# First time filing 1040 /2555EZ as an Expat - Need advice!



## alexcr18

Hi everyone,

I'll be filing my US tax forms for the first time as an American living abroad. I am single, with no investments or properties, and I earn 30,000USD per year abroad, so I understand that I will not be paying taxes as I am under the 99,200USD limit for 2014. I was told I should fill out the 2555EZ and 1040, but I just want to make sure I am filling out all the proper forms.

For the 1040 my main issues are:

- After claiming my 30,000USD income in lines 7 and 21 (in minus) I arrive at 0 at line 22.
- I am currently paying my student loan back, and I understand that in normal cases I can deduct the interest I paid in line 33 (my interest was above the maximum 2500USD that can be deducted so I could only claim 2500USD) If my income in line 22 is 0, is there any interest in claiming the student loan deduction? Or can this deduction be somehow refundable by the government?

Aside from this, I have nothing else to claim. My situation is rather simple.

How should I proceed for the remaining sections? (Adjusted Gross Income, Tax and Credits, Other Taxes, Payments, Refund, Amount You Owe?) do I need to fill out '0' anywhere or can I simply sign at the bottom and be done after filling in up to line 22?

Also, are there any other forms I should submit aside from 2555EZ and 1040? I've read in some blogs that I should submit Schedule B filling out Section III (Foreign Accounts)?

If I understood correctly I do not need to fill out the FBAR as my foreign account has under 10,000USD.

As a first timer filling in while living abroad, any advice would be greatly appreciated.

Thanks!


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## BBCWatcher

alexcr18 said:


> I was told I should fill out the 2555EZ and 1040, but I just want to make sure I am filling out all the proper forms.


Yes, probably, though I recommend you use tax preparation software and let that software worry about which forms to fill out. TaxAct.com and TaxSlayer.com, as examples, both have free editions. The tax preparation software will understand where to put zeroes on the forms, for example.



> - I am currently paying my student loan back, and I understand that in normal cases I can deduct the interest I paid in line 33 (my interest was above the maximum 2500USD that can be deducted so I could only claim 2500USD) If my income in line 22 is 0, is there any interest in claiming the student loan deduction? Or can this deduction be somehow refundable by the government?


Student loan interest is not a _refundable_ deduction. However, you have a couple options:

(1) Skip the Foreign Earned Income Exclusion altogether and instead take the Foreign Tax Credit (which is reflected on IRS Form 1116). That, combined with your student loan interest deduction, would probably let you "bank" a fairly substantial amount of tax credit to "spend" in future (and/or the immediate past) tax year(s).

(2) Switch to an income-based repayment plan for your student loan(s). Income-based repayment is based on Adjusted Gross Income (AGI). If your AGI is zero, as it is today, then your student loan repayment is zero. If you were to continue zero repayments then, assuming the rules don't change, you would eventually only have to pay the U.S. income tax on the loan forgiveness (including accrued interest forgiven). That's a fantastic deal, of course.



> Also, are there any other forms I should submit aside from 2555EZ and 1040? I've read in some blogs that I should submit Schedule B filling out Section III (Foreign Accounts)?


Yes, if you have any foreign financial account(s) in any amount. Schedule B Part III then applies. But again the tax preparation software figures this out for you.


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## Bevdeforges

On the "back" side of the 1040 form, you should follow the logic of the form down the page. Transfer your 0 from the bottom line of the front page to the top line of the back page and continue down, taking your personal exemption and standard deduction.

The form tells you when to enter a negative number, and when to enter 0 if your result is less than 0. Only fill in the lines that relate to you or which include calculations (i.e. "subtract line x from line y"). Ultimately you come to the line for taxes due and if that is 0, you're done. Sign the forms (don't forget to sign the forms!) and send them off.

If you go the 2555 route, then no, you don't get to deduct your student loan repayments on your forms. But unless you have enough in French income taxes to offset any US tax obligation, you'll probably find that the FEIE (i.e. 2555) approach is the easiest way to go. 

Although France has a reputation for being a high tax venue, for the more modest income levels, I think you'll find that you may not have enough income tax to credit against your US taxes. (The CSG/CRDS is specifically NOT considered income tax, nor are any of the other assorted taxes you pay here.)
Cheers,
Bev


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## alexcr18

Thanks for the advice BBC Watcher and Bevdeforges! I will complete the 1040, 2555EZ and Schedule B Part III. I used TaxSlayer to test and it seems to fill out my 1040 accordingly. 

Does Schedule B Part III need to be filled out each year I am filing my tax returns or just once? Just to know whether I should file it again along with the other forms next year.

BBCWatcher, I will also take a look into the Income Based Repayment plan as you've suggested.


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## Bevdeforges

Technically speaking, the Schedule B needs to go in any year where you have overseas accounts with a cumulative balance of at least $10,000 - but just to play it safe, some folks advise all expats to fill it in, even if only to say "no, I don't have overseas accounts over $10,000." 
Cheers,
Bev


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## BBCWatcher

That's incorrect, Bev. Schedule B Part III has no $10,000 threshold. I think you're confusing Schedule B with FinCEN Form 114.

Yes, every year when any Schedule B trigger applies.


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