Hi Tax Experts,

I hope you can enlighten me. I just got here last October 29 as an immigrant. I have a foreign income from January to October, before I became a green card holder.

Foreign Income: $40,000
Tax Withheld: $10,000

Resident of US:
Salary income: $2,500

I passed the green card test so my residency starts on the day I entered US (October 29, 2018). But I did not pass the substantial presence test (~80 days). As per my understanding, my option is to file as a dual-status alien. I would not need to file 1040NR as I do not have a US income before I became a resident. However, I cannot use standard deduction as per IRS restrictions. Please correct me if I am wrong.

Do I also have an option to file as resident alien for the entire year (including my worldwide income)? My US income tax would be reduced with the Foreign Income Tax Credit for taxes paid on my foreign income, in this case, right?

As per IRS,
"If you receive your green card abroad, then the residency starting date is your
first day of physical presence in the United States after you receive your
green card. You may elect to be treated as a resident alien for the entire
calendar year if you were a lawful permanent resident of the United States at
any time during the calendar year."

Am I eligible based on this guideline? And would it be better for me to file as resident alien for the whole year or file as a dual-status alien?

Thank you for your help.

You got right. You can file as a resident and claim all world-wide income received in 2018, then claim the Foreign Tax Credit to use the taxes paid to another country to offset the U.S. tax. That likely is the best option for you, but you need to model it both ways to be sure.

If you decide to file dual-status, do NOT file it yourself. The dual-status return is NOT for amateurs, and a fair number of professional tax preparers have NO CLUE how to properly file a dual-status return. Get professional help from someone with experience in filing the dual-status return.


Atlanta Tax Expert

Thank you AtlantaTaxExpert! Can you provide brief guidelines or watch outs in filing a dual-status tax return? As per my research, I need to write Dual-Status Return at the top of the form 1040 and I would not be able to apply standard deduction. So I am assuming, I need to file 1040 with Schedule A and Schedule B.

I don't think I can claim any itemized deduction but will still need Schedule A. And Schedule B, to show I have financial accounts abroad.

Any other thing I need to note? I checked the reporting threshold for Form 8938 and I did not meet it at any point last year but will need to file FBAR to Department of Treasury.

Again, thanks so much for your guidance.

Read my earlier posting about NOT filing a dual-status return as an amateur.

In which state did you work in 2018?

I just thought I covered the dual-status return. Thanks for your advice.
I worked in WA.

Schedule B will be required, and the FBAR (FinCen Form 114), a separate INFORMATION ONLY report, has to be filed electronically.

If you want MY help filing the dual-status return, email me at the email address in my profile.

Hi AtlantaTaxExpert, one more question please. I just became aware that my US income last year did not reach the threshold of 12,000. So I have an option not to file. I checked that filing as dual-status resident, given that I cannot use standard deduction, will only give me ~25 usd refund, do you still recommend to file my tax return? Thanks again.

Actually, you DO have to file, because the threshold that applies to U.S. citizens and residents, at $4,350, does NOT apply to dual-status aliens. You have to file if your income is $500 or more.