Dual-status taxpayer or the entire-year taxation?


I'm preparing to file my first taxes in the U.S. I Would appreciate it if the community helps me decide whether to file taxes as a Dual-status taxpayer or the entire-year taxation.

Background Information:
๐Ÿ”น 2 spouses + a child
๐Ÿ”น Now living in the US
๐Ÿ”น LPR status obtained in September 2023, resulting in less than 183 days spent in the U.S. within that year
๐Ÿ”น Prior to acquiring LPR status in 2023, the couple earned approximately $70K in a foreign country, which was unrelated to U.S. income. The taxes have been paid in the foreign country.
๐Ÿ”น Prior to acquiring LPR status in 2023, the couple sold residential property valued at less than $250K in their home country.
๐Ÿ”น After obtaining LPR status in 2023, no income earned outside the U.S., no property sold, no taxes paid in foreign country
๐Ÿ”น After obtaining LPR status in 2023, one spouse commenced employment in the U.S. under W2, earning around $30K for the year.
๐Ÿ”น Financial assets in the U.S.: CDs, T-Bills, FSA/HSA/401k accounts, including earned interest
๐Ÿ”น Financial assets outside the U.S.: cryptocurrency accounts, accounts in banks outside of the U.S. (more than $10K )
๐Ÿ”น Gross income for the first spouse (W2) - $100,001-250,000, second spouse - unemployed.
๐Ÿ”น No gambling winnings, no mortgage, no earnings of legal entities, corporations, LLC, no involvement in any transactions with trusts
๐Ÿ”น Additionally, there were incoming transfers to the U.S. bank accounts from friends/relatives, each under $5K, totaling approximately $15K.

Thank you for your comments and your time!


  • KristineS
    KristineS FreeTaxUSA Agent

    Hi avarvashin, thanks for writing in.

    Check out this PDF of IRS Publication 519, U.S. Tax Guide for Aliens. You may or may not have an opportunity to decide which status to choose, but rather your set of facts and circumstances only allow you to file one way or the other.

    Here are just a fews things to be aware of:

    โ€ข are there tax treaty definitions of residency to be taken into consideration? found on page 7 under Effect of Tax Treaties

    โ€ข claiming treaty benefits requires you to file Form 1040-NR with Form 8833, which our software does not support

    โ€ข Restrictions for Dual-Status Taxpayers, such as not being allowed to file a joint tax return, found on page 32

    These are only a few things to help you get started and guide you in the decision making process. Good luck, and thanks for writing in to our forum and seeking help from members of the FreeTaxUSA Community.