Questions On How to Report Worldwide Income

[Tore 2]

We've decided to select married filling jointly as a "Non Resident Spouse" , and she has a SSN. We're awaiting our AOS interview confirmation and she just recently got approved to work!

Non Resident Spouse IRS Info: https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse

 

The article reads "Each spouse must report their entire worldwide income for the year you make the choice and for all later years unless the choice is ended or suspended."

 

Here is a list of what is included in worldwide income: https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-what-is-foreign-earned-income

 

(International Taxes: https://www.irs.gov/individuals/international-taxpayers - extra link)

 

So that means my wife should include:

• Her Salary When She worked in Her Country For The Beginning of 2021
• All Bank Accounts (FBAR?)
• Property (She doesn't rent, she just has a small plot of land)(?)
• Stocks (1099 Equivalents)(?)
  • She traded stocks but didn't receive 1099s so do we make them on our own? What document suffices for this?

 

We're using TaxAct and it's working so far... any advice would be greatly appreciated.

 

 

[Crazy Cat 41,884]

41 minutes ago, Tore said:

We've decided to select married filling jointly as a "Non Resident Spouse" ,

1.  To be perfectly clear, she will be considered a resident alien for tax purposes if you file a joint return. 

2. The 1099s must come from the investment income source.  You can't make your own. 

3.  Did she generate income from the property?  If not, there is noting to report on the 1040.

For IRS reporting, you include/report income, not wealth.   Foreign assets and bank accounts are reported via an FBAR, if applicable, to the Department of the Treasury.  

Edited April 3, 2022 by Crazy Cat

[Tore 2]

18 minutes ago, Crazy Cat said:

1.  To be perfectly clear, she will be considered a resident alien for tax purposes if you file a joint return. 

2. The 1099s must come from the investment income source.  You can't make your own. 

3.  Did she generate income from the property?  If not, there is noting to report on the 1040.

For IRS reporting, you include/report income, not wealth.   Foreign assets and bank accounts are reported via an FBAR, if applicable, to the Department of the Treasury.  

 

Thank you. On your 2nd point, then how do I file all of the stocks she traded? Form 8938 (FACTA)?

[JeanneAdil 6,510]

form 2555 to exclude foreign income

but south Korea does not have a tax treaty with the US like the following countries do

 

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

S

Slovak Republic
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland

 

The United States has tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income. Under these same treaties, residents or citizens of the United States are taxed at a reduced rate, or are exempt from foreign taxes, on certain items of income they receive from sources within foreign countries. M

[Crazy Cat 41,884]

Just now, Tore said:

 

Thank you. On your 2nd point, then how do I file all of the stocks she traded? Form 8938 (FACTA)?

If there was income generated, you just list the income and sources.  Personally, I would wait for a 1099, since, by law, they should have already been provided. 

[Wuozopo 4,293]

17 minutes ago, Crazy Cat said:

If there was income generated, you just list the income and sources.  Personally, I would wait for a 1099, since, by law, they should have already been provided. 

I think he means she traded stocks in South Korea,  A SK investment company wouldn’t issue a 1099 since that’s a US thing. But she can probably find out amounts she earned/lost from the trades during tax year 2021 and report them.

 

@Tore

Report her wages from a job on Line 1 with your wages. I don’t know TaxAct so can’t tell you how they will collect that figure to add it to Line 1. Exclude her wages from abroad using form 2555.

Report any interest or dividends she earned in 2021 on Schedule B. Those are taxable. Just list the payer and the amount even though you have no 1099.

Report gains/losses from stock sales in 2021 on Schedule D. Also taxable.

 

[Ayrton 965]

9 hours ago, JeanneAdil said:

form 2555 to exclude foreign income

but south Korea does not have a tax treaty with the US like the following countries do

 

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

S

Slovak Republic
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland

 

The United States has tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income. Under these same treaties, residents or citizens of the United States are taxed at a reduced rate, or are exempt from foreign taxes, on certain items of income they receive from sources within foreign countries. M

Tax treaty not required to exclude foreign earned income.