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Hello and thank you for using Just Answer,E1 and E2 visas are given to individuals from certain countries, who invest substantially in the United States. You will have to follow the rules for substantial presence in the US and if you meet the test then you will be a resident alien for US tax purposes (not immigration) and your worldwide income will be subject to US taxation.In the first year this happens you could choose to be a dual resident which would mean that from the day you meet the test till the end of the year you report worldwide income on US 1040 return and from Jan 1 of that year to the day you meet the test you would file a 1040NR US return and only report the US source income.
Here is a chart to assist in how to count the days:
You must pass both the 31-day and 183-day tests.
A. Current year days in United States x 1 =_____days
B. First preceding year days in United States x 1/3 =_____days
C. Second preceding year days in United States x 1/6 =_____days
D. Total Days in United States =_____days (add lines A, B, and C)
If line D equals or exceeds 183 days, you have passed the183-day test.
You would have to do this each year if you plan on coming and going form the US on your business dealings.
OK, thanks but you mentioned that in the first year we could choose being dual residents..can we choose not to?
great..the reason I ma asking is that we are Andorran citizens..meaning we live in a tax haven where we do not have to declare income whatsoever...so for the first two years it would be great if we could be taxed only on the US based income while maintaining our Andorran status..
sorry not Andorran citizens..I meant residents...
To do that you would need to watch your days in the US
ok, so if we are in the US for more than 183 days, we are US tax residents?
Yes but you also have to look back at the previous 2 years so the second year could be impacted by the first.
in the first year,we are there for more than 183 days
You are US resident alien
ok, I think I understand...
wow that's great to know finally!
Your positive rating is always thanks enough.
OK:) thanks for your help!
I really enjoyed working with you – please feel free to request me again when you come back to ask another question.
ok great !:)