chopper40

I am a UK citizen and became a LPR in July 09. I remained in the UK however, but maintained my green card by frequently returning to the USA. I have been in employment in the UK, but from May 2010 I will be working in Florida permanently. Basically, during 2009 I had no American earnings, although I have been a "resident" for the best part of half the year. My wifes CPA said I dont need to file for 2009 but I'm not sure if this is correct.
I thought I'd still have to report my worldwide (UK) income and enter "zero" for American earned income? I guess I wouldn't have any tax to pay to Uncle Sam for 2009.
I'd appreciate any advice, I'm in a panic and I hate telling accountants how to do their job. I've read it time and time again to make sure to get an accountant who understands the treatment of foreign nationals. Is my families CPA correct???
Thanks

Bob

You want to file even if you owe nothing, not filing could be a sign that you had abandoned your residence and cause problems later down the line.

Noorah101

I agree.

Rene

meauxna

Is your wife a US citizen then? You could be filing a joint return with her.
I think the CPA is confused, and he's probably not up on the immigration consequences of your choice.

US tax returns for citizens and LPRs require that you report all your worldwide income. Due to treaties between the two countries, you likely don't have to pay tax twice, but don't confuse reporting with paying.

Further, because you have been out of the US for a long time, it's more important for you to file a US income tax return as a demonstration of your 'residence'. One of the first things on the 'lose your green card status' list is failing to file a US income tax return as a resident.

I understand about not wanting to offend the CPA, but please take it from those who threw good money after bad.. find someone who does have the experience you need.

Peter Newton

Assuming you made more than $3,650 in the UK from July - Dec, then yes you have to file.

Two scenarios:

(1) You and your wife file seperate returns. Your return might be "dual status" if you were a LPR for only part of the year.

(2) You elect to be treated as US resident for the whole year and can then file jointly with your wife.

Make sure your CPA runs your numbers both ways to see which saves you the most tax.

lilrow83

Not sure what LPR means (legal permanent resident?) but it's late and wanted to answer anyway. I have been in US for less than a year, but I work as a tax preparer (yey!). If you were married and living in the USA on 31 Dec 2009 and have a SSN ( or apply for an ITIN if not) your best bet is to file Married Filing Jointly. Your return will probably see credits that your wife won't see if she did Married Filing Seperately. Plus the USCIS like to see you MFJ.

Don't worry about UK earnings for last year if you are no longer recieving that money. If you now live in USA and are married to a US citizen, file MFJ as above.

ian-mstm

Not true. USCIS doesn't care if you file jointly or separately... they only care that you file as "married".

Ian

meauxna

If you do not know what LPR means, you might not want to give advice on that (it's a specific immigration status.. you might be one also?).

dbj1000

WTF?!?

You get paid to prepare other people's taxes? Let me guess - H&R Block?

It is shocking that you can recklessly give bad advice like this and then reveal that that's what you do for a living! That's REAL money belonging to REAL people that you're dealing with, and it is your responsibility to get it right and when you don't know the answer to ask someone who does.

Now go off and read the IRS website all about first year immigrant tax issues, foreign earned income exclusion and the implications of international tax treaties and tax residence before you offer any more advice.

penguinsix

My advice, and I think the advice of many, is file EVERY year regardless of whether you owe or not.

Let's say you have no income, no tax liability. Technically, if you "don't owe, you don't file" but in a situation in which previous tax returns may be requested (i.e. immigration, naturalization, or for private reasons like a mortgage or loan) it's always better to have a piece of paper that was filed saying "I didn't owe anything" rather than just having you stand in front of a person and saying "I didn't owe anything".

If you don't file and it comes up later as an issue, you have to goto your records and prove to them you didn't actually owe. If you just go ahead and fill out the forms, even if you don't owe, then it's on paper and the folks can check off the little box "filed his tax returns XX year".

Just Jenney

There are so many things wrong with this post, it's not funny. Not funny at all -- and scary considering that you claim to be a professional tax preparer.

Others have pointed out some of your inaccuracies, I'd like to point out the one where you said that he should get an ITIN number if he doesn't have an SSN number. Only those who are ineligible for an SSN number are eligible for an ITIN number. Since the OP is an LPR (yes, that means Legal Permanent Resident), then he IS eligible for an SSN number and therefore INeligible for the ITIN.

TO THE OP: Check out tax Form 2555-Foreign Earned Income Exclusion on http://www.irs.gov.

~ Jenney

dakota44

Totally agree with much of what has been said. You MUST file and I'd get a new tax advisor. The one you have isn't giving good advice. For the 2555 or 2555EZ you need to calculate a presence test. 330 consecutive days in a foreign country, but not necessarily all in that tax year. That's important if you entered the U.S. to stay in, say, October or November of 2009. You then use 330 days beginning in 2008 and ending in 2009. The method of calculation is on the form. One would assume you would be allowed to include the time when you were not an LPR.

dbj1000

I don't know where you're getting 330 days from. From the IRS Substantail Presence Test page:
Since immigration status is unrelated to Tax status, you're correct that ALL days count, regardless of whether someone is an LPR or not.

Peter Newton

He's talking about the physical presence test for the foreign earned income exclusion...

dakota44

Thought I had been clear enough that it is the presence test for the forms 2555 and 2555ez for exclusion of foreign earned income. If one fails the presence test of 330 days and the Foreign Tax Home rule, they have to file a different form, 1116, to receive credit for foreign taxes paid. Unless they meet the Bona Fide Resident test (residence in a foreign country), which I would hesitate to claim if I were an LPR. So it is either Bona Fide resident, or tax home.

Here's the form. http://www.irs.gov/pub/irs-pdf/f2555ez.pdf

This is form 1116 for claiming taxes paid in a foreign country. http://www.irs.gov/pub/irs-pdf/f1116.pdf