2011 Tax Question

[mugumogu 18]

My fiancee arrived in the US in November 2011 on a K-1 visa and we were married a few weeks later. I've been reading the forums about filing married jointly and that in order to file a joint tax return, the income she earned in 2011 in Mexico will have to be reported. We have no idea what she earned. It's not like they give W2s in Mexico. She worked in the family business and got paid once in a while & always a different amount. When it asks how much she earned in 2011, do we just come up with a number?

[himher 634]

Yes but is eligible for foreign earned income exemption anyway - based on physical presence test.

So declare it and up to whatever she made or 10/12 X $92000 is exempted anyway.

Turbotax will do it for you. Make sure her physical presence starts back in 2010 and ends 34 days after she arrived in the US to maximize the exemption.

[chinita18 0]

Hello I have a question as well.

I got in the US last March 2010 by K1 visa, got married 3 months after but I didn't work until early 2011. My husband filed a joint tax return 2011.

Filed for AOS February 2011 and got my EAD around June and my Permanent Resident Card around July.

I was rehired by my previous company early 2011 which is based in Australia. I basically work remotely from home. Am I exempted for 2011 income taxes having a foreign-based company and a non-US citizen?

[aaron2020 11,651]

Hello I have a question as well.

I got in the US last March 2010 by K1 visa, got married 3 months after but I didn't work until early 2011. My husband filed a joint tax return 2011.

Filed for AOS February 2011 and got my EAD around June and my Permanent Resident Card around July.

I was rehired by my previous company early 2011 which is based in Australia. I basically work remotely from home. Am I exempted for 2011 income taxes having a foreign-based company and a non-US citizen?

Nope. The day that you got your green card is the day the US government gets to start taxing you as a US resident. An LPR must file taxes on earning on all income regardless of where it is earned. The income you earned after that magic day in July is taxable by the US government for tax year 2011.

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http://www.irs.gov/businesses/small/international/article/0,,id=129431,00.html

Introduction to Residency Under U.S. Tax Law

The taxation of aliens by the United States is significantly affected by the residency status of such aliens.

Although the immigration laws of the United States refer to aliens as immigrants, nonimmigrants, and undocumented (illegal) aliens, the tax laws of the United States refer only to RESIDENT and NONRESIDENT ALIENS. In general, the controlling principle is that RESIDENT ALIENS are taxed in the same manner as U.S. citizens on their worldwide income, and NONRESIDENT ALIENS are taxed according to special rules contained in certain parts of the Internal Revenue Code (hereinafter referred to as the Code). A major distinguishing feature of this special tax regime concerns the source of income: a nonresident alien (with certain narrowly defined exceptions) is subject to federal income tax only on income which is derived from sources within the United States and/or income that is effectively connected with a U.S. trade or business.

The residency rules for tax purposes are found in I.R.C. § 7701(b). Although the tax residency rules are based on the immigration laws concerning immigrants and nonimmigrants, the rules define residency for tax purposes in a way that is very different from the immigration laws. Under the residency rules of the Code, any alien who is not a RESIDENT ALIEN is a NONRESIDENT ALIEN. An alien will become a RESIDENT ALIEN in one of three ways:

By being admitted to the United States as, or changing status to, a Lawful Permanent Resident under the immigration laws (the Green Card Test);

By passing the Substantial Presence Test (which is a numerical formula which measures days of presence in the United States); or

By making what is called the "First-Year Choice" (a numerical formula under which an alien may pass the Substantial Presence Test one year earlier than under the normal rules). Refer to the discussion of "First-Year Choice" in Chapter 1 of Publication 519.

Under these rules, even an undocumented (illegal) alien under the immigration laws who passes the Substantial Presence Test will be treated for tax purposes as a RESIDENT ALIEN.

References/Related Topics

Foreign Students and Scholars

Determining Alien Status.

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.

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http://www.irs.gov/businesses/small/international/article/0,,id=96314,00.html

Alien Residency - Green Card Test

You are a resident, for tax purposes, if you are a Lawful Permanent Resident of the United States at any time during the calendar year. This is known as the "green card" test.

You are a Lawful Permanent Resident of the United States, at any time, if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Service (USCIS) issued you an alien registration card, Form I-551, also known as a "green card."

You continue to have resident status, under this test, unless you voluntarily renounce and abandon this status in writing to the USCIS, or your immigrant status is administratively terminated by the USCIS, or your immigrant status is judicially terminated by a U.S. federal court.

If you meet the green card test at anytime during the calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day on which you are present in the United States as a Lawful Permanent Resident. However, an alien who has been present in the United States at any time during a calendar year as a Lawful Permanent Resident may choose to be treated as a resident alien for the entire calendar year.

Edited January 24, 2012 by aaron2020

[himher 634]

No (laughing)

Surely your company is withholding and you are paying taxes on these earnings?

Hello I have a question as well.

I got in the US last March 2010 by K1 visa, got married 3 months after but I didn't work until early 2011. My husband filed a joint tax return 2011.

Filed for AOS February 2011 and got my EAD around June and my Permanent Resident Card around July.

I was rehired by my previous company early 2011 which is based in Australia. I basically work remotely from home. Am I exempted for 2011 income taxes having a foreign-based company and a non-US citizen?

[chinita18 0]

Nope. The day that you got your green card is the day the US government gets to start taxing you as a US resident. An LPR must file taxes on earning on all income regardless of where it is earned. The income you earned after that magic day in July is taxable by the US government for tax year 2011.

I see now I understand. So I just have to tell this to the accountant that we file taxes with so that they know when I got my green card. Thank you for your response. I appreciate it. I was looking for some information on IRS website but couldn't find one, so thank you for providing the link as well.

[himher 634]

It does not matter when you got your green card. You were present in the US all year and based on the substantial presence test your income, all of it, is taxable even if you are an out and out illegal immigrant.

I see now I understand. So I just have to tell this to the accountant that we file taxes with so that they know when I got my green card. Thank you for your response. I appreciate it. I was looking for some information on IRS website but couldn't find one, so thank you for providing the link as well.