Dotterelly

Hi everyone!

I have a large amount of confusion over my tax situation currently. I didn't think I would need to file taxes for 2020 since although I moved to the USA in March, I was on a K1 visa and didn't get my green card until 2021. Due to the pandemic and so on, I didn't get a social security number until I got my green card, and didn't bother with permission to work either. My move was rushed due to the pandemic and I'm still working through getting my affairs in order. Since I had no social security or job I didn't think I needed to file taxes, however I've had some acquaintances suggest I should have filed and that I may owe some taxes on income from money that was held in stocks in the UK last year. I honestly don't know what to do, I haven't been able to figure out whether I should have filed or not from the IRS website and I know the due date is already past so I'm worried that if I should have filed I'll be in trouble.

Can anyone recommend a tax assistance company that has experience with immigrant taxes that I can contact for help? The one my husband uses seemed as confused as I was. Even when I called the IRS contact number they seemed confused also. I really struggle with this sort of thing and need help.

Thanks in advance!

destone

It all comes down to the substantial presence test as per https://www.irs.gov/individuals/inte...-presence-test

Neither the pandemic or your visa/SSN/green card situation has any bearing over this.

tht

not only that, also gross income threshold of around $12,400:
https://www.google.com/amp/s/turbota.../amp/L7pluHkoW

There are many USC who don’t file a tax return.

Even if the income was below there at be a requirement to declare foreign assets:

https://www.irs.gov/businesses/corpo...nancial-assets

and even if they are below the IRS thresholds… there is still the FBAR at $10k+

https://www.fincen.gov/report-foreig...ncial-accounts

LegalEagleTX

Do not let the worry about filing late stop you from filing. You aren't too late, so your penatlies won't be much, but they will grow over time. The best time to file your taxes was by the deadline, the second best time is now. The good thing for you is if you arrived in March, you may be able to file a nil return for 2019 and be entitled to stimulus credits in your 2020 return. If all you have to return is taxable income from the UK that had UK tax deducted then if you can claim the stimulus credits you may find the IRS owes you a cheque.

Glasgow Girl

If your total income for 2020 was more than $12,400 since the date you arrived in the US then you need to file a tax return for 2020. If lower you do not need to.

IF you need to file a tax return, then you may have to complete Form 8938 if your combined total savings and investments in foreign accounts exceed $75,000 (assuming you were single for all of 2020). That is filed with your tax return. A good domestic CPA should be able to take care of you unless you have substantial or complex investments.

If your combined total savings and investments in foreign accounts exceed $10,000 then you need to to file an FBAR with the treasury. This applies whether or not you need to file a tax return. Filing an FBAR is not hard and does not take too long. You set up an online account and file online. https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html. You can easily do this yourself but again a good domestic CPA should be able to help with that.

If your stocks are simply shares held in an individual company and you want to keep them then you should transfer them to a US broker, like Fidelity or Schwab or any other US broker because that will eliminate the need to declare them on an FBAR going forward. Any of the large brokers will be very familiar with the process to transfer stocks and shares into their custody. The process takes about 2 or 3 weeks but is straightforward and they will manage all of the details. You cannot transfer any kind of foreign mutual fund like Unit Trusts, OEICs or Investment Trusts. If you hold these type of investments then you should sell them immediately and reinvest in US based mutual funds. The taxation of foreign assets other than shares held directly with a company listed on a stock market are draconian and get compounded with every year that passes. There are many threads outlining this particular issue, but I cannot emphasize enough how important it is to to get rid of any such investments.

EDIT: If you got married in 2020 then you have other options and obligations. Let us know if that is the case and we may be able to advise further. If so, it would be helpful to know what filing stratus was used (Married Filing Separately or Married Fiiling Jointly)

Dotterelly

Hi,
Thanks to everyone for their advice! I now feel like I have some level of grasp on what I need to do. We did get married in April of 2020, and my husband filed as married filing separately. I think I'll go back to the company my husband used and get assistance from them to make sure I don't miss anything.

Thanks again, this was all so helpful!

Glasgow Girl

If your husband filed an amended return as Married Filing Jointly, MFJ, you would benefit from a much larger standard deduction of $24,800 versus $12,400 for filing Married Filing Separately, MFS. Even if he itemized his deductions and the standard deduction does not apply you would still benefit from paying tax at 10 and 12% on your taxable income up to the first $80,250 versus the $40,125 that applies because he filed MFS. Refiling as MFJ also increases the threshold for having to file Form 8938 to $150,000 so if that applied you may get out of that issue as well.

Of course, you will have to add your income to the new return but unless you have very unusual circumstances warranting filing separately, or your foreign income was quite significant then you will likely find that the IRS sends you a pretty nice refund even after taking into account any tax due on your foreign income. Good Luck!