Question about income from worldwide tax before moving to US

[corvusheart 163]

 Hello all. My husband came here on K-1 fiance visa in June of 2014. Filed for AOS in August 2014. Was granted US residency in May 2015. Before he moved here from January to June 2014 he worked as a carer for a family member. Did not make much money from it at all.

 

When we filed for 2014 tax returns in January 2015 we only declared my income since he didn't find employment in the US until April 2016. So we thought he'd be considered unemployed since he was unemployed since moving here.

 

Im reading a bunch of things online about having to declare if you made income in another country and you're a US resident. But he made that income before he even moved here before he even had residency. This whole thing has my head spinning. Also I'm pretty sure he made under $10,000 in US dollars since the carers allowance didn't pay much.

 

Im worried about us being in trouble for him not declaring that bit of income before moving to US.

 

I don't want this causing problems for when he applies for citizenship.

 

 Can someone help us on this?

[Jojo92122 1,924]

His foreign income before he immigrated to the US is not taxable.  He does not have to declare it since he is not required to.  You do not have a problem.

[corvusheart 163]

48 minutes ago, Jojo92122 said:

His foreign income before he immigrated to the US is not taxable.  He does not have to declare it since he is not required to.  You do not have a problem.

This thread seems to say otherwise...

http://www.visajourney.com/forums/topic/584030-married-foreign-spouse-nra-vs-ra-how-to-file-taxes-the-first-year/

[Jojo92122 1,924]

38 minutes ago, corvusheart said:

This thread seems to say otherwise...

http://www.visajourney.com/forums/topic/584030-married-foreign-spouse-nra-vs-ra-how-to-file-taxes-the-first-year/

 

Please point to exactly where it says otherwise in the link you posted.  I don't see anything there.

[corvusheart 163]

6 minutes ago, Dee elle said:

There are 2 tax options for a person who becomes a resident during a US tax year.... they can do a partial return which covers just the time from when they became a resident, or they can nominate to be considered a resident for the whole tax year..  Each option has pros and cons. 

We filed it like a normal tax return. There was nothing special added to it. This was back in 2015. We had a tax professional do it for us. Just married filed jointly and he was listed as unemployed.

[corvusheart 163]

 He was in AOS pending status at the time of the 2014 tax return filing in January 2015. He didn't get his green card till May 2015.

[corvusheart 163]

I have already she said she didnt know there was anything special we had to do. Just listed him as resident on the application because thats what our lawyer told us to do even though he was not a resident yet. The whole thing is so dumb. He wasnt even paid much from his carers job in the UK. Also I read somewhere if the income from the worldwide source is under 10k you don't have to declare that but thats for singles (we're married) it says as married the rule is under 20k it doesnt have to be declared I don't know if my income which is 60k changes any of those variables. But he made under 3k in pounds for those few months from his carers allowance. Hopefully thats all they see it as.

 

Also he left his bank account open too when he left and forgot to close it but it only had 7 pounds in when he left. And was closed a year and a half later do to inactivity.

 

 This whole thing is complicated. I don't want us to get in trouble over something we didnt know. Is it possible to amend the 2014 taxes if we need to? This has had to of happened to other people before.

Edited April 28, 2017 by corvusheart

[corvusheart 163]

51 minutes ago, Jojo92122 said:

 

Please point to exactly where it says otherwise in the link you posted.  I don't see anything there.

This thread is in regards to first year filing taxes and it says required to state worldwide income:

 

3. Dual-Status/NRA spouse + Filing Jointly

 

 

 

You can choose to treat your dual-status/NRA spouse as a RA for tax purposes for the entire tax year in question. This option allows you to file a joint return (MFJ) and apply all eligible deductions and credits. You would be required to report BOTH spouse's worldwide income. A special election statement needs to be attached to your return indicating this choice. See the following IRS link for how to write the election statement: http://1.usa.gov/1Sw3S7A

 

The tax professional put him down as RESIDENT because thats what our lawyer told us to tell her to do. But there was no special election statement attatched. But the return was accepted and approved so I don't get it. Also at the beginning of 2014 tax year he was not a resident because he hadnt immigrated yet and at the end of the tax year 2014 he was in AOS pending status so still not a resident I see it makes a notation of the immigrant being a nonresident at the beginning of the tax year and being a resident at the end. This is so confusing.

Edited April 28, 2017 by corvusheart

[patriot10 11]

There are two ways your returns could be filed.

 

first way... married filing jointly. 

if you did this, you and your spouse's entire income for the whole year irrespective of where earned needs to be added. Once this method is elected for, the spouse's income is treated same as if he was a normal resident the whole year and hence all rules apply as they would to any us citizen.

 

In your case, it seems you used this method and your spouse's income needed to be included in the return that you filed.

 

Second way is married filing separately,

In this case, the us spouse would file for entire year , filing married filing separately.

The new resident would file a two 1040, one of them for NON RESIDENT ALIEN or form 1040NR for upto the period he/she was in the home country. Here, tax needs to be paid only on US based income but if there is no us based income and only home country income, then no tax needs to be paid.

From the time the spouse entered the us or become a resident alien, a separate 1040 would need to be filed as married filing separately, which would include worldwide income and taxes would need to be paid as per IRS rules relevant to the period. The two 1040s submitted will be marked ''dual status return''.

 

Useful links...

 

https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse-treated-as-a-resident

 

https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens

[corvusheart 163]

2 minutes ago, patriot10 said:

There are two ways your returns could be filed.

 

first way... married filing jointly. 

if you did this, you and your spouse's entire income for the whole year irrespective of where earned needs to be added. Once this method is elected for, the spouse's income is treated same as if he was a normal resident the whole year and hence all rules apply as they would to any us citizen.

 

In your case, it seems you used this method and your spouse's income needed to be included in the return that you filed.

 

Second way is married filing separately,

In this case, the us spouse would file for entire year , filing married filing separately.

The new resident would file a two 1040, one of them for NON RESIDENT ALIEN or form 1040NR for upto the period he/she was in the home country. Here, tax needs to be paid only on US based income but if there is no us based income and only home country income, then no tax needs to be paid.

From the time the spouse entered the us or become a resident alien, a separate 1040 would need to be filed as married filing separately, which would include worldwide income and taxes would need to be paid as per IRS rules relevant to the period. The two 1040s submitted will be marked ''dual status return''.

 

Useful links...

 

https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse-treated-as-a-resident

 

https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens

 SO what do we do now?

[patriot10 11]

To make things right, you can simply file an amended return.

 

https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/How-to-File-an-Amended-Return-With-the-IRS/INF14402.html

 

Keep in mind, 

• In most cases, you have three years from the original return's filing deadline to submit an amended tax return.

2014 is ok to file an amended return. Just file the return, pay the tax and be in peace.

 

My humble opinion.

 

 

Edited April 28, 2017 by patriot10

[corvusheart 163]

1 minute ago, patriot10 said:

To make things right, you can simply file an amended return.

 

https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/How-to-File-an-Amended-Return-With-the-IRS/INF14402.html

 

Keep in mind, 

• In most cases, you have three years from the original return's filing deadline to submit an amended tax return.

2014 is ok to file an amended return. Just file the return, pay the tax and be in peace.

 

My humble opinion.

 

 

OK our only problem is he doesn't have any documentation of what he made so we don't know. And we can't find a tax transcript website for the UK. Also he accidentally left a bank account open with 7 pounds sitting in it. It was eventually closed by the bank due to inactivity.

[patriot10 11]

Bank accounts (including any other financial accounts- stocks, mutual funds etc) with under $10000 total equivalent (in one or various accounts) are no problem and do not need to be reported.(although any income from derived from such needs to declared)
 

 

Regarding that there being no record of what your spouse earned, either with you or with the people who paid him, i suppose he can give a declaration that this is what he earned. 

Once he declares it and if it is all that he earned and all is in good faith, i doubt that anyone should have a problem.

Only if it is verified that he has under- declared, there could be a problem but since that will not be the case, i dont see what issue anyone could have with your amended return.

 

 

 

Edited April 28, 2017 by patriot10

[corvusheart 163]

 I just don't know how to find out what he earned we don't have any financial statements and I don't know how we'd get information remotely.

[corvusheart 163]

When we amend are we going to have to pay a fine for not reporting what he made?