Filing Taxes for 2001 as a permanent resident
Jan 8th 2002, 3:15 pm
#1
Forum Regular
Thread Starter
Joined: May 2001
Posts: 136
Hi all,
Just a little issue I need some clarification on:
I was recently admitted to the United States as an unconditional permanent resident (Dec 14th 2001) and am now thinking about filing my taxes for the 2001 tax year.
As I understand, greencard holders are required to report income from the US and worldwide just like US citizens, but here is the problem:
I was not a permanent resident for 99% of 2001 but I earned more than the cut off figure ($2800) in the UK before I left. I was present in the US for about 4 weeks prior to Dec 14th (travelling on visa waver program).
How should I go about filing the 1040 with these circumstances in mind, and if indeed I had to file a 2555 (foreign earned income exclusion) would it jeopardize my LPR status?
Suggestions would be appreciated!
PriZm.
Just a little issue I need some clarification on:
I was recently admitted to the United States as an unconditional permanent resident (Dec 14th 2001) and am now thinking about filing my taxes for the 2001 tax year.
As I understand, greencard holders are required to report income from the US and worldwide just like US citizens, but here is the problem:
I was not a permanent resident for 99% of 2001 but I earned more than the cut off figure ($2800) in the UK before I left. I was present in the US for about 4 weeks prior to Dec 14th (travelling on visa waver program).
How should I go about filing the 1040 with these circumstances in mind, and if indeed I had to file a 2555 (foreign earned income exclusion) would it jeopardize my LPR status?
Suggestions would be appreciated!
PriZm.
Jan 8th 2002, 3:40 pm
#2
Concierge
Joined: Apr 2001
Posts: 46,390
Just for the record there is no differences in being a conditional or unconditional PR with the exception of the removal of conditions.
Filing taxes in the US will not jeopardize your residency status in the US. Since you have not earned any monies in the US for the brief period of time you have been here you really don't have to file for the year 2001. The exception is if your wife's return would benefit by her filing, married, joint as opposed to married, separate. If she would benefit by filing joint then your UK income has to be declared. If it is under $70,000 odd USD, then there is no additional income since it is placed on the 1040 and then taken off before tax is calculated. You have to have paid your UK taxes however in order to do this.
FWIW and for us it was priceless, get yourself a tax accountant and have them complete your taxes for the first year. It won't cost much ... approximately $100 ... and it will give you peace of mind.
We still use an accountant for our returns as it saves the headache of dealing with international income.
Rita
Filing taxes in the US will not jeopardize your residency status in the US. Since you have not earned any monies in the US for the brief period of time you have been here you really don't have to file for the year 2001. The exception is if your wife's return would benefit by her filing, married, joint as opposed to married, separate. If she would benefit by filing joint then your UK income has to be declared. If it is under $70,000 odd USD, then there is no additional income since it is placed on the 1040 and then taken off before tax is calculated. You have to have paid your UK taxes however in order to do this.
FWIW and for us it was priceless, get yourself a tax accountant and have them complete your taxes for the first year. It won't cost much ... approximately $100 ... and it will give you peace of mind.
We still use an accountant for our returns as it saves the headache of dealing with international income.
Rita
Jan 8th 2002, 4:10 pm
#3
Guest
Posts: n/a
If you were single, probably the easiest thing is to be treated as a dual alien for
the tax year. See:
http://ftp.fedworld.gov/pub/irs-pdf/p519.pdf
However, since you'll probably want to file jointly with your spouse you'll be a
resident for tax purposes regardless so look at the foreign income earned exclusion.
Rest assured, filing this does not cause a problem to LPRs or US citizens! There's
absolutely no reason that you should pay (or that the US government wants you to pay)
for foreign income you've already paid taxes on.
Andy.
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I'm not really here - it's just your warped imagination.
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the tax year. See:
http://ftp.fedworld.gov/pub/irs-pdf/p519.pdf
However, since you'll probably want to file jointly with your spouse you'll be a
resident for tax purposes regardless so look at the foreign income earned exclusion.
Rest assured, filing this does not cause a problem to LPRs or US citizens! There's
absolutely no reason that you should pay (or that the US government wants you to pay)
for foreign income you've already paid taxes on.
Andy.
--
I'm not really here - it's just your warped imagination.
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Jan 10th 2002, 1:33 am
#4
Guest
Posts: n/a
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Yeh, and just where DO you find an accountant that can do the Canadian and the
American taxes? Somehow we muddled through it for the year 1999. 'Course we were
living in a small town, too. I took it to an accountant in a larger town and he
waffled on trying to learn how to do the Canadian one, not that I can blame him
since it was the height of the tax season and how the heck do you learn a new
system when you are swamped?
From what I learned, no one really knew how to do it. I'm still not clear about
what we should do about the small bit of pension that my husband is getting from
Canada that is being put into a Canadian bank account that we still have. It's a
small amout, about $200, and when we gave Canada Trust our new address they
riffled a bit and after some time sent us information informing us that they
would have to take taxes out of the pension so now $34 less is being deposited in
that account. Is there any chance we could get that back? I haven't for two years
now. Haven't filed a Canadian tax return. I was under the impression that we
didn't have to file one once we declared on that last statement in 1999 that we
had left the country.
Ugh. I even called Revenue Canada and their explanation was just too beyond me to
comprehend what to do. Anyone know?
Jo
--
"If you have fear of some pain or suffering, you should examine whether there is
anything you can do about it. If you can, there is no need to worry about it; if
you cannot do anything, then also there is no need to worry." --His holiness the
Dalai Lama
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Yeh, and just where DO you find an accountant that can do the Canadian and the
American taxes? Somehow we muddled through it for the year 1999. 'Course we were
living in a small town, too. I took it to an accountant in a larger town and he
waffled on trying to learn how to do the Canadian one, not that I can blame him
since it was the height of the tax season and how the heck do you learn a new
system when you are swamped?
From what I learned, no one really knew how to do it. I'm still not clear about
what we should do about the small bit of pension that my husband is getting from
Canada that is being put into a Canadian bank account that we still have. It's a
small amout, about $200, and when we gave Canada Trust our new address they
riffled a bit and after some time sent us information informing us that they
would have to take taxes out of the pension so now $34 less is being deposited in
that account. Is there any chance we could get that back? I haven't for two years
now. Haven't filed a Canadian tax return. I was under the impression that we
didn't have to file one once we declared on that last statement in 1999 that we
had left the country.
Ugh. I even called Revenue Canada and their explanation was just too beyond me to
comprehend what to do. Anyone know?
Jo
--
"If you have fear of some pain or suffering, you should examine whether there is
anything you can do about it. If you can, there is no need to worry about it; if
you cannot do anything, then also there is no need to worry." --His holiness the
Dalai Lama
Jan 10th 2002, 6:39 am
#5
Guest
Posts: n/a
Jo H wrote:
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[usenetquote2]> > We still use an accountant for our returns as it saves the headache of dealing[/usenetquote2]
[usenetquote2]> > with international income.[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> > Rita[/usenetquote2]
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If you have the money, there are several places that probably offer it. Many
companies do it for expats...
You really don't need a tax specialist to do both returns, simply get one specialist
for each country, or buy tax software for each company.
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[usenetquote2]> > We still use an accountant for our returns as it saves the headache of dealing[/usenetquote2]
[usenetquote2]> > with international income.[/usenetquote2]
[usenetquote2]> >[/usenetquote2]
[usenetquote2]> > Rita[/usenetquote2]
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If you have the money, there are several places that probably offer it. Many
companies do it for expats...
You really don't need a tax specialist to do both returns, simply get one specialist
for each country, or buy tax software for each company.
Jan 10th 2002, 10:21 am
#6
Concierge
Joined: Apr 2001
Posts: 46,390
Jo
Why would you think I said I found an accountant in the US that would do the Canadian taxes? Our Canadian taxes are done by a Canadian tax service and our US taxes are done by a US tax accountant.
Jim files every year in Canada as a non-resident. A pension is considered earned income and as such he has to pay taxes on it. But it is a bit more than $200 CDN a month.
As for your situation, I don't know enough about the Canadian tax system which is quite strange in comparison to the US system and won't even venture to guess if you are entitled to a refund.
Rete
Why would you think I said I found an accountant in the US that would do the Canadian taxes? Our Canadian taxes are done by a Canadian tax service and our US taxes are done by a US tax accountant.
Jim files every year in Canada as a non-resident. A pension is considered earned income and as such he has to pay taxes on it. But it is a bit more than $200 CDN a month.
As for your situation, I don't know enough about the Canadian tax system which is quite strange in comparison to the US system and won't even venture to guess if you are entitled to a refund.
Rete
Jan 10th 2002, 11:11 am
#7
BE Enthusiast
Joined: Mar 2001
Posts: 717
The taxes are nothing to worry about. The best thing, for most people, is to file a joint return with the spouse (although if your spouse is also new to the US, it probably won't make much difference). When you use the foreign earned income exclusion, I'm assuming it will bring your US taxes down to zero for the year. If not, you can use the foreign tax credit. You can also deduct any UK mortgage interest payments.
I wouldn't bother with a tax accountant for this, and you won't find one for $100 that can do anything remotely complicated and actually save you money.
Arriving in December is a too late to make big (any) tax savings in the US, but you should be able to take advantage of it in your UK taxes.
I wouldn't bother with a tax accountant for this, and you won't find one for $100 that can do anything remotely complicated and actually save you money.
Arriving in December is a too late to make big (any) tax savings in the US, but you should be able to take advantage of it in your UK taxes.
Jan 10th 2002, 11:41 am
#8
BE Enthusiast
Joined: Mar 2001
Posts: 717
The taxes are nothing to worry about. The best thing, for most people, is to file a joint return with the spouse (although if your spouse is also new to the US, it probably won't make much difference). When you use the foreign earned income exclusion, I'm assuming it will bring your US taxes down to zero for the year. If not, you can use the foreign tax credit. You can also deduct any UK mortgage interest payments.
I wouldn't bother with a tax accountant for this, and you won't find one for $100 that can do anything remotely complicated and actually save you money.
Arriving in December is a too late to make big (any) tax savings in the US, but you should be able to take advantage of it in your UK taxes.
I wouldn't bother with a tax accountant for this, and you won't find one for $100 that can do anything remotely complicated and actually save you money.
Arriving in December is a too late to make big (any) tax savings in the US, but you should be able to take advantage of it in your UK taxes.
Jan 10th 2002, 6:02 pm
#9
Guest
Posts: n/a
Rete wrote:
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Even so, there are accountants in the US that do both. They are easy to find at one
of the big accountting firms.. True, they are not cheap..
One of the benefits of
moving to our support center in Brussels would having the taxes filed by one of these
big firms.
Michael
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Even so, there are accountants in the US that do both. They are easy to find at one
of the big accountting firms.. True, they are not cheap..
One of the benefits ofmoving to our support center in Brussels would having the taxes filed by one of these
big firms.
Michael
Jan 10th 2002, 6:39 pm
#10
Concierge
Joined: Apr 2001
Posts: 46,390
My husband prefers to have his Canadian taxes done by an accountant in Canada. Since he is a property owner as well as pensioner of the country, he visits Canada regularly and prefers this approach.
As for the costs, our accountant here in the States only charges $100. Think that is a small price to pay.
As for the costs, our accountant here in the States only charges $100. Think that is a small price to pay.
Jan 10th 2002, 6:45 pm
#11
Concierge
Joined: Apr 2001
Posts: 46,390
My husband prefers to have his Canadian taxes done by an accountant in Canada. Since he is a property owner as well as pensioner of the country, he visits Canada regularly and prefers this approach.
As for the costs, our accountant here in the States only charges $100. Think that is a small price to pay.
As for the costs, our accountant here in the States only charges $100. Think that is a small price to pay.
Jan 10th 2002, 8:07 pm
#12
Forum Regular
Joined: May 2001
Posts: 104
Originally posted by Rete
Since you have not earned any monies in the US for the brief period of time you have been here you really don't have to file for the year 2001.
Since you have not earned any monies in the US for the brief period of time you have been here you really don't have to file for the year 2001.
Man, I hate taxes.
Jan 10th 2002, 8:41 pm
#13
Concierge
Joined: Apr 2001
Posts: 46,390
Perdue
To be honest with you since you reminded me that he is a PR, I am now perplexed. INS isn't going to hunt him down for not filing. After all he was only here for two weeks -- December 14/31 and hasn't earned any money in the US. However, his wife is a USC and by law has to report her income. Not necessarily on a joint return. Don't know if she has any income to report from having worked in the UK. Even if she didn't work there, they could file jointly with the IRS and only claim their joint worldwide income and take the write off.
Safest bet is to call the IRS and ask them for their advice. Also wondering what his wife did for the years she resided in England in regards to filing US taxes.
Rita
To be honest with you since you reminded me that he is a PR, I am now perplexed. INS isn't going to hunt him down for not filing. After all he was only here for two weeks -- December 14/31 and hasn't earned any money in the US. However, his wife is a USC and by law has to report her income. Not necessarily on a joint return. Don't know if she has any income to report from having worked in the UK. Even if she didn't work there, they could file jointly with the IRS and only claim their joint worldwide income and take the write off.
Safest bet is to call the IRS and ask them for their advice. Also wondering what his wife did for the years she resided in England in regards to filing US taxes.
Rita
Jan 11th 2002, 9:33 am
#14
Guest
Posts: n/a
Rete wrote:
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True, IRS won't "hunt him down". However INS has been known to be picky about PRs
following even the tiniest laws. It doesn't matter if they PR has US income or not.
He has to report foreign income, even if he can exclude it for being under $78000.
However, his wife is a USC and by law has to report her
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They wouldn't have to do a joint return, but I don't think they are going to save
money if she files a married filing separately. This could put her into the next tax
bracket. Legally, as a PR, he is supposed to file. And, with the exclusion, they can
file jointly with possibly no income added from him. This may actually put her in a
lower bracket. At a minimum, she gets his exemption.
Michael
Michael
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True, IRS won't "hunt him down". However INS has been known to be picky about PRs
following even the tiniest laws. It doesn't matter if they PR has US income or not.
He has to report foreign income, even if he can exclude it for being under $78000.
However, his wife is a USC and by law has to report her
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They wouldn't have to do a joint return, but I don't think they are going to save
money if she files a married filing separately. This could put her into the next tax
bracket. Legally, as a PR, he is supposed to file. And, with the exclusion, they can
file jointly with possibly no income added from him. This may actually put her in a
lower bracket. At a minimum, she gets his exemption.
Michael
Michael
