File tax return while abroad?

[rosajo 1]

My husband didn't work during 2011 while living in Sweden, but he did receive parental leave cash from the government (a basic amount given to people who haven't previously worked in Sweden), the equivalent of 4000 dollars. This is taxable income in Sweden, yet when my husband asked both IRS and a tax professional, he was told he didn't have to file a tax return for that year. I'm wondering if he should file one anyways, for I-864 purposes?

Thanks.

[Gosia & Tito 199]

My husband didn't work during 2011 while living in Sweden, but he did receive parental leave cash from the government (a basic amount given to people who haven't previously worked in Sweden), the equivalent of 4000 dollars. This is taxable income in Sweden, yet when my husband asked both IRS and a tax professional, he was told he didn't have to file a tax return for that year. I'm wondering if he should file one anyways, for I-864 purposes?

Thanks.

USC always "need" to file taxes, as everyone is suppose to report global income; he might have been told he would not be paying taxes (or that is not worth filing, very likely given the small amount); but keep in mind that IRS/tax professionals might not necessarily know the immigration implications (did husband indicate that an immigration process was coming up?). What happens is that in reality, if you are going end up not paying taxes, many people do not file and everything is ok; but many/most of those people don't have to deal with immigration matters.

Edited May 6, 2012 by Gosia & Tito

[grrrrreat 109]

My husband didn't work during 2011 while living in Sweden, but he did receive parental leave cash from the government (a basic amount given to people who haven't previously worked in Sweden), the equivalent of 4000 dollars. This is taxable income in Sweden, yet when my husband asked both IRS and a tax professional, he was told he didn't have to file a tax return for that year. I'm wondering if he should file one anyways, for I-864 purposes?

Thanks.

Did either the IRS or the tax pro. explain the reason he was not required to file? Is it because the 4000 dollars wasn't considered as income for U.S. tax purposes or something similar? In the U.S., taxable income is generally either earned income or investment income, and it doesn't sound like this, but you might have to get clarification from the tax pro. If so, include an explanation of that with the I-864 in lieu of the tax return. If doubt remains, I don't think it would hurt to file a 1040. I don't think you will owe taxes on that anyway, since if you are a resident of the foreign country and not the U.S. you can exclude up to 92k of foreign income.

Edited May 6, 2012 by grrrrreat

[grrrrreat 109]

USC always "need" to file taxes, as everyone is suppose to report global income; he might have been told he would not be paying taxes (or that is not worth filing, very likely given the small amount); but keep in mind that IRS/tax professionals might not necessarily know the immigration implications (did husband indicate that an immigration process was coming up?). What happens is that in reality, if you are going end up not paying taxes, many people do not file and everything is ok; but many/most of those people don't have to deal with immigration matters.

This isn't true. People who did not earn more than $400 of taxable income are not required to file tax returns whether they live in the U.S. or not. If this $4000 is not considered taxable income, there's no requirement to file.

[rosajo 1]

Thanks guys. I'm still a bit confused. The benefit he received is considered earned income here in Sweden. The amount a person gets depends on his previous salary before taking parental leave. It's based on taxes paid. Sort of like unemployment benefits, maybe? It was on his Swedish tax return and I can only imagine it's considered income in the US too. I know the US govt doesn't hand out these sort of benefits, but some employers do I believe, and in such a case wouldn't it be seen as earned income?

Obviously, he won't need to pay US taxes on it as he wasn't a US resident during that time, but for immigration purposes it might be different. Perhaps he should speak to some other tax pro. He had his 2010 done at H n R couple of weeks ago since he did work the first part of that year in the US. We're not at the NVC stage yet, just filing the I-130 but want to be prepared so there's no delay.

[grrrrreat 109]

Thanks guys. I'm still a bit confused. The benefit he received is considered earned income here in Sweden. The amount a person gets depends on his previous salary before taking parental leave. It's based on taxes paid. Sort of like unemployment benefits, maybe? It was on his Swedish tax return and I can only imagine it's considered income in the US too. I know the US govt doesn't hand out these sort of benefits, but some employers do I believe, and in such a case wouldn't it be seen as earned income?

Obviously, he won't need to pay US taxes on it as he wasn't a US resident during that time, but for immigration purposes it might be different. Perhaps he should speak to some other tax pro. He had his 2010 done at H n R couple of weeks ago since he did work the first part of that year in the US. We're not at the NVC stage yet, just filing the I-130 but want to be prepared so there's no delay.

You can't assume that it's U.S. taxable just because it is under Swedish laws. The two countries have different tax laws. You need to talk to a tax pro about whether this is considered taxable income under US laws. If it's not taxable income, he has no need to file a tax return but should enclose a statement saying that he did not file a tax return because he had no taxable income. The tax law only requires that you file if you earned more than $400 of taxable income.

You can't compare these to benefits paid out by an employer, as those are earned income and are always taxable. By contrast, in the U.S. most social security payments are not taxable even though you obtain them by working and paying taxes.

If it is taxable income, then you need to ask the tax pro. the reason he doesn't need to file. Once you have a reliable answer about whether or not to file taxes, you can proceed accordingly.

Edited May 7, 2012 by grrrrreat

[rosajo 1]

Thanks! Much clearer now:).