Hello, I’m CPA Maximiliano Mira Salas. Today we analyze the obligation to file Form 1040-NR (U.S. Nonresident Alien Income Tax Return), applicable to nonresident aliens earning U.S.-sourced income. This form is essential for tax compliance and must be filed even when income is limited or subject to withholding at source.

🔍 Who Must File Form 1040-NR?

Latin American investors, freelancers, or entrepreneurs with U.S.-sourced income (rentals, dividends, interest, royalties, services performed in the U.S., among others).
Beneficiaries of LLCs or partnerships effectively connected with U.S. trade or business activities.
Foreign individuals seeking refunds of taxes over-withheld on payments received.

🧾 Key Technical Aspects

Income subject to reporting: Includes Effectively Connected Income (ECI) —from business activities or services performed in the U.S.— and FDAP income (Fixed, Determinable, Annual, or Periodical) such as dividends, interest, or royalties.
Application of international treaties: Form 1040-NR allows the application of benefits under Double Taxation Treaties (DTTs) in force between the U.S. and the taxpayer’s country of residence, reducing withholding rates.
Limited deductions and credits: Unlike U.S. citizens or tax residents, nonresidents have restricted access to deductions and credits, except in specific cases (business expenses effectively connected to U.S. activities, certain dependent credits from treaty countries).
Filing deadlines:
- April 15 (if the taxpayer has income subject to withholding).
- June 15 (if no withholding was applied).
Consequences of non-compliance: Failure to file prevents refunds, generates interest and penalties, and may impact future U.S. visa or residency applications.

⚠️ Common Errors in Practice

Assuming withholding at source eliminates the obligation to file.
Not applying treaty benefits due to lack of residency certificates.
Filing late and losing the right to claim tax refunds.
Omitting passive income received through U.S. brokers or intermediaries.

📌 Legal and Accounting Disclaimer

This communication is for informational purposes only and does not constitute legal, accounting, or tax advice. Each situation must be evaluated individually by a licensed professional, considering tax residency, income type, and applicable international treaties.

At FINANCERS, we assist foreign individuals with U.S. income in the proper preparation and filing of Form 1040-NR, ensuring timely compliance to avoid penalties and preserve tax records.

If you received U.S.-sourced income and are unsure whether you are required to file, you can schedule a technical review with our team.

CPA Maximiliano Mira Salas
International Tax Advisor | FINANCERS 🇦🇷🇺🇸