What IRS Form 1040-EZ (NR) (2017) Is For
IRS Form 1040-EZ (NR) (2017) is used by a nonresident alien who must report taxable income to the Internal Revenue Service when the income is simple enough to qualify for this shorter form. It allows you to report wages, taxable interest, and specific scholarship amounts that count as income for federal income tax purposes. It is designed for individuals who do not meet resident alien requirements and who only need to report U.S. source income that is effectively connected with basic work or study activities.
When You’d Use IRS Form 1040-EZ (NR) (2017)
This section explains when this form applies for the 2017 tax year.
- Simple nonresident filing status: This form applies when you are a nonresident alien who does not meet the substantial presence test or green card test for the three years and must file a tax return based only on limited U.S. source income.
- Limited income types: You may use this form if you received wages, taxable interest, or scholarship income that counts as taxable income for the calendar year and does not require expanded reporting.
- No dependents or complex deductions: You use this form when you cannot claim dependents and do not qualify for extensive deductions or credits that require another form.
- Straightforward withholding situation: You file this form when your income taxes were withheld from wages at the standard rate, and you either owe additional federal income tax or expect a refund based on your final tax liability.
Key Rules or Details for 2017
These rules clarify the primary requirements applicable to IRS Form 1040-EZ (NR) for the 2017 tax filing year.
- Nonresident tax status: Your tax status is determined by residency rules, and you report only U.S. source income that is effectively connected with a U.S. activity or counted as FDAP income.
- Limited income categories: You can report wages, taxable interest, or scholarship income, but you cannot report capital gains, dividends, or other income types that require a longer form.
- Treaty considerations: You may apply a lower treaty rate when your country has a tax treaty with the United States, and the treaty reduces the tax rate for specific income categories.
- Withholding rules: Your employer withholds federal income tax during the year, and the Internal Revenue Service applies those withholding amounts against your total tax liability when calculating your final balance.
- No standard deduction: You cannot take the standard deduction for 2017 unless a treaty between your country and the United States provides a specific exception for eligible residents of that country.
Step-by-Step (High Level)
These steps outline the process for completing IRS Form 1040-EZ (NR) (2017).
- Determine your tax status: You confirm that you are a nonresident alien for the entire calendar year and that you do not qualify as a resident under physical presence rules or any other test.
- Gather income information: You collect wage statements and interest forms that show the income you earned and the withholding amounts taken from your paycheck during the year.
- Calculate taxable income: You figure the portion of your income that must be reported as taxable income for federal income tax purposes and ensure that no ineligible deductions are included.
- Estimate tax liability: You calculate your expected tax liability using the instructions for the form and compare it to the withholding amounts to determine whether you owe tax or expect a refund.
- Complete the form and file: Record your income, withholding, and credits, then sign and file the form with the Internal Revenue Service by the required date for the following year.
Common Mistakes and How to Avoid Them
These standard errors can lead to problems when filing IRS Form 1040-EZ (NR) (2017).
- Misreporting residency status: Determine your residency status accurately because applying resident rules when you are a nonresident can cause incorrect taxation and penalties.
- Incorrectly reporting income: Report all U.S. source income that is taxed and avoid excluding interest, wages, or FDAP income that must be included on the form.
- Assuming a standard deduction applies: Confirm that nonresident aliens generally cannot use the standard deduction for 2017 and avoid reducing taxable income incorrectly.
- Overlooking withholding errors: Review your wage statements to ensure the correct amount of tax was withheld because withholding mistakes can affect your refund or balance due.
- Ignoring treaty rules: Apply a treaty benefit only when a tax treaty provides a reduced rate, and ensure that you meet the eligibility requirements for your specific country.
What Happens After You File
After you file IRS Form 1040-EZ (NR) (2017), the Internal Revenue Service reviews the information you report and matches it with the withholding amounts submitted by your employer. Your tax return is processed, and any tax payment or refund is determined based on your tax liability for the year. If you paid more than required, you will receive a refund. If you owe additional tax, you must submit payment by the date provided in the notice. The IRS may assess penalties or interest for late payments or filing.
FAQs
Can resident aliens use IRS Form 1040-EZ (NR) (2017)?
No, resident aliens must file a different form because IRS Form 1040-EZ (NR) (2017) is designed only for nonresident aliens who meet specific tax status requirements.
Do I need to file quarterly estimated tax payments as a nonresident alien?
You may need quarterly estimated tax payments when your withholding is not enough to cover your expected tax liability, and you must use Form 1040-ES to submit estimated payments.
Is the effectively connected income reported on this form?
Yes, wages and specific scholarship amounts count as effectively connected income and must be reported if they are subject to federal income tax.
Can I use this form if I have capital gains or dividends?
No, capital gains, dividends, and other investment income require a longer form because this simplified form is limited to basic income categories.
Does having a green card affect my ability to file this form?
Yes, holding a green card generally makes you a resident alien for tax purposes, and resident aliens cannot file IRS Form 1040-EZ (NR) (2017).
