jcapulet

Hi Curlylocks,

I was referring to past tax filings (as an unmarried filer) with the 1040EZ...we were married only in May, so I still need to find out exaclty which forms to file for a joint filing.

I'm not sure if I answered your question?

Juliet

Mrraveltay

kariml wrote:

    > I called the IRS this morning about this same issue. The two options I
    > was given are:
    >
    >
    >
    > 1. File married jointly. If we do this my husband is choosing to file as
    > a resident and must report his earnings from Germany.
    >
    >
    >
    > or
    >
    >
    >
    > 2. I file married separate and because my husband did not earn any US
    > income he is not required to file anything.
    >
    >
    >
    > Seems simple enough and the IRS employees were very kind and helpful.
    >

Simple enough if you want to do #2. #1 might save you a bunch of money,
but would not be as simple to file. After all, you get to exclude around
$84K (or so) of his income, so you might end up in a lower bracket.

Just Jenney

What I can't seem to find out is, if we choose to file jointly, what documentation do we have to provide regarding Mark's UK income? I mean, do they just take Mark's word for it regarding that income? Or are we to supply the UK equivalent to our W-2? (Mark says this would probably be the P-45.)

Anyone know where to find this information??

~ Jenney

Mrraveltay

Jenney & Mark wrote:

    > Originally posted by kariml
    >
    >
    >>I called the IRS this morning about this same issue. The two options
    >>I was given are:
    >
    >
    >
    >>1. File married jointly. If we do this my husband is choosing to file
    >> as a resident and must report his earnings from Germany.
    >
    >
    >
    >>or
    >
    >
    >
    >>2. I file married separate and because my husband did not earn any US
    >> income he is not required to file anything.
    >
    >
    >
    >>Seems simple enough and the IRS employees were very kind and helpful.
    >
    >
    >
    >
    > What I can't seem to find out is, if we choose to file jointly, what
    > documentation do we have to provide regarding Mark's UK income? I mean,
    > do they just take Mark's word for it regarding that income? Or are we to
    > supply the UK equivalent to our W-2? (Mark says this would probably be
    > the P-45.)
    >
    >
    >
    > Anyone know where to find this information??
    >

On the IRS website.

HunterGreen

I don't mean to sound like a know-it-all, but follow the link I posted earlier - it has everything you need to know.

Elaine

Just Jenney

With all due respect, I read the entire publication thoroughly and it does not answer my question.

The link you provided -- Pub 501 -- keeps referencing Pub 519, Chapter 1 whenever the nonresident alien issue comes up. So I go to Pub 519, Chapter 1, and it just tells me what I already know: Since Mark (nonresident alien) was married to a US citizen (me) at the end of 2003, we can choose to have him treated as a US resident for tax purposes and file jointly.

And since that's the case, Pub 519's info doesn't apply to Mark since we'd be choosing to have him considered a US resident and NOT an alien, so we can file jointly. It also means he cannot apply for foreign-earned income exclusions, so both my US income and his UK income must be reported and taxed. However, despite repeated searches on the IRS website, I cannot locate the information which explains what documentation Mark needs to supply regarding his UK income, specifically what he'd need from Inland Revenue.

(BTW, the IRS link for Pub 519 is outdated -- it only applies to 2002, so who knows if this is really accurate, anyway??)

If anyone knows specifically where to find this information, please respond!!

~ Jenney

kariml

Have you tried calling the IRS and asking? When I called yesterday they were very informative.

jeffreyhy

Jenney,

Be careful with your use of language here - "we'd be choosing to have [Mark] considered a US resident and NOT an alien, so we can file jointly". You are chosing for him to be considered a resident alien, as opposed to a non-resident alien, for tax purposes. As long as he is not a citizen, he is an alien.

"It also means he cannot apply for foreign-earned income exclusions, so both my US income and his UK income must be reported and taxed. " Wrong. Mark can claim the foreign-earned income exclusion to off-set his UK income.

As far as documenting his UK income, I am facing the same problem myself. The 1st year I filed a joint return with my immigrant ex-wife, she had worked in her country for 9 months of the year as a self-employed restaurateur. I don't know what business records she kept, probably none, and I'd bet that she didn't report her income or pay her taxes in her own country. I asked her what she thought she her monthly gross income and expenditures were and reported a fabricated set of numbers on our tax return. I provided no supporting documentation of any kind, not even the worksheet I used to fabricate the numbers. The return was never questioned by the IRS, probably for 2 reasons:
1 - the numbers were quite reasonable, perhaps even overstated, for a person in her situation in her 3rd-world country (although I doubt that an IRS examiner would have any idea of what would be reasonable)
2 - the numbers were low by US standards, less than 10% of the exclusion amount, so documented or not they would have had to increase by an order of magnitude before the 1st penny of tax would be owed - hardly worth the cost of auditing

My present wife, who I married in September and is still waiting for her visa, is a different situation. She is a salaried company employee and will have an employer-supplied wage and tax statement available - eventually. Although her income is very low by US standards and will be far below the exclusion level, I will not risk reporting her income without the wage and tax statement. I haven't spoken with my tax accountant yet this year, but I am thinking that I will ask for a filing extension until I can get her statement.

I don't think you will find the IRS dictating specifically what one must provide to document income earned from a foreign company in a foreign country. Every country will have it's own tax laws and the foreign documentation will be designed accordingly. I am sure that whatever documentation Mark supplies when reporting to his own government will be accepted by the US IRS.

Regards, JEff

Squire

In article <[email protected]>, Jenney & Mark
<member2595@british_expats.com> writes
    >And since that's the case, Pub 519's info doesn't apply to Mark since
    >we'd be choosing to have him considered a US resident and NOT an alien,
    >so we can file jointly. It also means he cannot apply for foreign-earned
    >income exclusions, so both my US income and his UK income must be
    >reported and taxed. However, despite repeated searches on the IRS
    >website, I cannot locate the information which explains what
    >documentation Mark needs to supply regarding his UK income, specifically
    >what he'd need from Inland Revenue.
    >If anyone knows specifically where to find this information,
    >please respond!!

Jenney, its unlikely that any Inland Revenue information would help you
determine Mark's UK taxable income due to the differing tax years
between US and UK. In other words, to determine his tax information for
1 Jan 2003 to 31 Dec 2003 he would normally have the following paperwork
- assuming his primary income is as an employee.

P60 - issued by employer for the year ended 5 Apr 2003
P45 - issued by employer for the period 6 Apr 2003 to date of leaving
Monthly payslips issued by the employer

So you could calculate 3/12 (Jan - Mar) of the gross pay and tax
deducted as shown on the P60 (2002/2003) and add this to the gross pay
and tax deducted figures on the P45 (assuming this was issued prior to
31 Dec 2003).

However, if Mark's pay fluctuated (e.g. with commission earnings) then
you would have to use the individual payslips to make similar
calculations.

Other variances to watch out for would be superannuation deductions if
he were a government or local government employee (these would apply in
reduction of gross pay), other taxable income even if taxed at source
(e.g. bank interest and share dividends etc). If he made a Tax Return
for 2002/2003 this would indicate to an extent any non-employment income
or allowances. He should also consider making a UK tax return for
2003/2004 as chances are he will be due a small tax refund (allowances
are prorated to the date of leaving employment by the employer whereas
he is entitled to the full tax years quota).

I am surprised he isn't entitled to prorated foreign earned income
allowances by the IRS but this is not my field, so I will leave it to
others to comment.

--
squire
Those are my principles. If you don't like them I have others. (Groucho)

Jxab12

Jenney,

I did not have to provide any supporting documentation regarding UK income - and none was asked for. I did however, have to pay a large TAX bill here in the US, and then try and get a rebate from the Inland Revenue which was ultimately successful.

For information we filed jointly, both as US residents (1 Alien) and used Deloitte and Touche out of New York to do the long form 1040 on our behalf.

Just Jenney

OK -- just got off the phone with the IRS. A lengthy call, to be sure, but very informative...

(Let me say that the information I received is based on our specific situation -- income level, no dependents, the fact that Mark already has a SSN, the fact that all Mark's 2003 income was earned in the UK, etc. For others some or all of this info may not apply.)

First, I confirmed that since we're choosing for Mark to be considered a US resident for tax purposes (so we can file jointly), most of the info in Pub 519 (Tax Guide for Aliens -- http://www.irs.gov/pub/irs-pdf/p519.pdf) is NOT applicable to him.

The IRS rep said really the only info of any usefulness to us in Pub 519 is the section about submitting a statement along with our return declaring we want Mark considered a US resident for 2003 (see page 10 of Pub 519).

Second, Mark does NOT have to supply any official documentation from Inland Revenue or his former employer about his income. The income has to be converted to dollars and entered under "spouse's income." She said the only advantage to submitting documentation (as opposed to the IRS "taking our word for it") is that should there be an audit (yikes!) they may require it at that time for substantiation. We might submit something just in case, if only to avoid any miscommunication.

As far as converting his income from pounds to dollars, the rep advised me that the IRS website would have information on how to do this, although she wasn't sure if it had been updated yet. She said to do a search and I should find the info pretty easily (haven't done that yet).

Third, while Mark cannot apply for Foreign-Earned Income Exclusion, he might be able to apply for a Foreign Tax Credit. This is outlined in Pub 514 -- http://www.irs.gov/pub/irs-pdf/p514.pdf. I haven't looked up the specifics yet, but if he does qualify then we'd submit Form 1116 along with our return.

I think once we review all the information and everything, this should be relatively easy. In fact, this year will probably be much easier than any other tax year we have from now on!

Thanks for the OP letting me piggyback on their post, and to everyone who's responded to mine...

~ Jenney

Just Jenney

My use of language is based directly on the IRS's language in Pub 519.

Pub 519 (http://www.irs.gov/pub/irs-pdf/p519.pdf) on page 10 says:

If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident. ... If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year.

In other words, while Mark is still technically a nonresident alien, we can choose for him to be considered a US resident -- NOT an alien -- for tax purposes. That's why the IRS rep I spoke with admitted that most of the info in Pub 519 wouldn't really apply to him, that we'd file the same as if he was a US resident, since we'd be choosing for him to be considered a US resident and not an alien.

~ Jenney

jeffreyhy

Jenny,

Perhaps I should make the same comment to the IRS document writer! You will observe, however, that the IRS use the same term that I did at one point - I have marked it in bold in my quote of your post, hopefully it will not be confused with the portions that you boldened (bolded? emboldened? whatever...!).

Note that the in the phrase that you highlighted, the distinction the IRS was making was a distinction between the resident v nonresident status of the alien, not a distinction about citizenship (citizen v alien).

Note also that there are 2 varieties if US resident - US resident citizens and US resident aliens (to use the full phrases for the avoidance of further confusion). Until he becomes a citizen, Mark is of the alien variety.

I'm glad to see that you got it worked out with the IRS, and thanks for posting what you learned. I was certain that Mark, as a US resident alien for tax purposes, could use the foreign-earned income exclusion. In fact, as I posted, I've done this in the past. You seem to have been told differently by the IRS, so I'll be sure to discuss this aspect with my tax accountant next month.

Regards, JEff

Dekka's Angel

Slightly different wrinkle:

How have people handled it when (a) the foreign spouse does not qualify for automatic treatment as a resident because they are resident less than the 183 (or whatever it is) days in the US and (b) wants to stipulate to tax treatment as a resident because of the advantage of joint filing with their US spouse but (c) has already 100% paid taxes on their foreign income while still living in their foreign country? This is the situation we find ourselves in. The tax year in Australia ended just before Dekkie came here, so all his taxes for his Aussie income were paid in full. I have yet to be able to figure out how to handle it, given this, and am avoiding having to hire an accountant this year for the first time ever just to figure it out.

jeffreyhy

Angel,

See one of my posts earlier in this thread, where your situation was exactly the situation with my ex-wife. Except that I have no idea whether she paid the taxes she might have owed in her own country or not, so assume that she did pay them.

We reported her full income on our joint return and then subtracted it off again as off-set by the foreign-earned income exclusion.

Regards, JEff