Ask Experts Questions for FREE Help !
Ask
    sknnksskn's Avatar
    sknnksskn Posts: 1, Reputation: 1
    New Member
     
    #1

    Mar 29, 2009, 09:25 AM
    Reporting foreign salary pre-tax or gross amount
    Hi,

    I've been living in the US since 2004 and filing taxes as a resident alien. I got married in 2008 July and but my wife was physically present in the US only for about 3 months, Jul-Sep. I've learned that we can still choose to treat her as a resident for the whole year by filing as MFJ and reporting worldwide income.

    I have 2 questions:

    1. When reporting her Indian salary as foreign income, should I enter her gross salary (pre-Indian-tax) or the "net pay" (the actual money she received in her bank account after various Indian taxes and other taxable deductions like Indian pension funds)?

    2. After entering her Indian salary amount in "Turbo Tax" as foreign earned income (form 2555), I noticed that my total refund went up from before. I was expecting that we'll have to pay more tax (because our combined income is more than just my income). But my "Adjusted Gross Income" went down by a percentage of her earned foreign income. Is this what's supposed to happen? Or did the software make a mistake?

    Thanks
    --skn
    Five Rings's Avatar
    Five Rings Posts: 459, Reputation: 7
    Full Member
     
    #2

    Mar 29, 2009, 10:21 AM

    You report her gross income. Then you exclude it on the 2555.

    Don't forget to do the FEIE worksheet and the 6013(h) election where she elects to be treated as a US resident.

    If you file as MFJ you now have a $10,900 standard deduction and $7,000 personal exemption. Perhaps this is why your refund was increased.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Reporting Foreign Income [ 1 Answers ]

I worked in Canada for 2 1/2 months and do not qualify for the exclusions. I do have the Canadian equivalent to a W-2 (T4) I think. How or where do I report this income?

L1 Visa - medical expenses and foreign currency salary question [ 7 Answers ]

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...

Reporting Foreign Unincorporated Business Income [ 6 Answers ]

I have been attempting to figure out the proper filing for a lawful US resident that has made a tax home in a foreign country (passing the bona fide residence test), and derives all income from a sole proprietorship business. The return itself is considerably past due so there is no expectation...

Is my foreign salary earned before relocated to US considered as taxable? [ 1 Answers ]

I was internally transferred (within the same company) from Singapore to CA on June 11 2007 holding a L1 visa. I have been working in US since then. I earned salary at Singapore for the period before June 11 2007, which is not covered in my 2007 w2. My husband has been working and staying in...

Foreign income reporting [ 1 Answers ]

I am an Indian National and I have been in US on F1 since Aug 2001. My F1 expired on June 2006 and I was on OPT till my H1 began in Oct 2006 (havent got H1 stamped as yet). I had filed 1040NR for the past five years but read that after 5 years, I should start filing as a resident. Is this...


View more questions Search