International Tax Services for Foreign Nationals
CK Tax Services LLC has extensive experience working with the United States taxation of foreign nationals. We offer foreign nationals a full menu of services to manage and plan for the complexities of the United States tax law. Our team has deep knowledge of the tax rules that affect foreign nationals and utilize our tax and legal backgrounds to provide our foreign national clients with cutting-edge service and carry the planning to the necessary tax filings.
United States Taxation of Non-residents
A foreign national who does not meet the U.S. tax residency requirements (nonresident alien)are taxed on income effectively connected with a U.S. trade or business (or permanent establishment under a treaty) and at a flat rate on fixed or determinable, annual or periodic gains, profits, or income (FDAP). Our team has extensive experience planning for foreign investment in the U.S. and understand how to structure the investment tax efficiently.
United States Real Property
A non-resident alien is generally not subject to U.S. income taxation on gain from the sale of most types of assets. Gains from the sale of interests in U.S. real property are taxable under the Foreign Investment in Real Property Tax Act (FIRPTA). The buyer may be required to withhold 15 percent of the gross proceeds (including non-cash consideration) on the purchase of U.S. real property from a non-resident alien. Our team has extensive experience structuring foreign investment in U.S. real estate and working with the FIRPTA rules.
Taxation of Exempt Individuals
For U.S. income tax purposes, wages, fees, or salary of employees of a foreign government or of an international organization received as compensation for official services to such government or international organization are not taxable in the U.S. Income received by such employees from sources other than their compensation from employment is subject to U.S. income tax. These employees are exempt from the U.S. tax residency test and will only be subject to tax in the U.S. on U.S. source income similar to a non-resident alien. However, there are some differences between an exempt individual and a non-resident alien that is important for an exempt individual to understand in determining their U.S. tax liability. The tax rules for exempt individuals are applicable to employees of international organizations, foreign diplomats, consular officers, foreign students, or scholars in the U.S. in A, F, G, J, M, or Q non-immigrant status.
Pre-immigration Tax Planning
While the need for timely pre-immigration tax planning may not be readily apparent to a foreigner who is moving to the U.S., the failure to plan until it is too late may have extremely costly tax consequences. Prior to becoming a U.S. tax resident, there are several planning opportunities to reduce U.S. income and transfer (estate and gift) tax exposure.