Filing for taxes for the first time after AOS

[shrb 5]

Hi all!

First of all I wanted to apologize for creating this topic since I know that the answer is probably scattered around somewhere in the forum. I sincerely couldn't find an answer that would approach my situation exactly.

We have just received W2s for 2016 and I will be taking care of taxes for the first time this year.

 

A little of my story... I moved to the US from Uruguay on March 2016. We got married in April and filed for AOS on the same month. I have been a permanent resident since late November of 2016.

 

Now these are my doubts...

 

1) For the months of January and February of 2016, I had some income from my job back in Uruguay. Is it necessary for me to include that in our taxes? What are the benefits/rules about this? If it is a must, how do I do this? I have been unemployed ever since.

 

2) We are going to file MFJ. Will a 1040EZ be enough, or due to my situation we should file using other, more detailed, form?

 

3) I read that since I was not a resident during the whole year, we could write a letter to include with our forms so the IRS can treat me as one for the whole year. My confusion with this is that since I am a resident now, I don't know if they need that same letter or something different.

 

4) Given the potential need to include my 2016 income from Uruguay and the letter regarding residency, I also read that this time we will have to file manually, is that so?

 

Many thanks in advance for the help you can provide.

-s

[MariaR323 199]

22 minutes ago, shrb said:

Hi all!

First of all I wanted to apologize for creating this topic since I know that the answer is probably scattered around somewhere in the forum. I sincerely couldn't find an answer that would approach my situation exactly.

We have just received W2s for 2016 and I will be taking care of taxes for the first time this year.

 

A little of my story... I moved to the US from Uruguay on March 2016. We got married in April and filed for AOS on the same month. I have been a permanent resident since late November of 2016.

 

Now these are my doubts...

 

1) For the months of January and February of 2016, I had some income from my job back in Uruguay. Is it necessary for me to include that in our taxes? What are the benefits/rules about this? If it is a must, how do I do this? I have been unemployed ever since.

 

2) We are going to file MFJ. Will a 1040EZ be enough, or due to my situation we should file using other, more detailed, form?

 

3) I read that since I was not a resident during the whole year, we could write a letter to include with our forms so the IRS can treat me as one for the whole year. My confusion with this is that since I am a resident now, I don't know if they need that same letter or something different.

 

4) Given the potential need to include my 2016 income from Uruguay and the letter regarding residency, I also read that this time we will have to file manually, is that so?

 

Many thanks in advance for the help you can provide.

-s

Hi there, here's my recommendation...

 

1) You are required to report worldwide income. So, yes, you should include all foreign income. Foreign earned income can go on Form 2555 and you can probably qualify for the foreign earned income exclusion. Tip: if it's not a big chunk of money you might want to consider bypassing the exclusion altogether and just report as is since it does entail a little bit more work on your end to get the exclusion. If it's not a lot of money chances are it won't hurt your bottom line much on the tax return.

 

2) You're most likely going to file the 1040A or the regular 1040 - remember, it's not just based on your situation but rather your JOINT (financial) situation. Since you're not providing any details on your spouse we have no idea what your spouse has to report. For sure though, you're not going to use the 1040EZ.

 

3) Yes you need to attach a statement electing to be treated as a resident for tax purposes. Even though you became a resident, you would be considered a dual-status resident: nonresident for Jan-Mar and from the day after you entered the U.S. through 12/31/16 you are a resident. That's why you need the election statement.

 

4) Yes, you cannot file electronically. Send the return via U.S. mail with tracking.

 

MFJ is the most favorable filing status and from the sounds of it you'd really benefit from it because you only had foreign income Jan-March. So you'll have the full exemption for the year using the MFJ tax brackets on essentially a one-person income.

 

Hope this helps.

 

Maria

[shrb 5]

15 minutes ago, MariaR323 said:

Hi there, here's my recommendation...

 

1) You are required to report worldwide income. So, yes, you should include all foreign income. Foreign earned income can go on Form 2555 and you can probably qualify for the foreign earned income exclusion. Tip: if it's not a big chunk of money you might want to consider bypassing the exclusion altogether and just report as is since it does entail a little bit more work on your end to get the exclusion. If it's not a lot of money chances are it won't hurt your bottom line much on the tax return.

 

2) You're most likely going to file the 1040A or the regular 1040 - remember, it's not just based on your situation but rather your JOINT (financial) situation. Since you're not providing any details on your spouse we have no idea what your spouse has to report. For sure though, you're not going to use the 1040EZ.

 

3) Yes you need to attach a statement electing to be treated as a resident for tax purposes. Even though you became a resident, you would be considered a dual-status resident: nonresident for Jan-Mar and from the day after you entered the U.S. through 12/31/16 you are a resident. That's why you need the election statement.

 

4) Yes, you cannot file electronically. Send the return via U.S. mail with tracking.

 

MFJ is the most favorable filing status and from the sounds of it you'd really benefit from it because you only had foreign income Jan-March. So you'll have the full exemption for the year using the MFJ tax brackets on essentially a one-person income.

 

Hope this helps.

 

Maria

 

Thank you so much for your answers, Maria!!!

This sure has cleared things up a bit. Just as a follow up for your input...

 

1) Yes. It is very little money compared to a US income. Filing as is means just doing form 2555 and ignoring the exclusion?

2) I mentioned the EZ form because that's the one my husband always uses for his taxes. It's a single income from a permanent job. No other assets. 1040 or 1040A it is, then?

4) Will we be able to file electronically starting next year?

 

Thaks so much again!

 

[MariaR323 199]

14 minutes ago, shrb said:

 

Thank you so much for your answers, Maria!!!

This sure has cleared things up a bit. Just as a follow up for your input...

 

1) Yes. It is very little money compared to a US income. Filing as is means just doing form 2555 and ignoring the exclusion?

2) I mentioned the EZ form because that's the one my husband always uses for his taxes. It's a single income from a permanent job. No other assets. 1040 or 1040A it is, then?

4) Will we be able to file electronically starting next year?

 

Thaks so much again!

 

Your welcome, glad to help

 

You won't need Form 2555 at all if you won't be trying to qualify for the exclusion. You'll just report the total foreign income. (Use the currency exchange rate in effect at the time the income was earned to convert to U.S. dollars.) I don't have all the specifics memorized and don't have the requirements in front of me to verify the differences, but you can never go wrong with the regular 1040. The 1040EZ and 1040A have specific requirements and although your spouse has always used the 1040EZ, it can change depending on the situation or what needs to be reported.

 

You'll be able to e-File next year for tax year 2017

[shrb 5]

3 minutes ago, MariaR323 said:

Your welcome, glad to help

 

You won't need Form 2555 at all if you won't be trying to qualify for the exclusion. You'll just report the total foreign income. (Use the currency exchange rate in effect at the time the income was earned to convert to U.S. dollars.) I don't have all the specifics memorized and don't have the requirements in front of me to verify the differences, but you can never go wrong with the regular 1040. The 1040EZ and 1040A have specific requirements and although your spouse has always used the 1040EZ, it can change depending on the situation or what needs to be reported.

 

You'll be able to e-File next year for tax year 2017

That's great!

Thank you for everything!