[tcd]

Hi all

I will be working in the US from 1. Mar 2009 till 28. Feb 2010. As I am in the US for more than 183 days in 2009, I will have to file like a resident alien. At the moment I am Swiss tax resident.

My employer is paying the salary in Swiss Francs to my Swiss bank account during that year. How do I have to convert the salary to US$ for tax purposes? Is it OK to convert with the conversion rate valid at the date of payment every month? Currency rates are very volatile at the moment so it would be good to know...

Second question is following:
I will not file dual status for 2009 (I hope I am right and dual status filing is an option, not a must). Is it possible to claim medical expenses paid during 1. Jan - 28. Feb 2009 in the 2009 tax return?

One more thing is Social Security and FICA...
There is a Social Security Treaty between the US and Switzerland which allows me (and my employer) to pay those SS-things to Switzerland. What do I need for being exempt from SS/FICA, is there a certificate or something that IRS would need?

Thanks for your help

[MukatA]

1. If you are single, then you will file dual status tax return for 2009. You are not resident for full year.
2. You will report only income earned in the U.S.
3. For Swiss totalization agreement, read Description of the U.S.-Swiss Social Security Agreement

[tcd]

Hi MukatA

So Jan/Feb income is trated as non-resident income and Mar-Dec income as resident, right?
What is about the currency conversion?

3. Thanks for the link, explains pretty much everything ;-)

[MukatA]

Why do you need to figure out currency conversion? Read no. 2:
You will only report income earned in the U.S.

During non-resident period, your U.S. income is 0.

[tcd]

Because I am working in the US at a subsidiary of my Swiss employer, but my salary will be paid in Switzerland (from Swiss employer to my Swiss bank account in Swiss Francs). As far as I know, I have to claim all worldwide income when treated as resident alien.

[AtlantaTaxExpert]

You WILL file as a dual-status alien for both 2009 and 2010 (that is your ONLY option), and, yes, you will need to convert the income from the Swiss franc to the U.S. dollar, because, as you said, during your resident period, you report ALL world-wide income.

If you are also paying Swiss taxes, you can claim a foreign Tax Credit by filing Form 1116.

You can convert on the date you receive the funds, or use an average conversion factor for the year; your choice!

[tcd]

Thanks Atlanta, everything is clear now ;-)

[AtlantaTaxExpert]

Glad to help!