Moved to the US mid-year, no US-income for the remainder, but house sale went through just before arriving, and also got my final paycheck for my old job afterwards. Do I need to file and if so what should I report?

[user17700558098]

Using fake dates just to avoid divulging personal info.

On September 5th 2025, I moved in the US on an IR-1 spouse-based visa which was validated for a Green Card on arrival. Due to taking a career break across the move, I received no income for the remainder of the year so in theory as my US tax residency only began on September 5th as a dual-status resident, and I am filing Married Filing Separately for 2025, I wouldn't need to report anything except an FBAR for my foreign bank accounts, right? However:

1. - I had quit my old (foreign-based) job mid-August, but received my final paycheck on September 10th after I had arrived in the US. Do I need to report that paycheck if it was paid for work done prior to my US tax residency starting?
2. - The sale of my primary residence in my former country actually went through the same day as I arrived in the US on September 5th, while I was in the air on the long haul flight. I saw the "funds processed and deposited" notification as I turned my phone back on when I landed, before I went through US Customs/Border Control. The property was jointly owned by my American spouse, who is reporting 50% of the profits & costs on their tax return. But do I need to report it too? I'm not sure if I became a US tax resident "the day I landed" beginning at 00:00, or when I went through US Customs and got my IR-1 visa validated. Either way there shouldn't be any tax owed as the gains are below the US thresholds. I just need to know whether I should report it.

Please let me know if I've got any assumptions terribly wrong too!

[DaveF1006]

Yes, you're correct. You are considered a dual-status resident. Just to clear things up immediately, you became a U.S. resident on September 5, 2025. Even if you were in transit for the first half of the day, the moment you landed in the US, is typically treated as an entire day of U.S. residency.

Since you received your paycheck after you entered the US, your pay is considered US income. The IRS considers when the funds are received and not the actual dates you worked in your other country. Since the real estate transaction closed while you were in transit, you should report this on your US tax return. Since your spouse is reporting this on their US return, you need to do the same, even if the gains are below US thresholds. 

You are correct on the FBAR. Also, check if you need to file Form 8938 (FATCA) with your tax return. For Married Filing Separately, the threshold is $50,000 in foreign accounts on the last day of the year (or $75,000 at any point). This is crucial if the sale of your house exceeded $75,000 and if the money was deposited into a foreign account temporarily.

Now, let's discuss how you report this on your return. Because you are a Dual-Status Alien, you cannot simply file a standard 1040. You must file a "Dual-Status" return, which involves:

1. Form 1040 (The Return): This covers Sept 5 – Dec 31. Write "Dual-Status Return" at the top. This is your main tax return.
2. Form 1040-NR (The Statement): This covers Jan 1 – Sept 4. Write "Dual-Status Statement" at the top. It should show $0 if you had no U.S.-source income during that time.

Turbo-Tax is not designed to file this completely on its own. Because a dual-status return requires two separate tax forms (1040 and 1040-NR) to be physically attached to each other, you cannot e-file. You must print and mail your return.

You can file the 1040 in TurboTax and report your pay from your employer in the US, and the sale of the house. Turbo Tax will not create a 1040 NR. Our affiliate at Sprint tax can prepare this form. Their link is here. Alternately, you can download a copy here and fill in the zero's.

[user17700558098]

Hi DaveF1006 - thanks so much for your reply!

I need to clarify a bit further as I've just come off the phone with an Turbotax advisor and they actually said the opposite about the paycheck, that it wouldn't be reportable because it was earned prior to me becoming a US tax resident, even if it was received in a foreign bank account afterwards (and was actually already taxed by the UK government via their PAYE system, I didn't mention that but not sure how relevant it is). Can you help me understand which is right?

However, they also said it might just be simpler to do Married Filing Jointly and just declare all my UK income for the year as foreign earned income and get that excluded based on the UK-US tax treaty - the same way my spouse is reporting theirs - and also include the property sale together. Would this eliminate the need for me to physically file Form 1040 and Form 1040-NR? Could we e-file with Turbotax in that scenario?

If so, the drawback for me would be that I had a UK Cash ISA account (which I closed before moving to the US), the interest on which I've heard becomes taxable by the US because it's a specific account which the UK government does not apply taxes on, so the US may see that as something the UK-US tax treaty doesn't apply to. However I only earned around $100 per month on that account so I would hope I wouldn't need to pay any taxes on that due to the low income?

Thanks in advance for your help!

[DaveF1006 · Accepted solution]

Technically, the cash-basis receipt rule is the best way to report. IRS considers when income is paid and not when it is earned as to the timing  when or where to report the income.  If the amount is small, the IRS rarely flags this, but for a large final paycheck, the "Safe Approach" is best. 

Publication 519, explains this by stating, "For the part of the year you are a U.S. resident, you are taxed on income from all sources. Income from sources outside the United States is taxable if you receive it while you are a resident." * This is the "Cash Basis" rule. Because you received the money on Sept 10th (while a resident), the IRS technically views it as taxable worldwide income". You can find this in the section "Dual-Status Aliens."

Yes, Married Filing Jointly is the best way to file. In fact, I was going to suggest it, but I thought you may have reasons for not wishing to file Married Filing Jointly. I apologize for this assumption. Filing Married Filing Jointly would eliminate the need for you to file for filing an 1040 NR because you can make the first-year election to file Married Filing Jointly. This is your best choice. You can efile with TurboTax, making this choice if you have a valid Social Security Number. 

As far as the interest earned on the UK cash account is concerned, this is also reported on your tax return.  If you file jointly, you would need to report it for the full year. If you file separately, you would only report interest earned for the time you lived in the US.

[user17700558098]

Thank you Dave. You've been a great help and reassured me in my situation so much. Cheers!!