Filing Taxes for 2015 K-1 - please help :-(

[Bri150 0]

My husband came over in August 2015 and we were married in Oct 2015. He had no income in 2015, as he was unable to work as a K-1 holder. He is did not receive a greencard in 2015 and did not meet the substantial presence test requirements. So we have elected to file married filing separately as a non resident alien. However, see it that he has no income for 2015, does he need to file? If so, what does he file. Hopefully someone has been in this position and can help! I've called a tax accountant and the IRS with no answers

[Pennycat 880]

Browse around the tax forum:

http://www.visajourney.com/forums/forum/159-tax-finances-during-us-immigration/

Did he have 0 income in his home country, too?

[Bri150 0]

No, he had income there, so that's why we were planning to file "married filing separately" to avoid claiming his international taxes. He owned his own company there, so this seems the least complicated

[nickytn 0]

My husband came over in August 2015 and we were married in Oct 2015. He had no income in 2015, as he was unable to work as a K-1 holder. He is did not receive a greencard in 2015 and did not meet the substantial presence test requirements. So we have elected to file married filing separately as a non resident alien. However, see it that he has no income for 2015, does he need to file? If so, what does he file. Hopefully someone has been in this position and can help! I've called a tax accountant and the IRS with no answers

hi, i too was in same situation. Yet to get a job. But we applied jointly for the tax return.

[htfaust 131]

Have you considered electing to be treated as a resident alien for tax purposes, file "Married filing jointly", and claim a Form 2555, Foreign Earned Income Exclusion?

Usually it puts you in a lower tax bracket and allows you to claim 2 personal exemptions and 2 standard deductions, resulting in a larger refund, but each case is unique. If you haven't considered it yet, try doing a simulation.

There are some steps you have to take to do that, but there's a guide with general pointers in the tax subforum.

[Bri150 0]

Unfortunately that would be even more complicated because of him having owned the company. So that's why we decided separately. I'm not sure if he has to file anything since he has nothing to show.

[Pennycat 880]

Unfortunately that would be even more complicated because of him having owned the company. So that's why we decided separately. I'm not sure if he has to file anything since he has nothing to show.

Foreign income is foreign income, from what I worked on it, it wouldn't have been more complicated. It all still may be exempted, allowing you to treat him as a resident and file jointly (much more advantageous for you). If he paid taxes on it abroad and passed the physical presence test here, there is a very low likelihood that he'd need to pay on it here. Have you tried running through various situations with online software? If you download the software, you can save multiple versions to compare.

I'm still not sure if he's required to file if he's a NRA with $0 US income an you're filing separately, sorry (my guess is no but I really don't know).

[htfaust 131]

Unfortunately that would be even more complicated because of him having owned the company. So that's why we decided separately. I'm not sure if he has to file anything since he has nothing to show.

The following is "as far as I know, to the best of my ability" advice, given "as is", as I'm not a certified taxed preparer nor someone with any kind of professional or considerable knowledge in tax law, so use it on your own discretion and responsibility.

As far as tax law is concerned, he's in a special category considered a "dual status alien", because, at the same time:

a) he doesn't meet either the substantial presence or the green card test and entered the US under a non-immigrant visa (the K-1 is a special type of non-immigrant visa that allows immigrant intent);

b) he's an intending immigrant who married his petitioner, and has a pending I-485 application.

So he (and you) can elect to treat him either as a resident alien or as a non-resident alien for tax purposes.

If y'all elect to treat him as a resident alien, he has to report his entire worldwide income. Even though that's burdensome, it can lead to a larger refund or a smaller tax liability because he'll be eligible for a foreign income exclusion.

If you decide to treat him as a nonresident alien, he doesn't have to file, however at a later interview for AoS or removal of conditions, he might have to explain to USCIS why he treated himself as a non-resident for tax purposes while having clear immigrant intent, and it may cause trouble as filing as resident alien is a requirement to maintain permanent resident status. It would look weird in their eyes, even though technically you are only required to do that beginning the tax year his green card is granted.

I may be wrong, specially in the previous paragraph, so if anyone knows better, please feel free to correct me.

[TBoneTX 45,783]

Thread is moved from the K-1 Process forum to the Tax & Finances forum.

[Nich-Nick 3,354]

Unfortunately that would be even more complicated because of him having owned the company. So that's why we decided separately. I'm not sure if he has to file anything since he has nothing to show.

You are thinking absolutely correctly. If you file joint, he would report his foreign income just like if he was self-employed in the US. The killer would be the self-employment tax he would owe. That is to cover Social Security and Medicare based on his profit for the entire year 2015. It's roughly 15% of his Income to pay and is not excludable. When a person has an employer in the US , the boss covers half the contributions to Social Security and Medicare. A self-employed person pays the full amount himself calculated on his business profit.

Because he earned no US income, he does not have to file. You file Married Filing Separately. His name as your spouse will still appear on your tax return if you are worried about what USCIS will think. It would be filing "single" that might bother USCIS, however I think they are more interested in the dollar signs than how you filed. They are not the IRS.

Edited March 24, 2016 by Nich-Nick

[Bri150 0]

Thanks! This is helpful! Although it seems odd to not have him send anything in. So he's not required to fill out the 1040NR?

[Nich-Nick 3,354]

Thanks! This is helpful! Although it seems odd to not have him send anything in. So he's not required to fill out the 1040NR?

He earned no US income so has no income to tax. Therefore no return.

A NR tax return would be for example, a foreign student who was on a visa. He has a job on campus so is earning US money. He has US income to report. He isn't a resident so files a NR (non-resident) tax return. the difference is the tax rate for NRs. That why NRs don't file a regular 1040--different tax rules. A NR spouse can't file with a regular 1040 filer, unless the spouse is a US citizen, Then they have the option to file jointly under regular 1040 rules if they both sign a statement choosing to do so. In your situation, choosing to do so would be choosing to pay a years worth of self-employment tax for him.