Besides that, if the particular individuals don’t meet the requirements for the Form 8843 exemption or the Form 8840 closer connection test, this Substantial Presence Test is also meant for them. The IRS Substantial Presence Test applies to all foreign individuals staying in the United States and those people who haven’t been granted legal permanent residency yet in the country. It’s to determine if an individual qualifies as a non-resident or resident for tax purposes. It’s a criterion to determine the status of an individual who is not a resident or a lawful permanent resident in the country. Because of that, the Internal Revenue Service or IRS will have to check your tax residency status through the use of the Substantial Presence Test. If you’re a foreign national staying in the United States, you should know your legal responsibility for tax purposes. Learn how the Substantial Presence Test affects your federal tax situation.
SUBSTANTIAL PRESENCE TEST FULL
Check out the full details below to know what the substantial presence test is, and how it will help you file and pay your return tax on time. That’s why you have to determine your residency status for tax purposes using the Substantial Presence Test so that you can deal with your tax obligation. However, if you fail to do so, you’ll encounter various consequences, like failure-to-file or failure-to-pay penalty, and even the chance of losing your tax refund.
It’s because every foreign citizen has a responsibility to file an annual return with the help of the Internal Revenue Service. However, one of the challenges these foreign nationals will usually encounter is determining the status of residency for tax purposes. It may include people in business who look for company expansion, foreign government officials, students who pursue higher education, and other people who look for more opportunities for career growth. Moreover, there are also temporary residents who are staying in the country for different purposes.
Generally, they can even qualify to be lawful US citizens after the span of 3 to 5 years.
Others are successfully granted a green card to have permanent residence and legally work in various states in the country. In fact, there are currently millions of people in the US who are from different parts of the world. The number of foreign nationals staying in the United States continues to increase every year.
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