LPR entered US on Dec. 19 - how do we file 2020 taxes?

[Elle84 20]

Hello wise people!

If anyone can enlighten me, I have the following situation: I am the LPR, hubby is USC. I entered the US on December 19, 2020. Before this, we lived together in my home country, Romania, where we were both employed by Romanian employers.

Hubby wants to file his 2020 taxes tomorrow so the questions are:

- since I entered on December 19, which means I started being an LPR on December 19, do I have to file US taxes for 2020? I obviously didn't get any income here yet as I don't yet have a job. My SSN was issued on December 22 and my SS card arrived on January 4.

- assuming I don't have to file US taxes, is it ok if hubby files Married Filing Separately, so I don't have to mess with my Romanian income? (My Romanian income was way below $10000 if this has any relevance). He filed Married Filing Separately for 2019 since we didn't want to get through the hurdles of me getting an ITIN from Romania and we had enough relationship proof for my CR1 anyway. Would it be better if he files Married Filing Jointly for 2020? Would I have to pay US taxes for my Romanian income if he files jointly? I know for the ROC it's best to show joint tax filing but we are planning to file jointly for 2021 and 2022 (ROC application will be due late 2022 and interview no sooner than 2023 so plenty of time to built joint everything).

Anyone can advice? Sorry if my questions are silly.

Thanks a bunch!

A fresh Texan

[HRQX 4,145]

25 minutes ago, Elle84 said:

since I entered on December 19, which means I started being an LPR on December 19, do I have to file US taxes for 2020?

You don't have to file 2020 taxes.

 

But if you want to claim the Recovery Rebate credit of up to $1800 then you must file 2020 taxes. Thus, might as well do Married Filing Jointly.

 

https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test

You are a resident, for U.S. federal tax purposes, if you are a lawful permanent resident of the United States at any time during the calendar year. This is known as the "green card" test.

Edited January 18, 2021 by HRQX

[MariaR323 199]

31 minutes ago, Elle84 said:

Hello wise people!

If anyone can enlighten me, I have the following situation: I am the LPR, hubby is USC. I entered the US on December 19, 2020. Before this, we lived together in my home country, Romania, where we were both employed by Romanian employers.

Hubby wants to file his 2020 taxes tomorrow so the questions are:

- since I entered on December 19, which means I started being an LPR on December 19, do I have to file US taxes for 2020? I obviously didn't get any income here yet as I don't yet have a job. My SSN was issued on December 22 and my SS card arrived on January 4.

- assuming I don't have to file US taxes, is it ok if hubby files Married Filing Separately, so I don't have to mess with my Romanian income? (My Romanian income was way below $10000 if this has any relevance). He filed Married Filing Separately for 2019 since we didn't want to get through the hurdles of me getting an ITIN from Romania and we had enough relationship proof for my CR1 anyway. Would it be better if he files Married Filing Jointly for 2020? Would I have to pay US taxes for my Romanian income if he files jointly? I know for the ROC it's best to show joint tax filing but we are planning to file jointly for 2021 and 2022 (ROC application will be due late 2022 and interview no sooner than 2023 so plenty of time to built joint everything).

Anyone can advice? Sorry if my questions are silly.

Thanks a bunch!

A fresh Texan

I don't know what income levels your hubby is in but it almost sounds like you'd benefit more from filing married filing jointly - again all depends on what income level your husband is in. All this especially because of the "stimulus money". I would highly recommend you get estimates done both separately and jointly and then make a decision.

[HRQX 4,145]

41 minutes ago, Elle84 said:

Would I have to pay US taxes for my Romanian income if he files jointly?

Probably not. https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion "you may qualify to exclude your foreign earnings from income up to an amount that is adjusted annually for inflation ($103,900 for 2018, $105,900 for 2019, and $107,600 for 2020). In addition, you can exclude or deduct certain foreign housing amounts."

[Elle84 20]

18 minutes ago, HRQX said:

You don't have to file 2020 taxes.

 

But if you want to claim the Recovery Rebate credit of up to $1800 then you must file 2020 taxes. Thus, might as well do Married Filing Jointly.

 

https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test

You are a resident, for U.S. federal tax purposes, if you are a lawful permanent resident of the United States at any time during the calendar year. This is known as the "green card" test.

 

6 minutes ago, MariaR323 said:

I don't know what income levels your hubby is in but it almost sounds like you'd benefit more from filing married filing jointly - again all depends on what income level your husband is in. All this especially because of the "stimulus money". I would highly recommend you get estimates done both separately and jointly and then make a decision.

Thanks a lot! Apparently Filing Jointly seems like the way to go. Hubby made more than $10000 but less than $16000 in 2020. I guess my concern was that I didn't want to be taxed in the US for the income I made in Romania but I didn't know how to formulate it.

[JeanneAdil 6,510]

Your USC husband would know how to file

and to claim that exclusion,  he needs to include form 2555

most online sites go by simple steps and that don't include these steps, thus he may need to paper file 

[Elle84 20]

3 minutes ago, JeanneAdil said:

Your USC husband would know how to file

and to claim that exclusion,  he needs to include form 2555

most online sites go by simple steps and that don't include these steps, thus he may need to paper file 

He uses Turbotax to file taxes so we shall see tomorrow if it allows for that exclusion or we will have to file on paper. Thanks a lot!

[MariaR323 199]

3 minutes ago, Elle84 said:

He uses Turbotax to file taxes so we shall see tomorrow if it allows for that exclusion or we will have to file on paper. Thanks a lot!

Just a heads up... even though he "files" the taxes tomorrow they're not actually being submitted/sent over yet. The IRS system isn't open to accept e-Filing until Feb 12th and some forms aren't even finalized yet. He can certainly start it off though so you can see some estimates.

[Wuozopo 4,293]

7 minutes ago, Elle84 said:

He uses Turbotax to file taxes so we shall see tomorrow if it allows for that exclusion or we will have to file on paper. Thanks a lot!

You won’t have to file on paper. TurboTax has Form 2555 and I have filed with it. In the questionnaire part  under Less Common Income at the end of income questions.  There’s a few tricky things where people get off on the wrong path. The questions are geared toward Americans who are working abroad. Just remember when they talk about the foreign country, it’s Romania. When it asks what visa you had for a foreign country, it is not a CR1visa to America. It’s asking what visa allowed you to work in Romania. You didn’t need one because you were a Romanian citizen. These aren’t  really IRS questions. They are TurboTax questions that are meant to steer The software down the proper path.

[JeanneAdil 6,510]

10 hours ago, Elle84 said:

He uses Turbotax to file taxes so we shall see tomorrow if it allows for that exclusion or we will have to file on paper. Thanks a lot!

they  do now / they have upgraded the system according to the following

 

 

Yes - TurboTax supports filing Form 2555, Foreign Earned Income. The Deluxe, Premier and Self-Employed versions of TurboTax Online all support Form 2555 (not Federal Free).Jun 7, 2019

 

 

[Elle84 20]

Thanks again to all of y'all for the detailed insights. We decided to file jointly after all. Wishing everyone a great week! 

[Wuozopo 4,293]

@Elle84
TurboTax CDs and downloads support of Form 2555 is not new. I used it back in 2008. Even the Basic version supports it, but Deluxe is often on sale at the same price as Basic. I bought the 2020 Deluxe CD for $29.99 last week at Sam’s Club. (Federal only, no State return). That’s all you need since you’re in Texas and have no State income tax to file. I find the CD that you install more useful than online version. Same price at Amazon, Target, Costco. BestBuy and Staples are $10 more. 
 

There was one year that TurboTax tried a new business model where the cheaper versions (Basic, Deluxe) did not include all tax forms. There was a huge consumer backlash. H&R even gave me a free CD of their software to lure me away from TurboTax. The CEO of TT sent me apologetic emails and gave me the $100 version free. And he stated that TurboTax made a mistake, and promised in the future that all versions of CD software would contain all forms. 
 

 

[Elle84 20]

16 hours ago, Wuozopo said:

@Elle84
TurboTax CDs and downloads support of Form 2555 is not new. I used it back in 2008. Even the Basic version supports it, but Deluxe is often on sale at the same price as Basic. I bought the 2020 Deluxe CD for $29.99 last week at Sam’s Club. (Federal only, no State return). That’s all you need since you’re in Texas and have no State income tax to file. I find the CD that you install more useful than online version. Same price at Amazon, Target, Costco. BestBuy and Staples are $10 more. 
 

There was one year that TurboTax tried a new business model where the cheaper versions (Basic, Deluxe) did not include all tax forms. There was a huge consumer backlash. H&R even gave me a free CD of their software to lure me away from TurboTax. The CEO of TT sent me apologetic emails and gave me the $100 version free. And he stated that TurboTax made a mistake, and promised in the future that all versions of CD software would contain all forms. 
 

 

@Wuozopo wow now that's a story! Thank you for sharing!

In fact, I should have known, since last year hubby filed his 2019 taxes and part of the income was from abroad. But of course, last year I didn't take such a close look at the process as to know form numbers and such :D. Starting this year, I have to stay on top of everything IRS, and it's really not simple! Today I had to fill in a W4 (I got a job, yay!!) and I scratched my head more than once lol. 

[Wuozopo 4,293]

3 hours ago, Elle84 said:

@Wuozopo wow now that's a story! Thank you for sharing!

In fact, I should have known, since last year hubby filed his 2019 taxes and part of the income was from abroad. But of course, last year I didn't take such a close look at the process as to know form numbers and such :D. Starting this year, I have to stay on top of everything IRS, and it's really not simple! Today I had to fill in a W4 (I got a job, yay!!) and I scratched my head more than once lol. 

 My wife is the one with a lot of tax experience, filing her own returns since the days of paper forms and instructions books that hit your mailbox the day after Christmas; using paper, pencil, and eraser for all calculations since calculators hadn’t even made the market yet.  So she has a long experience reading IRS instructions and Publications and calling the IRS and bumping up the line until somebody gave her an answer. She’s been a TurboTax user for maybe 20 years and TaxCut before that. It’s convenient because the math is done for you And it will download data from our investment accounts and populate the correct forms. Magical! but having a lot of experience doing it manually reading the instructions for so long helps.  
 

A note on the TurboTax v. H&R software. She went through both to do our taxes that year. They came out exactly to the penny the same, even though the software took different paths to get there.  (That’s a metaphor because he IRS doesn’t use pennies much. They round off to whole dollars mostly) She found Turbo a little more intuitive to use even though H&R was good software and accurate. She efiled  with Turbo that year. She also tried online for fun a few years ago and found it more automated with less ability to dig for information and know why they filled out some random form. Overly automated can fail you if aren’t sure how to answer a question and kinda guess.That can lead you down the wrong path and inaccuracies. They also tacked on charges for stuff so it got expensive even though promised as “free”. It has been a  few years and maybe they have improved online’s offerings and pricing. With the disc, $29.99 is all you pay and you can try out multiple ways to file to see which is best for you without losing your first way of doing it. They will hound you to pay for audit defense, have somebody review your file, or saying since you are self employed you really should move to an upgrade to a higher level. Seriously not needed to be bullied to think you need audit defense. The IRS doesn’t tend to audit small time taxpayers. People are way too scared of the IRS. If you make an obvious mistake, they send a letter (a year later) and it says —You left off reporting $1100 in dividends from xyzCorp. You owe us $123. It’s kinda like an RFE really.  They know you left it off because xyzCorp reported to them that they paid you that. Easy for an IRS computer to catch and generate a “RFE” .

Edited January 20, 2021 by Wuozopo