Form 1040-NR: A Practical Guide for Non-Residents

You generally must file Form 1040-NR if, during the tax year, you were a non-resident alien and:

• You were engaged in a US trade or business, even if you had no US-source income;
• You had US-source income on which the full US tax was not withheld at source;
• You owe special taxes such as the alternative minimum tax or recapture taxes;
• You are a foreign owner of a US single-member LLC engaged in a US trade or business (filed alongside Form 5472 and a pro-forma 1120).

Residency for tax purposes is determined by the green card test or the substantial presence test — not your visa type. Dual-status filers (resident for part of the year, non-resident for the rest) often need both a 1040 and a 1040-NR statement.

• April 15 — if you received wages subject to US withholding.
• June 15 — if you did not have wage withholding (automatic 2-month extension).
• October 15 — extended deadline if Form 4868 is filed on time.
• April 15 — FBAR (FinCEN 114) for non-residents with US financial accounts above the threshold; auto-extended to October 15.

• State and local income taxes paid (subject to the SALT cap).
• Charitable contributions to qualified US organizations.
• Casualty and theft losses from federally declared disasters.
• Student loan interest, if connected with US trade or business income.
• Foreign tax credit on the same income, where allowed.
• Treaty-based reductions on dividends, royalties, pensions, and scholarships.

Non-residents cannot take the standard deduction (with limited exceptions for residents of India under the US-India treaty). Itemized deductions on Schedule A (1040-NR) are usually the only path.

If your country has a US income tax treaty, you may reduce or eliminate US tax on certain income — for example, capping withholding on dividends, exempting short-stay employment income, or protecting pensions from double taxation. You must disclose the treaty position on Form 8833 attached to your 1040-NR, citing the article relied upon.

A foreign person owning a US single-member LLC is treated as a disregarded entity for tax purposes, but is still required to file Form 5472 with a pro-forma Form 1120 to report reportable transactions with the foreign owner. If the LLC is engaged in a US trade or business, the owner also files Form 1040-NR to report the effectively connected income.

Penalties for missing Form 5472 start at $25,000 per form, per year — one of the most expensive compliance failures we see for non-resident founders.

• Filing Form 1040 instead of 1040-NR (or vice-versa) without testing residency.
• Claiming the standard deduction when not entitled to.
• Forgetting Form 8833 when taking a treaty position above the disclosure threshold.
• Missing Form 5472 for foreign-owned single-member LLCs.
• Ignoring state filing obligations — California, New York, and Texas each have their own rules.