Green card holder, worked abroad and filing US taxes

[Taxwoes 0]

Hello and thanks in advance for the help. My situation is as follows:

 

US Situation:

- My wife is a legal permanent resident (green card holder).

- For most of each year we live together in the states, although we do spend some time in the Netherlands regularly.

- Our stateside income is entirely derived from self-employment.

- We split this income onto three Schedule C's: one business is entirely run by me, and the other is split between us.

 

Netherlands Situation:

- At the very end of 2018 my wife was offered a 5-month contract job in the Netherlands while visiting home to take care of her aging parents. This is the first time she's done any work outside of the US since getting her green card.

- She worked this job and paid Dutch taxes on it before returning to the states.

- At the advice of a family friend, we excluded this income from our US taxes because she already paid Dutch taxes on it.

- However, after filing her Dutch tax return, she learned that she would have to provide her US taxes in order to get her refund for taxes already paid.

- Some research indicates that we did this incorrectly, and should have represented the Dutch income on our US taxes.

 

Questions:

- What process should we take to get this income reflected on our US taxes? Do we file a tax amendment? I'm assuming that the amended copy of the taxes is what would have to be submitted to the Dutch IRS-equivalent as well - not the original filing?

- How do we prevent 'double dipping' re: paying taxes on this income twice?

- In the future, if she ever does additional work for firms in the Netherlands / other countries while remaining a US green card holder, are there any other steps we should be taking to ensure that we file our taxes correctly the first time?

[SusieQQQ 11,587]

I don’t know about amending, but all international income needs to be reported, always. That was bad advice from your friend. Double taxation for “normal” type income is usually avoided by a combination of the international income exclusion and, if income goes above that (I don’t have exact number now but it’s a little north of $100k), double tax treaties. 

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

 

[Raquel Sanchez 0]

You cannot exclude foreign income in your US taxes if your wife have not met IRS's residency requirement in Netherlands. Does your wife have Dutch bank accounts that totals $10,000 or more? If yes, you also need to submit an FBAR form to the Treasury Department. You should get the services of an Enrolled Agent or CPA who specializes in foreign income and foreign bank accounts. I am an Enrolled Agent but I concentrate on my home country Philippines. I belong to this International Tax Professionals Group in Facebook and I could refer you to one of them who is familiar with your situation if you want.