U.S. RESIDENTS WITH FAMILY OUTSIDE THE U.S.

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If you are among the many U.S. residents who provide support for family members who reside outside the United States, you may wonder if any tax breaks are available for such assistance. The answer is maybe � it depends. "J.L. Galang" has put together some tax tips to help you answer this question. In addition, we suggest you consult with an experienced "J.L. Galang" tax return preparer who will help you sort through the special facts and circumstances in your case.

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CLAIMING EXEMPTIONS FOR FAMILY MEMBERS

You may not claim tax deductions or credits for any amounts you spend for your own personal living expenses or to support others. Instead, you may be eligible for one or more exemptions. An exemption is an amount set by law that reduces your taxable income. The exemption amount for 1997 is $2,650.

Whatever your resident status, you are entitled to an exemption for yourself unless you are a dependent of another U.S. taxpayer.

Exemption for Your Spouse. If you are married, you may file a joint return and claim two exemptions, one for each of you. This is true even if only one of you has income. It also is true when you and your U.S. nonresident spouse qualify for a joint return by agreeing to report worldwide income.

If you are married and file a separate return, you may claim an exemption for your spouse only if he or she:

• Had no U.S. gross income, and
• Was not the dependent of another U.S. taxpayer.

If these conditions are satisfied, you may claim an exemption for your spouse even if he or she lives outside the United States or otherwise has U.S. nonresident status.

Exemptions for Your Dependents. You may claim an exemption for each dependent for whom you satisfy all of the tests listed below.

• Your dependent must be related to you or be a member of your household for the entire year;
• Your dependent, if married, cannot have filed a joint return for the year;
• Your dependent�s gross income must be less than an exemption amount ($2,650 for 1997) unless the dependent is your child who is under age 19 or is a full-time student and under 24;
• You must have provided over one-half of the dependent�s total support for the year as figured under the general rules, divorced parent rules, or multiple support agreement rules; and
• Your dependent must be a citizen of the United States or a resident of the United States, Mexico, or Canada for some part of the year.

  
  

  A dependent is a U.S. resident if he or she has U.S. permanent immigrant status or meets the substantial presence test. A dependent is a resident of Mexico or Canada if that is where his or her permanent home or habitual abode is located.

  A dependent is a U.S. citizen if he or she was born within the geographical limits of the United States or if at least one parent was a U.S. citizen who met specific conditions of U.S. residence on the date of the dependent�s birth.

  Consult with your "J.L. Galang" tax return preparer, as soon as possible, to learn more about these rules and what steps you may be able to take to meet them for the current tax year or for future tax years.
  

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  SOCIAL SECURITY NUMBER

  If you are a U.S. resident, or a married U.S. resident, or a married U.S. nonresident who elects to report worldwide income, you are required to obtain a social security number that is to be used as an identification number for U.S. tax purposes. Your number will also be used by the Social Security Administration to record your earned income on which future social security payments will be figured.

  In addition to your own number, you must report on your tax return the social security of each dependent born before December 1, 1997, and whose exemption you claim.

  If you, your spouse, or a dependent doesn�t have a number, you should apply for one by filing Form SS-5 and proof of entitlement with the social security Administration. If you, your spouse or a dependent needs a tax identification number but is ineligible for a social security number, request and individual tax identification number (ITIN) from the IRS by filing form W-7. Be sure to consult with your "J.L. Galang" tax return preparer if you have questions about how to proceed.

  Note to U.S. Nonresidents. If you are a U.S. nonresident, you generally may claim only one exemption, the one for yourself. If you are a resident of Mexico, Canada, Japan, South Korea, or American Samoa, or a student form India, you may be able to qualify for exemptions for your spouse and dependents.

  A U.S. nonresident taxpayer who is not eligible for a social security number and who needs an identification number for tax purposes should request a number from the IRS.

  "J.L. Galang�s experienced tax return preparers are trained to help you with your U.S. tax returns whatever your resident status.

  
  
  

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