Form 1040 itself is only the front page of your return. Which Form 1040 schedules and attachments you need depends on what you earned, where you earned it and what you own abroad. For residents with an Indian or Canadian background the list is usually longer than average: foreign interest, a rental flat in Pune, a Canadian RRSP, a mutual fund bought through a Mumbai broker. This roadmap shows which schedule or form catches each item for tax year 2025 (returns filed in 2026) and what to plan for 2026.
Which Form 1040 schedules and attachments apply to you?
| If you have this | Attach | Notes |
|---|---|---|
| Business income, unemployment, prizes, rental income flowing from Schedule E | Schedule 1 Part I | Also holds treaty-exempt income entries |
| Student loan interest, self-employment tax deduction, educator expenses, IRA deduction | Schedule 1 Part II | Adjustments to income |
| Qualified tips, overtime, vehicle loan interest or the enhanced senior deduction | Schedule 1-A | New for 2025; most need a valid SSN, and most nonresidents cannot take the vehicle loan deduction |
| Alternative minimum tax or self-employment tax | Schedule 2 | Part II also covers household employment tax and IRA penalties |
| Foreign tax credit, education credits | Schedule 3 Part I | Foreign tax credit may need Form 1116 |
| Extension payment, excess social security tax | Schedule 3 Part II | Payments and refundable credits |
| Itemized deductions | Schedule A | State and local tax cap is $40,000 for 2025, phasing down above $500,000 of income |
| Taxable interest or dividends over $1,500, or any foreign account or foreign trust | Schedule B | Part III is the foreign accounts question |
| Sales of stock, mutual funds, property | Form 8949 and Schedule D | Includes Indian and Canadian securities |
| Rental property, including a flat in Hyderabad | Schedule E | Foreign rents are reported in US dollars |
| Net self-employment earnings of $400 or more | Schedule C and Schedule SE | Residents pay self-employment tax |
| Child or other dependent credits | Schedule 8812 | Child tax credit is $2,200 per child for 2025; needs a valid SSN |
| Wages and self-employment income above $200,000 single or $250,000 joint | Form 8959 | Additional Medicare Tax |
| Investment income, with adjusted gross income above $200,000 single or $250,000 joint | Form 8960 | Net investment income tax |
| Foreign financial assets above the threshold | Form 8938 | Attached to the return |
| Foreign mutual funds or ETFs | Form 8621 | See our PFIC guide |
How to assemble your return, step by step
- Sort your income by source. US wages go on line 1a from Form W-2. Foreign wages, interest, dividends and pension distributions are reported unless a treaty exempts them. The IRS says foreign pension distributions go on lines 5a and 5b.
- Convert foreign amounts to dollars. Use one consistent, documented exchange rate method for the year and keep the source.
- Decide credit versus deduction for foreign tax. The credit usually wins. Form 1116 is required unless all your foreign income was interest or dividends reported on Forms 1099, foreign tax was $300 or less ($600 joint), and other conditions are met. Indian tax on rent or salary will rarely qualify for the exception.
- Choose standard or itemized deductions. Residents may take the 2025 standard deduction ($15,750 single, $31,500 joint, $23,625 head of household).
- Add the disclosures. Answer Schedule B Part III, attach Form 8938 if needed, and prepare the separate FBAR.
- Attach statements. Dual-status filers write "Dual-Status Return" and attach a statement. Treaty-exempt income goes on Schedule 1, line 8z, with the words "Exempt income," the treaty country and the article.
- Sign, file and keep copies. Keep foreign bank statements and conversion support with your return file.
What goes where for Indian and Canadian items
| Item | Where it is reported |
|---|---|
| Indian bank, NRE or NRO interest (taxable once you are a US resident) | Line 2b, Schedule B Part III, FBAR |
| Dividends from Indian or Canadian companies | Line 3b |
| Sale of a Pune or Toronto home or shares | Form 8949 and Schedule D |
| EPF, PPF or NPS withdrawals | Pension lines or income schedules, depending on facts; see foreign retirement accounts |
| RRSP and RRIF distributions | Pension lines; Rev. Proc. 2014-55 applies to deferral |
| Indian or Canadian mutual fund and ETF income | Form 8621 |
| Gift from parents above $100,000 | Form 3520, filed separately; see foreign gifts |
| Indian private limited company you own or control | Form 5471; see foreign business reporting |
Documents and information you need
- W-2, 1099 and 1042-S forms; Form 1098-T and 1098 if you have tuition or a mortgage
- Indian Form 16, AIS and Form 26AS extracts, interest certificates and rent receipts
- Canadian T4, T5, T5008 and RRSP or TFSA year-end statements
- Foreign tax payment proof for the credit
- The maximum balance during the year for each foreign account and its currency
- Prior-year US return, if any
Deadlines and penalties
A 2025 return was due April 15, 2026, with an extension to October 15, 2026 if Form 4868 was filed on time. Returns for 2026 are due April 15, 2027. Form 8938 is due with the return, including extensions. If you must file it and do not, the IRS instructions state a $10,000 penalty, with up to $50,000 more after notice, and a 40% accuracy penalty on tax underpaid because of an undisclosed foreign asset. The FBAR has a separate due date and penalties; see the FBAR guide.
If you file Form 1040-NR instead
A nonresident files Form 1040-NR with Schedule OI (Other Information). Add Schedule NEC for US income that is not effectively connected with a US business (taxed at 30% or a treaty rate), Schedule A (Form 1040-NR) for itemized deductions, and the numbered Schedules 1, 1-A, 2 and 3 as needed. Nonresidents cannot use the married filing jointly or head of household status, and tax benefits such as the child tax credit are available in full only to residents of Canada and Mexico and, to a limited extent, to residents of India and South Korea. Our nonresident guide covers this in detail.
Country and local notes
| Point | India | Canada |
|---|---|---|
| Foreign asset disclosure in the home return | Schedule FA (ask your Indian CA) | Form T1135 (ask your Canadian CPA) |
| Credit for US tax paid | Your Indian CA claims relief | Your Canadian CPA claims it |
| Same asset on the US return | FBAR, Form 8938, Form 8621 | FBAR, Form 8938, Form 8621 |
Illinois has its own Form IL-1040. See Illinois income tax for how it starts from your federal return.
Worked example: Vikram and Neha, Naperville
Vikram holds a green card and earns $142,000. Neha has no US income. They have a child, Indian fixed-deposit interest of $3,100, net Pune rental income of $2,900 and Indian tax of $620. They file a joint Form 1040 and attach: Schedule 1 (rental income), Schedule B (interest and the foreign account answer), Schedule E (the Pune flat), Form 1116 (credit for the $620 Indian tax), Schedule 3, Schedule 8812 (child credit) and Form 8938 if their combined foreign assets pass $100,000 on December 31 or $150,000 at any time. They also file an FBAR electronically for the Indian accounts.
Mistakes to avoid
- Leaving Schedule B Part III unanswered.
- Reporting Indian income in rupees without conversion.
- Taking a foreign tax credit and a deduction for the same tax.
- Treating Form 8938 as a replacement for the FBAR.
- Forgetting Form 8949 for sales that a foreign broker did not report on a US 1099-B.
How we can help
Our firm in Aurora, Illinois prepares Form 1040 returns with the full set of international schedules and forms. We handle the US side and coordinate with your Indian CA or Canadian CPA so credits and income agree. See our individual returns for newcomers and NRIs and foreign account and asset reporting pages.
Frequently asked questions
Do I file Schedule B if my interest is under $1,500?
Yes, if you had a foreign account or foreign trust, because Part III must be completed.
Does a green card holder use Form 1040-NR?
No. A green card holder is a resident and files Form 1040, unless a treaty tie-breaker applies.
Can I e-file with all these schedules?
Residents can e-file returns with these schedules through approved software. Dual-status returns could not be e-filed for 2025.
Is the foreign tax credit better than deducting Indian tax?
Usually, because a credit reduces tax dollar for dollar, subject to limits. Your preparer runs both.
Official sources
- IRS: Instructions for Form 1040 and 1040-SR (2025)
- IRS: Publication 519, U.S. Tax Guide for Aliens (2025)
- IRS: Instructions for Form 8938
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.