IRS Form 1040-EZ (NR) (2015): Nonresident

What IRS Form 1040-EZ (NR) (2015) Is For

IRS Form 1040-EZ (NR) (2015) is for nonresident alien individuals who have simple taxable income and need to file a basic federal income tax return with the IRS for the calendar year. It applies when a person has wages or other limited income that is subject to taxation and must report this amount for tax purposes because they are required to pay taxes on United States income. This form is designed for individuals who meet strict filing limitations and do not need to claim dependents or complex deductions. 

When You’d Use IRS Form 1040-EZ (NR) (2015)

This form applies in situations where a nonresident alien is required to file a simple tax return for the calendar year.

• Limited types of income: The form is used when a nonresident alien has wages, FDAP income, or other U.S. source income that is taxed at graduated rates and must be reported in accordance with filing requirements.
  
  
• No dependents allowed: The form is selected when an individual does not claim dependents and needs to file Form 1040-EZ (NR) because exceptions do not permit dependents for this filing status.
  
  
• Resident vs. nonresident considerations: The form is appropriate when a person is a nonresident alien and is not treated as a resident for tax status or worldwide income purposes under any residency test.
  
  
• No adjustments or itemized deductions: The form is used when a filer cannot claim itemized deductions, adjustments, or additional credits and must follow the simplified approach for aliens with limited deductions.
  
  
• Simple federal income tax situation: The form is suitable when the individual has straightforward income, such as wages, interest, or dividends, and must file a return without reporting complex trade or capital gains activity.  

Key Rules or Details for 2015

These rules determine whether IRS Form 1040-EZ (NR) (2015) is the correct form for your tax purposes.

• Filing status limitations: The form can be used only when the individual is a qualifying nonresident alien who is not eligible to file a joint return with a spouse and must file separately for the calendar year.
  
  
• Income subject to taxation: The form applies when income is subject to federal income tax under United States rules, and the filer must report amounts that are determined to be taxable for the current year.
  
  
• Treatment of FDAP income: The form may be used when FDAP income, such as specific interest or dividends, is taxed at the applicable rate and must be reported even when subject to withholding.
  
  
• Use of graduated rates: The form uses the graduated rates required by the Internal Revenue Service, and filers must calculate their tax using these rules when income is effectively connected with a U.S. source.
  
  
• Restrictions on standard deduction: The form does not allow a standard deduction for most nonresident aliens; therefore, the filer must follow the instructions to determine if any limited deductions may apply.
  
  
• Restrictions on joint returns: A filer cannot use this form if they are married and wish to file jointly, and the Internal Revenue Service requires separate filing for nonresident aliens in most situations. 

Step-by-Step (High Level)

These steps outline how nonresident alien individuals complete IRS Form 1040-EZ (NR) (2015).

1. Gather required documents: The filer collects Forms W-2, records of wages, interest statements, withholding documents, treaty records, and any necessary instructions or worksheets to calculate income tax accurately.
   
   
2. Determine tax status for the year: The filer determines whether they qualify as a nonresident alien for tax purposes and confirms that they do not meet any resident alien tests that would require a different form.
   
   
3. Calculate taxable income: The filer calculates taxable income using the applicable worksheets, including the portion of income that is effectively connected with U.S. trade or business activities.
   
   
4. Enter federal income tax withheld: The filer enters all federal income tax withholding reported on Forms W-2 so the Internal Revenue Service can determine whether additional payment is required.
   
   
5. Apply treaty benefits if eligible: The filer applies any treaty benefits permitted by their country of residence, and they ensure that the correct lower treaty rate is used when eligible for reduced taxation.
   
   
6. Figure tax using the proper rates: The filer calculates the correct tax by using graduated rates that apply to nonresident aliens and verifies that the tax liability is determined using the appropriate instructions.
   
   
7. Sign and file the form by the due date: The filer completes all parts of the form, enters their address and identifying information, signs the return, and submits it by the required annual filing dates.

Common Mistakes and How to Avoid Them

Several errors frequently occur when nonresident aliens file IRS Form 1040-EZ (NR) (2015).

• Using the wrong filing status: This mistake occurs when a filer selects a status intended for a resident alien. To avoid this error, the filer should verify their tax status before completing the form.
  
  
• Failing to report all U.S. source income: This mistake occurs when a person omits wages or FDAP income; to avoid this error, the filer should include all source income that is subject to taxes and withholding.
  
  
• Confusing resident alien rules with nonresident alien rules: This mistake occurs when a filer applies rules that do not apply to aliens; to avoid this error, the filer should follow the instructions meant for nonresident aliens only.
  
  
• Overlooking treaty benefits: This mistake occurs when a filer ignores a treaty that reduces taxation; to avoid this error, the filer should review whether the treaty for their country provides benefits that affect their tax liability.

What Happens After You File

After the form is filed, the Internal Revenue Service reviews the information to determine whether the filer paid enough taxes for the calendar year and whether withholding and credits match the taxable income reported. If withholding exceeds the amount owed, a refund is issued, and the filer receives payment in accordance with the IRS's processing timelines. If the filer underpaid, additional taxes are due, and penalties may apply depending on the portion of tax that was not paid.  

FAQs

Can a nonresident alien use IRS Form 1040-EZ (NR) (2015) if they also earned income in their home country?

Yes, the filer may use this form when they have worldwide income, but only U.S. source income is reported on the tax return, and foreign income is not included for tax purposes.

Does a nonresident alien file this form if they have capital gains during the year?

No, capital gains generally require a different form, and IRS Form 1040-EZ (NR) (2015) can only be used when the filer has simple income that does not include taxable gains.

Are estimated tax payments required when filing Form 1040-EZ (NR)? 

Estimated tax payments are required only when withholding is not enough to cover tax liability, and a filer must make an estimated tax payment if IRS rules require it for their portion of taxable income.

Can a spouse be included on IRS Form 1040-EZ (NR) (2015)?

No, the form does not permit a joint return, and a nonresident alien must file separately even when their spouse is a resident alien or meets other filing requirements.