pk
Level 15
Level 15

Deductions & credits

@daniel-t-4c-com 

1. Whereas US taxes Residents ( GreenCard / Resident for tax purposes ) & citizens  on world income , South Africa only taxes its Residents { Article 4 of the  US-South Africa Tax Treaty )  on world income  but  only on in-country income for Non-Residents.  This and the fact that your spouse performed work ( for a South African entity ) while her tax home was in the USA, suggests  that this income  is taxable only by US ( for US purposes  this is US sourced income by a US person).  I do not believe , per the tax treaty that this income has to be declared to South Africa , since your spouse was not a resident of South Africa at the time  ( please confirm  that she was indeed in the USA at the time and was not  "ordinarily resident " of South Africa at the time ). I am not quite sure where it lands you because  I don't know whether you actually resided in SA during the last five years, whether you meet the Physical Presence test  -- five past year' residence.   This is my source on the subject ---> https://www.sars.gov.za/individuals/tax-during-all-life-stages-and-events/tax-and-non-residents/

 

2. For your rental income, this definitely income that will need to be  declared to both US and SA.  Generally it is a good idea to settle  the SA tax return  before doing the USA version because , to avoid/ ameliorate  double taxation, you will need to claim foreign tax credit on the US return.  You report your Rental income on Schedule-E and depending on the  foreign tax amount , submit form 1116 for tax credit.

3. My personal pref. is to use downloaded/ CD   windows  version of TurboTax   "Home & Business" -- everything on my machine, amendment is easy, next year work becomes a breeze etc. etc.

 Have I covered all your questions or did I miss something ?

 

Sorry for the delay in reponse

 

pk

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