Tax Tips for Nepalese Americans: What You Should Know

If you don't have a Social Security Number, you'll need an Individual Taxpayer Identification Number (ITIN) to file your federal tax return. Many Nepalese Americans — including students on certain visas, dependents, and spouses — rely on ITINs to stay compliant with U.S. tax law.

Key things to know about ITINs:

• You can apply using IRS Form W-7, submitted with your tax return

• An IRS Certifying Acceptance Agent (CAA) can verify your documents so you don't have to mail original passports

• ITINs expire if not used on a tax return for three consecutive years

• Renewing early avoids processing delays during peak filing season

At SSquare, Santosh Sah is an IRS-authorized CAA who can process your ITIN application in-office — no need to send your passport to the IRS.

U.S. tax law requires you to report worldwide income — that includes rental income from property in Nepal, interest from Nepali bank accounts, and any business income earned abroad.

If your foreign accounts exceed $10,000 in aggregate at any point during the year, you must also file an FBAR (FinCEN Form 114). Failing to file can result in significant penalties.

Common foreign income sources for Nepalese Americans:

• Rental income from property in Nepal

• Interest from Nepali bank savings or fixed deposits

• Income from a family business abroad

• Capital gains from selling property or assets in Nepal

Many Nepalese Americans regularly send money to family back home. The good news: sending money (remittances) is generally not a taxable event for the sender. However, there are reporting requirements if the amounts are large.

If you receive gifts or inheritances from relatives in Nepal exceeding $100,000 in a year, you must report them on Form 3520 — even though they're not taxed. Missing this form can trigger steep penalties.

Nepalese Americans often qualify for credits they don't claim simply because they're not aware of them:

• Child Tax Credit — up to $2,000 per qualifying child (ITIN holders may qualify for a portion)

• Education Credits — American Opportunity or Lifetime Learning credits for tuition paid

• Foreign Tax Credit — if you paid taxes on income in Nepal, you can often offset your U.S. tax

• Earned Income Tax Credit — for qualifying low-to-moderate income workers with SSNs

• Charitable Contributions — donations to qualifying U.S.-based organizations

Working with a tax professional who understands both U.S. tax law and the Nepalese community can help you claim every credit you're entitled to.

Tax situations for immigrant communities are rarely straightforward. Between foreign income reporting, ITIN renewals, treaty considerations, and FBAR obligations, it's easy to make costly mistakes or miss valuable savings.

At SSquare Inc., we've served hundreds of Nepalese American families in the Sacramento area. Santosh Sah, EA brings firsthand understanding of the community's needs combined with deep U.S. tax expertise. Whether you need help with your first ITIN application or a complex return with foreign income, we're here to help.