GLOSSARY · VISA-HOLDER FINANCE

Effectively connected income (ECI)

Income of a nonresident alien that is connected with a US trade or business, such as wages for work in the US, taxed at the ordinary graduated rates on Form 1040-NR. Retirement distributions that come from contributions for US work after 1986 are treated as effectively connected even after you leave; other US income of a nonresident is generally taxed at a flat 30% unless a treaty lowers it.

Also called: eci, income connected with a us trade or business

COMPUTE IT WITH YOUR NUMBERS

Take-home pay, visa-holder variant →What will I actually take home per paycheck, including as an H-1B, F-1 OPT or nonresident alien?401(k) withdrawal when leaving the US →Leaving the US on a visa: what do I net if I cash out now vs later, leave it or roll it over?Roth vs traditional if you might leave the US →Roth or traditional 401(k) if I might leave the US?

LEARN IT PROPERLY

CHAPTER · ARRIVING AND WORKING ON A VISA · FOUNDATIONSYour Tax Status Is Not Your Visa CHAPTER · ARRIVING AND WORKING ON A VISA · FOUNDATIONSFiling Your Return: Form 1040 or 1040-NR, and State Taxes

SOURCES

Publication 519, U.S. Tax Guide for Aliens. Internal Revenue Service.
Publication 519, U.S. Tax Guide for Aliens, chapter 4. Internal Revenue Service.

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