Definition:
Form 1040-NR is the U.S. federal tax return used by nonresident aliens (NRAs) to report income that is subject to U.S. income tax. If you are not a U.S. citizen or resident for tax purposes but earned income from U.S. sources such as through a U.S. LLC or freelance work you may be required to file this form.
Common scenarios where Form 1040-NR applies:
- Foreign owners of Single-Member LLCs (SMLLCs) with U.S.-source income
- Independent contractors performing services for U.S. clients
- Earning rental or investment income from U.S.-based assets
- Claiming tax treaty benefits to reduce withholding
Unlike U.S. residents who file Form 1040, NRAs must use Form 1040-NR and may also need to attach Schedule OI, Form W-8BEN, or other supporting documents.
Why is it important?
Filing this form ensures IRS compliance and may help nonresidents avoid unnecessary withholding or claim refunds. Failure to file can result in penalties and interest on unpaid taxes.
Who is it for?
Any non-U.S. individual with U.S.-source income especially those with pass-through income from an LLC should assess whether they need to file Form 1040-NR.
