Tax question

[UbiquitousPixie 0]

Ok, I still don't have my tax return in (I'm a USC) and now my accountant is trying to tell me that we might have to pay tax on the income he had in 2005 in England even though he never made any money here in the USA, he didn't live here most of the year and he isn't living here now (he's back in England). I just can't believe we have to pay taxes twice, once here and once in England. Can anyone help? Is my accountant right or are we just missing something?

Ally

[NigerLA 1]

Your husband never made any money in the States, and how then does your accountant expect him to pay taxes. He was never issued a W2 form or 1099 form, the only exception is if you worked outside the country and paid taxes in another country. You should get a tax credit for the amount you paid in taxes.

Ask your accountant if he has his calculations straight. I am an Accountant and I have never heard of that before.

Hope this helps.

[Boiler 45,486]

Ok, I still don't have my tax return in (I'm a USC) and now my accountant is trying to tell me that we might have to pay tax on the income he had in 2005 in England even though he never made any money here in the USA, he didn't live here most of the year and he isn't living here now (he's back in England). I just can't believe we have to pay taxes twice, once here and once in England. Can anyone help? Is my accountant right or are we just missing something?

Ally

You do not give enough information, probably not and even if you need to declare then there would except in pretty unusual cases be no additional tax liability in the US.

Was he resident in the US for IRS purposes, are you filing single or married etc etc.

[UbiquitousPixie 0]

Ok, I will try to explain further.

We are married after he came over on a K1 visa in Nov. 2005. He never worked in the US because he never got any working papers or a SSN. He left in Jan. 2006 after a huge argument. Now are are going through the K3 process. Anyway, he never worked a day over here. According to my accountant though, since he is an alien married to a USC we need to file a W-7 form and since I have to choose choice "e" on the form, it says he needs to submit an income tax form as well which means he would have to pay taxes on income he had in 2005 even though he made that income in England. It doesn't seem to matter if we file joint or separate, one of us would have to pay this tax. Filing this W-7 would apparently give him some sort of ID number for tax purposes.

Does that make sense? I think my accountant is wrong. If so, how do I go about filing as married if he doesn't have any ID number and he doesn't live in the US currently?

[Boiler 45,486]

Ok, I will try to explain further.

We are married after he came over on a K1 visa in Nov. 2005. He never worked in the US because he never got any working papers or a SSN. He left in Jan. 2006 after a huge argument. Now are are going through the K3 process. Anyway, he never worked a day over here. According to my accountant though, since he is an alien married to a USC we need to file a W-7 form and since I have to choose choice "e" on the form, it says he needs to submit an income tax form as well which means he would have to pay taxes on income he had in 2005 even though he made that income in England. It doesn't seem to matter if we file joint or separate, one of us would have to pay this tax. Filing this W-7 would apparently give him some sort of ID number for tax purposes.

Does that make sense? I think my accountant is wrong. If so, how do I go about filing as married if he doesn't have any ID number and he doesn't live in the US currently?

A US resident is taxed on his worl wide income. Residency is determined in this case by IRS regulations, not USCIS.

So from what you have said, maybe yes, maybe no, as far as declaring his income is concerend, probably no as far as paying any actual tax is concerned.

[zyggy 9]

Ok, I will try to explain further.

We are married after he came over on a K1 visa in Nov. 2005. He never worked in the US because he never got any working papers or a SSN. He left in Jan. 2006 after a huge argument. Now are are going through the K3 process. Anyway, he never worked a day over here. According to my accountant though, since he is an alien married to a USC we need to file a W-7 form and since I have to choose choice "e" on the form, it says he needs to submit an income tax form as well which means he would have to pay taxes on income he had in 2005 even though he made that income in England. It doesn't seem to matter if we file joint or separate, one of us would have to pay this tax. Filing this W-7 would apparently give him some sort of ID number for tax purposes.

Does that make sense? I think my accountant is wrong. If so, how do I go about filing as married if he doesn't have any ID number and he doesn't live in the US currently?

You have a choice.. a) you can choose to treat your husband as a non-resident alien and file as Married filing seperately or B) you can choose to treat your husband as a resident alien and file as Married filing jointly

No matter which choice you do, you will need to fill out a W-7...

If you wish to treat him as a non-resident alien, he does not need to file his own 1040. You only need to file your own seperate return...

If you wish to treat him as a resident alien, he must report his income with yours on the 1040. However, he can exclude up to $80,000 of that income by filing a Form 2555 or Form 2555EZ with the 1040. Any income over the $80,000 is taxable.

Edited April 19, 2006 by zyggy

[Widge 0]

I (who know nothing) think this may help

"However, nonresident aliens would be able to exclude their foreign earned income under the dual-status rules. Refer to Tax Topic 852 for dual-status information. A nonresident alien is generally not subject to U.S. tax on compensation for services performed outside the U.S."

http://www.irs.gov/faqs/faq-kw188.html

looking at the IRS site there are several ways round it (or so it appears to me), I seem to remember we had to opt for me to be treated as a resident alien for tax purposes and pass a substantial prescence "test" which if he only arrived in Nov I would doubt he'd pass. Good luck and happy reading ...... I hate US taxes!!!!!!!

[UbiquitousPixie 0]

Another quick question....since the IRS and immigration are two separate entities can I just file single and be done with it until next year?

[john_and_marlene 162]

Another quick question....since the IRS and immigration are two separate entities can I just file single and be done with it until next year?

NO