3 stupid questions

Forum|Forum|2 years ago
December 30, 2023
2 replies
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1. I assume oversea electricity bill accounts shouldnt be reported into Fbar /8938, right?

2. Fbar/8938 are only needed for US resident alien but not for non-US resident alien, right?

3. For my friend, his baby is an American. The couples are not the American and they do not live in the US. Does the baby need to report US tax before university graduation ? What is the minimum requirement for the baby to report tax?

Thanks,

TurboTax Deluxe Online

Best answer by DaveF1006

this is interesting

No. There is no credit for the NAR tax on a US tax return because there is no income to apply it to.

Anonymous_

Level 15

I will page @pk12_2

pk_

Level 15

@Helen123

1. I assume oversea electricity bill accounts shouldnt be reported into Fbar /8938, right?

FBAR and FAYTCA requires ONLY the reporting of Foreign Bank accounts ( and the amounts therein ) and other Specified Assets ( generally liquid or semi liquid )

2. Fbar/8938 are only needed for US resident alien but not for non-US resident alien, right?

FBAR and FATCA rules apply ONLY to US persons ( citizen / GreenCard / Resident for tax purposes )

A US person ( as defined above ) generally would not be required to file a return on world income unless the person is no-longer a dependent of the parents and makes more than US$4400 ( I think -- it is ion that neighborhood).

And NO , the questions are NOT STUPID at all.

Is there more I can do for you?

Helen123Author

Level 5

many thanks.

So, I assume for Q1 and 2, my original understandings are correct. For 3, if the parents of American baby are not American and they do not live in the USA, the baby doesnt need to report anything to IRS when they are the depent of the parents.

Can you please finally confirm my understanding is correct?

Much appreciated.

pk_

Level 15

Many thanks. The parents want to help kid to open the bank in the UK, not in the US. In the UK , there are bank account for junior, I do not know whether US has something similar. That is why they want me help ask before opening it.

In the short term, because parents need to pay NAR tax in 2023 and from 2024, they will have 0 income in the US and therefore no need to report any tax anymore in the US, therefore they want to know whether it is possible to get some deduction for the tax.

does it make sense to you?

@Helen123 , @JHH123 , reading through your post what I get is that the parents ( NRAs) are trying to set up bank accounts ( for the US citizen child) in reserve currency -- US$ or UKL-- ( to protect against currency effects of national currency ? ). Which country are they ( parents ) from? -- perhaps the tax treaty between home country and US/UK might allow mechanisms to help in their quest.

It appears that we have answered your query ( ies) on this subject and therefore the thread could be closed --- if that is the case the you need to accept the answer(s) as "accepted". Else tell me what more we can do for you, please?

Generally agreeing with colleague @DaveF1006 that child credit may not be available because of no US taxable income, but more germane is the fact that the parents are filing 1040-NR for 2023 ( although I don't understand why, unless they were here only for the birth of the child ? ) and that the parents will not (?) want to be treated as a resident for tax purposes for the year 2024. The main thing is that any earnings whether in the name of the child or the parents and sourced/ connected to US will be taxed per the tax treaty between the resident/home country of the parents and the US .

If there is more help needed by the parents on this or similar tax issues , please consider having the parents start a new thread.