Tax returns as evidence for removal of conditions - help

[LucaBonnie 0]

LPR is not the same as resident for tax purposes. If you came on K-1 then you were living in the US before September 2011 when you got your GC. Your accountant has given you bad advice (especially that you would have to pay more, ridiculous!).

Edit: According to your timeline you entered early July and got your GC in October. Not sure why you keep mentioning September.

ok, thanks for pointing the error in my timeline, which I have now corrected. I entered the USA in July and received my green card in September. So, what do you think I ought to do? I had income - in Italy from January through to July - worth approximately $40,000. Once I got to the USA - July onwards - I did not have any income. Not here, nor anywhere else.

[LucaBonnie 0]

LPR is not the same as resident for tax purposes. If you came on K-1 then you were living in the US before September 2011 when you got your GC. Your accountant has given you bad advice (especially that you would have to pay more, ridiculous!).

Edit: According to your timeline you entered early July and got your GC in October. Not sure why you keep mentioning September.

OK, thanks for pointing out my mistake on my timeline. I entered the country on a K1 and got my green card on 9/27. So, what should I do? I lived in Italy until July and had income there, duly reported to the italian IRS and taxed. Once I got to the USA in July I had no further income until the end of the year. So, in other words, I have World Wide income for the first 6 months of 2011 and no income as a LPR.

[Harpa Timsah 13,258]

Me? I would have filed married filing jointly, claimed to be a resident for the year for tax purposes, reported my income from the early year, taken the foreign income exclusion and deduct the tax I already paid per the instructions, and been on my merry way.

There are a few ways to do it but to not file taxes at all? No, I wouldn't have done that.

And I would fire that accountant because s/he is a bozo. Since you asked.

Edited June 14, 2013 by Harpa Timsah

[Dave&Roza 748]

OK, thanks for pointing out my mistake on my timeline. I entered the country on a K1 and got my green card on 9/27. So, what should I do? I lived in Italy until July and had income there, duly reported to the italian IRS and taxed. Once I got to the USA in July I had no further income until the end of the year. So, in other words, I have World Wide income for the first 6 months of 2011 and no income as a LPR.

As Harpa has stated, you claim the entire year's worldwide income and put that on your US income tax return. Then you put down what you earned in Italy. Then you put down the foreign taxes paid to Italy. Then you take your standard deduction. OOOPSS you have zero income inorder to do that. So you just lost the standard deduction.

Now if you filed jointly you would add your income to your wife's. Take the foreign income earned in Italy off the table and maybe a tax credit for the taxes paid to Italy and then the standard deduction. Since your wife had income and the amount is above zero you now get to take your standard deduction and foreign tax credit off of your wife's taxable income thus reducing both of your tax liabilities. Filing seperately means you get to only take the deductions until your taxable income reaches zero. If you have more deductions, you loose them. By combining your incomes you have more taxable income, but you also get to combine all the deductions and it almost always benefits the tax payer to do so. I would see what filing seperately does for you--I can bet you will owe no taxes base on what you have told us; and see what amending your wife's return to filing jointly with your income from Italy and all your deductions. You might be suprised as to how much of a refund your wife will get if you file jointly. It is up to you, but you do need to file a US income tax return for 2011.

Dave

Edited June 14, 2013 by Dave&Roza

[LucaBonnie 0]

As Harpa has stated, you claim the entire year's worldwide income and put that on your US income tax return. Then you put down what you earned in Italy. Then you put down the foreign taxes paid to Italy. Then you take your standard deduction. OOOPSS you have zero income inorder to do that. So you just lost the standard deduction.

Now if you filed jointly you would add your income to your wife's. Take the foreign income earned in Italy off the table and maybe a tax credit for the taxes paid to Italy and then the standard deduction. Since your wife had income and the amount is above zero you now get to take your standard deduction and foreign tax credit off of your wife's taxable income thus reducing both of your tax liabilities. Filing seperately means you get to only take the deductions until your taxable income reaches zero. If you have more deductions, you loose them. By combining your incomes you have more taxable income, but you also get to combine all the deductions and it almost always benefits the tax payer to do so. I would see what filing seperately does for you--I can bet you will owe no taxes base on what you have told us; and see what amending your wife's return to filing jointly with your income from Italy and all your deductions. You might be suprised as to how much of a refund your wife will get if you file jointly. It is up to you, but you do need to file a US income tax return for 2011.

Dave

ok, thank you. Anyone know of a good accountant? I think I need one....

[NigeriaorBust 4,087]

You will find USCIS is very concerned about you filling taxes every year.

[canuckbos 10]

Thank you Magical.

ok, so here is something else. I just had a long conversation with my accountant explaining to him that we need to amend our 2011 Tax Return to include little me and file jointly. He states that a resident alien cannot file jointly unless he's been in the country for the whole calendar year, (bear in mind I got my green card in September 2011). Alternatively, I would need to report my World Wide Income, (the money I made in Italy from Jan through to Sept 2011) and, obviously, be taxed on. That would be a very, very expensive thing for me and I already paid my taxes in Italy. From September, (when I was granted conditional residence), to end December 2011 I had no income.

He suggests that the only thing to do would be to file a separate tax return, (me only), for the year 2011 showing no income.

I have a lot of documentation showing that we are legit. From joint home ownership to joint back accounts to joint insurance, to joint lease here in FL. Im the beneficiary on her retirement funds. Joint Health Insurance. Our 2012 Taxes are filed jointly, both Federal and State. I am part owner of our business. What I DONT have is a joint tax return for 2011, which, apparently, I cannot get unless I report my income overseas for the months thst I was NOT a resident...and pay lots of taxes. (which I paid already overseas).

Will a separately filed 2011 Tax return to my name showing no income help me or am I in a jam??

We did the exact same thing as you did.

Look at your wife's 2011 Tax Return and you should see your name on the return and if you had a ssn that would be there also.

This shows that your wife reported your marriage to the IRS; it is also proof of co-mingling of finances for your 10 year green card. I would not amend your 2011 tax return, your wife filed correctly.

Your other information substantiates your relationship along with your tax returns.

You are not in a jam at all! :-)

[Done--Really 331]

This IRS doc has all the options...it is complicated sometimes, but clear if you follow step by step.

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

[LucaBonnie 0]

This IRS doc has all the options...it is complicated sometimes, but clear if you follow step by step.

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

Thank you Canuckbos. I will not change anything on my Income Tax return. Enerything is totally legal and correct. I consulted another Accountant yesterday. He confirmed that as a DUAL ALIEN you need not file an Income tax return if I did not have any income since becoming a LPR. Income generated prior to becoming a LPR does not need to be reported.

Magical, Thanks for your input, which basically states the same thing.

I also took the liberty of calling USCIS. They confirmed what I have stated above.

[Dave&Roza 748]

Thank you Canuckbos. I will not change anything on my Income Tax return. Enerything is totally legal and correct. I consulted another Accountant yesterday. He confirmed that as a DUAL ALIEN you need not file an Income tax return if I did not have any income since becoming a LPR. Income generated prior to becoming a LPR does not need to be reported.

Magical, Thanks for your input, which basically states the same thing.

I also took the liberty of calling USCIS. They confirmed what I have stated above.

This is all true, however; you may be causing your wife to pay more in taxes then she needs to. I would go thru the excerise of filing both of your taxes as married filing jointly on paper and see if she gets a refund by being able to take your standard deduction off of her taxable income. All of your income will be excluded as it is from a foreign source and you may also get to claim a credit for the taxes paid to Italy. I am suggesting you do this just to see if there is a benefit to YOU AND YOUR WIFE'S tax situation, not because of the USCIS. I may be wrong and both you and your wife paid the lower in taxes by filing seperately, but my gut is telling me that you and her over paid your taxes to the US. It should take a couple of hours and if the refund is substantial then it wil lbe well would your time.

Dave