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Old 02-17-2015, 04:17 PM
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Dual status foreign income

Hi!

I'm so confused and I hope somebody can help me here. I spoke to about 5 accountants and each one is saying something else.

I came to the US in September 2010 as a green card holder. I was here for two weeks and left back to Poland for the rest of the year. I was just working in Poland in 2010 and I was single. I did file my taxes in my home country. I did not file a tax return for 2010 in the US as I was advised by a CPA. I came back to the US in 2011 and started filing taxes since then.

I read on the IRS website that under Green Card test I should file dual status tax return on worldwide income because I became a resident in September. I had no income in the US. What forms should I file? Can I claim foreign earned income exclusion if dual status? There is a tax treaty agreement with Poland.

Thanks for any advise!



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Old 02-18-2015, 06:58 AM
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I came to the US in September 2010 as a green card holder. I was here for two weeks and left back to Poland for the rest of the year. I was just working in Poland in 2010 and I was single. I did file my taxes in my home country. I did not file a tax return for 2010 in the US as I was advised by a CPA. I came back to the US in 2011 and started filing taxes since then.========>>>>>>>>>> Look closely at your green-card, it says "Resident Since" on it. As you said, aslongas you came to US as a green card holder, then you had to file US return for 2010; a green card holder , as a US resident, need to report both US source and world wide income that you earned at that time.I mean UNLESS you had reportable taxable on income that you earned in US and Poland, you had to fileyour US return as a US resident.

I read on the IRS website that under Green Card test I should file dual status tax return on worldwide income because I became a resident in September. I had no income in the US. What forms should I file?====. No I do not think so as you were already green card holder NOT a dual status filer. DUAL status filer means that for example say you moved to the US from Poland in July 2010 and got your Green card in December 2010. As a result you area dual status alien for the year 2010, NOT in 2011.

when you have been both a U.S. resident alien and a nonresident alien in the SAME tax year For example, if you , for The Part of the Year , are a U.S. Resident Alien

For the part of the year you are a U.S. resident alien, you are taxed on income from all sources. Income from sources outside the US is taxable if you receive it while you are a resident alien. If you, For The Part of The Year , are a Nonresident Alien.For the part of the year you are a nonresident alien, you are taxed on income from U.S. sources only.

Can I claim foreign earned income exclusion if dual status? There is a tax treaty agreement with Poland.========>>>>>>>>>>as mentioned above; no not for dual status alien as dualstatus alien is still non resident.The General Rules To qualify for the foreign earned income exclusion, a U.S. citizen or resident alien must have a tax home in a foreign country and income received for working in a foreign country, otherwise known as foreign earned income. The taxpayer must also meet one of two tests: the bona fide residence test or the physical presence test.



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Old 02-18-2015, 09:42 PM
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Thank you for response.

So are you saying that I should file a return as a Resident and declare my income since September 2010 on the return?

I found this sentence in Publication 519 'You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2014'

and this one is exactly about me '
Residency starting date under green card test. If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident'
based on this Im Resident for the whole year? So I can claim the foreign income exclusion...


Last edited by prezes : 02-18-2015 at 09:58 PM.


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Old 02-18-2015, 09:58 PM
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Thank you for response.

So are you saying that I should file a return as a Resident and declare my income since September 2010 on the return?

I found this sentence in Publication 519 'You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2014'

and this one is exactly about me '
Residency starting date under green card test. If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident'
based on this Im Resident for the whole year? So I can claim the foreign income exclusion...


Last edited by prezes : 02-18-2015 at 09:59 PM. Reason: correction


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Old 02-18-2015, 10:40 PM
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Originally Posted by prezes View Post
So are you saying that I should file a return as a Resident and declare my income since September 2010 on the return?...
you said that you were a GREEN CARD HOLDER in 2010 by saying,"I came to the US in September 2010 as a green card holder." this means that you were a alreday a US permanent resident witha SSN#, then as a US permanent resident, you are SUBJECT TO US TAXES( to IRS/ your home state) on your WORLD WIDE and US SOURCE income and you must file form 1040. You are NOT a duaL STATUS AILIEN or you are not a US resident for tax purposes. Why? because you received your green card in 2010.



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Old 02-18-2015, 11:08 PM
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Thank you! Pls let me understand. So I should file 2010 1040 for my worldwide income since September 2010 right?



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Old 02-19-2015, 02:47 AM
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Originally Posted by prezes View Post
Thank you! Pls let me understand. So I should file 2010 1040 for my worldwide income since September 2010 right?
yes; however aslongas you paid taxes on your income that you eanred in poland to polish taxing authorities, then you CAN claim those taxes paid to Poland on your US return as foreign tax credit. you need to file form 1116; i mean if you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

Taken as a deduction on sch a of 1040 line 8, foreign income taxes reduce your U.S. taxable income.

Taken as a credit on form 1040 line 47, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.

or for ofreign earned incoem exclusion, please visuit the irs website here;
Foreign Earned Income Exclusion - Requirements



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Old 02-19-2015, 11:27 PM
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That helps a lot. Thank you!

Do you know what are the consequences or penalty for filing 4 years late?


Last edited by prezes : 02-19-2015 at 11:29 PM. Reason: Adding question


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Old 02-20-2015, 03:52 PM
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Originally Posted by prezes View Post
That helps a lot. Thank you!

Do you know what are the consequences or penalty for filing 4 years late?
The IRS has three years to give you a refund, three years to audit your tax return, and ten years to collect any tax due. Together, these laws are called the statute of limitations

not only penalties yopu also need to pay interest aslongas you owed taxes to IRS/your state, Or if you can’t pay the tax all at once. The IRS has a number of ways for people to pay their tax bill.If you get a bill for late taxes, you are expected to promptly pay the tax owed including any penalties and interest. If you are unable to pay the amount due, it is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS.you may be granted a short additional time to pay your tax in full. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at Internal Revenue Service or by calling 800-829-1040.You may request an installment agreement if you cannot pay the liability in full. This is an agreement between you and the IRS to pay the amount due in monthly installment payments. You must first file all required returns and be current with estimated tax payments. i guess you need to contact an IRS enrolled agent or a CPA in your local area for more info in detail.



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