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My last return to NJ was resident for 2016. Now I live

abroad. but my income is...
My last return to NJ was resident for 2016. Now I live abroad. but my income is below 10K for the year 2017 and NJ rules says I dont have to file below 10K (I had a single member LLC there which I closed end of last year). Now if I dont file now as non resident to NJ, I will never file again. And if I file now , as NR, it will be my last one and it will be just because I had LLC there. My question is, should I file or not? If I dont file, few years from now will they come after me saying where are your taxes and i will have to deal with paperwork internationally to prove that I was indeed living abroad? So even if I am below 10 K, filing as non resident is better? My hesitation is because I didnt have any income abroad yet, and on my NR return they will not see foreign income. for 2017 I only has my LLC income which is very little, and some capital gains from stock trading which I am also showing both on my federal return (and for that I didnt pay taxes to the foreign country since the tax laws here plus the tax treaty between the US and here allows me to show it only to US for as they are US stocks, plus the amount is small anyway)
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Answered in 4 minutes by:
3/20/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,630
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello!

I am familiar with your situation over the past year. I recommend that you do file, simply because this will start the statue of limitations that New Jersey has to go back and assess additional taxes.

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New Jersey Tax Law generally places a four-year statute of limitations on tax audits, beyond which the Division may not audit without your written consent. The exception is the Gross Income Tax., which has a different statute of limitations.

www.state.nj.us/treasury/taxation/pdf/pubs/misc/aud100.pdf

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The statute of limitations does not apply for any period during which a taxpayer:

Failed to file a return; or

• Failed to report Federal changes; or

Filed a false or fraudulent return to evade tax.

Please let me know your follow up questions.

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Customer reply replied 4 months ago
Thanks and what do you mean by " New Jersey has to go back and assess additional taxes."... what additional taxes and why?

If you don't file NJ is able to go back further than four years if NJ feels that you have any unpaid additional taxes.

If you do file, NJ may only go back four years to audit or any unpaid additional tax.

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"because this will start the statue of limitations that New Jersey has"

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Customer reply replied 4 months ago
ok so if I file as NR now, they will know that I am not resident anymore, at least formally I am telling them correct? so for the future, I am closing them the door about questioning my residency? first of all is this right? I have nothing in NJ now not even a drivers license, which expired long time ago. All I have in NJ now is a mailbox for convenience and few US credit cards and bank accounts still has that address for convenience but may be I should update them to foreign address too? All my life is abroad now. I have drivers license here, i am taking masters classes, I pay rent and utilities...

When you file as a NR you are formally telling NJ that you:

  • New Jersey was not your domicile, and you spent 183 days or less here; or
  • New Jersey was not your domicile, you spent more than 183 days here, but you did not maintain a permanent* home here.
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Customer reply replied 4 months ago
those criteria i saw, i definitely meet both of them

Q: so for the future, I am closing them the door about questioning my residency?

A: If you are in New Jersey and earn income in NJ then NJ may question your residence as either a NR, Part time resident or full time resident.

Below is a link, on page 6 of the pdf are NJ definition NR, part time resident and Resident. ---Since you live over seas, you wouldn't have to file under those definitions. Your LLC would have to file if the domicile of the LLC is in New Jersey.

http://www.state.nj.us/treasury/taxation/pdf/current/1040nri.pdf

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When the state determines your filing status they consider all the facts and from what you have shared, you are not a NR, part time resident or resident of NJ

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Customer reply replied 4 months ago
I was never in NJ. but how can my LLC file by itself? It was single owner LLC and I was attaching it as a schedule C to my personal tax return...

If you formed the LLC under New Jersey law, then the LLC is domiciled in NJ, regardless of your location.

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Customer reply replied 4 months ago
it was a NJ LLC and I was single owner so I was always attaching it to my personal income tax as schedule C. how can it file separately? So I was not a resident of NJ so I file NR, and attach it as schedule C to my NR return no?
Customer reply replied 4 months ago
I show the NJ income source as my LLC income and my stock trading income as not NJ source.. these two incomes are all I have
Customer reply replied 4 months ago
LLC is a disregarded entity for tax purposes so I file its income tax as attached to my personal income tax return as a schedule C

Even though you are a single owner the LLC is domiciled in NJ, because that is where you registered the LLC. State registration of a LLC is separate then federal taxation. --

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Here is a separate source for you

https://www.nolo.com/legal-encyclopedia/llc-filing-requirements-new-jersey.html

"The State of New Jersey requires you to file an annual report for your LLC. The report must be filed online using the DOR's On-line Corporate Annual Report website. You'll need your LLC's state-issued entity number and original date of organization to access the online form. "

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Customer reply replied 4 months ago
I already filed annual and paid all annual reports... when i formally closed my LLC with NJ, I went through that process. I was up to date on my annual reports... it was $50 per year and I paid it all the time...

Perfect!

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Customer reply replied 4 months ago
I also didnt have any employees or sold anything subject to sales tax... so I didnt have those taxes or any other special tax ...

If the LLC is closed, you are not a resident, part time resident or NR then you are correct you would not have a filing requirement.

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Customer reply replied 4 months ago
well yes for 2018 you are right... but i am talking about 2017 here... my LLC was opn in 2017... I closed it in december of 2017...i am doing my 2017 tax now... so for that, I file as NR since I was not in NJ, but since I had LLC in NJ, right?
Customer reply replied 4 months ago
my LLC income were things that could be generated remotely such as a domain sale, book royaty, and a small fee for a remote service I performed for someone in the US. all those are just as a reulst of things that didnt reuqire me to be in NJ while generating that income but I consider part of my LLC income regardless

Yes, you are correct for 2017 you will file as a NR.

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Customer reply replied 4 months ago
I will file, although I am below the 10K income, since, it will tell them I am not a resident anymore.. so 5 years from now they will not say "hey you were our resident, where are your taxes, and here is the billl".... makes sense?

That does make sense, which is why I do recommend that even though you earned under $10K, you still file. This way NJ can't come back to you in 5 years because the statue of limitations will have past.

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Customer reply replied 4 months ago
ok i see now what you mean by statue of limitations... you mean adding one more year to my side.. ok... and one more thing, now, this return can not be efiled because NJ form doesnt allow foreign address on it so I was advised to send by hand in the mail. Do you think it is a problem when someone sees that I didnt have foreign earned income although i was in foreign country? or it is not so much of a problem? I really didnt have to work yet here as I am taking classes and my parents are helping me in a lot of ways too (i am in my native country now),and costs are low here too

Even though you have a foreign address, it is not an issue if you don't report any foreign income as long as you didn't earn any foreign income.

Being an international US tax payer has become very common.

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,630
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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