Filing taxes jointly for the first time

[Joan58 47]

Thank you. I think I will have to file 2 Tax Returns. One for Canada for the 6 weeks prior to moving and then one Joint for US.

I will review the sites you suggested.😊

[JessCan 1]

On 4/12/2019 at 10:19 AM, Wuozopo said:

 

You have several topics mixed together so let me help you separate them.

 

Filing Jointly

In order to file jointly for 2018, you need to be a resident alien. That means you must have (a) permanent resident status...a greencard OR (b) physical presence in the US for a certain length of time. You have neither for 2018 because you arrived late in the year.

 

BUT the IRS will allow you to be treated as a resident alien for tax filing purposes because you are married to an American. That means you can do taxes as a resident alien even though USCIS hasn't given you a greencard yet. That allows you to file a joint return. The IRS says you and your spouse must put it in writing if you choose to do this. You both have to sign a written statement saying that's what you choose to do. It is included with your tax return. There is no built in IRS form for this statement, so e-filing won't work. Generally those who have to write a statement, print out their return, add in the statement they wrote/signed, and mail it to the IRS. 

 

Foreign Earned Income

Often new immigrant spouses worked part of the year in their home country before moving to the US. If they file a joint return, they have to report every bit of money that was earned anywhere in the world. Many foreign countries have a tax treaty with the US that says you don't have to pay taxes to two countries on the same earnings. The foreign spouse puts her foreign earnings on the joint US tax return , but she can use Form 2555 that allows the foreign earnings  to not have US tax applied to them.

Hi  Wuozopo! 

 

We are filing jointly.  I moved to the US September 2018 and worked in Canada from Jan to Aug of that year.  I just got my green card March 2019.  Do I still need to do that letter with the statement?

 

Also for my foreign earned income, if my country has a tax treaty with the US, do I still need to fill out form 2555?

 

Thanks!

 

 

[Wuozopo 4,293]

1 hour ago, JessCan said:

Hi  Wuozopo! 

 

We are filing jointly.  I moved to the US September 2018 and worked in Canada from Jan to Aug of that year.  I just got my green card March 2019.  Do I still need to do that letter with the statement?

 

Also for my foreign earned income, if my country has a tax treaty with the US, do I still need to fill out form 2555?

 

Thanks!

 

 

You probably don't have to do the election since you have a greencard now. Some people that need to write it get by without it. The IRS doesn't check up on you as much as people fear.

 

The tax treaty is what allows you to file 2555. You MUST report the following on your US tax return IF YOU FILE JOINTLY:

• all the money you earned in Canada from Jan to August of 2018 plus
• all you earned in the US in 2018 (if any) plus
• your spouse's income.

Form 2555 is what keeps you from paying US tax on the Canadian money. Otherwise you are going to be paying Canada and the US. Your other option if you did not work in the US at all in 2018 is file nothing and your spouse files as Married Filing Separately. I think you will find that Married Filing JOINTLY will be the best option taxwise even though you have to do the extra form.

Edited April 15, 2019 by Wuozopo

[JessCan 1]

4 minutes ago, Wuozopo said:

You probably don't have to do the election since you have a greencard now. Some people that need to get by without it. The IRS doesn't check up on you as much as people fear.

 

The tax treaty is what allows you to file 2555. You MUST report the following on your US tax return IF YOU FILE JOINTLY:

• all the money you earned in Canada from Jan to August of 2018 plus
• all you earned in the US in 2018 (if any) plus
• your spouse's income.

Form 2555 is what keeps you from paying US tax on the Canadian money. Otherwise you are going to be paying Canada and the US. Your other option if you did not work in the US at all in 2018 is file nothing and your spouse files as Married Filing Separately. I think you will find that Married Filing JOINTLY will be the best option taxwise even though you have to do the extra form.

Perfect, thanks!  Things are starting to make sense now...I've done a lot of research and asked many people for help, it can get exhausting.

My last concern is my RRSP (Registered retirement savings plan), I think I do the FBAR for it and is there another form to report this to IRS?  I only have 20K on it.

 

[Wuozopo 4,293]

1 hour ago, JessCan said:

Perfect, thanks!  Things are starting to make sense now...I've done a lot of research and asked many people for help, it can get exhausting.

My last concern is my RRSP (Registered retirement savings plan), I think I do the FBAR for it and is there another form to report this to IRS?  I only have 20K on it.

 

I don't know anything about a RSSP in Canada but I assume it is an asset and reportable for FBAR. That is not on your tax return, but an online report to FinCen, the US Treasury Dept. Google FBAR.  I do it every year. 

[JessCan 1]

5 minutes ago, Wuozopo said:

I don't know anything about a RSSP in Canada but I assume it is an asset and reportable for FBAR. That is not on your tax return, but an online report to FinCen, the US Treasury Dept. Google FBAR. I do it every year. 

RRSP I think is considered a Foreign Financial Assets.  Yes I will do the FBAR, but also reading about form 8938.  Did you do that one too?

[Wuozopo 4,293]

2 hours ago, JessCan said:

RRSP I think is considered a Foreign Financial Assets.  Yes I will do the FBAR, but also reading about form 8938.  Did you do that one too?

Yes I did. And I admit that I just pulled the trigger to submit efile 15 minutes ago. That's why slow to reply. What do you need to know?

Edited April 15, 2019 by Wuozopo

[JessCan 1]

15 hours ago, Wuozopo said:

Yes I did. And I admit that I just pulled the trigger to submit efile 15 minutes ago. That's why slow to reply. What do you need to know?

Is form 8938 for reporting Foreign Financial Assets?  So same as the online report FinCen that goes to US treasury and the 8938 goes  to IRS correct?  And we have to do this every year?

[Wuozopo 4,293]

46 minutes ago, JessCan said:

Is form 8938 for reporting Foreign Financial Assets?  So same as the online report FinCen that goes to US treasury and the 8938 goes  to IRS correct?  And we have to do this every year?

FBAR is foreign assets/accounts exceeding $10k anytime during the tax year and is submitted to FinCen online by April 15 (the date was changed from June 30). It's all foreign assets combine being over $10k. 

 

FATCA (8938) is foreign assets exceeding $100k if married ($50k single). It is an IRS tax form and is part of the tax return when over the threshold.

 

My "presumed" asset is a foreign pension which counts for FATCA.  I say presumed because I do not have a value of the account, but it's 30 years worth so maybe. It's a general pension scheme and not a defined pot of my specific money. So just to be on the honest side I do FATCA and include it plus two other accounts.

 

The totally weird thing is the IRS says if you don't have an exact value or can't get one, then put zero as the balance. So on my 8938 ---

Do you have accounts exceeding $100,000 YES

Pension 1: $0

Pension 2: $0

Bank acct: $xxxxx,xx

Did you receive payments, interest, or dividends from this account  in 2018? NO

 

It is only a report of where asset is held- name, address, account number, type of account, value. Just an extra 10 minutes to inform IRS I have foreign pensions sitting in the UK that  MIGHT  be considered as over the $100k threshold. I just decided to do it after ignoring it the first two years. 

 

[JessCan 1]

3 minutes ago, Wuozopo said:

FBAR is foreign assets/accounts exceeding $10k anytime during the tax year and is submitted to FinCen online by April 15 (the date was changed from June 30). It's all foreign assets combine being over $10k. 

 

FATCA (8938) is foreign assets exceeding $100k if married ($50k single). It is an IRS tax form and is part of the tax return when over the threshold.

 

My "presumed" asset is a foreign pension which counts for FATCA.  I say presumed because I do not have a value of the account, but it's 30 years worth so maybe. It's a general pension scheme and not a defined pot of my specific money. So just to be on the honest side I do FATCA and include it plus two other accounts.

 

The totally weird thing is the IRS says if you don't have an exact value or can't get one, then put zero as the balance. So on my 8938 ---

Do you have accounts exceeding $100,000 YES

Pension 1: $0

Pension 2: $0

Bank acct: $xxxxx,xx

Did you receive payments, interest, or dividends from this account  in 2018? NO

 

It is only a report of where asset is held- name, address, account number, type of account, value. Just an extra 10 minutes to inform IRS I have foreign pensions sitting in the UK that  MIGHT  be considered as over the $100k threshold. I just decided to do it after ignoring it the first two years. 

 

Thank you for your reply! Ok I probably won't have to do FATCA, I only have under 25k in my retirement savings plan and i'm not contributing to it anymore.

We filed for an extension so I wonder if we get an extension for the FBAR too ?  !!

[Wuozopo 4,293]

36 minutes ago, JessCan said:

Thank you for your reply! Ok I probably won't have to do FATCA, I only have under 25k in my retirement savings plan and i'm not contributing to it anymore.

We filed for an extension so I wonder if we get an extension for the FBAR too ?  !!

I don't think there is an FBAR extension.  Just fill it in with the details of your $25k account plus any other accounts you held in Canada during 2018. You have to list all if you exceed $10k, even if others are less that 10k. It's the aggregate of all accounts. For bank accounts it's the,highest value it reached during the year. Even if you since moved all the money out of the bank, if it existed in 2018 put it on FBAR. For 2019, it won't make the list unless it was still in Canada at any time in 2019.

 

I wouldn't worry so much about missing the deadline. I missed my FBAR deadline the first time by a year 😂

Edited April 16, 2019 by Wuozopo

[JessCan 1]

9 minutes ago, Wuozopo said:

I don't think there is an FBAR extension.  Just fill it in with the details of your $25k account plus any other accounts you held in Canada during 2018. You have to list all if you exceed $10k, even if others are less that 10k. It's the aggregate of all accounts. For bank accounts it's the,highest value it reached during the year. Even if you since moved all the money out of the bank, if it existed in 2018 put it on FBAR. For 2019, it won't make the list unless it was still in Canada at any time in 2019.

 

I wouldn't worry so much about missing the deadline. I missed my deadline the first time by a year 😂

haha ok, thank you for all your help!  I think we are hiring an accountant to do the taxes for us this first time, don't think they will do the FBAR though, but I will give it a try.   My husband tried to the taxes online but we need to get another software, which one do you use?

[Crazy Cat 41,850]

12 minutes ago, JessCan said:

haha ok, thank you for all your help!  I think we are hiring an accountant to do the taxes for us this first time, don't think they will do the FBAR though, but I will give it a try.   My husband tried to the taxes online but we need to get another software, which one do you use?

I have a great accountant who does our taxes, along with the FBAR  and other required forms every year.........PM me if you want her name.

Edited April 16, 2019 by missileman

[Wuozopo 4,293]

47 minutes ago, JessCan said:

haha ok, thank you for all your help!  I think we are hiring an accountant to do the taxes for us this first time, don't think they will do the FBAR though, but I will give it a try.   My husband tried to the taxes online but we need to get another software, which one do you use?

We use TurboTax Basic or Deluxe if it's on special offer. We buy it every year and install on the desktop computer. My wife is the good one with taxes having done her own since the dinosaur days (pre-software and calculators). She always studies the IRS publications and instructions if it's something new such as death of a taxpayer, an estate return,  a new Immigrant, self-employment.  You can't answer the TurboTax questions if you have no background of what they are asking. It's just like learning immigration things, the best source is reading the instructions and not just winging it looking at the form only.

 

Anyway the very cheapest version will do investments, a business, a job, foreign income etc. Their marketing makes you think if you own a home or have investments or a business you need the higher priced level. Not really. Ours was $29.99 this year (Deluxe on sale at Sam's club). One year H&R Block gave her free software to try out. She compared with TurboTax. The forms/taxes came out exactly the same, but HRB was not as intuitive to use.