tax question about foreign income

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pizzahug

New Member
I am a graduate student US citizen who receives a fellowship stipend, and my husband is a GC holder who has a job abroad. He lives in the US but he works long-distance for his company in another country, and they pay him by putting money on his work debit card. Can anyone tell me what forms we need to fill out for taxes? i filed a tax extension already, so technically i have until october to figure this out, but i need to fill out a FAFSA very soon for my upcoming TAship, so i have to do my taxes in the coming month.

Any information anyone has would be greatly appreciated!

thanks!
 
no, why would he set aside 40%? He's already been taxed on this income in the originating country, so it shouldn't be a problem, right? I don't understand why this is "unlikely to end well". Could you please clarify or explain?
 
If he doesn't receive pay in the US, he is not required to pay FICA taxes. He has to declare the income on a tax return filed in the US.

OP has to file tax returns showing her graduate stipend AND her husband's foreign income. US taxes are due on the total worldwide income. If taxes are paid to the foreign country, you may be able to claim those taxes on your US tax return.
 
thanks, nkm, this is much more helpful! do you know which tax form or separate form would be used to report the foreign income or how one would prove that taxes have been paid on it? i think i have to go to a tax accountant anyway, but i at least want to get a handle on the situation! thanks again!
 
pizzahug said:
thanks, nkm, this is much more helpful! do you know which tax form or separate form would be used to report the foreign income or how one would prove that taxes have been paid on it? i think i have to go to a tax accountant anyway, but i at least want to get a handle on the situation! thanks again!
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You report foreign income in IRS form 1040 and form 1116, check IRS website: http://www.irs.gov/taxtopics/tc856.html

If taxes were paid in a foreign country, you should receive a notice/receipt for that payment. You will be required to attach a copy of that receipt to your US tax return.
 
Re

I heard that foreign workers who work in US on F, J, M or Q visas are taxed as non-resident aliens for the first 5 years in the US and that the rates are higher because NRAs cannot deduct anything but state income taxes from their wages. Then how much higer do they have to pay for the tax? how much more percentages?
 
Generally, taxes paid to foreign governments are deductible in the same manner a US state and local taxes on Schedule A. Alternatively, taxpayers can elect to claim foreign income tax as a credit by filling Form 1116 annually. In most instances, foreign tax credit saves more income tax than a deduction, and also avoids triggering AMT. One caution is that any foreign tax allocated to excluded earned income is not eligible as either deduction or credit.
 
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