1040-NR Question

[ldreyna]

I have never done one before, so please bear with me.

One question for now--this t/p is an alien that worked and got paid cash. Would I report this income as self employed, or can I put it on line 7 for wages ?

Probably will have other question later on. Told t/p to come on Friday to give me a chance to read the form instructions.

Any reply to this question is appreciated.

Thanks,

Larry

[Lion EA]

Is he truly a non-resident alien? Read the definitions. See if he is qualified to file Form 1040 and if it is to his advantage.

Start with the things you are familiar with, sources of income and deductions, SS#s, ITINs, etc.

Then, look into a possible tax treaty with his country, days in and out of the country, Visas, things that are unique to Form 1040-NR.

Start with the instructions and Pubs. 513 and maybe 515.

[kcjenkins]

Read the definition for Non-Resident vs Resident Alien. Odds are he may qualify as resident, and file 1040. If he was paid cash [under the table, so to speak] you still need to file it. But whether you use a Sch C-EZ or put it on line 7 has more to do with whether he wants to draw attention to his boss and probably lose the job.

[Pacun]

Don't waste much time with this person. You might end up requesting an ITIN for him and filing 1040 with schedule C. As soon as you tell him how much he will have to pay, he will walk away. The very first thing I do for these people is to run a quick estimate of their taxes and then I ask them, do you want me to start working on your taxes or no. If yes, I start the real work. If no, I wish them a nice day and call my next customer.

If you use line 7, the IRS will question the return sooner or later. Remember that you don't have all the information from the employer so the IRS will not know who to go after even if you use line 7 and treat him as an employee.

[ldreyna]

Thanks for your replies. She is a non registered alien (Mexico), I will be filling out a W-7 for her. She stated that the reason she wants to file is that she will be applying for citizenship and I guess that helps their situation in applying. It sounds like I will report her income as self employed since no W-2 and she has proof (I think from her boss) of the amount. But I am still unsure now if I should file a 1040NR or a 1040.

Any other comments?

Larry

[Pacun]

Was she in the US 183 or more days? If yes, file W7, 1040 (regular), and schedule C.

[kcjenkins]

She is a non registered alien (Mexico), I will be filling out a W-7 for her. She stated that the reason she wants to file is that she will be applying for citizenship and I guess that helps their situation in applying. I am still unsure now if I should file a 1040NR or a 1040.

Any other comments?

Larry

Larry, it's not "a non registered alien". The 1040NR is for Non Resident aliens. It has to do with whether they are in this country working long enough to qualify as a Resident or not.

[ldreyna]

Larry, it's not "a non registered alien". The 1040NR is for Non Resident aliens. It has to do with whether they are in this country working long enough to qualify as a Resident or not.

That's really what I meant, just didnt realize I was saying it wrong. Thanks for all replies.

Larry

[kcjenkins]

You're welcome. It takes years to learn all the special terminology of tax work. That is one of the main reason so many people mess up using TurboTax, even the 'brilliant' ones like Geithner.