Resident Alien on J-1

Technical topics regarding tax preparation.
#1
Posts:
20
Joined:
29-Apr-2014 7:23am
Location:
Boston
Hi: I need some expert opinions! While I have Resident Alien Clients, this one has bit of a different twist. New client is a Resident on a J-1 in a postdoc with local hospital. German citizen with NO US income. Income is from German sources,scholarship, rent and investment income of about 3000 Euros. Wife has applied for ITIN for her but not yet on 2 kids ages 2 and 5. They have filed and paid German Income Taxes. It would be my understanding that they would have to file US 1040 as they pass the Substantial Presence Test. It also seems to me that they would file the 1040 along with Report of Foreign Bank Accounts if they exceed $100,000 in US and FBAR if required. They would be required to include all worldwide income and use the taxes paid in Germany as a credit against any tax due.
Appreciate your opinion as the people on this forum represent the most knowledgable in tax expertise.
Mike
 

#2
novacpa  
Posts:
1228
Joined:
28-Apr-2014 1:16pm
Location:
McLean, Virginia 22101
You could have "big troubles" with this account - how can you "Represent" the client before the IRS or a State Revenue Dept (Attorneys, CPAs, EA) I would consult with an experienced Int'l tax practitioner.
 

#3
Posts:
2318
Joined:
21-Apr-2014 10:39am
Location:
Los Angeles, California
First determine if they are in fact substantially present, and make sure to note the special treatment for J-1 Visa holders.

https://www.irs.gov/individuals/interna ... sence-test
 


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