# Yet another first time filer



## palmerpat (Feb 5, 2013)

Apologies if Im asking things that have been mentioned before but I just cant find all the answers so...
Im biting the bullet to file after finding out a few months back I had to! 7 years in UK as dual US citizen. Normal job, not much savings. Just trying to make sure Im on the right track for 'Streamline' process. As far as FBAR Im thinking I dont need to do anything as I havent had near 10k in my bank account(s) over the last 6 years. I have normal salaried job. (Not enough money to pay for someone to do my taxes!). Im thinking I just need 1040A. Not sure about what to do in the parts where it asks about W2. Also I have pension plan at work. Minimal contribution from employer and also 2 old pension plans with a few thousand in each. Again just the company pension plans. I also have 401k in the USA which I never moved. Its worth around 60k dollars. Is there anywhere I can get more advice where in the forms I have to declare these things? Any direction appreciated.

Thank you in advance.


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## Bevdeforges (Nov 16, 2007)

OK, you may or may not need to bother with the "streamlined" process. If you don't owe any taxes over the last few years, you may be able to get away with just filing a few years back to "prove" that you don't owe anything - and then keep filing going forward.



> Im thinking I just need 1040A. Not sure about what to do in the parts where it asks about W2.


If you want to use the FEIE (Foreign Earned Income Exclusion) to exclude your salary income from US taxation, you'll have to file a 1040 (so-called "long form") to go with your form 2555 (which comes in "long form" and EZ versions). Where they ask for a W-2, you just fill in your earnings (accumulated from your payslips from January to December of the relevant year). If you don't have a W-2, you can't provide one, but your salary income still goes on the same line. If you're using a free-file or other e-filing site, there should be some way to recreate an ersatz W-2 in order to fill in the proper line. Your employer won't have an EIN (Employer ID number) if they are not a US employer.

The employer pensions may or may not have to be declared. Depends on if they are pension savings plans or "defined benefit" plans. The US 401K does not need to be declared at all - at least not until you start withdrawing funds from it.
Cheers,
Bev


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## palmerpat (Feb 5, 2013)

Thank you soooo much Bev. This info has helped me more than I've been able to find out over the last 3 weeks. Again, apologies if all has been covered before. I promise to write a summary of my experiences for other folks when done as I think Im pretty typical! Im sure Ill have other questions as I go along. Again thank you!


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## BBCWatcher (Dec 28, 2012)

Per earlier discussions, I'd start with tax year 2010 right now, skip the Foreign Earned Income Exclusion (FEIE) work on your first pass, take the Foreign Tax Credit instead, and take the Making Work Pay Tax Credit if you qualify. See what that particular calculation shows (2010/no FEIE/FTC/MWPTC). If your calculation shows a refund from the IRS -- and it very well might if your income is not too high and your U.K. tax rate is comparatively high -- then you're done for 2010 and don't have to worry about running through the FEIE/FHE calculations. Tax year 2010 was the last of the MWPTC years, and you'll want to grab that free money if you're eligible, so try that particular spin through the tax calculations first.


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## palmerpat (Feb 5, 2013)

Thank for the replies! Been a great encouragement and help. Starting the forms now. First hurdle --- 2555 with a change of jobs halfway through the year. Only room for one on the form.


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## Bevdeforges (Nov 16, 2007)

palmerpat said:


> Thank for the replies! Been a great encouragement and help. Starting the forms now. First hurdle --- 2555 with a change of jobs halfway through the year. Only room for one on the form.


Yet another reason to file your tax forms on paper. You can always squeeze in a second employment/employer on the paper forms! Just write small.
Cheers,
Bev


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## palmerpat (Feb 5, 2013)

Hi Bev, filing on paper but the form only caters for one employer. So.. either must file a separate schedule for other employer I expect, or small writing time


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## BBCWatcher (Dec 28, 2012)

See my post above. You don't need a Form 2555 at all if you don't take the Foreign Earned Income Exclusion (FEIE). Start with tax year 2010, FTC only, MWPTC, and see what the calculation shows. If the calculation shows you get money from the IRS, stop right there, you're done -- no FEIE, no Form 2555.

Choosing the FEIE is optional. Sometimes it's helpful, sometimes not. Tax year 2010 is the perfect year to test this because of the MWPTC.

If you are entitled to money from the IRS (MWPTC) then you must file tax year 2010 by April 15, 2014. (Well, you might be able to stretch that to June 15 if you really know what you're doing, but I wouldn't risk that.)

Good luck, and let us know how it turns out.


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## palmerpat (Feb 5, 2013)

Thank you BBC great info. Have started looking at your approach. Got the wages figured I think. Now to find out what to do with mortgage if anything Some research I think. No 1099 of course. I'm guessing that deducting interest will kick off audit.


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## BBCWatcher (Dec 28, 2012)

Check IRS Publication 936 for details on the home mortgage interest deduction. You will need to fill out Schedule A if you are eligible to take that deduction. I think you're referring to Form 1098, which would be the mortgage interest statement.

Note that the mortgage interest deduction is only relevant if you end up itemizing deductions. As a quick check, take a look at your standard deduction and compare that against the amount of mortgage interest you paid.


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## palmerpat (Feb 5, 2013)

BBCWatcher said:


> Check IRS Publication 936 for details on the home mortgage interest deduction. You will need to fill out Schedule A if you are eligible to take that deduction. I think you're referring to Form 1098, which would be the mortgage interest statement.
> 
> Note that the mortgage interest deduction is only relevant if you end up itemizing deductions. As a quick check, take a look at your standard deduction and compare that against the amount of mortgage interest you paid.


Yep 1098. Apologies. Will get the calculator out tonight. Thanks again.


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## Bevdeforges (Nov 16, 2007)

palmerpat said:


> Thank you BBC great info. Have started looking at your approach. Got the wages figured I think. Now to find out what to do with mortgage if anything Some research I think. No 1099 of course. I'm guessing that deducting interest will kick off audit.


Deducting the mortgage interest shouldn't kick off an audit unless there is something else "fishy" about your return - and if you're home and mortgage are overseas, there is no need for a 1098 or 1099 or whatever. If and when it comes to an audit, you would have to show how you determined your mortgage interest deduction - so hang onto whatever paperwork you use to generate your figures.

One of the advantages of using the FEIE is that you just don't have to worry about itemizing deductions (like the mortgage) if the exclusion covers the bulk of your income. But once you've started itemizing your deductions, you ought to check to see if you have other expenses that go into the itemized deductions.
Cheers,
Bev


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## RandallSamaritan (Nov 5, 2013)

As long as you are legally liable for the mortgage, the mortgage interest on your primary home is deductible as an itemized deduction just like if the property was in the U.S. A 1099 is not needed to claim the mortgage interest.

Any real estate or property taxes that you have paid on your home are likewise deductible as well.

Best regards,
Randall


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## palmerpat (Feb 5, 2013)

Thanks again for the help folks. Im keeping a log of what Im doing so may be of some use in the future for folk. Right now trying to figure out calendar year taxes. With only p60 for 2010 and 2011 think I have to write off to get breakdown (Old payslips?) for the year. Slowing me down but plodding forward to become compliant.


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