CLIENT MOVED TO BRAZIL MIDDLE OF YEAR, HAD INCOME AND PAID TAXES THERE

Forum|Forum|6 years ago
February 7, 2020
5 replies
34 views

Where do I show that income and taxes paid.

He's got a permit to work outside the States for 2 years, and desires to show this income in his 2019 income tax here. What's best?

ProSeries Basic

This topic has been closed for replies.

Best answer by itonewbie

Sounds like he's a green card holder and he's got a re-entry permit to work temporarily away from the US. As a green card holder, he is subject to US tax on a worldwide basis, just like any American. If he doesn't comply with his US filing and reporting requirements (including various information returns) and pay his taxes, that could put his green card in jeopardy. Foreign earned income exclusion and foreign tax credit should help alleviate double taxation.

itonewbie

Level 15

Take a look at whether your client qualifies for foreign earned income exclusion under physical presence test or bona fide resident test. Pubs from the IRS are easy to understand but you will find the technical details under §911 and its regulations.

If the foreign earned income cannot be fully excluded, foreign tax credit may be claimed to alleviate double taxation.

Besides basic compensation reporting, there is a whole host of international tax issues and US reporting obligations that need to be considered, mitigated, and/or fulfilled. Many a time, there are serious consequences for failure to comply. In case you are not familiar with structures of foreign compensation and benefit plans, which do not conform to US regulations, as well as various US international tax provisions, you should be ready to invest a substantial amount of time to research all the related topics or consider farming this out to someone who specializes in expatriate and international tax.

---------------------------------------------------------------------------------Still an AllStar

W

WALLSTREET3Author

Level 3

forgot to mention that he is a brazilian native, and worked here as a resident, got permit to be absent from the USA for 2 years, so he cannot lose his status. He has reported and done his brazilian income taxes in brazil and paid his taxes there.

Does he really need to report this in the States, he just wants to show that even down there he still got an income.

itonewbieAnswer

Level 15

Sounds like he's a green card holder and he's got a re-entry permit to work temporarily away from the US. As a green card holder, he is subject to US tax on a worldwide basis, just like any American. If he doesn't comply with his US filing and reporting requirements (including various information returns) and pay his taxes, that could put his green card in jeopardy. Foreign earned income exclusion and foreign tax credit should help alleviate double taxation.

---------------------------------------------------------------------------------Still an AllStar

Sign up

Login with SSO

Let's get you signed in

Login with SSO