Foreign Earned Income Exclusion (FEIE) tax filing and CR1/IR1 visa for my spouse

[dd2024dd 9]

@JeanneAdil what are you basing it on?

[pushbrk 13,254]

5 hours ago, dd2024dd said:

I applied for the CR1/IR1 visa for my spouse back in Feb 2024. We were married online in the UT state prior to that. I lived with her since Dec 2023. I was able to do that because I work remotely for a US company.

 

I'm filing my taxes for the year 2024 now and since I haven't set foot on the US soil in 2024, my tax advisor prepared the Foreign Earned Income Exclusion (FEIE) tax write-off for me. Which is a decent amount.

 

My question is (maybe someone knows) - can the FEIE filing affect my wife's visa application?

Not really a tax expert, but if you work for a US Company and get a W2 form, I doubt it's proper to take the FEIE to begin with.  But yes, this will reduce your qualifying sponsor income to whatever is left over on the "total income" line of your 1040.  If you have an offer letter that shows you will return to the same company in the USA, then you can state your "current income" as what is stated on that offer letter, and should be ok.

 

[KMG 156]

6 hours ago, dd2024dd said:

I applied for the CR1/IR1 visa for my spouse back in Feb 2024. We were married online in the UT state prior to that. I lived with her since Dec 2023. I was able to do that because I work remotely for a US company.

 

I'm filing my taxes for the year 2024 now and since I haven't set foot on the US soil in 2024, my tax advisor prepared the Foreign Earned Income Exclusion (FEIE) tax write-off for me. Which is a decent amount.

 

My question is (maybe someone knows) - can the FEIE filing affect my wife's visa application?

FEIE is for those employed by foreign companies.  I have been filing for FEIE for 7 years because I live and work abroad for an international school.  The FEIE form asks specific questions about working for a foreign company.  You may have to amend your tax return.  I am surprised a professional told you this.

Edited Tuesday at 12:41 AM by KMG

[dd2024dd 9]

@KMG please read it from the IRS website yourself:
 

Quote

The foreign earned income exclusion, the foreign housing exclusion, and the foreign housing deduction are based on foreign earned income. For this purpose, foreign earned income is income you receive for services you perform in a foreign country in a period during which your tax home is in a foreign country and you meet either the bona fide residence test or the physical presence test.

Where does it say that you need to work for a foreign company?

[KMG 156]

7 minutes ago, dd2024dd said:

@KMG please read it from the IRS website yourself:
 

Where does it say that you need to work for a foreign company?

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

Read all three 3 of your links you sent to me again.  @pushbrk also mentioned, if you receive a W-2, you can't take FEIE. Call the IRS yourself if you don't believe the people who just told you.

Good Luck!

Edited Tuesday at 01:21 AM by KMG

[pushbrk 13,254]

3 hours ago, pushbrk said:

Not really a tax expert, but if you work for a US Company and get a W2 form, I doubt it's proper to take the FEIE to begin with.  But yes, this will reduce your qualifying sponsor income to whatever is left over on the "total income" line of your 1040.  If you have an offer letter that shows you will return to the same company in the USA, then you can state your "current income" as what is stated on that offer letter, and should be ok.

 

I also said I'm not a tax expert. I'll defer to those who are.  But, it just seems counterintuitive that a W2 employee of a US Company, can take the FEIE just because they don't live in the USA.

[TBoneTX 46,425]

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[pushbrk 13,254]

2 hours ago, KMG said:

FEIE is for those employed by foreign companies.  I have been filing for FEIE for 7 years because I live and work abroad for an international school.  The FEIE form asks specific questions about working for a foreign company.  You may have to amend your tax return.  I am surprised a professional told you this.

The FEIE exists because foreign income presumably is taxed in the country where it is earned.  A W2 US employee isn't earning that income as foreign income.  

 

[garebear397 84]

 

11 hours ago, KMG said:

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

Read all three 3 of your links you sent to me again.  @pushbrk also mentioned, if you receive a W-2, you can't take FEIE. Call the IRS yourself if you don't believe the people who just told you.

Good Luck!

 

I mean I think @dd2024dd should obviously talk with a tax accountant that is an expert on filing for "expats" (I have used MyExpatTaxes many times myself for both FEIE and Foreign Tax Credits), besides just trusting anyone one of us. But I am not seeing anywhere on the IRS page where having a W-2 means you can't claim FEIE? Feel free to point it out if I am missing something. Actually here it explicitly says where or how you get paid has nothing to do with it: 

 

The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income. For example, income you receive for work done in France is income from a foreign source even if the income is paid directly to your bank account in the United States and your employer is in New York City.

 

 

9 hours ago, pushbrk said:

The FEIE exists because foreign income presumably is taxed in the country where it is earned.  A W2 US employee isn't earning that income as foreign income.  

 

You can absolutely still be taxed in a foreign country if you are earning US income with a W2 while living in that foreign country. Many countries have rules that tax "worldwide earned income" that if you are living in that country, you can be taxed on any income earned while living there, regardless of where that company is located or where you are paid. Now, it is very up to the individual to report that income, but you can and usually will be subject to foreign tax. 

 

Just as an example, because I know Chilean tax law the best, from PWC: Chile taxes its individuals resident or domiciled in Chile on worldwide income. Foreigners working in Chile are subject to taxation only on their Chilean-source income during the first three years in Chile, after which worldwide income is taxed.

Edited Tuesday at 12:29 PM by garebear397

[dd2024dd 9]

I'm really surprised that people give advice on filing FEIE with a note that "I'm not an expert", or when someone said that "taxes are complicated" You bet they are. I'm not an expert either. That is why I hired an expat tax preparer that is also an enrolled agent with the IRS to prepare my FEIE. I didn't understand it like half of the people who post here. And that is why I hired someone who does understand and deals with it on a regular basis.

 

Anyway, this question was not about filing for FEIE. It was about the immigrant (spouse) visa, which this forum is about. And I think I kinda got the answer from the first couple replies: I need to have the income above the poverty line after the FEIE write-off is deducted.

[pushbrk 13,254]

4 hours ago, dd2024dd said:

I'm really surprised that people give advice on filing FEIE with a note that "I'm not an expert", or when someone said that "taxes are complicated" You bet they are. I'm not an expert either. That is why I hired an expat tax preparer that is also an enrolled agent with the IRS to prepare my FEIE. I didn't understand it like half of the people who post here. And that is why I hired someone who does understand and deals with it on a regular basis.

 

Anyway, this question was not about filing for FEIE. It was about the immigrant (spouse) visa, which this forum is about. And I think I kinda got the answer from the first couple replies: I need to have the income above the poverty line after the FEIE write-off is deducted.

Correct.

[S2N 23]

W-2 does not say someone owes taxes on those amount to the U.S. government— it is an informational schedule reported to the IRS on your earnings. Tax liability is a different question and that’s one that OP and their tax preparer are responsible for coming up with the initial answer to on a 1040.

 

The complication here is that most countries tax-based on physical presence. The US has a worldwide tax system for natural persons, and FEIE is designed to alleviate the burden of double-taxation on wage earners without having to get into complicated tax treaties. Presumably OP does owe tax to his country of residence due to earning the income there, but that is not a requirement to claim it.

 

OP should talk to an accountant who has experience with the tax laws of both the United States and country of residence to see the tax implications here — I’d suggest a CPA or tax attorney and not just an EA. Probably one of the certified acceptance agents for form W-7 in the country would be a good place to start since they regularly handle both US and country of residence issues.

 

In terms of immigration: if you take the exclusion I’d line up a joint sponsor if possible.

Edited 2 hours ago by S2N