Discussion:Help figuring out resident alien situation
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Discussion Forum Index --> Tax Questions --> Help figuring out resident alien situation
| 28 May 2010 | |
| Couple from India, scientists, came to CA 6 years ago. Their tax returns have been simple. But now the wife has moved back to India, and works there.
I just can't figure out whether I need to report her India income on the joint Form 1040, or whether I can file a MFS return for the husband and be done with it. I will continue to beat my head in, researching this, but if anyone has any knowledgable advice or direction to give me I would appreciate it. Thanks. | |
| 28 May 2010 | |
| If she moved back in 2009 and does not have a green card, she may not file a 2009 joint return with her husband unless they make a 6013(g) election. If they make a 6013(g) election, she must report her worldwide income for the entire year on the joint return.
Do they have any dependent children? If so, HOH might be an alternative. | |
| 30 May 2010 | |
| Wife not a US citizen, was a green card resident. No children. Has an SS#.
I have just read many of the links regarding 6013 election. So, I file the 6013 with the 2009 MFJ Form 1040, report her Indian income and take a credit for the Indian tax she paid on that income? Seems simple enough. Can she get a spousal ROTH IRA (his income too high for Traditional)? Regarding Foreign Tax Credit. Of course easy when on a Form 1099 from a stock broker. But I expect it will get very confusing putting down withheld tax from this Indian pay on the Form 1116. Any advice to warn me what I am up against on the Form 1116? | |
| 31 May 2010 | |
| If the wife has a green card, they cannot file a 6013(g) election. In fact, until she surrenders her green card, she is treated as a US resident and must report her worldwide income on a US tax return. In addition, she will be required to pay SE tax on any self-employment earnings she recieves in India. | |
| 31 May 2010 | |
| Kendrick, I'd recommend you read IRS Pub 54 first. Then if you have specific questions about the foreign earned income exclusion or the foreign tax credit, then we can help more. | |
| 31 May 2010 | |
| You talk about Roth IRAs. I know nothing about how India taxes these, but I assume you will also be thinking about Indian tax too. | |
| May 31, 2010 | |
| It may be a close call, but the wife is probably a resident of India under the treaty (and therefore saved from the savings clause). That means, assuming she files separately, probably little or no income subject to U.S. tax. | |
| 1 June 2010 | |
| Agree with LH2004. If the treaty tie-breaker rules may apply here, she may be able to avoid US taxation on her income from sources within India. | |
| 1 June 2010 | |
| If she claims she is an India resident under the treaty, it may impact her immigration status. She may want to consult an immigration attorney prior to invoking the treaty. | |
