How do I file my foreign source fellowship grant as a resident alien for tax purposes, given that it is paid as a yearly lump sum onto my foreign bank account?

[orlando-schwery]

I was in the US under an F-1 student visa since 2014, and have been employed at two places since, and filed taxes in a regular way with W-2's from my employers etc. But since I am here for so long already, I've been  a tax-resident for a while now.

Now I got a fellowship grant from my home country (Switzerland) to be a research scholar here (under a J-1 visa now), since the latter half of last year. If I was still non-resident alien, this wouldn't be taxed, but apparently since I'm a resident alien now it is.

The fellowship contains salary, some research funds, and some travel funds, and is paid in two yearly lump sums onto my Swiss bank account, from where I essentially pay myself semi-regular salaries onto my US account.

So my issues are:
- what do I declare this as (esp. in TT)
- how do I deal with the lump sum payment? I got a year's wages in August, so if I count that all as my salary for 2022 my taxable income is huge. I could only declare the fraction that would represent the salary for these months, or only the parts that I paid onto my US account, but I'm not sure that's correct?
- I seem to have understood that I should also declare my Swiss bank account, but am not sure how to combine that with the salary i.e. to not double-tax myself on this money.
- I have to pay for my own Health Insurance, not sure if that qualifies for some kind of deduction?

Needless to say, I don't have any withholding or W-2's.

Thanks!

[DaveF1006]

if you were exempt in 2021, you would not declare the income earned in 2021 if you filed a 1040 NR for that year since you were not required to declare your foreign income.

For your 2022 resident return, you will just include the income earned after 12/31/2021. Here is how to enter this income. 

• Federal
• Income and Expenses
• Scroll down to Less Common Income and click Show More
• Start next to Miscellaneous Income
• Start next to Other Reportable Income
• For description enter foreign income from a fellowship and then the amount.

You do have a reporting requirement for both FBAR and 8938.  For the FBAR, you will need to report if the bank balance exceeded $10,000 during anytime of the year. Turbo Tax does not handle this reporting but you will report that here.

in addition, you do need to report form 8938 if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.  Form 8938 can be filed by Turbo Tax by going to federal>other tax situations>Miscellaneous Forms>prepare a report on Foreign Financial Assets.

FBAR and 8938 are informational forms that do not have taxable implications so you won't be taxed twice on your salaries.

As far as health insurance, this can be deducted if you itemize expenses and declare this as a medical expenses. Unless you have large ticket items like home mortgage, large medical expenses, large charitable deductions, your standard deduction will outweigh any itemized deduction you may make. You can enter this as a medical expense in the deduction and credit section in your return but chances are, it won't make a difference in your return unless you were able to itemize your deductions.