Sponorship worries

[ashp 0]

I have a little worry about the need to re-do the sponsorship. My fiancee doesn't work, I'm the person coming from the UK to marry her. I've been putting money into our bank account there, about $1000 a month, stepping up to $2000 lately, to cover all our costs and regular household stuff while we've gone through this process.

My concern is that we're using a cosponsor as she doesn't make enough, and as she doesn't have an income we haven't filed a tax return for her. I don't fully understand the tax system (at all!) but my belief was that this is already taxed income I'm just moving to her account, so it's not really income as such and as such she doesn't have any income to file for.

On the form can I just put her income as 0, not add IRS transcripts and list that as the reason, and have the burden on the cosponsor? This is how we did things in the K-1 filing, but we didn't need tax returns, just bank statements.

[Urge To Race 2]

I have a little worry about the need to re-do the sponsorship. My fiancee doesn't work, I'm the person coming from the UK to marry her. I've been putting money into our bank account there, about $1000 a month, stepping up to $2000 lately, to cover all our costs and regular household stuff while we've gone through this process.

My concern is that we're using a cosponsor as she doesn't make enough, and as she doesn't have an income we haven't filed a tax return for her. I don't fully understand the tax system (at all!) but my belief was that this is already taxed income I'm just moving to her account, so it's not really income as such and as such she doesn't have any income to file for.

On the form can I just put her income as 0, not add IRS transcripts and list that as the reason, and have the burden on the cosponsor? This is how we did things in the K-1 filing, but we didn't need tax returns, just bank statements.

Hi,

Not an expert on the affadivit of support, but I would think that it would be ok to put her income as 0, not add her IRS transcripts, indicating that she was not required to file tax return(s) for the past year(s).

Now, the question about the tax status of money you are putting in the account is indeed tax free for her. In the first paragraph, you say "our bank account there" and in the second you say "moving to her account." If you are putting money into her account that doesn't have your name, then it is considered a gift. If you were putting money into a joint account with both of your names, then its not considered a gift at all. You are just depositing into your bank account (which just happens to be a joint account).

A person receiving gifts in the US (even if it is large sums of cash) does not have to report and pay taxes on it. Makes sense if you think about it. Your fiancee got a gift, doesn't make sense to be taxed on it. A burden imposed as a result of your gift would diminish it. This, there is no gift tax or income tax on the gift to the recipient . The gift tax applies to the giver of the gift. But, since you were not a US person for tax purposes, you are not subject to the US gift tax. None of this applies now, as after you are married you may gift any amount to your spouse without needing to file a gift tax return or paying gift tax.

If you were interested in how the gift tax would work out, it would be something like this: If the giver of the gift gives gifts with a total value of more than the annual exclusion amount, which varies from year to year, but was $12,000 for 2006, they are required to report the total value of the gifts to the IRS by filing a gift tax return, IRS Form 709. The amount you gave over the $12,000 may be taxable to you. This only gets more complex. You are given a lifetime credit of $345,800 to apply to gift and estate taxes. So you would figure your tax on the amount over $12,000, then subtract that from 345,800 on your Form 709 so that the IRS knows how much you have outstanding for you estate and future gifts. The tax varies from 18% to 47% depending on how much over the exclusion amount you gave. This is designed to prevent the rich from gifting all of their money to their children prior to death to avoid estate taxes.

Cheers

[ashp 0]

I have a little worry about the need to re-do the sponsorship. My fiancee doesn't work, I'm the person coming from the UK to marry her. I've been putting money into our bank account there, about $1000 a month, stepping up to $2000 lately, to cover all our costs and regular household stuff while we've gone through this process.

My concern is that we're using a cosponsor as she doesn't make enough, and as she doesn't have an income we haven't filed a tax return for her. I don't fully understand the tax system (at all!) but my belief was that this is already taxed income I'm just moving to her account, so it's not really income as such and as such she doesn't have any income to file for.

On the form can I just put her income as 0, not add IRS transcripts and list that as the reason, and have the burden on the cosponsor? This is how we did things in the K-1 filing, but we didn't need tax returns, just bank statements.

Hi,

Not an expert on the affadivit of support, but I would think that it would be ok to put her income as 0, not add her IRS transcripts, indicating that she was not required to file tax return(s) for the past year(s).

Now, the question about the tax status of money you are putting in the account is indeed tax free for her. In the first paragraph, you say "our bank account there" and in the second you say "moving to her account." If you are putting money into her account that doesn't have your name, then it is considered a gift. If you were putting money into a joint account with both of your names, then its not considered a gift at all. You are just depositing into your bank account (which just happens to be a joint account).

A person receiving gifts in the US (even if it is large sums of cash) does not have to report and pay taxes on it. Makes sense if you think about it. Your fiancee got a gift, doesn't make sense to be taxed on it. A burden imposed as a result of your gift would diminish it. This, there is no gift tax or income tax on the gift to the recipient . The gift tax applies to the giver of the gift. But, since you were not a US person for tax purposes, you are not subject to the US gift tax. None of this applies now, as after you are married you may gift any amount to your spouse without needing to file a gift tax return or paying gift tax.

If you were interested in how the gift tax would work out, it would be something like this: If the giver of the gift gives gifts with a total value of more than the annual exclusion amount, which varies from year to year, but was $12,000 for 2006, they are required to report the total value of the gifts to the IRS by filing a gift tax return, IRS Form 709. The amount you gave over the $12,000 may be taxable to you. This only gets more complex. You are given a lifetime credit of $345,800 to apply to gift and estate taxes. So you would figure your tax on the amount over $12,000, then subtract that from 345,800 on your Form 709 so that the IRS knows how much you have outstanding for you estate and future gifts. The tax varies from 18% to 47% depending on how much over the exclusion amount you gave. This is designed to prevent the rich from gifting all of their money to their children prior to death to avoid estate taxes.

Cheers

Wow, an awesome response! Thank you very much, that makes perfect sense and settles my mind completely. You clearly know a lot about taxes, as an incoming brit, I'm going to need to get up to speed on these, is there any certain guide you'd recommend for getting to grips with the tax system? It's fairly complex, compared to our system here of 'taxes automagically happen', and I'd like to get to grips with it and understand some of the ramifications during the lesuirely three months or so I get before my EAD will arrive!