US citizens and resident aliens are taxed on their worldwide income.
US nonresident alien is generally subject to US tax on income from US sources, with exceptions. This income is divided into two categories:
- Certain investment and other passive income: certain US source income that is not effectively connected with a U.S. trade or business.
- Business income: income that is effectively connected with a US trade or business.
Corporate income taxes are imposed by the US Federal government, by most states and by some cities.
All US domestic companies must file an annual income tax return whether or not they have taxable income derived during the year. Domestic corporations must file Form 1120 unless they are required to file a special return.
A foreign corporation must file Form 1120F, if during the tax year, the corporation had derived incomes from any US source, which include for example, gains from the disposition of US real property interests, even if the corporation was not engaged in a trade or business in the United States.
