Tax Status Question

[Fr8dog 312]

My two cents:

 

FBAR no:

based on the following quote from the previous link:

Who Must File an FBAR

United States persons are required to file an FBAR if:

1. the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

Also when you look up the definition on United States person, you should be in the clear (I was and I entered oct1st 2015).

 

As to declaring his Dutch income to the IRS

Again I have to say no.

There is a tax treaty between the 2 countries and it states you will not be taxed twice. He was already taxed in the Netherlands so he got screwed royally once already. Also he was not a resident of the US when he had that income and did not fall under the IRS.

 

He does need to file the special form "Conserverende aanslag" he should be lucky as this year it is supposed to be the first year you can do that online vs the book they sent you before.

Little heads-up. he'll need his "pensioenfonds" data for that one. If he fails to file that one, he might have a nasty surprise in the future when he wants to depart from Schiphol.

 

I'm not a tax specialist in any way but I googled the hell out of it and these were the things I found on official sites.

Edited January 27, 2017 by Fr8dog

[LAS1204 6]

4 hours ago, Delirium said:

I filed through turbo tax online. They never asked me for a 1040NR (I didn't even know what that was till I looked it up right now). My husband has a SSN number so I used that to file and filed my taxes as I've done the previous years.

 

Well my husband (foreigner) has a SSN. As of tax year 2016, he doesn't have a status - he's in that limbo status while we wait for approval for PR. We filed the AOS in Oct 2016 and did the fingerprinting but that's all for that year. I just wanted to make sure I don't do anything wrong and screw anything up.

 

Hubby was actually on a student visa in Canada (his naturalization country is Guyana) so he didn't work at all in Canada and thus never filed any Canadian taxes (no need to).

 

I didn't think we needed to file the 1040NR either but eh. The plan is to just go to an H&R office and see what they say. 

[Delirium 114]

32 minutes ago, Fr8dog said:

My two cents:

 

FBAR no:

based on the following quote from the previous link:

Who Must File an FBAR

United States persons are required to file an FBAR if:

1. the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

Also when you look up the definition on United States person, you should be in the clear (I was and I entered oct1st 2015).

 

As to declaring his Dutch income to the IRS

Again I have to say no.

There is a tax treaty between the 2 countries and it states you will not be taxed twice. He was already taxed in the Netherlands so he got screwed royally once already. Also he was not a resident of the US when he had that income and did not fall under the IRS.

 

He does need to file the special form "Conserverende aanslag" he should be lucky as this year it is supposed to be the first year you can do that online vs the book they sent you before.

Little heads-up. he'll need his "pensioenfonds" data for that one. If he fails to file that one, he might have a nasty surprise in the future when he wants to depart from Schiphol.

 

I'm not a tax specialist in any way but I googled the hell out of it and these were the things I found on official sites.

Ah awesome...thank you so much for all of this. This was pretty much exactly what I was looking for!  I'll make sure to have him read this post once I get home from work. This was seriously great information.

 

Did you and your S/O file jointly in your first year here? And if so, did you send a letter to the IRS stating you wished to be considered a resident for tax purposes? 

[MariaR323 199]

6 minutes ago, LAS1204 said:

 

Well my husband (foreigner) has a SSN. As of tax year 2016, he doesn't have a status - he's in that limbo status while we wait for approval for PR. We filed the AOS in Oct 2016 and did the fingerprinting but that's all for that year. I just wanted to make sure I don't do anything wrong and screw anything up.

 

Hubby was actually on a student visa in Canada (his naturalization country is Guyana) so he didn't work at all in Canada and thus never filed any Canadian taxes (no need to).

 

I didn't think we needed to file the 1040NR either but eh. The plan is to just go to an H&R office and see what they say. 

If he has nothing to report there would be no need for a 1040NR. It's true he's considered a nonresident for tax purposes but if you wanted to file jointly you could easily just by attaching a statement electing to treat him as a resident for tax purposes.

 

I really don't recommend you go to the "block" for tax return prep... they want you to go in so they can try and charge you for "in-person" consult. Find an independent tax preparer

[Fr8dog 312]

She filed, and as far as I know, no additional letters were sent. She filed jointly (If I type we filed, she's going to slap me she said)

Edited January 27, 2017 by Fr8dog

[Delirium 114]

Just now, Fr8dog said:

She filed, and as far as I know, no additional letters were sent.

Awesome! Thanks so much

[LAS1204 6]

36 minutes ago, MariaR323 said:

If he has nothing to report there would be no need for a 1040NR. It's true he's considered a nonresident for tax purposes but if you wanted to file jointly you could easily just by attaching a statement electing to treat him as a resident for tax purposes.

 

I really don't recommend you go to the "block" for tax return prep... they want you to go in so they can try and charge you for "in-person" consult. Find an independent tax preparer

Thanks for that! Will definitely skip the "block" lol

[marriott574 13]

21 hours ago, Delirium said:

Hello! I'm hoping someone could make the whole tax process a littler clearer for me.

 

My husband entered the US on October 28th and we were married on December 1st. I filed taxes on the 13th of this month and reported us to be "Married Filing Jointly" as it allowed for a greater tax deduction and will give us proof of a valid relationship for the AOS if we need it. I recently came across a few people talking about the FBAR and am concerned because I was unaware if I needed to file one. My husband's bank account remained under 10,000 USD throughout the year, but he was in the US for longer than 60 days on his K1 Visa. I'm just a little confused if I was supposed to file one or not. 

 

Thank you!

 

Hi, I am a CPA, some o the info provided is correct some is a little less correct.

 

FBAR or Foreign Bank Account Reporting, is NOT a tax form it is a TREASURY FORM, very few online programs provide this form, if you are interested it is FinCEN 114. The form is required to be filed on or before April 15th and there is a free 6 month extension. Failure to file the form carries a $10000 penalty, it is on of the highest penalties out there.

 

You are required to file the form if the aggregate of the highest balance of all foreign accounts was over $10000 at anytime during the year using an average exchange rate. 

For example, Bank account one had it highest balance of $5000 in June and Bank account two had a its highest balance in September of $6000, the total foreign assets are $11000 thus an FBAR is required.

 

You need to add up all the foreign accounts,

 

Now the IRS has a different form, for Foreign bank accounts, THIS IS A TAX FORM, Form 8938, this is required even if the balance is $0.

 

I would recommend contacting and using a tax professional to help file your return, you can amend if you have already filed incorrectly, PLEASE NOTE H AND R BLOCK are not tax professionals!!!!!

 

 

[Delirium 114]

5 minutes ago, marriott574 said:

 

Hi, I am a CPA, some o the info provided is correct some is a little less correct.

 

FBAR or Foreign Bank Account Reporting, is NOT a tax form it is a TREASURY FORM, very few online programs provide this form, if you are interested it is FinCEN 114. The form is required to be filed on or before April 15th and there is a free 6 month extension. Failure to file the form carries a $10000 penalty, it is on of the highest penalties out there.

 

You are required to file the form if the aggregate of the highest balance of all foreign accounts was over $10000 at anytime during the year using an average exchange rate. 

For example, Bank account one had it highest balance of $5000 in June and Bank account two had a its highest balance in September of $6000, the total foreign assets are $11000 thus an FBAR is required.

 

You need to add up all the foreign accounts,

 

Now the IRS has a different form, for Foreign bank accounts, THIS IS A TAX FORM, Form 8938, this is required even if the balance is $0.

 

I would recommend contacting and using a tax professional to help file your return, you can amend if you have already filed incorrectly, PLEASE NOTE H AND R BLOCK are not tax professionals!!!!!

 

 

Thank you, if I already filed through turbo tax online two weeks ago...What do you recommend I do? I'm pretty worried as I've never knew I had to do any of this. This is my third time filing taxes haha. I didn't even send the form that we want my non resident husband to be treated as a resident for tax purposes because I didn't know I was supposed to

[marriott574 13]

4 minutes ago, Delirium said:

Thank you, if I already filed through turbo tax online two weeks ago...What do you recommend I do? I'm pretty worried as I've never knew I had to do any of this. This is my third time filing taxes haha. I didn't even send the form that we want my non resident husband to be treated as a resident for tax purposes because I didn't know I was supposed to

You have three different issues at stake here,

First the 1040NR/1040 Statement, I dont see much exposure here, as you pai the tax and that is what the IRS cares about, general a statement is not required and just filing the 1040 (NOT THE NR) is enough proof that you wanted to be treated like a resident. The IRS actually prefers the 1040 over the NR as they get more tax revenue, NR filers can claim back Social security payments.

 

The Second is FBAR, like I said this is not a tax form thus you can still file this with the treasury.

 

The third is form 8938, if you failed to tile this, then you will need a tax pro to amend your return.

 

FYI ignorance is no excuse in tax law,

 

 

 

 

[Delirium 114]

3 minutes ago, marriott574 said:

You have three different issues at stake here,

First the 1040NR/1040 Statement, I dont see much exposure here, as you pai the tax and that is what the IRS cares about, general a statement is not required and just filing the 1040 (NOT THE NR) is enough proof that you wanted to be treated like a resident. The IRS actually prefers the 1040 over the NR as they get more tax revenue, NR filers can claim back Social security payments.

 

The Second is FBAR, like I said this is not a tax form thus you can still file this with the treasury.

 

The third is form 8938, if you failed to tile this, then you will need a tax pro to amend your return.

 

FYI ignorance is no excuse in tax law,

 

 

 

 

Thank you. I'll see about contacting a tax consultant.

 

I do not need to file an FBAR as my husband has 1 account and it never exceed 10,000 USD.

 

Thank you

[Delirium 114]

14 minutes ago, marriott574 said:

You have three different issues at stake here,

First the 1040NR/1040 Statement, I dont see much exposure here, as you pai the tax and that is what the IRS cares about, general a statement is not required and just filing the 1040 (NOT THE NR) is enough proof that you wanted to be treated like a resident. The IRS actually prefers the 1040 over the NR as they get more tax revenue, NR filers can claim back Social security payments.

 

The Second is FBAR, like I said this is not a tax form thus you can still file this with the treasury.

 

The third is form 8938, if you failed to tile this, then you will need a tax pro to amend your return.

 

FYI ignorance is no excuse in tax law,

 

 

 

 

I found that I can file 8938 through TurboTax if I purchase deluxe. So I will be doing that and amending it through there as there is an option to amend it.

[Fr8dog 312]

On 1/27/2017 at 1:02 PM, marriott574 said:

Now the IRS has a different form, for Foreign bank accounts, THIS IS A TAX FORM, Form 8938, this is required even if the balance is $0.

I just scanend through the instructions of this form:

https://www.irs.gov/pub/irs-pdf/i8938.pdf

 

And it clearly states there are thresholds, Am I missing something here?

[Suss&Camm 2,213]

44 minutes ago, Fr8dog said:

I just scanend through the instructions of this form:

https://www.irs.gov/pub/irs-pdf/i8938.pdf

 

And it clearly states there are thresholds, Am I missing something here?

Yea... for example.. married, living in US $100,000 at end of tax year or $150,000 during any time of year... Also any money earned abroad up to a bit above $100,000 can be excluded using the foreign earned income exclusion , form 2555 if filing jointly and electing to be a US person for tax purposes.

 

Soo.. if MFJ on your first year... 1040, election statement, 2555(ez) if you made income that you want to exclude from being taxed... no FBAR needed.. no 8938...

[Fr8dog 312]

That was my feeling too, but the post quoted stated it was regardless of balance. Hence my question.