Arthur L. Rubin wrote:
- quote -

I knew there must be some reason I live in CA.

--
Alan
http://taxtopics.net

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Dave wrote:
- quote -

The foreign earned income exclusion is available to US
citizens and resident aliens of the US who are able to meet
the eligibility requirements for the exclusion.

--
Alan
http://taxtopics.net

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"A.G. Kalman" wrote:
- quote -

In California, that would be inaccurate. He would be a
full-year resident, and she would be part-year, and they
would file jointly on the 540NR.

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Dave wrote:

- quote -

Yes -- but she was living outside the US before March 2003.
If she can qualify for the year ending (say) March 1, 2003,
you could claim 60/365 of the $80,000 exclusion against
income earned outside the US from January 1, 2003 thru March
1, 2003.

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"A.G. Kalman" <agk202[at]netscape.net> wrote:
- quote -

Thanks very much for the response and pointers. Does the
$80,000 foreign earned income eclusion only apply if one is
living outside the US? If not, could we use this to exclude
her income in her home country if we file jointly (and
therefore have to count her income for the entire year, even
before she became a US resident)?

Dave

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Arthur L. Rubin wrote:
- quote -

Yes they do and if they file separately in IL she would be a
part-year resident. To file a joint return, she would have
to consider herself a full year resident.

--
Alan
http://taxtopics.net

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"A.G. Kalman" wrote:

- quote -

THAT, I question. Doesn't IL have part-year joint returns?

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Dave wrote:

- quote -

I don't know about IL, but CA and AZ don't care where in the
world you moved from, as long as it isn't in-state. At
least for CA, you've have to report her foreign income as
non-resident income (after converting it to US$), regardless
of any part-year non-resident status for the Federal return.

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Dave wrote:

- quote -

Your wife is a dual-status alien for 2003. If you want to
file a joint return, you both must make an election to treat
her as a resident alien of the US for the whole year. (See
IRS Pub 519 for how to make the election.) You both could
then file jointly and you must include your world-wide
income for the entire year on your tax return. You may use
any reasonable method that does not distort income to
convert her income from foreign currency to dollars. If she
paid any foreign income tax on that income, you may be
eligible for the foreign tax credit. See IRS Pub 514 or the
instructions for Form 1116.

Illinois kind of works the same way. She would be a
part-year resident of Illinois. If you file a joint federal
return you may opt to file married separate returns for Il
or you may file a joint return for IL. If you file jointly,
then she will be considered an Illinois resident for the
entire year thereby making her full year income subject to
Illinois tax.

If the amounts in question were rather small, it is highly
probable that a joint return across the board would provide
the best outcome for you.

--
Alan
http://taxtopics.net

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My wife and I were married last year and she moved to the US
as a permanent resident on a spousal visa in March 2003.
She had a small income in her home country in Jan 2003
before moving to the US. As I understand it, any income she
had in 2003 prior to becoming a US PR is not taxable by the
US. A question is, must we still report this income to the
IRS somehow (obviously she won't get any W-2's from this
employment, since employers in her home country do not send
out W-2's). She gained employment in the US after moving
here which is obviously subject to US income tax. Our plan
is to file jointly. Is there anything we should be aware
of?

In addition, we live in Illinois. As far as Illinois taxes
go, must we somehow complete a part year resident form for
her or does this just apply for moving from somewhere in the
US to Illinois?

Thanks

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