Foreign Income before becoimg US permanent resident

[tijwin]

Hi,

I came to US on K1 Visa On April 2024 and became permanent resident in Sep 2024. I am filling jointly with my spouse. Do I have to report my Indian income before April 2024?

[DaveF1006 · Accepted solution]

Yes, since you are filing jointly with your spouse, you are making the election as if you were a US resident for the entire year. Since you are making this election, you would need to report your worldwide income for the entire year, including your Indian income before April 2024.

[tijwin]

Hi @DaveF1006 

Thank you a lot for the quick and clear response. Really appreciate it.

Would the rule be different if we file separately. Can I file as a Dual-Status Aliens if I file separately?

What forms and documents do I need to file as Dual-Status Aliens?

Thanks lot. We really appreciate the help.

[DaveF1006 · Accepted solution]

If you file separately, you may indeed qualify as a Dual-Status Alien for the tax year 2024. This status applies when you are both a nonresident alien and a resident alien within the same tax year. Here’s how it works and what you’ll need:

Filing as a Dual-Status Alien

1. Nonresident Period (Before Becoming a Resident):You are taxed only on U.S.-sourced income during this period (April to September 2024 in your case).Foreign income earned during this time (e.g., Indian income) is generally not subject to U.S. taxes.
2. Resident Period (After Becoming a Resident):From September 2024 onward, you are taxed on your worldwide income, including any foreign income.

Forms and Documents You’ll Need

• Form 1040: For the resident portion of the year (September to December 2024).
• Form 1040-NR: For the nonresident portion of the year (April to September 2024).

Here's the process of how to file with Turbo Tax. 

If you’re a nonresident alien who’s changed to a resident alien and are a U.S. resident on the last day of the tax year, Form 1040 is your main return. Include Form 1040-NR as an “informational statement” and be sure to write Dual-Status Return across the top of it. 

1. Fill out your 1040-NR. Print it. You may download the form here.
2. Start preparing your 1040. You will need to purchase Turbo Tax software to complete the rest of the steps.  You can't perform these steps using the online version.
3. Open the 1040/1040SR Worksheet in Forms mode when you have completed the interview section of the 1040.
4. Scroll down to the Line 17z - Other Taxes Smart Worksheet on Schedule 2 Part II, Line 17(z) and enter the federal tax withheld from your 1040-NR.
5. Finish filling out your 1040. Choose to file by mail.
6. Print and sign your 1040. Write Dual-status Return at the top of the form.
7. Mail your 1040 and 1040-NR together by the mailing instructions you will be given.

[tijwin]

Thank you so much. That is very detailed, clear, and extremely helpful. We really appropriate your help.