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LearnFAQImmigrant & NRI Finance

Why does the first year on an H-1B often create a more complicated tax return than later years?

Answer

Your first H-1B year is frequently a dual-status year, because you usually pass the substantial presence test partway through, so you're nonresident before your residency start date and resident after. That splits how your income is taxed, blocks the standard deduction, and complicates joint filing unless you make a first-year or resident election. You may also still be sorting an SSN, treaty positions, and foreign accounts from before arrival. In every later full year you're simply a resident alien filing a normal Form 1040, so it's far simpler. Because the first year has the most moving parts, many people use a preparer that year. The IRS covers dual-status and the elections in Publication 519 at irs.gov.

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