Passed Substantial Presence Test - What tax forms do I need to file now?

The Substantial Presence Test is definitely a turning point for your tax status! You're right that once you pass this test, you're generally considered a U.S. resident for tax purposes. Moving forward, you'll need to file Form 1040 instead of 1040-NR. The regular 1040 requires you to report your worldwide income, not just U.S. source income like the 1040-NR. You should inform your employer about your change in tax status so they can adjust their withholding accordingly - they'll need to switch from nonresident withholding to regular withholding procedures. As for foreign accounts, you've now entered the world of FBAR (Foreign Bank Account Report) and FATCA (Foreign Account Tax Compliance Act) requirements. If the total value of your foreign financial accounts exceeds $10,000 at any time during the year, you'll need to file FinCEN Form 114 (FBAR). For FATCA, you may need to file Form 8938 depending on the total value of your foreign assets.

After reading your post, I immediately thought of something that helped me when I was in a similar situation last year. I found this service called taxr.ai (https://taxr.ai) that specializes in analyzing tax residency status and foreign income reporting. I was also confused about the Substantial Presence Test and wasn't sure which forms to file. Their system analyzed my situation and helped me understand exactly what forms I needed to file after passing the Substantial Presence Test. They have experts who specialize in expat and resident alien taxation, which was exactly what I needed. They even helped me figure out my FBAR requirements which I had no clue about before.

I wanted to follow up about my experience with taxr.ai since I was skeptical at first. After passing the Substantial Presence Test last year and getting conflicting advice from friends, I decided to give them a try. They immediately identified that I qualified for treaty benefits that my regular tax software completely missed! The analysis showed me exactly which forms I needed for my foreign accounts and walked me through the FBAR filing process step by step. I was able to properly claim Foreign Tax Credits for taxes I'd already paid in my home country, which saved me over $3,000. They even flagged some deductions I was eligible for as a resident that I would have completely missed. What impressed me most was how they explained the Substantial Presence Test transition in simple terms and provided documentation I could share with my employer to update my withholding. Definitely worth checking out if you're dealing with this complicated transition.

If you need to actually talk to someone at the IRS about your substantial presence status (which I recommend), good luck getting through to them! I spent literally WEEKS trying to reach someone about my own residency status issues last year. After wasting hours on hold each time, I almost gave up. Then I found Claimyr (https://claimyr.com) which got me through to an actual IRS agent in under an hour. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They somehow bypass the usual wait times and get you connected quickly. The IRS agent I spoke with clarified exactly what forms I needed after passing the Substantial Presence Test and explained how to properly report my foreign accounts. They also confirmed that I needed to file Form 8833 for treaty benefits I was claiming. Getting official answers directly from the IRS was so much better than guessing or relying on potentially outdated information online.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I was desperate to get an answer about my substantial presence situation before filing, so I tried it anyway. To my shock, I was talking to an actual IRS international tax specialist in about 45 minutes! The agent walked me through exactly what forms I needed after passing the Substantial Presence Test and confirmed that I needed to report my foreign pension accounts on both FBAR and Form 8938. She also explained how the Closer Connection Exception works and whether I might qualify based on my specific circumstances. What was most valuable was getting clarity on treaty provisions that applied to my situation - something I had been confused about for years. The peace of mind from having official IRS confirmation was absolutely worth it. I'm actually embarrassed about how dismissive I was initially.

One thing nobody mentioned yet - if this is your first year passing the Substantial Presence Test, you might qualify as a "dual-status alien" for the tax year. This means you're a nonresident for part of the year and a resident for the rest. For a dual-status year, you typically file Form 1040 for the resident part and attach a Form 1040-NR as a statement for the nonresident part. It's kinda confusing but important to get right. The tax rules that apply to each period are different!

Be careful about state residency too!! The Substantial Presence Test is for federal taxes, but states have their own rules for residency. Some states are super aggressive about claiming you as a resident if you spend a certain number of days there. For example, NY considers you a resident if you maintain a permanent place of abode and spend 183 days or more in the state. California is even worse - they'll try to claim you're a resident based on much less. State taxes can be a huge additional burden depending on where you live.

This is such a common situation that catches people off guard! I went through the exact same transition two years ago and it was overwhelming at first. One thing I'd add to the great advice already given - make sure you understand the timing of when you need to start making estimated quarterly tax payments. Once you're a tax resident, you're subject to the same pay-as-you-go requirements as US citizens. If your employer is still withholding at nonresident rates, you might end up owing a significant amount at year-end and potentially face underpayment penalties. I'd recommend calculating your expected tax liability early in the year and either asking your employer to increase withholding or starting to make quarterly estimated payments. The IRS doesn't care that this is your first year as a resident - they expect you to figure it out! Also, start gathering all your foreign account statements now. The FBAR filing deadline is different from your tax return deadline (October 15th with automatic extension vs. April 15th), and the penalties for not filing or filing incorrectly can be severe. Better to be over-prepared than scrambling at deadline time.