Tax Help - Foreign Monies

[DavidYule 6]

Hello, 

 

Im really sorry if this has already been posted. I couldn't find anything quite similar. 

 

I moved to the US in April on a J1 visa. During this time I worked and earned money,  then married a US citizen and filed for AOS, I now have my EAD card etc and everything going well. 

 

I now have got my W2 from my J1 employer, and we are trying to file for taxes. We are slightly confused about what to do when it asks about foreign income. I did work in the UK until I left. 

 

When we submitted my income on Turbo Tax it made all the refund disappear and said I had to file some forms with the IRS, 1040? 

 

Has anyone got any advice? Do we need to state the income from the UK if I have not been there in 9 months and paid my UK taxes? 

 

Thanks! 

[Wuozopo 4,293]

@DavidYule
Going to tricky for you if you haven’t read a lot of background from IRS publications and don’t even know what a 1040 is. TurboTax will do the math and fill in the forms but won’t teach you the nuances of tax law, especially your unique situation which isn’t that common. 
 

First bit of info—if you want to file a joint return with your American spouse then every bit of income earned by both in the calendar year 2019 has to be reported. That is her US income, your UK income,  your J1 income, your US income after EAD  (if you took a different job.)

 

Publication 519 deals with some of your situation. https://www.irs.gov/pub/irs-pdf/p519.pdf

note: They don’t have a 2019 version available so 2018 will give you the info but just read things that say the year 2018 as 2019.  “If in 2018 you earned....”  in your mind should be “If in 2019 you earned.....”

I suggest, You want to be treated as a resident alien for the entire tax year. It will work out better for you as a couple since you married an American. Before somebody mentions you can file as a dual status alien, that will not allow you to file joint with wife, nor take the standard deduction. That means she has to file as Married filing Separately and takes a hit on her taxes over joint filing.

 

So if  you buy into that resident all year, go to page 8 of Publication 519 and read the whole section called Choosing Resident Status Alien, which is a perk since you married an American. You both have to sign a statement you write to make the choice. Page 8 tells you what to include in the statement. That means you can skip all the Publication sections that talk about Dual Status or Non-resident status because that statement makes only the resident alien rules apply to you. If TurboTax asks if you were a resident all year..YES, because that’s how IRS views you. Do not be confused with visas, moving mid year or immigration. To the IRS, you are a resident for the entire year.

 

Next Publication 54 https://www.irs.gov/pub/irs-pdf/p54.pdf

Skip to page 5–Will tell you about converting foreign earned (UK)  money to US dollars. Section Foreign Currency

Skip to page 6–Non-resident spouse treated as a resident repeats making that choice and how to write the statement

Skip to page 11–Chapter 4 Foreign Earned Income Exclusion. Forget the housing talk, you can’t do that. Read pages and pages. Pay attention to Bonafide Resident Test because you were a bonafide resident of the foreign country (UK) when you were earning money there. That’s how you will qualify for the Foreign Earned Income Exclusion (Form 2555).  That will take off taxes your UK earnings would generate. 
 

Get those concepts down and you will do better with TurboTax. 
Both spouses  W2 info goes in the TurboTax W2 Wages section. Do not enter UK income there.

Foreign Income is covered under Less Common Income.

 

Don’t look at the refund thing at the top until you finish. It’s a fake refund until you have entered all information and the taxes are calculated. 

 

 

 

 

 

 

[Wuozopo 4,293]

@DavidYule

 

If you need help remembering what you earned in the UK during 2019, this thread in the UK forum helped somebody else find theirs online. https://www.visajourney.com/forums/topic/731701-trying-to-understand-p-45-please-help/

Add on to that thread if you get stuck.

 

Edited February 12, 2020 by Wuozopo