K1 Visa - Tax question

[cristinea2 7]

Hi guys,

 

Awaiting for my k1 visa interview but preparing for the next steps!

 

Q: I would like to ask you if there are any pros/cons or difference if we get married 31 Dec 2021 or 1 January 2022 regarding the taxes? Or will be handled the same? (Eg to skip fill a form? Or my husband to be to have returns on 2020 or we may pay more money etc)

 

Quick background:

- 2020 i have income to my home country only, 2022 till April i will not have work in US anyway

- my country seems that is including to countries that are under 2055 excemption form.

- on April 2022 I will probably NOT be considered as tax resident as I have 15 days in 2019, 17 days in 2020 and until tax season on 2022 which is around 120 days but I saw the offline statement that we can complete to be treated as one.

 

We will probably have to to advise an tax specialist anyway but good to have an understanding and know what to expect.

Edited October 9, 2021 by cristinea2

[aaron2020 11,651]

If you marry on Dec. 31, 2021, then your husband's marital status for Tax Year 2021 is married.  He can file married filing separately with only his 2021 income.  Alternatively, he and you can file as married for Tax Year 2021.  You would need to include your worldwide income.  There may be foreign income tax exemptions.

Without knowing your income, it's impossible to tell you which is better for you.  Your accountant can help you with this.  

[cristinea2 7]

10 minutes ago, aaron2020 said:

If you marry on Dec. 31, 2021, then your husband's marital status for Tax Year 2021 is married.  He can file married filing separately with only his 2021 income.  Alternatively, he and you can file as married for Tax Year 2021.  You would need to include your worldwide income.  There may be foreign income tax exemptions.

Without knowing your income, it's impossible to tell you which is better for you.  Your accountant can help you with this.  

Thank you so much! 

 

If we get married on Jan 1 2022, do i will still have to submit a tax 1040 form to IRS?

 

 

[aaron2020 11,651]

1 minute ago, cristinea2 said:

Thank you so much! 

 

If we get married on Jan 1 2022, do i will still have to submit a tax 1040 form to IRS?

 

 

No.

You may want to consider getting marry on Dec 31, 2021 if it will get you a better financial result.  Check with your accountant.  

[cristinea2 7]

9 minutes ago, aaron2020 said:

No.

You may want to consider getting marry on Dec 31, 2021 if it will get you a better financial result.  Check with your accountant.  

Great, thanks again!

 

 

Edited October 9, 2021 by cristinea2

[Sagior 15]

14 hours ago, cristinea2 said:

Great, thanks again!

 

 

 

14 hours ago, cristinea2 said:

Hi guys,

 

Awaiting for my k1 visa interview but preparing for the next steps!

 

Q: I would like to ask you if there are any pros/cons or difference if we get married 31 Dec 2021 or 1 January 2022 regarding the taxes? Or will be handled the same? (Eg to skip fill a form? Or my husband to be to have returns on 2020 or we may pay more money etc)

 

Quick background:

- 2020 i have income to my home country only, 2022 till April i will not have work in US anyway

- my country seems that is including to countries that are under 2055 excemption form.

- on April 2022 I will probably NOT be considered as tax resident as I have 15 days in 2019, 17 days in 2020 and until tax season on 2022 which is around 120 days but I saw the offline statement that we can complete to be treated as one.

 

We will probably have to to advise an tax specialist anyway but good to have an understanding and know what to expect.

It seems you are Greek. and according to the US/Greece agreement you considered a Greek tax resident, unless you live in the US for 183 days/year, but you must prove this to the tax department of your country. 

Specific for you it will be better to married in December, so, you will be able to file joint taxes, claim the second deduction, but most important you will file joint taxes next April and then apply to the IRS for a Foreign Certificate Of Tax Residency. You will use the certificate to transfer your file to the tax department of foreign residence of your country, So, you will avoid double taxation, otherwise you will have to file taxes in your old country, deduct taxes you paid in the USA and pay the difference there.

[cristinea2 7]

8 minutes ago, Sagior said:

 

It seems you are Greek. and according to the US/Greece agreement you considered a Greek tax resident, unless you live in the US for 183 days/year, but you must prove this to the tax department of your country. 

Specific for you it will be better to married in December, so, you will be able to file joint taxes, claim the second deduction, but most important you will file joint taxes next April and then apply to the IRS for a Foreign Certificate Of Tax Residency. You will use the certificate to transfer your file to the tax department of foreign residence of your country, So, you will avoid double taxation, otherwise you will have to file taxes in your old country, deduct taxes you paid in the USA and pay the difference there.

Thank you for your time to reply this!

 

Question re "deduct taxes you paid in the USA and pay the difference there."

 

 

are you reffering to the year 2023 for economic year 2022? I will have to fill in the two countries that year?

If I marry Jan 1 2022:

I will pay my taxes for 2021 in Greece as normally on 2022 for the economic year 2021.

 

Why to pay taxes in USA as I will not have to fill a form on April 2022 tax year (for 2021 income) as I will not be a redisent, I will not be 183 days in US and I will not have any US income?

 

So actually my understanding is I just have to pay my taxes in GR and thats it, no? 

 

[cristinea2 7]

Ah got it actually what you said! Thank u that was very helpful

[Sagior 15]

4 hours ago, cristinea2 said:

Thank you for your time to reply this!

 

Question re "deduct taxes you paid in the USA and pay the difference there."

 

 

are you reffering to the year 2023 for economic year 2022? I will have to fill in the two countries that year?

If I marry Jan 1 2022:

I will pay my taxes for 2021 in Greece as normally on 2022 for the economic year 2021.

 

Why to pay taxes in USA as I will not have to fill a form on April 2022 tax year (for 2021 income) as I will not be a redisent, I will not be 183 days in US and I will not have any US income?

 

So actually my understanding is I just have to pay my taxes in GR and thats it, no? 

 

You confuse me now. Let's go again.

Let's say you married a US citizen in 2021 and then you relocate to USA.

a) You will be obligated if you have income to file(in 2022) in GR, the 2021 taxes.

b) Your spouse+you, will file 2021 US tax, as married file joint. Because of your deduction and your probably zero income in US, he will have a large tax refund.

BUT

If you married in 2022, your spouse will lose your deduction of 2021 and pay more taxes.

You will have to file taxes in both countries every year and pay taxes you may own to each country until you become a US tax resident. Example: You file in March 2022 US taxes for the year 2021 and you own $100. Then you file in June 2022 GR taxes for the year 2021 and you own 200 euros. We exchange the $100 to 90 euros, we deduct from the 200 and pay the tax department 110 euros.

The tax system it's very complicate. Ask an accountant there to explain you how and what you need to transfer your file to the department of tax resident, So, you will avoid the double taxation.

You can avoid paying taxes there if you transfer your file to the department of foreign residence of GR(Eforia katoikwn exwterikou). If you do that, you will never have to file taxes there again unless you have a lot of income there.

To transfer your file besides 3-4 other documents you will need from the IRS a certificate of tax residence, So, if you married in December, you can file joint and then ask for the 2021 certificate, otherwise you will have to wait for an another year.

FOR THE FUTURE

[cristinea2 7]

39 minutes ago, Sagior said:

You confuse me now. Let's go again.

Let's say you married a US citizen in 2021 and then you relocate to USA.

a) You will be obligated if you have income to file(in 2022) in GR, the 2021 taxes.

b) Your spouse+you, will file 2021 US tax, as married file joint. Because of your deduction and your probably zero income in US, he will have a large tax refund.

BUT

If you married in 2022, your spouse will lose your deduction of 2021 and pay more taxes.

You will have to file taxes in both countries every year and pay taxes you may own to each country until you become a US tax resident. Example: You file in March 2022 US taxes for the year 2021 and you own $100. Then you file in June 2022 GR taxes for the year 2021 and you own 200 euros. We exchange the $100 to 90 euros, we deduct from the 200 and pay the tax department 110 euros.

The tax system it's very complicate. Ask an accountant there to explain you how and what you need to transfer your file to the department of tax resident, So, you will avoid the double taxation.

You can avoid paying taxes there if you transfer your file to the department of foreign residence of GR(Eforia katoikwn exwterikou). If you do that, you will never have to file taxes there again unless you have a lot of income there.

To transfer your file besides 3-4 other documents you will need from the IRS a certificate of tax residence, So, if you married in December, you can file joint and then ask for the 2021 certificate, otherwise you will have to wait for an another year.

FOR THE FUTURE

Thank you so much for your detailed explanation!! All clear now!

[SteveInBostonI130 3,468]

1 hour ago, Sagior said:

b) Your spouse+you, will file 2021 US tax, as married file joint. Because of your deduction and your probably zero income in US, he will have a large tax refund.

BUT

If you married in 2022, your spouse will lose your deduction of 2021 and pay more taxes.

 

US taxes individuals on worldwide income, not just on income earned in the US.

 

@cristinea2, please consult a tax accountant.  There may be advantages to marry in 2021 for the tax refund as MFJ, but it will depend on the income earned in Greece and taxes payed there.

 

Some extremely basic example:  Your husband earns $50k and you earn $50k in 2021.  Not counting deductions, your husband's tax as single is $6,785.   If you file MFJ, your combined $100k income's tax is $13,575.  Let's say you paid $10,000 in taxes to Greece on your $50k income.  You can claim tax credit of $10k, making your tax only $3,575 and saving you guys $3,210.  Or you may qualify to exclude all your foreign income, which means as MFJ the total US income is $50k, for which the tax is $5602, which saves you guys $1,183.

 

The above is probably not accurate for the degree of tax credit that can be applied or income that can be excluded -- please, please get in touch with a tax professional.

 

[cristinea2 7]

38 minutes ago, SteveInBostonI130 said:

 

US taxes individuals on worldwide income, not just on income earned in the US.

 

@cristinea2, please consult a tax accountant.  There may be advantages to marry in 2021 for the tax refund as MFJ, but it will depend on the income earned in Greece and taxes payed there.

 

Some extremely basic example:  Your husband earns $50k and you earn $50k in 2021.  Not counting deductions, your husband's tax as single is $6,785.   If you file MFJ, your combined $100k income's tax is $13,575.  Let's say you paid $10,000 in taxes to Greece on your $50k income.  You can claim tax credit of $10k, making your tax only $3,575 and saving you guys $3,210.  Or you may qualify to exclude all your foreign income, which means as MFJ the total US income is $50k, for which the tax is $5602, which saves you guys $1,183.

 

The above is probably not accurate for the degree of tax credit that can be applied or income that can be excluded -- please, please get in touch with a tax professional.

 

Guys I really dont know how to thank you! Your answers helped me a lot! I have contacted my accountant here in GR  to start with but reading your anserrs gave me a better understanding so to plan next steps.

 

Thanks again, appreciate that