- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
@taxnoob24 , this is generally beyond the scope of then kind of help we volunteers provide --- this is more tax planning. Strongly suggest consultation with a professional; tax planner , especially since the amounts you are talking about is quite large.
Also not knowing your own citizenship and residency leaves us with ONLY the ability to give directional answer in a hypothetical case of an NRA married to a US person and residing in the USA with foreign income during NRA period.
Generally, a person entering the USA with work- visa ( i.e. having potential of having a US sourced income ) and married to a US person ( citizen / GreenCard / Resident for Tax purposes ) :
(a) will be treated as a Non-Resident till passing the SPT ( Substantial Presence Test -- 186 days presence in the USA counting all days present in the current year , + 1/3 rd the days present in the USA during the first previous year + 1/6th the days present in the USA during the 2nd previous year ).
(b) During the period of " Non-Resident" , the person is taxed ONLY on US sourced / connected income
(c) Post SPT , the person is treated as a Resident for Tax purposes ( irrespective of Immigration status ) and taxed on his/her world income.
Thus for the first year a person is often a dual status person ( unless the person chooses to be treated otherwise or becomes an immigrant / GreenCard ) --- the first part as an NRA , taxed Only on US sourced/connected income, reconciled / reported on form 1040-NR; the second part as a Resident for Tax purposes , taxed on WORLD income, reconciled/reported on form 1040. There are also some follow-on effects such as limits on credits, the use of standard deduction vs. itemized deduction etc. etc.
Also note that once one becomes a resident one's use of tax-treaty ( between the USA and the his/her country of citizenship) benefits may be limited.
I hope this gives you a general idea of taxation of foreign income.
Is there more I can do for you ?
pk