Res Alien income

[Unregistered]

I have a client that elects to be treated as a resident alien for 2005. Where on the 1040 is the most appropriate place to list the income she earned before she came to the US?

[Brian EA]

I have a client that elects to be treated as a resident alien for 2005. Where on the 1040 is the most appropriate place to list the income she earned before she came to the US?

Line 21 with a description

[Koss]

Alien income

I have a client that elects to be treated as a resident alien for 2005. Where on the 1040 is the most appropriate place to list the income she earned before she came to the US?

The income should be reported on the appropriate line of the return.

Okay, that sounds really ridiculous because I'm almost repeating your question.

But what I mean is this:

If your client had self-employment income outside the US, then report it on Schedule C. If your client had interest income from outside the US, then report on line 8. If your client had capital gain from outside the US, then report on Schedule D.

Line 21 may work, but I would avoid for two reasons: It may raise questions and generate IRS correspondence, and for certain things like capital gain and qualified dividends, reporting the income where it actually belongs will result in a lower tax rate.

If the income in question is wages, then it should be reported on line 7, with an explanation.

Okay... this is going to evolve into a software issue. Check your support manual or the help screen. There are many different "types" of W-2 forms that can be entered. You may have to do a Substitute Form W-2, but your program may have some other option for "foreign wages not reported on Form W-2," or something like that.

Works like a taxable scholarship, which also has to be reported on line 7, even though there is no W-2.

Burton

[Brian EA]

The income should be reported on the appropriate line of the return.

Okay, that sounds really ridiculous because I'm almost repeating your question.

But what I mean is this:

If your client had self-employment income outside the US, then report it on Schedule C. If your client had interest income from outside the US, then report on line 8. If your client had capital gain from outside the US, then report on Schedule D.

Line 21 may work, but I would avoid for two reasons: It may raise questions and generate IRS correspondence, and for certain things like capital gain and qualified dividends, reporting the income where it actually belongs will result in a lower tax rate.

If the income in question is wages, then it should be reported on line 7, with an explanation.

Okay... this is going to evolve into a software issue. Check your support manual or the help screen. There are many different "types" of W-2 forms that can be entered. You may have to do a Substitute Form W-2, but your program may have some other option for "foreign wages not reported on Form W-2," or something like that.

Works like a taxable scholarship, which also has to be reported on line 7, even though there is no W-2.

Burton

Thanks Burton, but I still stand with the original thread. It will be difficult to enter wages without FEIN depending on the software as you mentioned. Other issues include conversion of currencies.

[Unregistered]

I agree. However the income must go on the correct line. Therefore the only option is to file a paper return. I assume the election has been made to maximise foreign tax credit carryover in which case it is vital that items are properly reported on the return and indeed the TDF90-22.1.