Guide to Nonresident Alien Tax Filings in the US

If you’re a nonresident who owns an LLC in the States or has a US tax obligation, you should be aware that the 2025 tax season is coming up. We know it’s not that exciting, but it is still something you don’t want to miss, especially if you want to avoid paying penalties to the US Internal Revenue Service (IRS). With that in mind, we decided to write an article to help you better understand nonresident taxes, deadlines, and tax obligations. 

In this article, we’ll talk about different types of nonresident alien tax filings. We’ll help you figure out whether or not you have a US tax obligation, and we’ll share some real-life examples to make it easier to understand. We’ll review the most important nonresident tax deadlines for 2025 and will share all of the US nonresident tax forms you need to keep in mind. 

Let’s start.

What Is a Nonresident Alien for Tax Purposes?

For tax purposes, the US categorizes foreigners into two distinct groups — resident and nonresident aliens:

• A nonresident alien, for tax purposes, is a person who is not a permanent US resident, does not have a Green Card, and does not meet the requirements set by the Substantial Presence Test (SPT). Nonresident aliens only have to pay taxes on their US source income. To do that, they have to file the 1040NR form. 
• Resident aliens, for tax purposes, are people who meet the SPT test criteria or have a Green Card. They are taxed on their worldwide income (just like US citizens) and must file taxes in pretty much the same way as US citizens by filing the 1040 tax form. 

Nonresident Alien Tax Filing: Figuring Out if You Owe US Taxes?

Before you file a single tax form for nonresident aliens, you must first determine whether you have a US tax obligation. So, when do you have to pay nonresident taxes in the US? Let’s take a look.

1. Nonresident Taxes: You Have US Tax Obligation

There are two main factors that will determine whether or not you’ll have a US tax obligation as a nonresident alien:

• US source income — if you have US source income, you must pay taxes on it. It’s as simple as that.
• Substantial Presence Test — if you meet the criteria for this test, you can automatically become a resident for tax purposes and will have to pay taxes on your worldwide income, not just your US source income. 

Nonresident Taxes: Examplse of US Tax Obligation

To make it easier to understand what US source income and SPT tests are and how they can impact your nonresident taxes, let’s give you a couple of real-life examples:

1. Olivia Anderson is a Canadian citizen and real estate investor who decided to purchase a property in Florida. Her goal is to turn said property into a short-term rental and make money from it. Because all real estate properties are taxed based on their location, and Olivia’s property is in Florida, she will have a US tax obligation. However, that obligation will be limited to US source income (e.g., the income her property generates).
2. Pavan Kumar is an Indian citizen and a part-owner of a gas station in the US. Because the business is physically located in the States, all the income from it will be considered as US source income. This means that Pavan has to pay taxes on it and has a US tax obligation. 
3. Juliette Dubois is a French citizen who spends a lot of time in the US as a tourist. She doesn’t own a business in the States and doesn’t have any US source income. However, because she spent more than 183 days in the US during the past year, she meets the requirements set by the Substantial Presence test, and she will automatically become a resident alien for tax purposes. This means that she will have a US tax obligation and will have to pay taxes on her worldwide income.

2. Nonresident Taxes: You Don’t Have US Tax Obligation 

If you don’t have any US source income and don’t meet the requirements set by the Substantial presence test, you don’t have to pay taxes in the US (i.e., you don’t have a US tax obligation). However, if you own a US LLC as a foreigner, you still have to file the informational 5472 form.   

US Nonresident Tax: Examples of No Tax Obligation

In most cases, nonresidents don’t have to pay taxes on investments, shares, or online businesses. Here are a couple of examples to help you understand in which situations you won’t have a US tax obligation:

1. Amir Khan is an IT expert from Pakistan. Because of the amazing tax exemptions, he opened an LLC in Delaware as a foreigner. He has clients from all around the world, but because he doesn’t perform his work in the US (i.e., he works directly from Pakistan,), the income he makes is not US source income. This means that, even though he owns an LLC in the US, he doesn’t have a US tax obligation. The only form he needs to file is the 5472 informational tax form.
2. Michael Johnson is a Canadian investor who owns shares in a US-based company. He decided to sell those shares to make a profit. Because Michael is a nonresident, he’s exempt from paying taxes on his profit from selling shares, even if the company is located in the US. In this case, Michael doesn’t have a US tax obligation. However, he does have to pay taxes in Canada.

Nonresident Taxes: Brief Summary 

Each year, nonresident aliens with US source income must file a nonresident tax return called the 1040NR form along with other types of tax forms, depending on what type of US business they own (single-member or multi-member LLC, partnership, etc…).

However, in the case that they meet the requirements of the Substantial Presence Test or have a US Green Card, they will automatically become US residents for tax purposes. This means they will have to pay taxes like US citizens and be taxed on their worldwide income, not just their US source income. 

Are you a nonresident alien who needs help figuring out US taxes? At NRI, we specialize in helping foreigners deal with taxes in the US. Get in touch with us to learn how we can help. 

US Nonresident Tax: What Is FIRPTA?

FIRPTA, or the Foreign Investment in Real Property Tax Act, is a law that ensures nonresident investors pay taxes on capital gains from selling property in the US. FIRPTA regulates that a certain percentage of the property’s sale price (usually 15%) needs to be paid to the IRS as a unique form of tax. And why is it unique? Because it’s paid by the buyer, and the money is taken directly from the sale before the seller can calculate their gains or losses. Essentially, it’s a fee that foreign investors have to pay to the IRS in advance when selling a US property. Now, it’s not all doom and gloom; foreign investors can get all or a portion of the FIRPTA money back. However, they first need to satisfy different IRS requirements. 

In most cases, FIRPTA can be legally avoided with a good tax plan. However, that plan needs to be implemented before paying the FIRPTA tax. NRI’s CPA has over 30 years of experience dealing with foreign real estate investors and can help you avoid this unnecessary tax. Contact us and we can help you set up the best tax plan for your unique situation. 

FIRPTA Nonresident Tax: Examples

To make it easier to understand how FIRPTA impacts foreign real estate investors, let’s take a look at some real-life examples:

FIRPTA Example 1

Aarush Bajaj is an Indian citizen who bought a property in the US. He found a great deal on the house and bought it for under $300K. He rented it for a time but wants to sell it because, thanks to appreciation, that property is now worth $500K. Because of FIRPTA, the buyer, let’s call him John, is required to withhold 15% of the sale price, which, in the case of $500K, would be $75,000. John must remit that withheld amount to the IRS. Aarush has the right to file a tax return and potentially recover any excess money that was paid to the IRS. However, this process can take a while and can include a lot of complicated steps, as the IRS is not known for making things easy (especially when it comes to returning money). 

FIRPTA Example 2

Jason Anderson, a Canadian national, bought a property in Florida to use as a vacation home. He paid $200K for it. As time went on, the property’s value rose, but it also became Jason’s primary residence. Now, that property is valued at over $600K, which is why he wants to sell it. Because of FIRPTA, the buyer, let’s call her Lena, needs to withhold 15% of the selling price, which in this case is $90,000, and pay that money directly to the IRS. Because the property was used as a primary residence for a while, Jason can file for an exemption for the FIRPTA to lower the withholding tax. He can also file a tax return to potentially get the rest of the money back if the withholding amount is greater than his capital gains. 

2025 Nonresident Tax Deadlines and Extensions

Now, let’s talk about the 2025 US tax deadlines and forms for nonresident aliens. And remember, being a nonresident alien means you don’t have a US Green Card and have not met the criteria of the SPT test. If one of the two is true, you’ll automatically become a resident for tax purposes and will be taxed as a US citizen.

Nonresident Tax Forms for Single-Member LLCs

If you’re a foreigner who owns a single-member LLC in the US, which tax forms you’ll have to file will depend on whether or not you have US source income.  

In the case that you have US source income, you’ll have to file the following tax forms by their deadline:

• 1040NR tax form for nonresident aliens by April 15th, 2025
• 5472 informational nonresident tax form by April 15th, 2025

If, for some reason, you’ve missed these deadlines and want to extend them to October 15th, 2025, you’ll have to file two separate extension forms:  

• Form 4648 to extend the 1040NR deadline
• Form 7004 to extend the 5472 deadline 

In case you don’t have any US source income, you won’t have to pay taxes in the US. However, you must still file the informational 5472 tax form. Whether or not you have US source income, this form’s due date is April 15th, 2025, and can be extended to October 15th, 2025. 

If you’re looking to find out which state is the best to open a US LLC as a foreigner for your online business, check out the linked article. It’s a great source of information in which we analyze different US states and their pros and cons when it comes to forming a nonresident LLC. In the article, we also mention that two of the most popular states for creating a tax-free LLC as a foreigner are Wyoming and Delaware. 

Looking to open a tax-free US LLC as a foreigner? For a fee of $1,500, NRI can help you do just that. Book a free call to learn more. 

Cheatsheet: Nonresident Alien Tax Filing for Single-Member LLCs

Nonresident Tax Forms for Multi-Member LLCs and Partnerships  

If you’re an owner of a multi-member LLC or a partnership, you’ll have to file form 1065 with the schedule K-1 for partnerships for your nonresident taxes. Both of these forms should be filed by 

March 17th, 2025. To get extensions on these forms, you have to file the 7004 form. If you do that, the new nonresident tax deadline will be September 15th, 2025. 

Cheatsheet: Nonresident Taxes for Multi-Member LLCs and Partnerships

Nonresident Tax Forms for S Corporations 

Nonresidents can not be owners of S Corporations in the US. To become an owner of this type of entity, you’ll have to be at least a resident alien for tax purposes. This means that you either need to have a US Green Card or meet the requirements of the Substantial Presence Test. So, why are we mentioning this in the article for nonresident taxes? Because, technically, you can still be a nonresident who is a resident alien for tax purposes. And don’t forget, as a resident alien for tax purposes, you will be taxed on your worldwide income. 

Nonresident alien tax filing for S Corporations should be done by March 17th, 2025. The forms you must file by this date are the 1120S with schedule K-1 for S corporations. To extend this deadline, you’ll need to file the 7004 form. This will move up the nonresident tax deadlines for both the form and schedule K-1 to September 15th, 2025.

Cheatsheet: Nonresident Alien Tax Filing for S Corporations

Tax Forms for Foreigners Who Are US Residents or Resident Aliens

If you’re a foreigner who meets the criteria of the Substantial Presence Test or have a US green card, you will be taxed as a US citizen. In that case, you must file the 1040 form instead of the 1040NR. The deadline for this form is April 15th, 2025. To extend this deadline to October 15th, 2025, you have to file the 4868 extension form.  

Cheatsheet: Resident Alien Tax Form Deadlines