Q USA Tax forms 2012

[Geordie 9]

Hi,

I apologise if this is in the wrong forum. If the forum software allows, I'll report it myself.

I emigrated to America in May of 2011. My American Wife has told me that I will need my salary information from my previous UK job, in filling out my first ever tax forms this coming March / April.

I am in the process of contacting family back home, and trying to ring my old job to see if they can send me this information.

It is confusing as I never thought I would need this information, and it may prove hard to locate.

[Nich-Nick 3,354]

Hi,

I apologise if this is in the wrong forum. If the forum software allows, I'll report it myself.

I emigrated to America in May of 2011. My American Wife has told me that I will need my salary information from my previous UK job, in filling out my first ever tax forms this coming March / April.

I am in the process of contacting family back home, and trying to ring my old job to see if they can send me this information.

It is confusing as I never thought I would need this information, and it may prove hard to locate.

Do you not have any idea of how much money you earned in a month? Just make the best estimate on how much you earned From Jan 1 until you left your job. It will be reported as "other" income on your joint return. Then you get to exclude it..subtract it so to speak.

No official proof of that income is required by the IRS with the tax return. And because it's excluded, being off a thousand or so makes little difference to the bottom line (report it, then subtract it). Convert it to US dollar equivalent based on the exchange rate at the time you earned it. That's also not an exact science, but use a reasonable rate and make some notes for your records of how you came up with your dollar amount in case you were audited. But that's probably not going to happen.

oanda.com has historical exchange rates

[Geordie 9]

Thank you!

[M&Pooh 12]

Do you not have any idea of how much money you earned in a month? Just make the best estimate on how much you earned From Jan 1 until you left your job. It will be reported as "other" income on your joint return. Then you get to exclude it..subtract it so to speak.

No official proof of that income is required by the IRS with the tax return. And because it's excluded, being off a thousand or so makes little difference to the bottom line (report it, then subtract it). Convert it to US dollar equivalent based on the exchange rate at the time you earned it. That's also not an exact science, but use a reasonable rate and make some notes for your records of how you came up with your dollar amount in case you were audited. But that's probably not going to happen.

oanda.com has historical exchange rates

Nich-Nick,

How you can be so sure that the UK income is excluded?? The OP obviously doesn't pass bona fide residency test for '11 and we don't know whether he passes the physical presence test. And if not, he is not able to exclude using 2555.

Am I missing anything?

[Nich-Nick 3,354]

Nich-Nick,

How you can be so sure that the UK income is excluded?? The OP obviously doesn't pass bona fide residency test for '11 and we don't know whether he passes the physical presence test. And if not, he is not able to exclude using 2555.

Am I missing anything?

Well, I'm just sure because I read the stuff from IRS over and over until I understood it. I've gotten pretty good at "IRS speak" because I've been doing my own taxes since before calculators were invented...the old fashion way with pencil and paper...way before TurboTax. You learn a lot with the IRS instruction book and adding and subtracting on paper. LOL. TurboTax doesn't give you a good understanding when it fills things in automatically for you and you don't follow why and where. And we filed 2008 taxes jointly and haven't heard from IRS. I dunno, I'm just 100% sure.

I've explained it in great detail in years past but can't do that right this minute. The confusion comes from the fact that the form/instructions are also for Americans living overseas and trying to exclude income. Form 2555 wants to know if the person was a resident and physically present. Yes, he has a British Passport and he was probably present in the UK since his birth. That's different than say an American who got sent to Leeds, UK to do some work for Dow Chemical for 3 months and wanted to exclude the income he earned those months. I'll try to find an old post with more detail.

Edited January 19, 2012 by Nich-Nick

[M&Pooh 12]

Well, I'm just sure because I read the stuff from IRS over and over until I understood it. I've gotten pretty good at "IRS speak" because I've been doing my own taxes since before calculators were invented...the old fashion way with pencil and paper...way before TurboTax. You learn a lot with the IRS instruction book and adding and subtracting on paper. LOL. TurboTax doesn't give you a good understanding when it fills things in automatically for you and you don't follow why and where. And we filed 2008 taxes jointly and haven't heard from IRS. I dunno, I'm just 100% sure.

I've explained it in great detail in years past but can't do that right this minute. The confusion comes from the fact that the form/instructions are also for Americans living overseas and trying to exclude income. Form 2555 wants to know if the person was a resident and physically present. Yes, he has a British Passport and he was probably present in the UK since his birth. That's different than say an American who got sent to Leeds, UK to do some work for Dow Chemical for 3 months and wanted to exclude the income he earned those months. I'll try to find an old post with more detail.

Yeah, I know what you're talking about... the instructions for "Foreign Income exclusion", "Foreign Tax Credit" forms as well as "Tax Guide for Aliens" were in my required reading list... I did my homework. So, I am understanding pretty well the different scenarios when people have foreign income. And no TurboTax at this moment. I prefer to fully understand what's going on and where the numbers are coming from. Being a math major, I am not scared by the idea of calculating all the stuff myself.

Will much appreciate if you can find the older post or explain to me how a newly immigrated spouse can pass the tests for the 2555. You just follow the instructions literally, and bona fide residency test is failed by such a spouse because since the moment he/she immigrated to the U.S., he/she ceases to be a bona fide resident of the foreign country... do you disagree? And I am sorry, I REALLY appreciate you sharing your own experience but "I did it this way and I got away with that" is not an adequate proof something was done according to what the law/instructions stipulate ( no offense! )

[monyfer 27]

Yeah, I know what you're talking about... the instructions for "Foreign Income exclusion", "Foreign Tax Credit" forms as well as "Tax Guide for Aliens" were in my required reading list... I did my homework. So, I am understanding pretty well the different scenarios when people have foreign income. And no TurboTax at this moment. I prefer to fully understand what's going on and where the numbers are coming from. Being a math major, I am not scared by the idea of calculating all the stuff myself.

Will much appreciate if you can find the older post or explain to me how a newly immigrated spouse can pass the tests for the 2555. You just follow the instructions literally, and bona fide residency test is failed by such a spouse because since the moment he/she immigrated to the U.S., he/she ceases to be a bona fide resident of the foreign country... do you disagree? And I am sorry, I REALLY appreciate you sharing your own experience but "I did it this way and I got away with that" is not an adequate proof something was done according to what the law/instructions stipulate ( no offense! )

Sorry to chime in here, but I have also been studying this topic and all the relevant IRS guides and I agree with Nich-Nick. We are about to file and my husband hasn't yet received his green card, but we are going to fill out the statement to have him considered as a resident alien for the year 2011. The reason I believe that he can exclude his income is that, according to the 2555 form, you can use it if you meet the tax home test and you meet either the bonafide residence or physical presence test. In our case, hubby does:

Tax home: Country of employment for a period of physical presence. Yes, see below.

Physical presence: "Must be physically present in a foreign country for 330 full days of 12 months in a row" There is a special note on the form instructions that says "A nonresident alien who chooses to be taxed as a resident with a US citizen spouse can qualify under this test if the time requirements are met - see pub 54 for details"

Ok, going to pub 54, You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. The 330 days do not have to be consecutive. So, it has to be within a 12 month period. My husband was present in a foreign country for 330 days in the 12 month period of October 2010 - October 2011 (when he moved to the US on his K1 visa), so he does qualify, because the 12 month period does not have to be totally in one tax year - it can be overlapping tax years as mentioned above - see the example here http://www.irs.gov/publications/p54/ch04.html#en_US_2011_publink100047432, Figure 4b, how to figure overlapping 12 month periods.

Does this make sense? I know it's confusing, and I am no tax professional, but I believe I am understanding correctly that in least in our case husband does qualify to exclude his foreign earned income under those instructions even though we are delcaring him a res alien in '11 for tax purposes.

[Nich-Nick 3,354]

Does this make sense? I know it's confusing, and I am no tax professional, but I believe I am understanding correctly that in least in our case husband does qualify to exclude his foreign earned income under those instructions even though we are delcaring him a res alien in '11 for tax purposes.

I'm back. We had a biometrics appt. Moneyfer has explained it well.

To the Canadian--yes you should do your taxes anyway you see fit. The US spouse can file married filing separately. I don't believe people on forums either, but use them to figure out where to research. I disagree that a UK citizen ceases to be one when he enters the US on his K1. He certainly isn't more than a 90 day visitor at that point. Read up on IRS about the difference in residence and domicile. I'm trying to do this on my iPad from Starbucks and it's hard to navigate a bunch of pages because I suck at this new gizmo.

And I suppose as a Canadian you may have crossed the border every weekend so would be hard pressed to find a 12 month period with a total of 330 days spent in Canada. And there are those who enter theUS for 89 days on VWP over and over who would have trouble proving they were physically present in the UK. your point is well taken in that regard.

I appreciate that you're brilliant and a math major. I'm just a Mom, so do your research and go with what you understand to be true. I do find that the instructions tend to give examples and explanations/direction to Americans working abroad. Finished coffee so long drive home. Later.

[M&Pooh 12]

I'm back. We had a biometrics appt. Moneyfer has explained it well.

To the Canadian--yes you should do your taxes anyway you see fit. The US spouse can file married filing separately. I don't believe people on forums either, but use them to figure out where to research. I disagree that a UK citizen ceases to be one when he enters the US on his K1. He certainly isn't more than a 90 day visitor at that point. Read up on IRS about the difference in residence and domicile. I'm trying to do this on my iPad from Starbucks and it's hard to navigate a bunch of pages because I suck at this new gizmo.

And I suppose as a Canadian you may have crossed the border every weekend so would be hard pressed to find a 12 month period with a total of 330 days spent in Canada. And there are those who enter theUS for 89 days on VWP over and over who would have trouble proving they were physically present in the UK. your point is well taken in that regard.

I appreciate that you're brilliant and a math major. I'm just a Mom, so do your research and go with what you understand to be true. I do find that the instructions tend to give examples and explanations/direction to Americans working abroad. Finished coffee so long drive home. Later.

Moneyfer and Nich-Nick - thanks a lot for your contribution!! I think, we are on the same page now.

As for entering US with K1 - I woundn't say this person is treated as just a visitor. K1 clearly implies immigration intent, so, I would say - yes, this person ceases to be a _resident_ of his country of citizenship. But our case is CR1/IR1 and I've never studied K1 process in deep details, so I might be wrong on that.

Yes, Nich-Nick, you got it correct - with my wife ( who is the actual Canadian ) visiting me in 2010/11 and us traveling together to Europe ( a week ) and Latin America ( 10 days ), we can't find a 365-days period when she spent 330 days physically being in Canada - the maximum we're coming up with is ~315-320 days.

And what I meant by my original comment is that this is THE POSSIBLE case with OP as well. We don't know if he satisfies the physical presence test. Living in Europe, it's pretty easy to spend 35+ days outside of your country.

I regularly see the advices here just to exclude the foreign income of a newly immigrated fiance/spouse. Looks like some people pay no attention to the eligibility criteria for 2555 form.

Thanks for the discussion guys, good luck to both of you!

[Nich-Nick 3,354]

Moneyfer and Nich-Nick - thanks a lot for your contribution!! I think, we are on the same page now.

As for entering US with K1 - I woundn't say this person is treated as just a visitor. K1 clearly implies immigration intent, so, I would say - yes, this person ceases to be a _resident_ of his country of citizenship. But our case is CR1/IR1 and I've never studied K1 process in deep details, so I might be wrong on that.

Here's why I say a K1 is not a resident until they get their greencard. There is a period of time that they are a nothing. K1 enters and gets a 90 day I-94...an official 90 day stay in the US. If they don't marry, they have to leave. They can't work. They can't get a driver's license. They can't leave the US and expect to get back in without starting from scratch. K1 visa is done/over/kaput the day it is used to enter the US. It's a one-use visa. The I-94 of a K1 can't be extended. They are permitted to remain in the US while they have an Adjustment of Status application pending, but technically they are accrueing overstay days once the I-94 expires. That is over-looked if their greencard is approved.

Most K1s don't file the first week they arrive or even the first month. They plan weddings, wait on marriage certificates, get their shots recorded by a civil surgeon, or are just broke and can't come up with the $1070 filing fee on one sorry income. So AOS can take 4-5 months after they finally file. There is that limbo period when they are past the I-94, got no valid visa, and the USCIS has not granted them permanent residence status yet. They have difficulty explaining to a state highway patrolman (who's not versed in immigration nuances) why they are driving with a UK license when a TX license was required within 30 days of moving to the state. A Mexican would have been locked up in that scenario, but the British are a rarity I guess and don't fit racial profiling (that doesn't exist ) There is no document that says yes, you are legal here in that limbo time. I call K1 the step-child visa.

Yes, Nich-Nick, you got it correct - with my wife ( who is the actual Canadian ) visiting me in 2010/11 and us traveling together to Europe ( a week ) and Latin America ( 10 days ), we can't find a 365-days period when she spent 330 days physically being in Canada - the maximum we're coming up with is ~315-320 days.

Okay but I still think she meets the bonafied residence test and had a tax home in Canada. The main focus is delineating between US citizens truly having residence in a foreign country over being temporarily there and trying to get out of some taxes. That's the main focus of the income exclusion...to keep Americans from saying they were residents of a foreign country unless they really were.

From IRS:

Bona fide residence.

To meet the bona fide residence test, you must have established a bona fide residence in a foreign country.

To meet the bona fide residence test, you must reside in a foreign country or countries for an uninterrupted period that includes an entire tax year.

Your wife is a Canadian citizen. No doubt she had legal residence there and wasn't just visiting temporarily. Did she consider herself Canadian for at least a whole tax year---like Jan 1 - Dec 31, 2010. Probably was resident for two decades of tax years. They give examples about previous years and part years for US citizens. It doesn't say residence for the whole tax year for which you are currently filing. I think it boils down to really being a Canadian resident vs being on temporary assignment there.

And what I meant by my original comment is that this is THE POSSIBLE case with OP as well. We don't know if he satisfies the physical presence test. Living in Europe, it's pretty easy to spend 35+ days outside of your country.

Yes I got what you meant after I posted and re-read it. Tried to edit, but 5 minutes had passed because I was writing too much. Just had to let it go because we had things to do and USCIS folks to see.

I regularly see the advices here just to exclude the foreign income of a newly immigrated fiance/spouse. Looks like some people pay no attention to the eligibility criteria for 2555 form.

Thanks for the discussion guys, good luck to both of you!

For the record I'm still 100% sure they are eligible to exclude their foreign income. I guess we have to agree to disagree. The people I think are afoul of IRS laws are the ones that say "H&R Block told me I should file 'Single' because my wife didn't earn any money in the US because she doesn't have a greencard yet." A married person is not single.

[EV11 18]

I am a UK born citizen and moved to the US August 2011. For the bona fide residence test do I put my birth date in the residence start date? Also do I put continue in the residence end section as I am a UK citizen or do I put my POE date into the US as my residency end date as I am electing to be considered a resident for tax purposes?