pk
Level 15
Level 15

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@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 

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