Taxes

[JeanneAdil 6,672]

On 8/13/2021 at 5:50 AM, nastra30 said:

 

I'll like to understand this more. I do know you can claim an unrelated person as a dependent if they lived with you all year as a member of the household. But I think the dependent must be a U.S. citizen, U.S. national, or resident alien. So I'm doubting op can claim fiance as a dependent using non-immigrant visa but I could be wrong. 

 

On the other hand, if op gets married only options are married filing jointly or married filing separately. Can't claim spouse as dependent when married. Spouses will be spouses on tax forms.ervie

IRS has a site for overview of dependents

 

https://apps.irs.gov/app/vita/content/globalmedia/overview_of_the_rules_for_claiming_4012.pdf

[JeanneAdil 6,672]

On 8/12/2021 at 10:43 PM, janet3 said:

You still file the 1040. You will file married and jointly if you are married before December 31, 2021. If you are not married before December 31, 2021 and he has been in the USA for over a certain amount of time you can look at filing for for him as a dependent....but you will need to get the advice of a CPA or Tax advisor for that (regarding timelines and standards for meeting a classification as "dependent")

nope,  he is still spouse not dependent as she is married 

if not married by end of the year ,  she can not claim him at all as she has not provided 6 months of his support and he has not lived here 6 months with her

IRS is clear on this

last statement on the right side of this site (6 months of support)

 

https://apps.irs.gov/app/vita/content/globalmedia/overview_of_the_rules_for_claiming_4012.pdf

[Crazy Cat 42,413]

18 hours ago, JeanneAdil said:

Morocco is part of tax treaty with the US so if he has 2021 income ,  she can file form 2555 to have $108,700 excluded (which no one would leave morocco if they made that much money )

Good point.  That is another thing to consider.  Taiwan does NOT have a tax treaty with the US, so that played a big part in our tax strategy the first year since my wife had  income before arriving in the US.  She was a dual status resident that year....thus she had to report only income received after arriving.  

Edited August 14, 2021 by Crazy Cat

[JeanneAdil 6,672]

35 minutes ago, Crazy Cat said:

Good point.  That is another thing to consider.  Taiwan does NOT have a tax treaty with the US, so that played a big part in our tax strategy the first year since my wife had  income before arriving in the US.  She was a dual status resident that year....thus she had to report only income received after arriving.  

yeah,   i see some say money can be excluded but they have to look at the country's that have a tax treaty / not all do 

[Ayrton 965]

1 hour ago, Crazy Cat said:

Good point.  That is another thing to consider.  Taiwan does NOT have a tax treaty with the US, so that played a big part in our tax strategy the first year since my wife had  income before arriving in the US.  She was a dual status resident that year....thus she had to report only income received after arriving.  

 

49 minutes ago, JeanneAdil said:

yeah,   i see some say money can be excluded but they have to look at the country's that have a tax treaty / not all do 

 

You don't need to have a tax treaty with the foreign country in order to exclude foreign income. Brazil has no treaty with the US and I excluded my foreign income on the first year here.

 

In order to qualify for foreign income exclusion you either have to satisfy the Bona Fide Residence Test or the Physical Presence Test (not both). Tax treaty is required for the first option, but not for the second. Most immigrants will fall under the physical presence test because they were  at least 330 full days during any period of 12 months in a row in a foreign country (this period is not Jan-Dec, it can start in one year and end in the next year.

 

The instructions even say:

 

"Note. A nonresident alien who, with a

U.S. citizen or U.S. resident alien spouse,

chooses to be taxed as a resident of the

United States can qualify under this test if

the time requirements are met. See Pub.

54 for details on how to make this choice."

 

Which is OP's case.

 

Edited August 14, 2021 by Ayrton

[Crazy Cat 42,413]

5 minutes ago, Ayrton said:

 

 

You don't need to have a tax treaty with the foreign country in order to exclude foreign income. Brazil has no treaty with the US and I excluded my foreign income on the first year here.

 

In order to qualify for foreign income exclusion you either have to satisfy the Bona Fide Residence Test or the Physical Presence Test (not both). Tax treaty is required for the first option, but not for the second. Most immigrants will fall under the physical presence test because they were  at least 330 full days during any period of 12 months in a row in a foreign country (this period is not Jan-Dec, it can start in one year and end in the next year.

 

The instructions even say:

 

"Note. A nonresident alien who, with a

U.S. citizen or U.S. resident alien spouse,

chooses to be taxed as a resident of the

United States can qualify under this test if

the time requirements are met. See Pub.

54 for details on how to make this choice."

 

Which is OP's case.

 

Thanks.  For our situation, the better strategy was for my wife to be classified as dual-status the first year.....as recommended by our accountant.   She ran the numbers for filing jointly and separately. 

Edited August 14, 2021 by Crazy Cat

[JeanneAdil 6,672]

15 minutes ago, Ayrton said:

 

 

You don't need to have a tax treaty with the foreign country in order to exclude foreign income. Brazil has no treaty with the US and I excluded my foreign income on the first year here.

 

In order to qualify for foreign income exclusion you either have to satisfy the Bona Fide Residence Test or the Physical Presence Test (not both). Tax treaty is required for the first option, but not for the second. Most immigrants will fall under the physical presence test because they were  at least 330 full days during any period of 12 months in a row in a foreign country (this period is not Jan-Dec, it can start in one year and end in the next year.

 

The instructions even say:

 

"Note. A nonresident alien who, with a

U.S. citizen or U.S. resident alien spouse,

chooses to be taxed as a resident of the

United States can qualify under this test if

the time requirements are met. See Pub.

54 for details on how to make this choice."

 

Which is OP's case.

 

Since there is no Tax Treaty between United States and Brazil, the default position is that a taxpayer who is a US person such as a US Citizen, Legal Permanent Resident, or Foreign National who meets Substantial Presence Test is taxed on their worldwide. With Brazil, this would also include income that is being generated in Brazil, and may be tax free under the tax rules of Brazil.

[Ayrton 965]

4 minutes ago, Crazy Cat said:

Thanks.  For our situation, the better strategy was for my wife to be classified as dual-status the first year.....as recommended by our accountant.   She ran the numbers for filing jointly and separately. 

I hope your accountant was right. A dual status alien CANNOT file a joint return, therefore you can't use the standard deduction for married couples. So you definitely filed separately for your spouse's first year.

 

If your spouse made more than 100k dollars (or whatever the max deduction was when your spouse moved to the US)  in her foreign country before moving to the US, then maybe it made more sense for her to file as dual status since part of it wouldn't be excluded. But if she didn't make more than that, I can guarantee it would've been better to file jointly.

 

[Ayrton 965]

1 minute ago, JeanneAdil said:

Since there is no Tax Treaty between United States and Brazil, the default position is that a taxpayer who is a US person such as a US Citizen, Legal Permanent Resident, or Foreign National who meets Substantial Presence Test is taxed on their worldwide. With Brazil, this would also include income that is being generated in Brazil, and may be tax free under the tax rules of Brazil.

They are not taxed on their worldwide income, they must REPORT their worldwide income. These are two different things and that doesn't mean that part of this income can't be excluded with form 2555 if the physical presence test was met. Read the instructions for form 2555.

 

In my case I moved in June 2019 to the US. I was a resident alien for tax purposes of the US, and I was in Brazil at least 330 days in a 12 consecutive months period before moving (June 2018-June 2019), therefore I qualified to have my Brazilian 2019 income excluded by form 2555.

[Crazy Cat 42,413]

8 minutes ago, Ayrton said:

I hope your accountant was right. A dual status alien CANNOT file a joint return, therefore you can't use the standard deduction for married couples. So you definitely filed separately for your spouse's first year.

 

If your spouse made more than 100k dollars (or whatever the max deduction was when your spouse moved to the US)  in her foreign country before moving to the US, then maybe it made more sense for her to file as dual status since part of it wouldn't be excluded. But if she didn't make more than that, I can guarantee it would've been better to file jointly.

 

We each filed "Married-filing separately" for that year.  Since then, Married-Filing Jointly has been the more beneficial strategy.    

Edited August 14, 2021 by Crazy Cat

[MrsAb2021 29]

Thanks everyone for all of the replies. I learned a lot. Once he is here, we will apply for the SSN right away and then marry right after to meet the time frames.