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Filing US taxes after relinquish Green Card (I-407)

Anja_SG — Fri, 20 Nov 2020 02:39:09 GMT

I voluntarily abandoned my green card status my sending form I-407 in December 2019. However, I only received acknowledgement end of Feb 2020 from USCIS that they received the form and it had been acknowledged.

Moved to Singapore in mid summer 2018 and haven't re-entered the US in 2020. Do I still need to file US taxes for 2020 and do i need to file for the full year or only for Jan & Feb 2020?

Re: Filing US taxes after relinquish Green Card (I-407)

pk — Tue, 24 Nov 2020 03:39:04 GMT

@Anja_SG , from the instructions etc. for the form I 407, it is a notification that you have abandoned the LPR status. The processing part by USCIS is to record / update their files. Thus I think if you sent the I-407 on 12/31/2019, then there is sufficient expectation that you have abandoned LPR on that date .\

Hence my question whcih year are you trying to file and questioning about. You migrated to Singapore in 2018, and filed I-407 in Dec 2019--- therefore I assume that you have filed your US returns on world income for 2018 and 2019. For 2020 you are a Non-Resident Alien for US tax purposes and therefore taxed ONLY on US sourced/connected income. So why are you filing 2020 ? Do you have or will have US income in 2020 ?

Re: Filing US taxes after relinquish Green Card (I-407)

Anja_SG — Tue, 24 Nov 2020 04:24:14 GMT

@pk thanks so much for your response.

I still filed US taxes in 2018 and 2019. However I realized now that I also need to file a form 8854 since I was a US Resident for just over 8 years.

My husband is a US citizens and we have US income from house rental, dividends and capital gains from US brokerage account.

So ideally, we would still file jointly again this year if I only need to pay taxes on my US sources income, but not on my SG earned salary. Plus this year I need to submit the 8854 form.

Any idea how I need to file the next year's if I continue to have some US sources income (joint mortgage and joint brokerage account).and my husband will always have to file?

Re: Filing US taxes after relinquish Green Card (I-407)

pk — Sat, 28 Nov 2020 18:50:33 GMT

@Anja_SG sorry for the delay in response

1. As long as your husband retains US citizenship, he will be taxed by the USA on world income and be able to exclude foreign earned income ( up to a max amount that is indexed yearly ) as long he qualifies for a foreign tax home.

2. If you file jointly then giving up Green Card does not do anything for you -- you will still have your wrold income taxed by the USA. If you wish for the USDA not to tax your SG income, then your husband would have to file as Married Filing Separate ( MFS) or as Head of Household ( HoH ) , if you have child(ren) that he maintains a household for .

3. If you continue with the GC abandonment , you will have to file 8854 and this is where you will have some issues with the properties that you jointly hold/own. If you have already abandoned your GC, then you may have to gift your ownership(s) to your husband, to avoid complications of filing form 8854. Would strongly suggest consultation with tax attorney or tax professional familiar with Expatriation Tax ( IRC 877 ) and its mark-to-market regime. In prep. for this perhaps a read of the following may be useful :

Expatriation Tax | Internal Revenue Service (irs.gov)

Is there more I can do for you ?

Stay safe

Re: Filing US taxes after relinquish Green Card (I-407)

evrr — Fri, 05 Jul 2024 17:52:05 GMT

Thanks for the details. We are in a similar situation and living in India. I am a US Citizen and my wife abandoned her green card on Apr, 15 2024 filing I-407. My wife has US capital gains income in 2024 and expect to have such income in subsequent years. As per India tax law we need to declare global income and will file taxes in India. Checking if my wife has to continue filing taxes in US as well ?

Re: Filing US taxes after relinquish Green Card (I-407)

pk — Sun, 07 Jul 2024 18:44:53 GMT

@evrr in addition to what I said above, the question here becomes

(a) since as a citizen of US you will have to file US return, do you have any need to file jointly with your wife? If you do then she will need a tax id ( SSN or ITIN ), she will have to request to be treated as a resident alien and of course her world income comes under US tax. But this also means that if your tax home is India, you each can use Foreign Earned In come exclusion to exclude " active" in come ( up to the max allowed each year ). Passive income cannot be excluded but is eligible for foreign tax credit/ deduction etc. type of treatment.

(b) If she has only passive income ( from US sources) and is taxed in India then this must be resourced under treaty to claim foreign tax credit.

There are too many paths based on the facts and circumstances of your case. I need more details from you.

If the details are not of interest to the general user , you are welcome to PM me with details of your situation ( what types of incomes are involved, is there any active income involved or are you both retired, do you have US pension / SSA etc. -- the more detail the better ) -- just no personally identifiable information.

I look forward to hearing from you