TurboTax help for Joint filing- 2012

[erica_itz 5]

I don't remember your state. The thing I looked up was for California on their state website. which said use the same status as federal. So in CA, if federal was resident, then state would be too.

We're filing state returns for PA and UT. So I was just wondering if I should include a copy of the "Statement for Nonresident Spouse to be Treated as a Resident" on those returns too when I mail them. Or am I mixing things up and that return is only necessary to attach to the federal returns?

[Nich-Nick 3,354]

Thanks for all your help.

So are you getting your CPA license soon?

My daughter is actually a CPA, but her field is audit so she doesn't work with taxes in her job. I kinda figured I paid for a Master's and CPA education once so that'll do for me. I finally e-filed today and the IRS has accepted my return already. Yay! We owe I e-paid...first time to do a bank debit thing. Hope it works.

[Nich-Nick 3,354]

We're filing state returns for PA and UT. So I was just wondering if I should include a copy of the "Statement for Nonresident Spouse to be Treated as a Resident" on those returns too when I mail them. Or am I mixing things up and that return is only necessary to attach to the federal returns?

That statement comes from federal tax law so I would say no to sending with state returns. They are completely separate sets of rules. Read your state tax guide or instructions to see if they ask for a statement.

PA- http://www.portal.state.pa.us/portal/server.pt/document/628135/pitguide_chapter_04_pdf

I didn't see anything in here about a statement.

UT - http://tax.utah.gov/forms/current/tc-40inst.pdf

On page 6 it says

1. Filing Status

Enter the code that matches the filing status from your federal return:

1040 and 1040A, lines 1 through 5

1040EZ, no federal filing status listed. Select filing status code 1 or 2, whichever applies.

Edited April 11, 2013 by Nich-Nick

[erica_itz 5]

Thank you vey much!

That statement comes from federal tax law so I would say no to sending with state returns. They are completely separate sets of rules. Read your state tax guide or instructions to see if they ask for a statement.

PA- http://www.portal.state.pa.us/portal/server.pt/document/628135/pitguide_chapter_04_pdf

I didn't see anything in here about a statement.

UT - http://tax.utah.gov/forms/current/tc-40inst.pdf

On page 6 it says

1. Filing Status

Enter the code that matches the filing status from your federal return:

1040 and 1040A, lines 1 through 5

1040EZ, no federal filing status listed. Select filing status code 1 or 2, whichever applies.

[Tiekey 1]

For those of you from the UK, much of Europe, or indeed anywhere else with tax rates higher than the US, or if income is over $95,100, you may be better off filling 1116 instead of 2555 to claim credit for foreign tax paid, dollar for dollar. Also, to claim child tax credits, or to contribute to a Roth IRA you need Earned Income, which will be reduced if you file the 2555.

Be aware that this doesn't work for State Tax (usually), so always check the effect on State taxation as well as on Federal Taxation!

[CarlosAndSveta 808]

For those of you from the UK, much of Europe, or indeed anywhere else with tax rates higher than the US, or if income is over $95,100, you may be better off filling 1116 instead of 2555 to claim credit for foreign tax paid, dollar for dollar. Also, to claim child tax credits, or to contribute to a Roth IRA you need Earned Income, which will be reduced if you file the 2555.

Be aware that this doesn't work for State Tax (usually), so always check the effect on State taxation as well as on Federal Taxation!

If you earned income in a country with a higher tax rate than the U.S. do not expect to reduce your U.S. Income Tax liability by 100 % of the foreign income taxes that you paid to that other country. The amount of the credit is calculated by multiplying your total U.S. tax liability (taxes before reduction by any other credits) by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. This calculation in effect only lets you reduce your U.S. taxes by the U.S. taxes that you would have paid on that foreign income.

[Tiekey 1]

If you earned income in a country with a higher tax rate than the U.S. do not expect to reduce your U.S. Income Tax liability by 100 % of the foreign income taxes that you paid to that other country. The amount of the credit is calculated by multiplying your total U.S. tax liability (taxes before reduction by any other credits) by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources. This calculation in effect only lets you reduce your U.S. taxes by the U.S. taxes that you would have paid on that foreign income.

Hi, you're 100% correct. I wasn't implying that the FTC could exempt tax on US earnings, just that of foreign earnings, which was the subject under discussion, and was suggested as an alternative to the Foreign Earned Income Exclusion.

A further benefit of the FTC is (1) it can be used on passive income too *e.g. interest, dividends, rental income. The FEI exclusion can only be used for earned income. Secondly, any unused FTC can be carried forward for up to 10 years, so if you may be continuing to receive foreign income, you'll be able to offset future tax (on that foreign income).

[DaisyD 12]

Just wanted to say thanks to Nich-Nick for this guide. We used it yesterday and managed to fill it in easily on the 2013 taxes with Turbo Tax Basic (we tried Free tax first, but they don't have the option for the foreign income). You just saved us from having to pay for a tax accountant to fill it out for us.

Many thanks

Daisy

[Travelpro 3]

I also want to say thanks. This post made my filing via TT so easy. I also purchased CA state through TT and it completed everything using the Fed info.

We have no evidence of my wife's pay from the Philippines as she was paid in cash. We have asked her employers to send some kind of email without any response. Since we are out of time I just wrote a statement explaining work history and pay then had her sign it. The amount is very insignificant so we have no worries.

Thanks again to the OP and others who provided info here.

[Ontarkie 14,218]

~~Moved to Tax & Finances During US Immigration,from Moving Here and Your New Life In America - As we have a new tax forum this thread will be better fitted here~~