Form 1040-NR

Income, filing status, and age generally determines whether one must file a tax return but the necessary documents required for non-residents can be categorized as follows:

Basic Information:

Tax Questionnaire (including demographic information):
The first step towards filing of a return requires the basic information by filling a questionnaire. In this questionnaire, the non-resident alien of the US is required to fill in information about identification of themselves and their dependents, giving a brief account or activities regarding expatriates. Any misinformation in this form will lead to obstructions which will slow down the rest of the process.

Last Year’s Tax Return Filing:
If the person has already filed a tax return in the previous year, they must provide their taxpayer with the form of their previous year’s filing. This will enable the expat tax professional to cross-reference their current information with the previous information and make them aware of the new changes. The tax professional will also look for other deductions in the last year’s return.

Income:

• Compensation, wages, and salaries:
  It is a necessity to provide all the W-2, P60 and P45 and other wage reporting forms. Those expats that are self-employed will have to report detailed and accurate records of all their earnings and deductions. Those residing in foreign countries that do not have income taxes will have to save bank statements and check stubs to report to the IRS.
• Interest and dividend income:
  All sorts of income generated through interests or dividends will have to be reported in form 1099. Each interest-earning account requires its filing, the expat must inform their taxpayers even if the account was closed due to any reason or within any time period.
• Securities and stock transactions:
  At the end of every year, the broker sends a statement detailing all the stocks and securities that were purchased and sold last year. These statements should outline all the relevant information for filing tax returns such as purchase price, transaction fees, sale date, etc.
• Real Estate:
  Rental property income or any real estate sold or purchased is highly relevant for the expat’s tax return forms.
• Distributions including pensions, annuities, profit-sharing plans, and IRA:
  Any information regarding withdrawals from IRA, pensions, and other annuities should be provided to the tax preparer.
• Any other source of income:
  Schedule K-1 form is required to report other income sources from a partnership, trust, or business interests. This form should be provided to the tax preparer.

Deduction Documents (these documents help to reduce taxable income):

• Interest and taxes paid:
  Following the expatriate tax rules, any accumulated interest paid on a home mortgage or student loans will grant expats deductions. It is essential to keep accurate records of property taxes and foreign income taxes to provide proof to the tax preparer for a deduction.
• Foreign housing income:
  This requires providing tax preparers financial details of housing situations to qualify for deducting a portion of expat’s overseas housing expenses.
• Dependents (if a person is dependent on a taxpayer):
  The taxpayer must provide accurate information of all dependents and pay for their necessities (such as paying for higher studies for their children) will also result in deduction and credits.
• Other deduction:
  The taxpayer must provide details of gifts to family members or business expenses that were never reimbursed, alimony and child support payments, medical expenses, donations to charity, etc. that will also help them get deductions on your taxes.

Other documents such as details of foreign bank details can be required. You may express your amounts reported to US tax return in US dollars and convert your foreign currency to US dollars. Most of the taxpayers use the foreign exchange rate on a yearly average to report their foreign earned income. One is advised to reach out to Taxpayer Advocate if you are facing any unresolved tax issues.