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Puerto Rico income but reside in Florida US

Hi,

I work as a Self-Employed IT Consultant for a company in Puerto Rico. I make invoices and they retrieve 10% of the invoice for Puerto Rico tax purposes. For my taxes, I receive a 480.6SP. 
How do I file federal taxes and Puerto Rico taxes?

Do I file first in PR and then in the US or viceversa? 

As well, I'm married. Is it best to file jointly?

 

Thanks in advance

 

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1 Best answer

Accepted Solutions
DanielV01
Expert Alumni

Puerto Rico income but reside in Florida US

It depends and it's complicated.  The easiest question to answer is if it is better to file as jointly or separated.  Usually filing jointly is best and results in the lowest tax because you are allowed to claim certain deductions and credits that are not allowed when filing separately.  But there are cases when filing separately can be more advantageous.   You can look at your circumstance more closely to see which is better for you.

 

For Puerto Rico and US Filings, that also depends.  If you are not a bona fide Puerto Rico resident, your income may or may not be subject to Puerto Rico tax.  (Whether or not it is can be very complicated, and TurboTax does not support the Puerto Rico Tax Returns.)  Even if not subject to Puerto Rico tax, it might be good to file anyways.  If Puerto Rico tax has been withheld on the informational document you mention, then you will need to file a Puerto Rico return, if for no other reason than to get a refund of withholdings if such were withheld mistakenly.  Regardless of the situation, you will want to prepare the Puerto Rico return first, because any amount of tax you pay to Puerto Rico is a potential tax credit to the US.

 

You will have to pay tax on this income to the United States.  If you pay tax to Puerto Rico also, you will be able to use the Foreign Tax Credit Screens to claim your credit.  This Help Article will assist you with this if needed:  Where do I enter the foreign tax credit (Form 1116) or deduction for 2020?

 

For information regarding taxation of Puerto-Rico source income, please see this website:  Topic No. 901 Is a Person with Income from Puerto Rico Required to File a U.S. Federal Income Tax Re...

 

Do you need to file a Puerto Rico return?  Please see this website (in Spanish):  Hacienda Virtual | Departamento de Hacienda de Puerto Rico

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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1 Reply
DanielV01
Expert Alumni

Puerto Rico income but reside in Florida US

It depends and it's complicated.  The easiest question to answer is if it is better to file as jointly or separated.  Usually filing jointly is best and results in the lowest tax because you are allowed to claim certain deductions and credits that are not allowed when filing separately.  But there are cases when filing separately can be more advantageous.   You can look at your circumstance more closely to see which is better for you.

 

For Puerto Rico and US Filings, that also depends.  If you are not a bona fide Puerto Rico resident, your income may or may not be subject to Puerto Rico tax.  (Whether or not it is can be very complicated, and TurboTax does not support the Puerto Rico Tax Returns.)  Even if not subject to Puerto Rico tax, it might be good to file anyways.  If Puerto Rico tax has been withheld on the informational document you mention, then you will need to file a Puerto Rico return, if for no other reason than to get a refund of withholdings if such were withheld mistakenly.  Regardless of the situation, you will want to prepare the Puerto Rico return first, because any amount of tax you pay to Puerto Rico is a potential tax credit to the US.

 

You will have to pay tax on this income to the United States.  If you pay tax to Puerto Rico also, you will be able to use the Foreign Tax Credit Screens to claim your credit.  This Help Article will assist you with this if needed:  Where do I enter the foreign tax credit (Form 1116) or deduction for 2020?

 

For information regarding taxation of Puerto-Rico source income, please see this website:  Topic No. 901 Is a Person with Income from Puerto Rico Required to File a U.S. Federal Income Tax Re...

 

Do you need to file a Puerto Rico return?  Please see this website (in Spanish):  Hacienda Virtual | Departamento de Hacienda de Puerto Rico

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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