Don't have to report foreign income if she is living here now

[V-G-1 1]

Just to throw a monkey wrench in the whole issue:

General Information

"If you are a U.S. citizen or a U.S. resident alien living in a foreign country, you are subject to the same U.S. income tax laws..."

Techinically, a K-1 finance who moves here, gets married, and is now together filing jointly is NOT living in a foreign country anymore, She is just a U.S. Resident Alien living here now.....

So technically, there is no place for her to report her foreign income from before she moved here.

[payxibka 10,047]

Just to throw a monkey wrench in the whole issue:

General Information

"If you are a U.S. citizen or a U.S. resident alien living in a foreign country, you are subject to the same U.S. income tax laws..."

Techinically, a K-1 finance who moves here, gets married, and is now together filing jointly is NOT living in a foreign country anymore, She is just a U.S. Resident Alien living here now.....

So technically, there is no place for her to report her foreign income from before she moved here.

This is basically saying that a resident alien or USC living abroad is still within the reach of the IRS

A non-resident alien's foreign sourced income is NOT reportable

A resident alien and a citizen's foreign sourced income is

Edited August 11, 2009 by payxibka

[featherB 1]

There are a few threads knocking around on the subject, and it's far from my area of "expertise" (not that I have one!) so I won't go into it too much. But there's info here on determining whether your wife counts as a resident- or non-resident alien as far as the IRS is concerned:

http://www.irs.gov/publications/p519/ch01.html

And there's information here on the foreign-earned income exclusion:

http://www.irs.gov/businesses/small/intern...d=97130,00.html

I moved to the US in April 2007, and when we filed our taxes jointly for the first time, in January 2008, I clearly met both tests (green card test and substantial presence test, I think they're called) that determined me as a resident alien. We declared all my income from the UK, and then got to exclude the whole lot of it via form 2555. We got a rather large refund check too, as I recall.

[V-G-1 1]

OK, but here is a problem with Abode

"You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling"

If wifey moved here in November, she did not have a Tax Home back in foreign country anymore....thus, cannot use 2555 EZ either....

[payxibka 10,047]

OK, but here is a problem with Abode

"You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling"

If wifey moved here in November, she did not have a Tax Home back in foreign country anymore....thus, cannot use 2555 EZ either....

she does not appear to be a resident alien for tax purposes because she does not fit the GC test or the substantial presence test... unless of course you exercise the special election to treat her as a resident alien.... if you do so then you must declare her worldwide income as US based income...

[Nich-Nick 3,354]

You need to read this entire document. The information you seek is partly on page 9 in the middle column.

http://www.irs.gov/pub/irs-pdf/p519.pdf

Basically, she is a non-resident alien and is earning no money in the US or from US sources so she files no tax form and reports nothing.

BUT if you want to get the tax advantages of filing jointly and get her personal exemption and standard deduction off your income---

(Think about it...your same income, but double exemption and standard deduction taken off than you could as a single filer)

the only way to do that is send the statement saying you wish for her to be declared a resident alien for tax purposes. A non resident alien and a USC can not file a joint return together, unless you make that declaration. But if you file jointly, you must declare worldwide income. It doesn't say pay tax on worldwide income...just tell them about it. So because it was earned abroard and not associated with US in any way, it can be excluded up to a certain level.

That is your choice to make. If you don't want to include her or get the advantages of a joint return, the you can file married filing separately.

In my case, I figured both ways last year. My husband's income was below the threshold so was excluded. It was $2000 to my advantage to file jointly. You have a choice depending on what works out to your advantage. It was a little more trouble to learn all about this, but I thought $2000 was worth it.

I'm sure this was explained in detail in several tax threads I participated in. Just read Pub. 519.

[V-G-1 1]

ok, got it....take the tax advantage, I shall.......)))))))

[munchkins 0]

OK, this is something that has always puzzled me since I got here, put it down to age

I have my pension come over from the UK, state pension not a company pension and the DHSS convert it for me and direct it straight into my bank account which is great. Should I be declaring that as income, even though I think I am taxed on it in the UK. I know someone who has been receiving a pension from the Uk for years and has never declared it

What is the best way forwared, the tax system here is, as I said, a puzzle to me.

[Nich-Nick 3,354]

The short answer is if you have a green card, then you are a Resident Alien and file taxes exactly like any US citizen with most of the same rules, deductions, etc. So you would have to read up on foreign income or foreign pensions. This is a starter page http://www.irs.gov/businesses/article/0,,id=187083,00.html

When reading, keep in mind they will discuss non-resident aliens (not you, skip all that) and US citizens abroad getting pension from US companies (not you, skip that) as well as resident aliens getting pensions paid by foreign companies (you.) So if you can keep that in mind to focus on your bit and skip the pages and pages of other situations that should eliminate alot of the excess confusion.

If you pay tax in the UK, the foreign tax credits may apply to you http://www.irs.gov/pub/irs-pdf/p514.pdf

Just skimming the material, I believe you should file taxes, and report the pension, along with any interest you earn from investments. But that doesn't mean they will tax you on that pension if you already pay taxes on it. Lot's of reading.

Publication 519, page 11, Chap 2 Source of Income http://www.irs.gov/pub/irs-pdf/p519.pdf

Resident Aliens

A resident alien’s income is generally subject to tax in the same manner as a U.S. citizen. If you are a resident alien, 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.