I was planning on wiring that money back into US.

nothing to do with claiming non-resident status, by which i mean using the NR forms for aliens.  don't us citizens file as "resident" with standard 1040's regardless of physical location?

 

fill out the normal 1040, attach a 2555 to report foreign income and claim the exclusion of up to around $100K.

 

**just checked my 2555, use is restricted to "For Use by U.S. Citizens and Resident Aliens Only"**

 

then get $12K standard deduction for short term gains, and up to around $40K non-taxed long term gains depending on income.

 

i didn't know it was possible for citizens to file the NR forms.

please don't tell me i've been filing out the wrong forms all these years!!!

(1040, sched B, sched D, 8949's, 2555)

Edited August 19, 2018 by ChouDoufu

[T1000]

13 minutes ago, ChouDoufu said:

nothing to do with claiming non-resident status, by which i mean using the NR forms for aliens.  don't us citizens file as "resident" with standard 1040's regardless of physical location?

 

fill out the normal 1040, attach a 2555 to report foreign income and claim the exclusion of up to around $100K.

 

**just checked my 2555, use is restricted to "For Use by U.S. Citizens and Resident Aliens Only"**

 

then get $12K standard deduction for short term gains, and up to around $40K non-taxed long term gains depending on income.

 

i didn't know it was possible for citizens to file the NR forms.

please don't tell me i've been filing out the wrong forms all these years!!!

(1040, sched B, sched D, 8949's, 2555)

Yep. Just checked my records... I was filing 1040 + 2555 + some other forms (foreign accounts, etc) back then. 

[Sheryl]

Using US address is fine.

It's just a mailing address, not a statement of residency.

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[gk10002000]

I am aware of several expats that list a Thailand address.  It is the address at the moment you file your taxes.  There is nothing wrong with moving or changing an address, and there is nothing that requires a US citizen to list a USA state as a place of residency.  I am aware of expats that live overseas, do not maintain any USA connection, do not have any USA state affiliation or driver license or state issued ID.  They have their USA passport and that's about it.  If your investments gross more than 10K you are required to file a tax return, even if some is tax free, or all foreign income excluded, or whatever. 

[mtls2005]

Personally, I do (and would) list my current Thai physical address when filing a 1040. I would also recommend always filing an annual 1040, even if you end up having to pay/refund any taxes. 

 

I would include a cover letter which details your situation, including contact information. In my cover letter, I include my Thai street address, my Thai Post Post Office Box and my U.S. "contact" address, along with several phone numbers, and some information about how much time I spend in the U.S. (less than 30 days over several trips). This remains necessary through this year to avoid paying the Individual (Health Care) Mandate.

 

 

[Curt1591]

10 hours ago, mogandave said:

Also, if you have no Thai income and are not filing in Thailand there is no benefit in filing NR.

One benefit is no state tax, although I'm not familiar with Washington's taxation.

Also, one is exempt from Obamacare mandates.

[mogandave]

One benefit is no state tax, although I'm not familiar with Washington's taxation.

Also, one is exempt from Obamacare mandates.

The OP stipulated he did not need to file state.

It is my understanding that (generally) regardless of where you reside, if you generate income in a state, you have to pay taxes to that state.

[mtls2005]

1 hour ago, mtls2005 said:

even if you end up having to pay/refund any taxes. 

 

should be... even if you end up NOT having to pay additional taxes or claim a refund.

 

 

[JimGant]

Quote

 Is it safe to continue to file as a US resident, or should I file as a non-resident?

As a US citizen, you file Form 1040, regardless of where you reside. Form 1040NR, as the full title implies, is only for "Nonresident Aliens."

The address on your Form 1040 is only the address where you can be reached. It can be a PO box, or a mail forwarding address -- there is no requirement that it has to be your physical address (unlike with most financial institutions). You're not filing as a "US resident," but as a US citizen. Any tax issues based on residency are dealt with by individual 1040 schedules.

If the address you provide is a US address, the IRS shares this with the applicable state or territory. But the OP has a WA address (no state income tax), so no nasty letters from a state tax revenue department.

Thus, no need to vacate your WA filing address.

[gk10002000]

1 hour ago, mtls2005 said:

Personally, I do (and would) list my current Thai physical address when filing a 1040. I would also recommend always filing an annual 1040, even if you end up having to pay/refund any taxes. 

 

I would include a cover letter which details your situation, including contact information. In my cover letter, I include my Thai street address, my Thai Post Post Office Box and my U.S. "contact" address, along with several phone numbers, and some information about how much time I spend in the U.S. (less than 30 days over several trips). This remains necessary through this year to avoid paying the Individual (Health Care) Mandate.

 

 

I agree with always filing a 1040, even if no taxes end up being due.  The reason is simple:  It closes the books.  Later if one is filing for disability, or some social benefit from somebody, the agencies involved often ask for your past tax returns.  If you didn't file, well, you may have some difficulties.  Also, sometimes the IRS may think you owed them something, or their records don't match yours, etc.  You would not want to find out later that you owed them taxes or penalties or interest.  Much better to close things out.  I could not convince my sisters to make my Mom file her 1040, and it caused many issues when applying for state benefits.  Things would have been much simpler to just provide a copy of a 1040, instead of gathering social security  benefit records, sending in affirmation statements, etc.

[gk10002000]

18 minutes ago, mogandave said:

 

The OP stipulated he did not need to file state.

It is my understanding that (generally) regardless of where you reside, if you generate income in a state, you have to pay taxes to that state.
 

well, obviously nothing is due in a no state income tax state such as Florida.  Wages earned in any particular state are in general taxable in the state they are earned in.  I am a florida resident and have worked temporary contract jobs in a dozen states.  In those states that had income state taxes, I had to file the State Non Resident return, and pay taxes on the wages, just the wages earned in that state.  The state I worked in does NOT tax my investment income, capital gains, etc.  Those things are only considered by the FEDs.  In some years I worked in two states and that is a bit of a pain, but most state tax forms fairly clearly tell you how to account for the income earned, i.e. w-2 numbers from that state.  I think one year I worked in 3 states.  I quickly moved to Florida after that to eliminate one form, and since then only had one out of state tax form to file now and then for the state I was contracting in.

[LomSak27]

Quote

I am just wondering if I am violating any tax law here providing my US address on my tax forms = claiming to be a US resident when I am actually not.

 

NO - I have had a Seattle address for the last 17 years I have been living and working in Thailand and SEA and positively NO problems with doing it given conditions that you have stated.

Next Question 

 

 

[GinBoy2]

In all the years I lived in Thailand, I filed a regular 1040, using my Thai address. I declared the pitiful interest earnings from SCB, filed my fbar, never a problem

[khaepmu]

What IRS forms do you use to declare your Thai interest and/or  dividends? 

[Pib]

1 hour ago, khaepmu said:

What IRS forms do you use to declare your Thai interest and/or  dividends? 

Just add the info to the Sch B area just like you do for  U.S. bank interest/dividends.