Filing our first Tax's after K1

[JennyR 11]

19 hours ago, markandoliv said:

Hi, did you have to pay to upgrade from basic taxact so that they could help with the 2555 form?  Thanks

Yes we had to use the Delux to get the extra forms i dont think they come with the classic

[panamerican 36]

Wanted to chime in again since our taxes were accepted by the IRS and our state of residency yesterday. We used H&R Block Deluxe and I paid extra for a tax pro to review everything and help us e-file. It was $29.99 for deluxe federal return, $36.99 for deluxe state return, and $59.99 for the tax pro review. Total of $126.97 which was well worth it to be sure our hefty refund was accurate.

 

We were able to do MFJ and file as resident for tax purposes for her as she is technically non-resident (no green card, does not pass substantial presence test). This required us to complete form 2555 to report foreign income (available on the online H&R Block service) and then answer questions to exclude the income (no tax treaty with Panama, but her income was only $7440 so we were able to exclude all of it). Her tax home was considered Panama (she was born there).

 

I completed the special election statement (I can share mine if someone wants an example), both of us signed and dated it, and I sent a scanned copy to my tax pro. She said she would mail it in for us, but e-file the rest of the return. I wanted to share this part specifically because I was under the impression that I would have to mail the entire return, but no.

 

Good luck to everyone else!

[Mr and Mrs S 207]

52 minutes ago, panamerican said:

Wanted to chime in again since our taxes were accepted by the IRS and our state of residency yesterday. We used H&R Block Deluxe and I paid extra for a tax pro to review everything and help us e-file. It was $29.99 for deluxe federal return, $36.99 for deluxe state return, and $59.99 for the tax pro review. Total of $126.97 which was well worth it to be sure our hefty refund was accurate.

 

We were able to do MFJ and file as resident for tax purposes for her as she is technically non-resident (no green card, does not pass substantial presence test). This required us to complete form 2555 to report foreign income (available on the online H&R Block service) and then answer questions to exclude the income (no tax treaty with Panama, but her income was only $7440 so we were able to exclude all of it). Her tax home was considered Panama (she was born there).

 

I completed the special election statement (I can share mine if someone wants an example), both of us signed and dated it, and I sent a scanned copy to my tax pro. She said she would mail it in for us, but e-file the rest of the return. I wanted to share this part specifically because I was under the impression that I would have to mail the entire return, but no.

 

Good luck to everyone else!

Just the person I was looking for 😁

 

Can you share your special election statement please (redacting any sensitive information of course)?

 

 

[panamerican 36]

27 minutes ago, Mr and Mrs S said:

Just the person I was looking for 😁

 

Can you share your special election statement please (redacting any sensitive information of course)?

 

 

No problem. Glad I can help. Not entirely sure if putting the IRS headquarters address was necessary, but this is how I write all of my letters to federal government bureaus. The last part about determining non-residency my also be unnecessary, but our tax pro did not say there was anything wrong with our statement.

[My name]
[My wife’s name]
[Our address]

Internal Revenue Service
1111 Constitution Avenue Northwest
Washington, DC, 20224

To whom it may concern,

My name is [my name] and I was married in 2019 to [wife’s name]. I am a United States Citizen and [wife’s name] is a Nonresident Alien as of December 31st, 2019, the tax year for which we are married filing jointly. We are electing to both be treated as U.S. residents for the entire tax year of 2019. Below is our information:

Name: [my name]
SSN: 123-45-6789
Address: [our address]

Name: [wife’s name]
SSN: 987-65-4321
Address: [our address]

To determine her non-residency status, we tried both the green card test and the substantial presence test. She has applied for Adjustment of Status but does not yet have her green card. As for substantial presence, the calculation resulted in [number] days, less than the 183-day requirement.

Thank you,

(SIGN AND DATE HERE)

[my name]

(SIGN AND DATE HERE)

[wife’s name]

 

[Wuozopo 4,293]

1 hour ago, Mr and Mrs S said:

Just the person I was looking for 😁

 

Can you share your special election statement please (redacting any sensitive information of course)?

 

 

 

IRS Publication 519 tells you on page 9 what should be included. It’s up to you to compose it.

How To Make the Choice
Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information.
• A declaration that one spouse was a non- resident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year, and that you choose to be treated as U.S. residents for the entire tax year.
• The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)
 

 

Ours was like this

———————

Statement: Nonresident Spouse Treated as a Resident

We declare that on the last day of tax year 2019:
• Mary A. Jones was a U.S. citizen
• John J. Jones was a nonresident alien
• Mary A. Jones and John J. Jones are married.

We choose to be treated as U.S. residents for the entire tax year.

__________________________________ 2/4/2020
Mary A. Jones  SSN 123-45-6789

123 Main St.
Smalltown, TX 77771

__________________________________ 2/4/2020
John J. Jones  SSN 987-65-4321

123 Main St.
Smalltown, TX 77771
 

——————

[Mr and Mrs S 207]

@panamerican @Wuozopo

 

Thank you for the responses. My wife does not have a SSN (we'll be applying for an ITIN when we file our return). I'm thinking her passport number should suffice instead. A certified copy of her passport will be sent along with the return as it is needed to apply for the ITIN (Form W 7).

 

Also, I'm not sure if I should use her foreign address or my mailing address in the statement. She's still in Pakistan waiting on the CR1 process.

[Wuozopo 4,293]

38 minutes ago, Mr and Mrs S said:

@panamerican @Wuozopo

 

Thank you for the responses. My wife does not have a SSN (we'll be applying for an ITIN when we file our return). I'm thinking her passport number should suffice instead. A certified copy of her passport will be sent along with the return as it is needed to apply for the ITIN (Form W 7).

 

Also, I'm not sure if I should use her foreign address or my mailing address in the statement. She's still in Pakistan waiting on the CR1 process.

Her foreign address if that is where she lives at the time of filing the return. 
 

I will refer you to what the IRS says about getting an ITIN. Read the details and follow any links because guessing won’t cut it.

https://www.irs.gov/individuals/how-do-i-apply-for-an-itin

 

Form W-7 Instructions. Pay attention to the identity documents that are required. 

https://www.irs.gov/pub/irs-pdf/iw7.pdf

Form W-7 https://www.irs.gov/pub/irs-pdf/fw7.pdf

[Wuozopo 4,293]

1 hour ago, Mr and Mrs S said:

My wife does not have a SSN (we'll be applying for an ITIN when we file our return). I'm thinking her passport number should suffice instead.

For your spouse who is not yet in the US—On the joint tax return you leave her SSN blank and mail the return, statement, W7, and her ID documentation to a specific address. (Previously this was only done in Austin, TX, but I have not looked up if it is still the same for 2019). They will first process the ITIN, then add it to your return in her SSN area you left blank, then process the return. 

Edited January 31, 2020 by Wuozopo

[Mr and Mrs S 207]

12 minutes ago, Wuozopo said:

Her foreign address if that is where she lives at the time of filing the return. 
 

I will refer you to what the IRS says about getting an ITIN. Read the details and follow any links because guessing won’t cut it.

https://www.irs.gov/individuals/how-do-i-apply-for-an-itin

 

Form W-7 Instructions. Pay attention to the identity documents that are required. 

https://www.irs.gov/pub/irs-pdf/iw7.pdf

Form W-7 https://www.irs.gov/pub/irs-pdf/fw7.pdf

I'll be reading the documents. Just wasn't sure about what ID number to put on the statement requesting she be treated as a resident for tax purposes. 

[Wuozopo 4,293]

3 minutes ago, Mr and Mrs S said:

I'll be reading the documents. Just wasn't sure about what ID number to put on the statement requesting she be treated as a resident for tax purposes. 

I guess I would write “ITIN applied for. Passport number xxxxxxxxx”

[EnglishLove 112]

On 1/29/2020 at 8:29 AM, Wuozopo said:

Coming back to this thread

 

All the income earned worldwide has to appear on Form 1040 Line 1.

That means the USCs income + the foreign earned income.

If it’s not there, then any potential refund you think you are getting is false hope. The entire return is not accurate until Line 1 is accurate.

 

How to get the tax program to put it there depends on how each brand wrote their software.

TurboTax has it at the end of asking about W2 income, and all the rest of income sources. They have a section called “Less Common Income” and that’s where they ask about any foreign income. You say yes and it pops it into Line 1.

 

If I remember H&R software, they want you to create a pseudo W2 for the foreign income. It’s nothing but a fake W2 for their programming to know to put it in Line 1. Anything on a W2 tells their software to add that amount to Line 1, even if it’s not a real W2. It gets the right number on Line 1. 
 

If you were doing it old school by hand with a blank form 1040, a pencil, and the instructions, you would just add his and hers together with a calculator and write it on Line 1. 
 

You have to report the foreign income first on Line 1 before you can subtract it on Line 7a. 

I'm trying this on Turbo Tax but it will not allow me to report my husbands income he made in England because he was not a resident. 

[Wuozopo 4,293]

37 minutes ago, Pooley said:

I'm trying this on Turbo Tax but it will not allow me to report my husbands income he made in England because he was not a resident. 

Can you find the area they call “Less Common Income”? Foreign income is in that section. 
 

if you are filing jointly, your husband has to be  a resident for tax purposes. There is a statement to elect for him to be treated as a resident for the entire year.  So you have to say your husband is a resident of the US and your state or TurboTax will not move on.  This has nothing to do with USCIS. It is that the IRS allows him to follow resident rules on his tax return because he married a USC.

 

If you are talking about something else, then describe better.

Edited January 31, 2020 by Wuozopo

[EnglishLove 112]

Just now, Wuozopo said:

Can you find the area they call “Less Common Income”? Foreign income is in that section. 
 

if you are filing jointly, your husband has to be  a resident for tax purposes. There is a statement to elect for him to be treated as a resident for the entire year.  So you have to say your husband is a resident of the US and your state or TurboTax will not move on.  This has nothing to do with USCIS. It is that the IRS allows him to follow resident rules on his tax return because he married a USC.

Oh okay, so I just say that he's a resident and then attach a letter stating I wish for him to be treated as a resident? I selected was not a resident (since we have not received his green card) and it wouldn't let me go any further.

[EnglishLove 112]

11 minutes ago, Wuozopo said:

Can you find the area they call “Less Common Income”? Foreign income is in that section. 
 

if you are filing jointly, your husband has to be  a resident for tax purposes. There is a statement to elect for him to be treated as a resident for the entire year.  So you have to say your husband is a resident of the US and your state or TurboTax will not move on.  This has nothing to do with USCIS. It is that the IRS allows him to follow resident rules on his tax return because he married a USC.

 

If you are talking about something else, then describe better.

Also.. In the question, it asks how he qualifies for the exclusion.. Bona Fide Resident Test or Physical Presence. It would select Bona Fide since he didn't arrive until end of August?

[Wuozopo 4,293]

33 minutes ago, Pooley said:

Also.. In the question, it asks how he qualifies for the exclusion.. Bona Fide Resident Test or Physical Presence. It would select Bona Fide since he didn't arrive until end of August?

It wants to know if he was a bonafide resident of the foreign country where he earned the foreign income. Was he a bonafide resident of the United Kingdom? Was he allowed to Legally work in the United Kingdom. Of course he was.

 

He was probably a bonafide resident and physically present in the UK since the date of his birth. Vacations don’t count.

Edited January 31, 2020 by Wuozopo