Australian Tax for Australians and Founders Living in the United States
- Extax Oceania
- 1 day ago
- 4 min read
Direct answer: the United States is a high-complexity destination because immigration status, federal tax residence, state tax residence and business nexus are separate questions. An Australian already living in the US—or planning a move—must coordinate the green-card or substantial-presence rules with Australian residence, CGT event I1, US entity classification, US trade-or-business exposure, state obligations and founder equity.
What changes for an Australian already living in the United States
A non-US citizen can become a US federal tax resident under the green-card test or the substantial-presence test.
The substantial-presence test uses a weighted three-year formula, not simply 183 days in the current year.
US federal residence, state residence and immigration status are distinct. A conclusion under one system does not settle the others.
If Australian residence ceased, CGT event I1 may affect founder shares, options and other assets. If it did not cease when assumed, Australian worldwide-income and foreign-tax-credit positions may need correction.
An Australian company can be engaged in a US trade or business and earn effectively connected income through US activities even without forming a US subsidiary.
LLCs, corporations, partnerships, equity plans, IP, fundraising and exit structures can be classified differently in Australia and the United States.
Founder and company decision matrix
1. When did Australian residence cease, if at all?
The review reconstructs homes, family, business control, expected duration, immigration steps and the actual departure timeline. Australian CGT event I1 may arise when residence ceases, while US worldwide-income taxation may begin under a different starting-date rule.
2. Which US residence and state rules apply?
A green card can create continuing US tax residence until properly terminated. The substantial-presence formula counts all current-year days plus fractions of the prior two years, subject to exclusions and limited exceptions. State rules can apply different tests, and a move between states can materially change the result.
3. How does the business operate in the US?
Direct sales, employees, contractors, a subsidiary, an LLC, inventory, services and founder contracting authority can create federal and state exposure. The US classification of an entity may not match its Australian treatment, so formation documents and elections should be reviewed before relying on the structure.
4. Does prior advice need review?
A client already in the United States may have had separate Australian and US returns prepared without a coordinated residence, entity-classification, CGT, treaty or founder-equity analysis. Extax can reconstruct the timeline and identify whether earlier assumptions, forms or transactions require correction.
Worked scenario: the founder is already in California
An Australian founder relocated to California, obtained permanent residence and formed a Delaware company for fundraising. The Australian company owns the original software and employs the engineering team, while the founder leads sales, strategy and investor discussions from the United States. Australian and US advisers have prepared annual filings but have not reconciled the founder’s departure date, equity exchange or company activities.
The review must coordinate Australian departure and CGT event I1 with the US residency starting date and state residence. The Delaware entity’s classification, equity exchange, IP rights, services and funding need review. The Australian company may also have a US trade or business or permanent establishment depending on the founder’s authority and activities.
Evidence to assemble
Travel history, visas, green-card documents, homes and state locations
Australian housing, family, assets, professional roles and return pattern
Founder shares, options, valuations, cap tables and transactions since departure
Australian federal and state returns, elections and written advice already received
Group chart, board minutes, delegations and signing authorities
Entity documents, fundraising terms, IP, employment, customer and intercompany agreements
Primary sources
Frequently asked questions
Can Extax review my position after I have already moved to the US?
Yes. The work can reconstruct the Australian departure and US residence timelines, review prior filings and entity choices, and coordinate US federal and state input where required.
Does a US visa determine my US tax residence?
Not by itself. Immigration status can affect the analysis, but federal tax residence is determined under the green-card and substantial-presence rules, with separate state tests.
Is a US LLC treated the same way in Australia?
Not necessarily. Entity classification can differ between the two countries. Australian treatment, US elections, ownership and cash flows should be reviewed before formation or restructuring.
Review an existing or proposed US position
Extax can review an arrangement already operating from the United States or a proposed move, including Australian residence, CGT event I1, US federal and state residence, entity classification, fundraising, trade-or-business exposure, IP, transfer pricing and founder equity.
Extax Oceania
Ex Big 4 | International Tax
Published 28 July 2026. Technically updated 28 July 2026.
Extax leads or coordinates the Australian tax analysis. US federal, state, legal, immigration and regulatory advice must be provided or confirmed by appropriately qualified US advisers. This page is general information only.
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