# 2019 - Form 1040 Queries



## texasbrit

US citizen here :wave: - I am a full time resident in the UK. Filing taxes for 2019 on my own this year vs through a paid preparer. I am aware for my circumstances I need to file:


Form 1040
Form 2555
Schedule 1 to reflect the income reported on Form 2555
Schedule B

I have filled out all of the above bar the 1040. I only have foreign earned income, which I declared on Form 2555. I understand the income figure from Schedule 1 goes on the 1040 line 7a in parenthesis.

I am seeking clarification on how to fill out the remaining lines 1-19 on the 1040. As I only have foreign earned income, does that mean I leave lines 1-6 blank or do I put my earned income on line 1 without parenthesis?

For line 9, would I use the standard deduction or do I leave that blank?

On a related, but separate note - is there anything I need to do regarding Social Security when earning towards National Insurance in the UK? I had a few years of Social Security contributions when I lived in the US, but have not since worked there after I moved to the UK. Should I make it to retirement age (not sure if i'll be in the US or the UK), curious if anyone knows what I might be entitled to in the US.

Thanks in advance!


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## Bevdeforges

texasbrit said:


> I have filled out all of the above bar the 1040. I only have foreign earned income, which I declared on Form 2555. I understand the income figure from Schedule 1 goes on the 1040 line 7a in parenthesis.


Yes, your earned income goes on line 1 in the 1040 - however, I don't believe you use Schedule 1 for FEIE adjustments. Look at Part VIII line 45 and it tells you how to report this all on both Schedule 1 and on line 9 of the 1040. 


> Subtract line 44 from line 43. Enter the result here and in parentheses on Schedule 1 (Form 1040 or 1040-SR),
> line 8. Next to the amount, enter “Form 2555.” On Schedule 1 (Form 1040 or 1040-SR), subtract this amount
> from your additional income to arrive at the amount reported on Schedule 1 (Form 1040 or 1040-SR), line 9 .


Hey, why do things simply if you can find a more complicated way to do it?



> I am seeking clarification on how to fill out the remaining lines 1-19 on the 1040. As I only have foreign earned income, does that mean I leave lines 1-6 blank or do I put my earned income on line 1 without parenthesis?


Any line that doesn't apply to you, just leave it blank. 



> For line 9, would I use the standard deduction or do I leave that blank?


Put in the standard deduction for your filing status. (See the note to the left of line 9.)



> On a related, but separate note - is there anything I need to do regarding Social Security when earning towards National Insurance in the UK? I had a few years of Social Security contributions when I lived in the US, but have not since worked there after I moved to the UK. Should I make it to retirement age (not sure if i'll be in the US or the UK), curious if anyone knows what I might be entitled to in the US.


You don't need to do anything about US SS for the moment. When you get closer to retirement age, you will want to make sure you have an earnings statement from US SS. If you don't have the requisite "40 quarters" (i.e. 10 years) of working credits, they will count the time you work in the UK (or in many other countries). They don't count the salary you earned while working abroad, but if you need the work credits to qualify for US SS, they will count the time - even when you have only worked for a couple of years in the US. And by the way, if you should somehow fall a little short of the work time required in the UK, they will count your US working time, too.

Of course, all this could change in the next 10, 20 or 40 years. But for the moment, that's how it is.


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## texasbrit

Super - thanks for the reply, Bev! I am still a little confused here.



Bevdeforges said:


> ...however, I don't believe you use Schedule 1 for FEIE adjustments. Look at Part VIII line 45 and it tells you how to report this all on both Schedule 1 and on line 9 of the 1040.
> 
> Subtract line 44 from line 43. Enter the result here and in parentheses on Schedule 1 (Form 1040 or 1040-SR), line 8. Next to the amount, enter “Form 2555.” On Schedule 1 (Form 1040 or 1040-SR), subtract this amount from your additional income to arrive at the amount reported on Schedule 1 (Form 1040 or 1040-SR), line 9.


Can you please clarify? You've said not to use Schedule 1, but in the text that you've quoted it says "...enter 'Form 2555' On Schedule 1..." 

Just as an example - lets say my salary is $50,000. On Form 2555 I'd write:


Line 43 = 50,000
Line 44 = 0
Line 45 = 50,000

On Schedule 1 - as per the text you quoted - on line 45 I had already written "Form 2555" and entered the amount corresponding to the amount on line 45 onto line 8 in parentheses ie (50,000). As I have no additional income on Schedule 1 line 9, I wrote (50,000). Schedule 1 line 9 says: 



> Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a


Therefore I've entered (50,000) on line 7a.

Subsequently on the 1040 I now have:


Line 1 = 50,000
Line 7a = (50,000)
Line 9 = 12,200
Line 11a = 12,200
Remaining lines blank.

Am I on the right track here? Or should lines 9 and 11a be left blank too - are they even needed?


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## Bevdeforges

Sorry for the confusion - they changed Schedule 1 quite a bit this year and my initial statement (not to use Schedule 1) was wrong. In editing my original post, I forgot to delete that first statement about the Schedule 1.

What you have is right - just don't forget to actually enter a 0 on line 11b. Line 8b should also be 0. (Make it real easy for them to see that you don't owe them anything.)


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## texasbrit

Perfect. Many thanks again, Bev. All the best!


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## shony

texasbrit,
you are exactly right with the way to enter your numbers. One more thing: if you have traditional IRA from that years when you worked in US now it is time to convert them into ROTH without paying any taxes. Just use standard deduction for that.


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## clivepocock

Hi 

Newbie here - I hope its OK to tag onto this thread as I have similar problems for my three US born sons (they all want to live in USA hence the need to make them compliant - despite reading all the arguments against doing so)

I believe all three are "Taxpayers Qualifying Under Bona Fide Residence Test" as they have lived in the UK since the ages of 4, 2 and 2 months and are now 24, 22 and 20 respectively.

The oldest works in UK and has worked in USA for 3 months each year of the last three years (and has W-2s). 
on form 2555 he can enter his "foreign earnings" does he then add those to his US earnings in line 1?

Thanks in Advance 
Feeling a bit overwhelmed but neither they nor I can afford a Tax cosultant 
Clive


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## Bevdeforges

You may want to check out the Free File page on the IRS website: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

If your sons qualify for Free File, the various softwares will stick the various amounts in all the right lines (or so we can hope). They have changed the forms a little bit from 2018 (and so if they decide to go Streamlined Compliance will have to fill out the prior years' form on their own) - but as far as I know, the foreign earnings appear on the 2555 form, plus on Schedule 1 (related to the 1040) and then again on the "salary" line on the 1040 itself. (Never do simply what one can make a complicated mess of.)

Most of the tax prep software companies will sell you the prior years' programs for a reasonable fee - but you won't be able to e-file the resulting forms if you're filing under the Streamlined Compliance program. https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures

But, at their ages, it may not be necessary to go through the Streamlined Compliance stuff. It's not that unusual for young people not to have to file until they hit age 24 or 25 or so. (Or sometimes older if they're living at home.) It could well be perfectly adequate to just start filing for 2019 and then keep filing going forward.


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## Moulard

clivepocock said:


> Hi
> I believe all three are "Taxpayers Qualifying Under Bona Fide Residence Test" as they have lived in the UK since the ages of 4, 2 and 2 months and are now 24, 22 and 20 respectively.


Yep. Bona Fide Residents.



> The oldest works in UK and has worked in USA for 3 months each year of the last three years (and has W-2s). on form 2555 he can enter his "foreign earnings" does he then add those to his US earnings in line 1?


You are on the right track .... 


Convert gross UK wages (pay + taxes withheld) into USD
Add US wages from the W2 and the converted UK wages on line1
Use Form 2555 to claim foreign earned income exclusion.
The number that comes out of that form will end up as a negative number on Line 7 I think it is

There is the option of using foreign tax credits rather than the foreign earned income exclusion... For certain refundable US Tax credits and other US benefits, sometimes you need to have taxable income.. and because the way the FEIE works, this can make you ineligible because it reduces your taxable income. 

But one additional point you may not have considered.

As tax residents of the UK, they will also have to pay UK tax on that US income and claim a tax credit for any US taxes paid on the UK returns.

The UK-US tax treaty may well have a special clause in it on the tax treatment of US sourced income of a US Citizen who is a UK tax resident... If it is anything like the Australian clause, it is probably easier to take the approach I mention above.. and simply claim a tax credit in the UK for US taxes paid.


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## clivepocock

Thank you so much for the help Bevdeforges


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## clivepocock

Thank you so much for the help Moulard


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## Nabijem

This was really helpful. Where can I find the form online?


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## Moulard

All 2020 IRS Forms, Instructions and publications can be found here...






Forms & Instructions | Internal Revenue Service


Access IRS forms, instructions and publications in electronic and print media.




www.irs.gov


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## Nabijem

Hey, thanks for sharing, Moulard. I actually managed to find the form on Fillable SCHEDULE C (Form 1040): Printable SCHEDULE C (Form 1040) blank, sign forms online — PDFliner, and it was the first helpful thing that popped in my google search. It's kind of strange that the first thing I managed to find was not the IRS form. Internet is full of ads, and it's hard for me to find anything that's good for me...
Still, I'm not computer savvy, and it might have been there, but I just didn't see it. Still, I will use the thing you've shared because it's probably the right thing, and you can really find all the info there. Thanks for sharing it once more.


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