[Bonustax]

I received a preemployment bonus of 20K (into a US bank account) in March 2006 and relocated to the US on a H1B visa to start work only in October 2006. Prior Oct 2006, I was a non-US resident for a full 365 days (lived in US before that). Do I have to pay taxes on the 20K bonus I received while I was out of the country?

Thanks!

[AtlantaTaxExpert]

You will need to file as a non-resident alien for 2006.

The bonus is considered earned income from a U.S. source, so, yes, by law, you need to pay taxes on it.

I suspect that bonus will be reflected on your W-2.

[RubyPitbull]

Since you were working in the US for part of 2006, you need to file a return after you receive your W-2 from your employer. Although you may not have lived and worked in the US for a year prior to receiving the bonus, the IRS doesn't look at that. Filing years run from January through December. But, don't worry. Because you were working out of the country for most of the year, it should work in your favor, although you will owe something. You should have a CPA file your tax return for you.

Usually what happens on the return is, you claim the full amount you earned (W-2 and any other forms such as 1099, K-1,. ). As part of the calculation, you include how many days you actually lived and worked in the US and how many you didn't. Depending on the state you are living in, you most likely will have to file a state tax return as well. As I said before, best thing for you to do is find a CPA in your area. I am sure a few people at your new job will give you a recommendation. Interview them to find out which one you are the most comfortable with and go with that person. Please do it soon because April 15 is the deadline and accountants are very busy now. If you owe any money, you need to get it paid by that date to avoid any penalties or interest.

Hope this helps. All the best,.

[AtlantaTaxExpert]

I just answered the E-mail you sent.