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I'm moving to the US in 2 weeks. I'm a Polish independent contractor working with US clients. I expect to obtain work permit within 30 days after arrival.

I do understand the taxation for the US tax residents. Just want to clarify this part, because my Polish taxes are much lower than the US taxes.

One of my clients asks me if he can write a check for the next payment so I can cash it upon arrival instead of a SWIFT transfer to my Polish bank as usual. I can do this before or after obtaining the work permit.

  1. Can I/Should I cash it before obtaining the work permit?
  2. Do I pay taxes in the US as a slef-employed for these money? Technically I've earned these money before arrival.

Another client. I've verbally agreed to postpone the next payment to November, because my client wants this expense to go to the next fiscal year or something.

  1. Can I sign some kind of agreement on that, so these money would not be taxed in the US, because I've earned them outside of the US?

  2. What kind of accountant knows these things?

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    Will you receive the check when you are in Poland, or after you arrive in the United States? Aug 17, 2022 at 13:02
  • Where are you physically locate when you perform the work?
    – user102008
    Aug 17, 2022 at 16:49
  • I'm not sure why you think the time you "obtain a work permit" matters. You are a resident alien for the year if you pass the Green Card Test or the Substantial Presence Test; otherwise you are a nonresident alien.
    – user102008
    Aug 17, 2022 at 16:50
  • @user102008 in Poland. I become tax resident after 180 days of continuous staying in the US AND I'm obligated to pay back taxes for that 180 days.
    – stkvtflw
    Aug 18, 2022 at 5:50
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    @stkvtflw: The tests operate by year. You pass the Substantial Presence Test for a given year if: (the number of days you are in the US that year + 1/3 the number of days you are in the US the previous year + 1/6 the number of days you are in the US the year before that) >= 183 days. So if you are in the US less than half of this year, and have not been in the US the previous 2 years, you are by default a nonresident alien for this whole year.
    – user102008
    Aug 18, 2022 at 15:43

2 Answers 2

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There are at least two options for avoiding taxation of this money. One is the Foreign Earned Income Exclusion, and the other is the Foreign Tax Credit. Tax software is not that great at handling these so you could get an accountant that has experience with these.

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  • FEIE would probably not be applicable here. FTC means you're not avoiding taxation, you're paying the taxes still, it's just that you're paying in Poland instead of the US. If the US tax rate is higher - you'd need to pay the difference. There's also state taxes which are not covered by FTC (and may not be covered by FEIE).
    – littleadv
    Aug 19, 2022 at 19:31
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Can I/Should I cash it before obtaining the work permit?

Doesn't matter, if the work you're paid for is already done.

Do I pay taxes in the US as a slef-employed for these money? Technically I've earned these money before arrival.

If you're a cash based taxpayer (which almost any individual in the US is), you're taxed on the money when received. In this situation you receive the money when you receive the check (i.e.: you get the title for the money). Whether you converted the check to cash, or deposited it electronically, or assigned it to someone else - doesn't matter. Once you got the check - you got paid. If you got the check before moving to the US - you got paid outside the US.

Can I sign some kind of agreement on that, so these money would not be taxed in the US, because I've earned them outside of the US?

You can sign whatever you want, but it wouldn't affect the US government. If you're paid in November, when you are already a US tax resident, the US government will want its cut. See the definition of taxable income in the IRC Sec. 63. Unless you can find a way to exclude that income - it is taxable (and I can't think of a way).

In this case the client wants to postpone the recognition of the expense to the next year, so clearly the recognition of income would be postponed as well, they're symmetrical. You can't both double-dip on tax benefits.

What kind of accountant knows these things?

EA (Enrolled Agent), CPA (Certified Public Accountant) which is licensed in your State, or Attorney licensed in your State who's specializing in taxes. Noone else is allowed to render tax advice in the US (some other people are allowed to prepare tax returns, but not render advice).


A side note, as was mentioned by another user in the comments: you do not necessarily become US tax resident immediately when moving. You become US tax resident based on Green Card test (i.e.: once you become a lawful permanent resident) or substantial presence test (i.e.: once you stay in the US long enough). In some cases you can elect to be treated as resident, even if you don't pass these tests. So if you're not moving on an immigrant visa (which it sounds like you are, but we don't know for sure), you may end up being non-resident this year, and the question would be moot. See the IRS site on the determination of residency.

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    I don't think receiving a check in the US for work done in another country before becoming a US tax resident would create US income tax liability. Can you provide support for your answer?
    – minou
    Aug 17, 2022 at 20:14
  • @googlecloudsuportsucks Why don't you think that? For US tax resident it doesn't matter where the work was performed. If the OP is paid when they're already tax resident - it's taxable. The OP may be able to claim at audit that the delay was out of their control and such, but by default they'd have to pay the taxes.
    – littleadv
    Aug 17, 2022 at 20:30
  • For downvoters - please explain the downvote. If you disagree with anything - please leave a comment, preferably with actual source and not just "i don't like it so -1"
    – littleadv
    Aug 17, 2022 at 20:32
  • Not sure why someone downvoted your answer, thanks for answering!
    – stkvtflw
    Aug 18, 2022 at 5:55
  • "For US tax resident it doesn't matter where the work was performed." This is a pretty odd claim, and not one I'm familiar with being broadly accurate. As a counter-example: consider that the Canada-US tax treaty which typically allows 10k to be earned cross-border without even a filing requirement [see page 2: irs.gov/pub/irs-pdf/p597.pdf] references days worked not days that a paycheque was paid. Aug 18, 2022 at 15:28

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