# USA Expat Back Taxes



## thinkwatson (Feb 9, 2015)

Hello,

I've lived in *Belgium* now for about 6 years. Initially I had a student visa then a *Co-habitation visa* with my girlfriend.

When I left the US at *19 yrs* my mom filed me as a dependant and I never filed myself since then.

I was *financially dependant* on my girlfriend until *June 2014*, in that I was studying. We were filing *Belgian taxes* together, me as her *dependant.*

Before I go and pay 60$ per year with Turbo Tax for State and Federal I am wondering what I really need to file? Do I even need to file *state tax for Arizona*? I have earned very little to nothing here until now and we have gotten back each year on our taxes the last three years.

Just this year I have an account *(FBAR*) in which for one day there was an amount above 10,000$ which was the notary cost of my purchased home.

I am a *bona fide resident *here qualifying for the *(FEIE)* and have zero 1040's from the US for the last 6 years.

Any tips? Which filing documents? State and Fed.?


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## BBCWatcher (Dec 28, 2012)

thinkwatson said:


> Do I even need to file *state tax for Arizona*?


From your description, no. You are not a resident of Arizona, and (I assume) you have no Arizona source income -- as one example, rental income from a property in Arizona.



> I have earned very little to nothing here until now and we have gotten back each year on our taxes the last three years.


Assuming you received less than about $10,000 in worldwide income (less than $10,150 for tax year 2014 specifically), as a Single tax filer you are not required to file a U.S. income tax return.

Once you start earning more you'll start having to file. Since you're a resident of Belgium, a comparatively high tax jurisdiction, and looking at the published Belgian income tax rates, it'd almost certainly be to your financial advantage to skip the Foreign Earned Income Exclusion and just take the Foreign Tax Credit.

It might be worth filing a tax return even if you're not required to if you can claim the American Opportunity Tax Credit (AOTC), a partially refundable tax credit, or any other tax credit. (From your description I think the AOTC is the only possible one.) Check to see if you qualify. You have until April 15, 2015, to claim the AOTC (and any other refundable tax credits) for tax year 2011, so focus on tax year 2011 first if you think you qualify for any refundable tax credits. "Refundable tax credit" means free money from the IRS.



> Just this year I have an account *(FBAR*) in which for one day there was an amount above 10,000$ which was the notary cost of my purchased home.


Great, no problem. You have until June 30, 2015, to file FinCEN Form 114 for 2014.

If you're still age 25 (or less) and haven't registered with U.S. Selective Service yet, drop everything and do that immediately. Visit U.S. Selective Service for details.

You have until April 15, 2015, to make a U.S. Individual Retirement Account (IRA) contribution, such as a Roth IRA contribution, for tax year 2014. If you had earned income (income from work) in 2014 -- sounds like you had some -- then generally you can contribute as much as you earned up to a maximum of $5500. You can contribute to an IRA even if you aren't required to file a tax return, as long as you qualify to make a contribution.

Hope that helps.


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## Bevdeforges (Nov 16, 2007)

OK, basically, you certainly sound eligible for the Streamlined Compliance program - the one where you file current year and three prior years (so, 2014 as current and then 2013, 2012 and 2011 as the priors). Start here: Streamlined Filing Compliance Procedures and click on the link on the left for taxpayers resident outside the US.

At this point, unless you hold some substantial property back in Arizona, I wouldn't bother with state taxes. And, before you bother with any tax preparation program, I would check the filings thresholds. As long as you aren't actually married to your girlfriend, you still fall under the "single" filing category. 

For the 2014 tax filing, you don't have to bother filing if your income is less than $10,150. For prior years, you should check the instructions for the year's 1040 forms, but the amounts have been around $10,000 each year. Unless your girlfriend is a US citizen or otherwise subject to US taxes, nothing of her income is relevant to your US filings.

And I wouldn't use TurboTax if you do wind up having to file. They apparently cannot handle overseas addresses and/or have other problems, as they were removed from the list of commercial programs that are usable for overseas filers. http://photos.state.gov/libraries/france/5/irs/efiling.pdf

TaxAct seems to work pretty well for most folks - and is available in freebie form for all if you go directly to their website. Back years only cost about $15 each, too. 

Check the Expat Tax section here on the Expat Forum for various handy dandy tips as the tax season rolls out. Expat Tax - Expat Forum For People Moving Overseas And Living Abroad (Hasn't really got started yet, as overseas filers have until June 15th.)

That should get you started. Post any questions you have as they come up - preferably over on the Expat Tax section.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Bev, ThinkWatson is _eligible_ for the Streamlined Compliance Program. But from his description he probably never met the filing threshold to file a U.S. tax return until tax year 2014 (and perhaps not even then). If he never met the filing threshold, and he never had a FinCEN Form 114 ("FBAR") filing requirement, he's already fully compliant.

The Streamlined Compliance Program only gets interesting if TW had a filing requirement (tax and/or FBAR) for tax year 2013 or previous.


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## Bevdeforges (Nov 16, 2007)

I only gave him the reference for the streamlined program because he seemed to think he needed to file something. (Perhaps he thought he needed to file something that corresponded to what he has been filing in Belgium.) But yes, if he doesn't meet the filing threshold, then no need to file anything for those years. 
Cheers,
Bev


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## thinkwatson (Feb 9, 2015)

*Threshold*

Hello Bev and BBCWatcher,

I really appreciate the amount of useful info I am receiving here. This is really clearing up many questions for me.

I actually just assumed I needed to file and was not aware of the threshold being the determining factor.

Until December 2014 neither my girlfriend nor I had more than $10,000 to our name on any account. At the end of 2014 however we did, for one day, have the amount of about $21,000 (18,500€) transferred through our shared account for the notary cost of our purchased home.

It is mostly due to what I have read about FBAR regarding this threshold that initially gave me the kick in the ass to start researching my Expatax situation.

In this case should I best file only 2014 Federal and forget about the other back taxes? And do I need to apply for the US citizens residing abroad filing date of June 15th?

And I have one other question. Am I required to officially renounce my residency in the US? Or is that automatic in that I am a resident of Belgium?

Thank you both very much for the efficient follow-up.

Kindest regards,

Cody Watson.


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## Bevdeforges (Nov 16, 2007)

OK, assuming you are a US citizen, then you are always subject to the need to file if your worldwide income meets or exceeds the threshold levels for your filing status and year. (Sounds to me like your filing status is "single." So for the past few years the filing threshold has been around $10,000. It changes a bit every year.)

That, however, refers only to your income.

The FBAR filing stuff is completely separate. If you have a combined total of $10,000 or more in your foreign bank accounts, even for just one day, then yes, you're supposed to file an FBAR. 

Now, whether or not they'll "come after you" based on your exceeding the limit for a very brief period during the year is anyone's guess. Does the bank have your social security number? (I.e. have they asked you to fill out a W-9?) If not, they may or may not report your account to the IRS and without your SSN, it's anyone's guess if the IRS will be able to link you to the account anyhow. This is, after all, the first year of FBAR reporting for the foreign banks, so you plays the game and you takes your chances.

There are lots of folks who prefer to just report the bank accounts in order to enable them to sleep at night. And, the FBAR forms don't involve any assessment of taxes, just disclosure of the existence (and high balance) of the account.

The choice is up to you.
Cheers,
Bev


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## thinkwatson (Feb 9, 2015)

Ok,

Yes I am an American citizen. At no point have I had an income out here for my than $10,000. And I am not married to my girlfriend.

So I take it I do not even need to file. Perhaps next year in that I have just graduated out here and 2015 will be my first full-time working year.

The FBAR does still makes me twitch a bit. Is there a percentage they will take from that High balance? EU banks are required now to comply with the IRS and however I have never had to file a W-9 I do think they are required to give my info directly to the US, not sure really. They do not have my SS#.

I finally feel like I know what I need to do, and how.

Thank you.

Cody


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## BBCWatcher (Dec 28, 2012)

You just file a 2014 FBAR (FinCEN Form 114) by June 30, 2015, and that's done.

Please note that the threshold is this: if the total value, across all non-U.S. accounts, was $10,000 or more at any time. Then, if you meet the threshold to file, you report all non-U.S. accounts, even those with $1 (or 1 euro) high balances.


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