# 2018 1040NR Questions



## OldMusicGuy (Jan 27, 2019)

Hi all,

First post here with some questions regarding 1040NR. I did do a forum search but couldn't find the answers I needed, so hope I'm not asking something that has been answered.

I'm a UK national that worked in the US for three years in the late 90s and accumulated a 401(k) which rolled over into an IRA. I took this as a lump sum distribution last year (I was aged 60) so need to fill out a 1040NR as IRA distributions count as connected income. My understanding is that these distributions cannot be reported as income on a 1040NR-EZ, hence I have to use 1040NR.

The IRA provider (John Hancock) insisted on deducting 30% withholding tax so I am due a fairly good sized tax refund. I am keen to get this refund as quickly as possible and have the form 1040NR ready to submit but I had some questions that I cannot answer. I'd appreciate any help with these questions (I haven't done a US tax return since I was in the US):

- The 2018 Form 1040NR is available on the IRS website. However, the instructions have the following wording on them: "Caution: DRAFT—NOT FOR FILING". Does this mean I cannot file a 1040NR for 2018 until the instructions have been updated? The form 1040NR itself seems to be the final 2018 version, no mention of "draft" anywhere.

- I would like to file electronically but it doesn't seem possible for 1040NR. I registered for eFile but there doesn't seem to be a way to submit a 1040NR, nor is there an online fillable version available (there is a 1040NR-EZ). Does anyone know if 1040NRs could be submitted electronically in the past? Is there likely just a delay in getting the fillable form available (maybe due to the shutdown), or do I have to file a paper return?

- If I file a paper return, any opinions on the best way of submitting this from the UK to ensure it gets delivered? Is it possible to get mail signed for at the IRS, or should I just use tracked mail without any need for a signature?

Any advice gratefully received!


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## Bevdeforges (Nov 16, 2007)

We don't get a lot of questions here regarding 1040NRs, which is no doubt why you didn't find much on the forum.



> The IRA provider (John Hancock) insisted on deducting 30% withholding tax so I am due a fairly good sized tax refund. I am keen to get this refund as quickly as possible and have the form 1040NR ready to submit but I had some questions that I cannot answer. I'd appreciate any help with these questions (I haven't done a US tax return since I was in the US):


Unless you have a US filing obligation (i.e. you're a US citizen), I think you'll find that 30% is the NR rate for income tax in the US these days. Non-residents don't get most of the usual kinds of deductions and are not subject to progressive tax rates like citizens or residents of the US are.



> - The 2018 Form 1040NR is available on the IRS website. However, the instructions have the following wording on them: "Caution: DRAFT—NOT FOR FILING". Does this mean I cannot file a 1040NR for 2018 until the instructions have been updated? The form 1040NR itself seems to be the final 2018 version, no mention of "draft" anywhere.


The 2018 1040NR form on the IRS website is good to go, but the instructions are labeled as being for 2017 rather than for 2018. It's doubtful that anything significant has changed for 2018 (i.e. with the changes to the tax law that take effect in 2018), so you can probably just fill out the 2018 forms using the 2017 instructions without any significant problem.



> - I would like to file electronically but it doesn't seem possible for 1040NR. I registered for eFile but there doesn't seem to be a way to submit a 1040NR, nor is there an online fillable version available (there is a 1040NR-EZ). Does anyone know if 1040NRs could be submitted electronically in the past? Is there likely just a delay in getting the fillable form available (maybe due to the shutdown), or do I have to file a paper return?


I found this: https://www.irs.gov/media/187251 which says that a 1040NR can be filed electronically, but I haven't yet managed to find anything about "Options for e-filing" in the instructions other than this: https://www.irs.gov/filing/e-file-options

It's possible that some of the commercial filing software (Turbo Tax or TaxAct or something like that) might do the NR forms.



> - If I file a paper return, any opinions on the best way of submitting this from the UK to ensure it gets delivered? Is it possible to get mail signed for at the IRS, or should I just use tracked mail without any need for a signature?


Somewhere on the IRS site it says that they won't sign for mail under any circumstances, so don't waste your postage. Tracked mail is a possibility but when I used the French tracked mail (for something else) the tracking only seems to go as far as notification that the letter arrived in the US. After that, there was no further tracking.


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## OldMusicGuy (Jan 27, 2019)

Thanks for replying. 

The 30% is not the NR rate, that's withholding. AFAIK I will be subject to the rates per the tax tables in the 1040NR instructions which are significantly below 30%. Although I have no deductions, I am due a nice refund. 

I have been digging around the IRS site a lot and found a page which has the draft 2018 instructions (unable to post link as I don't have 5 posts yet). However, the main page for 1040NR on the IRS website leads to the 2017 instructions. Very confusing. I guess I may have to try to call the IRS, something I was keen to avoid.

Thanks for the steer on the paper return, I guess I will just have to chance my luck with tracking only.


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## JustLurking (Mar 25, 2015)

OldMusicGuy said:


> The 30% is not the NR rate, that's withholding. AFAIK I will be subject to the rates per the tax tables in the 1040NR instructions which are significantly below 30%. Although I have no deductions, I am due a nice refund.


Should be. The US/UK treaty reserves taxing rights on 401ks and so on to the country of residence, _except_ for lump sums, when it's reserved to the country of source. No UK tax then, so that's good.

You get no personal exemption for 2018 unfortunately. That went away with the 2017 TCJA. Had you cashed in the pension earlier you could have extracted $4,050 tax-free. Perhaps you weren't over age 55 or 59.5 or whatever then, though.



OldMusicGuy said:


> I have been digging around the IRS site a lot and found a page which has the draft 2018 instructions (unable to post link as I don't have 5 posts yet). However, the main page for 1040NR on the IRS website leads to the 2017 instructions. Very confusing. I guess I may have to try to call the IRS, something I was keen to avoid.


The IRS is inefficient, and calling them is unlikely to illuminate anything for you. If I were you I would just fill out the 2018 1040NR from a combination of the 2018 draft and the 2017 instructions. I noticed that the two pension lines on it collapsed to one this year, so no worries about which to use there any more then.



OldMusicGuy said:


> I would like to file electronically but it doesn't seem possible for 1040NR. I registered for eFile but there doesn't seem to be a way to submit a 1040NR, nor is there an online fillable version available (there is a 1040NR-EZ). Does anyone know if 1040NRs could be submitted electronically in the past? Is there likely just a delay in getting the fillable form available (maybe due to the shutdown), or do I have to file a paper return?


Paper. For non-residents, the IRS is still firmly in the 20th century (if that). I file a 1040NR and estimated taxes, and always on paper. TurboTax recently partnered with Sprintax to support some 1040NR filing, but for a simple return it is at a much higher cost than justifies the effort saved.



OldMusicGuy said:


> If I file a paper return, any opinions on the best way of submitting this from the UK to ensure it gets delivered? Is it possible to get mail signed for at the IRS, or should I just use tracked mail without any need for a signature?


From a decade of experience, I can vouch for the fact that you pretty much never get UK international tracked mail to work with the IRS. Your mail always arrives, but the proof of delivery never does (I've used this to my advantage on several occasions -- when the proof of delivery never arrives the Post Office has to refund your mail costs!).

Now I just send it through normal airmail, and haven't yet had anything get lost. In your case, receiving your refund would be incontrovertible proof of delivery. It's not like the IRS is going to send it out unasked.


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## OldMusicGuy (Jan 27, 2019)

Many thanks for your helpful reply. 



JustLurking said:


> You get no personal exemption for 2018 unfortunately. That went away with the 2017 TCJA. Had you cashed in the pension earlier you could have extracted $4,050 tax-free. Perhaps you weren't over age 55 or 59.5 or whatever then, though.


I just missed the opportunity to take the lump sum in 2017 as I wasn't 59.5 until Feb 2018. 




JustLurking said:


> If I were you I would just fill out the 2018 1040NR from a combination of the 2018 draft and the 2017 instructions. I noticed that the two pension lines on it collapsed to one this year, so no worries about which to use there any more then.


Will do. If it's not correct when it arrives, they can always query it with me.




JustLurking said:


> Paper. For non-residents, the IRS is still firmly in the 20th century (if that). I file a 1040NR and estimated taxes, and always on paper. TurboTax recently partnered with Sprintax to support some 1040NR filing, but for a simple return it is at a much higher cost than justifies the effort saved.


Thanks, that confirms what I found. The return is so simple it;s not worth paying a preparer or using anything other than the basic stuff, provided that submitting a paper return isn't sending it into some kind of Kafka-esque abyss. My experience with US public sector organisations when I lived there did not fill me with confidence...



JustLurking said:


> Now I just send it through normal airmail, and haven't yet had anything get lost. In your case, receiving your refund would be incontrovertible proof of delivery. It's not like the IRS is going to send it out unasked.


Thanks, will use airmail.


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## JustLurking (Mar 25, 2015)

OldMusicGuy said:


> I have been digging around the IRS site a lot and found a page which has the draft 2018 instructions (unable to post link as I don't have 5 posts yet). However, the main page for 1040NR on the IRS website leads to the 2017 instructions. Very confusing.


Just FYI, as of Feb 6 the 1040NR instructions are finally available in non-draft form:

https://www.irs.gov/pub/irs-pdf/i1040nr.pdf


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## OldMusicGuy (Jan 27, 2019)

JustLurking said:


> Just FYI, as of Feb 6 the 1040NR instructions are finally available in non-draft form:


Thanks. Fortunately nothing changed that affected my return (which I already submitted), the tax table number I used is correct. Phew! 

Now all I have to do is to wait for it to be processed.......


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