Income in Foreign Country

[Tony Wong 4]

Hi,

I moved to the US on Apr 12 this year with a CR-1 spousal visa. Prior to that I've been living and working in Sweden. When I moved to the US, I was technically still on paid vacation from my Swedish job, until Jun 9.

I started working in the US (totally unrelated to my previous job in Sweden) on May 13.

My question is whether I need to include my salary from Sweden in my next tax filing here in the US, and if there's any difference between the Swedish salary I made before immigration (before Apr 12) and after immigration (Apr 12 - Jun 9).  

  

[Nashmusah 29]

3 hours ago, Tony Wong said:

Hi,

I moved to the US on Apr 12 this year with a CR-1 spousal visa. Prior to that I've been living and working in Sweden. When I moved to the US, I was technically still on paid vacation from my Swedish job, until Jun 9.

I started working in the US (totally unrelated to my previous job in Sweden) on May 13.

My question is whether I need to include my salary from Sweden in my next tax filing here in the US, and if there's any difference between the Swedish salary I made before immigration (before Apr 12) and after immigration (Apr 12 - Jun 9).  

  

Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.

Good luck boss 👍. 

[Tony Wong 4]

@Nashmusah

Oh, but I wasn't a U.S. citizen or resident before I moved to the States on Apr 12. 

[Lil bear 4,181]

17 minutes ago, Tony Wong said:

@Nashmusah

Oh, but I wasn't a U.S. citizen or resident before I moved to the States on Apr 12. 

This is a complex tax year for you.   Depending on your full  situation , you may need to  file a “dual status” year where you only report on income earned after the date you became an lpr .. So that includes the overseas earned income from your paid vacation time after you moved   Prior to that,  you are not a resident for US tax purposes, so do not include income earned before that date   Some people also have the option of choosing to be considered a tax resident for the whole  year..  so you declare all income for that tax period .. but you haven’t given us enough info to know if that might apply to you 

[Tony Wong 4]

Thank you. I suspect that's the case, that I'll have to file for dual status, with the cut-off being my arrival date: before Apr 12, no income; after Apr 12, all my income from the US and Sweden. 

I also have the possibility to file jointly with my spouse, and I've heard that would make me a tax resident for the whole year. Isn't that a bit counter-intuitive, that I'll then have to pay tax for the 4 months' salary before I even became a resident in the States? Or do the perks of filing jointly make it worth?  

[Lil bear 4,181]

50 minutes ago, Tony Wong said:

Thank you. I suspect that's the case, that I'll have to file for dual status, with the cut-off being my arrival date: before Apr 12, no income; after Apr 12, all my income from the US and Sweden. 

I also have the possibility to file jointly with my spouse, and I've heard that would make me a tax resident for the whole year. Isn't that a bit counter-intuitive, that I'll then have to pay tax for the 4 months' salary before I even became a resident in the States? Or do the perks of filing jointly make it worth?  

You will need to run the numbers both way to see which is best. US tax deduction for filing joint is often a big savings .. And you can claim a deduction for foreign earned  income and foreign tax already paid, which ensures you aren’t double taxed.
 

Compared to IRS and US tax regulations, USCIS and immigrating is a walk in the park 😵‍💫. 

Edited August 17 by Lil bear

[nastra30 2,284]

@Tony Wong, there's an approx 120K foreign income exclusion you can exempt from your taxes. I don't know what you made but you can keep your filing simple by filing as full time and taking that exemption. Also, doesn't Sweden and US have a Treaty that prevents double taxation?

[Tony Wong 4]

@nastra30: Thank you for the advice. True that there's a treaty preventing double taxation, probably with Foreign Tax Credits. And about Foreign Earned Income Exclusion (Form 2555), I don't think I'm eligible to that because the tax home must be a foreign country.

I'll just have to delve in the issue and run the numbers in different scenarios to find out which of them makes most sense. And then I have to factor my spouse's tax into the situation too. Thanks for the input everyone. 

Edited August 17 by Tony Wong