Taxes/First year choice etc

[IllinoisDave]

I'm thinking ahead about taxes.

 

Tell me if I have this right. In order to file Married Filing Jointly with the first year option, Christine must have been here for 31 consecutive days in 2007, (no problem) and meet the substantial presence test for 2008. Since she came October 16th, that means that she won't meet the requirement until April 16th. Am I right so far?

 

All this means that I'll have to wait until April 17th to file? Which means I'll have to file an extension for those two days? Which means that if we had come back two days earlier, I would have saved myself the headache of having to file an extension?

 

And as far as her income... Since an employer in China, (if she had one)wouldn't be reporting her income (if she had any) or any taxes she paid (if she paid any) to the IRS, she probably didn't have any income in 2007 correct? She probably had a volunteer job teaching English to kids correct?

 

Then, when I do file, per an old post of Lee's, I'll need to attach a statement that includes:

 

The statement must contain your name and address and specify the following.

 

?That you are making the first-year choice.

?That you were not a resident in 2005.

?That you are a resident under the substantial presence test in 2007.

?The number of days of presence in the United States during 2007.

?The date or dates of your 31-day period of presence and the period of continuous presence in the United States during 2006.

?The date or dates of absence from the United States during 2006 that you are treating as days of presence.

 

 

Do I have all that right or am I completely mis-reading Lee's post and the IRS website?

Thanks

Edited December 18, 2007 by IllinoisDave (see edit history)

[Randy W]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

Edited December 18, 2007 by Randy W (see edit history)

[IllinoisDave]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

Including the first year choice?

[esun41]

This is what I did in 2006 for 2005 tax year. It may not be relevent to your situation Dave.

 

We were married December 19th, 2005 as she arrived November 7th, 2005 with her children as well.

 

I was able to file married/jointly and use the kids as deductions as long as I had Tax I.D. numbers for them and my wife had a social security number. She had her social security number 2 weeks after arriving and the kids received the Tax I.D. not long after. I was even allowed to use child credit for the daughter which gave me an additional break on my taxes. I did not itemize that year as I did not have enough in deductions. I was not a property owner at that time either.

 

I had my taxes reviewed by a trained professional but prepared them myself using a software program. Both did not red flag my preparation.

 

Maybe the tax laws have changed. I recommend seeking a professional opinion-advice. Don't think you need to wait or extend anything but I may be incorrect in this. My personal experience is all I have to offer.

 

Good Luck,

[Randy W]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

Including the first year choice?

The first year choice affects her Chinese income that you are reporting to the IRS.

[Shenzhen K-1]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

Texas RW for future reference, you only need to be married before the end of the year and get the ssn#??

 

Have you ever compared filling jointly to seperate, not much sense because of $$, right??

 

Merry

[Randy W]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

Texas RW for future reference, you only need to be married before the end of the year and get the ssn#??

 

Have you ever compared filling jointly to seperate, not much sense because of $$, right??

 

Merry

 

 

Yes - or TIN (Taxpayer ID) if you're married and she's still in China. And, yes married filing jointly is the best under almost all circumstances.

[IllinoisDave]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

Including the first year choice?

The first year choice affects her Chinese income that you are reporting to the IRS.

So since she didn't have any income in China the first year option doesn't pertain to us? Just file MFJ?

[IllinoisDave]

This is what I did in 2006 for 2005 tax year. It may not be relevent to your situation Dave.

 

We were married December 19th, 2005 as she arrived November 7th, 2005 with her children as well.

 

I was able to file married/jointly and use the kids as deductions as long as I had Tax I.D. numbers for them and my wife had a social security number. She had her social security number 2 weeks after arriving and the kids received the Tax I.D. not long after. I was even allowed to use child credit for the daughter which gave me an additional break on my taxes. I did not itemize that year as I did not have enough in deductions. I was not a property owner at that time either.

 

I had my taxes reviewed by a trained professional but prepared them myself using a software program. Both did not red flag my preparation.

 

Maybe the tax laws have changed. I recommend seeking a professional opinion-advice. Don't think you need to wait or extend anything but I may be incorrect in this. My personal experience is all I have to offer.

 

Good Luck,

 

Thanks.

She also has her SSN so that helps. Sounds like you and Randy are in agreement that I don't need to extend. That's a relief.

[LeeFisher3]

An immigrant who arrives during 2007 is technically considered a resident for only the part of the year in which they arrived, which pro-rates the deduction. The first year choice bypasses the pro-rated deduction and allows you to claim the full amount.

 

The question comes up, does it matter? The answer is yes and no.

 

If a future examination of your tax return determines you didn't make the first year choice you get fined and pay back some money. But if the IRS makes an issue of it there is the possibility it could affect your LPR spouse who is held to a different letter of the law by the USCIS.

 

It's a simple letter to write and keeps everything above board, most tax professionals have never read the items pertaining to immigrants.

 

So if the 6 month date hits on April 17th, I'd file everything on the 15th assuming it won't be opened until the 17th or later. I doubt anyone would notice or even care about a couple of days.

[IllinoisDave]

An immigrant who arrives during 2007 is technically considered a resident for only the part of the year in which they arrived, which pro-rates the deduction. The first year choice bypasses the pro-rated deduction and allows you to claim the full amount.

 

The question comes up, does it matter? The answer is yes and no.

 

If a future examination of your tax return determines you didn't make the first year choice you get fined and pay back some money. But if the IRS makes an issue of it there is the possibility it could affect your LPR spouse who is held to a different letter of the law by the USCIS.

 

It's a simple letter to write and keeps everything above board, most tax professionals have never read the items pertaining to immigrants.

 

So if the 6 month date hits on April 17th, I'd file everything on the 15th assuming it won't be opened until the 17th or later. I doubt anyone would notice or even care about a couple of days.

 

Thanks Lee.

So I go ahead and file MFJ,opt for the first year choice and include the letter I found in your old post that I cited above? Then we're good to go legally correct?

 

And how does all this affect her income, or lack thereof, as Randy mentioned?

[LeeFisher3]

An immigrant who arrives during 2007 is technically considered a resident for only the part of the year in which they arrived, which pro-rates the deduction. The first year choice bypasses the pro-rated deduction and allows you to claim the full amount.

 

The question comes up, does it matter? The answer is yes and no.

 

If a future examination of your tax return determines you didn't make the first year choice you get fined and pay back some money. But if the IRS makes an issue of it there is the possibility it could affect your LPR spouse who is held to a different letter of the law by the USCIS.

 

It's a simple letter to write and keeps everything above board, most tax professionals have never read the items pertaining to immigrants.

 

So if the 6 month date hits on April 17th, I'd file everything on the 15th assuming it won't be opened until the 17th or later. I doubt anyone would notice or even care about a couple of days.

 

Thanks Lee.

So I go ahead and file MFJ,opt for the first year choice and include the letter I found in your old post that I cited above? Then we're good to go legally correct?

 

And how does all this affect her income, or lack thereof, as Randy mentioned?

I haven't checked this year to see what updates, if any, apply to the IRS publications. They are usually a bit late in getting them published waiting for last minute changes made by congress. Last year they didn't even update the publication to the current tax year until April.

 

Filing jointly doesn't require that she have any income.

 

What you are doing is legally taking a full year deduction for a partial year of residency by agreeing to include her full years world wide income as US income.

 

Now if she didn't have any income it's not your fault that you got a good deal and the IRS didn't rake in extra income because of your situation.

 

After reading the section again, you are supposed to file an extension if she does not meet the substantial presence test by April 15 and pay any taxes you expect with that extension. I'd bet that you will be receiving a refund so filing an extension and mailing your return on April 18 doesn't have a down side.

[IllinoisDave]

An immigrant who arrives during 2007 is technically considered a resident for only the part of the year in which they arrived, which pro-rates the deduction. The first year choice bypasses the pro-rated deduction and allows you to claim the full amount.

 

The question comes up, does it matter? The answer is yes and no.

 

If a future examination of your tax return determines you didn't make the first year choice you get fined and pay back some money. But if the IRS makes an issue of it there is the possibility it could affect your LPR spouse who is held to a different letter of the law by the USCIS.

 

It's a simple letter to write and keeps everything above board, most tax professionals have never read the items pertaining to immigrants.

 

So if the 6 month date hits on April 17th, I'd file everything on the 15th assuming it won't be opened until the 17th or later. I doubt anyone would notice or even care about a couple of days.

 

Thanks Lee.

So I go ahead and file MFJ,opt for the first year choice and include the letter I found in your old post that I cited above? Then we're good to go legally correct?

 

And how does all this affect her income, or lack thereof, as Randy mentioned?

I haven't checked this year to see what updates, if any, apply to the IRS publications. They are usually a bit late in getting them published waiting for last minute changes made by congress. Last year they didn't even update the publication to the current tax year until April.

 

Filing jointly doesn't require that she have any income.

 

What you are doing is legally taking a full year deduction for a partial year of residency by agreeing to include her full years world wide income as US income.

 

Now if she didn't have any income it's not your fault that you got a good deal and the IRS didn't rake in extra income because of your situation.

 

After reading the section again, you are supposed to file an extension if she does not meet the substantial presence test by April 15 and pay any taxes you expect with that extension. I'd bet that you will be receiving a refund so filing an extension and mailing your return on April 18 doesn't have a down side.

Cool. Thanks again.

[mchina34]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

 

i second that, that's what i heard.

[LeeFisher3]

To file married filing jointly, you need to be married by Dec 31st. The rest is all stuff that you don't need to worry about, unless you would like to make a donation to the IRS in Christine's and your own name.

 

She does not even have to have been in the country at all this year.

 

 

i second that, that's what i heard.

That's one way, IRS Publication 519, Tax Guide for Aliens presents the law on filing.

 

Married filing jointly is proper if you were married before the end of the year, but being able to claim a full year residency when you do not meet the rules for alien residency would not stand up under a simple audit review by the IRS.

 

So I ask again, is it worth the risk of having your LPR spouse being charged with Tax Fraud just to avoid writing a simple letter? Remember you are having them sign the return as well.

 

While I doubt the IRS would do more than fines and penalties, they have the option to take it further and any criminal charges can have a dramatic affect on Immigrants by the USCIS.