First Taxes after Entry

[Mrs.Delaet 0]

Hello,

My fiance and I filed last month for our K-1 visa, but I had an interesting question. When he is available to move over into the states how do we go about filing for taxes next year. He is a Canadian citizen and I understand their is a tax agreement that states an individual cannot be double taxed on income he has made internationally, but I do not fully understand how we go about about filing our taxes in the US.

I know he will more than likely be unable to work until the start of next year, since it will take time for our Fiance visa to get approved and then the filing after for his temporary permanent residence, AP, and work permit, but I do not know if we file stating he has made no income (while in the US) or do we have to file some special way to federally claim his earnings in Canada this year while in the US.

Thank you so much for your time and I know I may be getting a bit ahead of myself, but I like to know as much of the process as humanly possible to make this transition for us go much more smoothly!

[B-2-Z 37]

Hi. You should fix your timeline from F1 to K1.

To answer your questions, yes your fiance will not be double taxed unless they make over I think $100ish thousand a year. There's a foreign earned income exclusion that you file at the same time. It's easy enough to do yourself, in simplified terms you list the income and it takes it back off at the end as a credit since it's already taxed. It's just a supplement sheet that goes with the return.

Even if he has no US income, he will still have to file if he's a resident at the end of the year. At the same time, you don't have to file Canadian taxes after you're no longer a resident. Probably in his best interest to file them though, since he could always get a refund.

The IRS and CRA websites are a good idea to read through and get familiar with. They're also great to talk to on the phone and will guide you through everything and let you know if you have to file or not in each country. When all else fails it's always a great idea to go see a professional tax accountant that's familiar with both countries.

[Mrs.Delaet 0]

Thank you so much!

That sounds easy enough, but I am still curious on how the "Resident" part factors in. We are planning on keeping his citizenship in Canada and having him go for Dual Citizenship.

How is he classified in Canada once he moves here for his Permanent Residence. Is he a non-resident citizen?

I always file in office at H&R Block and I will call them and ask what documents they need from us to file correctly.

[B-2-Z 37]

Thank you so much!

That sounds easy enough, but I am still curious on how the "Resident" part factors in. We are planning on keeping his citizenship in Canada and having him go for Dual Citizenship.

How is he classified in Canada once he moves here for his Permanent Residence. Is he a non-resident citizen?

I always file in office at H&R Block and I will call them and ask what documents they need from us to file correctly.

You're welcome!

Yeah it's very easy Resident simply means the country/state or province in which you live, I'm not sure but I think it varies from 30-90 days. After you get married(the requirement of the K1) and has a AOS pending, he'll be considered a resident alien. After his green card comes in he'll become a permanent resident. Unless he formally renounces his Canadian citizenship, he'll be fine, and yes he'd be considered a non-resident citizen after leaving the country.

The important form for you to fill out is the form 2555/2555EZ. There's a link I'll attach at the bottom of this, it tells you which form is the one you need, and they're interactive and do all of the work for you. The only things he should need are his Canadian T4(so make sure he updates his address with his ex-employer) and either a SSN or an ITIN.

**Oh just another thought I had - he needs to contact his provincial health care and get some sort of letter/confirmation of when he'll lose coverage after moving. He needs this to avoid the health care penalty on his US taxes. This created a major headache for us this year, we were both living in NS until March 2015 and we almost got charged the whole year for not having US health care..which was because we lived in Canada. If he has a medical plan through work for prescriptions/dental he should get the same thing from them as well!

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-which-form-to-file

[KayDeeCee 4,891]

~ Moved from K-1 Process to Tax & Finances During US Immigration ~

[Nich-Nick 3,353]

I always file in office at H&R Block and I will call them and ask what documents they need from us to file correctly.

H&R Block is probably not your best source for your first year return. They don't always know the more complicated international issues. This tax forum you have been moved to is very active at tax filing time and you can learn a lot so if you use Block, you know how to check that they did it correctly.

If your husband earns zero money in the US in 2016, he does not have to file. But you (being married during 2016) would have to file Married Filing Separately. That would likely mean higher tax to you due to your new filing status.

-OR- because he is married to a US citizen, you both can elect for him to be treated like a US permanent resident for tax purposes and file Married Filing Jointly with you. This is an IRS thing and has nothing to do with the fact he won't have a greencard yet. So if you file jointly, he reports his Canadian Income, excludes it using Form 2555EZ, and you will come out better than Married Filing Separately.

You have the option to do it either way and can work out both scenarios and pick the one with lowest taxes. The reason it would most likely benefit you jointly is because adding a spouse on your return gives you an additional $10,000+ in exemptions and standard deductions to reduce your taxable income. For example if your taxable income was $30,000 it could be reduced to $17,000 by having the spouse. Taxes on $17k are lower than on $30k. Your husband's foreign income is reported but the exclusion means any tax it would general is subtracted out. You win.

In over simplified terms...by filing jointly you get that extra $10.300 taken off yours and his Canadian doesn't cost you anything. Of course there are so many specifics to individual situations, that is only a general example.

[NikLR 13,220]

He ceases to be a resident of Canada when he activates the eventual visa. That means his health care stops then too. He will have to do an exit return that year so he will file in the USA and Canada.

[Avsiws 4]

On 6/9/2016 at 7:02 PM, B-2-Z said:

**Oh just another thought I had - he needs to contact his provincial health care and get some sort of letter/confirmation of when he'll lose coverage after moving. He needs this to avoid the health care penalty on his US taxes. This created a major headache for us this year, we were both living in NS until March 2015 and we almost got charged the whole year for not having US health care..which was because we lived in Canada.

What exactly should this say? Where should this letter be submitted? With the MFJ tax filing?

[NikLR 13,220]

18 hours ago, Avsiws said:

What exactly should this say? Where should this letter be submitted? With the MFJ tax filing?

The second part I can answer, yes with the tax return.  

[Suss&Camm 2,213]

19 hours ago, Avsiws said:

What exactly should this say? Where should this letter be submitted? With the MFJ tax filing?

I found this this example:

 

First year election statement

 

Date

 

To Whom It May Concern:

In the tax year 20xx, I was a non-resident for tax purposes but was married to a (choose one: resident, permanent resident or U.S. citizen).
My spouse and I therefore choose for me to be treated as U.S. resident for the entire tax year.

 

Spouse’s Signature
Spouse’s Printed Name
Address
SSN or ITIN

 

Your Signature
Your Printed Name
Address
SSN or ITIN

[Avsiws 4]

On 2/2/2017 at 10:13 AM, Suss&Camm said:

To Whom It May Concern:

In the tax year 20xx, I was a non-resident for tax purposes but was married to a (choose one: resident, permanent resident or U.S. citizen).
My spouse and I therefore choose for me to be treated as U.S. resident for the entire tax year.

 

Spouse’s Signature
Spouse’s Printed Name
Address
SSN or ITIN

 

Your Signature
Your Printed Name
Address
SSN or ITIN

I was referring to the letter that I must get from my provincial health care provider in Canada... however, from your response, I'm going to assume I need to also include a letter with the MFJ return!

 

Given that my POE was November 1st, my K1 expired Jan 29th and I have not yet filed for AOS:

In the tax year 2016, I was a non-resident for tax purposes but married to a US citizen.
My spouse and I therefore choose for me to be treated as U.S. permanent resident for the entire tax year.

 

So, in requesting that I be treated as a permanent resident for 2016, am I going to have to pay the healthcare penalty for November and December? 

 

[Suss&Camm 2,213]

4 hours ago, Avsiws said:

I was referring to the letter that I must get from my provincial health care provider in Canada... however, from your response, I'm going to assume I need to also include a letter with the MFJ return!

 

Given that my POE was November 1st, my K1 expired Jan 29th and I have not yet filed for AOS:

In the tax year 2016, I was a non-resident for tax purposes but married to a US citizen.
My spouse and I therefore choose for me to be treated as U.S. permanent resident for the entire tax year.

 

So, in requesting that I be treated as a permanent resident for 2016, am I going to have to pay the healthcare penalty for November and December? 

 

Lol oh... I have no idea about your Canada stuff

 

Yes you need to send all taxes by mail and attach the election statement.

 

No you don't need to pay a penalty. You fill in part III of the 8965 exemption Form.  For January until November you mark exemption C (not inside country) and for December you mark exemption B (short gap).

https://www.irs.gov/uac/about-form-8965

 

Edit: actually since you were not one full day in Canada in November it will be January-October exemption C and November-December exemption B... sorry about that

Edited February 6, 2017 by Suss&Camm