Advice on extension for first tax filing?

[SusieQQQ 11,586]

So, trying to get our minds around the IRS. We understand one can apply for an automatic 4-month extension for filing. Our reason for wanting to do this is: we entered late last year (26 Dec) to activate our green cards and are currently back "home" sorting things out before moving over for good. I know these forms can be tricky and especially with the first one where we will be using the part non-resident/part resident system would like to have professional assistance, but we are unlikely to find anyone in our home country who can help us (or who we would trust enough with knowledge of the system). So we want to wait till we are back in the US and can get proper assistance.

So, I'm a bit baffled. Which form do we fill in? (Obviously not the non-resident one as we don't want to jeopardize residency) Is our reason a valid one? Are there any pitfalls to doing this that may come back to haunt us? I know we will be liable for interest on any late tax payments but with tax only accruing for 5 days of the year and likely to be offset by tax treaty anyway that isn't an issue.

Thanks

[aussie_jason 195]

It doesn't sound like you are a resident for tax purposes yet, sounds like you should just file taxes in your home country as otherwise what are you going to report as income to the IRS?

[aussie_jason 195]

I was wrong - http://www.irs.gov/Individuals/International-Taxpayers/Introduction-to-Residency-Under-U.S.-Tax-Law

[SusieQQQ 11,586]

Yep, one day as a green card holder means you are liable to file. And I of course want everything in place to show CBP we have not abandoned residency when we return.

[novedsac 355]

Form 4868, for tax year 2013, is what you need to file. It must be filed by April 15, 2014.

Check box #8 as you were out of the country for 2013. Please read the definition for 'out of the country' on page two of the instructions.

You do not need a reason to request this extension. It is automatic for the asking.

You will receive an automatic six month extension, calculated from April 15, 2014 - so, your tax return will not be due until October 15, 2014. However, your taxes will be due by April 15, 2014 regardless. Penalties and interest for late payment of tax begin to accrue on April 16, 2014. To avoid this, calculate your tax liability and ensure at least 90% of your 2013 tax liability, if any, is paid by April 15, 2014. Tax accruing for five days of 2013 … it is irrelevant.

Edited February 13, 2014 by novedsac

[novedsac 355]

Oh, what state did you reside for the last part of 2013? You'll need to file an extension with the state department of revenue as well. Each state has different requirements and grants different lengths of extensions. While your 'five days residency' does not impact the federal income tax return, it will impact the state income tax return and you're likely not going to owe any tax … but the extension forms are very simple, short and easy to file … so why take the risk of even a small penalty? State income taxes and tax returns are due on April 15th as well, unless you use a different accounting year for your finances.

[SusieQQQ 11,586]

That's very useful, thanks!

To the extent we were "resident", it was California. (We are hoping that CA is where we settle too, but that may change.)

Incidentally, in our home country the tax year runs Mar-Feb, but I'm guessing I can't use that as our tax year for CA too?

Edited February 13, 2014 by SusieQQQ

[NikLR 13,227]

Fyi, if you have no income in the USA you do not have to file as you made under the thresholds required to do so.

[SusieQQQ 11,586]

Fyi, if you have no income in the USA you do not have to file as you made under the thresholds required to do so.

How does this work exactly though, given that one is taxed on worldwide income?

[NikLR 13,227]

How does this work exactly though, given that one is taxed on worldwide income?

You could file and submit a form 2555 excluding foreign income made under the foreign income amount. In effect your income would then be zero.

[SusieQQQ 11,586]

Hmm... You've made an assumption about income there that will only work if I can use it just for the 5 days we were resident. Do you know if I can do that?

[NikLR 13,227]

Not sure. Double check with IRS. But I would assume that if you have no US income to declare, you don't need to file..

[SusieQQQ 11,586]

Not sure. Double check with IRS. But I would assume that if you have no US income to declare, you don't need to file..

See previous posts, as soon as you pass the green card test (I.e. one day in the US as an LPR) you are required to file, and declare worldwide income. I'm not worried about a tax liability as it will be offset by tax treaty - but filing tax returns is one of the main means by which you can show you have not abandoned residency so I am doing everything by the book.