Feeds Topics Working abroad Taxation & Immigration In The United States

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    Taofikat Oduola
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    Did you know? Taxation in the United States follows special rules and procedures, especially if you are not a citizen. Thus, if you are thinking of moving to the U.S. in the nearest future, it wouldn’t hurt to have an idea of how taxes are being paid.

    Generally speaking, taxation in the United States is dependent on the residency status of each individual. All U.S. citizens are taxed on their worldwide income and the same goes for tax residents. A “Green Card Holder” is assumed to be a lawful permanent resident and is treated as such. By implication, obtaining a green card means you qualify to be a “Resident Alien” and as such, will be charged just as any U.S. National is. This includes income generated from businesses outside the United States. As a U.S. national, it doesn’t matter where you reside as your worldwide income is subjected to the U.S. income tax only.

    Non-residents on the other hand, are taxed only on income derived from sources within the United States. Please note that this includes income that is directly connected with a U.S. trade or business.

    When Are You Considered A U.S. Resident Alien?

    1) When you obtain a Green Card which changes your status to that of a lawful permanent resident.

    2) When you meet the standard for the Substantial Presence Test which entails your physical appearance in the U.S. for a minimum of 31 days during the current year and 183 days during a 3-year period (including the current year and 2 years immediately before the current year).

    More information on how taxation in the United States works can be found here.

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