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Throwaway777

K1 Visa Tax Question

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Posted (edited)

Hi all,

 

Not sure if this question has been asked before, but I couldn't find anything after searching so I'm posting it anyways.

 

My fiancee will be coming here on a K1 in October and we will be married by November. For tax purposes, I'm wondering if we should file jointly or separately. I am aware that filing both ways is an option, but I would obviously like to get the best break possible. If I file jointly, I will get a better standard deduction, but I will also have to report income that my spouse earned this year before coming to the U.S., correct? My question is, how would this even be enforced? My fiancee is from South Korea, but she has only earned about 10-15K, and it was essentially "under the table". That said, she won't even have official tax documents from South Korea confirming her income. Of course, I want to be as honest as possible and comply with tax law, but is it necessary to report her income given the circumstances and the relatively small size of the income? Has anyone been in a similar situation?

Edited by Throwaway777

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9 minutes ago, Throwaway777 said:

Hi all,

 

Not sure if this question has been asked before, but I couldn't find anything after searching so I'm posting it anyways.

 

My fiancee will be coming here on a K1 in October and we will be married by November. For tax purposes, I'm wondering if we should file jointly or separately. I am aware that filing both ways is an option, but I would obviously like to get the best break possible. If I file jointly, I will get a better standard deduction, but I will also have to report income that my spouse earned this year before coming to the U.S., correct? My question is, how would this even be enforced? My fiancee is from South Korea, but she has only earned about 10-15K, and it was essentially "under the table". That said, she won't even have official tax documents from South Korea confirming her income. Of course, I want to be as honest as possible and comply with tax law, but is it necessary to report her income given the circumstances and the relatively small size of the income? Has anyone been in a similar situation?

Entire tax forum exists on VJ and had been asked all the time


YMMV

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8 minutes ago, Throwaway777 said:

If I file jointly, I will get a better standard deduction, but I will also have to report income that my spouse earned this year before coming to the U.S., correct?

Correct

 

9 minutes ago, Throwaway777 said:

My question is, how would this even be enforced? My fiancee is from South Korea, but she has only earned about 10-15K, and it was essentially "under the table". That said, she won't even have official tax documents from South Korea confirming her income. Of course, I want to be as honest as possible and comply with tax law, but is it necessary to report her income given the circumstances and the relatively small size of the income? Has anyone been in a similar situation?

Yes it must be reported. It can then likely be excluded via the FEIE.

Under the table there is the same as under the table in the US. It's required to be reported to comply with tax law. Not to mention it might sound kind of odd if she claimed to be working on the I-129F and/or DS-160 and/or I-485 later (it does ask about employment history) but she never claimed any income. Not that they normally match thsoe records up, but there is a paper trail.


Timelines:

Spoiler

AOS (I-485 + I-131 + I-765):

9/25/17: sent forms to Chicago

9/27/17: received by USCIS

10/4/17: NOA1 electronic notification received

10/10/17: NOA1 hard copy received. Social Security card being issued in married name (3rd attempt!)

10/14/17: Biometrics appointment notice received

10/25/17: Biometrics

1/2/18: EAD + AP approved (no website update)

1/5/18: EAD + AP mailed

1/8/18: EAD + AP approval notice hardcopies received

1/10/18: EAD + AP received

9/5/18: Interview scheduled notice

10/17/18: Interview

10/24/18: Green card produced notice

10/25/18: Formal approval

10/31/18: Green card received

 

K-1:

Spoiler

I-129F

12/1/17: sent

12/14/17: NOA1 hard copy received

3/10/17: RFE (IMB verification)

3/22/17: RFE response received

3/24/17: Approved!

3/30/17: NOA2 hard copy received

 

NVC

4/6/2017: Received

4/12/2017: Sent to Riyadh embassy

4/16/2017: Case received at Riyadh embassy

4/21/2017: Request case transfer to Manila, approved 4/24/2017

 

K-1

5/1/2017: Case received by Manila (1 week embassy transfer??? Lucky~)

7/13/2017: Interview: APPROVED!!!

7/19/2017: Visa in hand

8/15/2017: POE

 

 

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Posted (edited)

In this situation, you might want to consider the benefits of being a dual status alien........That was extremely beneficial to our taxes the year my wife arrived in the US....Our accountant did a great job for us.

 

https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens

 

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20 minutes ago, geowrian said:

Correct

 

Yes it must be reported. It can then likely be excluded via the FEIE.

Under the table there is the same as under the table in the US. It's required to be reported to comply with tax law. Not to mention it might sound kind of odd if she claimed to be working on the I-129F and/or DS-160 and/or I-485 later (it does ask about employment history) but she never claimed any income. Not that they normally match thsoe records up, but there is a paper trail.

She actually did not claim to be working on the I-129F for the same reason, however I did not feel bad about that since it was only for her visa application. I'm much less comfortable with not complying with tax law haha.

 

Anyway, it sounds like the best option will be to file jointly, report her foreign income for the year, and then receive the foreign income exemption, correct? This way we should get the standard deduction for filing jointly, and only be paying taxes on my income (all of hers should be exempted since she made well under 100K abroad). Does all of this sound right?

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25 minutes ago, Throwaway777 said:

She actually did not claim to be working on the I-129F for the same reason, however I did not feel bad about that since it was only for her visa application. I'm much less comfortable with not complying with tax law haha.

 

Anyway, it sounds like the best option will be to file jointly, report her foreign income for the year, and then receive the foreign income exemption, correct? This way we should get the standard deduction for filing jointly, and only be paying taxes on my income (all of hers should be exempted since she made well under 100K abroad). Does all of this sound right?

Stacking misreps on misreps is not a good way to get started. ;) But personally I'd be more worried about misrepresentation for anything immigration related than IRS-related....that's one thing that never goes away immigration-wise.

 

Correct. Then you get the larger standard deduction while being married, but effectively only your income is taxed.

I recall it resulted in about $5,000 extra refund our first year. Not shabby at all... It's just a PITA since you won't be able to file electronically (due to the Resident Alien choice needed).


Timelines:

Spoiler

AOS (I-485 + I-131 + I-765):

9/25/17: sent forms to Chicago

9/27/17: received by USCIS

10/4/17: NOA1 electronic notification received

10/10/17: NOA1 hard copy received. Social Security card being issued in married name (3rd attempt!)

10/14/17: Biometrics appointment notice received

10/25/17: Biometrics

1/2/18: EAD + AP approved (no website update)

1/5/18: EAD + AP mailed

1/8/18: EAD + AP approval notice hardcopies received

1/10/18: EAD + AP received

9/5/18: Interview scheduled notice

10/17/18: Interview

10/24/18: Green card produced notice

10/25/18: Formal approval

10/31/18: Green card received

 

K-1:

Spoiler

I-129F

12/1/17: sent

12/14/17: NOA1 hard copy received

3/10/17: RFE (IMB verification)

3/22/17: RFE response received

3/24/17: Approved!

3/30/17: NOA2 hard copy received

 

NVC

4/6/2017: Received

4/12/2017: Sent to Riyadh embassy

4/16/2017: Case received at Riyadh embassy

4/21/2017: Request case transfer to Manila, approved 4/24/2017

 

K-1

5/1/2017: Case received by Manila (1 week embassy transfer??? Lucky~)

7/13/2017: Interview: APPROVED!!!

7/19/2017: Visa in hand

8/15/2017: POE

 

 

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Posted (edited)
5 minutes ago, geowrian said:

Stacking misreps on misreps is not a good way to get started. ;) But personally I'd be more worried about misrepresentation for anything immigration related than IRS-related....that's one thing that never goes away immigration-wise.

 

Correct. Then you get the larger standard deduction while being married, but effectively only your income is taxed.

I recall it resulted in about $5,000 extra refund our first year. Not shabby at all... It's just a PITA since you won't be able to file electronically (due to the Resident Alien choice needed).

Thank you! And yes haha I will keep that in mind. Her work was the only thing not included on the K1, but will definitely be sure to avoid misrepping as we move forward to AOS and stuff. Did not even consider how it could conflict with taxes at that time.

 

But anyway, that all sounds great. So how did the payment work? Would I pay the taxes on both her and my own income, and then they just refund the amount that is exempted? Or do you just not even pay for the exempted amount?

 

Thank you for all of your help! I'm only 24 btw so I'm still a bit of a tax newbie - Please excuse my naivety haha

Edited by Throwaway777

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Posted (edited)
1 hour ago, Throwaway777 said:

Thank you! And yes haha I will keep that in mind. Her work was the only thing not included on the K1, but will definitely be sure to avoid misrepping as we move forward to AOS and stuff. Did not even consider how it could conflict with taxes at that time.

 

But anyway, that all sounds great. So how did the payment work? Would I pay the taxes on both her and my own income, and then they just refund the amount that is exempted? Or do you just not even pay for the exempted amount?

 

Thank you for all of your help! I'm only 24 btw so I'm still a bit of a tax newbie - Please excuse my naivety haha

You claim all the income earned worldwide for each of you.

Also, you include a letter from her stating that she is choosing to be treated as a resident alien for the entire tax year. Sample we used for 2017: https://drive.google.com/open?id=1oFYM0MbbUxFPLTxOzn6qsk_eZMLhF42O9zRUs-KtVzU

 

Then you use the FEIE (https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion) - via Form 2555 or 2555-EZ - to exclude that income from your taxable income. There's no extra pay/refund involved....it's all handled in the numbers on the 1040.

I used TurboTax in 2017 to fill this out (then print & file since I couldn't do it electronically due to the election letter). I'm sure other software has very similar wizards. The main thing to keep in mind with the FEIE is that the bona fide residence test is not limited to the tax year for residence (i.e. my wife lived & worked abroad from 2011-2017, not just 1/1/2017 onward).

 

If the forms or wizards aren't doing it for you, then there's always a tax professional.

Edited by geowrian

Timelines:

Spoiler

AOS (I-485 + I-131 + I-765):

9/25/17: sent forms to Chicago

9/27/17: received by USCIS

10/4/17: NOA1 electronic notification received

10/10/17: NOA1 hard copy received. Social Security card being issued in married name (3rd attempt!)

10/14/17: Biometrics appointment notice received

10/25/17: Biometrics

1/2/18: EAD + AP approved (no website update)

1/5/18: EAD + AP mailed

1/8/18: EAD + AP approval notice hardcopies received

1/10/18: EAD + AP received

9/5/18: Interview scheduled notice

10/17/18: Interview

10/24/18: Green card produced notice

10/25/18: Formal approval

10/31/18: Green card received

 

K-1:

Spoiler

I-129F

12/1/17: sent

12/14/17: NOA1 hard copy received

3/10/17: RFE (IMB verification)

3/22/17: RFE response received

3/24/17: Approved!

3/30/17: NOA2 hard copy received

 

NVC

4/6/2017: Received

4/12/2017: Sent to Riyadh embassy

4/16/2017: Case received at Riyadh embassy

4/21/2017: Request case transfer to Manila, approved 4/24/2017

 

K-1

5/1/2017: Case received by Manila (1 week embassy transfer??? Lucky~)

7/13/2017: Interview: APPROVED!!!

7/19/2017: Visa in hand

8/15/2017: POE

 

 

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~~moved to Taxes and Finances, from K1 P&P - as this is not a K1 Visa question but a tax question.~~


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