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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22616
Experience:  Taxes, Immigration, Labor Relations
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I am a US and Israeli citizen (dual citizenship) living outside

Customer Question

I am a US and Israeli citizen (dual citizenship) living outside US for 18 years (in Israel). Since I have left the US in 1991 I haven't filed 1040, but I do pay tax in Israel (I actually filed 1040 in the first year after I left and did not need to pay anything so since then I just haven't filed).
I now intend to return to the US with my family and need to provide 1040s as affidavit of support for their immigration Visas.

What should I do now? Do I have to file 1040s for the last 7 years even though I am not supposed to pay anything?

Thanks,
Me & my family
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

Assuming you had income - as US citizen - you are required to file a fax return and report your worldwide income.

Filing requirements (based on income level ) are listed in IRS publication 501 - http://www.irs.gov/pub/irs-pdf/p501.pdf

graphic

 

If you are living abroad - you may claim a foreign earned income exclusion.

The person may qualify for the foreign earned income exclusion - he/she should:
-- Work and reside outside the United States for at least 330 days during the year, or
-- Meet either the Bona Fide or Physical Presence tests.
If the person qualifies, he/she may exclude up to $91,400 (2009 in foreign wages -- plus housing allowances (limited to 30% of the earned income exclusion).

To receive that exclusion - the taxpayer should file either form 2555 or 2555EZ.

Here are forms you likely need:

Please be aware that - the exclusion above will not affect self-employment taxes - only income taxes. Only earned income is excludable - income from wages and self-employment. For instance - dividends, investment income, rental income, etc - are not excludable.

Please also be aware that this credit is not granted automatically - you need to file a tax return and claim the credit.

 

If the same income is taxable in the US and in a foreign country - you may claim a credit for taxes paid in a foreign country on your US tax return.

To determine the amount of credit -the person should use the form 1116 and attach it to the tax return. - http://www.irs.gov/pub/irs-pdf/f1116.pdf

Here are instructions - http://www.irs.gov/pub/irs-pdf/i1116.pdf

 

Let me know if you need any clarification or help with reporting.

 

Customer: replied 4 years ago.

You gave a general answer and did not really answer my question.

 

The only reason I need the 1040 is for the US consulate.

 

The question is whether there is another way to satisfy them or do I really have to file.

 

If you believe there is no way I can satisfy them withour filing, then the next question is whether I have to file for 7 years back.

 

What happens if I file for one year only (say 2008)?

 

Thanks again

Expert:  Lev replied 4 years ago.

Depending on your income and filing requirements - you need to determine if you are required to file or not.

If you do not required to file - you may provide information about your income accomplished by the statement that you was not required to file.

If indeed you was required to file - you do not have any choice, but to file.

 

Generally - you need to file for each year you was required to file.

If you do not file - and the IRS will get information about your income - you may expect to receive a note asking for explanation - as they do not know if you are eligible for any credit.

 

As for immigration authorities - they normally require tax returns for last three years.

Please be aware that according to the US law - government agencies may not provide your personal information to each other.

Let me know if you need any help.

 

Customer: replied 4 years ago.

You say that whether I need to file depends on:

1) my income

2) filing requirements.

 

Regarding 1 - My salary is about $55,000-65,000 gross per year (in Israeli Shekels). I also get about $1000-2000 interest from bank deposits. Other than this I have no income.

 

Regarding 2 - what do you mean by "filing requirement"?

 

And finally - do i need to file or I can tell them that I am not required to file?

Expert:  Lev replied 4 years ago.

As an US citizen - you are required to file a fax return and report your worldwide income.

Filing requirements (based on income level ) are listed in IRS publication 501 - http://www.irs.gov/pub/irs-pdf/p501.pdf

graphic

 

as your income is above that level - you are REQUIRED to file your tax return regardless if you owe any taxes or not.

That is from IRS side.

 

From immigration point of view - if you tell that you are not required to file - that will be incorrect.

For immigration purposes - most likely you need to provide tax returns for last three years.

 

Let me know if you need any help.

 

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