US Tax Return as new LPR

[SimonBelgium 49]

As the date comes closer where I will be moving to the US, I have of course been reading a bit on what happens after you arrive.

From my understanding, if I move to the US on my CR-1 in October, I would have to file a US tax return in April 2015 for my 2014 income, but it seems I would have to include my 2014 income in Europe (Jan - Oct 2014) as well? Even though I have already paid taxes, and even though I might not yet have a US income for 2014?

Can someone please explain exactly how that works and what I would have to declare on the return? Because I don't feel like paying another 30-odd % and getting nothing in return...

Edited June 30, 2014 by SimonAndKimberly

[TheCaptain 67]

The income that you earned in Europe is indeed declared on your US taxes.

This does not mean that you will be required to pay tax on that income. It simply means that you have to declare it as foreign income. The US government simply wants to make sure that any and all income you earn has had tax paid on it in somewhere.

[SimonBelgium 49]

I've been spending some time today reading up on the matter:

The year you arrive in the US as an LPR, you should file a "DUAL STATUS RETURN".

This means, your US income starts on the day you "activate" your greencard (i.e. the CBP officer at the PoE stamps your passport). Any previous income, not linked to US sources, it not taxable, if I read it OK.

It's all described in IRS Publication 519, chapter 6:

http://www.irs.gov/pub/irs-prior/p519--2013.pdf

But also Chapter 4 seems relevant.

Any accountants present who can shed some light on what to include and what not?

[Harpa Timsah 13,258]

You can do dual status, but you can also elect to be treated as a resident for the whole year.

As already stated, you will not need to PAY tax again on your foreign income if you elect to be treated as a resident for the whole year. On the tax return, you will show that you had income and that you paid taxes on it abroad.

[greg1031 1]

I understand you have to show your foreign income only since you became LPR or came to the U.S. in this case...?