Before EAD & GC

[Thefiance 3]

Hi All,

 

so i have a question regarding TAX & stock market trading.

 

i have a SSN now. i have also worked for a US based company before i arrived on a K1. so i have a bank account too but i didn't have an SSN then and i haven't connected it to the account so far since its still a "salary account" although i am not getting salary anymore. i am still waiting for my EAD and GC and considering the pandemic i am guessing it might take a little while longer.

My question is, will connecting the SSN to the account have a problem with tax and IRS later since i didn't have to pay tax before the K1 on the income earned?

Also, since i have an SSN now, can i use the account to trade in the stock market if i connect the SSN? or does that count as income if i gain something from it?

 

i am just trying to figure out what i can do with the time i have before i can work again. Appreciate your advise.

 

[Thefiance 3]

22 hours ago, Thefiance said:

Hi All,

 

so i have a question regarding TAX & stock market trading.

 

i have a SSN now. i have also worked for a US based company before i arrived on a K1. so i have a bank account too but i didn't have an SSN then and i haven't connected it to the account so far since its still a "salary account" although i am not getting salary anymore. i am still waiting for my EAD and GC and considering the pandemic i am guessing it might take a little while longer.

My question is, will connecting the SSN to the account have a problem with tax and IRS later since i didn't have to pay tax before the K1 on the income earned?

Also, since i have an SSN now, can i use the account to trade in the stock market if i connect the SSN? or does that count as income if i gain something from it?

 

i am just trying to figure out what i can do with the time i have before i can work again. Appreciate your advise.

 

Anyone???

[Villanelle 4,121]

These are very specific questions so you might want to consider talking to a local CPA. Everyones tax situation is different. 

 

And just for clarification- are you saying you have a US bank account already? One you were able to open w/o a SSN?  Anyway-  usually when people come as K they elect their first year to be treated as a resident for the entire year for tax purposes. There are a few threads about it in this sub forum. Again though I think your best bet is to speak to a CPA about the specifics in your situation. Regarding stock market trading- I have no idea about potential tax implications on earnings you may get but I can tell you for immigration purposes its N/A as long as you do pay whatever taxes you may owe from doing such- (but the act of doing such is N/A for the immigration process)

[Thefiance 3]

1 minute ago, Villanelle said:

These are very specific questions so you might want to consider talking to a local CPA. Everyones tax situation is different. 

 

And just for clarification- are you saying you have a US bank account already? One you were able to open w/o a SSN?  Anyway-  usually when people come as K they elect their first year to be treated as a resident for the entire year for tax purposes. There are a few threads about it in this sub forum. Again though I think your best bet is to speak to a CPA about the specifics in your situation. Regarding stock market trading- I have no idea about potential tax implications on earnings you may get but I can tell you for immigration purposes its N/A as long as you do pay whatever taxes you may owe from doing such- (but the act of doing such is N/A for the immigration process)

Hey , thank you. Yes I have a bank account without SSN ... since it was an American company we we allowed to do it.

[Villanelle 4,121]

Ah well then there is no issue to attach your SSN to it now.   

[Wuozopo 4,285]

On 3/15/2020 at 7:50 PM, Thefiance said:

My question is, will connecting the SSN to the account have a problem with tax and IRS later since i didn't have to pay tax before the K1 on the income earned?

 A bank uses your SSN to report interest that account earned to the IRS. Banks do not report salary that got put into the account. Salary that was taxable would be reported to the IRS by the employer. Since you resided in India, worked in India, and you probably paid tax to India, then that money held in the account is not taxable as income. If the account earned any income, the bank would have issued you a 1099-INT to show you how much taxable interest the account earned in 2019.

 

On 3/15/2020 at 7:50 PM, Thefiance said:

Also, since i have an SSN now, can i use the account to trade in the stock market if i connect the SSN? or does that count as income if i gain something from it?

Typical “banks” don’t trade on the stock exchange. You would trade through a “broker” authorized and regulated my the SEC (Securities and Exchange Commission). Financial firms like Edward Jones, Fidelity, Charles Schwab are authorized traders. Some banks may have relationships with brokerages for your convenience but you are actually buying or selling through a company other than the bank.  If the brokerage allows you as a foreigner to have a account then you can. Right now you are a non-resident alien. Ask them. 
 

So when you purchase securities (stocks) the money you take out of the bank to use is not taxable. The shares you own are not taxable. But if it is a stock that pays dividends to shareholders, then the dividend money earned during the tax year is taxable. Also there are tax implications when you sell a stock. Any gain you made on the stock is considered income. Example— you bought $3000 worth of stock and later sold the shares for $4000. You earned $1000 profit which is taxable income. 

 

Does that answer your question?

[Thefiance 3]

1 hour ago, Wuozopo said:

 A bank uses your SSN to report interest that account earned to the IRS. Banks do not report salary that got put into the account. Salary that was taxable would be reported to the IRS by the employer. Since you resided in India, worked in India, and you probably paid tax to India, then that money held in the account is not taxable as income. If the account earned any income, the bank would have issued you a 1099-INT to show you how much taxable interest the account earned in 2019.

 

Typical “banks” don’t trade on the stock exchange. You would trade through a “broker” authorized and regulated my the SEC (Securities and Exchange Commission). Financial firms like Edward Jones, Fidelity, Charles Schwab are authorized traders. Some banks may have relationships with brokerages for your convenience but you are actually buying or selling through a company other than the bank.  If the brokerage allows you as a foreigner to have a account then you can. Right now you are a non-resident alien. Ask them. 
 

So when you purchase securities (stocks) the money you take out of the bank to use is not taxable. The shares you own are not taxable. But if it is a stock that pays dividends to shareholders, then the dividend money earned during the tax year is taxable. Also there are tax implications when you sell a stock. Any gain you made on the stock is considered income. Example— you bought $3000 worth of stock and later sold the shares for $4000. You earned $1000 profit which is taxable income. 

 

Does that answer your question?

Hi there,

thanks for this. Just to clarify - I lived in india but worked in the US on contract. So my income wasn’t taxable anywhere. 
And regarding the tradings I got the profit part but would that be termed as income in the US? Since a K1 is not supposed to get any income before the EAD will that have an issue later.

 

 

[Wuozopo 4,285]

The dividends, interest, or capital gains from investing are termed unearned income. That is not the same as having a job and getting paid wages. 
 

You’re going to have to explain your job better.

You worked in the US. Meaning you were physically present in the US doing the work.

Then how did you live in India at the same time?

Edited March 17, 2020 by Wuozopo

[Thefiance 3]

2 minutes ago, Wuozopo said:

The dividends, interest, or capital gains from investing are termed unearned income. That is not the same as having a job and getting paid wages. 
 

You’re going to have to explain your job better.

You worked in the US. Meaning you were physically present in the US doing the work.

Then how did you live in India at the same time?

Hi,

sorry about that. I worked on ships in US waters. So they paid in dollars but it wasn’t taxable here neither was it in India.

 

thank you for this. So that means there is no harm in having a trading account then. Or connecting the bank account.

[DELETEME1234 208]

1 hour ago, Thefiance said:

So they paid in dollars but it wasn’t taxable here neither was it in India.

You might have bigger problems than getting access to the stock market. This is not how that works, I suggest you talk to a CPA. 

[Thefiance 3]

25 minutes ago, Poseidon1212 said:

You might have bigger problems than getting access to the stock market. This is not how that works, I suggest you talk to a CPA. 

Lol what kinda problems? The bank account has no issue.. the income is legitimate and no illegal activities .. 

[Wuozopo 4,285]

2 hours ago, Thefiance said:

Lol what kinda problems? The bank account has no issue.. the income is legitimate and no illegal activities .. 

I also think it sounds a bit dodgy that you pay no taxes to either country, but I don’t know India tax laws or how you were authorized to work for an American company offshore in American waters.  

[Thefiance 3]

43 minutes ago, Wuozopo said:

I also think it sounds a bit dodgy that you pay no taxes to either country, but I don’t know India tax laws or how you were authorized to work for an American company offshore in American waters.  

The company has about 3000 employees having the same bank accounts. Even if the ship is American they always sail out to international waters and come back so unless you are American you don’t have to pay tax here.. and Indians don’t pay tax if you work outside india. Guys, the account is legit and I have all the pay stubs and employment records for it.. IL check with the CPA about the tax  but the person I asked doesn’t have an idea about K1 and effect of a trading account on it.. that’s why I wanted to check here.

[Wuozopo 4,285]

12 minutes ago, Thefiance said:

The company has about 3000 employees having the same bank accounts. Even if the ship is American they always sail out to international waters and come back so unless you are American you don’t have to pay tax here.. and Indians don’t pay tax if you work outside india. Guys, the account is legit and I have all the pay stubs and employment records for it.. IL check with the CPA about the tax  but the person I asked doesn’t have an idea about K1 and effect of a trading account on it.. that’s why I wanted to check here.

i don’t doubt your bank account or any of that. I was just curious how you avoided income tax.  If India doesn’t tax you, then that’s the answer. 

[Villanelle 4,121]

It seems your main concern here is earning money as a K.  All you need to know is as long as you pay taxes on whatever money you earn- you will have no issues. You can pay the taxes to the US, to India, to whoever- as long as you can show you paid and it was all reported properly- you will have no issues with the IRS or USCIS. 

 

 Also you said something like a K can not have income before EAD? That is incorrect. A K can have income- a K does not have work authorization. You can have passive income with out working.  Now I have no idea if USCIS would consider stock trading to be 'employment' or some type of passive income but it does not matter. Even if they decided it was 'working'- working with out auth is NOT a bar to adjusting for a K visa holder. So there are no issues with any of this immigration side. The only thing is USCIS will want to see all your income has been reported and IRS stuff properly filed so find a CPA who is knowledgeable with both international issues and whatever it is you are doing with the stock market.