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Claiming for Dependents..Help!!

Claiming for Dependents..Help!!

Old Sep 30th 2014, 7:31 pm
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Default Claiming for Dependents..Help!!

Hi All,

Appreciate your comments...As a non resident Alien coming into the US (Texas) with Husband and 2 Children can we file as Married with 2 dependents? Having read the IRS website over and over my understanding is that we cant and can only file as single but his employers is saying we can. We will be entering on a L1 visa.

Thanks in advance.
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Old Sep 30th 2014, 7:36 pm
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Default Re: Claiming for Dependents..Help!!

If you are married, you must file as married. You can either file as married filing jointly or married filing separately.

Not sure why you are worrying about this now - if you aren't in the US yet, you are unlikely to pass the substantial presence test for 2014, so your next filing deadline is likely to be April 2016. That is a long way away.

http://www.irs.gov/Individuals/Inter...-Presence-Test
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Old Sep 30th 2014, 7:37 pm
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Default Re: Claiming for Dependents..Help!!

What's the text on the IRS website that you think applies?
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Old Sep 30th 2014, 7:52 pm
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Default Re: Claiming for Dependents..Help!!

We are due in the US on Dec 01st this year. The main reason for asking as it makes a huge difference in take home pay for my hubby and need to be sure we have the right figures. You mention the next deadline is 2016 do we not have to do one in 2015?
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Old Sep 30th 2014, 7:55 pm
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Default Re: Claiming for Dependents..Help!!

Originally Posted by PaulineMurray View Post
We are due in the US on Dec 01st this year. The main reason for asking as it makes a huge difference in take home pay for my hubby and need to be sure we have the right figures. You mention the next deadline is 2016 do we not have to do one in 2015?
If you arrive with a non-immigrant visa in December, you will not pass the substantial presence test for 2014. Therefore you will first have to do a tax return for your family's 2015 income. This return is due in April 2016. Obviously your husband will have to withhold taxes from his pay in 2015, though.

Yes, your children will be dependents.
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Old Sep 30th 2014, 8:02 pm
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Default Re: Claiming for Dependents..Help!!

This is what the IRS website states....maybe I am reading it wrong..let me know what you think.

Special Instructions for Form W-4 For Nonresident Alien Employees

A nonresident alien subject to wage withholding must give the employer a completed Form W-4 to enable the employer to figure how much income tax to withhold. In completing the form, nonresident aliens should use the following instructions instead of the instructions on Form W-4.

For Forms W-4 completed after December 31, 2005:
1.Check only "Single" marital status on line 3 (regardless of actual marital status).
2.Claim only one withholding allowance on line 5, unless you are a resident of Canada, Mexico, South Korea, a U.S. national, or a student or business apprentice from India.
3.Do not claim “Exempt” withholding status on line 7.
4.Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4.

For wages paid on or after January 1, 2006, you are required to apply the following procedure in calculating the amount of federal income tax withholding on the wages of nonresident alien employees. Under this procedure, you add an amount as set forth in the chart below to the nonresident alien's wages solely for calculating the income tax withholding for each payroll period. You determine the amount to be withheld by applying the income tax withholding tables to the amount of wages paid plus the additional chart amount. For more information, see Notice 2005-76.
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Old Sep 30th 2014, 8:15 pm
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Default Re: Claiming for Dependents..Help!!

OK.

The W4 is about your how much will get withheld from your husband's pay each pay period.

The W4 does not affect how you file your tax return. On your tax return (for 2015), you will file as married, either married filing jointly or married filing separately. Joint is usually better, but not always.

How you deal with your 2014 withholding and possible tax return, I don't have experience to know, but if you file, it will be as married.
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Old Sep 30th 2014, 8:27 pm
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Default Re: Claiming for Dependents..Help!!

Thanks for your help, apologies if I am not getting this but am I right in saying that when completing the w4 form to give to his employer we need to put down that he is single with 1 federal allowance and pay more federal withholding tax than someone who can claim as having 4 federal allowances. Using the pay calculator on Payroll Services | HR Services | Human Capital Management this would make a big difference in his take home pay.
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Old Sep 30th 2014, 8:33 pm
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Default Re: Claiming for Dependents..Help!!

You must complete the W4 as required. However, it's not at all clear to me what the impact will be of writing "non-resident alien" on the form. It might mean that you have no tax withheld, it's outside my experience. Others here hopefully know more.
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Old Sep 30th 2014, 8:44 pm
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Default Re: Claiming for Dependents..Help!!

Isn't this procedure designed to make sure that a NRA pays more in withholding for each paycheck rather than less, since perhaps the IRS feels some NRAs may scoot back to their home country and never file their tax return. This way, the NRA is encouraged to file and will get the overpaid withholding back in the end.
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Old Sep 30th 2014, 8:56 pm
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Default Re: Claiming for Dependents..Help!!

Sounds vaguely familiar, think it's what happened to us. Hubby started work in Dec 2011, and had to put down just the one withholding, and they kept a reasonable chunk of his wages as 'just in case you skip the country' tax (30% is ringing a bell...).

We got a refund the following spring after filing a 1040NR. It's all a bit of a blur now, but I think we actually got it all back; there was definitely a period in late 2011 when we magically weren't tax residents of anywhere! (It got a bit complicated, as hubby stayed on the Swiss operation's payroll for some weeks after moving over.)

So it's more of a temporary cash-flow thing. Unless hubby's being paid a telephone number monthly salary, the amount you'll earn in 2014 will be negligible once it's on an annual tax return, and will barely even trip over into a marginal rate of 10%. You'll get it back once you file.
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Old Sep 30th 2014, 9:01 pm
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Default Re: Claiming for Dependents..Help!!

Thank you I think it's starting to make sense. Do you remember what happened the following year or will this happen until we can pass the substantial presence test?
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Old Sep 30th 2014, 9:04 pm
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Default Re: Claiming for Dependents..Help!!

Originally Posted by PaulineMurray View Post
Thank you I think it's starting to make sense. Do you remember what happened the following year or will this happen until we can pass the substantial presence test?
Pretty sure it was just for that first month, and that once we ticked over into 2012, he did a W4 like normal people. Hang on, will pull out some payslips to see what was withheld...

Yep, checked with hubby, and he said that for Dec 2011, he had to do the weird single withholding thing, but that as soon as it ticked over into 2012, it was assumed that we would meet Substantial Presence shortly, and he could do withholding based on married-with-two-kids.

Last edited by kodokan; Sep 30th 2014 at 9:08 pm.
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Old Sep 30th 2014, 9:13 pm
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Default Re: Claiming for Dependents..Help!!

Here are a couple of useful links to play with:

Tax-Rates.org - The Tax Information Portal

https://turbotax.intuit.com/tax-tool...ors/taxcaster/

The first one is much more comprehensive, as it does payroll and state taxes too, but the Turbotax one is pleasingly simple and visual.

Just for background info once you're past the initial Non-Resident phase, organising how you pay tax here needs to be thought of a little differently to the UK. Everyone files, and the money that comes out of the payslip each month/ two weeks are just payments on account towards whatever your final yearly bill is after 31st December. The system is designed to be 'pay as you go', but with a lot more responsibility for the individual filer. Even so, for most people, following the instructions on the W4 for their family circumstances will result in your withholding approximately matching your tax liability come year end, a few hundreds either way.

But if you know that you're going to owe a lot more, based on out-of-work financial matters - own a lot of dividend-paying shares, for example - then it's your responsibility to either adjust your monthly withholding to pay more tax as you go along (by reducing your allowances/ dependents), or make actual quarterly payments to the IRS on account. It's expected that you pay as you go along through the year, so if you have a large lump of non-work taxable income arrive in Jan or Feb, you're not supposed to wait until the end of the year to pay the tax due on that, you're supposed to pay in the quarter in which you got the income. That said, I think if you can shuffle the withholding about sufficiently - have enough allowances to reduce - and it all comes good by return filing time, that's fine.

So around this time of year, people start pulling up online tax software or the Taxcaster linked above, and playing with the numbers to see how they're going to be positioned at year-end, as regards withholding versus what they'll actually owe, taking into account other money received during the year such as bank account interest, dividends and capital gains, income from a side job, etc. They can then file a new W4 - you can do this at any time during the year. There are set formulas as to when you'll owe too much, and the IRS will ding you for penalties and interest, but the easiest one to remember/ calculate is that if you owe less than $1k, you're fine. Other people like to set their withholding deliberately high, because they like the enforced saving approach and enjoy getting a refund check for thousands in the spring. It's entirely up to each individual.

Last edited by kodokan; Sep 30th 2014 at 9:31 pm.
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Old Sep 30th 2014, 9:17 pm
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Default Re: Claiming for Dependents..Help!!

Originally Posted by kodokan View Post
Here are a couple of useful links to play with:

Tax-Rates.org - The Tax Information Portal

https://turbotax.intuit.com/tax-tool...ors/taxcaster/

The first one is much more comprehensive, as it does payroll and state taxes too, but the Turbotax one is pleasingly simple and visual.
Thank you sooo much....that has helped me immensely.
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