I do have bit of a thorny tax question for you. I’m a professional basketball player who played overseas since 2006 (Out of college). I never filed taxes for any season, as I was told bringing home less than 70k, I didn’t need to. I just brought my fiancé here from Czech Republic on a K1 Fiancé Visa. She is here, we married and now I must prove I can sponsor her. They require at least the 2010 tax return, but suggest having 2008 and 2009 tax returns for further evidence. We’re filling out an Affidavit of Support and will be sending it in soon. I e-filed for 2010, but heard that previous years, 08 and 09, will take 3-6 months, at this present non-tax season time, to obtain an IRS receipt proving I filed. Is there a way around this? We need to start the process because she’ll get her Green Card quicker. Should I just file now for back taxes and tell them I back filed, but haven’t received the IRS tax receipt yet. Any useful information will help me greatly. It is quite thorny! Thank you for your help.

This is a really great question, thank you. 

Like so many things with taxes you only got part of the message.  Taxes are crazy with rules that are a lot more complex than they should be.  So here is the issue for you.  As aUScitizen, you are taxable on your income no matter where it is earned.  If you earned money inCzech Republicit is still taxable here. 

Where does the $70,000 come in?  There’s a foreign earned income exclusion.  An exclusion doesn’t mean you don’t have to file it means you don’t have to pay tax on the excluded amount.  So you file a return and show the exclusion.  There are two ways to qualify for the exclusion one is physical presence test.  Were you out of theUSfor 330 days?  The second is bona fide residence.  Did you intend the other country to be your home?

Even if you didn’t qualify for an exclusion you qualify for a credit for any foreign taxes you paid.  So it is not likely you would owe much Federal Tax. 

Californiais different.  I think for each year you file, it is quite likely CA will come after you for tax.  They don’t have the above rules.  It looks like you left CA to go to college, traveled a bit, and came back to CA. Californiawill try to say you are domiciled in CA the whole time.  You can fight it but I would have to know more to know if you have a chance to win.  I bring this up because it will be an important consideration in what to file. 

If you want the returns done we can do them.  The cost would be about $250 per year and it will take about a week to get them finished.  If you want to discuss more probably best to call the office 310-347-7499 and they can set up a phone conference time for a complimentary review of your situation.

 

This blog is a collection of questions from clients and the answers.  The goal of the blog is not to answer the questions you might have.  Most times the answers are based on each client’s personal situation.  Please do not rely on this information to make important financial and tax decisions.  The advice presented here is presented to give examples of the type of information you get as a client of a true tax professional, like Ray Simmons and the preparers he employs.  Advice regarding similar issues for you should be based on your personal situation. 

Treasury Department Circular 230 Notice. “To ensure compliance with Treasury Department Circular 230, prospective clients are hereby notified that: any discussion of Federal Tax Issues contained or referenced to in this communication is not intended or written to be used and cannot be used by the prospective client or investor for the purpose of avoiding penalties that may be imposed on them under the Code.” Such discussion is written in connection with the promotion or marketing by Ray Simmons Corporation of the transactions or matters addressed in this correspondence.

Advertisements

About taxdude8422

Basically I am just a tax nerd, have been all my life. However I have found the more open you are to opportunities the better off you will be in this world. That makes my what is know as an open networker on Linkedin, I will connect with anyone. I am not an expert on Linkedin by any means but one day when I was asking someone to connect I mentioned that I had just been refilled on invites. My new connect asked how I did that. I used that same line for the next month and got asked the same question four times. I started thinking there was a lot of little things it took my sometime to learn. Through this blog I plan to share some of those "Linked Secrets"
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s