N-400 Tax questions and working/leaving overseas

[imin]

I was out of the country for 3 years with N-470 and Re-entry permit. But i visited US often, almost every 5 months. Inspite of having the above two documents.

But during the above time.
1) Once i didn't file State taxes, since i had no income attributed to State.

2) Once i filed State taxes as Non-Resident while overseas.


Now i am trying to answer the following.
Then in N-400 in SECTION 10.

Section 10:
Question4: Since becoming a Lawful Permanent Resident, have you ever failed to file a required Federal state or local tax return?

Answer: NO
Reason: Since i didn't have any income in the State to Pay taxes for hence didn't pay.

Question 13. Have you ever called yourself a ''nonresident'' on a Federal, state or local tax return?

Answer: NO.
Reason: Since calling non-resident is different from filing as non-resident.


14. Have you ever failed to file a Federal, state or local tax return because you considered yourself to be a "nonresident"?

Answer: NO
Reason: Since i filed the return but as non-Resident.

Any info will be appreciated.
Thanks.

 

[mario123]

I'm no lawyer or CPA, but from what I know in general terms:
As a permanent resident, you must file income tax returns and report your income to the IRS and your state, city, or local tax department even if you live overseas temporarily. You also may be entitled to a credit for taxes paid to a foreign government, but you must file a return to claim this credit.

U.S. citizens and U.S. permanent residents are taxed on their worldwide income. Every U.S. citizen or permanent resident must file a U.S. income tax return if certain income levels are reached. Income for filing requirement purposes is determined without regard to the foreign earned income exclusion. To determine whether you are required to file a U.S. income tax return, you will need to review the income levels for filing purposes which appear in IRS publications, including Publication 17 ("Tax Guide for Individuals") and Publication 54 ("Tax Guide for U.S. Citizens and Resident Aliens Abroad").

If you do not file income tax returns while living outside of the U.S. for any length of time, or if you say that you are a “non-immigrant” on your tax returns, the U.S. government may decide that you have given up your permanent resident status and start removal proceedings.

There are 4 sins you never commit in the eyes of the USCIS especially when applying for citizenship:

1) Be convicted of a crime
2) Tell lies under any circumstances
3) Not file taxes
4) Vote in fed/state elections

Not filing taxes is a cardinal sin in the eyes of the USCIS!

Check this out: http://www.irs.gov/publications/p54/index.html

I think you need to consult with a good immigration lawyer before making your next move.

 

[Flydog]

I do not believe you need to file state income tax unless you made money in that state or actually lived in the state. You are, however, required to always file federal taxes. But, I'm not sure.

Look up the rules for the last state you lived in before the year you were away (that's the state in which you would vote (if you were a citizen living abroad)).

If you are "resident" in the state, you usually have to file income taxes even if you made no money there (for example, I used to live in RI but work in MA - I'd file non-resident taxes in MA and resident taxes in RI (I really like living in Texas in April - no state income tax!!)). The question is what does state "resident" mean for tax purposes.

By the way, even though I filed NR taxes in MA, I answered "No" to the "have you ever called yourself a NR on tax form". I also brought this up at my interview. The IO said "oh, that doesn't matter - we only worry about Federal taxes" (Dallas DO).

 

[MichaelDE]

I would not worry about calling yourself a non-resident for state tax purposes on a state tax return. It is very common to pay taxes in more than one state. One as a resident others as a non-resident. Calling yourself a non-resident on a Federal Return or filing the form 1040NR is a big trouble.

Last comment, even though it is not your question directly, but in my mind if you did nof file any State Returns for a year or so, it will be difficult for you to claim that you had residency in the U.S. for that year for purposes of doing your 5-3 year required residency test.

 

[imin]

Thanks Michael,

Just to let Mario know, the question was about STATE taxes. I have been filing Federal as Resident while i was abroad, & was visiting U.S often every year, inspite of having both N-470 and Re-Entry permit. Even my Expat Tax Accountant told me that STATE tax were not required for that year.

Basically even in Federal 1040, one should NOT claim themselves to be Bonafide Resident of a foreign country for exemptions but instead should use Physical Presence test.

One thing is clear filing NR State tax form is not a big deal and can answer the above listed question simply NO.

That leaves Michaels concern about not filing State Taxes and continuity of residence, i think that is not a concern since. N-470 (Preservation of Residency for Naturlization) precludes that. I had NO state income so no state taxes, period.

I also know U.S is the only country in the world which taxes its citizens based on their Citizenship doesn't matter where they live/work. There is no escaping.