# US in UK Filing for 1st Time..Please Help!



## VisaVivs (Mar 26, 2013)

Hi everyone! I've been looking through this forum, and have looked at Publication 54, but am feeling so confused and overwhelmed as to what I need (or don't need) to do about filing my taxes. A bit of background:

Moved to the UK on a Spouse Visa at the end of August 2013, did a two week temp job in October, and another full month temp job in December (which went permanent in January, and I am currently employed there). That is the only work I did in 2013, as I did not work in the months prior to moving here, and therefore have not received a W2 for the year. I also have gains from a mutual fund I have/sold stock as well, but that aside, my total income for the year can't be higher than $4700 when converted from the £££ equivalent. I know I don't qualify for an FEIE as I've not been here a full year yet, and I plan to file as "married filing separately" since DH is a UK citizen, but beyond that I am completely lost (don't even know what my address should be - the home I'm renting in the UK, or my family home in the US that my mother lives in/I've always used as my permanent address).

Given my situation outlined above, does anyone have any suggestions for how I should proceed? Can I do this on TurboTax, even though I don't have a W2 (also have no idea how to claim for my money earned in the UK / if there are exemptions since it was such a low earning)? Also, do I automatically have an extension till June 15th, even without qualifying for FEIE? And if so, do I have to apply for said extension, or just include a note when I do file?

I'm having a very hard time processing the information on the IRS site, and didn't realize this would be as complicated as it is. Any help or pointers for how to do this, broken down in as simple English as is possible with something complex as this (re: like you're explaining it to a 5 year old) would be hugely appreciated.


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## BBCWatcher (Dec 28, 2012)

VisaVivs said:


> Moved to the UK on a Spouse Visa at the end of August 2013, did a two week temp job in October, and another full month temp job in December (which went permanent in January, and I am currently employed there). That is the only work I did in 2013, as I did not work in the months prior to moving here, and therefore have not received a W2 for the year.


Whether you receive a W-2 or not is never relevant in terms of income reporting, even within the U.S. Don't worry about that.

I assume this temporary (now permanent) employment in the U.K. was subordinate employment, and you paid into the U.K. social insurance system via payroll taxes. If that's not the case, please advise.



> I also have gains from a mutual fund I have/sold stock as well, but that aside, my total income for the year can't be higher than $4700 when converted from the £££ equivalent. I know I don't qualify for an FEIE as I've not been here a full year yet, and I plan to file as "married filing separately" since DH is a UK citizen....


Your spouse has the option to file a joint U.S. tax return with you if he desires. That's called a Section 6013(g) election. His citizenship is not disqualifying. It's unlikely from your description it would make sense for him to do that for tax year 2013, but it's possible.



> ...but beyond that I am completely lost (don't even know what my address should be - the home I'm renting in the UK, or my family home in the US that my mother lives in/I've always used as my permanent address).


You're living and working in the U.K., and you're settled in the U.K. on a spousal visa, so your residence is clearly in the U.K. If you want to use a mailing address on your tax return that differs from your residential address, that's up to you, but that's all any other address would be.



> Can I do this on TurboTax, even though I don't have a W2 (also have no idea how to claim for my money earned in the UK / if there are exemptions since it was such a low earning)?


Sure. TurboTax, TaxAct, and the rest have no trouble handling earned income (income from wages) that is not reported on a W-2. Happens all the time, even within the U.S. Exactly how they do that varies a bit depending on which one you use, but they all support that.



> Also, do I automatically have an extension till June 15th, even without qualifying for FEIE?


Yes, but what you really should do is file IRS Form 4868 electronically, immediately. That'll extend your filing deadline to October 15. Then file your tax return in September, whereupon you will meet the Foreign Earned Income Exclusion (FEIE) requirements if you decide to take the FEIE. Problem solved.

You may not want to take the FEIE, though. Run the calculation both with and without the FEIE. (Without the FEIE you would use the Foreign Tax Credit.) See what you get. If you end up with zero tax owed either way, don't use the FEIE. Your income is so low that I'm guessing you'll be better off not taking the FEIE even if you have no foreign (U.K.) income tax for the FTC, but it's hard to predict.



> And if so, do I have to apply for said extension, or just include a note when I do file?


Yes, per Publication 54 when you do file you should include a simple statement explaining that you qualify for the June 15 deadline because of your residence overseas. That also extends the time you have to pay any U.S. tax owed until June 15. It may not matter, but it can't hurt.

Unfortunately you earned just a bit above the threshold to file if you're Married Filing Separately, so it does appear you are obliged to file a tax return.

Don't forget to file FBAR and/or FATCA forms, as applicable, if you meet those thresholds. FinCEN Form 114 is due by June 30, and there is no extension. Even if you don't have substantial funds you brought outside the U.S. you might still have a filing obligation if you and your husband now have a joint account. A joint account is yours, too, so it becomes subject to U.S. FBAR/FATCA reporting.


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## Bevdeforges (Nov 16, 2007)

OK, a slightly different opinion from this side.

I'll agree that you should file for an extension to October for filing you taxes for 2013. That's so that you will have a full year in the UK by the time you file and thus can take the FEIE based on the bona fide resident test. (You have to have spent your full year overseas at the time you file - even though you're filing for the prior year, when you only spent the last few months of the year outside the US. Makes no real sense, but neither does most tax law.)

For your first year overseas, I would forget about even trying to do the Foreign Tax Credit or attempting to file jointly with your husband. It complicates your situation tremendously (especially in that first "split" year) and the end result is still going to be that you probably won't owe the US any tax. The difference in the tax year in the UK just adds to the confusion. Next year, when you are dealing with complete, if different, tax years, you can always change how you do things.

You file using your current UK address. If you use TurboTax (or any other tax prep software) check to see how they want you to enter your "foreign" address. Not all tax prep software can deal with foreign addresses.

Otherwise, you do your taxes pretty much the same way as when you were in the US. For your UK income, you'll need to enter the information in what's called an FEC form (again, not all tax prep software can deal with this - though Turbo Tax is supposed to be able to). Where it asks you to enter your salary information, skip the option to copy in your W2 and scroll all the way down to the end of the list of options (usually) where there should be something about income from a Foreign Employer. Fill in the information here - skipping anything you don't have or know (like Employer Identification Number, which is strictly speaking a US i.d. number so most foreign employer won't have them).

Some tax prep software has a separate way to enter foreign investments, too, though on some, you just enter a sort of "dummy" 1099. But you have lots of time to play with the software, since you can't actually file until September anyhow.

First time through is the toughie. After that, it gets way easier.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> For your first year overseas, I would forget about even trying to do the Foreign Tax Credit or attempting to file jointly with your husband. It complicates your situation tremendously (especially in that first "split" year) and the end result is still going to be that you probably won't owe the US any tax.


We're not disagreeing, Bev. I'm just providing full information.

Actually, I think it's fairly unlikely she will owe U.S. tax even without the FEIE and FTC due to the personal exemption and standard deduction. Probably the best, simplest way to do things for tax year 2013 is just run through the calculation without taking either the FEIE or FTC and see what happens. (There's no obligation to take either.) If the answer is zero U.S. tax owed, she's done. She could run that calculation right now and, if the answer is zero, file now too, if desired.


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## VisaVivs (Mar 26, 2013)

Thanks BBCWatcher and Bevdeforges! This really is incredibly confusing and tough, and I know some of my questions may seem stupid, but I am having an extremely difficult time wrapping my head around this, so I genuinely appreciate your help!

How would I run calculations for both scenarios? By changing the dates? And where can I do that? Although it is tempting to put this off as long as possible, if there isn't much different in it, I'd probably rather get it over with by June..

However, let's say I go with extending till October.. I already have a TurboTax account from previous years, and I'm trying to file for the extension, but it won't let me change my address to a foreign country. Do you know a way around this? It also asks what taxes I owe / have already paid for 2013.. I have no idea how I'm supposed to know that as I don't have anything equivalent to a W2 here yet.. 

Also, with an extension, come September, would I still only be filing using income from 2013, even though I'd be filing nearer the end of 2014?

I know this will probably sound ridiculous, but when you say you have to have spent a full year overseas, do that just mean living overseas, or that you can't have been in the US at all during that time (on a holiday, for example)?

Not sure what the Foreign Tax Credit is, but if you think I can wait till next year to figure that out, I'm all for having one less thing to be confused over now!

In regards to TurboTax, or any e-filing site for that matter, I had heard before that you can't file electronically and have to mail everything in. Is this true / is there an option to just print and mail your return at the end of the process on these online sites?

FBAR / FACTA / FinCEN Form 114..you're saying there's more to fill out and figure out?! What are these, and how do I find out which one applies to me / where to fill them out?

All my investments are US based, so hopefully the software will let me enter that even with a foreign address..

Again, thank you so much for any help on this! This site was absolutely invaluable when I applied for my Spouse Visa, and I'm so grateful to be able to come back to it for taxes fun


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## BBCWatcher (Dec 28, 2012)

VisaVivs said:


> How would I run calculations for both scenarios?


My suggestion would be you start by pretending you live in the U.S. and running a "standard" Married Filing Separately tax calculation on your ~$4700 of tax year 2013 income. Pretend your U.K. gross wages appeared on a U.S. W-2. If you end up with zero U.S. tax owed in that simulation -- and that's pretty likely -- you don't have to worry about the FEIE, FTC, or possible joint filing for tax year 2013. You can spend the next 10 months or so reading Publication 54 and other IRS publications. 



> I already have a TurboTax account from previous years, and I'm trying to file for the extension, but it won't let me change my address to a foreign country. Do you know a way around this?


Sure. Don't change your address in your extension filing. As long as somebody can receive mail at that address and let you know about it, that's fine for now. When you file your actual tax return go ahead and change your address on it. And file on paper if necessary.



> It also asks what taxes I owe / have already paid for 2013.. I have no idea how I'm supposed to know that as I don't have anything equivalent to a W2 here yet.


Try zero in your initial simulation and see what happens.



> Also, with an extension, come September, would I still only be filing using income from 2013, even though I'd be filing nearer the end of 2014?


Absolutely. You're still filing your 2013 tax return.



> I know this will probably sound ridiculous, but when you say you have to have spent a full year overseas, do that just mean living overseas, or that you can't have been in the US at all during that time (on a holiday, for example)?


After you run the initial simulation, in the fullness of time take a look at the Foreign Earned Income Exclusion (FEIE) rules for the physical presence test. You are allowed a limited number of days in the U.S. to still qualify for the FEIE.



> In regards to TurboTax, or any e-filing site for that matter, I had heard before that you can't file electronically and have to mail everything in. Is this true / is there an option to just print and mail your return at the end of the process on these online sites?


Yes, if you cannot e-file you can print out your return, sign it, and mail it in the old fashioned way. TaxAct certainly works that way and is free for everyone at their direct Web site. (Of course they try to upsell you on various offers, and maybe they're worth paying for in some circumstances, but you don't have to.)



> FBAR / FACTA / FinCEN Form 114..you're saying there's more to fill out and figure out?! What are these, and how do I find out which one applies to me / where to fill them out?


Maybe. Think back to 2013. Counting all the funds you held outside the United States, including any joint accounts, was the total value (adding up all the accounts) $10,000 or more? If so, you need to file FinCEN Form 114 (FBAR). It's an electronic form, and it's due by June 30.

FATCA is a form you fill out and send in with your tax return to the IRS. It's IRS Form 8938. You need a higher total value in foreign accounts in order to trigger FATCA filing.



> All my investments are US based, so hopefully the software will let me enter that even with a foreign address..


Sure. And if you had no non-U.S. financial accounts in 2013 -- not even a joint account with your husband -- then FBAR and FATCA don't apply.


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## Bevdeforges (Nov 16, 2007)

VisaVivs said:


> How would I run calculations for both scenarios? By changing the dates? And where can I do that? Although it is tempting to put this off as long as possible, if there isn't much different in it, I'd probably rather get it over with by June..


Basically, you just fill out the software one way (pick a way, any way) and then you blank it out and do it a different way. (Or just change the lines that need to be changed.) 



> However, let's say I go with extending till October.. I already have a TurboTax account from previous years, and I'm trying to file for the extension, but it won't let me change my address to a foreign country. Do you know a way around this? It also asks what taxes I owe / have already paid for 2013.. I have no idea how I'm supposed to know that as I don't have anything equivalent to a W2 here yet..


I don't know with Turbo Tax, but check to see if anywhere under "life events" or something like that there is a heading or question for "I moved during the year." (Or sometimes it's phrased "I moved more than 50 miles") That should give you something that allows you to enter your new address.

Worst possible case, just set up a new TurboTax account, using their Free File site. Yes, you'll have to re-input your information, but it should work. Or just go to the IRS website and download the pdf version of any form you need.



> Also, with an extension, come September, would I still only be filing using income from 2013, even though I'd be filing nearer the end of 2014?


Yup. You always file for a given calendar year, you even if you extend until September, you will still be filing your 2013 taxes, using only 2013 figures. (I told you it makes very little sense. And it's only this first year abroad where you have to bother with this.)



> I know this will probably sound ridiculous, but when you say you have to have spent a full year overseas, do that just mean living overseas, or that you can't have been in the US at all during that time (on a holiday, for example)?


For the bona fide resident test, you have to be a "bona fide" resident for a full calendar year. In your case, you won't be able to file that way until your 2014 filing. For the first year, you file under the Physical Presence test, which requires that you have been overseas for at least 330 days during a period of 12 consecutive months. As long as you're not back in the States for more that 365-330 = 35 days, there is no problem. (And as BBC indicates, if you don't need to take the FEIE, it doesn't matter anyhow. The overseas residence stuff is only for the FEIE.)



> Not sure what the Foreign Tax Credit is, but if you think I can wait till next year to figure that out, I'm all for having one less thing to be confused over now!


Good plan.



> In regards to TurboTax, or any e-filing site for that matter, I had heard before that you can't file electronically and have to mail everything in. Is this true / is there an option to just print and mail your return at the end of the process on these online sites?


Not necessarily. I'm not sure about TurboTax - last time I tried it, you had to pay to print out the returns at the end of the process. But that was last year and it may have changed. I used TaxAct this year and that one does let you print out your forms when you're done. (Which is what I did this year - and last.) 



> FBAR / FACTA / FinCEN Form 114..you're saying there's more to fill out and figure out?! What are these, and how do I find out which one applies to me / where to fill them out?


FBAR only applies if you have foreign accounts (or signature authority over one or more foreign accounts) with a combined balance of $10,000 at any point during the year.



> All my investments are US based, so hopefully the software will let me enter that even with a foreign address..


Better yet, for US investment accounts, you should have gotten a 1099, so will have all the information handy for filing purposes. 



> Again, thank you so much for any help on this! This site was absolutely invaluable when I applied for my Spouse Visa, and I'm so grateful to be able to come back to it for taxes fun


It's the first year that is the tricky one while you figure out how all this stuff works. By this time next year, you'll be an "expert" at your own tax situation (or at least you can just copy what worked for you last year).
Cheers,
Bev


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## VisaVivs (Mar 26, 2013)

Ok, so I filed for the extension using my US address since it wouldn't let me change it, and I've been granted till October. Nevertheless, I'd still like to get it over and done with as soon as possible.

From what you're both saying, it seems like I can easily just do this myself online, at least this year when my situation isn't overly complicated yet. TaxAct sounds good - would I just choose the basic, free version, even with stocks/dividends? (TurboTax has a separate package for that). And will TaxAct accept all of the foreign information (ie: address, and accounts)?

As for FBAR, I may have had more than $10,000 between my account and our joint savings at some point, but if so, it would have been marginally above that, and I honestly can't remember at this point. How would I prove or disprove that for these forms? And is it the same as FACTA/due in June?

And lastly, I'm assuming for the automatic June extension for living overseas, you don't have to meet the same FEIE qualifications, right? Just wondering what exactly they would look to see in my attached letter when I send it in.

A million thanks, as always!


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## BBCWatcher (Dec 28, 2012)

VisaVivs said:


> TaxAct sounds good - would I just choose the basic, free version, even with stocks/dividends?


Yes.



> And will TaxAct accept all of the foreign information (ie: address, and accounts)?


Yes, though if you have trouble e-filing there's still the option to print, sign, and mail your tax return.



> As for FBAR, I may have had more than $10,000 between my account and our joint savings at some point, but if so, it would have been marginally above that, and I honestly can't remember at this point. How would I prove or disprove that for these forms?


"Might have" means you should file. There's no penalty for overreporting. Take your best, most reasonable guess of your high balances. Remember that report is due June 30, no extensions.



> And is it the same as FACTA/due in June?


You are unlikely to be required to file a FATCA report since you're barely over the FBAR threshold. If you are required to file a FATCA report it's due when your tax return is, now October 15 since you filed for an extension.



> And lastly, I'm assuming for the automatic June extension for living overseas, you don't have to meet the same FEIE qualifications, right?


Correct.


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