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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22771
Experience:  Taxes, Immigration, Labor Relations
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Hello I am polish and My husband is an american citizen(Alexandria

Customer Question

Hello
I am polish and My husband is an american citizen(Alexandria Virginia) .I live in Poland and he came here last year here so he didnt work in USA from 2010. he got residence permit for 2 years and this time he set up businnnes- he teaches english language as self employment from september 2011,before for few months he had kind of work contract with 2 schools for teaching as indywidual employee.So he pays taxes from his incomes here in Poland as resident and social insurance.My question is if he needs to send any tax form and if yes what kind to his tax office in USA for 2011?What he should show in this tax form is here the curency is in in zlotych and if he will have to pay any tax in USA from his incomes here?

Joanna
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
Hi and welcome to Just Answer!
As an US citizen - your spouse is required to report all his worldwide income on the US tax return.

Based on your information - he is self-employed and is treated as he runs his own business. He has business income and business expenses.

The business income and expenses will be reported on the schedule C - http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

The net income (after deductions)will be reported on the form 1040 line 12 - http://www.irs.gov/pub/irs-pdf/f1040.pdf

If the business has net income over $400, it may be required to file Schedule SE, Self-Employment Tax and net income is likely self-employment income and 15.3% self-employment tax would be required (13.3% in 2011).

Self-employment taxes from schedule SE will go to the form 1040 line 56 - http://www.irs.gov/pub/irs-pdf/f1040.pdf

Also - he will deduct half of self-employment taxes on the line 27.
Generally - that all he needs. Please review all possible deductions - that might help to reduce tax liability.

If the same income is taxable abroad and in the US - he may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 - http://www.irs.gov/pub/irs-pdf/f1116.pdf please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdf
The credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. Means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.

 

To report transactions in foreign currencies - he should use the currency conversion rate on the day when the transaction occurred.

Here are government and external resources you may use for currency exchange rates - http://www.irs.gov/businesses/small/article/0,,id=130524,00.html

Governmental Resources

External Resources

Let me know if you need any help.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22771
Experience: Taxes, Immigration, Labor Relations
Lev and 5 other Tax Specialists are ready to help you
Customer: replied 2 years ago.
1. do you mean net incomes by - putting gros(from his invoices) minus cost like here we have fuel,courses,insurance ,or putting gross amount and then show in form all expences?
2. exchange rate you mean- the day he receive money i must calkulate every month into dollars? or all amount the day i full the form?
3. if i need to send this online or print it and send by mail and to which tax office?or if in USA you have different tax offices depends on sate or city or there is general tax office?
Expert:  Lev replied 2 years ago.
1. do you mean net incomes by - putting gross(from his invoices) minus cost like here we have fuel,courses,insurance ,or putting gross amount and then show in form all expenses?
That is correct - only NET income is subject of income taxes in the US.
2. exchange rate you mean- the day he receive money i must calculate every month into dollars? or all amount the day i full the form?
That is correct - currency exchange rate on the day when income is received or an expense is paid.
3. if i need to send this online or print it and send by mail and to which tax office?or if in USA you have different tax offices depends on sate or city or there is general tax office?
US tax return may be filed electronically - for that we need to use a provider. For instance
TaxAct - www.hrblock.com
TurboTax - www.turbotax.com
HRBlock - www.taxact.com
If your spouse decides to mail his tax return - there are different addresses - see last page in instructions -www.irs.gov/pub/irs-pdf/i1040.pdf
Last line is for those living abroad.
Customer: replied 2 years ago.
ok . so it means different form i must send to diferent offices or all to one because now i am confused.like form 1040 and 1116 to one office or to different office? and what is form w2 and 1099 is asked about in forms?
Expert:  Lev replied 2 years ago.
ok . so it means different form i must send to different offices or all to one because now i am confused.like form 1040 and 1116 to one office or to different office?
The tax return consists from a main form - that is 1040 - and supplemental forms - that are attached to the main form. There are many supplemental forms - and which are used is based on individual circumstances. For instance - if you have rental activity - you would use additional form for rental income; if not - that form is not used, etc.
All forms are sent together and to the same address.
and what is form w2 and 1099 is asked about in forms?
These are informational tax returns,
W2 form is issued by employers to each employee and reports wages income. -
www.irs.gov/pub/irs-pdf/fw2.pdf1099 - is a series of forms for different purposes - some of them are:
1099MISC - reports miscellaneous incomes - non employee's compensation, rent, etc - www.irs.gov/pub/irs-pdf/f1099msc.pdf
1099DIV - reported dividends - www.irs.gov/pub/irs-pdf/f1099div.pdf
1099INT - reported interest income -www.irs.gov/pub/irs-pdf/f1099int.pdf
Customer: replied 2 years ago.
oh ok so then i just have to check if for example he is from alexandrian virginia i have to find the right office where i should send all of them?
2.in form 1040 he must write his address-does it mean his american or polish one? or both?
3. if he had incomes less than 200 for 2010 and he didnt send his tax form for that yeat does he has to send it or this is not nessesary?
4.if we have child 1 year old but he hasnt got social security number do he needs to apply for this number (he got american passport in Poland after his father)or this is not nessesary and if he can put him to the form or not?
Expert:  Lev replied 2 years ago.
so then i just have to check if for example he is from Alexandrian Virginia i have to find the right office where i should send all of them?
That is correct. If your spouse decides to mail his tax return - there are different addresses - see last page in instructions -www.irs.gov/pub/irs-pdf/i1040.pdf
2.in form 1040 he must write his address-does it mean his American or polish one? or both?
He may use ANY address he wants - no limitations.. It may be PO box as well. Just be sure that correspondence from the IRS would not be lost.
3. if he had incomes less than 200 for 2010 and he didn't send his tax form for that year does he has to send it or this is not necessary?
There are filing requirements based on the gross income. lease see IRS publication 501 - www.irs.gov/pub/irs-prior/p501--2011.pdf - page 3 - Table 1. 2011 Filing Requirements Chart for Most Taxpayers

Thus if you are single - you are not required to file your tax return is your income is below $9500 (in 2011).


4.if we have child 1 year old but he hasn't got social security number do he needs to apply for this number (he got American passport in Poland after his father)or this is not necessary and if he can put him to the form or not?
Yes - he should have SSN for the child in order to claim the child as a dependent and he might be eligible for additional tax benefits.
Customer: replied 2 years ago.
ok so thank you very much it really helped me,just one question about snn for child, if he is in poland how he can get the snn for child?
Customer: replied 2 years ago.
Ok so am trying to count so to be sure- for example- in several month he his gros incomes were in dollars
Month the 9 th(when he started business- 1000 dolars
10-1000 dolars gross
11- 1000 dolars
12- 1000 dolars
Total =4000 dolars gros s
And cost monthly 300
I neet to put gross 4000 to incomes and then in expences 300 x 4months =1200
And in the end resume net 2800 dollars in total net incomes- yes?
Or to income straight total 2800?
Expert:  Lev replied 2 years ago.
Generally - when you report your child’s birth abroad - you should apply for an SSN at the same time in US embassy - http://poland.usembassy.gov/ssn.html
If you did not do that - you need to set another appointment. - https://evisaforms.state.gov/acs/default.asp?postcode=WRW&appcode=1
This is an application for SSN - http://www.socialsecurity.gov/online/ss-5.pdf
Customer: replied 2 years ago.
Ok so am trying to count so to be sure- for example- in several month he his gros incomes were in dollars
Month the 9 th(when he started business- 1000 dolars
10-1000 dolars gross
11- 1000 dolars
12- 1000 dolars
Total =4000 dolars gros s
And cost monthly 300
I neet to put gross 4000 to incomes and then in expences 300 x 4months =1200
And in the end resume net 2800 dollars in total net incomes- yes?
Or to income straight total 2800?

2. and other question –if snn what has my husband needs to have any card -social security card or only number is XXXXX to have?
Customer: replied 2 years ago.
Relist: Answer came too late.
Expert:  Shawn P Adamo replied 2 years ago.

Report the gross income of 4,000 with expenses of 1200 on Schedule C.

 

As long as he has a ss # XXXXX should use that to file.

Customer: replied 2 years ago.
Could you tell me if there is any form my husband should put his current bank account in case if he would have tax return from US?he doesnt have in US anymore he opened in Poland last year.And what we could put generally to make his tax less.
I want to admit he was all year in Poland,had no incomes in USA in 2011and he didnt visit USA at all last year
Customer: replied 2 years ago.
and we pay in poland 18% tax, has it any meaning in USA?
Expert:  Shawn P Adamo replied 2 years ago.

If he pays tax on these earnings to Poland he gets a CREDIT on his us tax return.. Otherwise there is no issue.

 

I will monitor this as I see you are responding quickly.

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