FBAR & greencard

[enigma992 45]

15 hours ago, Wuozopo said:

I do not know what  a tax accountant experienced with international situations would charge. I wouldn't trust that the H&R Block dude in the Walmart kiosk would have a clue how to do your return. My American wife has never had anybody do a tax return and did ours the year I immigrated as well as learned the self-employed requirements.  Fees are something we are not familiar with. Texas does not have a state income tax, so no experience with that either. Somebody else will have to answer the fee question. For us, it's $20 TurboTax software and lots of reading of actual IRS publications. Start with Pub 519 https://www.irs.gov/pub/irs-pdf/p519.pdf 

 

In general, the year you are a resident alien (greencard holder in your case) and have enough income to need to file a return, then your income for the entire 2017 is reported no matter where in the world you earned it. That does not mean it is taxed because there is foreign earned income exclusion or foreign tax credits,  but all worldwide income is reported. There may be something in the dual status year option to learn. So yes it gets complicated. Get you answers by reading that 67 page publication above because I have no experience with your exact situation. Also read the instructions for Form 1040 https://www.irs.gov/pub/irs-pdf/i1040gi.pdf which as a permanent resident is your form. That link is 2016 instructions, but the basic rules will be similar in 2017 when it is published.  

Thanks. From reading Pub 519 and other documents, it would appear that I do not have to report foreign(non US) source income earned and received before becoming a resident alien. Since I become a resident alien on the day I enter the US with my approved green card, as long as I have been paid for all self employment work before then, it appears I do not have to report it.  Any payment received after that date, even for work completed before that date, is subject to US tax - which make things interesting as Canada would also want to tax  that money since it would have been earned while I was a tax resident in Canada. I think tax treaty tie breaker rules come into play then which obviously sounds painful.

 

The other question is that since my self employment income is paid from the US, is it really foreign source income. Thankfully the IRS seem to regard the source of the income as where the work was performed, which is Canada, as long as it was not effectively connected with a US trade or business, which I do not believe it was according to the rules.

 

Overall, and this is just my understanding so far, it would seem that as long as I receive payment for all self employment work done in Canada before I become a resident alien in the US, then I don't need to report it..as below.

 

 

• Dual Status Aliens report their entire worldwide income for that portion of the year in which they are Resident Aliens, and report only income that is sourced in the United States or that is effectively connected with a U.S. trade or business for that portion of the year in which they are Nonresident Aliens.

 

 

Edited October 23, 2017 by enigma992

[enigma992 45]

33 minutes ago, enigma992 said:

Thanks. From reading Pub 519 and other documents, it would appear that I do not have to report foreign(non US) source income earned and received before becoming a resident alien. Since I become a resident alien on the day I enter the US with my approved green card, as long as I have been paid for all self employment work before then, it appears I do not have to report it.  Any payment received after that date, even for work completed before that date, is subject to US tax - which make things interesting as Canada would also want to tax  that money since it would have been earned while I was a tax resident in Canada. I think tax treaty tie breaker rules come into play then which obviously sounds painful.

 

The other question is that since my self employment income is paid from the US, is it really foreign source income. Thankfully the IRS seem to regard the source of the income as where the work was performed, which is Canada, as long as it was not effectively connected with a US trade or business, which I do not believe it was according to the rules.

 

Overall, and this is just my understanding so far, it would seem that as long as I receive payment for all self employment work done in Canada before I become a resident alien in the US, then I don't need to report it..as below. (I should add that I am not a Canadian citizen)

 

 

• Dual Status Aliens report their entire worldwide income for that portion of the year in which they are Resident Aliens, and report only income that is sourced in the United States or that is effectively connected with a U.S. trade or business for that portion of the year in which they are Nonresident Aliens.

 

 

 

[Nitas_man 3,100]

On ‎10‎/‎22‎/‎2017 at 2:06 PM, enigma992 said:

What's a "fortune", ballpark figure? $1000, $5000, more? If I do enter the US in December, if I have stopped working as self employed and received all payments before entering the US and become tax resident, would I still need to file all that stuff for self employment work done before I became US tax resident?

 

Appreciate the help btw.

 

On ‎10‎/‎22‎/‎2017 at 1:28 PM, enigma992 said:

Thanks helpful. Not married to a US citizen, it is an employment based green card application.

 

My paycheck situation is somewhat complicated as I am self employed. I will probably receive payment for my November work in December and I think it would be enough to require filing a tax return. It may actually work in my favor though as it will taxed at a much lower rate as only 1 months income for 2017 in the US, then it would as the 12th month of income in Canada.

 

My plan is actually to enter the US to get the stamp in my passport and then fly home back to Europe for Christmas. I will then permanently "move" to the US in January. Is there anything I should be concerned about with this plan? Will this plan mean that I should be exempt from any state taxes in 2017 even if I do need to file a return, since I will not actually have a residence in any state.

A "fortune" is probably $400-$500 if you have everything well-documented.

 

You file 2017 taxes as a resident in 2017 and it is not "US" or "Canadian" income.  It's all reported and all taxed, no matter where you earned it.  Add it up,  subtract your exemption, exclude about 100k (foreign earned income exclusion), and pay taxes on the rest at the bracket rate of whatever your original income would have been.  If you made less than $110K or so - it doesn't matter anyway - you won't owe any taxes, but if you made more that that then the taxes on all of it will pay for a nice trip before your move to the US. 

 

Me?  In your place I would avoid entering the US if possible until after the first of the year.  You file federal taxes and file from a state address the state will come after you to file.  Not worth it if it can be avoided.

Edited October 24, 2017 by Nitas_man

[enigma992 45]

58 minutes ago, Nitas_man said:

 

A "fortune" is probably $400-$500 if you have everything well-documented.

 

You file 2017 taxes as a resident in 2017 and it is not "US" or "Canadian" income.  It's all reported and all taxed, no matter where you earned it.  Add it up,  subtract your exemption, exclude about 100k (foreign earned income exclusion), and pay taxes on the rest at the bracket rate of whatever your original income would have been.  If you made less than $110K or so - it doesn't matter anyway - you won't owe any taxes, but if you made more that that then the taxes on all of it will pay for a nice trip before your move to the US. 

 

Me?  In your place I would avoid entering the US if possible until after the first of the year.  You file federal taxes and file from a state address the state will come after you to file.  Not worth it if it can be avoided.

Correct me I'm wrong but the above applies to if I file as a resident, which I can choose to do if I'm married to a US resident at the end of a tax year. I can also choose to file as a (and if unmarried would have no choice but to file as a) dual status alien in my first year. Unless you are saying that for some reason I would not be allowed to file as a dual status alien which contradicts my understanding. As a dual status alien I would not have to report or be taxed on foreign sourced income earned and received prior to the date I become a resident alien. To be clear, this is an employment based green card and neither myself nor my spouse are US citizens or as of yet, resident aliens. We both live in Canada and have never lived in the US.

 

• What is a dual-status alien?  A dual-status alien is an individual who is considered to have been both a resident and a nonresident of the United States in the same tax year.  This is generally caused by an immigration occurrence such as acquiring or revoking a Green Card. Source: https://www.taxesforexpats.com/articles/expatriation/dual-status-aliens-how-to-file-your-us-income-tax-return.html

 

• Dual Status Aliens report their entire worldwide income for that portion of the year in which they are Resident Aliens, and report only income that is sourced in the United States or that is effectively connected with a U.S. trade or business for that portion of the year in which they are Nonresident Aliens. Source: https://www.irs.gov/individuals/international-taxpayers/aliens-which-income-to-report

Edited October 24, 2017 by enigma992

[SusieQQQ 11,587]

As dual status you report but are not taxed on what you earn on the non-resident part of your tax return, and even though you're  technically taxable on the portion you’re resident it’s unlikely you’ll owe anything for such a small part of the year, unless your earnings are well into 7 figures or something. But as someone who did what you’re planning because of our visa expiry dates... honestly, it’s just an extra hassle that you don’t really need. If there is no overwhelming need to enter before 2018, I wouldn’t bother. It gives you extra hassle with no extra benefit.