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I am a dual Australian / British citizen living in the United States on a G-4 spousal visa. I am classed as a non-resident alien in the US so fill out a 1040NR and only pay tax on US based income.

So my question is: Where am I resident for tax purposes? I left Australia 7 years ago on an L1A but changed to G4 a year later in March 2010

Am I in no man's land for tax residency?

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    You ought to look at it this way: for each country where you have income, assets, citizenship, etc., the question is "am I a tax resident?" In your case, the answer is probably "no" for all of them. (Obviously for the US, the answer might be different for 2009 or 2010.) – phoog Mar 4 '16 at 16:52
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    Possible duplicate of Trying to figure out my tax residency – phoog Mar 4 '16 at 18:51
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Disclaimer: I'm not a lawyer nor a tax advisor

USCIS “visitor” status is not imply IRS “non-resident alien” status. IRS has what it calls Substantial Presence Test:

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

However, in you particular case, since you say that you're on G-4 visa, it would seem that you're exempt from being resident (therefore a “non-resident alien”):

An individual temporarily present in the U.S. as a foreign government-related individual under an “A” or “G” visa, other than individuals holding “A-3” or “G-5” class visas.

Being IRS “non-resident alien” might not always be a good thing, in fact you loose the posibility of using many tax decuctions and credits, ending up paying significanly higher taxes in US. On the other hand you don't pay US taxes on your income earned outside of US.

  • Then again, being a US non-resident for tax purposes can be a fine thing if you have significant income from outside the US which this causes the IRS to no longer be interested in, particularly if the tax authority in the country that income is sourced from isn't interested in it either. What is a "good thing" and what isn't depends on each individual's own circumstances.. – Dennis Apr 7 '16 at 21:41
  • @Dennis fair enough, I update the answer – vartec Apr 7 '16 at 21:48
  • @ Dennis, vartec, plus don't forget that the spouse (the G-4 principal) most likely pays no income tax on his or her salary. That's a pretty advantageous situation, and the choice for the OP is (a) live apart from the spouse, or (b) live in the US without working, or (c) pay nonresident income tax. It's pretty clear that c will be the best choice for most people even if they have no non-US income. – phoog Apr 8 '16 at 21:53
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This will be a very hard question to answer as you need an accountant specializing in all 3 countries to give you the right answer. However, I help you with Australian one so you may work out the rest by doing more research (although it should be fairly similar to Australia). In Australia you can declare to be a resident or a non resident. The normal requirement is to stay more than 180 days in a financial year in the country. However, even if you do fly in fly out jobs they will consider you a resident and make you to pay tax on your foreign income (made law by Rudd/Guillard government since 2009). If you have a high Australian income it is in your benefit to choose becoming a resident (considering you are a citizen it is possible) as your income tax rate is a lot lower than when you are a non resident. In any case, any of these countries will ask you to pay income on your foreign income unless you have gone around being a resident in the US somehow. The tax office in Australia never gives you a straight answer in grey areas and they will try to get as mush as tax they can from you. To me it seems you make your money in Australia while you live in the US. In this case, it is a trade off to see which way you pay less tax: 1- Be an Australian resident and pay less tax on your Australian income while you also have to pay tax on foreign income if any (soon or later OECD countries will exchange your financial information which makes it too difficult to avoid paying tax). 2- Be a non resident and pay more tax in Australia while paying no tax on other income. What bigger countries like Apple do: make the head office in a country with very low tax rate such as Ireland. Sell your product from Ireland to Australia double the price. Pay tax in Ireland for the income (which is much lower than Australia). Show that you had no income in Australia from selling iPhones (say you buy from Apple Ireland for $650 and sell in Apple Australian shop for $655).

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    Why do you think the source of the income is Australia? If that were true, there would be no need to file US income taxes. – phoog Apr 8 '16 at 21:59

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