Could someone help me understand how to think about the dual status tax filing vs. filing as a resident in the year you get your green card?
Scenario:
Jan-April 2018
You earn income of Rs11 lakh in India($18k)
You sell properties in India and make a gain of $80k
May 2018 you get your green card.
May-Dec 2018 - you earn income of $20K
Questions:
1. What is better tax filing option for 2018?
2. Dual Status or as resident and why? What is your tax liability in each case?
3. My understanding is that since your capital gains are so high in the early part of the year, dual status would be better as you do not have to pay tax on the income+ capital gains before you got the green card. You only pay taxes on the income earned in the later part of the year, but you cannot take the standard deduction.
I'm coming up with $2400 (federal income tax) for dual status vs. $3737 (federal income tax) + $2365 (federal capital gains).
Is my understanding correct? Am I missing anything?
Thanks in advance!
Scenario:
Jan-April 2018
You earn income of Rs11 lakh in India($18k)
You sell properties in India and make a gain of $80k
May 2018 you get your green card.
May-Dec 2018 - you earn income of $20K
Questions:
1. What is better tax filing option for 2018?
2. Dual Status or as resident and why? What is your tax liability in each case?
3. My understanding is that since your capital gains are so high in the early part of the year, dual status would be better as you do not have to pay tax on the income+ capital gains before you got the green card. You only pay taxes on the income earned in the later part of the year, but you cannot take the standard deduction.
I'm coming up with $2400 (federal income tax) for dual status vs. $3737 (federal income tax) + $2365 (federal capital gains).
Is my understanding correct? Am I missing anything?
Thanks in advance!
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