Taxes done in philippines??

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Arizona Kid
Posted
Posted
7 minutes ago, Tommy T. said:

Well, some of the other guys have mentioned several other programs earlier in this thread. So I would try one of those that they say works? Best of luck. And you don't have to worry about it for another four months... I did mine last day on the 15th date in USA - not a great plan on my part, but it worked...

Actually I was technically 1 hour late, but maybe because I didn't owe they let it ride?

I've already sent mine via snail mail. I LBC it to the RAO Angeles City FPO mail room. Takes about 2 months but I always get my refund. BTW if you live overseas you get an extra month for the filing deadline.:biggrin:

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OnMyWay
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Posted
12 hours ago, dj3642 said:

.. i actually do have some interest from the banks here on my savings. so i am guessing i have to file taxes here in the philippines as well. the federal tax exemption i am talking about is.. something you are able to apply for granting you up to 90000 free from reporting to US if you make money here. we MAY start a business here and so i am sure we will need to get this credit.. 

You don't have to file Philippine taxes just because of interest income.  Your bank already deducts taxes.  Unless you have a LOT of money in the bank here, the interest and taxes are piddling amounts and not worth worrying about for Philippine taxes.

For U.S. taxes, you do need to report that Philippine bank interest on your U.S. return, unless it is below a threshold.  I think the threshold is $10 or something a bit higher.  The banks report it to the IRS via FACTA rules.  However, you can report the PH taxes withheld on your U.S. return and get a tax credit.

If you do start a business here and have income, you need to file PH income taxes, but I suspect many do not.  The you also have to report that income to the U.S. IRS, but as mentioned for interest income, you can get a tax credit for the PH taxes paid.  This can get complicated and I'm fairly certain you have to file a long 1040 and then use the proper additional forms.

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RickTacloban
Posted
Posted
17 hours ago, Mike J said:

When you say she has no immigration status, are you saying?  Does she have a social security number, has she overstayed her visitor visa,  does she have a green card, etc?

She has only a visitor's visa.  She lives in Tacloban but we were married here in the U.S.  We haven't yet applied for immigration status.  I just need to know if she has to do the W7 for her ITIN so I can file "married filing separately" or if I have to file as a single.  I think it is illegal for me to file as a single if I'm married.  I believe that to file "married filing separately" she has to have an SSN or ITIN.  To obtain the ITIN she has to go with me to the IRS office and we have to submit the W7 form, which in essence will prohibit her from obtaining an SSN.  So, we're considering all these options.  Married filing separately would save me money on taxes.  It seems like everything is a lose-lose situation.

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RickTacloban
Posted
Posted
17 hours ago, KC813 said:

A couple of choices.  Talk to your tax advisor about getting her an ITIN, or file 2019 taxes as 'married filing separately'.

Another option is to file for an extension of time, then file 2019 jointly after she gets her social security number later in 2020.

Well, maybe I'll apply for her green card after all.  To get an ITIN she has to be here in the U.S. and we have to file form W7.  For her future maybe I should sponsor her to get her green card and put off filing my taxes until we're done with it.  She doesn't live here currently but in Tacloban.

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Gentleman.Jack.Darby
Posted
Posted
18 hours ago, dj3642 said:

from what i understand. from all the things i found online.. . even if you have no- income you still need to file a tax form. its letting the IRS know you are still here..  this is my first round of this.. so its all new.. 

The only time an income tax return MUST be filed is if the taxpayer has taxable income.

The IRS doesn't care where a taxpayer is only, if he has taxable income, that a return, or documentation providing enough information to identify the taxpayer and to compute any tax liability, be filed and the tax paid

I always recommend filing a return, even if a taxpayer has no taxable income, because the statute of limitations for audit purposes doesn't start unless and until a return is filed.

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Gentleman.Jack.Darby
Posted
Posted
18 hours ago, dj3642 said:

.. i actually do have some interest from the banks here on my savings. so i am guessing i have to file taxes here in the philippines as well. the federal tax exemption i am talking about is.. something you are able to apply for granting you up to 90000 free from reporting to US if you make money here. we MAY start a business here and so i am sure we will need to get this credit.. 

I think what you're referring to in the Foreign Earned Income Exclusion, which applies to folks working outside the U.S.

For the interest earned on a bank account in the Philippines:

IF you file a return and pay income tax on the earnings to the Philippines, for your U.S. return (IF you meet the taxable income threshold for filing a U.S. return), you would enter the interest amount as income AND take a credit for foreign taxes paid (to the Philippines) against any U.S. tax liability;

If you DON'T file an income tax return and pay income tax to the Philippines, you would still enter the interest amount as income, but you won't have a credit for foreign taxes paid, i.e., you'll pay income tax just as if the interest was earned in the U.S.

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earthdome
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Posted

I was able to get an ITIN for my wife while living in the Philippines. You file the form requesting the ITIN along with your income tax return and Fed Ex it to a special IRS office which handles these special cases. A few years later when I got a US CRl-1 spouse visa for my wife she was issued a SSN a few weeks after we arrived in the US and now use her SSN for filing. Since my wife had income in the first year we were married from outside the US we also filed the foreign income tax exemption so we didn't have to pay US taxes on the money she had earned outside the US.

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OnMyWay
Posted
Posted
8 minutes ago, earthdome said:

I was able to get an ITIN for my wife while living in the Philippines. You file the form requesting the ITIN along with your income tax return and Fed Ex it to a special IRS office which handles these special cases. A few years later when I got a US CRl-1 spouse visa for my wife she was issued a SSN a few weeks after we arrived in the US and now use her SSN for filing. Since my wife had income in the first year we were married from outside the US we also filed the foreign income tax exemption so we didn't have to pay US taxes on the money she had earned outside the US.

Same here.  Probably a high % of ITIN are obtained from overseas.

4 hours ago, RickTacloban said:

Married filing separately would save me money on taxes. 

That seems unlikely based on my experience, but maybe you have a unique situation.  Is she going to have U.S. income and file a return?

Married filing jointly usually is the best for average married couples.  Instead of 12,000, you get 24,000 standard deduction.

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Gentleman.Jack.Darby
Posted
Posted
On 1/7/2020 at 5:36 PM, Mike J said:

It is possible that you could quality for the "earned income tax credit" if you had very little income.  There are a number of easy to use programs on the web that are free or inexpensive.  I used TurboTax while I lived in the USA.  I could no longer use it here because they would not accept my credit card as living in the Philippines.  I have used TaxAct for several years now and am happy with it.  You will not need assistance as these programs are easier to use than the forms you have been used to.

None of us claim to be experts in taxes or the law as regards filing.  Keep that in mind when being advised that you may not have to file. 

The Earned Income Credit won't help the OP since that credit is designed for low-income folks whose income is from employment rather than interest.

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Gentleman.Jack.Darby
Posted
Posted
5 hours ago, RickTacloban said:

Well, maybe I'll apply for her green card after all.  To get an ITIN she has to be here in the U.S. and we have to file form W7.  For her future maybe I should sponsor her to get her green card and put off filing my taxes until we're done with it.  She doesn't live here currently but in Tacloban.

It might be possible for her to get an ITIN without being in the U.S.

See the following IRS page for general information about TINs and specifically ITINs:

https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin

I extracted the following section from that page (it's under the ITIN section, about halfway through):

Acceptance Agents are entities (colleges, financial institutions, accounting firms, etc.) who are authorized by the IRS to assist applicants in obtaining ITINs. They review the applicant's documentation and forward the completed Form W-7 to IRS for processing.

According to this IRS page, which was last updated January 8, 2020, there are two IRS-authorized Acceptance Agents in the Philippines:

https://www.irs.gov/individuals/international-taxpayers/acceptance-agents-philippines

Seems strange that there aren't more Agents in more convenient locations, but perhaps most folks who need that service are near AC, but Illocos Norte, now that seems counter-intuitive.

Hope it helps

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