For a 1040 Tax return Non Resident US Citizen

Forum|Forum|3 months ago
March 19, 2026
2 replies
9 views

I have a client MFJ, Non Resident, US Citizen. Spouse income is CA based remote work. The Taxpayer has a corporation in the country they live in and reported a loss of $412 in 2025. How best to file the 1040, forms etc. in this scenario?

ProConnect Tax

sjrcpa

Level 15

US citizens report and pay tax on their worldwide income.

If the corporation is really a corporation in that country and acknowledged as such by the IRS the loss doesn't matter. But did taxpayer get wages from it? Dividends? Rent? That is taxable on the US return.

Then you have the foreign reporting issues - FBAR, 5471, 8938 etc. HUGE Penalties for noncompliance.

Possible foreign earned income exclusion and/or foreign tax credit.

The more I know the more I don’t know.

J

Jeeter25Author

Level 2

Thank you for the response! Yes always learning for sure!

I entered the business income on schedule C, treating it like a Sole Prop. So far not getting any critical errors. Its a small coffee farm.

sjrcpa

Level 15

That does not sound correct.

The more I know the more I don’t know.

T

TaxGuyBill

Level 15

If you have a client that is an owner of a foreign corporation, you REALLY, REALLY, REALLY need to have an expert in foreign matters to review or do the tax return.

As was mentioned before, the penalties for not reporting things correctly can be ENORMOUS.

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