Non immigrant visa - taxes
 

Hi all,

I moved to the USA from the uk in August. I am employed on an h-1b visa. My question is about taxes. I tried to use turbo tax to file my taxes but stopped when I was asked questions about my foreign income. I was asked to declare foreign banks and earnings etc. I didn't quite understand the questions I was being asked and I wonder if anyone could clear this up- on a USA tax return do I need to declare earnings from the uk since I became a non-resident alien in August? Or do I need to die are earnings in, for example, march if 2014 when I was not a USA resident? The latter seems peculiar to me but I thought I would check- why would the USA need to know about my uk income that I paid uk tax on?

A quick search of non immigrant taxes did not yield an answer.

Thank you for your help.

Re: Non immigrant visa - taxes
 

The first year can be complicated.

Something that you need to figure out before going any further is whether the IRS considers you to be a resident or non-resident alien for 2014 since that will help to determine what income you need to report.

Since you didn't move to the U.S. until August you might be non-resident but that will depend on whether or not you meet the "substantial presence test" which considers the amount of time that you have been physically present in the U.S. during the past three years.

See Taxation of Nonresident Aliens and Substantial Presence Test for starters.

Re: Non immigrant visa - taxes
 

As Md95065 said, the first year can be complicated, and the answer may be a "dual status" return for your first year only. The way to calculate your taxes for 2014 is to compare the taxes due under a dual status return with those due under a "normal" return, which would mean global income. The benefit of choosing the normal return is that you get the "standard deduction", but you may need professional help to prepare returns on the two bases and decide which is better for you, and if your tax software doesn't support dual status returns then that may be your only option.

To answer your general question though, just because you are on a non-immigrant visa does not mean that you aren't resident in the US for tax purposes, because from 2015 onward you most certainly are and that means tax on your world wide income.

Re: Non immigrant visa - taxes
 

Ok sounds like I will be needing help with this. Thank you for your replies. I have an appointment at an h and r block with someone who apparently is experienced in helping people like me file.

Re: Non immigrant visa - taxes
 

Take that one with a pinch of salt (or bucket as applicable).

Re: Non immigrant visa - taxes
 

H&R Block are totally useless on dual-status returns. You need a serious accountant for a dual-status return.

The better idea is to understand what a dual-status return is by reading IRS Publication 519. It's essentially a pro-rated return for the part of the year you were in the US and you file a 1040NR for the first part of the year declaring any US-source income (which is probably nil, so a blank return).

You can elect to be resident for the whole year as explained in publication 519 but if you do that, any money you earned in 2014 prior to moving to the US becomes subject to US taxes.

In the 2011 edition of publication 519 there is a step-by-step example of a dual-status return.

I'm told TaxACT can do dual-status returns if you insist on using software.

Re: Non immigrant visa - taxes
 

And the last year, unless he becomes a U.S. citizen.