Green Card Holder Tax Services

Yes. A green card holder is a 'US person' for tax purposes and is taxed exactly like a US citizen — on worldwide income, from the first day of residency, regardless of where you live or where the income is earned. Your foreign salary, self-employment income, rental income, dividends, interest, capital gains, and even foreign pensions must all be reported on Form 1040. You may also need to file the FBAR (FinCEN Form 114) for foreign bank accounts and Form 8938 (FATCA) for foreign financial assets. The foreign tax credit (Form 1116) and the foreign earned income exclusion can reduce or eliminate double taxation, but the income still has to be reported. Many new lawful permanent residents are surprised by this — they assumed only US-source income mattered.

In the year you receive your green card, you are usually a dual-status alien: a nonresident for the part of the year before your residency starting date, and a US resident afterward. Your residency starting date is generally the first day you are present in the US as a lawful permanent resident, and the Substantial Presence Test can also establish residency based on days present. On a dual-status return, only US-source income is taxed for the nonresident portion, while worldwide income is taxed from the residency start date forward. Dual-status returns have special rules — no standard deduction and limited filing statuses — but certain elections, such as the first-year choice or electing to be treated as a full-year resident and filing jointly with a spouse, can sometimes produce a lower total tax. We run the options and file whichever produces the best result.

Almost certainly yes, and this is the most expensive misunderstanding we see. Your US tax residency does not end just because you moved abroad or your physical green card expired. Under US tax law you remain a lawful permanent resident — required to file Form 1040 on worldwide income and FBARs on your foreign accounts every year — until you do one of two things: formally abandon the card by filing Form I-407 with USCIS, or take a treaty tiebreaker position (Form 8833) claiming residency in a treaty-partner country. Doing nothing leaves you liable for every unfiled year. If you have fallen behind, the IRS Streamlined Filing Compliance Procedures usually let non-willful taxpayers catch up with three years of returns and six years of FBARs. Be aware that for Long-Term Residents, taking a treaty tiebreaker position can itself trigger the expatriation and exit-tax rules — so this should be planned carefully.

When you give up your green card, you may face an 'exit tax' under IRC Section 877A — but only if you are a Long-Term Resident and a covered expatriate. You are a Long-Term Resident if you held a green card in at least 8 of the last 15 tax years (the '8-year rule'). You become a covered expatriate if you fail any of three tests: (1) your net worth is $2 million or more; (2) your average annual net US income tax liability over the last five years exceeds an inflation-adjusted threshold; or (3) you fail to certify five years of tax compliance on Form 8854. A covered expatriate is treated as having sold all worldwide assets at fair market value the day before expatriation (a mark-to-market deemed sale), and the net gain above an annual exclusion amount is taxed. Form 8854 is required to complete the expatriation. Because timing the surrender — via Form I-407 — can determine whether you cross the 8-year threshold, planning in advance is essential.

Yes, if the aggregate value of your non-US financial accounts exceeds $10,000 at any point during the year. Because green card holders are US persons, the FBAR (FinCEN Form 114) applies to you the same way it applies to citizens. Reportable accounts include foreign checking and savings accounts, brokerage and investment accounts, most foreign pension accounts, and certain foreign life insurance policies with cash value — in your home country and anywhere else. Separately, if your foreign financial assets exceed the Form 8938 (FATCA) thresholds, that form is filed with your 1040. FBAR penalties start at $10,000 per year per violation for non-willful failures and can stack across years, so these home-country accounts — which are easy to overlook — are exactly the ones to report.

It can. When you apply to naturalize, USCIS asks on Form N-400 whether you have filed all required federal, state, and local tax returns, and unfiled returns or unresolved tax debts can affect the good moral character determination. Failing to file — or having a large unpaid balance with no arrangement to pay — is a red flag. The good news is that being current or having a documented plan resolves the concern: filing any delinquent returns and setting up an IRS installment agreement for outstanding balances generally satisfies the requirement. We make sure your tax record is clean and documented before you file your N-400, so your tax history supports your application rather than complicating it.

Our standard Green Card Holder Return — a Form 1040 reporting worldwide income plus your FBAR — starts at $599. If it is your first year as a lawful permanent resident and you need a dual-status return, that engagement starts at $899 because of the split-year analysis and elections involved. For catch-up situations under the IRS Streamlined Filing Compliance Procedures (three years of returns plus six years of FBARs), or for exit-tax planning and Form 8854 preparation for Long-Term Residents, pricing starts at $2,499 and is quoted based on the number of years and the complexity of your assets. Every engagement includes unlimited communication with your assigned advisor.

Green card holder taxation sits at the intersection of US worldwide-income rules, foreign account reporting, and immigration consequences — an area most general accountants rarely handle. A specialist knows how to file a first-year dual-status return, when the Substantial Presence Test applies, how to identify PFICs hiding in a foreign mutual fund, and how the 8-of-15-year Long-Term Resident rule interacts with the exit tax when you surrender your card. Getting these wrong can mean thousands in unnecessary tax, five- and six-figure information-return penalties, or complications with your naturalization. Our IRS Enrolled Agent focuses on US persons with foreign ties and handle the full lifecycle — from your first year with the card, through annual compliance, to an eventual clean exit if you choose to abandon it.