I hold J1 visa from June 2016 to Feb 2019 and came back to work in Hong Kong. Do I need to report FBAR for my salary account in Hong Kong?

[MinhT1]

As you held a J1 visa for less than 3 years, you are considered as a nonresident alien for tax purposes and you are not required to file a FBAR.

[zhanglu295]

Thank you for your prompt reply. But I am a resident alien because I was a visiting student in 2014 holding J1 visa.

[KarenJ2]

Yes, if you were a tax resident in 2018, then you were a resident for part of 2019 and you are required to file the FBAR if the requirements apply to you.

If you were a US resident in 2018, then you will need to file a resident return for 2019.  You can either file a dual status return (part year resident and part year nonresident) or you can file a resident return for calendar year 2019 and claim your worldwide income.  You can use the foreign tax credit  from Hong Kong to help offset any US taxes. 

TurboTax does not support dual status returns.  Also, if you want to file a dual status return. you are not allowed to take  the standard deduction which is $12,200 if you are single. 

You can read more about Dual-Status filing requirements on Page 32 of US Tax Guide for Aliens  It is complicated and you are not allowed to use the standard deduction if you file a dual status return and if married, you must file married filing separately.

[zhanglu295]

Thank you very much for the informative reply. I tried to use turbo to file a resident return. But it only asked me to input the information in W2 (US income), but I have no space to provide my income in HK. Do you have any suggestions? In addition, I just hold J1 visa before and am not US PR or citizen now.

Thank you. 

Eric

[KarenJ2]

I understand. however you were a US resident when you moved out of the US.  You need to enter your foreign income (converted to US dollars) in the foreign earned income exclusion section of TurboTax..  

When your return is open:

1. Enter foreign earned income in the Search box at the top of the page (magnifying glass).
2. Check the box that you have a statement from you foreign employer
3. Next screen enter your foreign wages
4. Go through the next couple of screens and click the circle that you do want the program the so if the income qualifies for the foreign earned income 
5. Go through next couple of screen and click the circle that you are not a US citizen
6. Another question will appear on the same screen , click the circle that you are not a US resident alien
7. Next screen indicate that you are not a citizen of a treaty country
8. If it asks for arrival departure dates in the foreign country... enter something like 1/1/20019 to 2/1 2019 (one or two months)
9. You do not qualify for a waiver
10. It will finally tell you that you do not qualify for the foreign earned income exclusion (which it true)  but that they will keep your foreign income in the program and remove Form 2555 , Click continue
11. Click Yes, and Yes 

Now your have your foreign income entered.  You need to enter your foreign tax:

1. Enter foreign tax credit in the search box at the top of the page and click Jump to
2. Go through the screens and complete.  Your wages will be considered general limitation income.

If you end of owing tax on your foreign wages. let us know and we can help your complete a dual status return.

[zhanglu295]

Thank you very much and I have two more questions:

1. The total salary of I and my wife is below $211,800, which satisfies "foreign earned income exclusion". Do we still need to report our foreign income?

2. I have generated the pdf file of my 2019 tax return in turbo tax, how can I go back and enter the foreign income?

[KarenJ2]

You are not eligible for the foreign earned income exclusion.  I directed you there just so you could enter your foreign earned income.  I should have been more clear.  The foreign earned income exclusion is for green card holders and US citizens.  I know it mentions US residents.  But for someone that was in the US for only a few years, you are not eligible.

[zhanglu295]

But from the IRS website (https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion), I found the following description, which means U.S. resident alien is also eligible to claim FEIE.

If you meet certain requirements, you may qualify for the foreign earned income exclusion, the foreign housing exclusion, and/or the foreign housing deduction. To claim these benefits, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

[KarenJ2]

The foreign earned income exclusion is only for US citizens and green card holders. You do not qualify to claim this exclusion.  It is for US citizens and green card holders that move to a foreign country or their Company sends them on assignment overseas for a few years.

[zhanglu295]

Dear KarenJ2,

Thanks for your suggestions, I tried to use turbotax to amend my tax return by adding foreign income.

However, after the step 6 and select "No, xx is not a U.S. resident alien". I would jump to the next page saying,

"Since was a nonresident alien druing 2019,  must file Form 1040NR..."

I have two questions:

1. I pass the substantial presence test and should be treated as a resident alien in 2019. So why do I need to select I am not a U.S. resident alien?

2. If I have to do that? How can I do for the following step, say from step 7 to step 11?

Thank you,

Eric

[KurtL1]

Because you moved out of the United States in 2019 you will be required to file a Dual-Status Return. 

You will need to prepare a Form 1040 for the time you were in the U.S. and a Form 1040-NR for the period you were in Hong Kong.

TurboTax does not support Form 1040-NR or Dual-Status returns. You will need to use Sprintax to file a Form 1040-NR and the Dual-Status return. If you have questions you can contact Sprintax Help for assistance.

As to your 2nd Question, it no applicable since you will not be able to file a return through TurboTax.

[zhanglu295]

Dear Kurt,

Thanks for your quick response. I will prepare Form 1040-NR and also do I need to prepare another 540NR for my income in Hong Kong? 

Much appreciated!

Eric 

[KarenJ2]

You can check the following link to see what type of CA tax return you need to file.

CA FTB Publication 1031 Guidelines for Determining Residence Status