Passed Substantial Presence Test in the US - What Do I Need to Do Now?

Once you pass the substantial presence test, you're generally considered a US resident for tax purposes. This means you'll file taxes as a resident alien using Form 1040 (the same form US citizens use), not the non-resident 1040-NR. As a tax resident, you'll need to report your worldwide income - including any interest, dividends, or gains from your Canadian accounts. Look into Form 8938 for reporting foreign financial assets if they exceed certain thresholds. You might also need to file an FBAR (FinCEN Form 114) if your foreign accounts total over $10,000 at any point during the year. The good news is that the US-Canada tax treaty has provisions to help prevent double taxation. You may be able to claim foreign tax credits for taxes paid to Canada, which can offset your US tax liability on that same income.

I went through this exact nightmare last year! After trying to figure out all the forms and rules myself, I found this tool called taxr.ai (https://taxr.ai) that literally saved my sanity. It specifically helped me understand my residency status and exactly which forms I needed to file based on my particular situation. The thing that surprised me was how it analyzed my specific situation with the substantial presence test calculation and then gave me a detailed breakdown of my filing requirements. It even highlighted potential tax treaty benefits between my home country and the US that I had no idea about!

Just wanted to update after trying taxr.ai from the recommendation above. It was exactly what I needed! The substantial presence test calculator confirmed my status, and it walked me through the specific forms I need for my Canadian accounts. The best part was getting clarity on tax treaty benefits - turns out I can exclude certain Canadian retirement accounts from US taxation through the treaty! That's something I never would have figured out on my own. Definitely worth checking out if you're dealing with international tax situations like this substantial presence test issue.

If you need to get specific answers from the IRS about your substantial presence test status, good luck reaching them by phone! I spent WEEKS trying to get through to ask about my specific situation. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under an hour. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was skeptical at first but was desperate to get answers about my residency status and FBAR requirements before the filing deadline. They use some technology that navigates the IRS phone system and holds your place in line, then calls you when an agent is about to answer. Saved me literally days of frustration.

Well I'm eating my words about Claimyr. After my skeptical comment I decided to try it since I was desperate to get clarification about the substantial presence test for my situation with multiple entries and exits from the US. After three weeks of failing to reach the IRS on my own (either disconnected or couldn't stay on hold for 3+ hours during work), I used the service and got through to an agent within 45 minutes. The agent was able to confirm exactly how to count my days for the substantial presence test and what treaty benefits applied to my situation. Worth every penny just for the stress relief of actually getting official answers instead of guessing!

One thing to be careful about with the substantial presence test - if you've been in the US on a student visa (F visa) or teacher/trainee (J visa), those days might not count toward the substantial presence test. The rules are different for these "exempt individuals" so make sure you're actually subject to the test before filing as a resident.

Does anyone know if there's a way to elect to be treated as a NON-resident even after passing the substantial presence test? I might actually pay less tax that way because most of my income this year was from before I came to the US.

The substantial presence test can definitely be overwhelming when you first encounter it! Since you're on an H1-B and have been in the US for 8 months, you'll likely need to file as a resident alien using Form 1040. A few key points for your situation: First, make sure you understand the filing deadlines - typically April 15th for the following year, but you may be eligible for an automatic extension if needed. Second, regarding your Canadian accounts, you'll need to report the income from them on your US tax return, but the US-Canada tax treaty should help prevent double taxation through foreign tax credits. For FBAR filing (if your Canadian accounts exceeded $10,000 at any point), the deadline is different - October 15th with an automatic extension available. Don't worry too much about the payroll taxes you've been paying through work - those will be credited toward your total tax liability when you file. Since this is your first year dealing with US tax residency, I'd strongly recommend getting help from a tax professional who understands international tax situations, especially US-Canada tax treaty provisions. The peace of mind is worth the cost when dealing with potential penalties for missing requirements.

The substantial presence test definitely caught me off guard too when I first moved to the US! One important detail I learned the hard way - make sure you keep detailed records of your actual days in the US. The test counts any part of a day as a full day, so even if you just landed late at night or left early in the morning, those count toward your total. Since you mentioned you're from Canada, you might want to look into whether you qualify for the "closer connection exception" using Form 8840. If you maintained stronger ties to Canada (like a permanent home, family, bank accounts as your primary financial center, etc.) and were present in the US for fewer than 183 days this calendar year, you might be able to file as a non-resident even though you meet the substantial presence test. Also, don't panic about the foreign account reporting - the thresholds for FBAR and Form 8938 are different, and many people don't realize you might need both depending on your account balances. The FBAR threshold is $10,000 total across all foreign accounts at any point during the year, while Form 8938 has higher thresholds that depend on your filing status and where you live. The good news is that since you've been paying taxes through payroll, you're already on the right track and likely won't owe huge amounts when you file. The withholdings should cover most of your liability.