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

[Anja_SG]

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? 

[pk]

@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 ?

[Anja_SG]

@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?

[pk]

@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 

[evrr]

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 ? 

[pk]

@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 

pk