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Old 21.04.2008, 19:18
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Help With US Marriage Related Tax Issues?

Hi There

Recently I have been hearing horror story's from US friends who marry EU citizens about the tax implecations.

If I get married will my spouse be required to pay full US income on ALL world-wide income?

If so, can she simply not register as a green-card holder as I dont plan on moving to the US for some time.

Would the IRS really have access to her bank records or tax filings?
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Old 21.04.2008, 19:32
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Re: Help With US Marriage Related Tax Issues?

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Would the IRS really have access to her bank records or tax filings?
The US IRS is powerful. They have even cracked Swiss banking secrecy.
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Old 21.04.2008, 19:53
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Re: Help With US Marriage Related Tax Issues?

I am married to an EU citizen, and I file a "married filing jointly" return.

My wife does not file a return at all although she has a tax id.

I have had no problems whatsoever. Contact a CPA if you
have questions on what to do.


Cheers,
Grant
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Old 21.04.2008, 20:03
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Re: Help With US Marriage Related Tax Issues?

Hi Grant

But does your wife make CHF 200,000+? If she had no record of income I would say no problem. But I have a friend from Miami who had his wife pulled into customs at the airport when she arrived. They got split up and questioned about foriegn sourced income. And then slapped with a fine and 90 days to pay it.

Im just a little bit scared. Thats all....

Are you saying that greencard holders only have to pay on world-wide income once they enter the country?

Thanks for the help.

Steven



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I am married to an EU citizen, and I file a "married filing jointly" return.

My wife does not file a return at all although she has a tax id.

I have had no problems whatsoever. Contact a CPA if you
have questions on what to do.


Cheers,
Grant
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Old 21.04.2008, 20:06
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Re: Help With US Marriage Related Tax Issues?

Your solution is to do your taxes as "married filling separately" and if your wife doesn't have SSN then you don't have to provide it either. You only have to provide your income (you should check with someone before opening bank accounts etc.) Check the instruction for form 1040.
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Old 21.04.2008, 20:11
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Re: Help With US Marriage Related Tax Issues?

Ah, I see..... Who would I have to check with before opening bank accounts? Do you mean joint bank accounts?

This all makes sense. Thanks


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Your solution is to do your taxes as "married filling separately" and if your wife doesn't have SSN then you don't have to provide it either. You only have to provide your income (you should check with someone before opening bank accounts etc.) Check the instruction for form 1040.
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Old 21.04.2008, 20:18
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Re: Help With US Marriage Related Tax Issues?

Yes don't open joint bank accounts, and check with a tax adviser (someone who knows how to fill tax return and what not to do while living overseas).

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Ah, I see..... Who would I have to check with before opening bank accounts? Do you mean joint bank accounts?

This all makes sense. Thanks
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Old 21.04.2008, 20:33
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Re: Help With US Marriage Related Tax Issues?

Perfect, Thanks

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Yes don't open joint bank accounts, and check with a tax adviser (someone who knows how to fill tax return and what not to do while living overseas).
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Old 21.04.2008, 21:15
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Re: Help With US Marriage Related Tax Issues?

if you have a US green card you are obligated to file taxes, at least theoretically.
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Old 21.04.2008, 21:56
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Re: Help With US Marriage Related Tax Issues?

I would agree with the prior poster not to open a joint bank
account with your spouse overseas. It makes it easier for
the IRS to track combined income.

My wife does earn quite a bit of cabbage( more than me), and
I don't feel that we should pay taxes on her income in the States. She has never lived there.

My CPA advised me to file "Married Filing Separate". I did and filed my
return paying what I owed. We never filed a return for my wife.

I have done this three years running without a problem.

There is an American CPA in Zürich that does taxes:

Clint Emerson, Gerichtigkeitsgasse 31, 8001 Zurich.
His phone number is 0442125131.

I am an accountant; however, I am not a tax accountant.

You are in Zug? I am in Baar.

Cheers,
Grant
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Old 21.04.2008, 22:10
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Re: Help With US Marriage Related Tax Issues?

OK, that sounds like good advice.

I dont mind paying taxs, but there is no way that my girl-friend would marry me if she had to fork over 80,000CHF a year.

How expensive is a US tax accountant in Zurich?!

What kind of accounting are you doing?

I was in Menzingen but now is Stadt Zug. A little more fog, and less Nuns, but its not bad.





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I would agree with the prior poster not to open a joint bank
account with your spouse overseas. It makes it easier for
the IRS to track combined income.

My wife does earn quite a bit of cabbage( more than me), and
I don't feel that we should pay taxes on her income in the States. She has never lived there.

My CPA advised me to file "Married Filing Separate". I did and filed my
return paying what I owed. We never filed a return for my wife.

I have done this three years running without a problem.

There is an American CPA in Zürich that does taxes:

Clint Emerson, Gerichtigkeitsgasse 31, 8001 Zurich.
His phone number is 0442125131.

I am an accountant; however, I am not a tax accountant.

You are in Zug? I am in Baar.

Cheers,
Grant
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Old 21.04.2008, 22:17
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Re: Help With US Marriage Related Tax Issues?

I can't imagine that with tax credits and such that she would owe 80,000 in tax if she is paying anything in CH. Then again, I agree with the principle that she shouldn't have to pay taxes at all to the US.
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Old 21.04.2008, 22:31
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Re: Help With US Marriage Related Tax Issues?

Well she would pay some to the Ch government, and would pay a total of roughly 80,000CHF. I talked last year to the tax guy at the consulate (much nicer than the hot-shot at the embassy!) and he ran me through the math.

Most non-US folks tell me to give up my citizenship! Thats just too extreme I think. But it does feel like the second you leave the US, you have no rights according to the US government. No one should have to pay taxs if they dont live in the country, use the roads, use the hospitals, attend the schools, or get any benefit from paying those taxs.


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I can't imagine that with tax credits and such that she would owe 80,000 in tax if she is paying anything in CH. Then again, I agree with the principle that she shouldn't have to pay taxes at all to the US.
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Old 22.04.2008, 00:28
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Re: Help With US Marriage Related Tax Issues?

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The US IRS is powerful. They have even cracked Swiss banking secrecy.
Even the Irish Revenue Commissioners have managed that

Jim
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Old 22.04.2008, 00:30
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Re: Help With US Marriage Related Tax Issues?

Bloody Irish


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Even the Irish Revenue Commissioners have managed that

Jim
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Old 22.04.2008, 10:25
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Re: Help With US Marriage Related Tax Issues?

You can also call the IRS and ask these questions for free. I am married to an EU passport holder. I called the IRS and a representative told me exactly what forms I would need so I had a frame of reference. I also called a state tax representative and she told me what forms I would need there.

I filed separately because my husband is a non-resident alien and so is not required to file or pay US taxes because he doesn't live in the US. I used turbo tax to prepare my taxes and it worked fine for both federal and state.

Turbo tax complained that there was no SSN for my husband. But the IRS website states somewhere that you just need to include a letter stating that your spouse is a non-resident alien. Not 100% sure if it needs to be notarized or not but I think you both have to sign it.

I was panicked at first too because the IRS website is not clear on whether your spouse needs an ITIN number (the place holder number for a SSN but is NOT an SSN). When I spoke to the IRS rep. she said it was only necessary IF we were filing jointly...which we are not because we don't want to be taxed together.

Anyway...if it is still too intimidating call a professional. I just did a lot of research about getting a CPA locally and the guy I called (who was suggested on the EF) wanted me to pay 400CHF an hour. I thought that was nonsense and looked into using turbotax because I had been using it for years in the US already...and it worked out.

Good luck...you definitely have my sympathies.
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Old 22.04.2008, 10:40
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Re: Help With US Marriage Related Tax Issues?

Thanks, thats what I needed to know. I will call the IRS today. I think 400CHF an hour is simply a measure of the fear factor us Americans have of the IRS. My treuhand does Swiss taxs in about 90 minutes for CHF100. And I thought Swiss businesses were more expensive.

Thanks for the help!





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You can also call the IRS and ask these questions for free. I am married to an EU passport holder. I called the IRS and a representative told me exactly what forms I would need so I had a frame of reference. I also called a state tax representative and she told me what forms I would need there.

I filed separately because my husband is a non-resident alien and so is not required to file or pay US taxes because he doesn't live in the US. I used turbo tax to prepare my taxes and it worked fine for both federal and state.

Turbo tax complained that there was no SSN for my husband. But the IRS website states somewhere that you just need to include a letter stating that your spouse is a non-resident alien. Not 100% sure if it needs to be notarized or not but I think you both have to sign it.

I was panicked at first too because the IRS website is not clear on whether your spouse needs an ITIN number (the place holder number for a SSN but is NOT an SSN). When I spoke to the IRS rep. she said it was only necessary IF we were filing jointly...which we are not because we don't want to be taxed together.

Anyway...if it is still too intimidating call a professional. I just did a lot of research about getting a CPA locally and the guy I called (who was suggested on the EF) wanted me to pay 400CHF an hour. I thought that was nonsense and looked into using turbotax because I had been using it for years in the US already...and it worked out.

Good luck...you definitely have my sympathies.
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Old 22.04.2008, 11:51
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Re: Help With US Marriage Related Tax Issues?

Oh yeh, I also wanted to say that I thought I would not meet the residency requirements to get the tax exclusion but the IRS rep said that I can file taxes starting from the date I arrived in CH...which for me was may. Since we are Americans abroad we automatically get an extension for filing which for me meant that I would then fulfill the residency requirements and so be able to claim tax exclusion. Turbotax helped me through this easily.

I was pretty concerned for a while that I was going to be financially ruined if I did not meet the residency requirements...because if I didn't well then I would be taxed doubly...which is what I wanted to avoid from the very start.
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Old 22.04.2008, 12:02
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Re: Help With US Marriage Related Tax Issues?

Yeah, I get the exclusion because I havent been back in the States for more than week a year for the last 4 years. So as long as you arent in the US for more than 30 days a year, they cant tax you unless you make too much money.

Rumor has it that congress wants to get rid of this in the next 5 years (as the US highway system is $900B in debt, Social security is bankrupt, and public infrastructure spending has been negative since 1992) so they can keep spending. I have always been affraid that the "thresh-hold of non-tax payment would be dropped.

If there is a witch hunt, us citizens living outside the US will be the first to get it.







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Oh yeh, I also wanted to say that I thought I would not meet the residency requirements to get the tax exclusion but the IRS rep said that I can file taxes starting from the date I arrived in CH...which for me was may. Since we are Americans abroad we automatically get an extension for filing which for me meant that I would then fulfill the residency requirements and so be able to claim tax exclusion. Turbotax helped me through this easily.

I was pretty concerned for a while that I was going to be financially ruined if I did not meet the residency requirements...because if I didn't well then I would be taxed doubly...which is what I wanted to avoid from the very start.
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Old 22.04.2008, 12:22
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Re: Help With US Marriage Related Tax Issues?

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Yeah, I get the exclusion because I havent been back in the States for more than week a year for the last 4 years. So as long as you arent in the US for more than 30 days a year, they cant tax you unless you make too much money.

Rumor has it that congress wants to get rid of this in the next 5 years (as the US highway system is $900B in debt, Social security is bankrupt, and public infrastructure spending has been negative since 1992) so they can keep spending. I have always been affraid that the "thresh-hold of non-tax payment would be dropped.

If there is a witch hunt, us citizens living outside the US will be the first to get it.

Sorry, I don't always understand this line of reasoning as my understanding is that we get foreign tax credits for income tax paid in another country. Am I incorrect in my thinking?

If you are living in a very low income tax evironment (Dubai, HK) you are screwed or have alot of investment income (capital gains) which isn't taxed yeah.
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