For 2015 taxes, does it matter when I arrive in the US?

[MariaR323 199]

I'm in the same situation.

Just to see if I get this straight... even if the CR1 person earned more than USD 100k in the year of 2015 abroad, if they quit their job and have no more earnings from it after they have their POE as resident, they do not need to report their income to the IRS for year 2015?

Let me try and explain this assuming the following: CR1 (foreign spouse) earned $100,800 in 2015 while abroad and has no US source income since POE with green card in 2015 AND wanting to file a joint return:

First off, CR1 foreign spouse is considered to have dual status: non resident alien (NRA) before POE AND resident alien (RA) from POE and on. This would require both a resident tax return (1040) AND a non resident tax return (1040NR). However, an election is available to file a joint resident return for 2015 with the US spouse and be treated as a US resident for tax purposes for the ENTIRE YEAR 2015.

Making the election described above makes tax filing a lot easier eliminating the additional NR tax return AND allows tax benefits available to U.S. citizens and residents; in turn this makes you subject to tax on your gross worldwide income for the entire calendar year 2015 (in this sense it is making your foreign spouse's income subject to US taxation because you would be including it on the joint tax return). However, [foreign spouse] being considered a resident and eligible for tax benefits, this means the foreign tax credit and/or foreign earned income exclusion is available to claim either foreign taxes paid on foreign source income or the exclusion.

Note: I picked $100,800 because that is the limit for the foreign earned income exclusion for calendar year 2015.

I hope this helps clear it up.

~Maria

[afrocraft 313]

Making the election described above makes tax filing a lot easier eliminating the additional NR tax return AND allows tax benefits available to U.S. citizens and residents; in turn this makes you subject to tax on your gross worldwide income for the entire calendar year 2015 (in this sense it is making your foreign spouse's income subject to US taxation because you would be including it on the joint tax return). However, [foreign spouse] being considered a resident and eligible for tax benefits, this means the foreign tax credit and/or foreign earned income exclusion is available to claim either foreign taxes paid on foreign source income or the exclusion.

Note: I picked $100,800 because that is the limit for the foreign earned income exclusion for calendar year 2015.

I hope this helps clear it up.

~Maria

So, assuming I made $100,800 or less in 2015, if my goal were to minimize our joint tax burden, it might actually make sense to enter the US before Jan 1, 2016?!

[newacct 688]

So, assuming I made $100,800 or less in 2015, if my goal were to minimize our joint tax burden, it might actually make sense to enter the US before Jan 1, 2016?!

You don't have to be in the US at all. You can choose to be treated as resident as you are the spouse of a resident, and can file jointly.

[MariaR323 199]

So, assuming I made $100,800 or less in 2015, if my goal were to minimize our joint tax burden, it might actually make sense to enter the US before Jan 1, 2016?!

Yes, it might make sense. I mean, generally speaking, most of the time IT DOES make sense because simply put you're excluding foreign income while lowering tax liability on the U.S. citizen's income.

Just make sure you file correctly by not forgetting to make the election for treating the foreign spouse as a resident alien. Your tax preparer should be able to advise you on how to do this and should be able to draw that statement up for both spouses to sign.

[afrocraft 313]

OK, great. Thanks everyone!