Tax questions

[yemmie]

Hello again,

 

Please forgive me, I am not sure where to put this post.

 

My wife and I got married in December. My understanding is that we can file jointly for the 2008 federal income taxes. She had no income so that should help me out some.

 

This year, we are strongly considering moving some of our assests to China. Am I correct that as long as you do not take any money out of China to the U.S. that that money is not taxable in the U.S.? Also, I am unclear on how much money can be transferred out of the U.S.(invested) over there without any hassle, and I am wholy ignorant of what special filings with the federal government which might be required. Any guidance would be greatly appreciated.

[yuehan123]

My understanding is that we can file jointly for the 2008 federal income taxes...

Am I correct that as long as you do not take...

Also, I am unclear on how much money can be transferred out of the U.S.(invested) over there without any hassle,

and I am wholy ignorant of what special filings with the federal government which might be required.

Yes, you are eligible to file jointly. First, for the caveat- "seek Professional Tax Advice." Then see this thread http://candleforlove.com/forums/index.php?showtopic=22151

 

'take' money from anywhere to somewhere has very little, if anything, to do with taxes. However, the IRS probably insists you notify them of any 'foreign' bank accounts, particularly those that earn interest. The US income tax system is based on earned and unearned income. Gifts, for example, are taxable.

 

How much can you transfer without hassle? Depends on your bank, I guess. Several members here have purchased one or more houses in China, presumably using money transferred from USA. Recall that a former governor of New York lost his job legally transferring and withdrawing money, initially without hassle.

 

Special filings? Refer to answer # one.

[NewDay2006]

In order to get the ITIN number you will have to send in a paper return

 

into a Texas IRS office. When I got the ITIN for my wife it was amended return. It ended up coming maybe 3-4 months later if my memory serves me correctly(sometimes it doesn't )

 

IMO IF you want you money first, filed electronically, I'm assuming a refund is coming.. then file file the amended return to get the ITIN... from then on you can file electronically until she is here.

[yemmie]

In order to get the ITIN number you will have to send in a paper return

 

into a Texas IRS office. When I got the ITIN for my wife it was amended return. It ended up coming maybe 3-4 months later if my memory serves me correctly(sometimes it doesn't )

 

IMO IF you want you money first, filed electronically, I'm assuming a refund is coming.. then file file the amended return to get the ITIN... from then on you can file electronically until she is here.

Sorry Guys, I can see from the responses I did not express myself very well. My wife is already here. She arrived in November on a K1 and we got married on Dec.15, 2008. We received her SS card on 01-14-09, so can we file jointly for our 2008 taxes using her SSN or will I need to get an ITIN for her?

 

Thanks.

[Sebastian]

Use her SSN.

[georgeandli]

Just like if you have a baby in December, you get the whole year deduction

[Richard & Li]

IRS publication 519 specifies the rules regarding a non-resident alien opting to be treated as a resident alien for the first year of tax filing.

 

I believe one restriction is that the non-resident alien must have lived in America for 30 consecutive days during 2008.

 

I'm not a tax expert. I had a similar question and looked it up.

[Richard & Li]

AH! I misread your question. I was thinking she arrived in December.

 

You should be fine filing jointly. I determined that we could and your circumstances are similar to ours.

[Craig and Mingjun]

I married my first wife on December 28, and we had to file jointly for the whole year. Granted, she was a USC, but from what I read, the important thing is the marriage. Nothing else really matters that I am aware of, but I am not a CPA, so I really know nothing

[Randy W]

I married my first wife on December 28, and we had to file jointly for the whole year. Granted, she was a USC, but from what I read, the important thing is the marriage. Nothing else really matters that I am aware of, but I am not a CPA, so I really know nothing

 

The marriage penalty kicks in when your spouse has a sizable income, since that income is tacked on top of yours, putting you into a higher tax bracket. In this situation, you're better off (financially) to wait until January.

 

The marriage benefit, on the other hand, happens when your spouse has no (or very little) reportable income. You then file your income tax for the same amount of income, but at the lower married filing jointly rate. In this situation, it is advantageous to get married in December

[2mike&jin]

Hello again,

 

Please forgive me, I am not sure where to put this post.

 

My wife and I got married in December. My understanding is that we can file jointly for the 2008 federal income taxes. She had no income so that should help me out some.

 

This year, we are strongly considering moving some of our assests to China. Am I correct that as long as you do not take any money out of China to the U.S. that that money is not taxable in the U.S.? Also, I am unclear on how much money can be transferred out of the U.S.(invested) over there without any hassle, and I am wholy ignorant of what special filings with the federal government which might be required. Any guidance would be greatly appreciated.

 

0. Many have aswered the tax filing issue, yes you can file (I'm doing the same thing) together, and generally as long as she was earning wages in China and paying taxes, you will be better off filing together in the US regardless of the amount of money she made in China.

 

1. You can take as much money as you want to China. I have carried it, I have bank transferred it to my accounts there, and have transferred it to my wife and wife's relatives. No problems.

 

2. Each person - i.e. can exchange $50,000.00 USD per year (12 months). I tried the 2 bank multiple account approach - they are linked via computer - and they catch you trying! If you want to transfer a few million - your going to need a lot of your wife relatives - each can do $50K a year. I found no "viable strategy" for my own purchase of large amounts of RMB, betting the dollar would drop over time. If you want to do this you need to.... set up a currency exchange account and do it right - not individually with Chinese banks, accounts, etc!

 

3. All Income, Interest, investment, gifts, etc...ARE ALWAYS taxable to US citizens regardless of source of income WORLDWIDE. However, if you work overseas - some amounts can be excluded if rules are followed - this "wages only" from a foreign country - last time I checked - ~ $86K a year. There are threads here and on VJ about the "wages" exclusion methods -- follow the IRS guidelines.

 

4. Generally, if you move $ to a CHINA Bank, you will earn interest on the money. Both my spouse and I have accounts, her's are "CD" types with gurantees of non-withdrawal for higher interst returns. I spent some time with the bank trying to understand how they "grant the interest". It turns out for the Bank of China, they grant it - and post it in your bank book - when you present it to them. They do not issue monthly, yearly, etc statements. My plan is each time I go back to have the bank updated with the "earned interst" to date and use that to file. Additionally, TAXES for CHINA are taken out at the same time they post the interest to your bank book. For the last 2 years it's been about 5% tax on the interest. I've heard (Not confirmed) that they have dropped the interest rates - and eliminated the tax. Either way -- it makes not much difference...as it isn't that much - BUT Don't forget to include in your US taxes and pay the "regular rates for the interest". Honk Kong is better place for taxes and paid interest - the REAL problem there is that the HKD is pegged to the USD - and when our inflation goes through the roof -- there is a lot of speculation about what they will do with the HKD!

 

5. Don't forget - each year when you file your taxes you will have to tell them if you have a foreign bank account with over $10,000 at anytime during the year. You file an IRS TD F 90-22.1 NLT than the following June with details of the account.

 

6. Additionally, as many have said here and other threads -- foreigners can invest, own real estate, and the like in China. Real Estate only makes sense in the long run -- if you sell within 5 years there is a capital gains tax - over 5 years you don't pay (It's five years from when the property is "registered" with the government - no when you buy, not when you pay the 3% tax to the Gov't, not when you possess, not when you are living there...but WHEN the GOV"T gives you or issues, the DEED. Regardless, if you sell at anytime, and have a profit - you will report and pay taxes to the US Government - regardless of when this happens.

 

7. With inflation coming, because of the "bailouts, SSN, Health Care, and big Govt", the only hedge against what will certainly be rampant inflation is "precious metals". Gold is on a tear - silver looks to be the best buy - at least for the moment" -- but anything else is toast - when the inflation fire comes. Japan Economists are predicting a potential 40% inflation for the US Dollar - and they are making plans to "unload" the US treasuries. When you see the US Fed buying our own treasuries -- you'll know the beginning of the end is near! (I think they announced within the last two weeks that if the market [Read no foreign Gov't or Investor was willing to buy them] was not viable during the Treasury sales - the Fed "might" buy them. We're in trouble!!!!

 

8. Those of us who are older and have municipal bonds, we can dodge the increase in taxes - if the states and territories (PR, GUAM, VI) remain viable. The stock market has some short legs but again, inflation will kill it in the end...just when you might need it. Oh, don't forget when everyone wants the money -- it will go down by definition when you have more sellers than buyers. Most have figured these basic investment things out...that's why Gold is gaining every day. Many who have shunned GOld investing, for lot's of reasons, the time to relook might be upon us!