Form 14653 Instructions: How to Fill Out and File

Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Territory, is used to notify the IRS about a change in residency status. You must file this form for the tax year you begin or end bona fide residence in a U.S. territory if you meet certain requirements.

Determining Your Filing Requirement

You must file Form 8898 for the tax year you change your residency status if your worldwide gross income exceeds $75,000. For married couples, each spouse must assess their income separately against this limit. The filing requirement rests on being a “bona fide resident” of a U.S. territory. To be considered a bona fide resident for tax purposes, you must meet three distinct tests during the tax year as detailed in IRS Publication 570.

These territories include:

• Puerto Rico
• Guam
• American Samoa
• The Commonwealth of the Northern Mariana Islands (CNMI)
• The U.S. Virgin Islands (USVI)

The first is the Presence Test, which is primarily about physical location. The most straightforward way to meet this test is by being present in the relevant territory for at least 183 days during the tax year. An alternative is being present in the territory for at least 549 days over a three-year period, including the current tax year, with at least 60 days of presence in each of those years.

You must also satisfy the Tax Home Test. This test requires that you do not have a tax home outside of the relevant U.S. territory at any point during the tax year. Your tax home is your main place of business, employment, or post of duty. If you do not have a regular place of business, your tax home is where you regularly live.

Finally, the Closer Connection Test must be met. This test stipulates that you cannot have a closer connection to the United States or a foreign country than you have to the territory. This is a facts-and-circumstances test where the IRS considers various ties, including the location of your permanent home, family, and personal belongings.

Required Information and Documents

To complete Form 8898 accurately, you must first gather specific documents related to your income, travel, and personal connections. Having all materials ready will streamline the process. You will need your full name, Social Security Number (SSN), your address before the change in residency, and your address after the change. If both spouses are required to file, each must submit a separate Form 8898.

A detailed travel and presence log is required. To complete the Presence Test portion of the form, you must have a precise count of the days you spent in the specific U.S. territory, the United States, and any foreign countries during the tax year of your move.

Documentation for your Tax Home and Closer Connection claims is also needed. For the Tax Home Test, this includes employment contracts or details of your business’s main office. For the Closer Connection Test, you should gather evidence such as deeds or leases for your home in the territory, utility bills, local bank account statements, and vehicle registrations.

Finally, you must compile the documents needed to calculate your total worldwide income, including Forms W-2, 1099 series, and any statements from investment or bank accounts. The official and most current version of Form 8898 and its instructions can be downloaded directly from the IRS website at IRS.gov/Form8898.

A Guide to Completing Form 8898

With your preparatory documents in hand, you can proceed to fill out Form 8898. The form is divided into parts that correspond to the information you have gathered.

Part I: General Information

Part I establishes the basics of your residency change. On line 1, check the box indicating if you became or ceased to be a bona fide resident, enter the tax year, and check the box for the specific U.S. territory. Line 3 asks for your worldwide gross income for the tax year of the move, as well as your average worldwide gross income for the three-year period prior to that move.

Part II: Presence in the United States or Possession

This section requires data from your travel logs. Line 4 asks for the exact date you moved to or from the territory. Line 5 requires the total number of days you were present in the United States during the tax year. Line 6 is where you enter the number of days you were present in the territory for the tax year of the move and the two preceding years.

Part III: Tax Home and Closer Connection

This part uses the supporting documents you collected. Line 8 asks directly if you had a tax home outside the territory during the tax year. Lines 9 through 15 delve into the Closer Connection test, asking for the location of your permanent home, family, personal belongings, and vehicle registration.

Part IV: Information About Your Filing of Tax Returns

This part requires you to state whether you filed an income tax return with the IRS or the relevant territory’s tax agency for the year of the move and the preceding year. Finally, you must sign and date the form under penalties of perjury.

Submitting Your Completed Form

After completing and signing Form 8898, the final step is to submit it to the IRS. Form 8898 is a standalone statement and is not attached to your Form 1040 income tax return. It must be mailed to the specific address found in the official form instructions.

The deadline for filing Form 8898 is the same as the due date for your Form 1040, including extensions, which is usually April 15th of the year after your move. The penalty for failing to file a required Form 8898 can be $1,000 for each failure.

When submitting, send only the completed Form 8898 to the designated address. Do not include your Form 1040 or other tax documents, as they are processed separately. The IRS also offers a mobile-friendly version of Form 8898 that can be submitted online as an alternative to mailing a paper copy.

After you have submitted the form, it is highly recommended that you keep a complete copy of the signed and dated Form 8898 for your personal records. This copy serves as proof of your compliance and can be a valuable reference in the event of any future correspondence with the IRS.