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How to pay taxes after winning the GC ?

F

Farma

Registered Users (C)
Hello !

My husband and I won the lottery last year and we entered for the 1st time in US during the month of December 2014, only for 2 weeks. Right now, we are still working and living outside the US. As we activated the GC in 2014, I guess we need to fill a form to declare our income to the IRS... but we are wondering ... which form ? There are two much forms and we don't know which one to use, as we lived abroad in 2014 (and are still in 2015).
So which form have you filled ? Maybe someone can help us ! I believe we have a 2-months extension as we live outside, so until mid-June.

Thanks a lot !
 
You may want to consider using software that will guide you through the process. Google file taxes online or something along these lines. Also I believe you need to file for an extension in order to get one but I might be wrong as I have never needed it. The federal form is probably 1040ez and there is a state one. Pay for online filing via a software as it will make your life much easier. Alternatively consult a tax person (cpa) as your situation is rather simple but yet complex as you have spent so little time here during 2014.
 
Farma said:
Hello !

My husband and I won the lottery last year and we entered for the 1st time in US during the month of December 2014, only for 2 weeks. Right now, we are still working and living outside the US. As we activated the GC in 2014, I guess we need to fill a form to declare our income to the IRS... but we are wondering ... which form ? There are two much forms and we don't know which one to use, as we lived abroad in 2014 (and are still in 2015).
So which form have you filled ? Maybe someone can help us ! I believe we have a 2-months extension as we live outside, so until mid-June.

Thanks a lot !
Click to expand...

Just one quick point, in case you decide to work through a tax professional (I personally would advise for a do-it-yourself approach, using TurboTax Online, yet you do need at least basic knowledge of the US tax system): one thing you must not do, even though you only spent a short period of time in the US in 2014, is to declare yourself a “nonimmigrant” on your U.S. tax returns (see last point in the list below). It might well be what a tax professional might advise you to do, due to related tax saving implications, yet this route is not open to you in this case:

"Abandoning Permanent Resident Status

You may also lose your permanent resident status by intentionally abandoning it. You may be found to have abandoned your status if you:
  • Move to another country, intending to live there permanently.
  • Remain outside of the United States for an extended period of time, unless you intended this to be a temporary absence, as shown by:
    • The reason for your trip;
    • How long you intended to be absent from the United States;
    • Any other circumstances of your absence; and
    • Any events that may have prolonged your absence.
    • Note: Obtaining a re-entry permit from USCIS before you leave, or a returning resident visa (SB-1) from a U.S. consulate while abroad, may assist you in showing that you intended only a temporary absence.
  • Fail to file income tax returns while living outside of the United States for any period.
  • Declare yourself a “nonimmigrant” on your U.S. tax returns."
 
I think OP should just pay a consultant to ensure its correct. The first tax is supposed to be two returns, one as a non-resident up to date of activating green card, and the second as a resident. Even the IRS on its website suggests people use consultants for filing when they are dual status in a year and I don't think they usually recommend for this...

And yes also check whether or not you need to file for the extension. We also did an extension for the same reasons last year and we had to file for it, but it was a 6-month not 2-month extension so I'm not sure if it is the same clause OP means.
 
Yes, I agree this is probably the best way forward in this case. I included GC tax requirement information for OP, as most US tax professionals would not be aware of GC rules and simply would file federal and state non-resident returns for 2014 with, in worst case scenario, possibly disastrous outcome.
 
EURO2014 said:
Yes, I agree this is probably the best way forward in this case. I included GC tax requirement information for OP, as most US tax professionals would not be aware of GC rules and simply would file federal and state non-resident returns for 2014 with, in worst case scenario, possibly disastrous outcome.
Click to expand...
PS: for other DV readers - from a tax perspective it would probably be advisable to activate your GC at the beginning of the year, if you have the choice, as this will then allow you to file a standard US 1040 resident return for the tax year, avoiding the above-mentioned hassle of filing two returns for the same tax year with the issues and tax consulting requirements resulting from that tax filing strategy, depending on your personal circumstances.
 
EURO2014 said:
PS: for other DV readers - from a tax perspective it would probably be advisable to activate your GC at the beginning of the year, if you have the choice, as this will then allow you to file a standard US 1040 resident return for the tax year, avoiding the above-mentioned hassle of filing two returns for the same tax year with the issues and tax consulting requirements resulting from that tax filing strategy, depending on your personal circumstances.
Click to expand...

I agree with this. I was in the unfortunate circumstance of a visa expiring on 31 December so had no choice!!
 
Alright, thank you ! I had no choice either :) and now, this is a hassle to understand how to pay taxes. I am going to consider to pay a consultant, as the situation seems very complicated ...
 
Farma said:
Alright, thank you ! I had no choice either :) and now, this is a hassle to understand how to pay taxes. I am going to consider to pay a consultant, as the situation seems very complicated ...
Click to expand...

Then a further tip, many consultants are experts in US tax for 'normal' taxpayers and don't deal with filing for things like this, and don't actually know what to do. Try look for a facebook group of immigrants from your country and ask for recommendations there.

It may seem like a waste of money to pay a consultant, but it needs to be done right, including for your naturalization interview down the road.
 
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