Filing 2009 US Taxes

[BrahmaBull 0]

If you both "elect" for her to be treated as a resident alien for tax purposes, then she's a resident alien for the entire year 2009. If you make that election, then don't read the non-resident alien stuff. She IS a resident alien.

Can't answer the self employed part because I'm not finding that on a quick look at the instructions. Where did you read that?

If you file joint, you have to make the "election" to treat her as a resident alien. If you do that then must declare worldwide income. A US cititzen and a non-resident alien can't file joint. So you can't file jointly with her without claiming her income and making the election. You can file Married Filing Separately and she is not on the return and does not file anything because she doesn't live here and didn't choose to be treated as a resident alien. Hope that makes sense.

OK, so if I file joint, what form do I use to declare her income? I feel like the ones talked about in this thread wont work....

She is self employed in Canada.

EDIT: just realizing you did comment on the self employed piece.

On the top of the 2555EZ it mentions not to use the form for self employed. Maybe I just realized I would use the non EZ 2555....??

Edited February 8, 2010 by BrahmaBull

[BrahmaBull 0]

My head is spinning. We are going to go to a local IRS office Wednesday morning. According to the irs website, they will help us...

[BrahmaBull 0]

Maybe I can file the 1116?

[BrahmaBull 0]

IRS assistance center was pointless! They told me they cannot advise me on my concerns. wow.

[road417king 7]

IRS assistance center was pointless! They told me they cannot advise me on my concerns. wow.

The IRS cannot give tax advise, they're legally restricted. Just like people who work at the court house are not able to provide legal advise.

I've been fighting with the taxes thing for the past few days and I am getting ready to say "screw it" and file Married Separately.

I'm using Turbo Tax online and it's actually starting to frustrate me because my "married separately" filing gets a refund, changing it to "married jointly" almost triples the amount but then when I go through all the fun and games of adding in her income as "other income" and completing the Foreign Income Exclusion wizard, the final refund drops to less than 1/3rd of the "married separately" refund.

Now these aren't real numbers, however imagine starting with a refund of $500 (married separately), then changing it to married jointly and watching the refund go up to $1400, then adding her income as "other income, foreign income" and completing the Foreign Income Exclusion" and watching that $1400 *reduce* to $187.

Depressing and confusing are mild terms for what I'm feeling right now. I just don't get it.

Mike

[Nich-Nick 3,354]

I hate the online TurboTax. With the installed version (about $24) you can go look at all your forms. With online, you are stuck with the "interview" thing. If you don't answer something correctly, it may fill in a weird form that you have no idea. There's not a good way to actually look at what's going on because it's kinda hidden in interview mode. Online TurboTax is terribly frustrating to me. Buy and install, then all your info is there to print out, try a different scenario by saving file under a new name, and next year it will pull in your previous info from 2009 taxes and you don't have to enter all that again. It will even say "Did you get a W2 from DuPont (insert your employer) this year? Did you get a 1099R from Wells Fargo Bank this year? I think something isn't right with your entries because Married Filing Separately is normally the highest tax status. I suggest, go to Walmart or Target and purchase TurboTax BASIC...wherever it's cheapest.

[road417king 7]

I hate the online TurboTax. With the installed version (about $24) you can go look at all your forms. With online, you are stuck with the "interview" thing.

I agree, however I've already paid the fee for the online version in order to see the forms to try and figure out what was going on.

Next time I'll do the boxed version, however it boils down to having roughly $800 in capital gains. If I remove the stock sales from the calculations then I get a large refund, but because of the capital gains from the ESPP stock sales, I'm basically screwed because when doing capital gains they definitely consider my wife's (excludable) foreign income as part of the basis for figuring the tax percentage.

In the end, it's actually more cost effect at this time to file Married Separately.

Thanks Nich-Nick (I'm assuming the Nich part?)

Mike

[hieumin 2]

Hi,

on line 1b of 2555EZ tell me to input beginning and ending date of bona fide resident test, Do I put just last year 1/1/09 to "continue" OR from her birthday to "continue". my wife has been living all her life up to present time in vietnam. our petition is at nvc now. I know these two options are make sense, but which one is most prefer by irs?

hieuminh

[BrahmaBull 0]

Nich-Nick, Think I should do the Turbo Tax Basic too? Or bite the bullet and go to a tax pro?

[Nich-Nick 3,354]

Nich-Nick, Think I should do the Turbo Tax Basic too? Or bite the bullet and go to a tax pro?

I just don't know how self-employed works. I was trying to look at it, but it's an area of taxes I've never done.. Like "self-employment tax" is mentioned and may be getting into a whole new bunch of stuff that will not benefit you. Maybe somebody who files Schedule C and is familiar with it can help. Send a PM to RinandJohn. He knows alot. And Turbo Tax Basic might not be suitable for business taxes (self-employed.) I don't know how the online thing works. Can you try a higher level (business) for free before signing up? You could see where it gets you in the interview for her self-employment to maybe make a decision if you want to file jointly before you pay anything. If it looks good, buy the disk to install. If it looks like you're better off filing separately, buy the Basic disk.

Or you can call the IRS and ask a question. If my wife is self employed in Canada, can I exclude her income? If she files jointly with me, how to I treat her Canadian self-employment? What form do I use. I've talked to them on the phone before. They won't give you advice, but they will answer questions about tax forms. They kept bumping me up to a more specialized person, who in the end was reading the publication just like me and trying to figure it out. It was over estate things for a deceased tax payer.

[BrahmaBull 0]

I just don't know how self-employed works. I was trying to look at it, but it's an area of taxes I've never done.. Like "self-employment tax" is mentioned and may be getting into a whole new bunch of stuff that will not benefit you. Maybe somebody who files Schedule C and is familiar with it can help. Send a PM to RinandJohn. He knows alot. And Turbo Tax Basic might not be suitable for business taxes (self-employed.) I don't know how the online thing works. Can you try a higher level (business) for free before signing up? You could see where it gets you in the interview for her self-employment to maybe make a decision if you want to file jointly before you pay anything. If it looks good, buy the disk to install. If it looks like you're better off filing separately, buy the Basic disk.

Or you can call the IRS and ask a question. If my wife is self employed in Canada, can I exclude her income? If she files jointly with me, how to I treat her Canadian self-employment? What form do I use. I've talked to them on the phone before. They won't give you advice, but they will answer questions about tax forms. They kept bumping me up to a more specialized person, who in the end was reading the publication just like me and trying to figure it out. It was over estate things for a deceased tax payer.

Thanks. I wonder if it matters that she is self employed seeing how she is still a non resident alien and the IRS doesn't make me prove her wages anyways...

[BrahmaBull 0]

If you both "elect" for her to be treated as a resident alien for tax purposes, then she's a resident alien for the entire year 2009. If you make that election, then don't read the non-resident alien stuff. She IS a resident alien.

Can't answer the self employed part because I'm not finding that on a quick look at the instructions. Where did you read that?

If you file joint, you have to make the "election" to treat her as a resident alien. If you do that then must declare worldwide income. A US cititzen and a non-resident alien can't file joint. So you can't file jointly with her without claiming her income and making the election. You can file Married Filing Separately and she is not on the return and does not file anything because she doesn't live here and didn't choose to be treated as a resident alien. Hope that makes sense.

If we do a joint return and treat her as a resident alien, can she still file a return in Canada?

[hieumin 2]

BrahmaBull,

read these 9 pages, hope this help. please click link http://www.googobits.com/articles/1755-exc...x-purposes.html

[BrahmaBull 0]

That tax preparation place I went to charged me $95, told me I had a good "joint return". I inspected it once at home, it looked wrong, so I call them back. They agree its wrong, and say they are going to make it right. Now I get this email:

I was talking to Esther over the weekend, and she sd. that she believes for 2009 you two should file as Married Filing Separate, because otherwise you will get assessed about 15% in self employment tax twice (once on the U.S. and then on her Canadian Return). And so that would mean that there would be no advantage to you filing joint this year on the U.S. return. What are your thoughts on this; please let me know so that we can proceed accordingly. Thanks

Either they are right or don't want to deal with me anymore. I asked for a refund...

[BrahmaBull 0]

We got our ITIN! Also IRS claims they have my federal return. My question now is how do I file state taxes? Do I need to include stuff like the 2555 to exclude her wages? OR Do I just use the numbers from my federal return on the state form? (IT-201)