Form 2555 and exclusion of taxes

[cristinea2 7]

Hi,

 

I need your valuable help again!

 

Jan 1 - Jan 31 of 2022 I worked in my country Greece and I had a small income. I will pay my taxes for Greece in Greece.

 

Feb 1 enter USA with K1 stopped any work no income till Dec 1 of 2022 and for this one month income I have w2 and will pay taxes in USA. No green card just work permit. I got the green card in January

 

So I worked one month Jan (greece) one month Dec (usa).

 

 

Do I have to complete the form 2055 for foreign taxes attached with the 1099 in my situation for Jan 2022 before I entered USA?

 

I read on the following thread no but not sure if is true..

It is automatically excluded because your start date for us tax purposes as a us taxpayer is the day you stepped foot on us soil.  Any income earned prior is not a part of your taxable income for us purposes.  You dont bring it on the form at all.   You can voluntarily elect to be treated as a us taxpayer for the entire year at which time you become eligible to use the 2555

 

Ps: Will use turbotax deluxe for my taxes.

 

 

 

 

 

 

 

 

 

 

Edited January 29, 2023 by cristinea2

[powerpuff 6,697]

~~ Topic moved from AOS K1 to Tax & Finances during US immigration as the questions are about taxes ~~

[Mike E 11,739]

2 hours ago, cristinea2 said:

Do I have to complete the form 2055 for foreign taxes attached with the 1099 in my situation for Jan 2022 before I entered USA?

Simplest is to take the foreign income tax credit.   
 

besides which:

 

https://www.irs.gov/instructions/i2555

 

“

Note.

 

If you did not live 330 full days in a foreign country, or countries, during a 12-month period, you are not entitled to claim the foreign earned income exclusion. The 330 qualifying days do not have to be consecutive.”

 

I just let TurboTax figure this stuff out.  

[Wuozopo 4,293]

@cristinea2

 

A joint return with your spouse is going to be the best choice. Your questions ask only about yourself. How are you planning to file? Married Filing Separately or Joint?

 

 

[cristinea2 7]

34 minutes ago, Wuozopo said:

@cristinea2

 

A joint return with your spouse is going to be the best choice. Your questions ask only about yourself. How are you planning to file? Married Filing Separately or Joint?

 

 

Married joint 

[Wuozopo 4,293]

56 minutes ago, cristinea2 said:

Married joint 

Okay so you file with your husband. You have to report all his and all of your income (US and abroad) earned in 2022. Your US income is entered in TurboTax where it asks for W2 info. Foreign Income will be entered toward the end of the income questions under the section called “Less Common Income”. That’s where your January income gets entered. 
 

TurboTax will take you through questions and do form 2555 ito exclude your Greek income. You qualify to exclude because you were a bonafide resident of Greece, allowed to work and earn money there.. It is written more for Americans working abroad so sometimes the wording is confusing. I think it asks what visa you had. That is not K1. It is asking what visa you had for Greece. Well none. You didn’t need a visa because you were citizen of Greece allowed to work there. You do absolutely qualify for the foreign earned income exclusion and if TurboTax says you don’t, then you have answered on of their questions incorrectly so back up and review what you entered. 
 

If you get stuck, come back to this thread and ask specific questions.

 

[cristinea2 7]

15 minutes ago, Wuozopo said:

Okay so you file with your husband. You have to report all his and all of your income (US and abroad) earned in 2022. Your US income is entered in TurboTax where it asks for W2 info. Foreign Income will be entered toward the end of the income questions under the section called “Less Common Income”. That’s where your January income gets entered. 
 

TurboTax will take you through questions and do form 2555 ito exclude your Greek income. You qualify to exclude because you were a bonafide resident of Greece, allowed to work and earn money there.. It is written more for Americans working abroad so sometimes the wording is confusing. I think it asks what visa you had. That is not K1. It is asking what visa you had for Greece. Well none. You didn’t need a visa because you were citizen of Greece allowed to work there. You do absolutely qualify for the foreign earned income exclusion and if TurboTax says you don’t, then you have answered on of their questions incorrectly so back up and review what you entered. 
 

If you get stuck, come back to this thread and ask specific questions.

 

Gotcha, thanks it said that i did not qualify and i had to complete an other alien something form outside turbotax and manually. I will redo the foreign income section. Thanks again

[Wuozopo 4,293]

7 minutes ago, cristinea2 said:

Gotcha, thanks it said that i did not qualify and i had to complete an other alien something form outside turbotax and manually. I will redo the foreign income section. Thanks again

I will need to look at my 2022 TurboTax to review specifics for this year.  Each year things can be worded differently or the tax form slightly reorganized.  But if you wonder how to answer a specific question, just ask and I will try to help.

[Mike E 11,739]

15 minutes ago, cristinea2 said:

Gotcha, thanks it said that i did not qualify and i had to complete an other alien something form outside turbotax and manually. I will redo the foreign income section. Thanks again

No need to exclude a month’s income.  
 

You either paid Greece tax on your Greek income or you didn’t. If you did, you won’t be double taxed. 
 

If you didn’t you will be taxed by the IRS.  
 

How many dollars of taxes are you trying to save really? More or less than what you would pay a CPA?
 

I am so glad that the embassy issued my wife’s K-1 in January (after she stopped working in December) versus December. And I had already told her that if the visa is issued in December, she’s not coming until January. 

Edited January 29, 2023 by Mike E

[Wuozopo 4,293]

3 minutes ago, Mike E said:

No need to exclude a month’s income.  
 

You either paid Greece tax on your Greek income or you didn’t. If you did, you won’t be double taxed. 
 

If you didn’t you will be taxed by the IRS.  
 

How many dollars of taxes are you to save really? More or less than what you would pay a CPA.  

If she wants to get a credit for Greek taxes paid, that is a form to fill out— Form 1116 or she can choose to exclude  the income from US taxation with Form 2555. One or the other but not both. Either one can save tax dollars. Yes one month is not going to make a huge difference, but the IRS has procedures one is to follow even if it’s only a month to report as foreign earned income. 

[cristinea2 7]

6 minutes ago, Wuozopo said:

If she wants to get a credit for Greek taxes paid, that is a form to fill out— Form 1116 or she can choose to exclude  the income from US taxation with Form 2555. One or the other but not both. Either one can save tax dollars. Yes one month is not going to make a huge difference, but the IRS has procedures one is to follow even if it’s only a month to report as foreign earned income. 

Yes the money will save are not much anyway just trying to do it right so I have no tax issues or penalties

[Mike E 11,739]

11 minutes ago, Wuozopo said:

but the IRS has procedures one is to follow even if it’s only a month to report as foreign earned income. 

Did I say otherwise in this thread? Suffice to say I am not happy with your insinuations.  

 

I pay foreign income taxes every year. I take foreign income tax credits every year.  I don’t care about paying foreign income taxes because I know I am not double taxes. 
 

Too many mole hills being turned into mountains. Too many attacks on my character. 
 

I am out.  

[Wuozopo 4,293]

2 hours ago, Mike E said:

Did I say otherwise in this thread? Suffice to say I am not happy with your insinuations.  

 

I pay foreign income taxes every year. I take foreign income tax credits every year.  I don’t care about paying foreign income taxes because I know I am not double taxes. 
 

Too many mole hills being turned into mountains. Too many attacks on my character. 
 

I am out.  

Apologies. I didn’t really understand exactly what you were saying or how you thought she should proceed other than don’t bother choosing Form 2555. And I didn’t understand the CPA part since she wasn’t planning to use one. Sorry I misunderstood.  

[cristinea2 7]

On 1/29/2023 at 9:04 AM, Wuozopo said:

I will need to look at my 2022 TurboTax to review specifics for this year.  Each year things can be worded differently or the tax form slightly reorganized.  But if you wonder how to answer a specific question, just ask and I will try to help.

I was literally 1hour and 20 minutes over the phone with turbo tax advisor. She had never done before but was really keen to help.

After some tests etc we managed to include the form 2555 and exclude the foreign taxes. I still have some concerns may not did it correctly but fingers cross.

 

At Form 1040 

Line 1h Other Income Earned has the Gross Amount for foreign income

Line 8  Other income from Schedule 1, line 10   has - (minus the income earned)

Schedule 1 8d Foreign earned income exclusion from Form 2555    has - (minus the income earned)

 

[Wuozopo 4,293]

16 hours ago, cristinea2 said:

I was literally 1hour and 20 minutes over the phone with turbo tax advisor. She had never done before but was really keen to help.

After some tests etc we managed to include the form 2555 and exclude the foreign taxes. I still have some concerns may not did it correctly but fingers cross.

 

At Form 1040 

Line 1h Other Income Earned has the Gross Amount for foreign income

Line 8  Other income from Schedule 1, line 10   has - (minus the income earned)

Schedule 1 8d Foreign earned income exclusion from Form 2555    has - (minus the income earned)

 

Yes that is correct where the foreign income is shown reported (1h) then a negative number showing the excluded amount (Line 8). The US earnings  reported on W2s will be shown on 1a as a total for both of you.

 

i looked over the 1040 for 2022. It has changed from previous years. Line 1 used to be a single line. This year there are 10 parts covering Line 1.