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Immigrant visa - Start date from US tax perspective

Immigrant visa - Start date from US tax perspective

Old Sep 14th 2016, 10:29 am
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Default Immigrant visa - Start date from US tax perspective

Hello all,
When receiving a green card under an IR-1 application, what is the start date from the IRS's perspective from a tax point of view?
The day I receive the temporary VISA in my passport after the interview or the date I first enter the US and get stamped?
(Something else?)

Thanks
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Old Sep 14th 2016, 11:55 am
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Default Re: VISA - Start date from US tax perspective

Originally Posted by MrSunu
When receiving a green card under an IR-1 application, what is the start date from the IRS's perspective from a tax point of view?
AFAIK for individuals, the start date is always January 1 of the year you enter the US.


The day I receive the temporary VISA in my passport after the interview or the date I first enter the US and get stamped?
VISA is a registered trademark for a credit card company. The word "visa" is a simple noun. At any rate, January 1.

Ian
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Old Sep 14th 2016, 12:21 pm
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Default Re: VISA - Start date from US tax perspective

The date you become a US PR. You don't become a US PR until you enter the USA using your immigration visa

The time between getting your visa and entering the USA is only a few months at most anyway.

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Old Sep 14th 2016, 12:24 pm
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Default Re: VISA - Start date from US tax perspective

You become tax resident on entering the US. This in theory makes you liable for taxes from January 1 of the year you enter the US, however you can elect for a transitional treatment for that first year by excluding income prior to your arrival in the US, but you will lose out on your "standard deduction" and the ability to file jointly (assuming your spouse is a USC). If you file taxes for the whole calendar year you can get a credit for taxes paid overseas before you became tax resident in the US.
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Old Sep 14th 2016, 1:59 pm
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Default Re: VISA - Start date from US tax perspective

Thank you all this is very clear.

I will keep a close watch on my "Caps Lock" key Ian...
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Old Sep 14th 2016, 1:59 pm
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Default Re: VISA - Start date from US tax perspective

There is some confused advice in this thread, though only Ian is actually wrong. This is what comes of asking a tax question to the BE experts on immigration.

There are two tests for US tax residency - the substantial presence test, and the green card test. The latter is more important for you, and, as Rene says, it means that you count as tax resident as soon as you arrive. If you are only tax resident for part of the year, you count as dual status, meaning you are only taxed by the US on income after you arrive. You can, however, elect to be treated as tax resident for the whole year if you are a legal resident, and this can sometimes be worthwhile.

All the information you need is at this link.
https://www.irs.gov/individuals/inte...ien-tax-status
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Old Sep 14th 2016, 3:09 pm
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Default Re: VISA - Start date from US tax perspective

Thank you Owen, sorry for misclassifying.
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Old Sep 14th 2016, 5:46 pm
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Default Re: Immigrant visa - Start date from US tax perspective

I would read through this document, and maybe then ask questions. Especially the part labelled First Year of Residency

https://www.irs.gov/publications/p51...link1000222164
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Old Sep 16th 2016, 2:21 am
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Default Re: VISA - Start date from US tax perspective

Originally Posted by MrSunu
Thank you all this is very clear.
If you think that any part of the U.S. Tax Code is "very clear" then there is a high probability that you didn't understand some or all of it ...

(Conveniently, exactly the same caution applies if you found it confusing.)

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Old Sep 16th 2016, 9:45 am
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Default Re: Immigrant visa - Start date from US tax perspective

Oh no you're very right, the US tax is the most obscure thing I ever came across. What's clear to me is that I can treat my first year in 2 different ways, and plan accordingly in terms of taxes in between the US and the UK.
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Old Sep 23rd 2016, 1:41 am
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Default Re: VISA - Start date from US tax perspective

Originally Posted by Owen778
There are two tests for US tax residency - the substantial presence test, and the green card test.
Actually assuming he's from the UK the relevant bit is Article 4 of the tax treaty. Or Article 4 of the tax treaty for wherever he's from.

It does mention the substantial presence test and the green card test in the treaty but the most relevant bit is paragraph 4, which talks about the "centre of vital interests" which is what it really boils down to, because it's pretty easy to make out you're resident in both countries for the purposes of paragraph 1.

This comes up with snowbirds all the time.

But of course, if you make out you're resident elsewhere, it threatens your LPR status.
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Old Sep 23rd 2016, 1:43 am
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Default Re: Immigrant visa - Start date from US tax perspective

Originally Posted by MrSunu
Oh no you're very right, the US tax is the most obscure thing I ever came across. What's clear to me is that I can treat my first year in 2 different ways, and plan accordingly in terms of taxes in between the US and the UK.
You can either be dual-status or elect to be resident for the whole year. The second method is simpler but if you've paid any significant amount of tax abroad prior to immigrating you file dual-status. There is a step-by-step illustration of how to file dual-status in the 2011 edition of IRS publication 519.
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Old Sep 23rd 2016, 3:26 am
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Default Re: VISA - Start date from US tax perspective

Originally Posted by Steve_
Actually assuming he's from the UK the relevant bit is Article 4 of the tax treaty. Or Article 4 of the tax treaty for wherever he's from.

It does mention the substantial presence test and the green card test in the treaty but the most relevant bit is paragraph 4, which talks about the "centre of vital interests" which is what it really boils down to, because it's pretty easy to make out you're resident in both countries for the purposes of paragraph 1.
That's expressed in US terms under the closer connection exception to the substantial presence test. But since he's emigrating to the US under a CR-1 visa, I don't understand why you brought it up.
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