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Video instructions and help with filling out and completing Form 1040 vs. Form 1040-nr-ez

Instructions and Help about Form 1040 vs. Form 1040-nr-ez

Okay, for this video, I wanted to cover a simple example of how to complete a 1040 NR, which is an individual income tax return for a non-resident alien. So in this example, what we have here is John Doe. He's a Cayman Island citizen and tax resident, so he lives there full-time. Thus, he's not a US person in any respect. However, he has investments in US businesses which require him to file this return. So what we're going to do is I have a full 1040 NR, and we'll go through this for John. Additionally, I have a slide here that covers some background information on who needs to file and under what circumstances. Lastly, we have the fact pattern for John himself. So if we're starting at the top, here's who needs to file: generally, the 1040 NR is filed by a non-resident alien individual. It can also be filed by a non-resident trust or estate, but more often than not, we have these filed by non-resident individuals. Normally, it's because of one of two types of filing obligation circumstances. The first one is when the non-resident is engaged in US trade or business. We'll talk a little bit more about that later, but effectively, what this means is that the non-resident has opened a business in the US and has created a sufficient amount of nexus with the US to be subject to tax in the United States. The second obligation is when the non-resident has US source income not connected with the US trade or business. This is often called US source FDAP income. FDAP stands for fixed determinable annual or periodical income. This includes US source dividends, interest, rents, royalties, and other similar types of payments. If the non-resident receives these types of payments and not...