How should I handle taxes for 2008 as an L-1 visa holder?

Full question:

I have been working in the US with L-1 visa. But I have a contract with (and I am payed by) the main company, which is abroad (in Germany). The company to which my visa was issued is a sister company of the company I work for. My main company did not withhold any taxes for 2008. I am considered a resident alien in the US, and my question is how shall I pay taxes for 2008. I called IRS, but seems my case is not the standard one, and either I should pay as employee (I should get W-2), or as a contractor, than I am responsible for tax withholding (filing proper forms every quoter). My question is what is better in my case (considering my L-1 status), regarding not withheld taxes for 2008, what should I do? Also, what should I do for 2009? I would be very obliged if you answered my questions clarifying my situation and steps to properly file tax return forms for 2008. Is it okay for 2008 to just file 1040+1040CE (I have been working in the US since June 2008), and later pay all the required taxes at once, or shall I ask my company to send any forms/letters to IRS first? To summarize, I have L-1 issued for sister company in the US- I have a contract and I am payed by the main company in Germany- there was no tax withholding for 2008- I did not receive any forms regarding taxes for 2008.

  • Category: Taxes
  • Date:
  • State: Illinois

Answer:

As an L-1 visa holder, your tax situation is unique due to your employment structure. Since you are considered a resident alien for tax purposes and did not have taxes withheld for 2008, you will need to file a tax return. Here’s how you can proceed:

1. **Filing Status:** You will likely need to file a dual-status tax return for 2008. This is because you were a non-resident alien for part of the year and a resident alien after passing the substantial presence test.

2. **Forms to Use:** For 2008, you should file Form 1040 along with Form 1040CE. This allows you to report your income and calculate any taxes owed.

3. **Paying Taxes:** You can file your tax return and pay any taxes owed at that time. It is essential to ensure you pay the correct amount to avoid penalties.

4. **For 2009:** You will file as a resident alien using Form 1040 or its variants (1040A/1040EZ) since you will have been a resident for the entire year.

5. **Communication with Your Employer:** It may be beneficial to ask your employer in Germany for any documentation regarding your employment and income for 2008, but it is not necessary for filing your taxes. You are responsible for reporting your income and paying taxes directly.

Consulting a tax professional who understands international tax law may also be helpful to ensure compliance with IRS regulations.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

If you quit your job while on an L-1 visa, your visa status may be affected. The L-1 visa is employer-specific, meaning it is tied to your employment with the sponsoring company. Once you resign, you typically have a grace period of 10 days to leave the U.S. or change your status. If you wish to remain in the U.S., you must apply for a different visa or change your status before your grace period ends.