08 Aug 2009

Uncle Sam’s Residency Rules

by Darren

In the USA it is important establish whether you are resident or non-resident because as a resident you would be subject to tax on your worldwide income. However as non-resident you are not entitled to certain deductions and allowances that are provided to citizens and permanent residents. You would be classified as a tax resident if you are a US citizen, green card holder. In addition if you live in the US with an intention to make it your home you will be classified as a US tax resident. This is where you have lived in the US for greater than 183 days of a particular year. If you don't meet the above criteria you are treated as a non-resident for tax purposes. If you operate your business through a company or a partnership it will be treated as a resident if you created it under the law of the United States. The concept of control and management which we saw in Australia and Singapore do not apply under US tax law. In the coming weeks and months I will focus on the tax implications for you as a non resident individual, partnership or company.

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