If you are a nonresident alien in the U.S., you have distinct tax rules compared to citizens or resident aliens. You generally only pay U.S. taxes on income from U.S. sources, not on income earned abroad.
1. What income is taxed?
Your U.S. taxable income may include:
- Effectively Connected Income (ECI): Income from trade or business activities in the U.S. After allowable deductions, this is taxed at graduated rates similar to residents.
- FDAP income: Fixed, Determinable, Annual, or Periodical income (e.g. interest, dividends, rents) from U.S. sources. Often subject to 30% withholding (unless a tax treaty reduces that rate).
Some interest types (e.g. certain U.S. bank interest) may qualify for exemption or reduced withholding under IRS rules or treaties.
2. Filing a tax return & forms
As a nonresident alien, you’ll typically file Form 1040-NR to report your U.S. source income.
You may also need to submit:
- Form W-8BEN (to certify foreign status and claim treaty benefits) to withholding agents.
- Other IRS forms depending on categories of income (e.g. rents, scholarships, etc.)
3. Tax treaties and reduced rates
If your home country has a tax treaty with the U.S., you might qualify for reduced withholding rates or exemptions on certain income types. You need to claim treaty benefits properly (e.g. via Form W-8BEN) and follow treaty rules.
4. Why mention
dogpay
While dogpay is not part of U.S. tax rules, it can be useful in handling payments and transfers tied to your U.S. income:
- If you receive U.S. rental income, consulting fees, dividends, or other U.S.-source payments, you might use dogpay to move funds internationally with lower fees.
- When taxes or withholding are due, you may need to remit those payments from abroad—dogpay could provide a smoother USD transfer path.
- For managing cross-border income flows (receipts, reimbursements) tied to your U.S. income stream, dogpaycan act as a supportive financial tool.
