Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Filing Taxes as green card holder

Filing Taxes as green card holder

Old Jul 29th 2019, 7:42 pm
  #1  
Just Joined
Thread Starter
 
Joined: Dec 2018
Posts: 21
klawrence is an unknown quantity at this point
Default Filing Taxes as green card holder

Hi again...we planned to have my husband, the UKC, have his visa approved around August/September, convert to a green card in October during a visit to the US, then officially move around January. I just realized, however, that green card holders must file taxes on all income, even income earned abroad like regular USC do. So would this mean he’d have to file a return next year for 2019 and declare all his UK income and potentially pay a huge tax bill to the US? (I’m aware that you owe US taxes if you earn over a certain amount in the UK). If that’s the case we’ll just avoid him going to the US until January, but wanted to check if this makes sense. Thank you!
klawrence is offline  
Old Jul 29th 2019, 7:50 pm
  #2  
Often not so civil...
 
civilservant's Avatar
 
Joined: Apr 2010
Location: The Boonies, GA
Posts: 7,663
civilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond repute
Default Re: Filing Taxes as green card holder

As a US resident (which he is as a GC holder) yes he files taxes on his whole income for the year. There is a treaty, however, between the UK and US to avoid double taxation.

I would advise hiring a professional to do his taxes the first year rather than use something like Turbotax.
civilservant is offline  
Old Jul 29th 2019, 8:33 pm
  #3  
Just Joined
Thread Starter
 
Joined: Dec 2018
Posts: 21
klawrence is an unknown quantity at this point
Default Re: Filing Taxes as green card holder

Can he enter the USA as a visitor for our 5 day visit if his visa is approved at that point? Does he have to present it when he lands?
klawrence is offline  
Old Jul 29th 2019, 8:41 pm
  #4  
Often not so civil...
 
civilservant's Avatar
 
Joined: Apr 2010
Location: The Boonies, GA
Posts: 7,663
civilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond reputecivilservant has a reputation beyond repute
Default Re: Filing Taxes as green card holder

He doesn't have to activate it if he doesn't want too, but will have to request entry under the VWP, and the Officer may not let him with a valid immigrant visa in his passport. No harm in asking though.

I don't think 'I want to avoid taxes for this year' will go down well as a reason if he's asked why though.
civilservant is offline  
Old Jul 29th 2019, 10:27 pm
  #5  
Concierge
 
Rete's Avatar
 
Joined: Apr 2001
Posts: 43,727
Rete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond repute
Default Re: Filing Taxes as green card holder

The term is permanent resident vs green card holder. As a PR, you need to file US taxes, the same as you the USC spouse needs to do, but I believe it is not on monies earned for the time he was not a PR but only from the time his PR status started. I do suggest you contact a tax accountant who is familiar with foreign earned income once you are in the US.
Rete is offline  
Old Jul 30th 2019, 3:31 pm
  #6  
Forum Regular
 
Joined: Sep 2005
Location: Andover, MA
Posts: 250
rew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud ofrew1000 has much to be proud of
Default Re: Filing Taxes as green card holder

Once someone has lawful permanent resident status (green card) or meets the "substantial presence" test they are a "resident alien" and pay tax on worldwide income (but with credits/deductions for foreign tax paid, and the ability to rely on the US-UK tax treaty). A "non-resident alien" only pays US tax on US-sourced income.

For the first year, it is possible to be a "dual status" alien - nonresident at the beginning of the year, resident at the end of year. In this situation, you basically fill out two tax forms, one for the nonresident part of the year, one for the resident part of the year. The gory details are at https://www.irs.gov/individuals/inte...-status-aliens and https://www.irs.gov/publications/p519.

My guess is this is only worth worrying about if the foreign income is large (>$100k) or there is a significant benefit to filing a joint return (usually if one person's income is much lower than the other).







rew1000 is offline  
Old Jul 31st 2019, 12:55 pm
  #7  
Forum Regular
 
Joined: Apr 2017
Posts: 121
Chins is an unknown quantity at this point
Default Re: Filing Taxes as green card holder

I triggered my Visa end of Oct and then filed taxes for that year. Mentioned in another thread you are then hopefully triggering your SSN or worst case the minimum waiting period. You also trigger the 3 year period on citizenship. So in my mind its good to do.

My tax return was interesting. I hired an HR Block advisor. In all it cost me $1000 - paid them $500 and $500 to the state of New Jersey for tax. Sounds bad so far . However i ended up with a $5000 tax credit as i continued to work abroad in Nov/Dec. So each time i travel to Europe on business i can claim some of this back. Works out to about 30 days which i need to use i think over 5 years. Used a block advisor again this year as filing jointly, property disposal in UK, condo in SD, so not the easiest.
Chins is offline  
Old Jul 31st 2019, 6:15 pm
  #8  
tht
DE-UK-NZ-IE-US... the TYP
 
Joined: Mar 2010
Posts: 1,160
tht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond reputetht has a reputation beyond repute
Default Re: Filing Taxes as green card holder

A coupe of things for the OP to keep in mind. When looking at tax residence you have to look at the local rules for everywhere you may be considered a tax resident, it is possible to be tax resident in multiple places at once depending on your circumstances, being tax resident in 1 place does not mean you may not also be in another. As others note there is a DTA between the UK and US, this helps cap your federal / HMRC tax at the higher of the 2 if both apply, but take in to account that tax's paid in the UK can’t be offset / credited against state and city tax owed as a resident if applicable in the US, so you can end up with an unused credit to carry forward in the US at the federal level. Also make sure you understand how AMT works in the US.
tht is offline  
Old Aug 1st 2019, 9:44 pm
  #9  
Just Joined
Thread Starter
 
Joined: Dec 2018
Posts: 21
klawrence is an unknown quantity at this point
Default Re: Filing Taxes as green card holder

We just spoke to our tax people around specific questions related to our plans and income. Besides it being an expensive 30 minute phone call...I’m feeling much better. It doesn’t sound like we’d owe anything extra to the US if we trigger his permanent resident status in October. I’ve been using Taxes for Expats for several years for myself and have always had a good experience with them, in case anyone is looking! Now will schedule his medical appointment again after we canceled it this week in a panic! Thank you for all your advice.
klawrence is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.