Why the 7th is Classic, by Jean Mammen, EA

The 7th edition of “1040NR? or 1040?    +   International Organization and Foreign Embassy Employees” is Classic because:

There will always be people living and working outside their home country

Formats or laws may change, but they don’t all change at once

The 7th Classic introduces the tax law changes TCJA (Tax Cuts and Jobs Act) puts into effect for 2018 U.S. income tax returns.

Personal exemptions are “suspended”.  The 7th Classic is annotated (2018 n/a) where personal exemptions are mentioned.

Will this suspension of personal exemptions mean the 2018 Form 1040NR will no longer have boxes for qualifying dependents and spouses for residents of Canada, Mexico, South Korea, and Indian students and business apprentices? We won’t know until later. Maybe much later. But we do know that for 2018 and on, NR filers, like 1040 filers, will not be able to subtract the personal exemption amount from their gross income to lower their taxable income.

Filers of original and amended returns for 2017 and earlier will continue to apply the Classic rules, the pre-TCJA rules.

People who move to a new job location, post-TCJA, will not be able to deduct moving expenses, unless they are military with orders for a permanent change of station. That too is noted in the 7th Classic.

Is there or will there be an exception carved out for foreign service personnel, as usually is done?

For sure, an arriving J-1 teacher will not be able to deduct the expenses of moving themselves and their possessions to the U.S. in 2018 to take up that job.

The 7th is classic for all the things that were not changed by TCJA.

For Form 2555 – Foreign Earned Income Exclusion.  For Form 1116 – Foreign Tax Credit.

For using the best tax strategy to meet  the FIRPTA requirements when a foreign individual sells U.S. real property,

For determining what is taxable and what filing form, 1040NR? or 1040? should be used by an employee of an international organization or a foreign embassy located in the U.S., looking at the immigration status of the employee: U.S. citizen, U.S. tax resident by green card or by substantial presence test, an A visa holder (Vienna Convention), treaty, comparable treatment, or a G visa holder, full year or part year.

The 7th Classic sports its evergreen rosette in the lower right hand corner of the cover.

The 7th Classic helps taxpayers anticipate how TCJA will affect their 2018 tax returns, as well as providing guidance for 2017 and earlier income tax returns.

It will be available indefinitely.

The 8th edition will be published as soon as possible in 2019. And of course it will present  2018 forms and rules. When “as soon as possible”  will be is unpredictable.

The 7th Classic presents the basic tax information, if not the form detail, that will be needed in 2019 to complete 2018 tax returns.

 

 

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