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Why form 1040NR might be complicated


Is form 1040 NR widely used?

Form 1040 NR is not that commonly used compare to the use of regular 1040 despite the fact that in the U.S. live a lot of foreign working students and employees. Residents of different countries might never be residents of the U.S., but they cannot stay forever as nonresident aliens for tax purposes. Usually after two years when their substantial presence test will be met they will no longer qualify to use 1040 NR. Since this form is not that popular there is a lot of confusions and complications associated with preparing it.

Is it hard to complete the form 1040NR?

Form 1040NR might be simple and difficult at the same time. On one hand, this form looks a lot like a regular 1040 especially if it is relatively easy tax return. A tax professional or you just need to do itemization on the tax return instead of using a standard deduction if you are not a resident of India. On the other hand, different rules might apply to nonresident aliens from different countries which may make it complicated to deal with.

Can a nonresident alien use standard deduction on 1040NR?

On page 26 of the 1040NR instruction you can find that nonresident aliens must use itemized deduction and not standard deduction while resident aliens may choose one which is more beneficial to them or which is higher. However, residents of India who were students or business apprentices may be able to take the standard deduction instead of their itemized deductions if it is more beneficial to them for 2012 tax year.

How to correct an error on 1040NR

If you believe that error was made on form 1040NR you need to file 1040X Amended U.S. Individual Income Tax Return to fix the problem when necessary. This form should be filed after the original tax return has been filed. The mistake is not supposed to be from your side. For example, some other tax professional brought to your attention that instead of standard deductions itemized deductions were used even though you could use either one or it was not in your best interest.

The IRS is not responsible for a lost refund if you enter the wrong account info.