“1. Is the tax rate on investment income for me as resident alien same as for a US Citizen or Permanant Resident? If not, what are some differences?”--->Yes; you, as a US resident for tax purposes, are liable for taxes, federal and state( in US, actually 9 states do not impose income taxes on their residents) tax on your world wide and US source income. You, as a resident alien for tax purposes, are generally taxed in the same way as U.S. citizens; you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U.S. tax return. You must report these amounts whether from sources within or outside the United States.
“2. Are the interest, capital gain,etc of mutual fund still viewed as not effectively connected with U.S. Trade/Business, as they were when I filled 1040NR in the first five years?”--->I guess so; as said above, as a US resident UNDER the US Tax law, your world wide income, both earned and earned income, are subject o federal and state level taxes in US. You are also subject to FICA taxes on your earned income in US UNLESS you maintain closer connection to your country of citizenship than to the U.S.
“3. Where in 1040 shall I put the following investment incomes ：
“From 1099-INT:”----> On Form 1040 line 8a; as long as the amount of interest income is over $1,500 of taxable interest or ordinary dividends then you need to use Schedule B.
“Tax-Exempt Interest”---> You need to report it on Form 1040 line 8b.
“Specified Private Activity Bond Interest”---->Interest on a private activity bond that is a qualified bond is tax exempt. It gets entered on Schedule K, line 17f. The allocation to the partners is reported on Schedule K-1, line 17, code "F". This entry goes to Form 6251, line 11 on your individual income tax return. I guess it is part of AMT, Alternative minimum tax.
From 1099-DIV:
“total ordinary dividends include qualified dividends”--->report ordinary dividends on 1040 line 9a and you also need to report qualified dividends on 1040 line 9b.
qualified dividends
“total capital gain distributions”---? You usually report your total capital gain distributions on Line 13 of Schedule D.
“foreign tax paid”---->To claim your foreign earned income exclusion credit, you need to report it as an adjustment to total income on Form 1040 line 36; As an alternative to the exclusion, you May elect to include your foreign income in gross income and take a tax credit for the incomes paid to a foreign country. The foreign earned income exclusion is claimed and figured using Form 2555 , which must be attached to Form 1040. You ALSO may claim the Foreign Tax Credit for taxes paid in a foreign country. However, you may not claim a tax credit for taxes paid on any income which has been excluded from US taxation using the foreign earned income exclusion or the foreign housing exclusion. You may claim a tax credit or an itemized deduction for taxes paid to foreign countries. You do not need to live or to work in that foreign country in order to claim this benefit. You may claim an itemized deduction for foreign taxes. This generally provides the least tax benefit. However, if you cannot claim the foreign tax credit, deducting foreign taxes would be the only alternative. A tax credit reduces your US tax liability on a dollar-for-dollar basis, and so is generally more valuable than a deduction which reduces your taxable income; you need to report if on 1040 line 47 by attaching the Form 1116.
Please visit the IRS Websites here;
Foreign Earned Income Exclusion - Requirements Foreign Tax Credit http://www.irs.gov/pub/irs-pdf/f1116.pdf
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