Author Topic: Are fees/expenses for renewing Greencard tax deductible?  (Read 4059 times)

tweezers

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Are fees/expenses for renewing Greencard tax deductible?
« on: July 22, 2015, 10:21:20 AM »
I need to renew my Greencard next year which has a fee of $450, plus 200 mile round trip travel to the Homeland Security office.  Because I need this to work, can I deduct these expenses?  I'm going to attempt to expense this with my employer, but assuming they won't pay I'm hoping to be able to deduct the cost.  I haven't been able to deuce this from the IRS website, and the google results are mixed (personal expense and not deductible vs. work expense so deductible).  Thanks!

Cathy

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Re: Are fees/expenses for renewing Greencard tax deductible?
« Reply #1 on: July 22, 2015, 11:55:41 AM »
One thing you have to understand about the law is that unless the statute very clearly and explicitly addresses an issue, there might not be a simple "yes" or "no" answer. Instead, there might be possibly meritorious arguments on both sides. In the US, legal writers refers to possibly meritorious arguments as "colourable" arguments, although in Canada that term means something completely different. In Canada, something is "colourable" if its true purpose is different from what it appears on its face. For example, in R. v. Morgentaler, [1993] 3 SCR 463, the Supreme Court of Canada found that impugned provincial health legislation was really a colourable attempt to impermissibly regulate abortion, and was hence unconstitutional.

26 USC 212 authorises a miscellaneous itemised deduction for "ordinary and necessary expenses paid or incurred ... for the production or collection of income", subject to the 2% of AGI floor discussed by me in a previous post. Most likely the 2% floor is fatal to you, so you can't get any tax benefit from this fee and you don't need to analyse the problem further. If, however, the floor is not fatal, you need to consider whether the expense to renew your lawful permanent residency card ("green card") meets the test of 26 USC 212 or some other statutory deduction.

In your post, you assert that "I need [green card renewal] to work", but it's not that simple. The green card is a travel document and it is proof of lawful permanent residency status. However, it's the lawful permanent residency status that authorises you to work, not the card evidencing same. Even if the card is not renewed and is allowed to expire, you still remain authorised to work in the USA, although you could be arrested at any time for noncompliance with 8 USC 1304, which is a misdemeanour punishable by a $100 fine and 30 days in jail. In some hypertechnical sense, the green card renewal is not required to work, but merely to avoid arrest, though perhaps you could argue that expenses to avoid arrest and conviction still meet the test of 26 USC 212.

Ultimately, you and you alone have to decide whether you feel you have a persuasive argument for taking a deduction. I propose the following rule of thumb: only take a legal position if you are willing and able to defend it. If you don't feel up to task of defending the position if challenged, do not take the position. In this post, I have intended to provide you with some general information to start your research, but I am not providing any advice about what to do, because you are the one who has to make that decision.

mrshudson

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Re: Are fees/expenses for renewing Greencard tax deductible?
« Reply #2 on: July 22, 2015, 12:02:04 PM »
I propose the following rule of thumb: only take a legal position if you are willing and able to defend it. If you don't feel up to task of defending the position if challenged, do not take the position. In this post, I have intended to provide you with some general information to start your research, but I am not providing any advice about what to do, because you are the one who has to make that decision.

Agree with everything said above. I don't know the rules of the top of my head, but I would advise against taking a tax deduction. I need to look up the rules on renewal specifically, and the program (employment-based or family-based) under which you received green card, but if your employer sponsored you initially, then your "I need green card to work" argument may fly (but unlikely to work). But if it was investment based or family based, that argument is completely flawed.

tweezers

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Re: Are fees/expenses for renewing Greencard tax deductible?
« Reply #3 on: July 22, 2015, 03:38:37 PM »
Thanks for your responses.  My greencard was employment-based and employee-sponsored.  This isn't a hill I'm prepared to die on so I won't consider a possible tax deduction.

Rosy

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Re: Are fees/expenses for renewing Greencard tax deductible?
« Reply #4 on: July 22, 2015, 03:56:56 PM »
LOL, you have guts to even consider asking about a tax break:) Let's just say I wouldn't dream of tangling with anything that involves both Homeland Security and the IRS.
No matter that it took them about 8 months to re-issue a lost card and I had the pleasure of forking over another $450 - no break there either.

Some things in life you just have to ... ahem, accept?

Yup, just like you said:

"This isn't a hill I'm prepared to die on so I won't consider a possible tax deduction." (still, can't help but admire you for even asking:)
« Last Edit: July 22, 2015, 04:01:23 PM by Rosy »