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

Need help filing 2010 tax return - foreign tax credit or a deduction?

Need help filing 2010 tax return - foreign tax credit or a deduction?

Old May 2nd 2012, 3:30 am
  #1  
Forum Regular
Thread Starter
 
Joined: Aug 2010
Posts: 71
carmen blue is an unknown quantity at this point
Default Need help filing 2010 tax return - foreign tax credit or a deduction?

I've been posting on another forum and it has led to me posting this question.

I'm a USC and we applied for my husband's immigrant visa in London in 2010. He had his interview early December and when we landed in the USA mid-Dec 2010, he officially got his visa (soon after he received his green card).

To become totally compliant with the IRS, we need to file his 2010 tax return. I filed mine as married filing separately and so we are doing the same for him. I'm so confused as to how to fill it in. He earned about $2500 in those two weeks. It was all earned in the UK and went into his UK bank account (it was for work he did in the UK before he even received his visa). But I believe he needs to report it. He has already paid tax on it in the UK (it was due in Jan of this year).

I started off by filling in the foreign tax credit but then I read that I could deduct the taxes on a Schedule A. How do we even know how much tax he paid on that amount? It's such a rough guess because that $2500 was added to the rest of his income that year and the Inland Revenue have their own tax calculator. I could take a rough guess that it was something like 25%.

If he can list our children as dependents, then that wipes out any tax owed, but can he take the whole exemption if he only got his visa in mid-Dec 2010? And, if so, is there any point in filling in a Schedule A?

Thanks so much for all your wise words!
carmen blue is offline  
Old May 2nd 2012, 6:06 am
  #2  
Lost in BE Cyberspace
 
Joined: Jan 2006
Location: San Francisco
Posts: 10,301
Giantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond repute
Default Re: Need help filing 2010 tax return - foreign tax credit or a deduction?

Originally Posted by carmen blue View Post
I've been posting on another forum and it has led to me posting this question.

I'm a USC and we applied for my husband's immigrant visa in London in 2010. He had his interview early December and when we landed in the USA mid-Dec 2010, he officially got his visa (soon after he received his green card).

To become totally compliant with the IRS, we need to file his 2010 tax return. I filed mine as married filing separately and so we are doing the same for him. I'm so confused as to how to fill it in. He earned about $2500 in those two weeks. It was all earned in the UK and went into his UK bank account (it was for work he did in the UK before he even received his visa). But I believe he needs to report it. He has already paid tax on it in the UK (it was due in Jan of this year).

I started off by filling in the foreign tax credit but then I read that I could deduct the taxes on a Schedule A. How do we even know how much tax he paid on that amount? It's such a rough guess because that $2500 was added to the rest of his income that year and the Inland Revenue have their own tax calculator. I could take a rough guess that it was something like 25%.

If he can list our children as dependents, then that wipes out any tax owed, but can he take the whole exemption if he only got his visa in mid-Dec 2010? And, if so, is there any point in filling in a Schedule A?

Thanks so much for all your wise words!
A tax credit is almost always going to be worth more to you than a schedule A deduction. The former results in a $1 for $1 reduction in taxes; the latter results in a reduction of taxable income, which will be worth whatever percent of $1 your maginal tax rate is per $1 of foreign tax paid. Decent tax software should take the legwork out of claiming a foreign tax credit even for a part-year resident.
Giantaxe is offline  
Old May 2nd 2012, 5:35 pm
  #3  
Forum Regular
Thread Starter
 
Joined: Aug 2010
Posts: 71
carmen blue is an unknown quantity at this point
Default Re: Need help filing 2010 tax return - foreign tax credit or a deduction?

thank you so much for that. just spoke to the irs and because he got his green card in jan, 2011 and wasn't in the usa enough days (from 2008-2011 - they use a certain calculation), he wasn't considered a resident and doesn't have to file! thank you for your info though
carmen blue 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.