I'm crying for help!!

Thank you for taking time to take a look at this post!

I am desperately in need for your advice. Here's my situation. I am a translator in Ukraine, working for US-based translation companies. I have a fiance who is a US citizen and lives in the US. Recently he and I have decided to work hard for our future together, and now I want all the money I make off the US-based work to stay in the US. My question is: if my employers transfer my payments to my fiance's bank account, is that money taxable? If yes, how should we declare it and conduct tax payments? I am really looking forward to replies, because (and I'm sure you understand it too) this issue is very important to me. Please, if you know anything about it and can help me with my situation, do not hesitate to contact me. Thank you in advance!

Sincerely
Ekaterina

If you are a citizen of the Ukraine and work in the US, you are subject to United States income tax on the amount you earn while in the US. I don’t know Ukraine tax law, but if it is like most countries, as a citizen of the Ukraine, you would be subject to Ukrainian tax on the income also, but you would get a credit for taxes you pay the US. You are taxable on that income in both cases, at the time you earn it, and what you do after that has no bearing on the tax.

If you transfer it into your fiancé's bank account with the intent of having him hold it for you, it is no gift to him; therefore, there is no gift tax.

Thank you very much for your reply.

But you know, the problem is that I don't work on the territory of the US. I work directly from my home in Ukraine, contacting with my employers via the Internet! Does it mean anything, or am I still subject to the US income tax? Also, it wouldn't be me transferring money into my fiance's bank account, it would be my employers. Please help me. I am looking forward to your replies!!

Sincerely,
Ekaterina

[crager34]

You are a citizen of what....the Ukraine or the US?

I am the citizen of Ukraine!! I am currently living in Ukraine too. But I want all the money I make in the US to go to my fiance's bank account. That's why I need to know how we should pay taxes off the money I make.

Thanks for asking that question Crager34.

CCISA: Since you are a citizen of Ukraine, living in Ukraine, the US can only tax you on income that is effectively connected with the US. Income you earn by your own personal services performed in Ukraine are not subject to US income tax because it is not effectively connected with the US. That income is probably subject to Ukraine taxation, since you earned it while in Ukraine and you are a Ukraine citizen..

If you have the money deposited in your fiancé's bank account in the US, it could be a gift, and if it is all amounts over $10,000 each year would be subject to US Gift tax.

However, if you have him sign a note or promise to repay the money, it would not be a gift. He would merely be holding the money for you. There would be no US tax of any kind on this except for the tax on the interest the account earns, if any.

Well, now everything is quite clear to me. I would like to thank you guys for your interest and trying to help me. I appreciate your willing to help very much. Thank you all and may the best come to you!

Warmest wishes,
Ekaterina