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jgordosea
jgordosea, Enrolled Agent
Category: Tax
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Experience:  I've prepared all types of taxes since 1987.
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Hello, Im Russian working in US, Arizona on H1B visa and

Resolved Question:

Hello,

I'm Russian working in US, Arizona on H1B visa and an US company pays me a salary. This company has offices in different countries. My wife is working in Belarus for this company in local subdivision. She is a Belarus citizen and now the company is going to relocate her to work with me in Arizona using L1 visa. Dhe will be kept at Belarus payroll and will get her salary in Belarus (to a debit card issued in Belarus). Before we start L1 process, there is some questions to address:
1) How will we file joint tax return in the USA and where her BY income should be considered as foreign income?
2) How to report taxes properly?

Thanks,
Andrei Shevtcov
(XXX) XXX-XXXX XXX@XXXXXX.XXX
Submitted: 11 months ago.
Category: Tax
Expert:  jgordosea replied 11 months ago.
Greetings,

Proper reporting will first be determined by your and your spouse's resident or nonresident status, each determined separately.

Both you and your spouse are subject to US income tax as nonresidents unless you have a green card or meet the substantial presence test and then you are taxed as a resident and have to report your worldwide income as subject to US income tax.

The substantial presence test is that you are present in the US for at least 31 days in the current year and at least 183 counting all of the days present in the current year, 1/3 of the days in the prior year and 1/6 of the day in the second prior year.
For more details see http://www.irs.gov/Individuals/International-Taxpayers/The-Green-Card-Test-and-the-Substantial-Presence-Test

As nonresidents, the only income subject to US income tax is:
1)Income that is Effectively Connected with a trade or business in the United States
2) U.S. source income that is Fixed, Determinable, Annual, or Periodical (FDAP)
For more details see http://www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Nonresident-Aliens

Salaries, wages or compensation of nonresident aliens is based on where the services are performed, regardless of where paid.
For details see http://www.irs.gov/Individuals/International-Taxpayers/Source-of-Income---Personal-Service-Income
"All wages and any other compensation for services performed in the United States are considered to be from sources in the United States. The place where the personal services are performed determines the source of the personal service income, regardless of where the contract was made, the place of payment, or the residence of the payer."

If neither of you are residents due to substantial presence then you can file Form 1040-NR jointly and report only US source income.

If you are a resident due to substantial presence you will have to use Form 1040 and report your worldwide income.
Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year.
You can only file jointly if you and your spouse elect to have the nonresident spouse's worldwide income on that joint return.
For more details see http://www.irs.gov/Individuals/International-Taxpayers/Nonresident-Alien---Figuring-Your-Tax


Please ask if you need more discussion or clarification.
Thank you.





jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3032
Experience: I've prepared all types of taxes since 1987.
jgordosea and other Tax Specialists are ready to help you
Customer: replied 11 months ago.


Thank you very much. I will pass this information to our employer and and if no other clarification required - I will rate this answer. Shouldn't take a lot of time (prob 2 business days). Thanks again

Expert:  jgordosea replied 11 months ago.
You are welcome.

Just let me know if you do need clarification.

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