Tax considerations

[RealPi 0]

I added this question in this forum because I could not really find a more suitable discussion area. Anyway, it relates to working prior to getting a Green Card, since tax considerations are an integral part of the work process (at least eventually)

I arrived on US soil on May 19, 2008 as a K1-er. Recently thereafter I got my SSN, and then got married early July. Now that I filed for AoS and work authorization (I-485, I-765) I am curious as to some basic things as regards taxation.

First of all: when does an alien first need to file to the IRS after arrival to the US? I am thinking it's probably by April 15th of 2009 for the tax year 2008 but do I also need to file for the tax year 2007?

The thing is, the first thing you need is to establish if you are a nonresident or resident or dual status alien for tax purposes. Having traveled extensively in the years 2005, 2006 and 2007 to the US under a tourist B1/B2 to visit my gf/fiancee at the time (and now wife) I seem to qualify under the Substantial Presence Test for the year 2007 as a resident alien (total days in 2007 + 1/3 of days in 2006 + 1/6 of days in 2005 add up to more than 183). I did not see days physically present in the US under B1/B2 as being "exempt" visas (for the purposes of this test, not for taxing) so I counted all the days I was in the US during the above periods.

Assuming what I did so far makes sense, repeating this test for 2008 also makes me a resident alien since just 2008 alone gives 227 days in the country by the end of the year (I don't intend to leave), which exceeds the 183 day limit.

So what is the first time I file for taxes and when? Can anyone help me on this?

I'm having my biometrics done on Monday and hopefully will receive my EAD in a month or so; and thus it'd be nice to know before I begin applying for jobs.

Pi

[desert_fox 32]

Prior to your marriage, there is no need to file a return as you were only a tourist here and hopefully did not work in the US. Your first return will be for 2008 and needs to be filed before Apr 15, 2009.

[payxibka 10,045]

This return can either be filed jointly with your spouse or the two of you file individually as married separate.

[Señor Bonito 2]

You should have filed a return for 2007 because you met the substantial presence test - total of at least 183 days in the U.S. in 2005, 2006 & 2007. And as you said, as a tourist you were not an "exempt individual".

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

Somehow, you probably did not have any taxable income derived from U.S. sources in 2007, unless you struck gold at the lottery? There is a threshold on income for filing requirements and based on this threshold you might not be required to file for 2007.

I added this question in this forum because I could not really find a more suitable discussion area. Anyway, it relates to working prior to getting a Green Card, since tax considerations are an integral part of the work process (at least eventually)

I arrived on US soil on May 19, 2008 as a K1-er. Recently thereafter I got my SSN, and then got married early July. Now that I filed for AoS and work authorization (I-485, I-765) I am curious as to some basic things as regards taxation.

First of all: when does an alien first need to file to the IRS after arrival to the US? I am thinking it's probably by April 15th of 2009 for the tax year 2008 but do I also need to file for the tax year 2007?

The thing is, the first thing you need is to establish if you are a nonresident or resident or dual status alien for tax purposes. Having traveled extensively in the years 2005, 2006 and 2007 to the US under a tourist B1/B2 to visit my gf/fiancee at the time (and now wife) I seem to qualify under the Substantial Presence Test for the year 2007 as a resident alien (total days in 2007 + 1/3 of days in 2006 + 1/6 of days in 2005 add up to more than 183). I did not see days physically present in the US under B1/B2 as being "exempt" visas (for the purposes of this test, not for taxing) so I counted all the days I was in the US during the above periods.

Assuming what I did so far makes sense, repeating this test for 2008 also makes me a resident alien since just 2008 alone gives 227 days in the country by the end of the year (I don't intend to leave), which exceeds the 183 day limit.

So what is the first time I file for taxes and when? Can anyone help me on this?

I'm having my biometrics done on Monday and hopefully will receive my EAD in a month or so; and thus it'd be nice to know before I begin applying for jobs.

Pi

[payxibka 10,045]

You should have filed a return for 2007 because you met the substantial presence test - total of at least 183 days in the U.S. in 2005, 2006 & 2007. And as you said, as a tourist you were not an "exempt individual".

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

Somehow, you probably did not have any taxable income derived from U.S. sources in 2007, unless you struck gold at the lottery? There is a threshold on income for filing requirements and based on this threshold you might not be required to file for 2007.

I think should have filed is the wrong answer.... The substantial presence test is only designed to determine ones status as either non-resident versus resident alien filing status. It alone does not mean one has a filing requirement. Many other tests and criteria need be met including as you mentioned US taxable income. Without a source of US taxable income, there is no need to perform any of the other "tests".

[Señor Bonito 2]

Yeah, you're right. the substantial presence test only determines one's status in the U.S., not the filing requirement. However, in this case at bar, I presumed that Pi had U.S. income in 2007. And if there was income, he had a chocie between a regular 1040 or a 1040NR.

You should have filed a return for 2007 because you met the substantial presence test - total of at least 183 days in the U.S. in 2005, 2006 & 2007. And as you said, as a tourist you were not an "exempt individual".

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

Somehow, you probably did not have any taxable income derived from U.S. sources in 2007, unless you struck gold at the lottery? There is a threshold on income for filing requirements and based on this threshold you might not be required to file for 2007.

I think should have filed is the wrong answer.... The substantial presence test is only designed to determine ones status as either non-resident versus resident alien filing status. It alone does not mean one has a filing requirement. Many other tests and criteria need be met including as you mentioned US taxable income. Without a source of US taxable income, there is no need to perform any of the other "tests".

[RealPi 0]

Yeah, you're right. the substantial presence test only determines one's status in the U.S., not the filing requirement. However, in this case at bar, I presumed that Pi had U.S. income in 2007. And if there was income, he had a chocie between a regular 1040 or a 1040NR.

You should have filed a return for 2007 because you met the substantial presence test - total of at least 183 days in the U.S. in 2005, 2006 & 2007. And as you said, as a tourist you were not an "exempt individual".

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

Somehow, you probably did not have any taxable income derived from U.S. sources in 2007, unless you struck gold at the lottery? There is a threshold on income for filing requirements and based on this threshold you might not be required to file for 2007.

I think should have filed is the wrong answer.... The substantial presence test is only designed to determine ones status as either non-resident versus resident alien filing status. It alone does not mean one has a filing requirement. Many other tests and criteria need be met including as you mentioned US taxable income. Without a source of US taxable income, there is no need to perform any of the other "tests".

I would like to thank you guys for thinking about this. Well, first of all I must say that no I did not work in the US under my tourist visas (which I am not allowed to do of course). I was just spending time with my girl and nothing else. She could not leave the US due to work and thus someone had to make the sacrifice. It was a difficult period but I do not regret it, since we truly established in the meantime that we were other halves. Anyway, I was receiving no money from US sources either directly or indirectly. I simply had savings from the past that I used to help me travel to and fro the country; and I come from a rather financially comfortable family (that's the "lotto" I suppose), so I would receive help from there plus of course I had help from my fiancee during this time. Anyway, my meagre earnings from Greece surely don't qualify. However, I am not sure what necessarily qualifies as a "source of US taxable income" in this case. For example, real property, income from bonds etc that one may have in a "foreign country" (i.e. non-US as defined for tax purposes) are taxed if one falls under the category of a resident alien, since then s/he is then taxed similar to a US citizen, viz. on their worldwide assets.

Now, as regards to what AJAnTess wrote here:

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

At least I know the answer to this bit (I think!) While what you say is technically correct, AJAnTess, the thing is that I arrived to the US in 2008, having started the immigration process in 2007 when we first filed for (end of August 2007). Even filing DS-230 in this case counts as "beginning the alien process" so to speak. OK, in such a situation one cannot establish a closer connection to the foreign country (Greece in this case) than the US for the year (even though otherwise I would be able to). Consequently, I am considered a resident alien for tax purposes for 2007.

Similarly, the SPT test shows that I am a resident alien for 2006 too while a nonresident alien for 2005.

However, there is something I don't get in all this. I was in the US only as a tourist. I spent money, I did not earn money. Also, what about all the tourists I know who have traveled to the US and stayed for up to three months even, at times? Most people who travel to the US don't stay there for only a week or two but at least a month; e.g. summer vacation with some US relatives or friends etc. I used to do it too, when I was working in the EU.

But anyway, let me just concentrate on the calendar year 2007. So it all seems to boil down to taxable US sources of income for 2007.

Well, unsurprisingly I was officially unemployed for the year 2007 abroad. Some personal bank savings, and mainly support from family (which I would get anyway) were what helped me travel (plus some help with tickets from fiancee; officially she paid for them). However, I derive some small income from interest in some bonds I have (about $2500 per year). Also, I have under my name two small pieces of land (real estate) which I have not sold and from which I derive no income whatsoever; until I actually sell the lands when that will bring some temporary income of course. I have never worked in the US in any way whatsoever.

So do I need to file to or not? Here is the question. And if I need to file I am already late (I wasn't in the US on April 15, 2008 yet so I had an automatic extension until June 15, 2008 which is still two months ago ... and if we also consider the years 2006 and 2005 ... ).

Obviously, we're going to hire an accountant asap but it'd be nice to hear your guys' thoughts on this.

Thanks again

Pi

[payxibka 10,045]

Plain and simple. You have no tax filing obligation until after your arrival in 2008 for 2008. Period.

Edited August 8, 2008 by fwaguy

[RealPi 0]

Plain and simple. You have no tax filing obligation until after your arrival in 2008 for 2008. Period.

fwaguy...I think I've mentioned before that you're a star, right?

THANK you once again for your accurate and to-the-point help!

Thank you also to everyone else who contributed! Your input is MUCH appreciated. We wouldn't be here today without your help!

Hugz

Pi

[Señor Bonito 2]

In my opinion, you were not a resident alien in 2007 because you did not apply for status as a permanent resident of the U.S., or you did not have an application pending for adjustment of status. Although your process started in August 2007, you came here on a K-1 visa in 2008 and only after you are married were you able to apply for a green card. I could be wrong; I'm not an immigration lawyer, I think maybe our friend, fwaguy, is one.

Nevertheless, if you were a resident alien in 2007, you should have earned at least $8,750 from ALL sources to meet the filing requirement.

Yeah, you're right. the substantial presence test only determines one's status in the U.S., not the filing requirement. However, in this case at bar, I presumed that Pi had U.S. income in 2007. And if there was income, he had a chocie between a regular 1040 or a 1040NR.

You should have filed a return for 2007 because you met the substantial presence test - total of at least 183 days in the U.S. in 2005, 2006 & 2007. And as you said, as a tourist you were not an "exempt individual".

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

Somehow, you probably did not have any taxable income derived from U.S. sources in 2007, unless you struck gold at the lottery? There is a threshold on income for filing requirements and based on this threshold you might not be required to file for 2007.

I think should have filed is the wrong answer.... The substantial presence test is only designed to determine ones status as either non-resident versus resident alien filing status. It alone does not mean one has a filing requirement. Many other tests and criteria need be met including as you mentioned US taxable income. Without a source of US taxable income, there is no need to perform any of the other "tests".

I would like to thank you guys for thinking about this. Well, first of all I must say that no I did not work in the US under my tourist visas (which I am not allowed to do of course). I was just spending time with my girl and nothing else. She could not leave the US due to work and thus someone had to make the sacrifice. It was a difficult period but I do not regret it, since we truly established in the meantime that we were other halves. Anyway, I was receiving no money from US sources either directly or indirectly. I simply had savings from the past that I used to help me travel to and fro the country; and I come from a rather financially comfortable family (that's the "lotto" I suppose), so I would receive help from there plus of course I had help from my fiancee during this time. Anyway, my meagre earnings from Greece surely don't qualify. However, I am not sure what necessarily qualifies as a "source of US taxable income" in this case. For example, real property, income from bonds etc that one may have in a "foreign country" (i.e. non-US as defined for tax purposes) are taxed if one falls under the category of a resident alien, since then s/he is then taxed similar to a US citizen, viz. on their worldwide assets.

Now, as regards to what AJAnTess wrote here:

However, even if you met the substantial presence test in 2007, you can be treated as a nonresident alien if you were present in the U.S. for fewer that 183 days during 2007, you maintained a tax home in a foreign country during the year, and you have a closer connection to that country than to the U.S. Having said that, even as a nonresident alien, you are still required to file a Form 1040NR for 2007.

At least I know the answer to this bit (I think!) While what you say is technically correct, AJAnTess, the thing is that I arrived to the US in 2008, having started the immigration process in 2007 when we first filed for (end of August 2007). Even filing DS-230 in this case counts as "beginning the alien process" so to speak. OK, in such a situation one cannot establish a closer connection to the foreign country (Greece in this case) than the US for the year (even though otherwise I would be able to). Consequently, I am considered a resident alien for tax purposes for 2007.

Similarly, the SPT test shows that I am a resident alien for 2006 too while a nonresident alien for 2005.

However, there is something I don't get in all this. I was in the US only as a tourist. I spent money, I did not earn money. Also, what about all the tourists I know who have traveled to the US and stayed for up to three months even, at times? Most people who travel to the US don't stay there for only a week or two but at least a month; e.g. summer vacation with some US relatives or friends etc. I used to do it too, when I was working in the EU.

But anyway, let me just concentrate on the calendar year 2007. So it all seems to boil down to taxable US sources of income for 2007.

Well, unsurprisingly I was officially unemployed for the year 2007 abroad. Some personal bank savings, and mainly support from family (which I would get anyway) were what helped me travel (plus some help with tickets from fiancee; officially she paid for them). However, I derive some small income from interest in some bonds I have (about $2500 per year). Also, I have under my name two small pieces of land (real estate) which I have not sold and from which I derive no income whatsoever; until I actually sell the lands when that will bring some temporary income of course. I have never worked in the US in any way whatsoever.

So do I need to file to or not? Here is the question. And if I need to file I am already late (I wasn't in the US on April 15, 2008 yet so I had an automatic extension until June 15, 2008 which is still two months ago ... and if we also consider the years 2006 and 2005 ... ).

Obviously, we're going to hire an accountant asap but it'd be nice to hear your guys' thoughts on this.

Thanks again

Pi

[RealPi 0]

In my opinion, you were not a resident alien in 2007 because you did not apply for status as a permanent resident of the U.S., or you did not have an application pending for adjustment of status. Although your process started in August 2007, you came here on a K-1 visa in 2008 and only after you are married were you able to apply for a green card. I could be wrong; I'm not an immigration lawyer, I think maybe our friend, fwaguy, is one.

Nevertheless, if you were a resident alien in 2007, you should have earned at least $8,750 from ALL sources to meet the filing requirement.

In a paper I received from the Embassy in Athens it clearly states (as I now realize) -- this was a letter that was sent to me after I got my K-1 visa with general instructions on what to do next -- that I will have to apply for a SSN when in the US in order, among other things, to be able to file for taxes. I think that in cases that one qualifies as an alien for tax purposes before coming officially to the US, some sort of other number (I read something like ITIN? might be wrong) is used in place of SSN for tax purposes. I had neither a SSN nor a ITIN of course.

And what you say is indeed correct.

What I didn't know was the filing requirement amount; thanks for that. Indeed, I did a rough calculation on other sources of income in Greece during each of the "offending" years ('06 and '07) and the only source I found were the aforementioned interest from the bonds (which WOULD qualify) and renting - as it turns out - in my name as part of a property, giving me a small portion of the monthly rent as income (which I don't know if it would qualify since it gets taxed by the Hellenic State). (I just found out about this because my family uses that money and I never actually received a penny of it, but that's OK of course, we're totally bonded ). But assuming that it does qualify, that's about it. Altogether (adding a few other small possible income sources) gives a total that never exceeded $5000 per calendar year (all in and by non-US funds and fully taxed by the Hellenic State). Hence even if I did qualify as a resident alien for 2006 and 2007, I would still be well below the filing threshold.

Thank you AJAnTESS, your input has been much appreciated; and I think this helps clarify a few of the things that people may be confused about as regards when to first file.

Hugz

Real Pi!

[Señor Bonito 2]

In my opinion, you were not a resident alien in 2007 because you did not apply for status as a permanent resident of the U.S., or you did not have an application pending for adjustment of status. Although your process started in August 2007, you came here on a K-1 visa in 2008 and only after you are married were you able to apply for a green card. I could be wrong; I'm not an immigration lawyer, I think maybe our friend, fwaguy, is one.

Nevertheless, if you were a resident alien in 2007, you should have earned at least $8,750 from ALL sources to meet the filing requirement.

In a paper I received from the Embassy in Athens it clearly states (as I now realize) -- this was a letter that was sent to me after I got my K-1 visa with general instructions on what to do next -- that I will have to apply for a SSN when in the US in order, among other things, to be able to file for taxes. I think that in cases that one qualifies as an alien for tax purposes before coming officially to the US, some sort of other number (I read something like ITIN? might be wrong) is used in place of SSN for tax purposes. I had neither a SSN nor a ITIN of course.

And what you say is indeed correct.

What I didn't know was the filing requirement amount; thanks for that. Indeed, I did a rough calculation on other sources of income in Greece during each of the "offending" years ('06 and '07) and the only source I found were the aforementioned interest from the bonds (which WOULD qualify) and renting - as it turns out - in my name as part of a property, giving me a small portion of the monthly rent as income (which I don't know if it would qualify since it gets taxed by the Hellenic State). (I just found out about this because my family uses that money and I never actually received a penny of it, but that's OK of course, we're totally bonded ). But assuming that it does qualify, that's about it. Altogether (adding a few other small possible income sources) gives a total that never exceeded $5000 per calendar year (all in and by non-US funds and fully taxed by the Hellenic State). Hence even if I did qualify as a resident alien for 2006 and 2007, I would still be well below the filing threshold.

Thank you AJAnTESS, your input has been much appreciated; and I think this helps clarify a few of the things that people may be confused about as regards when to first file.

Hugz

Real Pi!

You're welcome, Pi. Congtratulations on your marriage and may you have a nice career in taxation here in the US!

[RealPi 0]

You're welcome, Pi. Congtratulations on your marriage and may you have a nice career in taxation here in the US!

LOL! I hope not! I used to think that accountants lead a boring life; now I see it must get quite stressful for them. I used to work in math (before this difficult period) so technically I might qualify for such a job. I have also worked part-time next to my mom as a sort of paralegal, when I was younger (you know, kids have fun outside while you comb long contracts and check for errors). Very responsible positions, a lot of careful preparation is needed. Red tape hardly ever makes the sense it should make. In the EU I think England's pretty good about its red tape, they're very well organized. Anyway all I have to say is kudos to all of the people who work in immigration law and accountancy!

Thank you for your best wishes. Good luck with your recent application, looking forward to hearing that you do well on your future embassy interview.

Pi

[RealPi 0]

This return can either be filed jointly with your spouse or the two of you file individually as married separate.

Thank you fwaguy, that's also important to note. I think by mistake she put down last time that I was a nonresident alien (and thus our taxes need to be calculated separately) so she got taxed more I think. But since for this year clearly I cannot file as a nonresident, we will file jointly by next April and hopefully she might see some of that extra money returned by the IRS (unlikely but it happens sometimes )

Pi