Do I report foreign income on U.S. taxes?

[OldUser 8,599]

18 hours ago, S2N said:

Would not recommend HR Block or any of the retail tax prep stores. Those are essentially data entry people and they cost similar to what a licensed CPA would charge. 

Agreed on this one. The only time I didn't file taxes myself it was through HR block. And I ended up owing taxes few months later as they were filed incorrectly. The guy just clicked few buttons and we were done in 10 minutes.

Filing myself it takes 2-3 hrs, by taxes are done correctly with max deductions.

 

HR block for taxes are like notarios for immigration cases.

Edited Thursday at 02:38 PM by OldUser

[Lemonslice 5,069]

On 3/28/2025 at 3:59 AM, hplusj said:

We ended up going with H&R Block due to the complexity of it; I've been doing my own taxes for years, but 2024 was humbling to say the least, given that Jon had foreign income before arriving AND after his EAD, not to mention I moved states and positions.

 

The cost of hiring a CPA offset our marriage tax credit sadly, but we wanted it done right.  Future years will be much easier to manage.

Many CPAs cost about the same as HR Block (only to file taxes), must have been a very fancy one to offset your whole credit. 

[S2N 55]

41 minutes ago, OldUser said:

Filing myself it takes 2-3 hrs, by taxes are done correctly with max deductions.

 

HR block for taxes are like notarios for immigration cases.

Yeah; once someones income is solely from one jurisdiction and they don’t have any business income, it really doesn’t make sense to hire someone as any of the free softwares will do the exact same thing as a CPA or HR Block, and you’re more or less paying for data entry at that point.
 

Reason I say people with multi-jurisdiction issues should hire a professional is that it’s really easy to over-claim credits in this area and also really easy to overpay. Neither is great, but overclaiming credits and underpaying is what you really want to avoid.
 

As an example: my husband pays Chilean property taxes. Those aren’t eligible for the credit as foreign taxes since only foreign income tax is deductible and his contributions to the local pension plan aren’t qualified retirement contributions since it’s not a U.S.-plan. Multi-state in the U.S. has a lot of similar issues.

 

Unless someone deals with stuff like that regularly or knows how to research it; there’s a very real risk that the numbers they’re inputting to the software are wrong. I have a a stronger professional background in this than most, and I still prefer someone who specializes in individual income tax do mine since I have multi-state, rental, and now foreign income. 

Edited Thursday at 03:18 PM by S2N

[Lemonslice 5,069]

3 minutes ago, S2N said:

Yeah; once someones income is solely from one jurisdiction and they don’t have any business income, it really doesn’t make sense to hire someone as any of the free softwares will do the exact same thing as a CPA or HR Block, and you’re more or less paying for data entry at that point.
 

Reason I say people with multi-jurisdiction issues should hire a professional is that it’s really easy to over-claim credits in this area and also really easy to overpay. Neither is great, but overclaiming credits and underpaying is what you really want to avoid.
 

As an example: my husband pays Chilean property taxes. Those aren’t eligible for the credit as foreign taxes since only foreign income tax is deductible and his contributions to the local pension plan aren’t qualified retirement contributions since it’s not a U.S.-plan. Multi-state in the U.S. has a lot of similar issues.

 

Unless someone deals with stuff like that regularly or knows how to research it; there’s a very real risk that the numbers they’re inputting to the software are wrong. I have a a stronger professional background in this than most, and I still prefer someone who specializes in individual income tax do mine since I have multi-state, rental, and now foreign income. 

If I remember correctly, FBAR fines for non disclosure are also heavy $$$$$$ 
I agree that many people could switch to self filing after the first year/first year without a change in situation, by following what was done by the expert.  Just don't forget FBAR.  Good tax professionals can also advise on how to plan for the year(s) to come.   I absolutely do not mind paying my fair share of taxes, but there is no reason to pay extra ¯\_(ツ)_/¯ 

[S2N 55]

10 minutes ago, Lemonslice said:

If I remember correctly, FBAR fines for non disclosure are also heavy $$$$$$ 
I agree that many people could switch to self filing after the first year/first year without a change in situation, by following what was done by the expert.  Just don't forget FBAR.  Good tax professionals can also advise on how to plan for the year(s) to come.   I absolutely do not mind paying my fair share of taxes, but there is no reason to pay extra ¯\_(ツ)_/¯ 

FBAR usually isn’t applicable to NRA spouses electing to be treated as tax residents from my understanding, but yes, very good point. You want someone who knows this stuff and isn’t giving you their best guess.

 

Edit: ignore me, I’m also replying on the other tax thread active right now and forgot that this was related to someone already in the U.S., for whom FBAR is much more of a concern.

Edited Thursday at 03:37 PM by S2N

[Crazy Cat 43,068]

22 minutes ago, Lemonslice said:

If I remember correctly, FBAR fines for non disclosure are also heavy $$$$$$ 
I agree that many people could switch to self filing after the first year/first year without a change in situation, by following what was done by the expert.  Just don't forget FBAR.  Good tax professionals can also advise on how to plan for the year(s) to come.   I absolutely do not mind paying my fair share of taxes, but there is no reason to pay extra ¯\_(ツ)_/¯ 

I could probably do our taxes now, but I would rather pay our CPA to do it.  She has done our taxes and FBAR every year since wife arrived in 2017.  We've  gotten it down to a science now.  I send her a spreadsheet that reports wifes foreign income and foreign bank account info every year, along with our US income evidence.  Our CPA then files our 1040 package and FBAR, etc.  She also includes a tax review.  She charges me about what I have seen some people pay for H&R Block....and that includes filing the FBAR with the Treasury Department. 

 

The first year, she ran the numbers several ways to help us determine the best tax strategy.  Since wife had significant income prior to arriving from a country without a tax treaty, dual status was the best choice for my wife that year. 

Edited Thursday at 03:49 PM by Crazy Cat