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March 15, 2021
Question

Turbo Tax Full Service, prior year 1044NR

  • March 15, 2021
  • 2 replies
  • 0 views

Hi,

 

two questions: 

1. in 2019 I was a non-resident alien with a 1044 NR. for 2020 I am a resident alien and looking to file a normal tax return. 

 

Can I use the turbo tax full service option for help?

 

2. in 2020 I had some foreign income from a job, that was taxed at source. can I report that on turbotax and benefit from the UK/US tax treaties to avoid double taxation?

 

Thank you,

George

2 replies

March 15, 2021

1.  Yes, you surely can use TurboTax full service option for assistance.  Check this out : Full Service

 

2.  Tax treaty-related matters are out of scope for our advice.  Generally, if you are a US citizen or resident, you will report worldwide income including your UK income on your US tax return.  To determine it's taxability, you would need to consult another professional who is specialized in it for verification.

 

If it is taxable, here are the steps:

 

In TurboTax online,

  • After sign into your account, select Pick up where you left off
  • At the right upper corner, in the search box, type in foreign income and Enter 
  • Select Jump to foreign income 
  • Follow prompts

After you enter the information, if you qualify for a foreign earned income exclusion, the program will prompt you to fill out a Form 2555 Foreign Earned Income Exclusion.  To qualify, you have to live outside the United States for at least 330 days during 12 consecutive months.  For more information, please see Foreign income and exclusion and Extension

 

If it is not taxable to you,

  • report your full amount as instructed above. Then enter the treaty exempt amount as negative amount (e.g. -5000) under Other Reportable Income by following these steps: 
  • To your left, select Federal
  • From the top, select Wages and Income
  • Scroll down to last section -Less Common Income -select  Miscellaneous Income, 1099-A, 1099-C- Start 
  • Next screen, scroll down to Other Reportable Income- Start
  • Follow prompts
  • Download and fill in a Form 8833 from IRS to claim an exception.  https://www.irs.gov/pub/irs-pdf/f8833.pdf
  • You cannot e-file.  You may still use the TurboTax program to prepare all your tax forms, but you would need to print them out and submit by mail along with form 8833. 

If you have paid taxes to both foreign and the US tax authorities, the IRS allows you to claim a foreign tax credit on your US tax return.  To claim this foreign tax credit, you would need to file a Form 1116 Foreign Tax Credit. 

 

Here are the steps: 

  • At the right upper corner, in the search box, type in "foreign tax credit" and Enter
  • Select Jump to foreign tax credit
  • Follow prompts

 

April 12, 2021

Thanks

Employee
March 16, 2021

@gwalder , concerning your question :

 

2. in 2020 I had some foreign income from a job, that was taxed at source. can I report that on turbotax and benefit from the UK/US tax treaties to avoid double taxation?  "

 

Generally , you should be able to avail of  either  (a) a deduction for the taxes paid  to another  taxing authority  within the SALT limitations  OR (b) a tax credit .  Note that the tax credit while recognized   in total , the actual allowable  for the year is based on a  ratio of foreign income world income  ( the taxes thereon) -- the unallowed portion can be carried back one year ( if there was foreign income  ) or forward for  10 years ( again need foreign income  ).   You said the income was for 2020 ( earned during  calendar 2020 or paid during 2020 ? ).  Were you in the USA while earning this income  i.e. was the work done  in the UK or  what ?.   When did you enter the USA and with what visa  -- trying to determine exactly when you became  a resident for tax purposes  ( or Green Card  ).

Need answers to be sure that  I am in the right ball park