Foreign Income and Income Tax in 1040

MukatA · Feb 9, 2008, 09:31 AM

1. You can make this choice only if you are married. You must file Married Filing Jointly and declare world wide income for both of you.
2. In future years, you must file as residents (you can't file as nonresident). You can file as Married Filing Jointly or Married Filing Separately.
3. Foreign lncome will be included on line 7 of form 1040.

Syracuse_TaxPayer · Feb 9, 2008, 09:48 AM

Thanks MukatA for Quick reply.

1) Yes, I am married filing jointly. What I need to provide to make "Full year resident" choice to IRS? I came in US 26th Jan 07 and completed 339 Days for year 2007 and my wife also completed 224 days for year 2007.
Or shall I simply proceed with 1040 form + W7 + W2.
2) Also after expiration of visa, (L1 visa), will I be resident or non-resident. Because my visa is expiring on 25th Jan 2010, so for year 2010 will I be resident or non-resident.
3) My Foreign income is not included in W2 form and I think I suppose to enter W2 wages on line 7 of form 1040.
4) Where to include Foreign paid income tax on form 1040
5) Which forms we suppose to fill for Forign income and income tax (1116 or 2225 or both)

Please Help.

MukatA · Feb 9, 2008, 10:25 AM

1. For more on the statement read page 9 (Statement required to Make First Year Choice) of Publication 519: Tax For Aliens.

2. Depends upon if you continue to stay in the U.S. Or not. (Resident means resident only for tax purpose).

3. Yes, enter on Line 7
4. You don't show tax on form 1040
5. If you file 2555, the income that you added on line 7 will appear again as other income with negative sign. If you file form 1116, then you will enter the foreign tax paid and it will work out foreign tax credit.

Syracuse_TaxPayer · Feb 9, 2008, 10:40 AM

Thanks for you help MukatA.

Syracuse_TaxPayer · Feb 9, 2008, 03:05 PM

One more question
Is it necessory or mandatory to write statement or nessory to make choice - "Resident for full year" as I already passed SPT.
Please Suggest.

AtlantaTaxExpert · Feb 15, 2008, 01:05 PM

Yes, the statement IS required, especially if you are requesting an ITIN for your spouse.

kaushik · Mar 7, 2009, 05:54 PM

Hello Syracuse Tax payer,

Could you please tell me what's the result of filling out form 2555 or 1116? Did the forms actually reduce your foreign income or foreign tax paid?

Could you please send me a sample with just random numbers on it?

I'm in similar situation as you. I got married in 2008 and will be filing as resident alien for tax purposes and I'll be filing married and joint status.

My wife worked in India in 2008 and hence, we will have to declare that income.

Could you please email me ASAP? I would appreciate it very much.

Thank you.

Kaushik

kaushik · Mar 7, 2009, 05:55 PM

Quote:

Originally Posted by Syracuse_TaxPayer

One more question
Is it necessory or mandatory to write statement or nessory to make choice - "Resident for full year" as I already passed SPT.
Please Suggest.

Hello Syracuse Tax payer,

Could you please tell me what's the result of filling out form 2555 or 1116? Did the forms actually reduce your foreign income or foreign tax paid?

Could you please send me a sample with just random numbers on it?

I'm in similar situation as you. I got married in 2008 and will be filing as resident alien for tax purposes and I'll be filing married and joint status.

My wife worked in India in 2008 and hence, we will have to declare that income.

Could you please email me ASAP? I would appreciate it very much.

Thank you.

Kaushik

AtlantaTaxExpert · Apr 30, 2009, 11:11 AM

Kaushik:

Most of the time, filing Form 2555 will reduce your tax liability MORE than filing Form 1116, because there is a cap on how much benefit you can get on the Foreign Income Tax Credit for EARNED income.

Foreign Income and Income Tax in 1040

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