Received my GC on Jan 2nd - do I need to file taxes?

[glmg21 330]

I got my green card on January 2nd, 2018. I arrived on August 7th, 2017 on a K1. Needless to say, I didn't work between August 7th and December 31st. 

 

Do I need to file a tax return for the 2017 tax year, on the basis that I'm a legal permanent resident and will be on the day that 2017 returns are due? If so, should this be a joint return, reporting my 2017 income from Germany on a 2555-EZ?

 

Been all over the IRS website for a few days and just getting more confused.

Thanks!

 

 

[ChrisMc 5]

2 minutes ago, glmg21 said:

I got my green card on January 2nd, 2018. I arrived on August 7th, 2017 on a K1. Needless to say, I didn't work between August 7th and December 31st. 

 

Do I need to file a tax return for the 2017 tax year, on the basis that I'm a legal permanent resident and will be on the day that 2017 returns are due? If so, should this be a joint return, reporting my 2017 income from Germany on a 2555-EZ?

 

Been all over the IRS website for a few days and just getting more confused.

Thanks!

 

 

I would like to know this answer too.  I read that immigrants should turn in income made in another country in order to up front and evidence full disclosure, however, he has already paid taxes in his home country (England) and I don't think they can tax him again on that income.  I read that the USCIS would look at it, though, when they look at the change of status paperwork, etc.  His employer is not really forthcoming at providing a statement of income he earned during the time he worked there.  I hope someone has the answer.  

[Wuozopo 4,285]

11 hours ago, glmg21 said:

I got my green card on January 2nd, 2018. I arrived on August 7th, 2017 on a K1. Needless to say, I didn't work between August 7th and December 31st. 

 

Do I need to file a tax return for the 2017 tax year, on the basis that I'm a legal permanent resident and will be on the day that 2017 returns are due? If so, should this be a joint return, reporting my 2017 income from Germany on a 2555-EZ?

 

Been all over the IRS website for a few days and just getting more confused.

Thanks!

 

 

 

The first concept you need to get your head around is if you earned no income in the US, then there is nothing to tax. No income, so no filing required for you whether you were a resident or US citizen or any other status. Your wife can file Married Filing Separately to figure the tax on her own income.

 

Option: You were married to a US citizen in the year 2017 so you can choose to file jointly with her. In that scenario, the worldwide income in 2017 of both is reported. That means your Jan-July UK income. It can be excluded using form 2555EZ. You will probably be surprised that jointly there will be less tax than if your wife files Married filing separately.  You can work it out both ways to make sure, then pick the one that means less tax to your household. 

[Wuozopo 4,285]

11 hours ago, ChrisMc said:

I would like to know this answer too.  I read that immigrants should turn in income made in another country in order to up front and evidence full disclosure,

Only if you are filing a joint return. Then all income in 2017 earned anywhere gets reported. "Reported" does not mean taxed. There are exclusions for foreign earned income or tax credit for foreign taxes paid on that money already.

 

11 hours ago, ChrisMc said:

he has already paid taxes in his home country (England) and I don't think they can tax him again on that income

That is correct. 

 

11 hours ago, ChrisMc said:

I read that the USCIS would look at it, though, when they look at the change of status paperwork, etc.

I wouldn't plan my taxes around immigration. Plan around what the IRS says and what gives you the least tax. Even if the American spouse chose to file separately, they file as Married and the immigrant spouse's name is given on their return. That's what removing conditions is looking for, that you are still married after two years.

 

11 hours ago, ChrisMc said:

His employer is not really forthcoming at providing a statement of income he earned during the time he worked there. 

If you choose to file jointly and need to report UK income, you don't need anything in writing from an employer to send to the IRS. It's kinda like the honor system really.  So pull it out of the air if you want to by knowing your salary per month OR looking online at what got deposited in your bank or looking at bank statements from that time. Yes, it's supposed to be exact,  but how does the IRS know the exact number? Your foreign employer didn't tell them. That's basically what I did...tried my best to be accurate with my UK income, but likely not perfect. No issues.

Edited February 9, 2018 by Wuozopo

[glmg21 330]

3 hours ago, Wuozopo said:

 

The first concept you need to get your head around is if you earned no income in the US, then there is nothing to tax. No income, so no filing required for you whether you were a resident or US citizen or any other status. Your wife can file Married Filing Separately to figure the tax on her own income.

 

Option: You were married to a US citizen in the year 2017 so you can choose to file jointly with her. In that scenario, the worldwide income in 2017 of both is reported. That means your Jan-July UK income. It can be excluded using form 2555EZ. You will probably be surprised that jointly there will be less tax than if your wife files Married filing separately.  You can work it out both ways to make sure, then pick the one that means less tax to your household. 

Thank you so very much for your help! This makes a lot of sense.

[ChrisMc 5]

9 hours ago, Wuozopo said:

Only if you are filing a joint return. Then all income in 2017 earned anywhere gets reported. "Reported" does not mean taxed. There are exclusions for foreign earned income or tax credit for foreign taxes paid on that money already.

 

That is correct. 

 

I wouldn't plan my taxes around immigration. Plan around what the IRS says and what gives you the least tax. Even if the American spouse chose to file separately, they file as Married and the immigrant spouse's name is given on their return. That's what removing conditions is looking for, that you are still married after two years.

 

If you choose to file jointly and need to report UK income, you don't need anything in writing from an employer to send to the IRS. It's kinda like the honor system really.  So pull it out of the air if you want to by knowing your salary per month OR looking online at what got deposited in your bank or looking at bank statements from that time. Yes, it's supposed to be exact,  but how does the IRS know the exact number? Your foreign employer didn't tell them. That's basically what I did...tried my best to be accurate with my UK income, but likely not perfect. No issues.

Thank you so much for your help

[Italian_in_NYC 259]

Just to be clear, any US person for tax purposes must report his or her worldwide income.

And yes, it is possible to pay taxes in the US on that income as well (although foreign tax credit covers in many cases, but not in low-tax countries cases).

It is not double taxation as the US allows you to claim foreign tax credit. However, if you pay no taxes abroad or not enough taxes, then you have a US tax liability.

FEIE is an option but only if you meet the tests and only if it is earned income (unearned income is not excludable).

And don't forget about State taxes. Foreign tax credit does not exist at the State level. And tax treaties do not apply to States.

Last but not least, information returns! FBARs, 8938, 5471, 8865, 8858, 8621 for PFICs etc etc.

[ms_bobdog 501]

On 09/02/2018 at 5:40 PM, Wuozopo said:

 

The first concept you need to get your head around is if you earned no income in the US, then there is nothing to tax. No income, so no filing required for you whether you were a resident or US citizen or any other status. Your wife can file Married Filing Separately to figure the tax on her own income.

 

Option: You were married to a US citizen in the year 2017 so you can choose to file jointly with her. In that scenario, the worldwide income in 2017 of both is reported. That means your Jan-July UK income. It can be excluded using form 2555EZ. You will probably be surprised that jointly there will be less tax than if your wife files Married filing separately.  You can work it out both ways to make sure, then pick the one that means less tax to your household. 

Thank you for this information. I have been trying to figure this out myself (I am still waiting for my CR1 NOA2 but I just want to keep myself updated) and my main concern is that I actually make quite a lot of money overseas and I didn't want to end up being slapped with a heavy tax for what I made before I became a US resident. For now my husband has filed Married Filing Separately because it's too much trouble to get myself an ITIN when I am outside of the US. But we will make amendments once I get there.

[Wuozopo 4,285]

1 hour ago, ms_bobdog said:

Thank you for this information. I have been trying to figure this out myself (I am still waiting for my CR1 NOA2 but I just want to keep myself updated) and my main concern is that I actually make quite a lot of money overseas and I didn't want to end up being slapped with a heavy tax for what I made before I became a US resident. For now my husband has filed Married Filing Separately because it's too much trouble to get myself an ITIN when I am outside of the US. But we will make amendments once I get there.

One of the requirements for taking the Foreign Earned Income Exclusion:

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

 

I don't think there is such treaty with Singapore. You should look at Foreign Tax Credit and how that affects your joint filing vs filing separately. https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit

 

[ms_bobdog 501]

2 minutes ago, Wuozopo said:

One of the requirements for taking the Foreign Earned Income Exclusion:

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

 

I don't think there is such treaty with Singapore. You should look at Foreign Tax Credit and how that affects your joint filing vs filing separately. https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit

 

Nope, we don't have an income tax treaty (our taxes are too low in Singapore!)

[Italian_in_NYC 259]

6 hours ago, Wuozopo said:

One of the requirements for taking the Foreign Earned Income Exclusion:

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

 

I don't think there is such treaty with Singapore. You should look at Foreign Tax Credit and how that affects your joint filing vs filing separately. https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit

 

That is true only for qualified dividends, meaning that you can treat foreign-source dividends as qualified dividends (if you satisfy the holding period test) only if there is a treaty in place.

No problem in taking the FEIE.
I actually have several clients who live in the UAE (no treaty and no income tax) who take the FEIE.