Filing Tax First Time for US Resident Working Overseas

[khalid_ahq 1]

Dear All,

Hope you can help and advise on my current situation, me and my family got our GCs and became a US residents starting May, 2015, I'm still working overseas, I went to US on November, 2015 for a short time, next time I plan to apply for exit reentry as my current circumstances will not make the final transition any time before 2 years, but will keep go and back each 6 months even with the permit, sorry for the long story ....

As far as I know in order not to delay our naturalization process and as I'm maintaining the residency I have to fill my tax as a resident, in this case what I have to do actually no income in US yet, but my work overseas still ongoing, my wife has no work and we have one child and expecting another one soon, please advice and sorry again for the long text but as English is not my first language I'm trying to make it clear as possible.

Thanks

[Nich-Nick 3,354]

Look up form 2555 and read the instructions. You likely qualify for the foreign income exclusion.

[khalid_ahq 1]

Look up form 2555 and read the instructions. You likely qualify for the foreign income exclusion.

Thank you for your reply, I'm trying to understand these instructions, in fact I'm reading a lot and trying to figure out the concept of tax as this is my first time.

I appreciate if you can help with some queries I have:

1- I'm permanent resident since may 2015, not from the beginning of the year, I need to apply for taxes for the whole year of just the period between may - December 2015 ?

2- I'm still working overseas and didn't stay out of US for more than 6 months, so I'm maintain my residency meanwhile, so as my understand I need to file as resident form 1040 and report my income as foreign income, and use 2555 form if any exclusions applicable, do you advise using turbo tax to file my tax ? does it work with this situation and these forms ?

3- does above will impact my naturalization process ? even using the 2555 ? even if I got refund for example ?

Thank you again appreciate your help.

[aaron2020 11,651]

You will not qualify for US citizenship with being outside the US physically. You need to meet the physical presence in the US for citizenship.

Filing taxes is a requirement to keep your green card.

Filing taxes and being outside the US will delay you getting US citizenship.

[aaron2020 11,651]

Thank you for your reply, I'm trying to understand these instructions, in fact I'm reading a lot and trying to figure out the concept of tax as this is my first time.

I appreciate if you can help with some queries I have:

1- I'm permanent resident since may 2015, not from the beginning of the year, I need to apply for taxes for the whole year of just the period between may - December 2015 ? Only time as an LPR.

2- I'm still working overseas and didn't stay out of US for more than 6 months, so I'm maintain my residency meanwhile, so as my understand I need to file as resident form 1040 and report my income as foreign income, and use 2555 form if any exclusions applicable, do you advise using turbo tax to file my tax ? does it work with this situation and these forms ?

3- does above will impact my naturalization process ? Yes. Being physically outside the US will mean delaying your eligibility for US citizenship. Visiting every 6 months is not enough. Go look up the physical presence requirement for naturalization. even using the 2555 ? Yes, you still need to meet the physical presence requirement. even if I got refund for example ? Why should you get a refund from the US government? Did you pay the US government any taxes? No? So, why should you get a refund? Getting a refund or not does not waive the physical presence requirement.

Thank you again appreciate your help.

https://www.uscis.gov/us-citizenship/citizenship-through-naturalization/continuous-residence-and-physical-presence-requirements-naturalization

Physical Presence

Applicants are required to show that they were:

• Physically present in the U.S. for thirty months within the five year period before applying, or (see legal basis)
• Physically present in the U.S. for eighteen months within the three year period before applying in the case of qualified spouses of U.S. citizens (see legal basis)

In addition, applicants are required to show they have resided for at least three months immediately preceding the filing of Form N-400 in the USCIS district or state where the applicant claims to have residency (See 8 CFR §316.2(a)(5) & §319.1(a)(5)).

Exceptions

Section 316 paragraphs (b), ©, and of the Immigration and Nationality Act allows for certain exceptions to the continuous residence requirement for those applicants working abroad for:

• The United States government, including the Military
• Contractors of the United States government
• A recognized American institution of research (List of Recognized American Institutions of Research and Other Recognized Organizations)
• A public international organization
• An organization designated under the International Immunities Act

If you seek to preserve your continuous residence for naturalization purposes while employed abroad by one of these recognized institutions you must file Form N-470, Application to Preserve Residence for Naturalization Purposes with USCIS.

An organization may obtain USCIS recognition as an American institution of research for the purpose of preserving the continuous residence status of its employees who are, or will be, naturalization applicants assigned abroad for an extended period of time. The requesting organization should follow the instructions found on the Requesting Recognition as an American Institution of Research page.

[khalid_ahq 1]

Thank you guys for this.

Aaron you are right, because of this I plan to move permanently soon.

But now stuck with tax issue for the first time, and I'm worry about this, I'm not aware if I'm eligible for foreign income exclusion, as I'm permanent resident since May 2015 and spent around 2 months in US during 2015 since then.

Also salaries here divided into actual or basic salary and allowances for living cost and being in this foreign country expenses, so I'm confused, some people said file only the basic salary as these allowances are to be spent in that country as a cost living which is sometimes provided by the company to people and provided as cash allowances as my case !

Also my parents are old and sick and have no work, so they are considered dependent but they don't have SSN?

I'll try to find a CPA accountant familiar with international tax, but meanwhile trying to understand the full picture so I can stay on the right track.

Thank you

[Nich-Nick 3,354]

First I want to comment on this question you asked.

" 3- does above will impact my naturalization process ? even using the 2555 ? even if I got refund for example?"

To me it sounded like you are worried that your tax return might affect your naturalization. You weren't asking about your time out of the country, as answered by Aaron. The USCIS will want to know you filed tax returns. As long as you follow IRS rules, then you are fine. If the IRS allows you a foreign income exclusion, then take it. USCIS doesn't care as long as you filed a proper legal return and paid any taxes due. A refund happens if you earned in the US and tax money was held out of your paycheck. When you file a tax return, if you overpaid, you get a refund. The USCIS wouldn't expect you to pay more than you owe. Of course a refund is okay.

Secondly, there are IRS publications to read and learn about different tax situations since you were not a US resident for all of 2015.

Publication 519-US Tax Guide for Aliens https://www.irs.gov/pub/irs-pdf/p519.pdf. It will explain your status for taxes and whether you are a Resident Alien, Non-Resident Alien, or both in 2015.

Publication 54-Tax Guide for US Citizens and Resident Aliens Abroad https://www.irs.gov/pub/irs-pdf/p54.pdf. That will discuss your tax obligations for the time you were considered a Resident Alien in the U.S. (Since May) but earned money abroad.

You will also find Form 2555 instructions Foreign Income Exclusion https://www.irs.gov/pub/irs-pdf/i2555.pdf will tell you all about your housing allowance or per day expense allowance and if you qualify for the exclusion.

In general, you may not be responsible for US taxes on money you earned prior to entering the U.S. and becoming a resident. There is a lot of talk in this forum about declaring yourself a Resident Alien for the entire year. That only applies to those who marry US citizens for example and choose that route of tax filing. You and your wife are both greencard holders since May.

Also citizens and greencard holders are allowed to work abroad and do report that income (earned since May) on your tax return. You have to read and see if you meet the requirements for the Foreign Income Exclusion on the money you earned since becoming a Resident Alien in May.

[khalid_ahq 1]

First I want to comment on this question you asked.

" 3- does above will impact my naturalization process ? even using the 2555 ? even if I got refund for example?"

To me it sounded like you are worried that your tax return might affect your naturalization. You weren't asking about your time out of the country, as answered by Aaron. The USCIS will want to know you filed tax returns. As long as you follow IRS rules, then you are fine. If the IRS allows you a foreign income exclusion, then take it. USCIS doesn't care as long as you filed a proper legal return and paid any taxes due. A refund happens if you earned in the US and tax money was held out of your paycheck. When you file a tax return, if you overpaid, you get a refund. The USCIS wouldn't expect you to pay more than you owe. Of course a refund is okay.

Secondly, there are IRS publications to read and learn about different tax situations since you were not a US resident for all of 2015.

Publication 519-US Tax Guide for Aliens https://www.irs.gov/pub/irs-pdf/p519.pdf. It will explain your status for taxes and whether you are a Resident Alien, Non-Resident Alien, or both in 2015.

Publication 54-Tax Guide for US Citizens and Resident Aliens Abroad https://www.irs.gov/pub/irs-pdf/p54.pdf. That will discuss your tax obligations for the time you were considered a Resident Alien in the U.S. (Since May) but earned money abroad.

You will also find Form 2555 instructions Foreign Income Exclusion https://www.irs.gov/pub/irs-pdf/i2555.pdf will tell you all about your housing allowance or per day expense allowance and if you qualify for the exclusion.

In general, you may not be responsible for US taxes on money you earned prior to entering the U.S. and becoming a resident. There is a lot of talk in this forum about declaring yourself a Resident Alien for the entire year. That only applies to those who marry US citizens for example and choose that route of tax filing. You and your wife are both greencard holders since May.

Also citizens and greencard holders are allowed to work abroad and do report that income (earned since May) on your tax return. You have to read and see if you meet the requirements for the Foreign Income Exclusion on the money you earned since becoming a Resident Alien in May.

Thank you for your useful comment, after looking at the instructions, to be eligibe I need to be out of US for at least 330 days in 12 consecutive months, so how come any new resident (who became a resident during the year of course) may have this exclusion for the same year he became in! I donno if my understand is correct.

Can I use the months before being resident to justify this 12 months rule ! As I was already out of US before may 2015.

[Nich-Nick 3,354]

Thank you for your useful comment, after looking at the instructions, to be eligibe I need to be out of US for at least 330 days in 12 consecutive months, so how come any new resident (who became a resident during the year of course) may have this exclusion for the same year he became in! I donno if my understand is correct.

Can I use the months before being resident to justify this 12 months rule ! As I was already out of US before may 2015.

I don't know the answer to your questions without studying and reading all those Publications, which I'm not going to do. If you read all that in the hour it took before you responded, then you probably need to read again and find more detail and examples which the IRS supplies. When I did read those publications a few years ago to learn what to do for my tax situation, it was every page. I even printed out the entire publication, put it in a binder and used a highlighter to mark areas I thought might apply to me. I crossed out sections I knew did not apply. Then I went back over the highlighted sections at least 2-3 more times.

My contribution here is to point you to available information. I can't understand it for you. You may have to invest more time in it if you want to learn it. Or you will have to pay somebody to understand it and do it for you.