US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.

Precambrian Video Games: Aug 19, 2002

How the gently caress do you talk to someone at the IRS about questions like determining tax residency?

I called their 800-829-1040 number and pressed 2-2-4 to get to the area about individual tax questions. Then I tried 4 for "other/advanced questions" and it said "we don't answer these questions by phone, check the website!" and hung up. Yes I've checked the loving website, I still have questions! Then I tried again and pressed 1 for form 1040 questions and talked to a live person, who wanted to know what specifically I was asking about. When I said tax residency they replied oh that's an advanced topic and transferred me to that same line thst just tells you to gently caress off and hangs up.

Yes I've had consultations with two cross-border accounting firms and they each gave different answers and also want to charge around $1000. I guess I can ask here but I want the drat bureau to clarify their confusing as hell documentation.

e: okay, if you call the number for taxpayers at 800-829-4933 you can skip the first two questions but the end result is the same. I had a longer conversation with another agent who said nope, nobody can answer your questions, good luck.

Precambrian Video Games fucked around with this message at 23:22 on Feb 16, 2024

# ¿ Feb 16, 2024 23:02

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# ¿ May 9, 2024 23:04

Precambrian Video Games: Aug 19, 2002

PatMarshall posted:

I can probably help, what's the question? Residency has pretty cut and dried rules unless we're talking about treaty tiebreakers, which are more facts and circumstances, or things like bona fide tax home etc. But residency should be something we can help you with. Are you a US citizen? Green card holder? How many days were you in the US in the year in question? 1000 is pretty cheap btw, my rate is 850 an hour and we really don't take clients for less than 5k.

Thanks... really, 5k? Is that for people with lots of forms to fill, investments and property etc? I just have a W-2 from one employer, plus the Canadian equivalent.

H110Hawk posted:

My various us+au coworkers have been paying around $5k/year to get their taxes done. You're getting off easy if someone will touch it for $1k, unless they mean literally answering the question. Which you haven't even posed yet.

Well, I have plenty more to follow up, but for context for the first question:

I'm Canadian, no green card, started the year on a J-1 (having been in the US for years and therefore a resident for tax purposes), switched to an H-1B, moved back to Canada in October. The guide for aliens says:

quote:

Last Year of Residency

If you were a U.S. resident in 2023 but are not a U.S. resident during any part of 2024, you cease to be a U.S. resident on your residency termination date. Your residency termination date is December 31, 2023, unless you qualify for an earlier date, as discussed later.

Earlier residency termination date.

You may qualify for a residency termination date that is earlier than December 31. This date is:

- The last day in 2023 that you are physically present in the United States, if you met the substantial presence test;
- The first day in 2023 that you are no longer a lawful permanent resident of the United States, if you met the green card test; or
- The later of (1) or (2), if you met both tests.

I easily meet the substantial presence test so I suppose I may qualify. But do I have a choice in the termination date or not? The rest says:

quote:

Note. Claiming residency status under an applicable treaty tiebreaker provision in another country may also lead to a residency termination date that is earlier than December 31.

You can use this date only if, for the remainder of 2023, your tax home was in a foreign country and you had a closer connection to that foreign country. See Closer Connection to a Foreign Country, earlier.

I'm pretty sure I meet the closer connection, but I'd be better off filing as a resident for the whole year, because under dual status returns it says:

quote:

Restrictions for Dual-Status Taxpayers: The following restrictions apply if you are filing a tax return for a dual-status tax year.

Standard deduction. You cannot use the standard deduction allowed on Form 1040 or 1040-SR. However, you can itemize any allowable deductions.

Head of household. You cannot use the head of household Tax Table column or Tax Computation Worksheet.

Joint return. You cannot file a joint return. However, see Choosing Resident Alien Status under Dual-Status Aliens in chapter 1.

That's awful for me as I'd lose two standard deductions on a joint return (my spouse has minimal income) and have next to nothing for itemized deductions, so I really don't want to file as dual status if I have a choice. But if I do have to, I'm still confused because on the Taxation of Dual-Status Individuals page it says:

quote:

Nonresident at End of Year

You must file Form 1040-NR, U.S. Nonresident Alien Income Tax Return, if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U.S. resident on the last day of the tax year. Write "Dual-Status Return" across the top of the return. Attach a statement to your return to show the income for the part of the year you are a resident. You can use Form 1040, U.S. Individual Income Tax Return as the statement and write "Dual-Status Statement" across the top.

So if I'm filing a 1040-NR does that mean that I qualify as a non-resident for tax purposes for the beginning of the year or not? This might matter for the part of the year I was on a J-1 because:

quote:

Special Social Security and Medicare tax exemption: A J-1 alien who is a nonresident alien for tax purposes and is paid wages in exchange for personal services performed within the United States is exempt from paying U.S. Social Security and Medicare taxes on such wages under Section 3121(b)(19) of the Internal Revenue Code, as long as the employment is authorized by USCIS and the services are performed to carry out the purposes for which the J-1 visa was issued to them.

J-1 aliens who become U.S. tax residents or change their visa status to other work visa types (other than F, M or Q visa) are subject to Social Security and Medicare taxes on their wages.

I didn't have payroll taxes deducted while I was a J-1 non-resident, but I did after I became a resident. I see that H-1Bs do have payroll taxes deducted while they are non-residents. This is moot if I (have to) file as a resident, so that's why I was going to leave this question for later.

Anyway, as I said I had two brief consultations where I was given similar estimates and one said no problem we'll file you as a full year resident and the other said no you can't even choose to do that, hence my confusion.

Precambrian Video Games fucked around with this message at 06:51 on Feb 17, 2024

# ¿ Feb 17, 2024 06:47

Precambrian Video Games: Aug 19, 2002

PatMarshall posted:

Ok, so i can see how this could be confusing as the IRS advice is not really crystal clear. Download Publication 519, best source of guidance on these issues. My understanding is that you have to affirmatively claim the early residency end date (i.e. in October rather than December 31) by attaching a statement signed under penalties of perjury and including sufficient facts to demonstrate that your tax home is in Canada and you maintained a closer connection to Canada. Otherwise, the default rule would apply and your residency ends December 31. It sounds like you could qualify, and the guidance doesn't really contemplate that a qualifying nonresident alien would not follow this procedure. In other words, it doesn't really present an option. That said, from a practical perspective, I believe you could simply file for the entire year as a resident, even though you would otherwise qualify for an earlier end date if you had filed the statement.

So, in short, both firms you talked to could be right. I'd be comfortable filing the full year, but other firms may not.

MadDogMike posted:

I'm leaning towards "could file as a full year resident" (you'd have to include the Canadian income as US income that way, but then you could do Form 1116 to write off the Canadian tax from the US taxes), but I'll be frank and say dual status stuff is the one thing I'm weakest on foreign-tax wise, so take my opinion with a grain of salt (and if anyone better informed wants to chime in, please do).

Thanks to both of you, that sounds plausible. Funnily enough the IRS has ten worked examples for determining residency status of increasing complexity and I don't think any of them cover leaving late in the year (most don't cover leaving at all, while #9 covers leaving the US on one visa and returning a year later on a different visa).

I may just call the Canada Revenue Agency to see if they have any issues with this since I was indisputably a Canadian resident for at least the last 1.5 months of the year, and reading Article IV P2 of (the summary of) the Canada-US tax treaty it sounds like the tiebreakers are meant to prevent anyone qualifying as a tax resident of both countries at the same time. Also they actually try to answer questions, in my prior experience.

# ¿ Feb 20, 2024 07:36

Precambrian Video Games: Aug 19, 2002

Xun posted:

Is there a non poo poo tax software that would work for someone filing abroad?

I was looking this up and found this article, which seems helpful (I've only ever used FreeTaxUsa while in the US so have no personal experience, yet...).

# ¿ Apr 5, 2024 20:56

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > US Income Tax Thread: Bank error in your favor! GO DIRECTLY TO JAIL.