# First time filing taxes out of US- Need help please



## New2Aussie (Apr 6, 2020)

Ok here's my story, 

I have lived in Australia since 2015, I didn't start working until January 2017. I haven't filed any taxes while living here, so I need to file my 2017, 2018 and now 2019 taxes, 2 of them being late. My taxes are very simple. No extra stuff involved, but when I go to the tax forms to fill them out because being in the US I always filed 1040ez, the 1040 looks very, shall I say, overwhelming. 

I worked out my 2017 ones, and it shows I get a $200 refund. Is this even possible with me not living in US or working there?? Didn't seem right to me, so I must be doing something wrong. Is there anyone that can help me know what to fill out on these forms 1040 with just my gross wage, superannuation, and taxes paid. It's that simple but I can't seem to work it out with all the 1040 stuff. 

Fast forward, I was like screw it, I'll do atleast my 2019 ones since i've worked out my income. A few issues have arose with that too..
A. Most online filing services want you to have a US bank account for paying/filing, does anyone have suggestions that aren't OVERLY expensive?
B. I tried TurboTax and and TaxAct. Turbotax from what I saw made you pay in US bank account. TaxAct was very confusing and was not very helpful at all. So does anyone recommend a straightforward program that could help me please?

Any help/private messages will be helpful. I can't justify paying an accountant $300 as I was quoted or expat tax service, when I don't owe any taxes or get anything back from it. I don't mind paying some for the service but $300 is WAYYYYYYYYY too much. Any help guys, as I want to do this myself so I know for the future to save money as my taxes are simple and not worth paying an exorbitant amount. (So I dont want to hear, if you dont know how to file them then pay someone, because the only way to know is to learn.) Thank you for your time!


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## New2Aussie (Apr 6, 2020)

I should also add that my total income from job and super is USD $20,000 and taxes paid were roughly $1750 USD


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## Bevdeforges (Nov 16, 2007)

OK, a couple of points here. First of all, there is no more 1040EZ form. It's the "regular" 1040 (with whatever side "schedules" apply) or the new 1040SR for senior citizens.

Now, you say that your only income is from your job and that your taxes paid were about $1750. If your job is in Australia, then you shouldn't have any US taxes paid on that - so no refund. For a foreign job, you have two options - either take the FEIE (Foreign Earned Income Exclusion) which you do using form 2555 to remove your job income from consideration, or you take the Foreign Tax Credit (FTC) for income taxes paid to your "home" jurisdiction. Just be aware that you can only claim tax credit for income taxes, not for social insurances or other sorts of tax.

Take a look at the IRS Publication 54 for overseas taxpayers, where you should be able to find some samples of how to take the FEIE (usually the simplest approach for first time filing). https://www.irs.gov/forms-pubs/about-publication-54

For paying US tax or receiving refunds, you do need a US bank account. Otherwise they'll send you a check for your refund. Paying tax to them usually involves paying bank or credit card fees - so the name of the game becomes making sure you don't owe anything.

There is no easy way to e-file - you either have to use an online tax preparation software software or the IRS' "free file fillable" forms system (which is horribly kludgy and tricky to use even if you know what you're doing). You may be able to use one of the Free e-File systems, but it's probably best to use their little "wizard" to find one that will handle overseas taxpayers. https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free


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## New2Aussie (Apr 6, 2020)

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Thank you for the response! Very helpful!


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## Moulard (Feb 3, 2017)

> it shows I get a $200 refund. Is this even possible with me not living in US or working there??


It is possible.. there are refundable credits that can result in a refund even if no tax was paid... The most common of these is the Child Credit, assuming you have a US citizen child. There is also the Earned Income Credit, which you might have qualified for if you are married and plan to file jointly. That said, if those aren't true, then you have probably made an error some where along the line.




> Most online filing services want you to have a US bank account for paying/filing


This does appear to be increasingly the case, that these companies are only accepting payment via a US credit card. I understand that this has been the case with TurboTax for a very long time. TaxAct started doing it this year.



> Any help/private messages will be helpful.


Happy to help.. It can be daunting, but you still have months to file your 2019 return. 
Pub 54 is a good place to start. https://www.irs.gov/pub/irs-pdf/p54.pdf

I am assuming that you want to file in part at least for the Covid stimulus payments.. if not, there are many on this forum that will simply suggest staying off the radar and not re-entering the US tax machine.

Fundamentally you are going to want the 1040 and Schedule B and a few other forms depending on your circumstances).

From your income profile that you mention, I assume that you have a bog standard super fund (industry, employer or government type fund), and are not contributing into a self managed fund. 

While there has been no formal guidance from the IRS, key point number 1 is that Super gets not tax preferential treatment from the US tax perspective. 

Common approach is to treat it as a Employee' Trust and report employer contributions as income in the year that they land in your account. I am going to assume you are a long way off reaching your preservation age, so I won't discuss distributions at retirement at this point.

With that settled you have two ways of treating your Australian wages.

You can use the foreign earned income exclusion (form 2555) or you can claim a credit for taxes paid in Australia (form 1116)

Curve ball number 1 - even though super is directly tied to your wages, under US law it is not considered earned income and therefore cannot be excluded. 

That said, if your super contributions, bank interest and any other income is below the standard deduction then you are likely still to owe zero US tax.

Typically because Australian taxes are higher than US federal taxes it can be beneficial to use form 1116. In part because you can carry over the tax credits. Because of the tax free threshold in Australia is reasonably high, there is a cross over point where Australian taxes are actually lower than US taxes, so you just need to be mindful of that.

At one point I had a little spreadsheet that compared US and Oz tax rates to find the cutover point. I can't find it at the moment, but I seem to recall, depending on exchange rate it was somewhere about 20-25k AUD.

Its worth noting tho if you start using form 1116 you cannot then change back to form 2555 for 5 years.

If you just want to get it done, and your wages are below about 110K USD then the FEIE is probably the simplest route... so long as your employer contributions into super and all of your other income is below your standard deduction (12,200 USD if you are filing single, or married filing separately)

Depending on the balances in your Australian financial accounts, and the profile of your other income that is not wages... there may be other forms required, but those three forms will be a way of dipping your toes in the water..

Feel free to PM me...


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