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rebnoe

moved Dec 20, K1 filling taxes with spouse 2018

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Hello!  I am beginning to think about filing taxes this year and I am hoping for some guidance from everyone on this site :),

 

My husband came here on a K1 visa on Dec 20th, 2018 from the Netherlands and we were married on Dec 28th, 2018.  He worked in the Netherlands all 2018.  No income from the US.

I have browsed this site for some information but I seemed to make myself more confused after reading more and more.  My taxes previous to this were simple to file and I always used TurboTax.

 

From reading, I feel I seemed to gather that we can file Married Filing Jointly - in which he will report his earnings from the Netherlands (but this will be exempt)?  Does this sound correct??

 

Also, for people that have done this, were you able to use TurboTax, or is it too complicated for the online systems??  If so, how were you able to find a preparer to help you?

 

Any advice would be appreciated.  I am sort of lost here, and I´m not sure where to start. 

 

Thanks for the help,

Rebecca

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The decision whether to file Married Filing Jointly or Married Filing Separately can be a little complex the first year as a resident.  There are multiple factors which would determine the best strategy for your case such as his income, whether he has a SSN/ITIN, etc.  There just is no quick answer.  Personally, I hired a great accountant who does a great job at a reasonable fee.  PM me if you want her name......good luck.


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39 minutes ago, rebnoe said:

Hello!  I am beginning to think about filing taxes this year and I am hoping for some guidance from everyone on this site :),

 

My husband came here on a K1 visa on Dec 20th, 2018 from the Netherlands and we were married on Dec 28th, 2018.  He worked in the Netherlands all 2018.  No income from the US.

I have browsed this site for some information but I seemed to make myself more confused after reading more and more.  My taxes previous to this were simple to file and I always used TurboTax.

 

From reading, I feel I seemed to gather that we can file Married Filing Jointly - in which he will report his earnings from the Netherlands (but this will be exempt)?  Does this sound correct??

 

Also, for people that have done this, were you able to use TurboTax, or is it too complicated for the online systems??  If so, how were you able to find a preparer to help you?

 

Any advice would be appreciated.  I am sort of lost here, and I´m not sure where to start. 

 

Thanks for the help,

Rebecca

I moved here in August 2018 from the Netherlands, had income from January till July 2018 back there and haven't had a job here yet. Since we're filing jointly we have to request the IRS to consider me a RA but then you'd also need to file foreign income. On top of that there might be exclusions. As you see, it's a very confusing process. Best advise is to get an accountant. Yes, it does cost a little bit of money, but at least you're pretty sure that it'll all be filed right. We're getting one cause we're in over our heads at this point lol (we got accountants in the family thank god, hopefully they'll know a thing or two about the immigration taxes)

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2 hours ago, rebnoe said:

From reading, I feel I seemed to gather that we can file Married Filing Jointly - in which he will report his earnings from the Netherlands (but this will be exempt)?  Does this sound correct??

 You will file married because you were married on the last day of 2018

 

Choices:

  1. Married Filing Separately for you. No filing for him.
  2. Married Filing Jointly. He needs a SSN. You both sign a statement saying you wish for him to be treated as a resident for tax purposes. His foreign income is reported...reported, not taxed. It is excluded using Form 2555. 

 

2 hours ago, rebnoe said:

Also, for people that have done this, were you able to use TurboTax, or is it too complicated for the online systems??  If so, how were you able to find a preparer to help you?

My wife did this for us using TurboTax Basic software installed on the computer. That's the cheap version. This year we bought TurboTax Deluxe because it was on sale at a retailer. She finds the home software has advantages over online. You can create as many scenarios as you like by saving under different names. For example to compare how MFS vs MFJ affects your specific situation and pick the best to file. You can also look at your forms in progress or print them at anytime to see the actual return in progress. What we did my K1 year was prepare on TurboTax, then printed the Forms required for filing, included the signed statement electing to be a resident for tax purposes, and put in the mail. Every year after will be normal e-filing.

 

TurboTax isn't magic. You have to have a basic understanding of a few things to answer the questions correctly. For example the Form 2555. Because it is written toward Americans working abroad, the language isn't always clear to a new immigrant who worked abroad in their home country. When it asks if X had a visa for the foreign country, immigrants think "Yes, I had a K1 visa to the foreign country America." No. TurboTax is asking if X had a visa to work in the foreign country Netherlands. Well X didn't need a visa, he was a citizen of the Netherlands allowed to work there. Sometimes you have to get TurboTax to move on and agree you qualify for Form 2555. Their questions are not worded for the new Immigrant so you can get hung up on their questions. It doesn't appear on the IRS form, but is TurboTax's question for guidance. A K1 qualifies on both tests to qualify for 2555...bonafide resident and physical presence. 

 

I will add that there are a lot of professional tax preparers who aren't that skilled in the specifics of new immigrants. I've seen it reported on here every year...mistakes and bad information. Told to skip the foreign income. You can't skip the foreign income if you want a joint return. 

Edited by Wuozopo

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6 hours ago, C90 said:

I moved here in August 2018 from the Netherlands, had income from January till July 2018 back there and haven't had a job here yet. Since we're filing jointly we have to request the IRS to consider me a RA but then you'd also need to file foreign income. On top of that there might be exclusions. As you see, it's a very confusing process. Best advise is to get an accountant. Yes, it does cost a little bit of money, but at least you're pretty sure that it'll all be filed right. We're getting one cause we're in over our heads at this point lol (we got accountants in the family thank god, hopefully they'll know a thing or two about the immigration taxes)

Thanks for the advice!  I want to find a person to hire, but I am finding it hard to locate a person who may be qualified to help us (someone who is experienced with immigration, ect), plus there are so many different types of professionals with different qualifications --- I'm not sure which is the best.

 

Any advice on that?

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5 hours ago, Wuozopo said:

 You will file married because you were married on the last day of 2018

 

Choices:

  1. Married Filing Separately for you. No filing for him.
  2. Married Filing Jointly. He needs a SSN. You both sign a statement saying you wish for him to be treated as a resident for tax purposes. His foreign income is reported...reported, not taxed. It is excluded using Form 2555. 

 

 My wife did this for us using TurboTax Basic software installed on the computer. That's the cheap version. This year we bought TurboTax Deluxe because it was on sale at a retailer. She finds the home software has advantages over online. You can create as many scenarios as you like by saving under different names. For example to compare how MFS vs MFJ affects your specific situation and pick the best to file. You can also look at your forms in progress or print them at anytime to see the actual return in progress. What we did my K1 year was prepare on TurboTax, then printed the Forms required for filing, included the signed statement electing to be a resident for tax purposes, and put in the mail. Every year after will be normal e-filing.

  

TurboTax isn't magic. You have to have a basic understanding of a few things to answer the questions correctly. For example the Form 2555. Because it is written toward Americans working abroad, the language isn't always clear to a new immigrant who worked abroad in their home country. When it asks if X had a visa for the foreign country, immigrants think "Yes, I had a K1 visa to the foreign country America." No. TurboTax is asking if X had a visa to work in the foreign country Netherlands. Well X didn't need a visa, he was a citizen of the Netherlands allowed to work there. Sometimes you have to get TurboTax to move on and agree you qualify for Form 2555. Their questions are not worded for the new Immigrant so you can get hung up on their questions. It doesn't appear on the IRS form, but is TurboTax's question for guidance. A K1 qualifies on both tests to qualify for 2555...bonafide resident and physical presence. 

  

I will add that there are a lot of professional tax preparers who aren't that skilled in the specifics of new immigrants. I've seen it reported on here every year...mistakes and bad information. Told to skip the foreign income. You can't skip the foreign income if you want a joint return. 

Thanks so much for all of these details!!  I found it extremely helpful.

The first year you must mail in the taxes, as opposed to e-filing, because you need statements asking to be considered a resident for tax purposes --- is that correct?

 

Also, yes, your other point about tax preparers not being skilled in this specific area, is something I have been thinking about.  I have actually been trying to find someone qualified to hire, but Im finding that difficult...

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6 hours ago, Wuozopo said:

 

  1. Married Filing Jointly. He needs a SSN. You both sign a statement saying you wish for him to be treated as a resident for tax purposes. His foreign income is reported...reported, not taxed. It is excluded using Form 2555. 

There are certain criteria the beneficiary has to meet to use form 2555, so make sure they qualify before filing this form. More info: https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-which-form-to-file

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11 minutes ago, C90 said:

There are certain criteria the beneficiary has to meet to use form 2555, so make sure they qualify before filing this form. More info: https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-which-form-to-file

Thank you... I didn't think to check this out before, I was just assuming based off what I read on here that we would qualify.   Thanks for pointing this out!!

 

It seems that he has to pass both the tax home test plus the bona fide residence test OR physical presence test. 

From what Im understanding he passes this.... But its very confusing to me still. 

He has lived in the Netherlands for the last 3 years and has been working at his prior job in the Netherlands since Oct 2017, ending when he moved here on Dec 20, 2018.  What Im really confused about is the physical presence test, I don't really understand the counting they want us to do.  He lived in the Netherlands full time, and only left to travel for pleasure (sometimes within Europe, sometimes to US to visit me)

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34 minutes ago, rebnoe said:

Thank you... I didn't think to check this out before, I was just assuming based off what I read on here that we would qualify.   Thanks for pointing this out!!

 

It seems that he has to pass both the tax home test plus the bona fide residence test OR physical presence test. 

From what Im understanding he passes this.... But its very confusing to me still. 

He has lived in the Netherlands for the last 3 years and has been working at his prior job in the Netherlands since Oct 2017, ending when he moved here on Dec 20, 2018.  What Im really confused about is the physical presence test, I don't really understand the counting they want us to do.  He lived in the Netherlands full time, and only left to travel for pleasure (sometimes within Europe, sometimes to US to visit me)

There are a few things you have to keep in mind. One of them is does he qualify for the exclusions? If you want to file jointly you have to request the IRS to treat him as a Resident Alien (he is a Non-Resident Alien right now) for 2018 and usually RA's don't qualify for exclusions etc. You can find all the info on the IRS website, but it's not easy always easy to understand.

It's basically one big puzzle and as someone else said before, if you want to do your own tax return you have to have basic understanding of US tax rules and how to apply them on aliens. I can't give you a good advice cause I don't understand the rules lol, that's why we are going to use an accountant. Turbotax is not really advanced enough imo to use if you don't have the right knowledge.
You could try to google something like 'immigration accountant' and just make a few phone calls to find out if there's an accountant around that knows his/her way around filing taxes in your situation.

Edited by C90

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2 hours ago, rebnoe said:

The first year you must mail in the taxes, as opposed to e-filing, because you need statements asking to be considered a resident for tax purposes --- is that correct?

Yes because you create the statement from scratch. There is no TurboTax form for it. The only way to get it there is by mail. No statement needed for 2019 tax year.

 

53 minutes ago, rebnoe said:

It seems that he has to pass both the tax home test plus the bona fide residence test OR physical presence test. 

From what Im understanding he passes this.... But its very confusing to me still. 

He has lived in the Netherlands for the last 3 years and has been working at his prior job in the Netherlands since Oct 2017, ending when he moved here on Dec 20, 2018.  What Im really confused about is the physical presence test, I don't really understand the counting they want us to do.  He lived in the Netherlands full time, and only left to travel for pleasure (sometimes within Europe, sometimes to US to visit me)

 

Sorry, I assumed he was a Dutch citizen and was a bonafide resident since birth as many on this forum are coming from their native country.  If he was in the Netherlands for 3 years then he has the physical presence. 

Edited by Wuozopo

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54 minutes ago, rebnoe said:

It seems that he has to pass both the tax home test plus the bona fide residence test OR physical presence test. 

From what Im understanding he passes this.... But its very confusing to me still. 

Did he pay taxes to the Netherlands? What passport/home country?

Edited by Wuozopo

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2 hours ago, rebnoe said:

Also, yes, your other point about tax preparers not being skilled in this specific area, is something I have been thinking about.  I have actually been trying to find someone qualified to hire, but Im finding that difficult...

There is usually an advantage to filing jointly over Married Filing Separately. But if you hire a CPA for a more complicated return with an immigrant spouse, you may very well eat up your tax savings with $$$ fees. Don't forget you can file separately and spouse files nothing.

 

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57 minutes ago, Wuozopo said:

There is usually an advantage to filing jointly over Married Filing Separately. But if you hire a CPA for a more complicated return with an immigrant spouse, you may very well eat up your tax savings with $$$ fees. Don't forget you can file separately and spouse files nothing.

 

I was also considering this senario - I have emailed a few CPAs tonight, so I guess I will decide based off the price they’ll quote me.   My taxes are always extremely simple.  This time it’s messy because of foreign spouse.  Neither of us have anything too complicated going on

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