Tax Questions

[JayHouser 209]

I have a bit of a complicated question here. So I am about to file my taxes soon. This year I made around 60K as an independent contractor. (Self Employed) Now normally, I would hire a great Tax expert and try to cut as many tax breaks as possible so I can ease my burden, however, I realized that if I take too many tax breaks it could make my income appear too low to meet the income requirement during the interview stage. I finished college last year and support my two brothers so I could realistically bring down my taxable income under 20k. Should I just play it safe and only claim enough where I still meet the 125% poverty threshold?

 

(Also using last years would not help because I made 35K and had taxable income of only 10K after I claimed my deductions)

[Highmystic 234]

18 minutes ago, JayHouser said:

I have a bit of a complicated question here. So I am about to file my taxes soon. This year I made around 60K as an independent contractor. (Self Employed) Now normally, I would hire a great Tax expert and try to cut as many tax breaks as possible so I can ease my burden, however, I realized that if I take too many tax breaks it could make my income appear too low to meet the income requirement during the interview stage. I finished college last year and support my two brothers so I could realistically bring down my taxable income under 20k. Should I just play it safe and only claim enough where I still meet the 125% poverty threshold?

 

(Also using last years would not help because I made 35K and had taxable income of only 10K after I claimed my deductions)

this should help you in your calculations.  "Annual income" is income "before" deductions.  But yes, if you grossed in business 60K and had 50K in expenses, it would leave you with 10K of "taxable gross income", which is way too low.  I do it different.  I am the sole owner of the LLC, so I pay myself a good CEO Bonus so the business taxes are low, but my personal income is a pain at times!  Good luck to you!

 

Example: Mike is immigrating his wife and is filing an I-864. It is Oct. 31, 2016 and you are assisting him in calculating his current income for Part 6. Mike was unemployed for the first six months of 2016, but started working at a job on July 1 that pays an annual salary of $48,000. He is not anticipating earning any additional income and he is planning on working for this employer indefinitely. Mike’s current individual annual income is $24,000 (not $48,000) because that is the amount of income he is anticipating earning in 2016.

Similarly, if the sponsor will be relying on the income of the intending immigrant or other household members, it is their current income that will be listed on the Form I-864 and I-864A. This is the amount of income they plan to earn for the calendar year in which the affidavit of support is filed.

The sponsor cannot count income from prospective employment or employment “that has not yet actually begun.” 8 CFR § 213a.1. The regulation stresses that it is the “reasonably expected household income” that shall be given the “greatest evidentiary weight.” 8 CFR § 213a.2(c)(2)(ii)(C). Tax returns or other documentation will serve merely as evidence of the likelihood that the sponsor will be able to maintain this income in the future.

The sponsor does not have to be employed. The Form I-864 requires the sponsor to state whether he or she is employed, self-employed, retired or unemployed.

The State Department interprets “income” for purposes of the affidavit of support to be “total unadjusted income as shown on the tax return, before deductions.” Foreign Affairs Manual (FAM) 40.41 N5.5. Income includes salary and any monetary gains from any source, including the following:

• Interest income and dividends
• Alimony
• Child support
• Retirement benefits
• Rent
• Unemployment compensation
• Workers’ compensation or other similar benefits, and
• Any other benefits that the sponsor has received that must be included as taxable income.
• https://cliniclegal.org/resources/calculating-income-affidavit-support

 

 

[JayHouser 209]

That is great! I can claim my business expenses down enough to qualify for the requirements. And my deductions wont have any impact based on what you are saying

 

 

Thanks so much!

[Highmystic 234]

35 minutes ago, JayHouser said:

I

 

(Also using last years would not help because I made 35K and had taxable income of only 10K after I claimed my deductions)

Forgot to add the other comment.  If you are supporting two brothers, are they deductible as dependants on taxes?  Keep in mind the Affidavit of Support asks how many you support on your income, and for each extra person, you have to account for more over the 125 percent.

[JayHouser 209]

Ah! I did not think of that! I think its best to leave them off then. Thanks!!!!!