Standard Deduction for First Year Immigrants - Found a Loophole in IRS Rules?

I'm a bit confused about a weird situation with standard deductions for new immigrants like me and my wife. We got our green cards when we arrived in the US in February 2023 and became residents immediately upon entry. Looking at the IRS rules, I noticed they state: "Certain taxpayers aren't entitled to the standard deduction: 1. ... 2. An individual who was a nonresident alien or dual status alien during the year (see below for certain exceptions)" This seems to suggest we can't claim the standard deduction since we weren't residents at the beginning of 2023. But then I found this exception: "However, certain individuals who were nonresident aliens or dual status aliens during the year may take the standard deduction in the following cases: 1. ... 2. A nonresident alien at the beginning of the tax year who is a U.S. citizen or resident by the end of the tax year, is married to a U.S. citizen or resident at the end of such tax year, and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year;" If I read this literally, we might qualify because: - We were nonresident aliens at the beginning but residents by the end of 2023 ✓ - We're married to residents (each other) at the end of the tax year ✓ Did the IRS accidentally create a loophole for married immigrant couples? The rule seems designed to prevent us from claiming the standard deduction, but the wording might actually allow it? Should we go ahead and claim the standard deduction on our 2023 taxes or am I missing something?

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19 comments

Dmitry Ivanov

•8M

You're actually interpreting this correctly, but it's not really a loophole - it's an intentional provision for situations exactly like yours. What the IRS is saying is that as a married couple who are both residents by the end of the tax year, you can elect to be treated as residents for the ENTIRE tax year by filing jointly. This is called a "dual-status election" and it's beneficial in many cases. By making this election, you're essentially telling the IRS to treat you both as though you were US residents from January 1, 2023, even though you didn't physically arrive until February. This allows you to claim the standard deduction and potentially other benefits of resident filing. To make this election, you need to file a joint return and attach a statement declaring that you're making this choice. Both spouses need to sign it. The key thing to remember is that by making this election, ALL of your worldwide income for the entire year becomes subject to US taxation, even income you earned before moving to the US. So you'll need to report any income you earned in your home country from January 1 until your move in February.

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Dmitry Ivanov

•8M

Yes, you would generally be eligible for the Foreign Tax Credit for any taxes you paid to your home country. This is done by filing Form 1116 with your tax return. The credit helps prevent double taxation by allowing you to reduce your US tax liability by the amount of foreign taxes you've already paid on that income. Keep in mind there are some limitations to the credit, but in most cases, it prevents you from paying taxes twice on the same income. Make sure you have documentation of any foreign taxes paid, as you may need this for your records.

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Ava Thompson

•8M

After struggling with a similar situation last year, I discovered taxr.ai (https://taxr.ai) which helped clarify this exact scenario for me and my spouse. We were also new immigrants wondering about standard deductions vs. itemized and whether we qualified. I uploaded our immigration documents and previous country tax info, and their AI analyzed everything and confirmed we could make the election to be treated as full-year residents. It even drafted the statement we needed to attach to our return! The site walked me through all the international income reporting requirements and identified deductions I didn't know we qualified for. Definitely saved us from making some costly mistakes our first year filing US taxes.

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Ava Thompson

•8M

For F-1 visa situations, it definitely handles those! My brother was actually on F-1 for 3 years before getting his green card, and the tool properly factored in the substantial presence test and his previous tax filings as a nonresident alien student. Regarding accuracy, I actually did have a CPA review everything after getting the AI recommendations, and they only made one minor adjustment related to state taxes. The federal portion was spot-on, especially with the residency election documentation. The tool uses actual IRS publications and international tax treaties to make its determinations, not just general algorithms.

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Miguel Herrera

•8M

I wanted to follow up about my experience with taxr.ai after seeing it mentioned here. I was really struggling with my mixed-status situation (F-1 student to green card mid-year), and none of the mainstream tax software seemed equipped to handle it. I gave taxr.ai a try and was genuinely impressed. It immediately identified the dual-status election option that would benefit us and showed exactly how much we'd save by making that choice ($3,200 in our case!). The documentation it generated for our special situation was comprehensive - my accountant friend was shocked at how thorough it was. What really helped was the specific guidance on reporting my foreign scholarship income from earlier in the year and how to properly claim education credits with my mixed status. Definitely using it again next year!

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Connor Murphy

•8M

If you're still struggling getting answers from the IRS about this dual-status election, I HIGHLY recommend using Claimyr (https://claimyr.com). I had been trying to reach the IRS international taxpayer hotline for WEEKS about a similar situation with no luck. Claimyr got me connected to an actual IRS agent in about 20 minutes! They have this service that basically waits on hold for you and calls when an agent is actually on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was super skeptical at first, but after weeks of frustration, it was worth trying. The IRS agent confirmed we were eligible for the election and explained exactly what documentation we needed to include. They even noted it in our file so if there were any questions later, there would be a record of the guidance they provided.

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Connor Murphy

•8M

They don't bypass the queue - they use technology that waits in the IRS phone queue for you. Basically, their system calls the IRS and waits on hold, then when a human agent finally answers, they call your phone and connect you. You don't have to sit listening to hold music for hours. Regarding trust concerns, they don't actually handle any of your tax information. They're just connecting the call - once you're on with the IRS agent, it's a direct conversation between you and the IRS. They aren't on the line or collecting any of your personal details. It's just a sophisticated call-back system, not a tax service itself.

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Yara Nassar

•8M

I need to update my previous skepticism about Claimyr. After struggling for literally MONTHS trying to get clear guidance on my own dual-status alien situation, I broke down and tried it. Within 45 minutes, I was talking to an actual IRS international tax specialist who confirmed exactly what others here have said - the dual-status election is DESIGNED for situations like ours. She walked me through the exact statement wording to include with our return and confirmed we qualify for the standard deduction when making this election. What's more, she explained that my foreign pension contributions needed special reporting I knew nothing about. Would have been a huge red flag if filed incorrectly. Honestly wish I hadn't wasted so much time trying to get through on my own!

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StarGazer101

•8M

Just be careful with the worldwide income requirement! My wife and I did this last year, but we didn't realize her inheritance from her grandmother in our home country counted as worldwide income. We had to file an amended return and pay additional taxes plus a small penalty. Make sure you declare EVERYTHING - bank interest from foreign accounts, any rental income if you still own property overseas, capital gains from selling assets before moving, etc. The standard deduction is great, but the worldwide income requirement is strictly enforced.

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StarGazer101

•8M

Good news - in most cases, inheritances actually aren't taxable income to the recipient in the US! Our situation was complicated because it involved inheritance from a foreign trust that had specific tax implications. For a straightforward inheritance like yours, you generally don't need to report it as income. However, if that money is now sitting in a foreign bank account and earning interest, the interest IS taxable. Also, if you have more than $10,000 total in foreign accounts, you need to file an FBAR form reporting those accounts (though this is just informational, not a tax).

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Natasha Petrova

•3M

This is exactly the kind of complex tax situation that mainstream software struggles with! I went through something very similar when I got my green card mid-year in 2022. The dual-status election is definitely legitimate and designed for cases like yours, but you're right to be cautious about the worldwide income reporting requirement. One thing I learned the hard way is that you need to be extra careful about foreign bank account reporting (FBAR) if you still have accounts overseas - even if they're being closed out. Also, make sure you understand the implications for future years. Once you make this election, you're committing to being treated as a full-year resident, which can affect things like the foreign earned income exclusion if you travel back to your home country for work in future tax years. I'd strongly recommend getting at least a consultation with a CPA who specializes in international taxation before filing, even if you use software to prepare the return. The peace of mind is worth it for something this complex, especially in your first year as residents.

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