I am helping a friend fill their tax return, but neither of us can answer the following question, any help much appreciated:
Should a Spanish citizen on a H1B visa who moved to the US in December last year and received a full month's salary from their US company declare foreign income? Before moving here, my friend was working in the UK and had never lived in the US before. Should they declare the money they made in the UK? Or should they just say that they do not have foreign income, since they were already taxed there?
Thank you very much!
2007-04-09 19:06:58 · 7 answers · asked by Bella 2 in Business & Finance ➔ Taxes ➔ United States
An H1B visa holder is only taxed by the US on their US source income. The UK income is not subject to US taxes.
2007-04-09 19:13:13 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
US source income will be taxed for tax year 2006 only. Your friend will need to fill out Form 1040-NR Non-Resident Tax Return.
When going over the form with your friend remember the tax rules are different for your friend than they are for you. One example is that non-residents do not get a standard deduction, they must itemize.
If your friend stays in the country and work for 180 days in 2007, than he will be considered a resident alien for tax purposes and will file the normal Form 1040. As a resident alien his world wide income will be taxed.
2007-04-10 00:41:38 · answer #2 · answered by jks_mi 3 · 0⤊ 0⤋
My advice: Call a tax preparer on the phone, though they MAY be busy this week, pretend that you want to come in for an appointment, and just simply ask that ONE question! "By the way, (tell about the foreign income) do I have to bring any of those documents?" You'll get your quick answer, and then you'll know what to do, FOR FREE! I checked the IRS website for you, and as far as I can tell, you are only taxable IN the USA for money you made IN the USA. Though I'm sure the Democrats are working on a way to take your money, as they have been to all of us for so long!
2007-04-09 19:28:40 · answer #3 · answered by Anonymous · 0⤊ 1⤋
My guess is no, you don't have to. Only the majority of the year is the standard for declaration. However, I am not a CPA, so my guess is only a guess. Seek professional guidance through a CPA and they will lead you in the right direction. By the way, good for both of you. You for helping, and your friend for living here the right way through a visa and actually paying taxes, if any, if they have to.
2007-04-09 19:11:15 · answer #4 · answered by kaliroadrager 5 · 0⤊ 1⤋
based upon the quantity and character of your US source earnings, you ought to evaluate claiming to be a resident of the united kingdom for tax applications under the U. S.-uk double tax treaty. (no remember if it is hassle-free to try this for previous years is a query that demands a splash prognosis.) this won't exempt you from tax on the income on your place, yet whilst it is the only merchandise human beings earnings you have the tax could be potential. in spite of everything, curiously to me you ought to qualify for the earned earnings exclusion on the muse of bona fide place of abode. even nevertheless, that throughout the time of ordinary terms covers a constrained quantity of earnings. you may actual report your tax returns with a view to declare any of those advantages, nevertheless some may well be attainable even on a antisocial return. this might properly be a complicated difficulty, and you may seek for expert recommendation from between the various qualified US tax preparers in the united kingdom.
2016-12-20 10:16:17 · answer #5 · answered by Anonymous · 0⤊ 0⤋
no they only need to declare foreign income the made while working and living in this country.
2007-04-09 19:10:47 · answer #6 · answered by benjamin 2 · 0⤊ 1⤋
You need to file income for the country you live-in. Foreign incomes are exempted.
2007-04-09 19:17:39 · answer #7 · answered by SGElite 7 · 0⤊ 2⤋