No tax job. Need advise for K-1

[Maryna and Justin 49]

Hello guys!

Hope you can help.

I am waiting for the interview for K-1 visa and have a trouble with the financial paperwork from my US fiancé. The thing is that he is working on a cruise ship contracted by UK company and pays no taxes. His tax guy says that as far as he makes money from outside the country (the UK) and is out of the USA for the most of the year, he doesn't have to pay the taxes.

Any ideas what kind of paperwork we can submit at the interview instead of these tax papers (W2 and 1040)? I will have his bank statement, employment letter and Affidavit of support. Do we need anything else?

Any advise will be appreciated!

[AB loves AG 54]

A US citizen is taxed on worldwide income, and still needs to file a 1040 as long as certain minimum income thresholds are met. Is your "tax guy" an accountant?

[Maryna and Justin 49]

A US citizen is taxed on worldwide income, and still needs to file a 1040 as long as certain minimum income thresholds are met. Is your "tax guy" an accountant?

Yes, he is an accountant.

[baron555 934]

This is from the IRS website and may apply in your case.

However what I didn't investigate is whether or not you have some sort of annual filing requirement even if you fall within the exclusion requirements. That you'll have to investigate yourself. Don't forget that you may still have to pay some taxes, maybe just a reduced amount. And, if you find out you did owe some taxes for previous years, then contact the IRS and they will work with you to get those paid; they are ammendable to payment plans. Again, if you did owe some taxes, you must pay those. Ask Al Capone how it went for him when he didn't pay anything !

Foreign Earned Income Exclusion - Requirements

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

• A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
• A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
• A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

Changes in the Foreign Earned Income Exclusion

The maximum amount of the Foreign Earned Income Exclusion under Internal Revenue Code (IRC) section 911 is indexed to inflation ($91,500 for 2010, $92,900 for 2011, $95,100 for 2012, $97,600 for 2013).

The amount of foreign earned income (and foreign housing costs) excluded from an individual's gross income will be used for purposes of determining the rate of income tax and alternative minimum tax (AMT) that applies to his or her nonexcluded income. An individual’s tax on any foreign earned income above the exclusion amount and on any unearned income is computed as if the foreign earned income exclusion was not claimed. The individual's tax will be the excess of the tax that would be imposed if his or her taxable income were increased by the amount(s) excluded, and the tax that would be imposed if his or her taxable income were equal to the excluded amount(s). For this purpose, the excluded amount(s) will be reduced by the aggregate amount of any deductions or other exclusions otherwise disallowed. In many cases this will have the effect of increasing an individual’s U.S. federal income tax to an amount greater than it would have been under prior law.

So to your questions: I will have his bank statement, employment letter and Affidavit of support. Do we need anything else?

Copies of recent pay summaries should be added.

References/Related Topics

• Foreign Earned Income Exclusion
• Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad

Note: This page contains one or more references to the Internal Revenue

Here you go: I think this is what should have been filed along with the standard 1040 form Consult with your guy about this.

Form 2555 required[edit]

The exclusion is an election. Taxpayers may claim the exclusion only if they file IRS Form 2555 or Form 2555-EZ. The form must be attached to a timely filed U.S. Individual Income Tax Return (IRS [Form 1040]) for the first year of election, or an amended timely filed return. IRS regulations allow the election with late filed returns in some cases.^[6] The election to exclude may be revoked at any time; however, once revoked the exclusion may not be elected again for five years.

Edited November 11, 2015 by baron555

[aaron2020 11,651]

Yes, he is an accountant.

Is he a US accountant familiar with US income tax laws? If he is a US accountant, then he sucks.

US citizens are required to file US tax returns on their worldwide income even if nothing is earned in the US.

The US tax return requirement is due regardless of whether a person owes taxes or not. Even if he doesn't have to pay, he still needs to file. To get the foreign income exemption, he would need to file.

[Maryna and Justin 49]

This is from the IRS website and may apply in your case.

However what I didn't investigate is whether or not you have some sort of annual filing requirement even if you fall within the exclusion requirements. That you'll have to investigate yourself. Don't forget that you may still have to pay some taxes, maybe just a reduced amount. And, if you find out you did owe some taxes for previous years, then contact the IRS and they will work with you to get those paid; they are ammendable to payment plans. Again, if you did owe some taxes, you must pay those. Ask Al Capone how it went for him when he didn't pay anything !

Thank you for information!!

Not sure now whether he is exempted from paying the tax...

I will pass it to my fiancé, hope he will sort it out!

[Maryna and Justin 49]

Is he a US accountant familiar with US income tax laws? If he is a US accountant, then he sucks.

US citizens are required to file US tax returns on their worldwide income even if nothing is earned in the US.

The US tax return requirement is due regardless of whether a person owes taxes or not. Even if he doesn't have to pay, he still needs to file. To get the foreign income exemption, he would need to file.

He is familiar with tax laws, but apparently not much! He said Justin's case is something special he hasn't dealt before and he is not sure what has to be done.

Well, we will investigate ourselves then and sort it.

Thank you!

[baron555 934]

He may be exempted but he would have still needed to file the 1040 form plus add this other form which allows him to pay no taxes.

He will most likely have to file new forms for each applicable year...and might be subject to some penalty payment since he was late to file.

[tamcloud 92]

When I lived out of the country, I fell below the line in having to pay taxes, but still had to file to show/prove that. Otherwise, I would have been required to file for those years, upon return. This may have changed (I lived out of country about 15 years ago), but I doubt it.

Edited November 11, 2015 by tamcloud

[baron555 934]

Go here and lookat example 1. Your fiance may not have to pay any penalties since those are based on a percentage of the taxes owed. If he can establish that he owed zero, then a percentage of zero is zero....but he still needs to file something.

https://www.irs.gov/uac/Newsroom/Information-for-U.S.-Citizens-or-Dual-Citizens-Residing-Outside-the-U.S.

[aaron2020 11,651]

He is familiar with tax laws, but apparently not much! He said Justin's case is something special he hasn't dealt before and he is not sure what has to be done.

Well, we will investigate ourselves then and sort it.

Thank you!

I have an advanced tax degree.

First year, first class on taxes; US citizens are required to file US tax returns on their worldwide income even if nothing is earned in the US.

Pretty basic. If he is not familiar with this, then he is not familiar with tax laws.

Is your fiance's guy real accountant; CPA, EA, etc? Or is this a guy who just does basic tax returns for people? Does he have an actual degree and credentials?

Edited November 11, 2015 by aaron2020

[aaron2020 11,651]

Thank you for information!!

Not sure now whether he is exempted from paying the tax...

I will pass it to my fiancé, hope he will sort it out!

As Yoda would say - There is no hope. There is only do.

Your fiance MUST file his US tax returns in order for you to qualify for a K-1. No US tax returns equal no K-1.

[Maryna and Justin 49]

Thanks, guys.

I have read your answers and checked a few more topics on VJ and see that my fiance needs to file the taxes.

Sometimes he was out of the country for the whole year (12 consecutive months) and should be exempted to pay, but I am not sure about his last year. I will pass the info to him.

Will you advise for how many years of his tax info we should have for K-1 and later for my AoS and so on? For 3 last will be enough?

Not sure about his "tax guy", but yeah, apparently he is no good

Edited November 11, 2015 by Maryna and Justin

[Maryna and Justin 49]

As Yoda would say - There is no hope. There is only do.

No US tax returns equal no K-1.

We respect Yoda, so we will do!

No K-1 would be too bad!!

[baron555 934]

Thanks, guys.

I have read your answers and checked a few more topics on VJ and see that my fiance needs to file the taxes.

Sometimes he was out of the country for the whole year (12 consecutive months) and should be exempted to pay, but I am not sure about his last year. I will pass the info to him.

Will you advise for how many years of his tax info we should have for K-1 and later for my AoS and so on? For 3 last will be enough?

Not sure about his "tax guy", but yeah, apparently he is no good

Even if you owe zero taxes, one must still file something which proves that, unless he was under the minimum amount for which no filing is required.

Usually they suggest the past three years copies of the full return filing or the tax transcripts free from the IRS and proof of current income...the latter is the key.