VisaJourney.com > Taxes - 2555 or 1116 Form?

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Linda&Dave

Mar 26 2006, 09:41 AM

Late in the day but still confused over which form to use to declare foreign income. Lots of people here say to use 2555 or 2555EZ but if you read the instructions for those, the 'substantive presence' test refers to the time spent in the foreign country, not the USA. These forms seem primarily for people who are US citizens or resident aliens but who are living (or spent most of the tax year) outside of the USA.

Form 1116 Foreign Tax Credit seems the more likely way to go for those of us who qualify as resident aliens for 2005 and who earned some foreign income (and paid taxes on it) before we got here. For non-US income, option J. General Limitation Income seems like the correct choice.

Anyone care to comment please?

Thanks.

clloyd

Mar 26 2006, 07:43 PM

From http://www.irs.gov/instructions/i2555/ch02.html#d0e218
(bold text is mine)

QUOTE

Physical Presence Test

To meet this test, you must be a U.S. citizen or resident alien who is physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row. A full day means the 24-hour period that starts at midnight.

To figure the minimum of 330 full days' presence, add all separate periods you were present in a foreign country during the 12-month period shown on line 16. The 330 full days can be interrupted by periods when you are traveling over international waters or are otherwise not in a foreign country. See Pub. 54 for more information and examples.
Note. A nonresident alien who, with a U.S. citizen or U.S. resident alien spouse, chooses to be taxed as a resident of the United States can qualify under this test if the time requirements are met. See Pub. 54 for details on how to make this choice.

Ohm I forgot to add this is from the instructions to Form 2555.

Paul

Mar 29 2006, 11:23 AM

Here's a stupid question (but one I'm not sure of) am I a resident alien yet? I've filed the I-485 and have my SSN but does that term apply to me?

Mand

Mar 29 2006, 11:47 AM

Paul, for tax purposes you can choose to be seen as a resident alien by submitting a signed statement with your tax return.

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