Foreign Income-Part Year Resident

[taxquestion]

Individual is a green card holder - Worked in Australia for 6 months - paid taxes on salary in Australia to Australian gov't - came to US in July - his family remained in Australia until December - they are all British citizens

Income in Australia was $ 300,000. income in US $ 40,000.

Please confirm - I need to file 1040 , FOrm 2555 - do I have to report all Australian income -
Can I take expenses for maintaining home in Australia when he was in US - until family moved -
What else can I do to reduce taxes
thanks

[Koss]

Need a bit more info...

When did he get his green card?

Is this the first year he is filing a US tax return?

You may have some fairly complicated issues involving filing status. Is he married? If so, is his wife also a permanent resident?

Are you 110% certain that this guy is a permanent resident? A green card is not the same as a visa with a work permit.

US citizens and resident aliens are taxed on their worldwide income. If he is indeed a resident alien, you may want to try it both ways. The foreign earned income exclusion, assuming that he meets all the criteria, even in combination with the foreign housing exclusion, may not help all that much at that level of income. He may be better off treating it all as taxable income, and claiming the foreign tax credit (Form 1116).

If he just arrived in the US in July, 2009, and had never before lived here, it is doubtful that he is already a permanent resident.

Permanent resident = resident alien = green card holder. These terms are synonymous.

But holding a visa with a work permit is a totally different ball game.

The fact that he has a social security number does not mean that he is a resident alien.

To sort all this out, you may also need to know exactly how many days he was in the US during 2009, and the same information for his wife and kids.

BMK

[JG EA]

Permanent resident = resident alien = green card holder. These terms are synonymous.

I absolutely love this kind of statement. Clarity is great. Thanks.